Gary Becker’s Grandson Ponders Opportunity Cost of College

HarboeLouisYoungTechEntrepreneur2014-03-30.jpg

“Louis Harboe with his parents, Frederik Harboe and Catherine Becker. Louis, now 18, got his first freelance tech job at age 12. Last year, he attended the Apple Worldwide Developers Conference in San Francisco.” Source of caption and photo: online version of the NYT article quoted and cited below.

(p. 1) Ryan was headed to South by Southwest Interactive, the technology conference in Austin. There, he planned to talk up an app that he and a friend had built. Called Finish, it aimed to help people stop procrastinating, and was just off its high in the No. 1 spot in the productivity category in the Apple App store.
. . .
Ryan is now 17, a senior at Boulder High. He is among the many entrepreneurially minded, technologically skilled teenagers who are striving to do serious business. Their work is enabled by low-cost or free tools to make apps or to design games, and they are encouraged by tech companies and grown-ups in the field who urge them, sometimes with financial support, to accelerate their transition into “the real world.” This surge in youthful innovation and entrepreneurship looks “unprecedented,” said Gary Becker, a University of Chicago economist and a Nobel laureate.
Dr. Becker is assessing this subject from a particularly intimate vantage point. His grandson, Louis Harboe, 18, is a friend of (p. 6) Ryan’s, a technological teenager who makes Ryan look like a late bloomer. Louis, pronounced Louie, got his first freelance gig at the age of 12, designing the interface for an iPhone game. At 16, Louis, who lives with his parents in Chicago, took a summer design internship at Square, an online and mobile payment company in San Francisco, earning $1,000 a week plus a $1,000 housing stipend.
Ryan and Louis, who met online in the informal network of young developers, are hanging out this weekend in Austin at South by Southwest. They are also waiting to hear from the colleges to which they applied last fall — part of the parallel universe they also live in, the traditional one with grades and SATs and teenage responsibilities. But unlike their peers for whom college is the singular focus, they have pondered whether to go at all. It’s a good kind of problem, the kind faced by great high-school athletes or child actors who can try going pro, along with all the risk that entails.
Dr. Becker, who studies microeconomics and education, has been telling his grandson: “Go to college. Go to college.” College, he says, is the clear step to economic success. “The evidence is overwhelming.”
But the “do it now” idea, evangelized on a digital pulpit, can feel more immediate than academic empiricism. “College is not a prerequisite,” said Jess Teutonico, who runs TEDxTeen, a version of the TED talks and conferences for youth, where Ryan spoke a few weeks ago. “These kids are motivated to take over the world,” she said. “They need it fast. They need it now.”

For the full story, see:
MATT RICHTEL. “The Youngest Technorati.” The New York Times, SundayBusiness Section (Fri., MARCH 9, 2014): 1 & 6.
(Note: ellipsis added.)
(Note: the online version of the story has the date MARCH 8, 2014.)

In Hard Times Entrepreneurs Need Advice on How to Fire

TheHardThingAboutHardThingsBK2014-03-30.jpg

Source of book image: online version of the WSJ review quoted and cited below.

(p. A13) Every entrepreneur has experienced what Ben Horowitz terms “the struggle.” That’s when things are going really, really badly. It’s when, as he puts it in “The Hard Thing About Hard Things,” “people ask you why you don’t quit and you don’t know the answer.” But there always is a way, Mr. Horowitz believes, and it’s the ability to spot the next move during the struggle that separates winners and losers.

Mr. Horowitz has authority on this subject. He was a successful tech CEO, having co-founded the pioneering cloud-computing company LoudCloud and subsequently overseen its evolution into a software firm, Opsware. He’s also one half of the venture-capital firm Andreessen Horowitz. Among the firm’s winning bets: Facebook, Skype and Twitter.
. . .
The book, the author says, is written primarily for “wartime CEOs”–those like the late Steve Jobs, who returned to Apple in 1997 at a time when the company was verging on bankruptcy. Jobs recognized that to survive, Apple had to ditch most of its products and focus singularly on just four computer models.
Wartime CEOs don’t need classic management books that “focus on how to do things correctly, so you don’t screw up,” Mr. Horowitz argues. What the author offers instead is “insight into what you must do after you have screwed up. The good news is, I have plenty of experience at that and so does every other CEO.”
. . .
Parts of the book are dedicated to providing practical leadership advice: how to hire, fire and scale and when to sell and when to spurn offers. Some of the advice is counterintuitive. He dismisses the “don’t bring me a problem without bringing me a solution” management maxim by asking: If an employee can’t solve the problem he encounters, do you really want him to hide it?

