artdiamondblog.com – Page 472 – Art Diamond's web log

Italy’s Dynastic Capitalism “Is Built Around Loyalty, Not Performance”

“Carlo Altomonte, an economist, says that “Italy’s problem isn’t that we have a lot of debt. It’s that we don’t grow.”” Source of caption and photo: online version of the NYT article quoted and cited below.

(p. 6) “I know that in the States, all Mediterranean countries get lumped together,” says Carlo Altomonte, an economist with Bocconi University in Milan. “But Italy’s problem isn’t that we have a lot of debt. It’s that we don’t grow.”
. . .
“There is no sense of what a market economy is in this country,” says Professor Altomonte. “What you see here is an incredible fear of competition.”
. . .
FIVE years ago, Francesco Giavazzi needed a taxi. Cabs are relatively scarce in Milan, especially at 5 a.m., when he wanted to head to the airport, so he called a company at 4:30 to schedule a pickup. But when he climbed into the cab half an hour later, he discovered that the meter had been running for more than 20 minutes, because the taxi driver had arrived soon after the call and started charging for (p. 7) his time. Allowed by the rules, but to Mr. Giavazzi, utterly unfair.
“So it was 20 euros before we started the trip to the airport,” recalls Mr. Giavazzi, who is an economics professor at Bocconi University. “I said, ‘This is impossible.’ ”
Professor Giavazzi later wrote an op-ed article denouncing this episode as another example of the toll exacted by Italy’s innumerable guilds, known by several names here, including “associazioni di categoria.” (These are different from unions, another force here, in that guilds are made up of independent players in a trade or profession who have joined to keep outsiders out and maintain standards, as opposed to representing employees in negotiations with management, as a union might.) Even baby sitters have associations in Italy.
The op-ed did not endear Professor Giavazzi to the city’s cab drivers. They pinned leaflets with his name and address at taxi stands around Milan and for the next five nights, cabs drove around his home, honking their horns.
“This is a country with a lot of rents,” says Professor Giavazzi, sitting in his office one recent afternoon, . . . “You need a notary public, it’s like 1,000 euros before you even open your mouth. If you’re a notary public in this country, you live like a king.”
For Mr. Barbera, as is true with every entrepreneur here, the prevalence and power of Italy’s guilds explains much of what is driving up costs. He says he must overspend for accountants, lawyers, truckers and other members of guilds on a list that goes on and on: “Everything has a tariff, and you have to pay.”
. . .
Italians, notes Professor Altomonte, are among the world’s heaviest consumers of bottled water. “Do you know why? Because the water in the tap comes from the government.”
The suspicion of Italians when it comes to extra-familial institutions explains why many here care more about protecting what they have than enhancing their wealth. Most Italians live less than a mile or two from their parents and stay there, often for financial benefits like cash and in-kind services like day care. It’s an insularity that runs all the way up to the corporate suites. The first goal of many entrepreneurs here isn’t growth, so much as keeping the business in the family. For a company to really expand, it needs capital, but that means giving up at least some control. So thousands of companies here remain stubbornly small — all of which means Italy is a haven for artisans but is in a lousy position to play the global domination game.
“The prevailing management style in this country is built around loyalty, not performance,” says Tito Boeri, scientific director at Fondazione Rodolfo Debenedetti, who has written about Italy’s dynastic capitalism.

For the full story, see:
DAVID SEGAL. “Is Italy Too Italian?” The New York Times (Sun., August 1, 2010): 1 & 6-7.
(Note: ellipses added.)
(Note: the online version of the article is dated July 31, 2010.)

“The clothier Luciano Barbera in his family’s “spa for yarn,” where crates of thread rest for months. Economists fear that such small-scale artisanship cannot sustain Italy’s economy forever.” Source of caption and photo: online version of the NYT article quoted and cited above.

