Why Starbucks Coffee is a Bargain

 

(p. 161)  These coffee places, most of which didn’t even exist ten years ago, had several virtues.  They were always in convenient locations.  They permitted, even welcomed, patrons to sit and talk for several hours.  And they had tables for spreading out my materials and electrical outlets for plugging in my equipment.  In short, they provided a four-hour office rental for the price of a three-dollar latte.

. . .  

(p. 162)  Starbucks and its caffeinated cousins are part of what I call the free agent infrastructure.  The components of this infrastructure, which I’ll review in a moment, include copy shops, office supply superstores, bookstore cafés, overnight delivery services, executive suites, and the Internet.  Like America’s system of federal highways, the free agent infrastructures form the physical foundation on which the economy operates.  But unlike the federal highway system, which was planned and paid for by the government, this infrastructure emerged more or less spontaneously.  Like so many other aspects of Free Agent Nation, it is self-organized.  Nobody is in charge of it.  That’s why it woks.  It  works so well, in fact, that few people realize that this collection of commercial Establishments even constitutes an infrastructure.

 

Source:

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

 

Internet Transmits and Applies Libertarian Ideas

 

Source of book image:  http://ec1.images-amazon.com/images/P/1586483501.01._SS500_SCLZZZZZZZ_.jpg

 

Today the Internet has become, Mr. Doherty notes, an efficient way to transmit libertarian ideas and show their practical application. (With its decentralized, free-wheeling ethos, the Internet is itself libertarian without even trying to be.) Jimmy Wales, the man who started the interactive online encyclopedia Wikipedia, believes that "facts can help set the world free." The largest retail market in the world is eBay, which allows anyone to buy and sell without a government license.

Louis Rosetto, the "radical capitalist" who founded Wired magazine, notes that, even if libertarian ideas must now push against a statist status quo, "contrarians end up being the drivers of change." Among the most ornery contrarians, he says, are the libertarians "laboring in obscurity, if not in derision." They have managed "to keep a pretty pure idea going, adapting it to circumstances and watching it be validated by the march of history." Mr. Doherty has rescued libertarianism from its own obscurity, eloquently capturing the appeal of the "pure idea," its origins in great minds and the feistiness of its many current champions.

 

For the full review, see: 

JOHN H. FUND.  "BOOKSHELF; Free to Choose, and a Good Thing, Too."  The Wall Street Journal (Thurs., February 15, 2007):  D7.

 

Should Netscape Be Viewed as a Failed Company, or as a Successful Project?

 

(p. 53)  Recall the story of Netscape, once the darling of the New Economy.  Netscape was formed in 1994.  It went public in 1995.  And by 1999, it was gone, purchased by America Online and subsumed into AOL’s operation.  Life span:  four years.  Half-life:  two years.  Was Netscape a company—or was it really a project?  Does the distinction even matter?  What matters most is that this short-lived entity put several products on the market, prompted established companies (notably Microsoft) to shift strategies, and (p. 54) equipped a few thousand individuals with experience, wealth, and connections that they could bring to their next project.

And Netscape is not alone.  A University of Texas study found that between 1970 and 1992, the half-life of Texas businesses shrank by 50 percent.  Likewise, a Federal Reserve analysis of New York companies found that the type of firm that created the most new jobs (microbusineses with fewer than ten employees) often had the shortest life span.  The life cycle of companies has been that jobs, too, have diminishing half-lives.  Ten years ago, nobody ever heard of a Web developer.  Ten years from now, nobody may remember Web developers.

Most important, at the very moment the longevity of companies is shrinking, the longevity of individuals is expanding.  Unlike Americans in the twentieth century, most of us today can expect to outlive just about any organization for which we work.  It’s hard to imagine a lifelong job at an organization whose lifetime will be shorter–often much shorter–than your own.

 

Source:

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

 

Medicare Part D Privatization “Has Succeeded”

 

The author of the commentary excerpted below, won the Nobel Prize in economics in 2000. 

 

Last year, Medicare underwent a major expansion with the addition of Part D prescription drug coverage. A controversial feature of this new program was its organization as a market in which consumers could choose among various plans offered competitively by different insurers and HMOs, rather than the single-payer, single-product model used elsewhere in the Medicare system. Proponents of this design touted the choices it would offer consumers, and the benefits of competition for product quality and cost; opponents objected that consumers would be overwhelmed by the complexity of the market, and that it was unnecessarily generous to pharmaceutical and insurance companies.

