... You may not have noticed, but last week was promoted as something called “Imports Work Week.”
The celebrate the importance of imports in the U.S., a group of
business associations led by the National Retail Federation (NRF) has
released a study showing the many ways that imports benefit American
consumers and businesses alike.
Cheaper prices are the most obvious benefit. “In the past decade, the
price of television sets sold in the United States has dropped 87
percent. Computers have gone down 75 percent, toys 43 percent and dishes
and flatware by a third,” the NRF’s Jon Gold explains in a blog post. “Why? The answer is easy – imports."
But the benefits don’t stop there, according to the study, which runs
down how imports also help farmers, mom-and-pop businesses,
working-class Americans, and even U.S. manufacturers. Here are a few of
the groups that should love what imports do for them, per the report:
• Imports improve American families’ standard of living.
They help families make ends meet by ensuring a wide selection of
budget-friendly goods, like electronics we use to communicate and many
clothes and shoes we wear, and improve the year-round supply of such
staples as fresh fruits and vegetables.
• Imports support more than 16 million American jobs. A
large number of these import-related jobs are union jobs, held by
minorities and women, and are located across the United States.
• More than half the firms involved in direct importing are small businesses, employing fewer than 50 workers.
• American manufacturers and farmers rely on imports
including raw materials and intermediate goods to lower their production
costs and stay competitive in domestic and international markets.
Factories and farms purchase more than 60 percent of U.S. imports. ...
Protectionism is one of
the most persistent misunderstandings I encounter when talking about economics.
What person wants to make everything the use ... car, computer, house, clothes,
etc. ... or become an expert on any number of topics to live self-sufficiently
... medicine, climate, chemistry, biology, etc. At the micro-level of our
personal lives, we intuitively understand that specializing in our work and
then engaging in exchange with neighbors who specialize in their work benefits
everyone involved. We seem to get that benefits multiply if we expand exchange
beyond our neighborhood, to our city, state, region, and country. But somehow
when expand the idea beyond national boarders, this understanding flies out the
window.
Some will say their
concern is international trade is unfair because workers in other countries get
paid lower wages. But they are also far less productive. Given a relatively
free market, as workers’ productivity increases, so does their wages. And while
there are certainly some exploitive circumstances around the world,
multinational corporations and their satellites typically offer some of the
highest wages and have the most sought after jobs. There are challenges when societies
of different degrees of development interact but I don't perceive that this is
really the issue behind much protectionist thinking. Rather it is the abstract
belief that our country will be better off our country made everything we consume, a standard we do not apply to our state, city, neighborhood, or family. And this is particularly problematic for the many who say they want justice for the poor but want to exclude the foriegn poor from networks of growing productivity and exchange.
... Barely half of Americans polled in 2010 by GlobeScan said they
believed in the free-market system, down from 80 percent in 2002. A
large majority had lost trust in government. The most recent Edelman
Trust Barometer found that trust in business has been below 50 percent
for 8 of the past 12 years. Throughout Europe, only small minorities
said they believed in free-market capitalism.
Meanwhile, social entrepreneurs are developing innovative business
models that blend traditional capitalism with solutions that address the
long-term needs of our planet. They are tackling chronic social
problems, ranging from healthcare delivery in sub-Saharan Africa to
agricultural transformation in East Asia and public-school funding in
the United States. Social entrepreneurs are working in close
collaboration with local communities, incubating groundbreaking (and
often lifesaving) innovations; modeling synergistic partnerships with
governments, companies, and traditional charities; and building business
models that deploy technology and enable networking to create wins for
investors and clients alike. “Social entrepreneurs are mad scientists in
the lab,” says Pamela Hartigan, director of the Skoll Centre for Social
Entrepreneurship at Oxford University. “They’re harbingers of new ways
of doing business.”
We believe this collaborative approach offers intriguing hints about how
enterprises of all sizes can deliver value for themselves and society.
Below we suggest four ways in which social entrepreneurs are showing the
way forward.
USING PROFIT TO FUND PURPOSE ...
DELIVERING INDIVIDUALIZED PRODUCTS THAT MARRY NEED AND WANT ...
This piece is a little too narrow in attributing positive change almost exclusively to markets. I would argue that things are considerably more complicated and the video would be more convining with some balance. But the video does do a powerful placing our economic moment in time in context.
... Fortunately, this deadly and cyclical form of poverty [living on less than $1.25 a day] is already on its
way toward obsolescence, and much faster than many development
economists expected. The first Millennium Development Goal — to halve
the proportion of the world population living in dire poverty by 2015 —
was met five years early, as the rate fell to an estimated 21 percent in
2010, from 43 percent in 1990. Some economists had feared that the
recession would arrest or even reverse the trend, given how
interconnected the global economy is, but the improvement continued,
unabated. Annual growth dipped for developing economies in 2009 but has
since rebounded to about 5.3 percent a year, a figure dragged down by
weaker peripheral European economies.
For much of the improvement, the world can thank one country: China,
which alone accounts for about half of the decline in the extreme
poverty rate worldwide. It has also driven significant gains across the
region. In the early 1980s, East Asia had the highest extreme-poverty
rate in the world, with more than three in four people living on less
than $1.25 a day. By 2010, just one in eight were. But other
middle-income countries, like Brazil, Nigeria and India, have
experienced significant growth, too — in no small part because tens of
millions of the very poor have moved from rural areas to cities, where
they become richer, healthier and more productive for their economies....
... For the poor living in poor countries, particularly the profoundly
unstable ones, gains have been harder-fought and slower, a trend that
the World Bank’s own economists describe as worrisome. But that is not
to play down the successes so far. In 2008, for the first time since the
bank started measuring the statistics, the number of people living in
dire poverty and the dire-poverty rate fell in every region around the
world. Extreme poverty in sub-Saharan Africa has at last dipped below
the 50 percent mark. Still, many within the development world doubt the
ability of NGOs to cure the world’s most troubled nations of their woes.
“I don’t think we have a recipe for fixing the Congo or South Sudan or
Afghanistan,” says Birdsall, of the Center for Global Development. ....
That assertion
might appear strange in light of the billions of dollars firms spend
lobbying Congress in America, but that is exactly the point. Most
lobbying seeks to tilt the playing field in one direction or another,
not to level it. Most lobbying is pro-business, in the sense that it
promotes the interests of existing businesses, not pro-market in the
sense of fostering truly free and open competition. Open competition
forces established firms to prove their competence again and again;
strong successful market players therefore often use their muscle to
restrict such competition, and to strengthen their positions. As a
result, serious tensions emerge between a pro-market agenda and a
pro-business one, though American capitalism has always managed this
tension far better than most.
This also explains why many people bristle at the term "free market." They incorrectly perceive that "free market" means unfettered businesses having the freedom to stack things in their favor (and indeed some business lobbyists try to twist free market constructs to justify efforts to curb challenges from competition contributing to the confusion.) They advocate for "fair trade" but free trade is fair trade. They should be championing a free market in opposition to many pro-business agendas.
... Until now, any questioning of the fair-trade movement has been limited
to the micro level. The movement has faced repeated criticisms, for
example, for the relatively expensive fees that producers must pay to
get a fair-trade label, which make it ineffective for many poor farmers.
Another area of concern is just how lucrative the process is for
middlemen and retailers. Finally, several studies show that very little
of the premium that consumers pay actually reaches needy producers.
Consumers might be surprised to learn that only one or two percent of
the retail price of an expensive cup of “ethical” coffee goes directly
to poor farmers.
The adverse effects of fair trade are even more worrying at the macro
level. First, fair trade deflects attention from real, long-term
solutions to rural poverty in developing countries; and second, it has
the potential to fragment the world agricultural market and depress
wages for non-fair-trade farm workers. ...
... Fair-trade enthusiasts might argue that the world would be better off
if the fair-trade market replaced the free-trade one. But in fact, such
an outcome would destroy the livelihoods of millions of farmers who do
not have the luxury of paying for fair-trade certification. To survive,
these farmers would likely have to stop planting basic crops, such as
wheat, corn, and rice, and shift to cash crops, such as coffee, tea, and
fruits, which could bring in the income for certification. The
immediate effect would be a prohibitive hike in food prices. Further, as
farmers shift their production, non-fair-trade basic food products
would become more vulnerable to price instability caused by supply and
demand shocks, because there would be fewer producers willing to take
the risk of non-subsidized farming.
If the fair-trade movement eventually came to encompass all
categories of agricultural production (including basic food products),
the price shocks would be even worse. Rather than responding to market
prices, farmers in developing countries would be incentivized to produce
whatever products garner the greatest subsidies. With subsidies, not
consumer demand, dictating production, consumers in the developed and
developing worlds would see further increases in basic food prices. ...
... Self-proclaimed ethical consumers need to start looking reality in the
eye. Fair trade is a form of protectionism, and it should not be allowed
to hide behind the mask of morality. There is nothing ethical about
privileging small groups of producers while the majority are sinking
deeper into poverty.
This is one of those topics where a particular activity (buying fair trade goods) feels so worthwhile and yet does harm in ways that are not readibly discernable. When it comes to commodities, I suspect the authors are right that fair trade does more harm than good. Fair trade doesn't fully account for the economic complexity involved. It becomes yet another form of toxic charity. However, it is not clear to me that all fair trade products have the same consequences. For instance, handcrafted products sold through stores like Ten Thousand Villages are not commodities and I don't think they subject to the same type of economic realities. I haven't seen a detailed analysis by economist that would help me clarify the differences.
Once again we need to heed the admonition to act with warm hearts and cool heads. For an insightful booklet on the problems with Fair Trade Coffee see Victor Claar's Fair Trade? Its Prospects as a Poverty Solution. I suspect that what he says about coffee applies to all agricultural commodities.
I've been doing some writing about the common misperception of the economy as a zero-sum game and the fear that we will soon (or ever) run out of nonrenewable resources. This is counterintuitive to so many people that I feel the need to address it some detail. I written a draft of this section for my book I'm working on but I need to massage more before posting it here.
In the meantime, Mark Perry has this interesting chart from his post Bad news for pessimists: Malthus was wrong. If commodities are becoming scarcer, then prices will go up. But as this chart shows, commodity prices over the long-haul, are getting less expensive in real dollars. Other databases I've seen show this to be true as far back as at least the mid-1800s. The trend is expected to continue for the foreseeable future. Why? I'll get to that in coming posts but here is the evidence making my point. Read Perry's post for more details on the data.
... Different languages have different ways of talking about the future.