For the full review, see:
DANIEL FREEDMAN. “BOOKSHELF; Business Tips From Karl Marx; Born to a family of Marxists, Ben Horowitz now invests in tech startups. Among his winning bets: Twitter and Facebook.” The Wall Street Journal (Fri., March 7, 2014): A13.
(Note: ellipses added.)
(Note: the online version of the review has the date March 6, 2014, and has the title “BOOKSHELF; Book Review: ‘The Hard Thing About Hard Things,’ by Ben Horowitz; Born to a family of Marxists, Ben Horowitz now invests in tech startups. Among his winning bets: Twitter and Facebook.”)

The book under review is:
Horowitz, Ben. The Hard Thing About Hard Things: Building a Business When There Are No Easy Answers. New York: HarperCollins Publishers, 2014.

Decline in Hours Worked Shows Weakness in Labor Market

(p. A15) Most commentators viewed the February [2014] jobs report released on March 7 as good news, indicating that the labor market is on a favorable growth path. A more careful reading shows that employment actually fell–as it has in four out of the past six months and in more than one-third of the months during the past two years.
Although it is often overlooked, a key statistic for understanding the labor market is the length of the average workweek. Small changes in the average workweek imply large changes in total hours worked. The average workweek in the U.S. has fallen to 34.2 hours in February from 34.5 hours in September 2013, according to the Bureau of Labor Statistics. That decline, coupled with mediocre job creation, implies that the total hours of employment have decreased over the period.
. . .
. . . , although the U.S. economy added about 900,000 jobs since September, the shortened workweek is equivalent to losing about one million jobs during this same period. The difference between the loss of the equivalent of one million jobs and the gain of 900,000 new jobs yields a net effect of the equivalent of 100,000 lost jobs.

For the full commentary, see:
EDWARD P. LAZEAR. “The Hidden Rot in the Jobs Numbers; Hours worked are declining, resulting in the equivalent of a net loss of 100,000 jobs since September.” The Wall Street Journal (Fri., March 17, 2014): A15.
(Note: ellipses, and bracketed year, added.)
(Note: the online version of the commentary has the date March 16, 2014.)

Better Policies Explain Why Poland Prospers More than Ukraine

RushchyshynYaroslavUkraineEntrepreneur2014-03-30.jpg “Yaroslav Rushchyshyn, a garment manufacturer, wants to end penalties when his company reports a financial loss.” Source of caption and photo: online version of the NYT article quoted and cited below.

(p. B1) LVIV, Ukraine — Every kind of business in this restless pro-European stronghold near the border with Poland has an idea about how to make Ukraine like its more prosperous neighbor.

For Yaroslav Rushchyshyn, founder of a garment manufacturer, it is abolishing bizarre regulations that have had inspectors threatening fines for his handling of fabric remnants and for reporting financial losses.
For Andrew Pavliv, who runs a technology company, it is modernizing a rigid education system to help nurture entrepreneurs.
For Natalia Smutok, an executive at a company that makes color charts for paint and cosmetics, it meant starting an antibribery campaign, even though she is 36 weeks pregnant.
. . .
(p. B10) Victor Halchynsky, a former journalist who is now a spokesman for the Ukrainian unit of a Polish bank, said the divergence of the two countries was a source of frustration.
“It’s painful because we know it’s only happened because of policy,” he said, adding that while both countries had started the reform process, Poland “finished it.”
Ukraine has been held back by a number of policies. Steep energy subsidies have kept consumption high and left the country dependent on Russian gas, draining state coffers. Mr. Pavliv said the state university system, which he called “pure, pure Soviet,” was too inflexible to set up a training program for project managers, or to allow executives without specific certifications to teach courses. An agriculture industry once a Soviet breadbasket has been hurt by antiquated rules, including restrictions on land sales. Aggressive tax police have been used to shake down businesses.

For the full story, see:
DANNY HAKIM. “A Blueprint for Ukraine.” The New York Times (Fri., MARCH 14, 2014): B1 & B10.
(Note: ellipsis added.)
(Note: the online version of the story has the date MARCH 13, 2014.)

PavlivAndrewTechEntrepreneur2014-03-30.jpg “Andrew Pavliv, who runs a technology company, wants to help turn Lviv into a little Ukrainian Silicon Valley.” Source of caption and photo: online version of the NYT article quoted and cited above.

Edison Sold Half-Interest in Some Patents, to Fund His Inventing

Stross discusses Edison’s inventing at age 21:

(p. 8) Edison soon sought investors who would provide funds in exchange for half-interest in resulting patents.

Source:
Stross, Randall E. The Wizard of Menlo Park: How Thomas Alva Edison Invented the Modern World. New York: Crown Publishers, 2007.

If Lack of Focus and Poverty Go Together, Which Is the Cause and Which the Effect?

