artdiamondblog.com – Page 582 – Art Diamond's web log

“Freedom and Prosperity Are Highly Correlated”

Source of graph: http://www.heritage.org/Press/ALAChart/images/ALC_017_index_econ_freedom_3col_c.jpg

(p. A13) . . . the evidence is piling up that neither government nor multilateral spending on education and infrastructure are key to development. To move out of poverty, countries instead need fast growth; and to get that they need to unleash the animal spirits of entrepreneurs.

Empirical support for this view is presented again this year in The Heritage Foundation/The Wall Street Journal Index of Economic Freedom, released today. In its 14th edition, the annual survey grades countries on a combination of factors including property rights protection, tax rates, government intervention in the economy, monetary, fiscal and trade policy, and business freedom.

The nearby table shows the 2008 rankings but doesn’t tell the whole story. The Index also reports that the freest 20% of the world’s economies have twice the per capita income of those in the second quintile and five times that of the least-free 20%. In other words, freedom and prosperity are highly correlated.

For the full commentary, see:

MARY ANASTASIA O’GRADY. "The Real Key to Development." The Wall Street Journal (Tues., January 15, 2008): A13.

(Note: ellipsis added.)

Source of table: online version of the WSJ article quoted and cited above.

“More Effective Economics Training Would Yield Enormous Dividends”

Source of the cartoon: online version of the NYT commentary cited below.

I agree with Franks, in the commentary excerpted below, that there is much room for improvement in the teaching of principles of economics. But I doubt that economics is alone in the dismal performance of students, six months after having completed the course.

My own views on improving the principles course, by including more content related to innovation and entrepreneurship, can be found in my article referenced at the end of this entry.

WHEN I began teaching economics in the 1970s, I noticed that people were generally disappointed when they learned what I did for a living. When I began asking why, many said something like this: “I took Econ 101 years ago, and there were all those horrible equations and graphs.”

Their unpleasant memories were apparently justified. Studies have shown that when students are tested about their knowledge of basic economic principles six months after completing an introductory economics course, they score no better, on average, than those who never took the course.

In other sectors of the economy, such dismal performance might provoke malpractice suits. But in the university system, students and their parents put up with this situation year after year.

. . .

Given the importance of the economic choices we confront, both as individuals and as a society, more effective economics training would yield enormous dividends. And in light of the low bar established by traditional courses, there seems little risk in trying something different.

For the full commentary, see:

ROBERT H. FRANK. "Economic View; The Dismal Science, Dismally Taught." The New York Times, SundayBusiness Section (Sun., August 12, 2007): 4.

(Note: ellipsis added.)

For my article on how to improve the principles course, see:

"The Neglect of Creative Destruction in Micro-principles Texts." History of Economic Ideas 15, no. 1 (2007): 197-210.

Scientists at Private Firms Publish More Research Than Expected

Dr. Terence Kealey is currently Vice-Chancellor at England’s only private university, the University of Buckingham. Source of photo: http://www.buckingham.ac.uk/publicity/academics/vc.html

Terence Kealey argues that science would be better done if it were all privately done, without government support. As you might expect, Kealey has not won any popularity contests among those receiving government support.

At the January American Economic Association (AEA) meetings in New Orleans, I heard a paper by Belenzon and Patacconi that presented evidence that scientists at private firms publish more research than Belenzon and Patacconi had expected to find.

Sounds like a bit of grist for Kealey’s mill?

The reference to the AEA paper is:

Belenzon, Sharon, and Andrea Patacconi. "Firm Size and Innovation: Evidence from European Panel Data." Presented at meetings of the American Economic Association. New Orleans, Jan., 4, 2008.

The reference to Kealey’s book is:

Kealey, Terence. The Economic Laws of Scientific Research. New York: St. Martin’s Press, 1996.

Environmentalists Find Something Else for Us to Feel Guilty About

Source of the cartoon: online version of the NYT article cited below.

(p. 1) In the last few months, bottled water — generally considered a benign, even beneficial, product — has been increasingly por-(p. 10)trayed as an environmental villain by city leaders, activist groups and the media. The argument centers not on water, but oil. It takes 1.5 million barrels a year just to make the plastic water bottles Americans use, according to the Earth Policy Institute in Washington, plus countless barrels to transport it from as far as Fiji and refrigerate it.

. . .

But even the noblest of intentions can wilt in the heat.

Dave Byers, 65, from Silver Spring, Md., discussed the issue with his wife, Pat, on the steps of the Metropolitan Museum of Art on a 90-degree Saturday. “I think it should be banned, actually,” he said of bottled water.

As he spoke, he and his wife shared a bottle of Poland Spring. They said they felt bad about it, but it was hot.

For the full story, see:

ALEX WILLIAMS. "Water, Water Everywhere, but Guilt by the Bottleful." The New York Times, SundayStyles Section (Sun., August 12, 2007): 1 & 10.

(Note: ellipsis added.)

More Choice Produces More Happiness

Source of book image: http://www.cambridge.org/catalogue/catalogue.asp?isbn=0521846951

At the AEA meetings in New Orleans I heard an excellent luncheon address on entrepreneurship by R. Glenn Hubbard, the former chair of Bush’s Council of Economic Advisers, and the current Dean of the Columbia Business School.