Some languages, such as English, Korean, and Russian, require their
speakers to refer to the future explicitly. Every time English-speakers
talk about the future, they have to use future markers such as “will” or
“going to.” In other languages, such as Mandarin, Japanese, and German,
future markers are not obligatory. The future is often talked about
similar to the way present is talked about and the meaning is understood
from the context. A Mandarin speaker who is going to go to a seminar
might say “Wo qu ting jiangzuo,” which translates to “I go listen
seminar.” Languages such as English constantly remind their speakers
that future events are distant. For speakers of languages such as
Mandarin future feels closer. As a consequence, resisting immediate
impulses and investing for the future is easier for Mandarin speakers. ...
“Capitalism has a purpose beyond just making money. I think the critics of capitalism have got it in this very small box. That it’s all about money. It’s based in being greedy, selfish and exploitative. And yet, I haven’t found it to be that way. Most of the hundreds of entrepreneurs I know and have met did not start their business primarily out of a desire to make money. Not that there’s anything wrong with making money. My body cannot function unless it produces red-blood cells. No red-blood cells and I’m a dead man. But that’s not the purpose of my life.
Similarly, a business cannot exist unless it produces a profit . . . but that’s not the only reason it exists.”
When I was writing a review of Dwight Lee's and Richard McKenzie's excellent book, Getting Rich in America: 8 Simple Rules for Building a Fortune and a Satisfying Life,
I called Dwight to ask a question and we got talking about Rule #5: Get
Married and Stay Married. Dwight pointed out that if you follow the
other 7 rules but don't get married or stay married, you have a
substantial probability of building a fortune and a satisfying life.
But, he said, if you don't get married and stay married, you tend not to
follow at least some of the other 7 rules.
While the upscale college-educated crowd continues to marry at very high rates, marriage rates are plummeting among those further down on the socioeconomic ladder.
... A useful debate about the morality of capitalism must get beyond libertarian nostrums that greed is good, what’s mine is mine and whatever the market produces is fair. It should also acknowledge that there is no moral imperative to redistribute income and opportunity until everyone has secured a berth in a middle class free from economic worries. If our moral obligation is to provide everyone with a reasonable shot at economic success within a market system that, by its nature, thrives on unequal outcomes, then we ought to ask not just whether government is doing too much or too little, but whether it is doing the right things.
Instead, Dr. Butzer argues that Sargon's conquest itself caused
the collapse of trade by destroying cities and disrupting what had
till then been "an inter-networked world-economy, once extending
from the Aegean to the Indus Valley." In other words, as with the
end of the Roman empire, the collapse of trade caused the collapse
of civilization more than the other way around.
A new find suggests farmers in Bible lands built channels for irrigation long before historians thought they did, allowing for cultivated vineyards, olives, wheat and barley.
... “Educational systems could be improved by acknowledging that, in general, boys and girls are different,” said University of Missouri biologist David Geary in their statement. “For example, in trying to close the sex gap in math scores, the reading gap was left behind. Now, our study has found that the difference between girls’ and boys’ reading scores was three times larger than the sex difference in math scores. Girls’ higher scores in reading could lead to advantages in admissions to certain university programs, such as marketing, journalism or literature, and subsequently careers in those fields. Boys lower reading scores could correlate to problems in any career, since reading is essential in most jobs.”
Generally, when conditions are good, the math gap increases and the reading gap decreases and when conditions are bad the math gap decreases and the reading gap increases. This pattern remained consistent within nations as well as among them, according to the work by Geary and Gijsbert Stoet of the University of Leeds that included testing performance data from 1.5 million 15-year-olds in 75 nations. ...
... Two rival reform movements arose to restore the integrity of
Catholicism. Those in the first movement, the Donatists, believed the
church needed to purify itself and return to its core identity. ...
... In the fourth century, another revival movement arose, embraced by
Augustine, who was Bishop of Hippo. The problem with the Donatists,
Augustine argued, is that they are too static. They try to seal off an
ark to ride out the storm, but they end up sealing themselves in. They
cut themselves off from new circumstances and growth.
Augustine, as his magisterial biographer Peter Brown puts it, “was
deeply preoccupied by the idea of the basic unity of the human race.” He
reacted against any effort to divide people between those within the
church and those permanently outside. ....
16. A great piece by someone who considers them unaffiliated with any religion. Every Christian and congregation needs to reflect on the insignificance of the church in this writers life. His tribe is growing: The significant insignificance of religion
1. The Economisthas an interesting graph showing the captialism has led to greater happiness in member countries of the Commonwealth of Independent States (former Soviet Union countries excluding the three baltic countries.)
There are two ways to define economic mobility: 1) absolute mobility, whether each generation is financially better off than the one before; and 2) relative mobility,
whether you can change your income rank vs. your parents. Most
Americans probably think both measures important. We want to be more
prosperous than mom and dad, but also be able to change our
circumstances and make our dreams come true. ...
... A San Francisco Fed study –
using data tracking families since 1968 — looks at both versions of the
American Dream, finding one healthier than the other. Looking
at absolute mobility, researchers Leila Bengali and Mary Daly find the
United States “highly mobile.” Over the sample period, 67% of US adults
had higher family incomes than their parents, including 83% of those in
the lowest birth quintile, or bottom 20% (versus 54% for children born
into the top quintile, or top 20%.) ...
... It’s true that conservatives’
standard proposals for privatizing Social Security and
voucherizing Medicare would shift risk onto beneficiaries -- but
this plainly isn’t a necessary consequence of the basic
principle. I agree with Konczal that adequate insurance against
economic risk, underwritten by the government, is essential. I
also agree that most conservatives aren’t interested in
providing that guarantee. That’s exactly why liberals ought to
take up the ownership society themselves.
Ownership entails risk, it’s true, but insurance can
minimize it. Ownership also provides control, independence and
self-respect -- things it wouldn’t hurt liberals to be more
interested in. And when it comes to inequality and stagnating
middle incomes, ownership can give wage slaves a stake in the
nation’s economic capital.
Done right, an equity component in government-backed saving
for retirement could be the best idea liberals have had since
the earned-income tax credit (oh, sorry, that started out as a
conservative idea as well). ...
FMRI scans of volunteers' media prefrontal cortexes revealed unique brain activity patterns associated with individual characters or personalities as subjects thought about them.
Researchers already knew humans, animals and plants have evolved in
response to Earth's gravity and they are able to sense it. What we are
still discovering is how the processes occurring within the cells of the
human and plant bodies are affected by the more intense gravity, or
hypergravity, that would be found on a large planet, or the microgravity
that resembles the conditions on a space craft.
According to estimations, engineers expect the the store to generate
around 265,000 kilowatt hours (kWh) per year. Store operation will only
require 200,000 kWh, so perhaps that extra wattage could be pumped back
into the grid or used to power nearby utilities.
When people can browse potential dates online like items in a catalog, geo-locate hook-ups on an exercise bike just seven feet away, arrange a spontaneous group date with the app Grouper or arrange a bevy of blind dates in succession with Crazy Blind Date, it makes me wonder if all this newfound technological convenience has, in fact, made romance that much more elusive. Now, we may be more concerned with what someone isn't rather than what they are. And as that twenty-something entrepreneur reminded me over coffee, services like OkCupid, and even Facebook, sap a lot of the mystique out of those first few dates. So, sure, it may be easier than ever to score a date, but what kind of date will it really be?
Many of us have read the Bible as if it were merely a mosaic of little
bits – theological bits, moral bits, historical-critical bits, sermon
bits, devotional bits. But when we read the Bible in such a fragmented
way, we ignore it’s divine author’s intention to shape our lives through
its story. All humanity communities live out some story that provides a
context for understanding the meaning of history and gives shape and
direction to their lives. If we allow the Bible to become fragmented, it
is in danger of being absorbed into whatever other story is
shaping our culture, and it will thus cease to shape our lives as it
should. Idolatry has twisted the dominant cultural story of the secular
Western world. If as believers we allow this story (rather than the
Bible) to become the foundation of our thought and action, then our
lives will manifest not the truths of Scripture, but the lies of an
idolatrous culture. Hence the unity of Scripture is no minor matter: a
fragmented Bible may actually produce theologically orthodox, morally
upright, warmly pious idol worshippers! (p. 12).
I wish someone had taught me basic leadership skills.
“I was well grounded in theology and Bible exegesis, but seminary did
not prepare me for the real world of real people. It would have been
great to have someone walk alongside me before my first church.”
I needed to know a lot more about personal financial issues.
“No one ever told me about minister’s housing, social security,
automobile reimbursement, and the difference between a package and a
salary. I got burned in my first church.”
I wish I had been given advice on how to deal with power groups and power people in the church.
“I got it all wrong in my first two churches. I was fired outright from
the first one and pressured out in the second one. Someone finally and
courageously pointed out how I was messing things up almost from the
moment I began in a new church. I am so thankful that I am in the ninth
year of a happy pastorate in my third church.” ...
A thought provoking peace about how we think about charity. His characterization of Puritanism is way off but most of his substantive points are important to consider.
1. Conventional wisdom says wearing the red shirt in Star Trek will get you killed. Not so fast. Statistical analysis in Significance Magazine disagrees. (Keep your redshirt on: a Bayesian exploration)
"... In spite of wearing a redshirt, there is
only an 8.6% chance of a member of the operations or engineering
departments becoming a casualty. These personnel should ensure that
their life insurance plans are based on their departments and not their
uniform color.
Although Enterprise crew members in
redshirts suffer many more casualties than crew members in other
uniforms, they suffer fewer casualties than crew members in gold
uniforms when the entire population size is considered. Only 10% of the
entire redshirt population was lost during the three year run of Star Trek.
This is less than the 13.4% of goldshirts, but more than the 5.1% of
blueshirts. What is truly hazardous is not wearing a redshirt, but being
a member of the security department. The red-shirted members of
security were only 20.9% of the entire crew, but there is a 61.9% chance
that the next casualty is in a redshirt and 64.5% chance this
red-shirted victim is a member of the security department. The remaining
redshirts, operations and engineering make up the largest single
population, but only have an 8.6% chance of being a casualty.
Red uniform shirts are safe, as long as the wearer is not in the security department."
2. Interesting piece on automation in the Economist: Robocolleague
Robots are getting more powerful. That need not be bad news for workers. ...
... Historically, technological advances have been relatively benign for
workers. Labour-market trends through the 19th and 20th centuries show
surprising continuity, according to Lawrence Katz of Harvard University
and Robert Margo of Boston University. In recent decades, for example,
computerisation and automation have displaced “middle-skilled” workers
at the same time as employment among high- and low-skilled workers has
increased. This “hollowing out” is not new, Messrs Katz and Margo note.