U.S. Citizens Choose Cars for 99% of Trips

(p. 92) America is a car culture and has been for almost a century, the phrase “traffic jam” dating to 1910, meaning we’re stuck with car culture for the time being. In the United States, the number of trips taken on public transportation has since 1998 been rising more rapidly than trips taken in cars. But public transportation nevertheless cannot be a cure-all for traffic congestion, since only a total of 1 percent of all U.S. trips occur on public transit. Double the share, which would require notable effort and capital expense, and it’s still only 2 percent. A car culture with a rising population and rising prosperity has little choice but to keep investing in roads and parking.

Source:
Easterbrook, Gregg. The Progress Paradox: How Life Gets Better While People Feel Worse. Paperback ed. New York: Random House, 2004.

Some “Professors Are Oblivious to the Costs of Complex Procedures”

Source of book image: http://si.wsj.net/public/resources/images/ED-AK828_book01_DV_20100114190709.jpg

(p. 30) Champions of the market can turn up in the oddest places. At the same time that bankers and businessmen are acknowledging the downsides of unregulated capitalism, college and university reformers are urging the academy to more closely embrace the marketplace.

Amid the raft of new books on the failings of higher education, some challenge the longtime separation between ivy-covered idealists and real-world demands. Scholarly disdain for getting and spending, they argue, has caused serious trouble both in the classroom and in the budget office.
In his slim book “The Marketplace of Ideas,” Louis Menand, an English professor at Harvard and a Pulitzer Prize-winning author, offers to answer a few questions about the humanities, like why professors all seem to have similar politics and why it is so difficult to implement a core curriculum.
. . .
Mr. Garland also wants to bring some market discipline to the culture of academia. While professors tend to be progressives, they are stubbornly conservative when it comes to change. Indeed, as Mr. Menand points out, early reformers argued that the only way to elevate excellence above profits in a capitalist society was by protecting the profession from the market’s insistence on cash rewards.
The result, Mr. Garland maintains, is that professors are oblivious to the costs of complex procedures, drawn-out debates and layers of committees; appeals to increase efficiency and productivity are routinely scorned.

For the full review, see:

PATRICIA COHEN. “Books; Reform; Embracing the Marketplace.” The New York Times, Education Life Section (Sun., January 3, 2010): 30.
(Note: ellipsis added.)
(Note: the online version of the review has the date December 29, 2009.)

First book discussed in review:
Menand, Louis. The Marketplace of Ideas: Reform and Resistance in the American University. Edited by Henry Louis Gates Jr., Issues of Our Time. New York: W. W. Norton & Company, 2010.

Second book discussed in review:
Garland, James C. Saving Alma Mater: A Rescue Plan for America’s Public Universities. Chicago: University Of Chicago Press, 2009.

Source of book image: https://www.stanford.edu/group/cubberley/files/images/SavingAlmaMater.preview.jpg

Socialism Is “Morally Corrupting”

On balance, Stephen Pollard believes that Claire Berlinski’s book on Thatcher is poorly written. But he does believe that Berlinski got one important point right:

(p. 22) She is quite right, . . . , to stress that Thatcher’s crusade against socialism was not merely about economic efficiency and prosperity but that above all, “it was that socialism itself — in all its incarnations, wherever and however it was applied — was morally corrupting.”

For the full review, see:
STEPHEN POLLARD. “Thatcher’s Legacy.” The New York Times Book Review (Sun., January 18, 2009): 22.
(Note: ellipsis added.)
(Norte: the online version of the review has the date January 16, 2009.)

Book reviewed:
Berlinski, Claire. There Is No Alternative: Why Margaret Thatcher Matters. New York: Basic Books, 2008.

