artdiamondblog.com – Page 637 – Art Diamond's web log

Hunter-Gatherers Prefer Civilization

Source of photo: online version of NYT article cited below.

(p. A13) The newly arrived Nukak do not provide much detail about why they left. They just say that "the Green Nukak," a possible reference to Marxist guerrillas, who wear camouflage, told them to leave.

"The Green Nukak said we could not keep walking in the jungle, or else there would be problems," explained Va-di, another Nukak man, whose words were translated from Nukak by Belisario. "The Green Nukak told us to go where it is safe."

. . .

In Aguabonita, the scene on a recent day was full of commotion and laughter. Naked children tugged at the shirts of two foreign journalists, offering big smiles and hugs. The men quickly welcomed the visitors into a makeshift shelter, where they laughed at some of the questions and, it seemed, wholly innocently at their own odd predicament.

Are they sad? "No!" cried a Nukak named Pia-pe, to howls of laughter. In fact, the Nukak said they could not be happier. Used to long marches in search of food, they are amazed that strangers would bring them sustenance — free.

What do they like most? "Pots, pants, shoes, caps," said Mau-ro, a young man who went to a shelter to speak to two visitors.

Ma-be added, "Rice, sugar, oil, flour." Others said they loved skillets. Also high on the list were eggs and onions, matches and soap and certain other of life’s necessities.

"I like the women very much," Pia-pe said, to raucous laughs.

One young Nukak mother, Bachanede, breast-feeding her infant as she talked, said she was happy just to stay still. "When you walk in the jungle," she said, "your feet hurt a lot."

The men still go into the jungle, searching for monkeys, a delicacy the Nukak cannot seem to live without. Monkeys are grilled, dismembered and boiled, then eaten piece by piece. The women still spend their time carefully weaving intricate wristbands and hammocks, using threads from palm leaves.

All live in shelters now, enjoy constant medical attention and, on weekends, stroll into town to take in the sights. "Nukak life is hard in the jungle," Dr. Maldonado said. "You wake up thinking about food and you go hunt, you go search for nuts. So when they see us they think their food problems are over."

That is not to say the Nukak do not have plans.

Ma-be explained that the idea is to grow plantains and yucca and take the crops to town. "We can exchange it for money," he said, "and exchange the money for other things." But first they need to learn how to cultivate crops. The Nukak say they would like their children to go to school. They also say they do not want to lose traditions, like hunting or speaking their language. "We do want to join the white family," Pia-pe said, speaking of Colombian society, "but we do not want to forget words of the Nukak."

For the full story, see:

JUAN FORERO. "Leaving the Wild, and Rather Liking the Change." The New York Times (Thurs., May 11, 2006): A1 & A13.

(Note: ellipsis added.)

Capitalist Enclave Celebrates Diversity

Barkeep Jae Hyuk Lee in Dublin. Source of photo: online version of NYT article cited below.

Ireland is a capitalist enclave, in a Europe infused with high taxes, heavy government regulation, and the welfare state. Captitalism is sometimes portrayed as inhumane, but it is under capitalism that diversity and tolerance thrive:

Like traditional Dublin pubs, bars catering to immigrants operate according to an Irish barman’s basic principles: drinks served promptly, customers treated with respect and, when the occasion calls for it, readiness to listen to the troubles of the day.

Since members of many other ethnic groups — from Asia, Africa and Eastern Europe — have also opened businesses in the area, Mr. Lee’s short, gritty stretch of Parnell Street feels like a bewildering experiment in diversity. This part of Ireland’s capital is a microcosmic study of how global migration trends can transform a formerly homogeneous city.

One of Mr. Lee’s neighbors displays an array of dangling hair extensions for African women; another sells sausages and bags of pretzels imported from Poland, in three or four different flavors.

The Ice Bar itself has been decorated by an eclectic imagination: Chinese drinking poems are painted on one wall and deer skulls are mounted on another. The patrons are a jumble of students and artsy types, Asian and European, and music fans drawn by Mr. Lee’s policy of letting local D.J.’s and Spanish bands take over the sound system.

Mr. Lee likes the "good balance" and says his customers, in an unspoken gesture of good will, drink each other’s national beers. "We are curious about another culture," he said. "I’m Korean; I want to have a pint of Guinness instead of Korean beer." And Irish patrons tend to order bottles of Asian brews like Tsingtao from China and Chang from Thailand.

. . .

"Life is quite short, and I wanted to have a look all over the world," he said. "That was my plan. But I realized I quite like this place."

For the full story, see:

BRIAN LAVERY. "DUBLIN JOURNAL; Now, the Barkeeps May Come From the Ends of the Earth." The New York Times (Tues., May 16, 2006): A4.