Early industrialisation had similar effects. Middle-skilled artisans,
like trained weavers, were put out of work by industrial textile
production, but the fortunes of less-skilled factory workers and
white-collar factory managers steadily improved. Mechanisation’s
insatiable appetite for routine work of all types has yet to create mass
unemployment. Quite the opposite.
The worry is that technology now has its sights set on non-routine
tasks as well as mundane ones. Yet Mr Autor notes that just because a
skilled job can be automated does not mean it will be. The number of
workers used to build Nissan vehicles varies a lot between Japan, where
labour is expensive, and India, where it is abundant and cheap. The
relative cost of different types of workers matters for firms as they
choose how to deploy new technologies. ...
Indie Capitalism has three foundational principles:
• Creativity generates economic value.
Creativity is the source of profit. Yes, efficiency can squeeze more
out of what exists, but creativity gives us originality, which
translates into a market advantage and big margins.
• Creativity drives capitalism.
These past few years we have been victimized by the disastrous results
of “creativity” applied to the financial sector (mortgage-backed
securities, for starters). What we lost sight of is that the scaling of
creativity to actually make things of value sold in the marketplace is
the true heart of our economic system. It is the true generator of net
new jobs, wealth, and tax revenue.
• Creative destruction is crucial to economic growth.
Crony capitalism, which relies on monopoly and political power, is
antithetical to entrepreneurial capitalism. A faster cycle of birth,
growth, and death of companies boosts creativity, economic value, and
growth.
The bottom line: For the first time in decades, several key economic drivers have created a competitive advantage for the U.S. that will encourage corporate strategic decisions on capital allocation and acquisitions for generations to come.
Here's why:
1. Cheap and abundant natural gas. ...
2. Innovation. Despite talk of a brain drain, the U.S. remains the global innovation leader, maintaining a position enjoyed for 50 years. ...
3. Rule of law. Without the means to protect intellectual property, it cannot be exploited for competitive advantage. ...
4. Human capital. The wage gap between the U.S. and China has been shrinking. ...
5. De-complexity. Western multinationals continue to struggle with management of operations in developing countries. ...
6. Public policy and abundance. The federal government appears to be seizing the opportunity to promote job growth at home.
7. Credit, currency and the coming wave of mergers and acquisitions.
"Picture an assembly line not that isn’t made up of robotic arms spewing sparks to weld heavy steel, but a warehouse of plastic-spraying printers producing light, cheap and highly efficient automobiles.
If Jim Kor’s dream is realized, that’s exactly how the next generation of urban runabouts will be produced. His creation is called the Urbee 2 and it could revolutionize parts manufacturing while creating a cottage industry of small-batch automakers intent on challenging the status quo. ..."
Throughout history, war and innovation have gone hand in hand,
whether it’s breakthroughs out of heavily funded R&D programs
or makeshift contraptions thrown together with spare parts. Soldiers are
trained to use the technology on hand to get the job done, one way or
the other.
But how would military operations change if soldiers on the
battlefield could have the best of both worlds: access to expert
engineers able to fabricate custom-designed fixes right on-the-spot and
in very little time? ...
"It may sound strange and far out, but it’s actually quite simple. 4D
printing is being billed as a process where synthetic objects can change
and adapt themselves to the environment. In a recent TED interview, Tibbits compared the process of 4D printing to the process of natural adaptation:
Natural systems obviously have this built in — the
ability to have a desire. Plants, for example, generally have the desire
to grow towards light and they generate energy from the translation of
photosynthesis, carbon dioxide to oxygen, and so on. This is extremely
difficult to build into synthetic systems — the ability to “want” or
need something and know how to change itself in order to acquire it, or
the ability to generate its own energy source. If we combine the
processes that natural systems offer intrinsically (genetic
instructions, energy production, error correction) with those artificial
or synthetic (programmability for design and scaffold, structure,
mechanisms) we can potentially have extremely large-scale
quasi-biological and quasi-synthetic architectural organisms."
The music industry, the first media business to be consumed by the
digital revolution, said on Tuesday that its global sales rose last year
for the first time since 1999, raising hopes that a long-sought
recovery might have begun.
The increase, of 0.3 percent, was tiny, and the total revenue, $16.5
billion, was a far cry from the $38 billion that the industry took in at
its peak more than a decade ago. Still, even if it is not time for the
record companies to party like it’s 1999, the figures, reported Tuesday
by the International Federation of the Phonographic Industry, provide
significant encouragement.
8. Teleworking: The myth of working from home from the BBC. "Yahoo has banned its staff from "remote" working. After years of many predicting working from home as the future for everybody, why is it not the norm?"
"Reasons for high unemployment among the young include ineffective education systems (the share of early school dropouts is 20% in Italy and 30% in Spain) and dual labour markets with highly protected jobs for older employees. The good performance of Germany is not least a result of the German apprenticeship system, which facilitates labour market access for school leavers by lowering the company’s costs for employing them. The OECD’s latest “Going for Growth” report recommends reforms to strengthen the vocational training systems as one of the most effective ways to fight structural youth unemployment. This would also be a reasonable starting point for the EU’s youth employment programme."
"What’s most revealing about this study is that, like earlier research,
it suggests that students’ preference for printed textbooks is reflects
the real pedagogical advantages they experience in using the format:
fewer distractions, deeper engagement, better comprehension and
retention, and greater flexibility to accommodating idiosyncratic study
habits. Electronic textbooks will certainly get better, and will
certainly have advantages of their own, but they won’t replicate the
particular advantages inherent to the tangible form of the printed book."
The Catholic Church has struggled to bring in young members in the
United States. Less than half of U.S. Hispanics between 18 and 29
identify as Catholic, compared with the 60+ percent of Hispanics older
than 50.
The narrative of decline in the mainline church underestimates the continuing influence of its members, says a religion researcher.
16.Some interesting observations by NYU psychologist Jonathan Haidt. He says we tend to process our social world through three lenses: Social distance, hierarchy, and disgust. Conservatives tend to have a lower threshold of revulsion while liberals, and praticularly libertarians, have a higher threshold.
Issue 104 examines the impact of automation on Europe and America and the varying responses of the church to the problems that developed. Topics examined are mission work, the rise of the Social Gospel, the impact of papal pronouncements, the Methodist phenomenon, Christian capitalists, attempts at communal living and much more.
"Despite the tough economy, many of the nation’s largest churches are
thriving, with increased offerings and plans to hire more staff, a new
survey shows.
Just 3 percent of churches with 2,000 or more attendance
surveyed by Leadership Network, a Dallas-based church think tank, said
they were affected “very negatively” by the economy in recent years.
Close to half — 47 percent — said they were affected “somewhat
negatively,” but one-third said they were not affected at all. ..."
... It's not surprising that younger entrepreneurial firms are considered more innovative. After all, they are born from a new idea, and survive by finding creative ways to make that idea commercially viable. Larger, well-rooted companies however have just as much motivation to be innovative — and, as Scott Anthony has argued, they have even more resources to invest in new ventures. So why doesn't innovation thrive in mature organizations? ...
... First, he says, the focus of an established firm is to execute an existing business model — to make sure it operates efficiently and satisfies customers. In contrast, the main job of a start-up is to search for a workable business model, to find the right match between customer needs and what the company can profitably offer. In other words in a start-up, innovation is not just about implementing a creative idea, but rather the search for a way to turn some aspect of that idea into something that customers are willing to pay for. ...
... discovering a new business model is inherently risky, and is far more likely to fail than to succeed ...
... Finally, Blank notes that the people who are best suited to search for new business models and conduct iterative experiments usually are not the same managers who succeed at running existing business units. ...
5. A fascinating, if sobering, look at the conflict over islands off the coast of East Asia. Trouble at sea
"President Barack Obama's proposed tilt of U.S. priorities toward the Pacific – and away from the historical link to Europe – represents one of the most encouraging aspects of his foreign policy. Although welcome, we should recognize that this shift comes about three decades too late and that it may miss the rising geopolitical centrality of sub-Saharan Africa and Latin America. The emergence of these longtime historically impoverished backwaters has been largely missed as American policy-makers and businesses are now obsessed with the challenges and opportunities posed by the emergence of China and, to a lesser extent, India. Sub-Saharan Africa, for example, over the past decade has produced six of the world's 10 fastest-growing economies. Through 2011-15, according to the International Monetary Fund, seven of the fastest-growing countries will be African, and Africa as a whole will surpass the slowing growth rates in Asia, particularly China.
This growth has caused the region's poverty rates, still unacceptably high, to fall from 56.5 percent in 1990 to 47 percent today. Further growth will likely push poverty levels down further."
8. New Geography also asks, Is the Family Finished? Some interesting thoughts about the impact of declining birthrates in the U.S.
Pew Research Center has compiled key findings from a new analysis of the
nation’s foreign-born population, based on U.S. Census Bureau’s 2011
American Community Survey.
With more than half the population of many U.S. cities who are
multicultural and Hispanics comprising more and more of the
U.S. population, when does it become meaningless and redundant to
execute marketing strategy that is directed to a general market and a
Latino market perceived to be homogenous?
11. Committee on Economic Development has an interesting piece looking at both the ideological and economic aspects underlying the debate about the minimum wage. Raising the Minimum Wage: “Which Side Are You On?”
"It is an easy call if you are either (a) a strict libertarian or (b) an
enthusiastic advocate of the less fortunate with limited concern about
the scarcity of resources. (If you belong to both of those groups,
there is little advice that I can offer.) However, in between those
poles of opinion, things become rather murky, rather quickly."
... Comparing the Democrat and Republican participants turned up differences in two brain regions: the right amygdala and the left posterior insula. Republicans showed more activity than Democrats in the right amygdala when making a risky decision. This brain region is important for processing fear, risk and reward.
Meanwhile, Democrats showed more activity in the left posterior insula, a portion of the brain responsible for processing emotions, particularly visceral emotional cues from the body. The particular region of the insula that showed the heightened activity has also been linked with "theory of mind," or the ability to understand what others might be thinking. ...
... The functional differences did mesh well with political beliefs,
however. The researchers were able to predict a person's political
party by looking at their brain function 82.9 percent of the time. In
comparison, knowing the structure of these regions predicts party
correctly 71 percent of the time, and knowing someone's parents'
political affiliation can tell you theirs 69.5 percent of the time, the
researchers wrote. ...
