artdiamondblog.com – Page 543 – Art Diamond's web log

Entrepreneurs Are the Main Source of Economic Growth

(p. 144) The reason the system of capitalism without capitalists is failing throughout most of Europe is that it misconceives the essential nature of growth. Poring over huge aggregations of economic data, economists see the rise to wealth as a slow upward climb achieved through the marginal productivity gains of millions of workers, through the slow accumulation of plant and machinery, and through the continued improvement of “human capital” by advances in education, training, and health. But, in fact, all these sources of growth are dwarfed by the role of entrepreneurs launching new companies based on new concepts or technologies. These gains generate the wealth that finances the welfare state, that makes possible the long-term investments in human capital that are often seen as the primary source of growth.

Source:
Gilder, George. The Spirit of Enterprise. 1 ed. New York: Simon and Schuster, 1984.

Experiments on Animal Genes Enthuses Longevity Researchers

“Charles Yogi, 89, a track & field athlete, is part of the Hawaii Lifespan Study.” Source of caption and photo: online version of the WSJ story quoted and cited below.

(p. A18) Based on animal experiments, gerontologists believe that one key to a healthy, longer lifespan may be found in a few master genes that affect cellular responses to famine, drought and other survival stresses. The more active these genes are, the longer an organism seems to survive — at least in the laboratory. Moreover, researchers are convinced that some genes may protect us against the risks of heart disease, diabetes, cancer and dementia.
. . .
Recent insights into the genetics of aging among simple organisms are stoking their enthusiasm. In January, for example, gerontologist Valter Longo at the University of Southern California reported that by altering two genes he made yeast that lived 10 times longer than normal. “We can really reprogram the lifespan of these organisms,” he said. In March, scientists at the University of Washington identified 15 genes regulating lifespan in yeast and worms that resemble genes found in humans. At least three companies are working independently on potential therapies based on the discovery that life span in mammals may be regulated partly by genetically controlled enzymes called sirtuins.

For the full story, see:
ROBERT LEE HOTZ. “Secrets of the ‘Wellderly’; Scientists Hope to Crack the Genetic Code of Those Who Live the Longest.” The Wall Street Journal (Fri., SEPTEMBER 19, 2008): A18.
(Note: ellipsis added.)

New Orleans Was and Will Be: “Disorganized, Impoverished, Violent, Screwed Up, Corrupt”

Dan Baum’s book has received some positive reviews, and sounds appealing. He admits to being a “partisan” of New Orleans, but note that even he knows that New Orleans’ problems are primarily due to the people and institutions of New Orleans, and not primarily due to the weather or to George W. Bush.

Widely celebrated as one of those outsiders who gets New Orleans, the writer Dan Baum appeared at Octavia Books Tuesday night and found himself having to account for disparaging remarks he’d made about the city days before.

The crowd was at the bookstore to celebrate Baum’s book, “Nine Lives: Death and Life in New Orleans,” a book drawing lots of attention for its compassionate portrayal of New Orleans through the lives of nine residents chosen by the author.
But before much could be said about the book, Baum was asked about an interview that had been broadcast on NPR Marketplace. He had said so many good things about the city that host Kai Ryssdal asked him, “Do you worry that maybe you’ve been too captivated by New Orleans to see the destruction?”
Baum answered, “I’m a partisan. I’ll admit it. I love the city. People ask me, ‘What’s going to happen to New Orleans?’ And I say, look, you know I think that in 10 or 15 years New Orleans will be the disorganized, impoverished, violent, screwed up, corrupt city it was before the storm and that’s really the way they want it.”

Source is online version of:
“Author’s gaffe hurts the ones he loves.” Posted by Jarvis DeBerry, Columnist, The Times-Picayune February 22, 2009 1:00AM

Myhrvold Claims His Patent Purchases Benefit Small-Time Inventors

Source of graph: online version of the WSJ article quoted and cited below.

(p. A1) Millionaire Nathan Myhrvold, renowned in the computer industry as a Renaissance man, has a less lofty message for tech companies these days: Pay up.