"his customers, in an unspoken gesture of good will, drink each other’s national beers." Source of caption, and photo: online version of NYT article cited above.

Mugabe’s Hyperinflation: More on Why Africa is Poor

(p. A1) HARARE, Zimbabwe, April 25 — How bad is inflation in Zimbabwe? Well, consider this: at a supermarket near the center of this tatterdemalion capital, toilet paper costs $417.

No, not per roll. Four hundred seventeen Zimbabwean dollars is the value of a single two-ply sheet. A roll costs $145,750 — in American currency, about 69 cents.

The price of toilet paper, like everything else here, soars almost daily, spawning jokes about an impending better use for Zimbabwe’s $500 bill, now the smallest in circulation.

But what is happening is no laughing matter. For untold numbers of Zimbabweans, toilet paper — and bread, margarine, meat, even the once ubiquitous morning cup of tea — have become unimaginable luxuries. All are casualties of the hyperinflation that is roaring toward 1,000 percent a year, a rate usually seen only in war zones.

. . .

(p. A11) Those with spare cash put it not in banks, which pay a paltry 4 to 10 percent annual interest on savings, but in gilt-edged investments like bags of corn meal and sugar, guaranteed not to lose their value.

”There’s a surrealism here that’s hard to get across to people,” Mike Davies, the chairman of a civic-watchdog group called the Combined Harare Residents Association, said in an interview. ”If you need something and have cash, you buy it. If you have cash you spend it today, because tomorrow it’s going to be worth 5 percent less.

”Normal horizons don’t exist here. People live hand to mouth.”

. . .

. . . , Mr. Mugabe’s government has printed trillions of new Zimbabwean dollars to keep ministries functioning and to shield the salaries of key supporters — and potential enemies — against further erosion. Supplemental spending proposed early in April would increase the 2006 spending limits approved last November by fully 40 percent, and more such emergency spending measures are all but certain before the year ends.

. . .

Hyperinflation is a cradle-to-grave experience here. The government recently announced that the price of childbirth, now $7 million, would rise 463 percent by October. Funeral costs are to double over the same period.

In rural areas, said one official of a foreign-based charity who declined to be named, fearing consequences from the government, even the barest funeral costs at least $6 million, or about $28.50 — well beyond most families’ means. The dead are buried in open fields at night, she said. Recently, she watched one family dismantle their home’s cupboard to construct a makeshift coffin.

”I’ll never forget that,” she said. ”The incredible sadness of it all.”

Critics say that Zimbabwe’s rulers are oblivious to such suffering — last year, Mr. Mugabe completed his own 25-bedroom mansion in a gated suburb north of town, close by the mansions of top ministers and military allies.

For the full story, see:

MICHAEL WINES. "Zimbabwe’s Prices Rise 900%, Turning Staples Into Luxuries." The New York Times (Tues., May 2, 2006): A1 & A11.

Omit the Footnotes?

When I was a graduate student at Chicago, Milton Friedman was rumored to have given a presentation on how to write a doctoral dissertation in which he said something like:

Take everything nonessential, and move it into footnotes. Then collect all the footnotes into an appendix. Finally, delete the appendix.

My memory is that Deirdra McCloskey, in her wonderful advice on how to write economics clearly, also advises against footnotes. I at least attribute this advice to McCloskey (and Friedman) when I pass it on to students.

But sometimes, when I write an article, a misguided referee, or editor, insists that I omit some stuff that I think is really good. When that happens, sometimes, if I feel strongly, I sneak some of that material back into the paper in footnotes. Maybe no one will ever read it, but I feel better that it is still there.

And every once in awhile, it may turn out that the footnotes are what matter most:

It was typical of Schumpeter’s love for theory that he rejected Marshall’s view that the reader could skip the footnotes and appendixes. If time were short, Schumpeter advised, read them and skip the text! (p. 7; italics in original.)

In this case, though, I suspect that Marshall was right, and Schumpeter wrong.

Source:

Samuelson, Paul. "Compete as an Economic Theorist." In Schumpeterian Economics, edited by Helmut Frisch, New York: Praeger Publishers, 1981, pp. 1-27.

Current Cost of Gas Needed to Drive a Mile, Is Not High, by Historical Standards

Source of graphic: p. C1 of NYT article cited below.

(p. C1) The price of gasoline is hovering around $3 a gallon, and politicians are falling over each other to pander to voters’ gas fears. In a recent Gallup Poll, 70 percent of people said they favored price controls, a relic of Richard Nixon’s day.

