Jeffrey Sachs “Has Apparently Spent More Time Studying the Economic Thinking of Salma Hayek than that of Friedrich”


  Salma Hayek.  Source of image: http://www.imdb.com/gallery/granitz/0273-spe/Events/0273-spe/hayek_sa.lma?path=pgallery&path_key=Hayek,%20Salma

 

(p. A18) Scientific American, in its November 2006 issue, reaches a "scientific judgment" that the great Nobel Prize-winning economist Friedrich Hayek "was wrong" about free markets and prosperity in his classic, "The Road to Serfdom."  The natural scientists’ favorite economist — Prof. Jeffrey Sachs of Columbia University — announces this new scientific breakthrough in a column, saying "the evidence is now in."  To dispel any remaining doubts, Mr. Sachs clarifies that anyone who disagrees with him "is clouded by vested interests and by ideology."

This sounds like one of those moments in which the zeitgeist of mass confusion about national poverty, world poverty and prosperity comes together in one mad tragicomic brew.

. . .  

Mr. Sachs, who is currently best known for his star-driven campaign to end world poverty, has apparently spent more time studying the economic thinking of Salma Hayek than that of Friedrich. 

. . .

Mr. Sachs’s empirical analysis purports to show that Nordic welfare states are outperforming those states that follow the "English-speaking" tradition of laissez-faire, like the U.K. or the U.S. Poverty rates are indeed lower in the Nordic countries, although the skeptical reader (probably an ideologue) might wonder if the poverty outcome in, say, the U.S., with its tortured history of a black underclass and its de facto openness to impoverished but upwardly mobile immigrants, is really comparable to that of Nordic countries.

Then there is the big picture, where those laissez-faire Anglophones in, first, the U.K. and, then, the U.S., just happened to have been the leaders of the ongoing global industrial revolution that abolished far more poverty over the past two centuries than a few modest Scandinavian redistribution schemes.  Mr. Sachs apparently thinks the industrial revolution was led by IKEA.  Lastly, let’s hear from the Nordics themselves, who have been busily moving away from the social welfare state back toward laissez-faire.  According to the English-speaking ideologues that composed the Heritage Foundation/Wall Street Journal Index of Economic Freedom, Denmark, Finland and Sweden were all included in the 20 countries classified as "free" in 2006 (with Denmark actually ranked ahead of the U.S.).  Only Norway missed the cut — barely.

Mr. Sachs is wrong that Hayek was wrong.  In his own global antipoverty work, he is unintentionally demonstrating why more scientists, Hollywood actors and the rest of us should go back and read "The Road to Serfdom" if we want to know what will not work to achieve "The End of Poverty."  Hayek gave the best exposition ever of the unpopular ideas of economic freedom that somehow triumph anyway, alleviating far more national and global poverty than more fashionable Scandinavia-envy and grandiose plans to "make poverty history."

 

For the full commentary, see:

WILLIAM EASTERLY.  "Dismal Science."  Wall Street Journal  (Weds., November 15, 2006):  A18.

(Note:  ellipses added.) 

 

Hayek’s courageous masterpiece is:

Hayek, Friedrich A. Von. The Road to Serfdom. Chicago: Univ of Chicago Press, 1944.

 

Easterly’s great book on how to encourage economic development in poor countries, is:

Easterly, William. The Elusive Quest for Growth: Economists’ Adventures and Misadventures in the Tropics. Cambridge, MA: The MIT Press, 2002.


“Come With Me, If You Want to Live”

Schumpeter famously stated that creative destruction is "the essential fact" about capitalism.  Was he right? 

To determine what is "the essential fact" you need to first answer the question "essential for what purpose?"  If the purpose is "life, liberty, and the pursuit of happiness" then I think you can show that creative detruction is indeed the essential fact about capitalism; in the key sense that with creative destruction you have a form of capitalism that is best able to enhance "live, liberty, and the pursuit of happiness."

The Terminator famously said "Come with me, if you want to live!" ("Terminator 2: Judgment Day," 1991).  Life is a choice.  You can choose death instead.  Most people, most of the time, choose life. But there are examples of choosing death.  E.g., Leon Kass, an oft-quoted "expert" on medical ethics issues, is against current efforts to lengthen the human life span:

(p. D4)  While an anti-aging pill may be the next big blockbuster, some ethicists believe that the all-out determination to extend life span is veined with arrogance.  As appointments with death are postponed, says Dr. Leon R. Kass, former chairman of the President’s Council on Bioethics, human lives may become less engaging, less meaningful, even less beautiful.

“Mortality makes life matter,” Dr. Kass recently wrote.  “Immortality is a kind of oblivion — like death itself.”