STERLING, Va. - Perched by a computer monitor wedged between shelves of cough drops and the pharmacy in a bustling Walmart, Mohamed Khader taps out answers to questions such as how often he eats vegetables, whether anyone in his family has diabetes and his age.
He tests his eyesight, weighs himself and checks his blood pressure as a middle-aged couple watches at the blue-and-white SoloHealth station advertising "free health screenings." ...
... As Americans gain coverage under the federal health law, putting increased demand on primary care doctors and spurring interest in cheaper, more convenient care, unmanned kiosks like these may be part of what their manufacturer bills as a "self-service healthcare revolution." ...
Recent developments in the field of nanotechnology might give new
meaning to the phrase “nothing gold can stay.” Atoms and bonds developed
not by Mother Nature, but by scientists, are gaining momentum as the
building blocks for cutting-edge materials.
Using nanoparticles as “atoms” and DNA as “bonds,” Chad Mirkin, the
director of Northwestern University’s International Institute for
Nanotechnology, is constructing his very own periodic table. So far Mirkin has built more than 200 distinct crystal structures with 17 different particle arrangements. ...
... Nonetheless, China has been transformed from the inside out over the past 35 years. This transformation is the story of our time. The struggle of China, in other words, is the struggle of the world. ...
Conclusion
Given our account of how China became capitalist, what can we say about
the form of capitalism that has emerged in China? A persisting feature
of China’s market transition is the lack of political liberalization.
This is not to say that the Chinese political system has stood still
over the past 35 years. The Party has distanced itself from radical
ideology; it is no longer communist except in name. In recent years, the
internet has increasingly empowered the Chinese to exercise their
political voice. Nonetheless, China remains ruled by a single political
party.
This continuity hides a fundamental change in China’s political
reality. With the death of Deng Xiaoping, “strongman” politics was
brought to a closure. Under Jiang Zemin and Hu Jintao, China is no
longer ruled by a charismatic leader. In that sense, Chinese politics
today is qualitatively different from the time of Mao and Deng. But the
Chinese government has not come to terms with this political change on
the ground; there have been few efforts at institution-building to
prepare China for the new political reality.
The combination of rapid economic liberalization and seemingly
unchanged politics has led many to characterize China’s market economy
as state-led, authoritarian capitalism, which many people have rightly
recognized as fragile and unsustainable. When and how China will embrace
democracy, and whether the Party will survive democratization, are the
main questions asked about China’s political future. In our book, a
different perspective is offered. It provides a different diagnosis of
the main flaw of the Chinese market economy: China has developed a
robust market for goods, but it still lacks a free market for ideas.
The market for ideas points to an alternative way of thinking about
China’s political future. Our reasoning is mainly based on the following
two considerations. First, multiparty competition does not work unless
it is cultivated and disciplined by a free market for ideas, without
which democracy can be easily hijacked by interest groups and undermined
by the tyranny of the majority. The performance of democracy critically
depends on the market for ideas, just like privatization depends on the
market for capital assets. Second, multi- party competition had
virtually no precedent in Chinese history. Indeed, the Chinese word for
the “party” (党) has a strong negative connotation in traditional Chinese
political thinking. “Forming a party and pursuing self-interest” (结党营私)
has been consistently denounced as undermining the political ideal,
which is “what is under heaven is for all” (天下为公). In contrast, the
market for ideas has a deep and revered root in traditional Chinese
thinking; “let one hundred schools of thought contend” has been
respected as a political ideal since the time of Confucius. In our view,
the market for ideas promises a more gradual and viable approach to
rebuilding Chinese politics on the principles of tolerance, justice, and
humility.
Over the past 35 years, China has embraced capitalism not just in the economy. The Theory of Moral Sentiments
has more than a dozen Chinese translations; the book has won the heart
and mind of premier Wen Jiabao. The message of Adam Smith resonates
strongly with the Chinese, not least because of its striking affinity
with the traditional Chinese thinking on economy and society. A
surprising outcome of China’s transition to capitalism is that China has
found a way back to its own cultural roots. ...
"The Easterlin paradox suggest that in terms of human happiness -- a
squishy concept to be sure -- there is a limit to economic growth beyond
which there really is just no point in attaining more wealth. Further, a
decoupling between income and happiness at some threshold would imply
that GDP would not be a good measure of welfare, we would need some
other metric.
A recent paper (PDF) by Daniel Sacks, Betsey Stevenson and Justin Wolfers argues that the Easterlin paradox is also wrong. ..."
"Why isn't there more outrage about the president's unilateral targeted assassination program on the left?"
5. Arnold Kling with an interesting piece on the role of Jews in the rise of the modern urbanized economic order. The Unintended Consequences of God
"In those days, most people were farmers, for whom literacy’s costs
generally outweighed its benefits. However, in an urbanized society
with skilled occupations, literacy pays off. As urbanization gradually
increased in the late Middle Ages, Jews came to fill high-skilled
occupations. Botticini and Eckstein argue that literacy, rather than
persecution, is what led Jews into these occupations."
"But while progressives would clearly mock this policy [trickle-down economics], modern day
urbanism often resembles nothing so much as trickle-down economics,
though this time mostly advocated by those who would self-identify as
being from the left. The idea is that through investments catering to
the fickle and mobile educated elite and the high end businesses that
employ and entertain them, cities can be rejuvenated in a way that
somehow magically benefits everybody and is socially fair."
8. Mark Perry excerpts a quote from green libertarian John Mackey, CEO of Whole Foods Market.
“Capitalism is the greatest creation humanity has done for social cooperation. It has lifted humanity out of the dirt. In statistics we discovered when we were researching the book, about 200 years ago when capitalism was created, 85% of the people alive lived on $1 a day. Today, that number is 16%. Still too high, but capitalism is wiping out poverty across the world. 200 years ago illiteracy rates were 90%. Today, they are down to about 14%. 200 years ago the average lifespan was 30. Today it is 68 across the world, 78 in the States, and almost 82 in Japan. This is due to business. This is due to capitalism. And it doesn’t get credit for it. Most of the time, business is portrayed by its enemies as selfish and greedy and exploitative, yet it’s the greatest value creator in the world.”
9. Economist Gavin Kennedy with some interesting thoughts on the relationship between the state and the economy in developing nations:
The problem is to achieve the right balance between a competitive market economy and an effective state: markets where possible; the state where necessary.
11. Great piece about yet another way family life is changing. Yes, I’m a Homemaker
I’m a guy. My wife works. We’ve got no kids. I’m a stay-at-home dude.
"... What a sweet picture this conjures: the stay-at-home dad nurturing his
children, looking after the house and helping support his wife in her
budding career and shelving his own big ambitions for later. Now it gets
a little awkward. There is no adorable kid, nor plans to have one. No
starter home that needs knocking into shape. I'm not just doing this
temporarily until I find something meaningful to do. I’m
actually a full-time homemaker ... not stay-at-home dad but stay-at-home
dude. A conversational pause. Where do you mentally file this guy?
Usually I just change the subject. ..."
A new study shows that high-earning women are more likely to let their houses be messy than to hire a housekeeper or get their husbands and kids to pitch in. ...
... "You can purchase substitutes for your own time, you can get your husband to do more, or you can all just do less," Killewald says. "Whether women outsource housework in particular has less to do with resources, but whether or not paid labor is viewed as an appropriate strategy for undertaking domestic work.
Doing less housework seems to be a popular option. ...
Psychiatrists have
concluded that males take longer to assess facial expressions as their
brains have to work twice as hard to work out whether another person
looks friendly or intelligent.
In particular, researchers found that 40% of people say they would avoid someone who unfriended them on Facebook, while 50% say they would not avoid a person who unfriended them. Women were more likely than men to avoid someone who unfriended them, the researchers found.
... Libraries are responding to the decline of print in a variety of creative ways, trying to remain relevant – especially to younger people – by embracing the new technology. Many, such as New York’s Queens Public Library, are reinventing themselves as centers for classes, job training, and simply hanging out. In one radical example, a new $1.5 million library scheduled to open in San Antonio, Texas, this fall will be completely book-free, with its collection housed exclusively on tablets, laptops, and e-readers. “Think of an Apple store,” the Bexar County judge who is leading the effort told NPR. It’s a flashy and seductive package.
But libraries are about more than just e-readers or any other media, as important as those things are. They are about more than just buildings such as the grand edifices erected by Carnegie money, or the sleek and controversial new design for the New York Public Library’s central branch. They are also about human beings and their relationships, specifically, the relationship between librarians and patrons. And that is the relationship that the foundation created by Microsoft co-founder’s Paul G. Allen is seeking to build in a recent round of grants to libraries in the Pacific Northwest. ...
3-D printers can produce gun parts, aircraft wings, food and a lot more,
but this new 3-D printed product may be the craziest thing yet: human
embryonic stem cells. Using stem cells as the "ink" in a 3-D printer,
researchers in Scotland hope to eventually build 3-D printed organs and
tissues. A team at Heriot-Watt University used a specially designed
valve-based technique to deposit whole, live cells onto a surface in a
specific pattern.
... Sweden has reduced public spending as a proportion of GDP from 67% in 1993 to 49% today. It could soon have a smaller state than Britain. It has also cut the top marginal tax rate by 27 percentage points since 1983, to 57%, and scrapped a mare’s nest of taxes on property, gifts, wealth and inheritance. This year it is cutting the corporate-tax rate from 26.3% to 22%.
Sweden has also donned the golden straitjacket of fiscal orthodoxy with its pledge to produce a fiscal surplus over the economic cycle. Its public debt fell from 70% of GDP in 1993 to 37% in 2010, and its budget moved from an 11% deficit to a surplus of 0.3% over the same period. This allowed a country with a small, open economy to recover quickly from the financial storm of 2007-08. Sweden has also put its pension system on a sound foundation, replacing a defined-benefit system with a defined-contribution one and making automatic adjustments for longer life expectancy.
Most daringly, it has introduced a universal system of school vouchers and invited private schools to compete with public ones. Private companies also vie with each other to provide state-funded health services and care for the elderly. Anders Aslund, a Swedish economist who lives in America, hopes that Sweden is pioneering “a new conservative model”; Brian Palmer, an American anthropologist who lives in Sweden, worries that it is turning into “the United States of Swedeamerica”.