For Rand Money Was a Reward and a Noble Means, But Her Vision Was the End

Source of book image:
http://2.bp.blogspot.com/_ZnmbvrcWaFQ/TQDZppbZS6I/AAAAAAAAAoM/CjtOtOuGYAM/s1600/ayn-rand-and-the-world-she-made.jpg

For Rand, adopting the dollar sign as a symbol was an ironic gesture–an elegant and graceful way of thumbing her nose at those who attacked the innovation and creativity of capitalism. They criticized a caricatured version of capitalism, and she threw the caricature back at them.
But at her most serious, money was never an end-in-itself for her, but rather a reward for achieving creative innovation, and a means for accomplishing even more ambitious creative innovation.
Remember that in Rand’s pure and lyrical Anthem, the hero is willing to give his invention away, and even be killed, as long as the Council agrees to allow the light he invented to keep shining.
In that wonderful moment with Bennett Cerf, Ayn Rand lived up to the hero she had created:

(p. 8) When Bennett Cerf, a head of Random House, begged her to cut Galt’s speech, Rand replied with what Heller calls “a comment that became publishing legend”: “Would you cut the Bible?” One can imagine what Cerf thought — he had already told Rand plainly, “I find your political philosophy abhorrent” — but the strange thing is that Rand’s grandiosity turned out to be perfectly justified.

In fact, any editor certainly would cut the Bible, if an agent submitted it as a new work of fiction. But Cerf offered Rand an alternative: if she gave up 7 cents per copy in royalties, she could have the extra paper needed to print Galt’s oration. That she agreed is a sign of the great contradiction that haunts her writing and especially her life.
. . .
Yet while Rand took to wearing a dollar-sign pin to advertise her love of capitalism, Heller makes clear that the author had no real affection for dollars themselves. Giving up her royalties to preserve her vision is something that no genuine capitalist, and few popular novelists, would have done.

For the full review, see:
ADAM KIRSCH. “Capitalist With a $.” The New York Times Book Review (Sun., November 1, 2009): 1 & 8.
(Note: ellipsis added.)
(Note: the online version of the review is dated October 29, 2009 and has the title “Ayn Rand’s Revenge.”)

Book reviewed:
Heller, Anne C. Ayn Rand and the World She Made. New York: Nan A. Talese/Doubleday, 2009.

Here is what the hero says in the key passage of Anthem:

“Our brothers! Your are right. Let the will of the Council be done upon our body. We do not care. But the light? What will you do with the light?” (p. 72)

Source:
Rand, Ayn. Anthem. Caldwell, Idaho: The Caxton Printers, Ltd., 1946.

Cars Increase Our “Personal Area”

(p. 89) Cars are the primary reason for the ever increasing “personal area” of Western life. As Jesse Ausubel of Rockefeller University has shown, “personal area”–the volume of territory through which someone moves in a typical day–has risen tenfold in the West since 1950, mainly because “personal speed” has tripled. Before general ownership of cars, most people were limited on most days to destinations to which the could walk, or that were close to bus or streetcar lines. Now most people head to whatever destination they wish, so long as traffic jams don’t intervene. Ausubel has found that the “personal speed” of typical Americans has been rising at about 2.7 percent per annum for a generation; at that rate, the “personal area” the typical individual covers per day doubles every twenty-five years. Racing around from one destination to the next–job, school, stores, gym, restaurant, church–may be stressful. But the fact that people are increasingly able to choose where they want to be, and choose when they want to be there, ¡s an addition to personal (p. 90) freedom. Cars are what make “personal speed” and “personal area” possible, and we wouldn’t love them so much were they not so damn convenient in this regard.

Aspects of car culture are unsettling, however. Speed and convenience in transit, for example, don’t necessarily translate into a more pleasing life. “The mobility of the private car has the paradoxical effect of lengthening how far people go rather than saving them time,” Alan Durning has written.

Source:
Easterbrook, Gregg. The Progress Paradox: How Life Gets Better While People Feel Worse. Paperback ed. New York: Random House, 2004.

If Countries Have Souls “Then America’s Is the Patent System”

Source of book image: http://yourbooksworld.com/images/Biographies/mr-gatlings-terrible-marvel.jpg

(p. 46) [Julia Keller] discusses Lincoln’s little-known interest in personally testing new Army weapons and, in a brilliant passage, rhapsodizes about creativity and the Patent Office: “If a country can be said to possess a soul, then America’s is the patent system: the simple, fair method of staking claim to a new idea and getting the chance to make money from it.”