Over the past few years, the former Microsoft Corp. executive has quietly amassed a trove of 20,000-plus patents and patent applications related to everything from lasers to computer chips. He now ranks among the world’s largest patent-holders — and is using that clout to press tech giants to sign some of the costliest patent-licensing deals ever negotiated.
. . .
(p. A21) Mr. Myhrvold says the fact he doesn’t make actual products is irrelevant. He stresses that Intellectual Ventures helps small-time inventors by providing them with an aggressive buyer to sell their patents to.
Intellectual Ventures, which has about $5 billion under management, bears some similarities to a private-equity firm that operates investment funds for the benefit of investors. However, its largest fund has an unusual structure in which fund investors are also responsible for the lion’s share of the fund’s returns.
It works like this: Technology companies agree to pay patent-licensing fees to inoculate themselves against potential lawsuits by Intellectual Ventures. These fees are how the fund generates its returns. As part of the deal, though, these same companies also put up the cash Mr. Myhrvold uses to buy more patents, receiving an equity stake in the fund in return.

For the full story, see:

AMOL SHARMA and DON CLARK. “Tech Guru Riles the Industry By Seeking Huge Patent Fees.” The Wall Street Journal (Weds., SEPTEMBER 17, 2008): A1 & A21.
(Note: ellipsis added.)

“Nathan Myhrvold’s message for tech firms: Pay up.” Source of caption and photo: online version of the WSJ article quoted and cited above.

“Capitalism without Capitalists”

(p. 131) . . . suffusing all the most visionary and idealistic prose of leftist economics is the same essential dream of the same static and technocratic destiny: capitalism without capitalists. Wealth without the rich, choice without too many things to choose, political and intellectual freedom without a vulgarian welter of individual money and goods, a social revolution every week or so without all this disruptive enterprise.

Source:
Gilder, George. The Spirit of Enterprise. 1 ed. New York: Simon and Schuster, 1984.
(Note: ellipsis added.)

Did Bourgeois Victorians, or Bloomsbury Rebels, Treat Servants Better?

Source of book image: http://images.barnesandnoble.com/images/27400000/27406153.jpg

(p. W14) Like Lytton Strachey, John Maynard Keynes and others in the Bloomsbury group, Woolf came from a well-to-do Victorian family living in a large house. When her family woke in the morning, the fires were already lit; while the family was out, the house was cleaned; when the family members arrived home, dinner was served. Part of Woolf’s rebellion against her patrimony was trying to free herself from the limitations placed on the education of women, on their sexual freedom, on their earning power. But another part, as Ms. Light reminds us, was trying to free herself from the strictures of a bourgeois household. As soon as possible, Virginia and her sister, Vanessa, wore simpler clothes, refused to change for dinner, had slighter meals at irregular times and rejoiced in clutter.

It’s not easy so to escape one’s class, however. When the daughters of Leslie and Julia Stephen left home after their father’s death in 1904, they took the household cook with them. And though they pursued busy bohemian lives thereafter — routinely challenging the legacy of Victorian propriety even as they married and set up households of their own — they preserved at least one assumption of privilege: They always had servants, whom they often passed around among themselves as their own needs and desires changed.

One of the ironies that emerges from Ms. Light’s book is that Woolf’s mother, a product of the Victorian age, treated her servants with both dignity and affection, and they were in turn devoted to her. Anybody who has read in Woolf’s diaries and letters, however, knows that she can be a dreadful snob, and worse. The shocking extent of her acrimonious journal entries about Nellie Boxall, her cook of 18 years — a “mongrel” and “rubbish,” according to Woolf — partly inspired Ms. Light’s book.

For the full review, see:

ALEXANDRA MULLEN. “BOOKS; Review; The Brooms of Bloomsbury.” The Wall Street Journal (Sat., SEPTEMBER 13, 2008): W14.

The book under review, see:
Light, Alison. Mrs. Woolf and the Servants. Bloomsbury Press, 2008.

No Fooling: Government Plants Dead Trees

(p. A25) Years ago, when I was a reporter, I remember getting a call from a woman in the Bronx who was screaming: “They’re over on Moshulu Parkway planting dead trees!”

A city work crew was, sure enough, digging holes along the side of the street and carefully sticking in brown and dried-up pieces of foliage. The men claimed the trees had simply lost their leaves for the winter — an explanation somewhat undermined by the fact that they were evergreens.
I’m telling you this because on Tuesday I was talking with a high-ranking Obama administration official about the stimulus plan. “There will be a dead tree planted, figuratively speaking,” he said somberly. “That will happen.”

For the full commentary, see:
GAIL COLLINS. “The Dead Tree Theory.” The New York Times (Thurs., February 25, 2009): A25.
(Note: the online version is dated Feb. 26, and has some substantial differences from the midwest print edition version I have, though there are only minor differences in the brief passages quoted above, which agree with my print copy.)