There can be no doubt that Sweden’s quiet revolution has brought about a dramatic change in its economic performance. The two decades from 1970 were a period of decline: the country was demoted from being the world’s fourth-richest in 1970 to 14th-richest in 1993, when the average Swede was poorer than the average Briton or Italian. The two decades from 1990 were a period of recovery: GDP growth between 1993 and 2010 averaged 2.7% a year and productivity 2.1% a year, compared with 1.9% and 1% respectively for the main 15 EU countries. ...
... The other Nordic countries have been moving in the same direction, if more slowly. Denmark has one of the most liberal labour markets in Europe. It also allows parents to send children to private schools at public expense and make up the difference in cost with their own money. Finland is harnessing the skills of venture capitalists and angel investors to promote innovation and entrepreneurship. Oil-rich Norway is a partial exception to this pattern, but even there the government is preparing for its post-oil future.
This is not to say that the Nordics are shredding their old model. They continue to pride themselves on the generosity of their welfare states. About 30% of their labour force works in the public sector, twice the average in the Organisation for Economic Development and Co-operation, a rich-country think-tank. They continue to believe in combining open economies with public investment in human capital. But the new Nordic model begins with the individual rather than the state. It begins with fiscal responsibility rather than pump-priming: all four Nordic countries have AAA ratings and debt loads significantly below the euro-zone average. It begins with choice and competition rather than paternalism and planning. The economic-freedom index of the Fraser Institute, a Canadian think-tank, shows Sweden and Finland catching up with the United States (see chart). The leftward lurch has been reversed: rather than extending the state into the market, the Nordics are extending the market into the state. ...
The unlikely coalition between Tea Party libertarians and small organic farmers.
Laura Bledsoe didn't set out to join a political movement, she merely wanted to serve what she considered a sustainable meal. ...
... But it soon became apparent that her nervousness wasn't unfounded.
The health inspector arrived simultaneously with several of the
event's guests. The Bledsoes led her to where the food was being
prepared while the guests were guided on a chaperoned tour of the farm
by interns.
"She literally came in and started looking for things she could find
fault with," Laura recalls. "That just became apparent in her attitude
and demeanor with how she handled things."
The health inspector raised several concerns, but chief among them
was the meat the Bledsoes were preparing to serve. Because the event was
advertised as a "zero mile footprint," the meat hadn't been sent
through a USDA processing plant, as is required for any meat purchased
at a grocery store or restaurant, so the inspector deemed it illegal to
serve.
"She immediately demanded that we send our guests home and cease the
event, and if we didn't she would call the police and have them
personally escorted off the property."
Increasingly panicked, flustered, and "having a nervous breakdown,"
Laura attempted to reason with the inspector without success. In
addition to being ordered to send their guests home, the farmers were
also told they needed to pour bleach over all the meat to ensure it
would never be served.
"It's one thing when you throw out a piece of food that you have no
relationship to," Laura says. "But we raised these animals. When you
raise animals and slaughter them and then prepare them, it's with great
reverence that you eat this food. The total disregard for any of that
was just appalling to me."
In the middle of this disruption, the Bledsoes recalled they had a
number for the Farm to Consumer Legal Defense Fund, a non-profit
organization that protects the legal rights of family farms and artisan
food producers. Though it was a Friday evening, the organization's lead
counsel Gary Cox called them back within 15 minutes. He instructed them
to ask if the inspector if she had a search warrant, if she didn't, Cox
told them to tell her to leave the property.
The tactic worked. Though the health inspector threatened to come
back with the police, she left, leaving the Bledsoes to explain what had
happened to their guests. They had already poured bleach on the meat,
but they were still able to serve their vegetable dishes without further
disturbance, and of the 100 who signed up for the event, only a handful
left because of time constraints, Laura says.
While the Bledsoes didn't immediately hear back from the health
department, they decided to send out an E-mail recounting the experience
to shareholders of their local food delivery service, known as a CSA.
Soon, the story went viral, traveling the globe and leading to hundreds
of E-mails from farmers and activists. Eventually, Laura was contacted
by Nevada lawmakers, many of whom were sympathetic to her cause and
wanted to reform state laws so that such a fiasco wouldn't happen again.
Without even meaning to, the Bledsoes found themselves swept up in a
political movement that has only accrued momentum in recent years, one
in which owners of small local farms and gardens are pitted against
government agencies, both local and federal, over the rights of property
owners and private citizens in terms of how and where they can prepare
their food.
But what is perhaps even more peculiar about this movement is its
bipartisan interest. Among its most vocal proponents you'll find an
amalgamation of ardent Tea Party libertarians—concerned over property
rights and the over-extended reach of government—and liberal
environmentalists who believe the local, organic farm is the
ecologically-friendly solution to the nation's health woes. ...
This is a wonderful case study of markets, public policy, and the challenge of crafting appropriate regulation. In many industries, regulation is as much about creating barriers against new competitors entering the industry as it is about safety or protecting consumers. It is a false perception that large corporations do not like regulation. In fact, enlisting government help in erecting barriers to new competitors is an intentional competitive strategy. I don't know if that is necessarily the case here but we can certainly see how adversely impacts small farmers, whether by design or not.
... To better understand
the impact of technology on jobs, The Associated Press analyzed
employment data from 20 countries; and interviewed economists,
technology experts, robot manufacturers, software developers, CEOs and
workers who are competing with smarter machines.
The
AP found that almost all the jobs disappearing are in industries that
pay middle-class wages, ranging from $38,000 to $68,000. Jobs that form
the backbone of the middle class in developed countries in Europe, North
America and Asia.
In the United States, half
of the 7.5 million jobs lost during the Great Recession paid
middle-class wages, and the numbers are even more grim in the 17
European countries that use the euro as their currency. A total of 7.6
million midpay jobs disappeared in those countries from January 2008
through last June.
Those jobs are being replaced in many cases by machines and software that can do the same work better and cheaper.
"Everything
that humans can do a machine can do," says Moshe Vardi, a computer
scientist at Rice University in Houston. "Things are happening that look
like science fiction." ...
... So machines are
getting smarter and people are more comfortable using them. Those
factors, combined with the financial pressures of the Great Recession,
have led companies and government agencies to cut jobs the past five
years, yet continue to operate just as well.
How is that happening?
-Reduced
aid from Indiana's state government and other budget problems forced
the Gary, Ind., public school system last year to cut its annual
transportation budget in half, to $5 million. The school district
responded by using sophisticated software to draw up new, more efficient
bus routes. And it cut 80 of 160 drivers. ...
... -In South Korea, Standard Chartered is
expanding "smart banking" branches that employ a staff of three,
compared with an average of about eight in traditional branches. ...
... -The
British-Australian mining giant Rio Tinto announced plans last year to
invest $518 million in the world's first long-haul, heavy-duty
driverless train system at its Pilbara iron ore mines in Western
Australia. The automated trains are expected to start running next year.
The trains are part of what Rio Tinto calls its "Mine of the Future"
program, which includes 150 driverless trucks and automated drills.
Like
many technologically savvy startups, Dirk Vander Kooij's
furniture-making company in the Netherlands needs only a skeleton crew -
four people ...
... -Google's driverless car and the Pentagon's
drone aircraft are raising the specter of highways and skies filled with
cars and planes that can get around by themselves. ...
... "Trying to keep it from happening would have
been like the Teamsters in the early 1900s trying to stop the
combustion engine," Lavin says. "You can't stand in the way of
technology."
The upside of emerging technology is that most will make goods and services
less expensive. That improves our living standard. The downside is that much of
the work we used to do in order to earn the wages to buy goods and services is
rapidly changing. As the last sentence of the article notes, this is not the
first time we have been in these circumstances. Years ago I read that in 1885,
approximately 80% of everything we consumed in the U.S. was produced at home.
By 1915, 80% was produced outside the home. It created massive economic
dislocations. Each time these disruptions occur it has been hard for the people
living at that time to foresee what the new economic order would look like.
It is critical that Christian thinkers wrestle with the challenges of technological
innovation. Creative destruction (the market dynamic where jobs and industries
are destroyed in the wake of creating new ones) has always been a difficult one
for ethics. It is painful but the social cost of other alternatives is also
quite high. Anti-technological calls to abandon consumerism or, conversely,
just saying that “the market will sort it all out,” are not legitimate
responses. I think topics like this should be at the center of our theological
reflection about human labor and the economy.
1. I don't know much about Common Good RVA but I like their vision. Christianity Today published a piece featuring them, Why the Rest of Your Week Matters to God
"In general, the church has done a fine job equipping Christians for the "private" areas of their lives: prayer, morality, family life, and so on. However, in general, the church has done a poor job equipping people for the "public" parts of their lives: namely, their work, their vocation. The reality is, most people spend the majority of their time in this latter, "public" area."
2. Can we Survive Technology? Written 57 years ago, Fortune resurrected this article by John von Neumann. The editor's note begins:
Editor's note: Every Sunday, Fortune publishes a favorite story from our magazine archives. This week, to mark our FutureIssue,
we turn to a feature from June 1955 by John von Neumann tackling the
profound questions wrought by radical technical advancement—in von
Neumann's day the atomic bomb and climate change. von Neumann was one of
the twentieth century's greatest and most influential geniuses. The
polymath and patron saint of Game Theory
was instrumental in developing America's nuclear superiority toward the
end of World War II as well as in framing the decades-long Cold War
with the Soviet Union. In his time, von Neumann was said to possess "the world's greatest mind." Here is his characteristically pessimistic look on what the future holds.
It is amazing how much of what he wrote remains true today!
"CONCLUSION: Although "materialists' perceptions that
acquisition brings them happiness appear to have some basis
in reality," that happiness is short-lived, Richins concluded. As such,
"The state of anticipating and desiring a product may be inherently more
pleasurable than
product ownership itself.""
5. One of the most difficult topics to understand in economics is comparative advantage, especially why outsourcing jobs to other countries often is advantageous for both countries. Forbes has a creative piece this week, Is Outsourcing American Jobs Wrong?. However, as the BBC reports American manufacturers come back home, a trend that has been true for a few years now.
"In order to fight that perception and reclaim capitalism and business as
positive words, businesses have to find a purpose beyond just making money. Profit is necessary for business, Mackey said, but it's necessary in the same way that his body has to produce red blood cells. It's needed, but it's not the sole purpose."
"Most business leaders don't understand what makes innovation so different from everything else they do at work -- and they haven't adjusted their behavior to accommodate these differences."
"The science fiction vision of stars flashing by as streaks when spaceships travel faster than light isn't what the scene would actually look like, a team of physics students says.
Instead, the view out the windows of a vehicle traveling through hyperspace would be more like a centralized bright glow, calculations show. ..."