Part D is a massive social experiment on the ability of a privatized market to deliver social services effectively. With the support of the National Institute on Aging, my research group has monitored consumer choices and outcomes from the new Part D market.  . . .

. . .

My overall conclusion is that, so far, the Part D program has succeeded in getting affordable prescription drugs to the senior population. Its privatized structure has not been a significant impediment to delivery of these services. Competition among insurers seems to have been effective in keeping a lid on costs, and assuring reasonable quality control. We do not have an experiment in which we can determine whether a single-product system could have done as well, or better, along these dimensions, but I think it is reasonable to say that the Part D market has performed as well as its partisans hoped, and far better than its detractors expected.

 

For the full commentary, see: 

DANIEL L. MCFADDEN.  "A Dog’s Breakfast."  The Wall Street Journal  (Fri., February 16, 2007):  A15.

(Note:  ellipses added.)

 

“Free Agent Nation” Still Rings True

 

   Source of book image:  http://g-ec2.images-amazon.com/images/G/01/ciu/10/ae/8ca3d250fca0f5b077de4010.L.jpg

 

Daniel Pink’s 2001 Free Agent Nation has been on my to-read list since it first came out.  It finally made it to the top—at least in the author-abridged two-cassette incarnation.

I always found the basic idea appealing:  the appeal of the freedom of working for yourself—Harry Browne’s How I Found Freedom in an Unfree World, but for real. 

But I also was a little anxious; fearful that the book would place too much emphasis on seeming flash-in-the-pan dot.com labor market phenomena and rhetoric.

To my relief, I can report that little in the book depends on the dot.com over-exuberance.  The internet appears, as an infrastructure enabler, but the free agents are mainly doing more standard stuff, but doing it from a home office, and doing it project-by-project.

Pink is not an academic, which has pros and cons.  One of the pros is that his prose is pleasant.  Another is that he has an ear for a good story and a telling example.  Perhaps a con is that he often hasn’t had the time, or the interest, (or maybe the data just don’t exist) to often follow-up with how widespread his examples are.

Still there’s some good stuff here.  Like suggesting that free agency is what you would expect more of us to pursue, as we work our way up Abraham Maslow’s hierarchy of human needs.  (In college I was enthused enough about Maslow that I was thinking of minoring in psychology, until they told me how many hours I would have to run rats through mazes before I’d be allowed to open a Maslow book.)

And there’s plausible discussion about how in some ways free agency is more secure than a regular job (multiple clients means diversification).  And there is more freedom to control your own time, and be your authentic self.

There’s also some good discussion of how the government makes free agency harder through health care and taxation policies.

All-in-all, this book helps make the case that labor can thrive in a Schumpeterian world of creative destruction.

 

Reference to the book:

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

 

The Best Case for Supporting a Tariff

 

I doubt the veracity of George Pendle’s humorous, but unkind, comment about Millard Fillmore’s views:

 

“His firm support for tariffs, . . . , seems to have been based on a misapprehension that a tariff was a long-legged marsh bird.”

 

Pendle is quoted in: 

THOMAS VINCIGUERRA.  "Why He Gets the Laughs."  The New York Times, Section 4  (Sun., March 18, 2007):  5.

(Note:  ellipsis added.)

 

Pendle’s forthcoming book, is:

Pendle, George.  The Remarkable Millard Fillmore: The Unbelievable Life of a Forgotten President.  Three Rivers Press, 2007.

 

DNA Scientist-Entrepreneur Venter at Sea

VenterSeaMap.jpg   The projected path of Venter’s Sorcerer II ship in collecting sea organisms.  Source of map:  http://scrippsnews.ucsd.edu/Releases/?releaseID=706

 

Craig Venter’s private gene-sequencing effort beat the government’s effort.  His new research is being funded by a $24.5 million private grant from the Gordon and Betty Moore Foundation.  (For more information beyond the WSJ article excerpted below, see the Scripps Institution of Oceanography press release.)

 

(p. B1)  Marine microbes are among the most abundant life form on the planet and among the most mysterious. Now, results from the first phase of a global expedition are expected to provide a glimpse into this long-hidden world while potentially leading to new drugs and even fighting climate change.

Craig Venter, the brash biologist who helped crack the human genome seven years ago, says he and other scientists have used DNA-analysis techniques to discover millions of new genes and thousands of new proteins in ocean microbes. These microscopic life forms are mainly bacteria and organisms known as archaea.

"Everything we’ve seen is a surprise," Mr. Venter said in a phone interview from his marine research vessel, Sorcerer II, in the Sea of Cortez. The unexpected variety of microbial DNA he’s found overturns earlier notions that the oceans are a homogenous soup of bacteria and other microscopic life. The details are being published today in the Public Library of Science Biology, an Internet-based scientific journal.

