artdiamondblog.com – Page 576 – Art Diamond's web log

Motive Power Really Does Matter: More on Why Africa is Poor

“A crowded train traveling through Katanga Province. Goods and people are crammed in, and bathrooms are used for storage.” Source of caption and photo: online version of the NYT article quoted and cited below.

(p. A4) In large swaths of Congo, a vast country the size of Western Europe, roads are impassable or nonexistent, large riverboats no longer ply the waterways and air travel is prohibitively expensive, leaving many people to rely on an increasingly dangerous railway system long past its prime.
Fresh from its first democratic elections in nearly 50 years and still struggling to emerge from civil war, Congo is trying to get its trains running again. But it has a long way to go.
. . .
The bathrooms in first class become filthy soon after a trip begins. In second and third class, the bathrooms are used for storage. In one car, five large bags of charcoal were stuffed into a bathroom, and people relieved themselves in buckets or out windows.
The railway employs over 13,000 people, but the last time paychecks were sent out was in May, and that was payment for the spring of 2005. So many employees do not go to work, and bribes are widespread.
“Sometimes it’s difficult to resist temptations,” said Agustín, the police chief at the Kamina station, who gave only his first name. “I do bad things.”
“I haven’t been paid in 29 months,” he added. “How am I supposed to send my children to school?”
Léon, a conductor and machinist who gave only his first name, thinks the problem begins in Kinshasa, the capital. “This is a state-owned company,” he said. “It’s bankrupt because of the government. The way things are going, we won’t last two years.”

For the full story, see:
WILL CONNORS. “Congo by Rail: Filthy, Crowded and Dangerous.” The New York Times (Tues., September 4, 2007): A4.
(Note: ellipsis added.)

“A train controller relays the position of a train to another station. Because pay is so infrequent, many employees do not go to work and bribes are widespread.” Source of caption and photo: online version of the NYT article quoted and cited above.

Co-Working in the Free Agent Nation

“Web entrepreneur Alex Hillman got together with a group of work-at-home businesspeople to create a hip space to work in Philadelphia.” Souce of caption and photo: online version of the Omaha World-Herald article quoted and cited below.

(p. 1D) “I always felt an obligation to the coffee shop. I was taking up precious space,” Hillman said. “I was definitely drinking more coffee than I should have, so I wasn’t sleeping.”

Even before he left his job, he had begun to learn about co-working, not to be confused with job-sharing, where two people take turns in the same stall in the cube farm.

Instead, think of co-working as an entrepreneurial version of parallel play, with owners of their own small businesses working side by side in a drop-in place that looks like a coffee cafe, minus the barista, with all the accoutrements of what’s hip: high ceilings, beer fridge, pool table and Internet access.

Paying as little as $175 a month, they mostly work on their own. But they also trade ideas, help solve problems, and move in and out of loose collaborations.

Today’s technology — wireless access, cell phones, BlackBerries and laptops — makes a mobile work force possible.

“I think when people work at home they have to come up with new ways to interact with people,” said Daniel H. Pink, one of the first authors to write about independent contractors in his 2001 book “Free Agent Nation.”

For the full story, see:

THE PHILADELPHIA INQUIRER. “Workplace; A step up from working in pj’s.” Omaha World-Herald (Monday, September 17, 2007): 1D & 2D.

The refererence to the Pink book is:

Pink, Daniel H. Free Agent Nation: How America’s New Independent Workers Are Transforming the Way We Live. New York: Warner Business Books, 2001.

Columbus Absolved of Bringing Lice-Borne Disease to Indians

“Braided hair is intact on a Peruvian mummy like those used in a study. Scientists say lice in the Americas predated Columbus.” Source of caption and photo: online version of the NYT article quoted and cited below.

(p. A10) When two pre-Columbian individuals died 1,000 years ago, arid conditions in the region of what is now Peru naturally mummified their bodies, as well as the lice in their long, braided hair.