That's all for this week. Like the Kruse Kronicle at Facebook.
Last week I linked an article reporting that rich
countries are trashing up to half of all food. Our distribution channels
are good but we tend to waste a lot of food through our consumption habits.
Emerging nations are wasting food too, but for different reasons. Distribution
channels are so bad that great quantities of food are wasted in transit. Furthermore,
because the distribution channels are so bad, and food must pass through so
many middle-men, it is often more expensive than it would otherwise need to be.
Business Insider now reports:
Last fall, following a relaxation in
India’s foreign-investment rules, [Wal-Mart] said it was planning to open its
first stores in the country in the next two years, tapping into a prized $490
billion retail sector. But to cash in, Wal-Mart and other foreign
retailers will have to solve a fundamental problem: how to move goods into
stores efficiently in a country that offers big retailers little in the way of
modern logistics and is plagued by dilapidated infrastructure.
The hurdles are particularly daunting in
the food sector, which makes up more than half of the revenues at the
Bentonville, Ark.- based company.
Watch this video by the Wall Street Journal as the document the
route of food from field to table. Here the age old cry of the various agents
in present decrepit system opposing streamlined distribution for fear of losing
their positions. The reality is that if distribution improves, then food will
become cheaper, people will have more disposable income, people will eat
better, people will become more productive, and all this will in turn lead to
the formation of new businesses and jobs. I'm not saying the change will be
painless and that some will not suffer in the process but I suspect the
trade-off for the masses in terms of improved quality of life is huge.
(Like the Kruse Kronicle at Facebook if you want links to daily posts to appear in your Facebook feed.)
1. Pray for Egypt Today!
More than 50 million Egyptians are voting today on a constitution that would be a giant step backward for Egypt and much of the Middle East, marginalizing women and religious minorities. A nation that has historically been a voice of moderation, the largest Muslim nation in the region, will likely move toward becoming an Islamist state. Remember to pray for Egypt. (See the Economist'sThe Founding Brothers)
2. Our prayers are with families of the victims at the Sandy Hook elementary school. Grace and peace to the entire community.
Traffic deaths in the USA continued their historic decline last year,
falling to the lowest level since 1949, the government announced
Monday.
A total of 32,367 motorists, bicyclists and pedestrians died in 2011,
a 1.9% decrease from 2010. Last year’s toll represents a 26% decline
from 2005, the National Highway Traffic Safety Administration (NHTSA)
said. ...
... The trend has emerged in big cities like New York and Los Angeles, as
well as smaller places like Anchorage, Alaska, and Kearney, Neb. The
state of Mississippi has also registered a drop, but only among white
students.
“It’s been nothing but bad news for 30 years, so the fact that we have
any good news is a big story,” said Dr. Thomas Farley, the health
commissioner in New York City, which reported a 5.5 percent decline in
the number of obese schoolchildren from 2007 to 2011....
....The experiment, in April, used a disabled form of the virus that causes AIDS to reprogram Emma’s immune system genetically to kill cancer cells. ...
... The research is still in its early stages, and many questions remain.
The researchers are not entirely sure why the treatment works, or why it
sometimes fails. One patient had a remission after being treated only
twice, and even then the reaction was so delayed that it took the
researchers by surprise. For the patients who had no response
whatsoever, the team suspects a flawed batch of T-cells. The child who
had a temporary remission apparently relapsed because not all of her
leukemic cells had the marker that was targeted by the altered T-cells. ...
....In 2011, 1.4 million chlamydia infections were reported to the CDC.
The rate of cases per 100,000 people increased 8%, to 457.6 in 2011 from
423.6 in 2010.
The CDC reported 321,849 gonorrhea infections. The
rate increased 4% to 104.2 cases per 100,000 in 2011 from 100.2 in
2010. Like chlamydia, gonorrhea can lead to pelvic inflammatory disease,
a major cause of infertility in women.
Last year, 13,970 primary and secondary syphilis cases were reported. The rate of 4.5 cases per 100,000 was unchanged from 2010. ...
7. You may be bilingual but can you write in two languages, one with each hand, at the same time?!
10. Kevin Drum of Mother Jones speculates on why liberals have more exaggerated perceptions of political differences. We Are More Alike Than We Think
11. A surprising "right to work" bill was signed into law in Michigan, of all places. That has spurred a lot of debate about unions and the right to work. Michael Kinsley wrote a thoughtful piece opposing RTW, The Liberal Case Against Right-to-Work Laws. David Henderson has piece in support of RTW, The Economics of "Right to Work".
12. Slate has a piece about The Great Schism in the Environmental Movement.
Keith Kloor opines on the division between mondernist environmentalists
(or eco-pragmatists) and conservation traditionalists.
...
Modernist greens don't dispute the ecological tumult associated with the
Anthropocene. But this is the world as it is, they say, so we might as
well reconcile the needs of people with the needs of nature. To this
end, Kareiva advises conservationists to craft "a new vision of a planet
in which nature—forests, wetlands, diverse species, and other ancient
ecosystems—exists amid a wide variety of modern, human landscapes."
This
shift in thinking is already under way. For example, ecologists
increasingly appreciate (and study) the diversity of species and
importance of ecosystem services in cities, giving rise to the
discipline of urban ecology. That was unthinkable at the dawn of the
modern environmental movement 50 years ago, when greens loathed cities
as the antithesis of wilderness. ...
13. One of the creepiest Twilight Zone episodes I remember from my
childhood was when this woman ends up trapped in a department store at
night. The mannequins begin calling to her. She discovers she is actually a mannequin who
has over stayed her time out in the world and it is time for the next
mannequin to spend some time outside the store. This story confirms my worst nightmares: In Some Stores, the Mannequins Are Watching You
15. One of the biggest concerns about fracking technology is the enormous amount of water it uses. A company has figured out how to recycle water so that far less water is used in the fracking process. Solving fracking's biggest problem
... 3D printing represents the latest version of what industry experts call
"additive manufacturing" — a way to turn practically any computer
designs into real objects by building them up layer-by-layer using
plastics, metals or other materials. The technology could end up
affecting every major industry — aerospace, defense, medicine, transportation, food, fashion — and have an even bigger impact on U.S. manufacturing than the robot revolution. ...
20. Michael Cheshire has a great piece in Leadership Journal on "What I learned about grace and redemption through my friendship with a Christian pariah." Going To Hell with Ted Haggard
".... A while back I was having a business lunch at a sports bar in the
Denver area with a close atheist friend. He's a great guy and a very
deep thinker. During lunch, he pointed at the large TV screen on the
wall. It was set to a channel recapping Ted's fall. He pointed his
finger at the HD and said, "That is the reason I will not become a
Christian. Many of the things you say make sense, Mike, but that's what
keeps me away."
It was well after the story had died down, so I had to study the screen
to see what my friend was talking about. I assumed he was referring to
Ted's hypocrisy. "Hey man, not all of us do things like that," I
responded. He laughed and said, "Michael, you just proved my point. See,
that guy said sorry a long time ago. Even his wife and kids stayed and
forgave him, but all you Christians still seem to hate him. You guys
can't forgive him and let him back into your good graces. Every time you
talk to me about God, you explain that he will take me as I am. You say
he forgives all my failures and will restore my hope, and as long as I
stay outside the church, you say God wants to forgive me. But that guy
failed while he was one of you, and most of you are still vicious to
him." Then he uttered words that left me reeling: "You Christians eat
your own. Always have. Always will."
He was running late for a meeting and had to take off. I, however, could
barely move. I studied the TV and read the caption as a well-known
religious leader kept shoveling dirt on a man who had admitted he was
unclean. And at that moment, my heart started to change. I began to
distance myself from my previously harsh statements and tried to
understand what Ted and his family must have been through. When I
brought up the topic to other men and women I love and respect, the very
mention of Haggard's name made our conversations toxic. Their reactions
were visceral."
21. Leonardo Bonucci got a yellow card for faking collision during a
soccer game. It should have been a red card. No one deserves to be a professional soccer player with acting skills
this bad!
My friend Victor Claar wrote a great monograph two years ago, Fair Trade? Its Prospects as a Poverty Solution. It cost $3.00 in Kindle format. You can read my review posted here at Kruse Kronicle. Some aspects of fair trade initiatives may be helpful. But while fair trade coffee sounds noble on the service, it does not help intended targets, and may in fact harm them (and I expect this is true with most fair trade agricultural commodities.) The linked article highlights some of the same problems Claar does. It is just interesting to see the points being made by an outlet that I expect does not identify as an economic conservative. ;-) He is a little more polemic than I like but you'll get the point.
Coffee is the second most valuable resource exported from poor and/or
developing countries (Angelina Jolie's children being the first). Thus
the Fair Trade model was established, which is supposed to pay coffee
growers a set "fair trade" price if they meet labor and production
standards. The idea was to prevent them from being exploited, but the
reality is that in practice, Fair Trade just makes exploitation easier.
#4. Growers Are Paid Very Little for Fair Trade Coffee ...
#3. Consumers Are Charged Much More for Fair Trade Coffee ...
#2. Fair Trade Is Essentially a Marketing Organization ...
#1. Growers Receive a Higher Percentage from Non-Fair Trade Coffee Sales ...
Here are the links. BTW, if you haven't already, you can "like" the Kruse Kronicle Facebook page and see daily links in your Facebook feed.
1. When I was a kid, I used to watch Mutual of Omaha's Wild Kingdom on Saturdays. That was the beginning of my life-long appreciation for big cats. One of the organizations we support is the Turperntine Creek Wildlife Refuge for big cats in Arkansas. Check out this Nat Geo super slo-mo video of a running cheetah. Be sure to go to minute 5:00, and see him from the front. His head barely moves. Just amazing!
7. If you are a man, getting along with the in-laws means you have 20% higher chance of not getting divorced. If you are a woman, getting along well the in-laws makes you 20% more likely to get divorced. Getting Along With The In-Laws Makes Women More Likely To Divorce
"The Supreme Court announced Friday it would review a case testing whether human genes may be patented, in a dispute weighing patents associated with human genes known to detect early signs of breast and ovarian cancer. A 2009 lawsuit filed by the American Civil Liberties Union claimed among other things the First Amendment is at stake because the patents are so broad they bar scientists from examining and comparing the BRCA1 and BRCA2 genes at the center of the dispute. In short, the patents issued more than a decade ago cover any new scientific methods of looking at these human genes that might be developed by others."
I am guessing there are some bioethics questions to consider here as well. ;-)
15. 4.5 billion years of the earth's evolution in as if it happened in 24 hours.