My ears especially perked up near the end, when he mentioned some survey research that showed that people have higher job satisfaction when they have more choice. He thought that this suggested that a society with more entrepreneurs would be one with higher job satisfaction, and suggested further, that this was a topic begging for further research.

The printed version of his talk, that he graciously sent me, does not have any full references to the survey research. But I’ve done some digging, and think that it’s highly likely that he’s referring to the extensive research of Ronald Inglehart and his colleagues.

I’m going to look into this more. In the meantime, an image of one of Inglehart’s most recent books appears above, and a relevant quote from that book appears below.

(p. 288) As we demonstrated in Chapter 6, opportunities for making autonomous choices are closely linked with human happiness. This association holds true in a systematic way that operates across cultures: in all cultural zones, societies that offer their people more room for choice produce higher levels of overall life satisfaction and happiness. A society’s level of subjective well-being is a strong indicator of the human condition, and it is systematically linked with freedom of choice.

Source:

Inglehart, Ronald, and Christian Welzel. Modernization, Cultural Change, and Democracy: The Human Development Sequence. New York: Cambridge University Press, 2005.

Reference to Hubbard luncheon address:

Hubbard, R. Glenn. "Nondestructive Creation: Entrepreneurship and Management Research in the Study of Growth." Paper presented at the Joint American Economic Association/American Finance Association Luncheon, New Orleans, Jan. 4, 2008.

Former French Socialist Lang: “Long Live Liberty! Long Live Life”

Lang on left; Sarkozy on right. Source of photo: online version of the NYT article quoted and cited below.

(p. A3) In the heat of the presidential campaign early this year, Jack Lang, a popular icon of the French left, accused Nicolas Sarkozy of ”trickery at the highest level,” ”anti-republican behavior” and — perhaps most cutting of all — being a ”Bush adapted for France.”

Now Mr. Lang, a former culture minister and education minister who served as campaign spokesman for the defeated Socialist candidate, Ségolène Royal, is the latest leading Socialist to defect to the Sarkozy camp.

. . .

”Human relations have deteriorated in the Socialist Party,” Mr. Lang told the left-leaning daily Libération last week. ”Today I don’t feel happy in this house.”

He accused the party of self-destruction, by casting out those who choose to work outside its structure. ”I am liberated,” he said of his decision to leave the party leadership. ”They have helped me by allowing me to make a decision I should have made long ago. Long live liberty! Long live life.”

For the full story, see:

ELAINE SCIOLINO. "Socialist Quits French Left To Join Right." The New York Times (Thurs., July 19, 2007): A3.

(Note: ellipsis added.)

“The Tender Ship” is a Great, but Unknown, Book

Source of book image: http://www.amazon.com/gp/product/081763312X/ref=cm_rdp_product

Many years ago, I presented a paper on polywater at a conference at VPI (now called "Virginia Tech"). An old man in the audience came up to me afterwards, and told me about a book he had written called The Tender Ship. It sounded intriguing so eventually I bought a copy and read it.

It is well-written, creative, and rich with examples.

The central thesis is that the government usually is not very good at directing technology.

The book reference is:

Squires, Arthur M. The Tender Ship: Government Management of Technological Change. Boston, Massachusetts: Birkhauser, 1986.

Newfoundland Benefits from Global Warming

"An iceberg as seen off the coast of Twillingate in Newfoundland." Source of caption and photo: online version of the WSJ article quoted and cited below.

(p. B1) Up and down the rock-ribbed coast of Newfoundland in centuries-old fishing villages like this one, Americans and Europeans are taking advantage of a warming climate and a struggling regional economy to buy seaside summer homes for the price of a used SUV.

. . .

In Twillingate, at least 17 inns and bed-and-breakfasts regularly book Americans and Europeans, up from just two a decade ago. The tourists come to watch the shimmering procession of icebergs the size of city blocks that calve off the coast of Greenland and ride the Labrador Current past town between May and July. After the icebergs are gone, the waters fill with humpback, right and fin whales that spend summer feeding offshore.

. . .

Climate change is attracting some of the tourism. The average temperature during the summers in Newfoundland and Labrador has increased by nearly four degrees Fahrenheit over the past 20 years, says David Phillips, the Canadian government’s senior climatologist. From 2001 through 2005, there were an average of 123 days when the weather was 77 degrees or warmer. In 1991-1995, it averaged just 63 days. Over the last 50 years the growing season — the gap between winter’s last frost and autumn’s first — has widened by three weeks.

. . .

Some Americans have begun to try to flip properties. New York artist Brian Byrne (sic) and his business partner bought a waterfront, six-bedroom home two years ago for $72,000. Now they’re asking $170,000. "There’s a lot of potential up there for tourism," Mr. Byrne (sic) says.

For the full story, see:

Douglas Belkin. "Property Report; More Americans Warm Up To Homes in Newfoundland." The Wall Street Journal (Weds., August 8, 2007): B1.

(Note: ellipses added.)