A diverse supply of microbial DNA from the oceans could be a rich lode for scientists. Drug companies are hunting for new compounds in sea creatures, especially to attack cancer and neurodegenerative diseases. The new data will also allow researchers to compare the DNA of oceanic bacteria to the genetic code of microorganisms that cause human disease.

"This is the largest DNA sequence ever obtained, and the magnitude of what’s being done is entirely unparalleled," said Douglas Bartlett, professor of marine microbiology at the University of California, San Diego, who isn’t involved in Dr. Venter’s project. Marine microbes "have all kind of metabolic activity. It is expected that [Dr. Venter’s team] will discover new pathways for making drugs and treating infectious disease."

 

For the full story, see: 

GAUTAM NAIK.  "Seafaring Scientist Sees Rich Promise In Tiny Organisms."  The Wall Street Journal  (Tues., March 13, 2007):  B1 & B5.

 

   Photo on left shows Venter (on left) on his Socerer II research ship.  Photo on right shows a slide of sea bacteria collected by Venter.  Source of photos:  http://scrippsnews.ucsd.edu/Releases/?releaseID=706

 

Commodity Trading Philistines Were Actually Not Very “Philistine”

  Inscriptions on Philistine pottery are being interpreted as evidence of a Philistine written language.  Source of photo:  online version of the NYT article cited below. 

 

Archaeologists have applied more polish to the long-tarnished reputation of the Philistines.

In recent years, excavations in Israel established that the Philistines had fine pottery, handsome architecture and cosmopolitan tastes. If anything, they were more refined than the shepherds and farmers in the nearby hills, the Israelites, who slandered them in biblical chapter and verse and rendered their name a synonym for boorish, uncultured people.

Archaeologists have now found that not only were Philistines cultured, they were also literate when they arrived, presumably from the region of the Aegean Sea, and settled the coast of ancient Palestine around 1200 B. C.

At the ruins of a Philistine seaport at Ashkelon in Israel, excavators examined 19 ceramic pieces and determined that their painted inscriptions represent a form of writing.  . . .

. . .

“We had no direct evidence of their early writing,” Dr. Stager said. “We knew they had weights and measures for trading commodities, even precursors of coinage. So we assumed they had some notation or writing system.”

 

For the full story, see: 

JOHN NOBLE WILFORD.  "Philistines, but Less and Less Philistine."  The New York Times  (Tues., March 13, 2007):  D3.

(Note:  ellipses added.)

 

  Philistine excavation.  Source of photo:  online version of the NYT article cited above 

 

Why More Cancer Screening May Not Lead to Longer Lives

(p. D8)  Most of us interpret “increased survival” to mean fewer deaths. But it does not, because survival is subject to two powerful distortions.

The first is called lead-time bias. Simply advancing the time of diagnosis (as with CT screening) will always increase survival.

Imagine two patients with lung cancer. Even if both die at age 70, a patient with cancer diagnosed by spiral CT screening at age 59 has a longer survival than one with cancer diagnosed because of symptoms (cough, weight loss and so on) at age 67. The first patient survives 11 years; the second 3 years. But both died at the same age. Survival is increased, but mortality is the same.

A second source of distortion results from overdiagnosis, when screening finds cancers that were never destined to progress and cause death. Overdiagnosis bias can also drastically inflate survival statistics, even if mortality is unchanged.

To understand why, you need to understand the definition of the two statistics. Both are fractions. Survival is calculated over a fixed period, for example 5 or 10 years.

Overdiagnosis inflates both the numerator of the survival statistic (number alive at a specified time) and the denominator (number of diagnoses). For the mortality statistic, overdiagnosis has no effect on the numerator (number of deaths) or the denominator (number studied). Perhaps the easiest way to understand this is to imagine if we told all the people in the country that they had lung cancer today: lung cancer mortality would be unchanged, but lung cancer survival would skyrocket.

The goal of lung cancer screening is to reduce mortality — to save lives. Because the New England Journal study examines only survival, it cannot tell us whether any lives are saved. Because the JAMA study examines mortality, it is the more valid study. It also corroborates the Mayo trial finding that a significantly increased survival rate can coexist with no difference in mortality.

 

For the full essay, see:

H. Gilbert Welch, Steven Woloshin and Lisa M. Schwartz.  "ESSAY; How Two Studies on Cancer Screening Led to Two Results."  The New York Times  (Tues., March 13, 2007):  D5 & D8.