For the full review, see:
MAX BYRD. “The Bullet Machine.” The New York Times Book Review (Sun., November 9, 2008): 46.
(Note: bracketed name added.)
(Note: the online version of the review is dated November 7, 2008.)

Book reviewed:
Keller, Julia. Mr. Gatling’s Terrible Marvel: The Gun That Changed Everything and the Misunderstood Genius Who Invented It. New York: Viking, 2008.

Huge “Green” Homes are “Monuments to Sanctimony”

(p. W9) In North Carolina, the owners of a 4,600-square-foot home that cost $1.2 million wanted it to be as “green” as possible, so they spent $120,000 on solar power.

In Colorado, using recycled materials, an architecture professor built a 4,700-square-foot home that uses geothermal heating and cooling and was on the market recently for $930,000.
And in Southern California, a husband-and-wife architect team who say that they “came of age during the ’60s and ’70s at U.C. Berkeley” also relied on recycled materials — in building a second home six hours from their primary residence.
By now these environmentally conscious “green” houses are a staple of home design magazines, where they are presented as exemplars of both good taste and good intentions. The Colorado house, for instance, has won awards from the state and the Colorado Renewable Energy Society and has appeared in the Washington Post and on Home and Garden TV.
The question, of course, is what on earth are all these people thinking? How “green” can huge and, in many cases, isolated houses be? Wouldn’t it be better to risk traumatizing the children by squeezing into a 3,000-square-foot home, especially one close to shopping, schools and work? How many less affluent, less guilt-ridden Americans can afford to build such environmental show houses?
These houses aren’t just ridiculous; they’re monuments to sanctimony.

For the full commentary, see:
DANIEL AKST. “Green House Gasbags.” The Wall Street Journal (Fri., January 13, 2006): W9.

Mickey Mouse: “A Little Fellow Trying to Do the Best He Could”

Source of book image: http://www.examiner.com/images/blog/EXID983/images/dancing_in_the_dark_by_morris_dickstein_250.jpg

(p. 17) After a fond, lingering look at “Shall We Dance” — Ginger Rogers and Fred Astaire in the spotlight, romancing to songs by George and Ira Gershwin — Dickstein sums up expertly: “Each number is a miniature of the movie, moving from singing alone, dancing alone, dancing with the wrong person, or dancing to the wrong music to making beautiful music together.” With his next breath he roughly reminds us of the context: “It’s the music, the dancing, that saves all this from familiar romantic cliché. As photography documents the Depression, dance countermands it.” And then he takes one more step back to give us an even broader view: “The culture of elegance, as represented by Astaire and the Gershwins, was less about the cut of your tie and tails than the cut of your feelings, the inner radiance that was one true bastion against social suffering. They preserved in wit, rhythm and fluidity of movement what the Depression almost took away, the high spirits of Americans, young and modern, who had once felt destined to be the heirs and heiresses of all the ages.” Sheer delight, pure escapism, serves its cathartic purpose — and it means something, too.

Which makes the omission of Walt Disney (his name doesn’t even appear in the index) all the more perplexing. Even if one rejects the provocative claim by the historian Warren Susman that “Mickey Mouse may in fact be more important to an understanding of the 1930s than Franklin Roosevelt,” it’s hard to deny Disney a place in the pantheon of the decade’s moviemakers, if only for “Snow White and the Seven Dwarfs” and “Fantasia.” Whether or not the cartoons that delighted ’30s audiences are complex works of art, they would have slotted nicely into several of Dickstein’s chapters. On the lookout for a cultural artifact that served to “lift sagging morale and stimulate optimism about the future”? Try any one of the dozens of animated shorts featuring that cartoon collective, Mickey, Donald Duck and Goofy. Every gag is an explosion of energy, and the whirligig of slapstick invention always ends happily, thanks to the orchestrated efforts of our heroes. Mickey, described by Disney as “a little fellow trying to do the best he could,” may have been born in the late ’20s, but he grew up a pure creature of the ’30s.

