The YouTube video embedded above was from a CBS Evening News broadcast in June 2012. It illustrates the difficulty of the government successfully selecting the technologies, and companies, that will eventually prove successful. (The doctrine that government can and should do such selection is often called “industrial policy.”)
The Obama administration has bet billions of tax dollars on lithium ion batteries for electric vehicles that A123 Systems won $249 million of. But as Sharyl Attkisson reports, expensive recalls and other setbacks have put substantial doubt in the company’s ability to continue.
Kevin Costner as the patriarch of the Hatfield clan on the HBO miniseries. Source of photo:
http://www.cowboysindians.com/Blog/May-2012/Blasts-From-Our-Past-With-Kevin-Costner/costner-hatfield.jpg
Kevin Costner plausibly suggests that when the productive activities of capitalism and entrepreneurship are not available or sought, people are more likely to let annoyances lead to violence:
(p. 15) Q. What was the root of the feud?
K.C. It’s fair to say that the economics of the time were the provocateurs in this story. I think there was a moment when Hatfield and McCoy would have laid down their guns. But these young guys didn’t have jobs anymore as we moved toward industrialization. They started to have children, and their families doubled in size, and suddenly they had to feed 26. Young men killing young men — it really has a lot to do with the offspring not having enough to do. Look, you’re talking about alcohol and guns, and you’re talking about unemployment, so there’s a reason for the bitterness.
In the passage below from 1984 Orwell presents an underground rebel’s account of why the authoritarian socialist dystopia cannot advance in science and technology.
(p. 155) The world of today is a bare, hungry, dilapidated place compared with the world that existed before 1914, and still more so if compared with the imaginary future to which the people of that period looked forward. In the early twentieth century, the vision of a future society unbelievably rich, leisured, orderly, and efficient–a glittering (p. 156) antiseptic world of glass and steel and snow-white concrete–was part of the consciousness of nearly every literate person. Science and technology were developing at a prodigious speed, and it seemed natural to assume that they would go on developing. This failed to happen, partly because of the impoverishment caused by a long series of wars and revolutions, partly because scientific and technical progress depended on the empirical habit of thought, which could not survive in a strictly regimented society.
Source:
Orwell, George. Nineteen Eighty-Four. New York: The New American Library, 1961 [1949].
“David Brooks, of Just Bulbs in Manhattan, has a customer who is secretly ordering thousands of incandescent bulbs. “She doesn’t want her husband to know,” he said.” Source of caption and photo: online version of the NYT article quoted and cited below.
(p. D1) BUNNY WILLIAMS, the no-nonsense decorator known for her lush English-style rooms, is laying in light bulbs like canned goods. Incandescent bulbs, that is — 60 and 75 watters — because she likes a double-cluster lamp with a high- and a low-watt bulb, one for reading, one for mood.
“Every time I go to Costco, I buy more wattage,” Ms. Williams said the other day. She is as green as anybody, she added, but she can’t abide the sickly hue of a twisty compact fluorescent bulb, though she’s tried warming it up with shade liners in creams and pinks. Nor does she care for the cool blue of an LED.
It should be noted that, like most decorators, Ms. Williams is extremely precise about light. The other day, she reported, she spent six hours fine-tuning the lighting plan of a project, tweaking the mix of ambient, directional and overhead light she had designed, and returning to the house after dusk to add wattage and switch out lamps like a chef adjusting the flavors in a complicated bouillabaisse.
She is aware that there is legislation that is going to affect the manufacture of incandescent bulbs, but she’s not clear on the details, and she wants to make sure she has what she needs when she needs it.
. . .
(p. D7) Other hoarders are hiding their behavior. David Brooks, who owns Just Bulbs on East 60th Street, said he has a customer in Tennessee who is buying up 60- and 100-watt soft-pink incandescent bulbs from G.E. and Sylvania for her three houses. Initially, she ordered 432 bulbs for each house, he said. Then she ordered another 1,000.
Mr. Brooks said the customer doesn’t want her husband to find out, and wouldn’t agree to speak to this reporter. The last order is destined, he said, “for a friend’s house that she is helping to redecorate in Alabama. She doesn’t want anyone to know her source.”
(p. 23) Dr. Coover first happened upon the super-sticky adhesive — more formally known as cyanoacrylates — by accident when he was experimenting with acrylates for use in clear plastic gun-sights during World War II. He gave up because they stuck to everything they touched.
In 1951, a researcher named Fred Joyner, who was working with Dr. Coover at Eastman Kodak’s laboratory in Tennessee, was testing hundreds of compounds looking for a temperature-resistant coating for jet cockpits. When Mr. Joyner spread the 910th compound on the list between two lenses on a refractometer to take a reading on the velocity of light through it, he discovered he could not separate the lenses. His initial reaction was panic at the loss of the expensive lab equipment. “He ruined the machine,” Dr. Paul said of the refractometer. “Back in the ’50s, they cost like $3,000, which was huge.”