That was all scientists needed, they reported Wednesday, to extract well-preserved louse DNA and establish that lice had accompanied their human hosts in the original peopling of the Americas, probably as early as 15,000 years ago. The DNA matched that of the most common type of louse known to exist worldwide now and also before Europeans colonized the New World.

The findings absolve Columbus of responsibility for at least one wrong unintentionally wrought on the people he found in the Americas and called Indians. The Europeans who followed Columbus to America may have introduced diseases, namely smallpox and measles, but not the most common of lice, as had been suspected.

For the full story, see:
JOHN NOBLE WILFORD. “Scientists Say Mummies’ Lice Show Pre-Columbian Origins.” The New York Times (Thurs., February 7, 2008): A10.

Controversial Patent Reform

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

(p. A3) The sweeping patent initiative — backed by a business coalition dominated by technology companies such as Cisco Systems Inc. and Microsoft Corp. — would . . . shift the balance of power of the U.S. patent system. It would make it a bit harder for holders to protect patents. Advocates of the legislation contend the current system encourages patent litigation and costly judgments against infringers — and stifles innovation. They say the proposals are designed to bring patent rules in line with the rapidly changing U.S. economy, where inventions often reflect hundreds of potentially patentable ideas.

Mark Chandler, Cisco’s general counsel, dismissed concerns that non-U.S. companies might gain some advantage by the bill. He said the proposed changes would strengthen companies at “the heart of innovation in the American economy,” better positioning them to compete at home and abroad.

Opponents of the legislation argue that it would make it easier for foreign competitors to legally copy patented methods and products.

For the full story, see:
GREG HITT. “Patent System’s Revamp Hits Wall; Globalization Fears Stall Momentum in Congress; AFL-CIO Sends a Letter.” The Wall Street Journal (Mon., August 27, 2007): A3.
(Note: ellipsis added.)

Bolivia Sells More Brazil Nuts Than Brazil

(p. A4) Throughout the 20th century, most of the Brazil nuts consumed around the world came from the jungle surrounding this bustling river market town in the eastern Amazon. But the bitter joke here these days is that the only place you can still find a Brazil nut tree is on the municipal seal.
To the chagrin of Brazilians, exports of the nuts that bear their country’s name have fallen precipitously to about 7,000 metric tons in 2003 from nearly 19,000 metric tons in 2000, allowing neighboring Bolivia to become the market leader. Groves of Brazil nut trees are disappearing all over the Brazilian Amazon, and the question of who bears responsibility for that sharp decline and resulting deforestation has become the subject of a heated and growing debate.
Economists, scientists and other scholars tend to point to a single family, based here, that has dominated the industry for three generations and controls hundreds of thousands of acres in this region at the junction of the Araguaia and Tocantins rivers. But members of the influential clan, called Mutran, say they are being unjustly attacked and complain of unfair competition and contraband.
. . .
”At their peak, the Mutrans had a monopoly on everything connected with the Brazil nut industry, from harvesting to transport to exports,” said Marilia Emmi, a professor at the Nucleus for Amazon Research at the Federal University of Pará. ”Much of their own production occurred on public lands that belonged to the state but were initially leased to them for a pittance as the result of backroom political deals.”
. . .
”Because of their monopoly, the Mutrans paid a price so low that production dropped off the map,” said Zico Bronzeado, a former Brazil nut harvester who now represents Acre in the lower house of Congress. The low prices drove growers to abandon the business, the critics say, selling their lands to loggers and cattle ranchers in a process that deforested vast stretches of the Amazon and further enriched the Brazilian elite.

For the full story, see:
LARRY ROHTER. “Marabá Journal; Brazil’s Problem in a Nutshell: Bolivia Grows Nuts Best.” The New York Times (Thurs., August 26, 2004): A4.
(Note: ellipses added.)

Kibbutzim Abandon Socialism

“Once for communal use, the Kibbutz Yasur swimming pool is now run as a private business.” Source of caption and photo: online version of the NYT article quoted and cited below.

(p. A1) KIBBUTZ YASUR, Israel — For much of Israel’s existence, the kibbutz embodied its highest ideals: collective labor, love of the land and a no-frills egalitarianism.