For the full review, see:
ADAM BEGLEY. “Side by Side .” The New York Times Book Review (Sun., September 27, 2009): 17.
(Note: the online version of the review is dated September 25, 2009.)

Book reviewed:
Dickstein, Morris. Dancing in the Dark: A Cultural History of the Great Depression. New York: W. W. Norton & Company, 2009.

“Would You Exchange Places with a Typical Person Living in Any Year Before Your Birth?”

(p. 80) Consider a thought experiment. If the means existed, would you exchange places with a typical person living in any year before your birth? Exchange places permanently–not, say observe the Battle of Hastings and then rematerialize in the present. You could pick the year and place in the past, but could not specify trading places with someone specific like Catherine the Great or Leonardo da Vinci, and you could not specify that you would he a lord or lady or hold some similar advantage. In this deal you’d he transported back to the year and society of your choosing to live out the rest of your life as an ordinary person.

A good guess is that hardly anyone in the United States or the European Union today would accept a one-way ticket to the everyday life of the past. The physical beauty of the world would be greater then, before the mixed blessing of development. And most moments in the past would be quieter than ours, though not necessarily less stressful–the lives of pioneer farmers for whom a crop loss meant destitution, or of seamstresses working fourteen-hour days in early industrial-era sweatshops and unable to afford more than tea and bread, were hardly (p. 81) serene. Nor was the quiet, small-town atmosphere of the past, which many today idealize, necessarily ideal. Everyone knew your name, but everyone also knew your secrets; men and especially women enjoyed much less personal freedom in small-town life of the past than is typical today.
For essentially all of human history until the last few generations, the typical person’s lot has been unceasing toil, meager living circumstances, uncertainty about food, rudimentary health care, limited education, little travel or entertainment; all followed by early death. (Keep in mind these remain the conditions under which more than a billion people live in the developing world today.) Even if you could somehow carry the benefits of modern medicine with you into the past–health care alone would make almost everyone decline the one-way ticket backward–the toil, low living standards, and isolated lives of past generations would seem awful to us compared to the sorts of things we complain about today.

Source:
Easterbrook, Gregg. The Progress Paradox: How Life Gets Better While People Feel Worse. Paperback ed. New York: Random House, 2004.

Affluence Has Made America More Libertarian

Source of book image: http://images.bookbyte.com/isbn.aspx?isbn=9780060747664

(p. 16) Various scolds and worrywarts have exclaimed, with Wordsworth, that “getting and spending, we lay waste our powers.” To such Jeremiahs, Lindsey provides an essentially cheerful, although not altogether so, counterpoint: affluence has made America a more libertarian, and hence a nicer, place.

First came material improvement. Until very recently, he notes, when people prayed for their daily bread, they often were praying for just that. Not so long ago, many ordinary lives of quiet desperation ended especially dismally: about 10 percent of burials in New York City in 1889 were in potter’s fields. In 1900, 1.75 million children between the ages of 10 and 15 — almost one-fifth of all children in that age cohort — were in the work force. Children provided one-fourth to one-third of the incomes for working-class families, which spent more than 90 percent of their household earnings on food, shelter and clothing. In 1900, Americans spent nearly twice as much on funerals as on medicine, and less than 2 percent of Americans took vacations.
. . .
Affluence, Lindsey writes, has provided “a mad proliferation of choices — and what, in the end, is freedom but the ability to choose?”

For the full review, see:
GEORGE F. WILL. “Land of Plenty.” The New York Times Book Review (Sun., June 10, 2007): 16-17.
(Note: ellipsis added.)

Book reviewed:
Lindsey, Brink. The Age of Abundance: How Prosperity Transformed America’s Politics and Culture. New York: HarperCollins, 2007.