But it’s time to take a deep breath and consider a radical fact: gas still isn’t all that expensive. I’m not just talking about the disparity between prices here and in Europe, where gas taxes are much higher. What really matters to people is the cost of the gas that is needed to drive a mile, a function of both the price of oil and the fuel efficiency of cars.

By this measure, gas for the average American now costs about what it did throughout the 1960’s and early 70’s and much less than in the early 80’s. The 1990’s, in other words, were the big exception.

For the full commentary, see:

David Leonhardt. "The High Costs of Cheap Gas and Vice Versa." The New York Times (Weds., May 10, 2006): C1 & C11.

Will Google Leapfrog Microsoft?

Microsoft co-founder Bill Gates and Google CEO Eric Schmidt. Source of photo: online version of NYT article quoted and cited below.

The Microsoft-Google rivalry is shaping up as a titanic corporate clash for the ages.

It may not turn out that way. Markets and corporate fortunes routinely defy prediction. But it sure looks as if the two companies are on a collision course, as the realms of desktop computing and Internet services and software overlap more and more.

Microsoft, of course, is the reigning powerhouse of computing and Google is the muscular Internet challenger. On each side, the battalions are arrayed: executives, engineers, marketers, lawyers and lobbyists. The spending and competition are escalating daily. For each, it seems, the other passes what Andrew S. Grove, a founder and former chairman of Intel, calls the "silver bullet test" of strategic competition. "If you had one bullet, who would you shoot with it?"

How the Microsoft-Google confrontation plays out could shape the future of competition in computing and how people use information technology.

Do the pitched corporate battles of the past shed any light on how this one might turn out?

Business historians and management experts say the experience in two of the defining industries of the 20th century, mass-market retailing and automobiles, may well be instructive. The winners certainly scored higher in the generic virtues of business management: innovation, execution and leadership.

But perhaps even more significant, those who came out on top, judging from history, had two more specific attributes. They were the companies, according to business historians, that proved able to adapt to change instead of being prisoners of past success. And in their glory days, these corporate champions were magnets for the best and brightest people.

For the full story, see:

STEVE LOHR. "And in This Corner . . . Microsoft and Google Grapple for Supremacy as Stakes Escalate." The New York Times (Weds., May 10, 2006): C1 & C14.

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

Static Versus Dynamic Pictures

Schumpeter distinguished the static picture of capitalism in the textbook model, with the dynamic reality captured in the process of creative destruction. Apparently Ronald Reagan also understood that a dynamic view is better than a static snapshot. Michael Deaver recounts:

(p. 75) . . . I told him that I noticed his aversion to sitting for photo shoots. He looked at me surprised. "That’s funny, in all these years, nobody’s ever noticed that." I asked him to elaborate. "Well, you can never recover from a still shot."

Reagan was most comfortable with moving film, he went on to say. He truly believed the television camera was a friend, a device that would separate the real from the phony. Still cameras could always be used to make a candidate look like a fool. When he explained this to me in the (p. 76) late 1960s, he said, "You know how I sometimes touch my nose before I make a point? Well, a still shot would show me picking my nose, while a live shot would show me making my point."

Source:

Deaver, Michael K. A Different Drummer: My Thirty Years with Ronald Reagan. Reprint ed. Harper Paperbacks, 2003.

Successful Mutual Fund Expert Claims Capitalism is Revitalized by Creative Destruction

SAN FRANCISCO — One morning in November 2003, 15 Dodge & Cox senior managers gathered in a conference room here to decide an issue brewing for years: Was it time to close the flagship Dodge & Cox Stock Fund to new investors?

For months, senior managers had stood in the hallways and gathered in glass-paned offices, questioning what long had been a point of pride in the mutual-fund world: huge sums of money pouring in for investment. It became "a water-cooler kind of issue," recalls Kenneth Olivier, the firm’s president.

. . .

Dodge also faces some other issues: In December, longtime Chief Investment Officer John Gunn became chief executive, and a new president and executive vice president were named. Another CEO switch could occur when Mr. Gunn turns 65 in 2008. That would be a relatively large amount of turnover for a firm that has had only five CEOs in its history.

. . .

. . . , Mr. Gunn often speaks at mutual-fund forums and investor conferences. The ruffled-hair Mr. Gunn resembles a college professor, wearing gray pants with yellow pinstripes, a light orange shirt and a yellow tie with zebras one recent day. His feet on a chair, he quoted 20th century Austrian economist Joseph Schumpeter when talking about media stocks, noting "capitalism is revitalized by waves of creative destruction." Ancient Asian artifacts, like a pink stone statue from a 14th-century tomb, adorn the office.