That man’s time on this planet is limited, and rightfully so, is a cultural belief deeply held by many.  But whether an increasing life span affords greater opportunity to find meaning or distracts from the pursuit, the prospect has become too great a temptation to ignore — least of all, for scientists.

“It’s a just big waste of talent and wisdom to have people die in their 60s and 70s,” said Dr. Sinclair of Harvard.

(And there’s the occasional hermit, like the unibomber, who chooses to live a brutish life without electricity and indoor plumbing.)  So long as I, Arnold, and our compatriots, are allowed an island somewhere to peacefully pursue life, I do not much care what Leon and his friends do.  My argument, and the book I am writing on creative destruction, are not written for Leon.  They are written for all those who choose life, liberty, and the pursuit of happiness.

 

The NYT quote related to Leon Kass’s praise of mortality, is from p. D4 of:

MICHAEL MASON.  "One for the Ages:  A Prescription That May Extend Life."  The New York Times  (Tues., October 31, 2006):  D1 & D4. 

 

“Man in White Suit” Science Fiction, Now Nearly Science Fact

PART of what sold James Tirey on a change in attire was the coffee spilled on his legs during a rough flight.  ”It stayed sticky until it dried,” he said, ”about mid-Atlantic.”

To avoid such incidents, he bought a new pair of pants with an invisible, high-tech surface suited to the exigencies of business travel.  These pants look and feel like most others, but the ingenious finish on the fabric is different:  it is made of tiny, nanosized particles that repel water, ketchup, honey, blood, vinaigrette and a thousand other potential indignities.  With such a surface, he said, ”if coffee is spilled on you, it just beads up” or runs off.  The pants can be wiped with a paper napkin — even the skimpy cocktail kind handed out on airplanes — leaving the material dry and unscathed.

Mr. Tirey, who lives in northern Virginia, bought his pants, called the Steel Pant, at Beyond, a Eugene, Ore., company that makes and sells outerwear for men and women at BeyondFleece.com.  The material is manufactured by the Swiss company Schoeller Textil, which makes both the weave and the nanofinish, called NanoSphere.  On the Beyond Web site, the pants cost $119, the nanocoating an additional $15.  ”It was definitely worth the money,” Mr. Tirey said of the purchase.

 

For the full story, see: 

ANNE EISENBERG.  "NOVELTIES; The Chemist’s Find: A Way to Shrug Off Spills." The New York Times , Section 3(Sun., August 27, 2006):  5. 

Entrepreneurship Survives, Even in Mogadishu

  In Mogadishu the nose of one of the two Black Hawk helicopters that were were shot down in 1993.  Source of the photo:  online version of the NYT article cited below. 

 

MOGADISHU, Somalia, Sept. 23 — They call her the “Black Hawk Down” lady.

And in the corner of her dirt yard, beneath rags drying in the sun and next to a bowl of filthy wash water, she keeps a chunk of history that most Americans would probably like to forget.

It is the battered nose of a Black Hawk helicopter, from one of the two that got shot down in Mogadishu on Oct. 3, 1993, in an infamous battle that killed 18 Americans, led to a major foreign policy shift and spawned a big movie.

The Black Hawk Down lady stands fiercely at her gate and charges admission to see it.

“You, you, you,” she said on a recent day, jabbing her finger at three visitors.  “Pay, pay, pay.”

. . .

Ecstatic Somalis ransacked the wreckage, stripping the helicopters and melting down the metal. Some people even ripped insignia patches off the bodies of the soldiers to keep as grim souvenirs.

. . .

But Ms. Elmi had a different plan.  Her husband had died a long time ago, and she had six children to feed.  Two of her older sons were killed, she said, when the helicopter crashed.  She dragged the cracked nose piece, about five feet across but actually pretty light because it was made of fiberglass, back to her house.

. . .  

Ms. Elmi began humbly, charging neighborhood boys the equivalent of a few cents to get a peek at her one exhibit, the last known chunk of wreckage from what Somalis refer to as Ma-alinti Rangers, the Day of the Rangers.

But after the movie “Black Hawk Down” came out in 2001 — and pirated copies found their way to Mogadishu — business boomed.

“So many people came, I cannot count,” she said.  “White people, brown people, black people.”

When asked why they come, she snapped:  “How should I know?  Do you think I am mind reader?”

The entrance fee is now around $3 for foreigners; locals get a discount and pay 75 cents.

. . .

Some people say they fear the Islamists will impose a draconian version of Islam in Somalia, which up until recently had been relatively secular.

But Ms. Elmi said she loved the Islamists.  And she has her own reasons.

“They bring peace,” she said.  “And peace brings tourists.”

 

For the full story, see: 

JEFFREY GETTLEMAN.  "MOGADISHU JOURNAL; From the Ashes, a Chunk of America Beckons in Somalia."  The New York Times  (Thurs., September 28, 2006):  A4.