"The Pew Research Center announced Nov. 29 that the U.S.
birth rate fell to its lowest level since at least 1920, when reliable
record-keeping began. That was true—but not news. The National Center
for Health Statistics reported that way back on Oct. 3.
What was
news was Pew’s analysis of the government data, which showed that the
birth rate decline was greatest among immigrant women. “We were the
first to point that out,” Gretchen Livingston, the lead author of Pew’s
report, said in an interview. ..."
... New research shows that Catholics now report the lowest proportion of
"strongly affiliated" followers among major American religious
traditions, while the data indicates that evangelicals are increasingly
devout and committed to their faith.
According to Philip Schwadel, a sociologist at the University of
Nebraska-Lincoln, in the 1970s there was only a five-point difference
between how strongly Catholics and evangelicals felt about their
religion.
By 2010, he said, that "intensity gap" had grown to around 20 points,
with some 56 percent of evangelicals describing themselves as "strongly
affiliated" with their religion compared with 35 percent of Catholics.
Even mainline Protestants reported a higher level of religious intensity
than Catholics, at 39 percent. ..."
"Indeed, for America’s Amish, much is changing. The Amish are, by one measure, the fastest-growing faith community in the US. Yet as their numbers grow, the land available to support the agrarian lifestyle that underpins their faith is shrinking, gobbled up by the encroachment of exurban mansions and their multidoor garages.
The result is, in some ways, a gradual redefinition of what it means to be Amish. Some in the younger generation are looking for new ways to make a living on smaller and smaller slices of land. Others are looking beyond the Amish heartland of Ohio, Pennsylvania, and Indiana, seeking more space in states such as Texas, Maine, and Montana."
21. Finally, one of the things I found interesting about the presidential election was Team Romney's seeming confidence they were winning. I think every candidate who is losing often tries to spin things positively until the very end but I had the sense that Team Romney wasn't faking it. They believed they were winning. I think post-election analysis is revealing that was true. From The New RepbulicThe Internal Polls That Made Mitt Romney Think He'd Win
After years of offshore production, General Electric is moving much of
its far-flung appliance-manufacturing operations back home. It is not
alone. An exploration of the startling, sustainable,
just-getting-started return of industry to the United States.
... What has happened? Just five years ago, not to mention 10 or 20 years
ago, the unchallenged logic of the global economy was that you couldn’t
manufacture much besides a fast-food hamburger in the United States. Now
the CEO of America’s leading industrial manufacturing company says it’s
not Appliance Park that’s obsolete—it’s offshoring that is.
Why does it suddenly make irresistible business sense to build not just
dishwashers in Appliance Park, but dishwasher racks as well?
In the 1960s, as the consumer-product
world we now live in was booming, the Harvard economist Raymond Vernon
laid out his theory of the life cycle of these products, a theory that
predicted with remarkable foresight the global production of goods
20 years later. The U.S. would have an advantage making new, high-value
products, Vernon wrote, because of its wealth and technological prowess;
it made sense, at first, for engineers, assembly workers, and marketers
to work in close proximity—to each other and to consumers—the better to
get quick feedback, and to tweak product design and manufacture
appropriately. As the market grew, and the product became standardized,
production would spread to other rich nations, and competitors would
arise. And then, eventually, as the product fully matured, its
manufacture would shift from rich countries to low-wage countries.
Amidst intensifying competition, cost would become the predominant
concern, and because the making and marketing of the product were well
understood, there would be little reason to produce it in the U.S.
anymore.
Vernon’s theory has been borne out again and again over the years.
Amana, for instance, introduced the first countertop microwave—the
Radarange, made in Amana, Iowa—in 1967, priced at $495. Today you can
buy a microwave at Walmart for $49 (the equivalent of a $7 price tag on a
1967 microwave)—and almost all the ones you’ll see there, a variety of
brands and models, will have been shipped in from someplace where hourly
wages have historically been measured in cents rather than dollars.
But beginning in the late 1990s, something happened that seemed to
short-circuit that cycle. Low-wage Chinese workers had by then flooded
the global marketplace. (Even as recently as 2000, a typical Chinese
factory worker made 52 cents an hour. You could hire 20 or 30 workers
overseas for what one cost in Appliance Park.) And advances in
communications and information technology, along with continuing trade
liberalization, convinced many companies that they could skip to the
last part of Vernon’s cycle immediately: globalized production, it
appeared, had become “seamless.” There was no reason design and
marketing could not take place in one country while production, from the
start, happened half a world away.
You can see this shift in America’s jobs data. Manufacturing jobs
peaked in 1979 at 19.6 million. They drifted down slowly for the next 20
years—over that span, the impact of offshoring and the steady adoption
of labor-saving technologies was nearly offset by rising demand and the
continual introduction of new goods made in America. But since 2000,
these jobs have fallen precipitously. The country lost factory jobs
seven times faster between 2000 and 2010 than it did between 1980 and
2000.
Until very recently, this trend looked inexorable—and the significance
of the much-vaunted increase in manufacturing jobs since the depths of
the recession seemed easy to dismiss. Only 500,000 factory jobs were
created between their low, in January 2010, and September 2012—a tiny
fraction of the almost 6 million that were lost in the aughts. And much
of that increase, at first blush, might appear to be nothing more than
the natural (but ultimately limited) return of some of the jobs lost in
the recession itself.
Yet what’s happening at GE, and elsewhere in American manufacturing,
tells a different and more optimistic story—one that suggests the
curvature of Vernon’s product cycle may be changing once again, this
time in a way that might benefit U.S. industry, and the U.S. economy,
quite substantially in the years to come. ...
... Even then, changes in the global economy were coming into focus that
made this more than just an exercise—changes that have continued to this
day.
Oil prices are three times what they were in 2000, making cargo-ship fuel much more expensive now than it was then.
The natural-gas boom in the U.S. has dramatically lowered the cost for
running something as energy-intensive as a factory here at home.
(Natural gas now costs four times as much in Asia as it does in the
U.S.)
In dollars, wages in China are some five times what they were in 2000—and they are expected to keep rising 18 percent a year.
American unions are changing their priorities. Appliance Park’s union
was so fractious in the ’70s and ’80s that the place was known as
“Strike City.” That same union agreed to a two-tier wage scale in
2005—and today, 70 percent of the jobs there are on the lower tier,
which starts at just over $13.50 an hour, almost $8 less than what the
starting wage used to be.
U.S. labor productivity has continued its long march upward, meaning
that labor costs have become a smaller and smaller proportion of the
total cost of finished goods. You simply can’t save much money chasing
wages anymore.
So much has changed that GE executives came to believe the GeoSpring
could be made profitably at Appliance Park without increasing the price
of the water heater. “First we said, ‘Let’s just bring it back here and
build the exact same thing,’ ” says Kevin Nolan, the vice president of
technology for GE Appliances. ...
... For years, too many American companies have treated the actual
manufacturing of their products as incidental—a generic,
interchangeable, relatively low-value part of their business. If you
spec’d the item closely enough—if you created a good design, and your
drawings had precision; if you hired a cheap factory and inspected for
quality—who cared what language the factory workers spoke?
This sounded good in theory. In practice, it was like writing a cookbook without ever cooking. ...
... “What we had wrong was the idea that anybody can screw together a
dishwasher,” says Lenzi. “We thought, ‘We’ll do the engineering, we’ll
do the marketing, and the manufacturing becomes a black box.’ But there
is an inherent understanding that moves out when you move the
manufacturing out. And you never get it back.” ...
While this article is talking about the return of manufacturing to the United States and think caution should be exercised in be optimism about new low-skilled jobs returning. The United States manufacturing sector has been growing at a steady rate even as manufacturing employment has tapered off and declined. I think automation, not globalization, is the longer-term threat manufacturing jobs.
Finally, the United States is beginning to take energy efficiency seriously. ...
... The Negawatt is the general principle of cutting electricity
consumption without necessarily reducing energy usage through things
like energy efficiency. Lovins first introduced it in the keynote
address to the 1989 Green Energy Conference in Montreal:
Imagine being able to save half the
electricity for free and still get the same or better services! … You
get the same amount of light as before, with 8 percent as much energy
overall—but it looks better and you can see better. … In the space
conditioning case—heating and cooling—you get improved comfort. ... It
is doing more with less.
The Negawatt itself is a theoretical unit of power measuring energy
saved—Lovins came up with the idea after seeing megawatt misspelled with
an n and deciding that this was a potentially useful
conceptualization. It sounds self-evident now that you could reduce
electricity consumption not by cutting back on energy usage but by
improving energy efficiency standards and modernizing antiquated power
sources. But the concept was revolutionary at the time. A major problem
with getting people to understand the environmental and cost-savings
benefits of energy efficiency was a perverse incentives structure that
rewarded power companies based on amount of electricity sold, not for
how much of a needed service it was providing. Lovins described the
dilemma as such:
There isn't any demand for electricity for
its own sake. What people want is the services it provides. …
Nonetheless, most of our utilities have gotten into the habit of
thinking they're in the kilowatt-hour business, so they should sell
more. … For some reason, it's hard for them to get used to the idea that
it's perfectly all right to sell less electricity, and so bring in less
revenue, as long as costs go down more than revenues do.
Though Lovins brought the idea to the fore of the environmental
policy discussion, he wasn’t the first to articulate the issue: In 1982,
California devised an inspired solution, called decoupling,
to this problem. The idea was that the state would reverse the
incentive structure by establishing the revenue rate that the power
company would need to meet in order to return a profit, along with a separate
target for electricity production needed. Any revenue over the target
amount would be returned to customers, while anything below would be
added on to the following year’s bills. This meant that greater
efficiency could actually return greater profit.
Decoupling is largely credited
with making California the most energy efficient and environmentally
friendly state in the country. But a mere disincentive to keep utilities
companies from pegging profits to electricity usage was not enough, so
the state launched a second program called “decoupling plus” in 2007 in order to incentivize
power companies to lower their electricity production. Through this
program, regulators set savings targets, and customers are asked to pay
fees to help provide the down payment for power companies to meet these
targets. Regulators then calculate long-term economic savings of this
efficiency. If the utilities meet or surpass their targeted electricity
savings, they get a cut of the projected savings. If they don’t meet the
targets, the utilities pay a fine.