Congress Blocked Navy’s Grab of Radio Airwaves

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

(p. A15) “Hello Everybody!” is at its most valuable when it chronicles the early regulatory fights over the new medium. In the days after World War I, the Navy pushed hard for control of all “wireless” facilities, which were then used primarily used for point-to-point messaging. If the admirals had succeeded in that grab, which was blocked by Congress, the advent of broadcast radio would no doubt have been delayed and the industry might have developed more along the lines of European radio, with a great deal of government control.

For the full review, see:
RANDALL BLOOMQUIST. “”Bookshelf; A Journey Across the Dial.” The Wall Street Journal (Thurs., OCTOBER 9, 2008): A15.

The reference to the book under review, is:
Rudel, Anthony. Hello, Everybody! Orlando, FL: Houghton Mifflin Harcourt Publishing Company, 2008.

The Difference Between Shirts and Ideas

In the discussion of public goods, economists distinguish between rivalrous goods (like shirts) and non-rivalrous goods (like ideas). With a rivalrous good, if I consume the good, the good is no longer there for you to consume it. With a non-rivalrous good, we can both consume it at the same time.
Entrepreneur Wayne Copeland, Jr., as quoted by Gilder, states it with over-the-top exuberance:

(p. 127) “If you give a man your shirt, you no longer have it. That is the world before the integrated circuit. But if you give a man an idea, you both have it. That is the magic of the solid-state world; it is essentially an ever-expanding circuitry of ideas. A truth that sets us free . . .”

Source:
Gilder, George. The Spirit of Enterprise. 1 ed. New York: Simon and Schuster, 1984.
(Note: ellipsis in original.)

Vaclav Klaus: The Czech Republic’s Free Market Crusader

“President Vaclav Klaus of the Czech Republic is known for his economic liberalism.” Source of caption and photo: online version of the NYT article quoted and cited below.

(p. A6) To supporters, Mr. Klaus is a brave, lone crusader, a defender of liberty, the only European leader in the mold of the formidable Margaret Thatcher. (Aides say Mr. Klaus has a photo of the former British prime minister in his office near his desk.)
. . .
As a former finance minister and prime minister, he is credited with presiding over the peaceful 1993 split of Czechoslovakia into two states and helping to transform the Czech Republic into one of the former Soviet bloc’s most successful economies.
But his ideas about governance are out of step with many of the European Union nations that his country will lead starting Jan. 1.
While even many of the world’s most ardent free marketeers acknowledged the need for the recent coordinated bailout of European banks, Mr. Klaus lambasted it as irresponsible protectionism. He blamed too much — rather than too little — regulation for the crisis.
A fervent critic of the environmental movement, he has called global warming a dangerous “myth,” arguing that the fight against climate change threatens economic growth.
. . .
Those who know Mr. Klaus say his economic liberalism is an outgrowth of his upbringing. Born in 1941, he obtained an economics degree in 1963 and was deeply influenced by free market economists like Milton Friedman.
Mr. Klaus’s son and namesake, Vaclav, recalled in an interview that when he was 13, his father told him to read Aleksandr Solzhenitsyn to better understand Communism’s oppressiveness.
“If you lived under communism, then you are very sensitive to forces that try to control or limit human liberty,” he said in an interview.

For the full story, see:
DAN BILEFSKY. “A Fiery Czech Is Poised to Be the Face of Europe.” The New York Times (Tues., November 25, 2008): A6.
(Note: ellipses added.)

“Government Interventions Only Prolonged the Crisis”

The comments of Maart Laar, former prime minister of Estonia, are worth considering:

(p.A13) It is said that the only thing that people learn from history is that people learn nothing from history. Looking at how the world is handling the current economic crisis, this aphorism appears sadly true.

World leaders have forgotten how the collapse of Wall Street in 1929 developed into a world-wide depression. It happened not thanks to market failures but as a result of mistakes made by governments which tried to protect their national economies and markets. The market was not allowed to make its corrections. Government interventions only prolonged the crisis.
We may hope that, even as we see several bad signs of neo-interventionist attitude, all the mistakes of the 1930s will not be repeated. But it is clear that the tide has turned again. Capitalism has been declared dead, Marx is honored, and the invisible hand of the market is blamed for all failures. This is not fair. Actually it is not markets that have failed but governments, which did not fulfill their role of the “visible hand” — creating and guaranteeing market rules. Weak regulation of the banking sector and extensive lending, encouraged by governments, are examples of this failure.

For the full commentary, see:
MART LAAR. “Economic Freedom Is Still the Best Policy.” Wall Street Journal (Fri., FEBRUARY 13, 2009): A13.