 

The New England Journal of Medicine article was published on Oct. 26, 2006, and the lead author was Claudia Henschke.

The JAMA article was published in March 2007.

 

 

 

New York Times Reports Al Gore Inaccurate and Alarmist on Global Warming

 

   Al Gore lectures.  Source of photo:  online version of the NYT article quoted and cited below.

 

(p. D1)  Hollywood has a thing for Al Gore and his three-alarm film on global warming, “An Inconvenient Truth,” which won an Academy Award for best documentary. So do many environmentalists, who praise him as a visionary, and many scientists, who laud him for raising public awareness of climate change.

But part of his scientific audience is uneasy. In talks, articles and blog entries that have appeared since his film and accompanying book came out last year, these scientists argue that some of Mr. Gore’s central points are exaggerated and erroneous. They are alarmed, some say, at what they call his alarmism.

“I don’t want to pick on Al Gore,” Don J. Easterbrook, an emeritus professor of geology at Western Washington University, told hundreds of experts at the annual meeting of the Geological Society of America. “But there are a lot of inaccuracies in the statements we are seeing, and we have to temper that with real data.”

. . .

(p. D6)  Geologists have documented age upon age of climate swings, and some charge Mr. Gore with ignoring such rhythms.

“Nowhere does Mr. Gore tell his audience that all of the phenomena that he describes fall within the natural range of environmental change on our planet,” Robert M. Carter, a marine geologist at James Cook University in Australia, said in a September blog. “Nor does he present any evidence that climate during the 20th century departed discernibly from its historical pattern of constant change.”

In October, Dr. Easterbrook made similar points at the geological society meeting in Philadelphia. He hotly disputed Mr. Gore’s claim that “our civilization has never experienced any environmental shift remotely similar to this” threatened change.

Nonsense, Dr. Easterbrook told the crowded session. He flashed a slide that showed temperature trends for the past 15,000 years. It highlighted 10 large swings, including the medieval warm period. These shifts, he said, were up to “20 times greater than the warming in the past century.”

Getting personal, he mocked Mr. Gore’s assertion that scientists agreed on global warming except those industry had corrupted. “I’ve never been paid a nickel by an oil company,” Dr. Easterbrook told the group. “And I’m not a Republican.”

 

For the full story, see: 

WILLIAM J. BROAD.  "From a Rapt Audience, a Call to Cool the Hype." The New York Times  (Tues., March 13, 2007):  D1 & D6.

(Note:  ellipsis added.)

 

EasterbrookDon.jpg   Geologist Don Easterbrook.  Source of photo:  online version of the NYT article quoted and cited above.

 

GE Stands Up for Innovation and Free Choice

MoorheadRandallLightBulbs.jpg   Randall Moorehead’s Phillips Electronics wants the government to force us to switch from the incandescent bulb on the left, to bulbs like the Phillips bulb on the right.  Source of photo:  online version of the NYT article cited below.

 

WASHINGTON, March 13 — A coalition of industrialists, environmentalists and energy specialists is banding together to try to eliminate the incandescent light bulb in about 10 years.

In an agreement to be announced Wednesday, the coalition members, including Philips Lighting, the largest manufacturer; the Natural Resources Defense Council; and two efficiency organizations, are pledging to press for efficiency standards at the local, state and federal levels.  . . .

. . .

The Australian government said on Feb. 20 that it would seek to ban incandescent bulbs and replace them with compact fluorescents. Shortly thereafter, the environment minister of Ontario, Laurel Broten, said her province was considering a similar step, and a California assemblyman, Lloyd Levine, introduced a bill to do the same.

“Incandescent light bulbs were first developed almost 125 years ago,” Mr. Levine said, “and since that time they have undergone no major modifications.”

Kathleen Rogers, president of the Earth Day Network, one of the groups in the alliance seeking to end the use of incandescent bulbs, predicted, “I think you’re going to see these disparate efforts adding up to this great tidal wave.” The problem, she said, was that “the incandescent spends most of its life making heat, not light.”

But General Electric, which traces its origins to Edison, said that could change.

“It’s shortsighted to freeze technology in favor of today’s high-efficiency compact fluorescent lamps,” the company said in a statement. ”We’d rather keep innovating and offering traditional, commercial and industrial consumers more energy-efficient choices — not fewer choices.”

 

For the full story, see: 

MATTHEW L. WALD.  "A U.S. Alliance to Update the Light Bulb."  The New York Times   (Weds., March 14, 2007):  C3.

(Note:  ellipses addd.)