But starting in the 1980s, when socialism was on a global downward spiral and the country was mired in hyperinflation, Israel’s 250 or so kibbutzim seemed doomed. Their debt mounted and their group dining halls grew empty as the young moved away.

Now, in a surprising third act, the kibbutzim are again thriving. Only in 2007 they are less about pure socialism than a kind of suburbanized version of it.

On most kibbutzim, food and laundry services are now privatized; on many, houses may be transferred to individual members, and newcomers can buy in. While the major assets of the kibbutzim are still collectively owned, the communities are now largely run by professional managers rather than by popular vote. And, most important, not everyone is paid the same.

. . .

(p. A4) The kibbutzim were once austere communes of pioneers who drained the swamps, shared clothes (and sometimes spouses) and lived according to the Marxist axiom, “From each according to his ability, to each according to his needs.”

Today, most are undergoing a process of privatization, though kibbutz officials prefer a more euphemistic term: renewal.

. . .

Mr. Varol was born on a kibbutz in the far north, but he left at 18. He is at peace in his new home, but bitter about the past. “My parents worked all their lives, carrying at least 10 parasites on their backs,” he said. “If they’d worked that hard in the city for as many years, I’d have had quite an inheritance coming to me by now.”

For the full story, see:

ISABEL KERSHNER. “The Kibbutz Sheds Socialism And Regains Lost Popularity.” The New York Times (Mon., August 27, 2007): A1 & A4.

(Note: the online version of the article had the title: “KIBBUTZ YASUR JOURNAL; The Kibbutz Sheds Socialism And Regains Lost Popularity.”)

(Note: ellipses added.)

“The dining room in Kibbutz Nachshon charges members $4 per meal. While kibbutzim once paid all members equally and provided food, today many have adopted a system of varying wages and require payment for many services.” Source of caption and photo: online version of the NYT article quoted and cited above.

Unintended Consequences of the Government’s Pushing Ethanol

Source of graphs: online version of the NYT article quoted and cited below.

(p. C1) Shopping at a Whole Foods Market in suburban Chicago, Meredith Estes said food prices have jumped so much she has resorted to coupons. Charles T. Rodgers Jr., an Arkansas cattle rancher, said normal feed rations so expensive and scarce he is scrambling for alternatives. In Oregon, Jack Joyce, the owner of Rogue Ales, said the cost of barley malt has soared 88 percent this year.

For years, cheap food and feed were taken for granted in the United States.
But now the price of some foods is rising sharply, and from the corridors of Washington to the aisles of neighborhood supermarkets, a blame alert is under way.
Among the favorite targets is ethanol, especially for food manufacturers and livestock farmers who seethe at government mandates for ethanol production. The ethanol boom, they contend, is raising corn prices, driving up the cost of producing dairy products and meat, and causing farmers to plant so much corn as to crowd out other crops.
The results are working their way through the marketplace, in this view, with overall consumer grocery costs up roughly 5 percent in a year and feed costs up more than 20 percent.
Now, with Congress poised to adopt a new mandate that would double the volume of ethanol made from corn, ethanol skeptics say a fateful moment has arrived, with the nation about to commit itself to decades of competition between food and fuel for the use (p. C4) of agricultural land.
(p. C4) “This is like a runaway freight train,” said Scott Faber, a lobbyist for the Grocery Manufacturers Association, who complained that ethanol has the same “magical effect” on politicians as the tooth fairy and Santa Claus have on children. “It’s great news for corn farmers, but terrible news for consumers.”
. . .
The price increases for corn have had a broad impact, both because farmers are planting more corn and less of other crops and because livestock producers are scrambling for feed substitutes. For instance, soybeans acreage planted this year was about 16 percent less than in 2006.
Feed costs have increased 25 to 30 percent in the last year, according to David Fairfield, director of feed services at the National Grain and Feed Association. He attributed virtually all of the increase to the demands of the ethanol industry
One consequence of the higher feed costs is rising competition for malt barley between livestock farmers, who want it for feed, and brewers, who need it for beer. Mr. Joyce, the Rogue Ales owner in Newport, Ore., said he has been forced to raise prices to pay for the additional costs of ingredients.
Mr. Rodgers, the Rison, Ark., rancher, said he used to feed his cattle a mixture of corn gluten and soybean hulls. But he said he cannot get corn gluten anymore, and the cost of soybean hulls has risen to $150 a ton from about $105 a ton.