But Dr. Coover saw an opportunity. Seven years later, the first incarnation of Super Glue, called Eastman 910, hit the market.
In the name of science, Mr. Joyner was not punished for destroying the equipment, Dr. Paul said.
. . .
“I think he got a kick out of being Mr. Super Glue,” she said. “Who doesn’t love Super Glue?”
One of his proudest accomplishments, Dr. Paul added, was that his invention was used to treat injured soldiers during the Vietnam War. Medics, she said, carried bottles of Super Glue in spray form to stop bleeding.
. . .
Super Glue did not make Dr. Coover rich. It did not become a commercial success until the patents had expired, his son-in-law, Dr. Vincent E. Paul, said. “He did very, very well in his career,” Dr. Paul said, “but he did not glean the royalties from Super Glue that you might think.”
Source of image: screen capture from YouTube clip referenced below.
What motivates employees? Economists have emphasized pay as the primary incentive, while recognizing that there may be “compensating differentials” for aspects of the work that are pleasant or unpleasant.
In recent years many non-economists, such as Daniel Pink in Drive, have emphasized non-pecuniary incentives.
Joe Paterno entered the debate at age 83, after he became the first major college coach to win 400 games on November 6, 2010.
Right after the victory, he was interviewed on the field by “Heather” of ESPN. Starting at 1:33 seconds into the clip referenced below, here is the key dialogue:
Heather: “Coach Paterno, what has motivated you to get to this point?”
Paterno: “Oh geez, I don’t know—gettin’ paid.”
Source: YouTube clip at http://www.youtube.com/watch?v=jQzdVeYtm5w
(Note: the clip was posted on 11/6/10 by shellymic and has the title “Joe Pa FIRST to 400 Wins!”)
“The unusual suspects, 1969: top row from left, Graham Chapman, Eric Idle and Terry Gilliam; bottom row from left, Terry Jones, John Cleese and Michael Palin.” Source of caption and photo: online version of the NYT article quoted and cited below.
(p. 24) “A lot of contemporary comedy seems self-conscious,” Mr. Palin said. “It’s almost documentary, like ‘The Office.’ That’s a very funny show, but you’re looking at the human condition under stress. The Pythons made the human condition seem like fun.”
He added: “I’m proud to be a Python. It’s a badge of silliness, which is quite important. I was the gay lumberjack, I was the Spanish Inquisition, I was one-half of the fish-slapping dance. I look at myself and think that may be the most important thing I’ve ever done.”
Mr. Cleese and Mr. Jones, in rare agreement, both suggested that one reason the Pythons have never been successfully imitated is that television executives nowadays would never let anyone get away with putting together a show like theirs. When they began, they didn’t have an idea what the show should be about or even a title for it. The BBC gave them some money, and then, Mr. Cleese joked, the executives hurried off to the bar.
“The great thing was that in the beginning we had such a low profile,” he said. “We went on at different times, and some weeks we didn’t go on at all, because there might be a show-jumping competition. But that was the key to our feeling of freedom. We didn’t know what the viewing figures were, and we didn’t care. What has happened now is the complete reverse. Even the BBC is obsessed with the numbers.”
So obsessed, Bill Jones pointed out, that in the case of “Monty Python: Almost the Truth” some people encouraged the documentarians to see if they couldn’t squeeze the six hours down to one.
“Above from left, Mr. Jones, Mr. Gilliam, Mr. Cleese, Mr. Idle and Mr. Palin at the premiere of “Spamalot.”” Source of caption and photo: online version of the NYT article quoted and cited above.
The clip is the famous corporate graveyard scene from Ben Wattenberg’s 1977 “In Search of the Real America: A Challenge to the Chorus of Failure and Guilt.” The scene appears in the first of 13 episodes, the episode called “There’s No Business Like Big Business” which received the Tuck Award for the Advancement of Economic Understanding. The episode was produced and written by Austin Hoyt.
The corporate graveyard scene illustrates that under entrepreneurial capitalism, companies prosper that innovate in better serving the consumer.
Wattenberg discussed the “In Search of the Real America” program, and the graveyard scene, in his recent book Fighting Words:
(p. 307) The central point of the program was that if big American corporations didn’t compete effectively, they suffer, and many would go out of business.