ScarcityBK2014-03-06.jpg

Source of book image: http://www.scientificamerican.com/sciam/cache/file/BF860CC7-371A-46BB-8ACCECD4289565A8.jpg

Are the poor poor partly because they concentrate less, or do they concentrate less partly because they are poor? Samantha Power discusses one of her favorite books of 2013:

(p. C11) In “Scarcity,” Sendhil Mullainathan and Eldar Shafir offer groundbreaking insights into, among other themes, the effects of poverty on (p. C12) cognition and our ability to make choices about our lives. The authors persuasively show that the mental space–or “bandwidth”–of the poor is so consumed with making ends meet that they may be more likely to lose concentration while on a job or less likely to take medication on time.

For the full article, see:
“12 Months of Reading; We asked 50 of our friends–from April Bloomfield to Mike Tyson–to name their favorite books of 2013.” The Wall Street Journal (Sat., Dec. 14, 2013): C6 & C9-C12.
(Note: the online version of the article has the date Dec. 13, 2013.)

The book that Power praises is:
Mullainathan, Sendhil, and Eldar Shafir. Scarcity: Why Having Too Little Means So Much. New York: Times Books, 2013.

Paul Ryan Warns that the Safety Net Can Be a Hammock

(p. A21) . . . Mr. Ryan said two years ago: “We don’t want to turn the safety net into a hammock that lulls able-bodied people to lives of dependency and complacency, that drains them of their will and their incentive to make the most of their lives.”

For the full commentary, see:
Krugman, Paul. “The Hammock Fallacy.” The New York Times (Fri., MARCH 7, 2014): A21.
(Note: ellipsis added.)
(Note: the online version of the commentary has the date MARCH 6, 2014.)

The original source of the Paul Ryan quote appears to be:
“Paul Ryan Wants ‘Welfare Reform Round 2’.” The Huffington Post (posted 03/20/2012).

Ryan made similar comments in his January 25th official Republican response to the State of the Union speech:

We are at a moment, where if government’s growth is left unchecked and unchallenged, America’s best century will be considered our past century. This is a future in which we will transform our social safety net into a hammock, which lulls able-bodied people into lives of complacency and dependency.

Depending on bureaucracy to foster innovation, competitiveness, and wise consumer choices has never worked — and it won’t work now.

Source:
NPR transcript of Paul Ryan response, January 25, 2011.

Edison Helped Us See the Light

WizardOfMenloParkBK2014-03-24.jpg

Source of book image: http://www.strategy-business.com/article/07408i?pg=all

Several biographies of Thomas Edison have appeared in recent decades. One of the strengths of Randall Stross’ The Wizard of Menlo Park is that it emphasizes how Edison’s story is relevant to current issues in the economics of invention, entrepreneurship and technology.
In the next several weeks, I will quote some of the more thought-provoking stories and observations in the Stross book.

The Stross book is:
Stross, Randall E. The Wizard of Menlo Park: How Thomas Alva Edison Invented the Modern World. New York: Crown Publishers, 2007.

Sleep Is a Dishwasher that Cleans Toxic Proteins from the Brain

(p. E8) . . . a . . . recent finding published in Science magazine suggests that sleep cleans the brain of toxic proteins “like a dishwasher,” as one of the study’s authors put it.

For the full commentary, see:
MOLLY YOUNG. “Tapping Into a Goodnight.” The New York Times (Thurs., MARCH 6, 2014): E8.
(Note: ellipses added.)
(Note: the online version of the commentary has the date MARCH 5, 2014.)

The Science article mentioned above is:
Xie, Lulu, Kang Hongyi, Xu Qiwu, Michael J. Chen, Liao Yonghong, Meenakshisundaram Thiyagarajan, John O’Donnell, Daniel J. Christensen, Charles Nicholson, Jeffrey J. Iliff, Takano Takahiro, Rashid Deane, and Maiken Nedergaard. “Sleep Drives Metabolite Clearance from the Adult Brain.” Science 342, no. 6156 (Oct. 18, 2013): 373-77.

“Babies Are Smarter than You Think”

JustBabiesBK2014-03-06.jpg

Source of book image: http://www.washingtonpost.com/rf/image_296w/2010-2019/WashingtonPost/2013/12/19/Outlook/Images/booksonbooks0031387485124.jpg

Harvard psychologist Steven Pinker discusses a favorite book of 2013:

(p. C11) . . . , babies are smarter than you think, and their cognitive and moral lives, revealed by ingenious experimental techniques, show that fairness, empathy and punitive sentiments have deep roots in human development. Paul Bloom’s “Just Babies” illuminates this research with intellectual rigor and a graceful, easygoing style.

For the full article, see:
“12 Months of Reading; We asked 50 of our friends–from April Bloomfield to Mike Tyson–to name their favorite books of 2013.” The Wall Street Journal (Sat., Dec. 14, 2013): C6 & C9-C12.
(Note: ellipsis added.)
(Note: the online version of the article has the date Dec. 13, 2013.)

The book that Pinker praises is:
Bloom, Paul. Just Babies: The Origins of Good and Evil. New York: Crown Publishers, 2013.