As for the flagship fund’s future, Mr. Pohl said as he and Mr. Gunn sat at a conference-room table, "the fact that we have outperformed" since closing to new investors, "I think is proof" that the decision was made at the right time.

"So far," Mr. Gunn added, half-jokingly.

For the full story, see:

DIYA GULLAPALLI. "When Mutual Funds Don’t Want Your Cash Dodge & Cox Says No To Many New Customers; Angst at the Water Cooler." The Wall Street Journal (Mon., May 1, 2006): R1 & R?.

(Note: ellipses added.)

Source of graphic: online version of WSJ article cited above.

Charles Koch Participates in Schumpeter’s Process of Creative Destruction

Charles Koch. Source of image: online version of WSJ article cited below.

I heard Charles Koch speak at the April 2005 Orlando meetings of the Association of Private Enterprise Education. Part of his speech involved how he has tried to apply in his own business, Schumpeter’s process of creative destruction. For a long time Koch has been a stalwart defender of the free market in word and deed.

Ideas seem to exhilarate him. This no doubt explains in part why this professorial CEO delivers "dozens and dozens" of lectures around the country to his employees on these very topics. But what does any of this have to do with explaining his company’s prodigious profitability? Well, everything — he believes. Mr. Koch contends that the key insight of his business career was melding these philosophical insights about the way the wealth-creation process works into a business operating system called "Market Based Management." This system, which he has trademarked, enables every division of his business empire to operate as a separate, autonomous, profit-maximizing unit. It is intended to reward employees who think like entrepreneurs.

"Long-term success entails constantly discovering new ways to create value for customers and building new capabilities to capture new opportunities," he instructs. "In this sense, maintaining a business is, in reality, liquidating a business." Mr. Koch likens the cycle to Schumpeter’s "creative destruction" — where the old and inefficient are ruthlessly swept away by the new.

For the full commentary, see:

STEPHEN MOORE. "THE WEEKEND INTERVIEW with Charles Koch; Private Enterprise." The Wall Street Journal (Sat., May 6, 2006): A8.

If Bush’s spirit breaks “evil will indeed triumph”

Natan Sharansky was a political prisoner for nine years in the Soviet Union. He is articulate and passionate. But I am not so sure he is right in almost equating freedom and democracy.

While I was an undergraduate at Wabash College, Ben Rogge arranged for Erik Maria Ritter von Kuehnelt-Leddihn to visit campus for a week. Kuehnelt-Leddihn was an improbable walras of a man. On my first encounter with him, I was stunned to hear him arguing that a monarchy embued with noblese oblige would be more likely to defend freedom, than would a democracy. At first I thought the conclusion was patently absurd. But over time, I gradually came to believe that although it was probably a false conclusion, it was not an absurd one.

History, and modern experience, provide us many examples of democracies that severely restrict the freedom of their citizens. And perhaps, for a time, freedom can thrive under enlightened monarchs, or dictators?

I hope, and still believe, that democracy is the system of government most likely, most of the time, to promote freedom. If so, then what Bush is trying to do, may eventually leave the world safer, and more free:

Critics rail against every step on the new and difficult road on which the United States has embarked. Yet in pointing out the many pitfalls which have not been avoided and those which still can be, those critics would be wise to remember that the alternative road leads to the continued oppression of hundreds of millions of people and the continued festering of the pathologies that led to 9/11.

Now that President Bush is increasingly alone in pushing for freedom, I can only hope that his dissident spirit will continue to persevere. For should that spirit break, evil will indeed triumph, and the consequences for our world would be disastrous.

For the full commentary, see:

Sharansky, Natan. "Dissident President." The Wall Street Journal (Mon., April 24, 2006): A15.

Charlie Munger Calls Ethanol “Stupid”

Charlie Munger. Source of image: http://daily.stanford.edu/tempo?page=content&id=16135&repository=0001_article#

Charlie Munger is the number two executive, next to Warren Buffett, at Berkshire Hathaway. He is old enough, and successful enough, and gutsy enough, and curmudgeony enough, to call ethanol "stupid" while in the "cornhusker state" for the company’s annual meeting. (Of course, he wasn’t running for public office, and knew he would soon be flying back to his home in California.)

Munger said using ethanol for fuel seems "stupid" to him because it takes more energy to create than it produces as a fuel. Buffett said there are so many ethanol plants, existing or planned, that he doesn’t see how they can all continue operating profitably.

For the full article, see:

STEVE JORDON and JONATHAN WEGNER. "Berkshire Notes: Clayton’s Excutives Double Up." Omaha World-Herald (Sunday, May 7, 2006): 1D.

(Note: the annual meeting was held on Sat., May 6, 2006)