The producers had the wonderful idea of a visual of a graveyard on a foggy night, with headstones made from papier-mâché and a smoke machine providing the fog. I walked through the mock cemetery in a raincoat and read off the names of corporate tombstones, which included Central Leather (the seventeenth largest company in 1917), International Mercantile Marine (the eleventh largest in 1917), as well as failures like Baldwin Locomotive Works, American Woolen, Packard Motor Car, International Match, Pierce Petroleum, Curtiss-Wright, United Verde Mining, and Consolidation Coal.2 When we showed the Central Leather tombstone, a sound effect mooed; behind International Mercantile Marine’s, a steamship horn bellowed (I love shtick).
. . .
2 The program was based on an article by James Michaels, editor of Forbes. For many years, people would come up to me in airports, recalling that one scene and complementing me on the program.
Source:
Wattenberg, Ben J. Fighting Words: A Tale of How Liberals Created Neo-Conservatism. New York: Thomas Dunne Books, 2008.
(Note: ellipsis added.)
(Note: I have corrected a few obvious errors involving the omission and placement of commas in the list of companies in the text of Wattenberg’s Fighting book.)
. . . , Mr. Michaels graduated from Harvard in 1943 with a bachelor’s degree in economics.
“Thomas Lee, one of the men featured in the documentary “A Father’s Promise,” watching a video of himself from 1996.” Source of caption and photo: online version of the NYT review quoted and cited below.
(p. C11) The program, with Al Roker as host, follows up a “Dateline NBC” report from 1996 that recorded several births among black women at a Newark hospital and interviewed the unmarried fathers of the children as they earnestly vowed to be there as their babies grew up. The piece was an attempt to look at the alarming rate of fatherless households among blacks.
It is, of course, a problem that has not gone away since 1996, and Mr. Roker’s program tracks down three of those newborns and the fathers who promised to stand by them. That none did — jail, joblessness, depression and general irresponsibility intervened — somehow isn’t surprising.
. . .
. . . the Rev. Eugene F. Rivers of Azusa Community Church in Boston explains in very personal terms why he discounts the easy economic explanations that so often get the blame for fatherless households.
“I had a child out of wedlock,” he says. “That was a bad decision. I can’t say capitalism did it to me.”
Source of photo: online version of the WSJ article quoted and cited below.
(p. A1) It didn’t take long after America started tuning in to television that people started to worry about what it was doing to children. “When it offers a daily diet of Western pictures and vaudeville by the hour, television often seems destined to entertain the child into a state of mental paralysis,” wrote The New York Times in 1949.
A generation later, the Scholastic Aptitude Test scores of college-bound teenagers had fallen significantly. A 1977 panel appointed by the College Entrance Examination Board suggested television bore some blame for the drop. Indeed, the decline began in the mid-1960s, just as the first students heavily exposed to TV took their SATs.
But University of Chicago Graduate School of Business economists Matthew Gentzkow and Jesse Shapiro aren’t sure that TV has been all that bad for kids. In a paper published in the Quarterly Journal of Economics this year, they presented a series of analyses that showed that the advent of television might actually have had a positive effect on children’s cognitive ability.
. . .
(p. A8) The economists . . . looked at results of a survey of 800 U.S. schools that administered tests to 346,662 sixth-grade, ninth-grade and 12th-grade students in 1965. Their finding: Adjusting for differences in household income, parents’ educational background and other factors, children who lived in cities that gave them more exposure to television in early childhood performed better on the tests than those with less exposure.
The economists found that television was especially positive for children in households where English wasn’t the primary language and parents’ education level was lower. “We don’t exactly know why that is, but a plausible interpretation is that the effect of television on cognitive development depends on what other kinds of activity television is substituting for,” says Mr. Shapiro, 28.
“Jonas Salk, right, inoculates his son against polio as his wife, left, looks on.” Source of caption and photo: online version of the WSJ quoted and cited below.
(p. W9C) “The Polio Crusade” will stir many memories with its account of successful efforts to eradicate the disease whose fear factor, we’re told, was second only to that of the atom bomb. (Monday 9-10 p.m. ET on PBS’s “American Experience” series, but check local listings.) The documentary also tells less-familiar, and sometimes disturbing, stories about the birth of modern fund-raising techniques, and old testing techniques.
. . .
Since the virus is spread most effectively by mouth, or through contact with byproducts of the intestinal tract, the improved hygiene of the 20th century should have led to a decrease in polio infections. The opposite happened. First in Europe and then in America, a disease which had barely registered on the medical radar began to strike more and more people, culminating in a U.S. record of nearly 58,000 cases in 1952.
The explanation for this seemingly counterintuitive symbiosis between cleanliness and disease is astonishing, yet simple. In a germier age, newborns were likely to be exposed to the polio virus very early in life, when they still had immunity conferred by their mother in the womb. When improved hygiene pushed back the time of exposure to a later age, or even to adulthood, many people were by then defenseless.