For the full story, see:
ANDREW MARTIN. “The Price of Growing Fuel.” The New York Times (Tues., December 18, 2007): C1 & C4.
(Note: ellipsis added.)

“Jack Joyce, the owner of Rogue Ales in Newport, Ore., says the cost of barley has skyrocketed, forcing him to raise prices.” Source of caption and photo: online version of the NYT article quoted and cited above.

Median Household Income Rose, and Poverty Rate Fell, in 2006

Source of graphic: online version of the NYT article quoted and cited below.

(p. A1) . . . slight improvements in household income and a drop in the poverty rate came during a period of job growth, particularly toward the end of 2006, and declining inflation as a result of falling oil prices. . . .

Some Republicans seized on the new data as evidence that Bush administration policies had been good for people’s pocketbooks. In a statement, President Bush said the news was a sign that Congress should not raise taxes. The data, he said, confirmed “that more of our citizens are doing better in this economy, with continued rising incomes (p. A14) and more Americans pulling themselves out of poverty.”

. . .

Over all, the nation’s median household income rose to $48,201 in 2006, from $47,845 in 2005. It was the second consecutive year in which income rose slightly faster than inflation, after five years of decline.

Douglas J. Besharov, a resident scholar at the American Enterprise Institute, a conservative research group, said that while the year-to-year increase in household income was small, the broader picture over the last few decades was more promising and more important.

“Over all,” Mr. Besharov said, “a lot of groups have done better over the last 40 years.”

For the full story, see:

ABBY GOODNOUGH. “Census Presents Mixed View of the Economy.” The New York Times (Weds., August 29, 2007): A1 & A14.

(Note: the online version of the article had the title: “Census Shows a Modest Rise in U.S. Income.”)

(Note: ellipses added.)

Incentives Matter: Capital Punishment Deters Murders

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

(p. A13) Recent high-profile events have reopened the debate about the value of capital punishment in a just society. This is an important discussion, because the taking of a human life is always a serious matter.
Most commentators who oppose capital punishment assert that an execution has no deterrent effect on future crimes. Recent evidence, however, suggests that the death penalty, when carried out, has an enormous deterrent effect on the number of murders. More precisely, our recent research shows that each execution carried out is correlated with about 74 fewer murders the following year.
For any society concerned about human life, that type of evidence is something that should be taken very seriously.
The study examined the relationship between the number of executions and the number of murders in the U.S. for the 26-year period from 1979 to 2004, using data from publicly available FBI sources. The chart nearby shows the number of executions and murders by year.

For the full commentary, see:
ROY D. ADLER and MICHAEL SUMMERS. “Capital Punishment Works.” The Wall Street Journal (Fri., November 2, 2007): A13.

Chinese Wages and Productivity Rise

“At the Dahon bicycle plant in Shenzhen, China, pay has risen 10 to 15 percent a year, but productivity gains have held down costs.” Source of caption and photo: online version of the NYT article quoted and cited below.