Brian Bryne (sic), a New York City artist, along with a partner, bought this Newfoundland house as a speculative investment. Source of photo: online version of the WSJ article quoted and cited above.

Feds Force Us to Fluoresce, Causing Migraines and Epileptic Seizures

Source: screen capture from the CNN report cited below.

The new energy bill signed into law on Weds., Dec. 19, 2007, included a provision to force us all to fluoresce starting in 2012. In the CNN report cited below, Dr. Sanjay Gupta summarizes recent research suggesting that fluorescent bulbs cause a significant increase in the number of migraine headaches and epileptic seizures.

For the full story, see:

Dr. Sanjay Gupta. "Eco-bulbs and migraines." CNN Report. Posted online on January 4, 2008.

Source: screen capture from the CNN report cited above.

Putin’s Russia Portrays Stalin, Not as Monster, But as Strong Ruler

(p. 5) STALIN has undergone a number of transformations of his historical image in Russia, interpretations that say as much about the country’s current leaders as about the dictator himself.

In the West, Stalin is remembered for the numbers of his victims, about 20 million, largely his own citizens, executed or allowed to die in famines or the gulag. They included a generation of peasant farmers in Ukraine, former Bolsheviks and other political figures who were purged in the show trials of the 1930s, Polish officers executed at Katyn Forest, and Russians who died in the slave labor economy. Stalin’s crimes have been tied to his personality, cruelty and paranoia as well as to the circumstances of Russian and Soviet history.

While not denying that Stalin committed the crimes, a new study guide in Russia for high school teachers views his cruelty through a particular, if familiar, lens. It portrays Stalin not as an extraordinary monster who came to power because of the unique evil of Communism, but as a strong ruler in a long line of autocrats going back to the czars. Russian history, in this view, at times demands tyranny to build a great nation.

The text reinforces this idea by comparing Stalin to Bismarck, who united Germany, and comparing Russia in the 1930s under the threat of Nazism to the United States after 9/11 in attitudes toward liberties.

The history guide — titled “A Modern History of Russia: 1945-2006” — was presented at a conference for high school teachers where President Vladimir V. Putin spoke; the author, Aleksandr Filippov, is a deputy director of a Kremlin-connected think tank.

For the full commentary, see:

ANDREW E. KRAMER. "WORD FOR WORD | NEW RUSSIAN HISTORY; Yes, a Lot of People Died, but …" The New York Times , Week in Review section (Sun., August 12, 2007): 5.

(Note: ellipsis in title in original.)

“At First, We Were Laughing at Him”

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

Below are some excerpts from one of the unique, sometimes funny, sometimes inspiring, front page stories that are a signature feature of the Wall Street Journal.

Rupert Murdoch, the new owner of the WSJ, is rumored in the press to dislike stories such as the one quoted below. I hope the rumors are wrong.

(p. A1) MASITALA, Malawi — On a continent woefully short of electricity, 20-year-old William Kamkwamba has a dream: to power up his country one windmill at a time.

So far, he has built three windmills in his yard here, using blue-gum trees and bicycle parts. His tallest, at 39 feet, towers over this windswept village, clattering away as it powers his family’s few electrical appliances: 10 six-watt light bulbs, a TV set and a radio. The machine draws in visitors from miles around.

. . .

(p. A13) The contraption causing all the fuss is a tower made from lashed-together blue-gum tree trunks. From a distance, it resembles an old oil derrick. For blades, Mr. Kamkwamba used flattened plastic pipes. He built a turbine from spare bicycle parts. When the wind kicks up, the blades spin so fast they rock the tower violently back and forth.

Mr. Kamkwamba’s wind obsession started six years ago. He wasn’t going to school anymore because his family couldn’t afford the $80-a-year tuition.

When he wasn’t helping his family farm groundnuts and soybeans, he was reading. He stumbled onto a photograph of a windmill in a text donated to the local library and started to build one himself. The project seemed a waste of time to his parents and the rest of Masitala.

"At first, we were laughing at him," says Agnes Kamkwamba, his mother. "We thought he was doing something useless."

The laughter ended when he hooked up his windmill to a thin copper wire, a car battery and a light bulb for each room of the family’s main house.

The family soon started enjoying the trappings of modern life: a radio and, more recently, a TV. They no longer have to buy paraffin for lantern light. Two of Mr. Kamkwamba’s six sisters stay up late studying for school.

"Our lives are much happier now," Mrs. Kamkwamba says.

The new power also attracted a swarm of admirers. Last November, Hartford Mchazime, a Malawian educator, heard about the windmill and drove out to the Kamkwamba house with some reporters. After the news hit the blogosphere, a group of entrepreneurs scouting for ideas in Africa located Mr. Kamkwamba. Called TED, the group, which invites the likes of Al Gore and Bono to share ideas at conferences, invited him to a brainstorming session earlier this year.

In June, Mr. Kamkwamba was onstage at a TED conference in Tanzania. (TED stands for Technology Entertainment Design). "I got information about a windmill, and I try and I made it," he said in halting English to a big ovation. After the conference, a group of entrepreneurs, African bloggers and venture capitalists — some teary-eyed at the speech — pledged to finance his education.