(Note:  in the print version, but not the online version, there is a subheader placed in the center of the article that reads:  "An entrepreneur feeds a family, thanks to the remnants of a battle.") 

(Note:  ellipses added.)

Taking the Red Pill in China

Surfing the Web last fall, a Chinese high-school student who calls himself Zivn noticed something missing.  It was Wikipedia, an online encyclopedia that accepts contributions or edits from users, and that he himself had contributed to.

The Chinese government, in October, had added Wikipedia to a list of Web sites and phrases it blocks from Internet users’ access.  For Zivn, trying to surf this and many other Web sites, including the BBC’s Chinese-language news service, brought just an error message.  But the 17-year-old had had a taste of that wealth of information and wanted more.  "There were so many lies among the facts, and I could not find where the truth is," he writes in an instant-message interview.

Then some friends told him where to find Freegate, a tiny software program that thwarts the Chinese government’s vast system to limit what its citizens see.  Freegate — by connecting computers inside of China to servers in the U.S. — allows Zivn and others to keep reading and writing to Wikipedia and countless other sites.

Behind Freegate is a North Carolina-based Chinese hacker named Bill Xia.  He calls it his red pill, a reference to the drug in the "Matrix" movies that vaulted unconscious captives of a totalitarian regime into the real world.  Mr. Xia likes to refer to the villainous Agent Smith from the Matrix films, noting that the digital bad guy in sunglasses "guards the Matrix like China’s Public Security Bureau guards the Internet."

. . .

(p. A9)  . . . , with each new version of Freegate — now on its sixth release — the censors "just keep improving and adding more manpower to monitor what we have been doing," Mr. Xia says.  In turn, he and volunteer programmers keep tweaking Freegate.

At first, the software would automatically change its Internet Protocol address — a sort of phone number for a Web site — faster than China could block it.  That worked until September 2002, when China blocked Freegate’s domain name, not just its number, in the Internet phone book.

More than three years later, Mr. Xia is still amazed by the bold move, calling it a "hijacking."  Ultimately he prevailed, however, through a solution he won’t identify for fear of being shut down for good.

Confident in that solution, Mr. Xia continues to send out his red pill, and users like Zivn continue to take it.  The teen credits his cultural and political perspective to a "generation gap" that has come of having access to more information.  "I am just gradually getting used to the truth about the real world," he writes.

 

For the full story, see: 

Geoffrey A. Fowler.  "Chinese Internet Censors Face ‘Hacktivists’ in U.S."  The Wall Street Journal  (Monday, February 13, 2006):  A1 & A9.

An Inconvenient Truth About “An Inconvenient Truth”


   Al Gore.  Source of photo:  http://in.news.yahoo.com/051008/137/60gzj.html

 

(p. A25) If Al Gore’s new movie weren’t titled ”An Inconvenient Truth,” I wouldn’t have quite so many problems with it.

. . .

Gore shows the obligatory pictures of windmills and other alternative sources of energy.  But he ignores nuclear power plants, which don’t spew carbon dioxide and currently produce far more electricity than all ecologically fashionable sources combined.

A few environmentalists, like Patrick Moore, a founder of Greenpeace, have recognized that their movement is making a mistake in continuing to demonize nuclear power.  Balanced against the risks of global warming, nukes suddenly look good — or at least deserve to be considered rationally.  Gore had a rare chance to reshape the debate, because a documentary about global warming attracts just the sort of person who marches in anti-nuke demonstrations.

Gore could have dared, once he enticed the faithful into the theater, to challenge them with an inconvenient truth or two.  But that would have been a different movie.


For the full commentary, see:

JOHN TIERNEY.  "Gore Pulls His Punches."  The New York Times  (Tuesday, May 23, 2006):    A25.


Static Versus Dynamic Pictures

Schumpeter distinguished the static picture of capitalism in the textbook model, with the dynamic reality captured in the process of creative destruction.   Apparently Ronald Reagan also understood that a dynamic view is better than a static snapshot.   Michael Deaver recounts:

(p. 75) . . . I told him that I noticed his aversion to sitting for photo shoots.  He looked at me surprised.  "That’s funny, in all these years, nobody’s ever noticed that."   I asked him to elaborate.  "Well, you can never recover from a still shot."

Reagan was most comfortable with moving film, he went on to say.  He truly believed the television camera was a friend, a device that would separate the real from the phony.  Still cameras could always be used to make a candidate look like a fool.  When he explained this to me in the (p. 76) late 1960s, he said, "You know how I sometimes touch my nose before I make a point?  Well, a still shot would show me picking my nose, while a live shot would show me making my point."

 

Source:

Deaver, Michael K.   A Different Drummer:   My Thirty Years with Ronald Reagan.  Reprint ed.  Harper Paperbacks, 2003.