(p. A1) SHENZHEN, China, Aug. 28 — At the Dahon bicycle factory here, Zhang Jingming’s fingers move quickly and methodically — grabbing bicycle seats, wrapping them in cardboard and smoothly attaching them to frames.
Working a 45-hour week, Mr. Zhang makes the equivalent of $263 a month; as recently as February, he was making just $197. Some of his higher pay comes from working more efficiently. “When I first started, I wasn’t this fast,” he said.
But a good portion reflects a raise Mr. Zhang got: to 1.45 cents for each bicycle seat from 1.32 cents. It is a small difference that signifies major change.
Chinese wages are on the rise. No reliable figures for average wages exist; the government’s economic data are notably unreliable. But factory owners and experts who monitor the nation’s labor market say that businesses are having a hard time finding able-bodied workers and are having to pay the workers they can find more money.
And higher wages in China are likely to lead to higher prices in the United States — at the mall, at the grocery, even at the gas pump.
Chinese companies are already passing along some of their higher costs to overseas customers. Prices for goods from China, after years of gradual decline, have risen 1.2 percent since February, according to the Labor Department. July’s increase was the biggest yet: 0.4 percent compared with June. Chinese companies and contractors are also passing on the cost of the rising value of their currency, the yuan, up 8.8 percent against the dollar in the last two years.
For decades, many labor economists said that China’s vast population would supply a nearly bottomless pool of workers. So many people would be seeking jobs at any given time, this rea-(p. A9)soning went, that wages in this country would be stuck just above subsistence levels. As recently as four years ago, some experts estimated that most of the perhaps 150 million underemployed workers in the countryside would be heading to cities.
Instead, sporadic labor shortages started to appear in 2003 at factories in the Pearl River delta of southeastern China. Now those shortages have spread to factories up and down the Chinese coast, specialists say.
. . .
(p. A9) The hardest variable to judge in China’s changing labor market is the pace of productivity growth. Since there are few reliable statistics, the best way to assess productivity is to look at individual factories like the Dahon operation here, which produces bicycles that collapse for easy storage.
David T. Hon, chief executive of the privately held Dahon Group, said that while he had been raising wages 10 to 15 percent a year, the average labor cost for each bicycle had actually edged downward. This is possible, he said, because sales are growing 30 percent a year and increasingly large-scale production has brought savings. The cost of engineering a new bicycle design, or handling the accounting and other back-office operations, is spread over more and more bicycles as production rises.

For the full story, see:
KEITH BRADSHER. “Wages Are on the Rise in China As Young Workers Grow Scarce.” The New York Times (Weds., August 29, 2007): A1 & A9.
(Note: ellipsis added.)

Source of graph: online version of the NYT article quoted and cited above.

Britain’s “Novel Immigration Problem”: Too Few Polish Immigrants

“Polish women selling sausages at the Borough Market in London. The British have also grown to enjoy Polish food.” Source of caption and photo: online version of the International Herald Tribune version of the article quoted and cited below.

(p. C1) LONDON, Oct. 18 — When Piotr Farbiszewski landed here three years ago, he had enough money in his pocket to live for two weeks.
A successful technology consultant in Warsaw, he and his wife, Ela, a schoolteacher, had come to London to try it on for size; if they liked it, they would stay. To earn money, he worked as a builder while she flipped hamburgers.
They decided that they liked London, and within a year, Mr. Farbiszewski was a senior programmer at a software company. In March, the couple bought a small terraced house outside London, where they plan to raise a family.
“We’re very happy here,” Mr. Farbiszewski, 31, said. “The quality of life is better, the economy is stronger, there is less bureaucracy, it’s a multicultural society and the lady in the supermarket will smile at me. People don’t smile at each other in Poland.”
The Farbiszewskis are small players in one of Europe’s most successful immigration stories. Since Poland joined the European Union in 2004 and Britain, unlike France and most other members, welcomed Polish workers, an estimated 1.1 million Poles, mainly young, have come to Britain. Today, they are the third-largest group of immigrants in the country, behind (p. C5) Irish and Indians.
Britain has benefited. On Tuesday, the Home Office estimated that immigration added £6 billion ($12.3 billion) to the nation’s economy last year. According to David Blanchflower of the Bank of England’s monetary policy committee, East European immigration has also reduced inflation pressure by increasing the supply of goods and services.
Indeed, Britain may soon face a novel immigration problem. As Poland’s economy has improved this year, immigration has slowed, which economists say could cause labor shortages in British industries.

For the full story, see:
JULIA WERDIGIER. “As the Poles Get Richer, Fewer Seek British Jobs.” The New York Times (Fri., October 19, 2007): C1 & C5.