In 2007, California was still the only state in the union to have even a
basic decoupling system in place. In the last five years, though, there
has been a decoupling revolution across the country. By the start of
2011, 27 states and the District of Columbia
had adopted gas decoupling, electric decoupling, or both. While the
incentive programs are not yet in place in the vast majority of these
states, at least the initial roadblock of the bad incentive structure
has been largely removed.
Paul Solman: It being Thanksgiving, we give today's post to Governor William Bradford of the Plymouth Colony, built by pious Protestant purists backed by profit-seeking investors.
Bradford tells the story of the tough Massachusetts winter of 1623 and how the colony barely survived, unable to raise enough food to sustain themselves. One reason he gave: the rules of the colony, as laid down by the investors, specified that the colonists should till their land in common, as was the case in the England from which they migrated.
But the colony, perhaps desperate, seems to have changed the rules in order to jack up productivity, allowing individual families to tend plots on their own, an early instance of the benefits of pursuing self-interest as opposed to communalism.
I am on record: successful economic grand strategy entails a balance between cooperation and self-interest. Extremes in one direction or the other are unsustainable. According to Governor Bradford, extreme communalism wasn't doing the job in Plymouth, Massachusetts ca. 1623. ...
Ever wonder why the red and white striped pole is displayed outside many barbershops? Neither have I. Not until I stumbled across a morsel of obscure history about this symbol. I was immediately drawn in.
In the middle ages surgeons and barbers performed most of the operations. Yes, that’s right – barbers. Blood-letting was the most commonly prescribed treatment of the day, a cure for almost every ailment. Surgeons would order it, barbers would do the cutting. The red-and-white-striped pole outside the barbershop was the signpost that blood-letting was performed here. The red represents the blood being drawn, the white represents the tourniquet used, and the pole itself represents the stick squeezed in the patient’s hand to dilate the veins. Interesting, eh?
What I found even more interesting, however, was that for more than 3000 years, from antiquity until the advent of modern scientific medicine, blood-letting was universally accepted as the most effective remedy for almost every disease. It was recommended for the treatment of countless ailments ranging from cholera to cancer, tetanus to tuberculosis, gout to gangrene. It was even prescribed to treat acne and hemorrhoids. Before the circulatory system was understood, a prevailing theory was that blood could stagnate in the extremities. A build-up of bad blood could cause all manner of maladies. The cure was purging.
Every one bought in. For eons. Even in ancient cultures like the Mesopotamians and Egyptians. The Talmud (ancient Israel’s sacred writings) specified certain days for blood-letting. Hippocrates (the father of modern medicine) accepted the practice as good medicine some 500 years before the birth of Christ. So did Socrates and Plato. Early Christian writings offer advice on which saints’ days were favorable for blood-letting. Well into the scientific era the practice continued to prevail. The more blood drawn the better, even to the point of losing consciousness. Many sessions would only end when the patient began to swoon. 1799 George Washington, suffering from a throat infection, requested that he be bled heavily (nearly four pints) and died shortly thereafter.
One typical course of medical treatment began the morning of 13 July 1824. A French sergeant was stabbed through the chest while engaged in single combat; within minutes, he fainted from loss of blood. Arriving at the local hospital he was immediately bled twenty ounces “to prevent inflammation”. During the night he was bled another 24 ounces. Early the next morning, the chief surgeon bled the patient another 10 ounces (285 ml); during the next 14 hours, he was bled five more times. Medical attendants thus intentionally removed more than half of the patient’s normal blood supply—in addition to the initial blood loss which caused the sergeant to faint. Bleedings continued over the next several days. By 29 July, the wound had become inflamed. The physician applied 32 leeches to the most sensitive part of the wound. Over the next three days, there were more bleedings and a total of 40 more leeches. The sergeant recovered and was discharged on 3 October. His physician wrote that “by the large quantity of blood lost, amounting to 170 ounces [nearly eleven pints], besides that drawn by the application of leeches [perhaps another two pints], the life of the patient was preserved”.
“The life of the patient was preserved” by draining thirteen pints of his blood?! Outrageous! Sounds totally absurd today. But is it any more absurd than the widely accepted practice of draining off the strength of able-bodied adults by “curing” them with dependency-producing subsidies? Can we legitimately claim to be “preserving the life” of the needy by weakening their capacity to become self-sufficient? And how absurd is it to measure the effectiveness of our remedy by the volume of recipients who return for repeated “treatments”?
Is harmful medical treatment better than no treatment at all? The French sergeant who survived the blood-letting would doubtless answer “yes”. His surgeon acted upon the best knowledge that was available at the time. Is harmful charity better than no charity at all? Recipients would doubtless urge its continuation. But just as it took centuries of malpractice before the medical profession finally realized that blood-adding, not blood-letting, actually saves lives, so charitable malpractice may have to run its course.
Bloodletting persisted into the 20th century. Not until Pasteur (1822-1895) figured out that germs, not bad blood, cause diseases did the practice begin to fall out of favor. It took many more decades before the practice was finally abandoned. The modern science of microbiology finally brought a 3000 year practice to an end. I can’t help wondering how long it will take the tradition-steeped compassion industry to recognize the need for a fundamental change of practice.
I've actually incorporated the bloodletting metaphor in some writing I've
been doing on economic issues. (Stay tuned.) For millennia, bloodletting was
the preferred method for treating illness. Only in the past century or two have
we learned enough about the human body to see that this is not effective, even
destructive. For millennia, the preferred method for treating poverty was
generosity. Poverty was an inadequate distribution of a fixed amount of wealth.
Only in the past century or two have we really unlocked the powers of
productivity and exchange. Poverty is now more appropriately seen as exclusion
from networks of productivity and exchange.
No metaphor is perfect. Generosity had limited effectiveness over the
millennia and generosity still has a critical role to play today, particularly
in times crisis. But the revolution in productivity and exchange has radically
altered how we address challenges we face.
All my life I've heard that the Bible talks about wealth and poverty more
than any other topic, yet I find very few theologians who have ever taken even
one class in economics. I can probably count on one hand the number who have
had formal training in economics. The irony is that it is often those who most
contextualized the Bible on a range of issues ranging from science, to gender
roles, to slavery, to war, and to government, who I find become the most wooden
and "fundamentalist" on economic questions ... unable (unwilling?) to
make a leap from the advanced agrarian societies of the Bible era to modern
economies, sometimes even pining for retreat from the dark dystopian present
back to the bucolic bliss of the past. (And just to be fair, those that are
most "fundamentalist" on so many other issues want to baptize our
present economic order as the "biblical" model.) We aren’t going back,
and idealistic models like distributism and liberationism, or any other model
that doesn’t seriously take into account issues of productivity and exchange, offer
no guidance for the future.
There are many challenges confronting the church of Jesus Christ but I
continue to be convinced that it is the church's inability to come to grips
with modern economic order, and by extension the inability to help people find
meaning in the our present context and equip them for ministry in our present
context, that is at the top of the list of challenges.
3. "British people - and many others across the world - have been brought up on the idea of three square meals a day as a normal eating pattern, but it wasn't always that way." Breakfast, lunch and dinner: Have we always eaten them?
7. "It's a common grumble that politicians' lifestyles are far removed from those of their electorate. Not so in Uruguay. Meet the president - who lives on a ramshackle farm and gives away most of his pay." Jose Mujica: The world's 'poorest' president
8. You may have heard that there was a presidential election last week. Here is a map showing how the counties voted, with red being the most intensely Republican and blue being the most Democrat. (Source: The Real Reason Cities Lean Democratic)
9. Speaking of the election, there has been a lot written about how the GOP will need to change if they want to win national elections. As a right-leaning guy, I thought this article in Slate, The New Grand Old Party, and this one by Bobby Jindal, How Republicans can win future elections, were among the best.
13. Nanotechnology just keeps getting more amazing. "The latest invention from Stanford University’s Department of Electrical
Engineering sounds like something a superhero would have. A
self-repairing plastic-metal material has been developed by a team of
professors, researchers and graduate students." New Self-Repairing Material Invented at Stanford
15. Speaking of 3D-Printing, how big a deal is it? "Chris Anderson has exited one of the top jobs in publishing -
Editor-in-Chief of Wired magazine - to pursue the life of an
entrepreneur, making a big bet that 3D printers represent a massive new
phase of the industrial revolution." Chris Anderson: Why I left Wired - 3D Printing Will Be Bigger Than The Web
"A
flash mob (or flashmob) is a group of people who assemble suddenly in a
place, perform an unusual and seemingly pointless act for a brief time,
then disperse, often for the purposes of entertainment, satire, and
artistic expression. Flash mobs are organized via telecommunications,
social media, or viral emails." [Wikipedia accessed 11.12.12]
How do you define a church?"
Some Oklahoma doctors are trying to reform the health care industry by offering cutting waste from surgical services and making costs transparent. They founded Surgery Center of Oklahoma. Reason.tv has produced a video about it. Here is what they have to say at their YouTube page.
Three years ago, Dr. Keith Smith, co-founder and managing partner of the
Surgery Center of Oklahoma, took an initiative that would only be
considered radical in the health care industry: He posted online a list
of prices for 112 common surgical procedures. The 51-year-old Smith, a
self-described libertarian, and his business partner, Dr. Steve Lantier,
founded the Surgery Center 15 years ago, after they became
disillusioned with the way patients were treated at St. Anthony Hospital
in Oklahoma City, where the two men worked as anesthesiologists. In
1997, Smith and Lantier bought the shell of a former surgical center
with the aim of creating a for-profit facility that could deliver
first-rate care at a fraction of what traditional hospitals charge.
The
major cause of exploding U.S. heath care costs is the third-party payer
system, a text-book concept in which A buys goods or services from B
that are paid for by C. Because private insurance companies or the
government generally pick up most of the tab for medical services,
patients don't have the normal incentive to seek out value.
The
Surgery Center's consumer-driven model could become increasingly common
as Americans look for alternatives to the traditional health care
market—an unintended consequence of Obamacare. Patients may have no
choice but to look outside the traditional health care industry in the
face of higher costs and reduced access to doctors and hospitals.
More than fifty years ago Leonard Read wrote his famous essay, I, Pencil: My Family Tree as told to Leonard E. Read." It has been used in economics classes ever since to help students get a sense of the incredible complexity of market economies. The free market think tank, The Competitive Enterprise Institute, has made a six minute video that tells the I, Pencil story. There clearly is an advocacy component at the end of video but the video tells the story quite well.
4. Inhabitat reports on The World's First Commercial Vertical Farm Opens in Singapore. "The dense metropolis of Singapore is now home to the world’s first commercial vertical farm! Built by Sky Greens Farms, the rising steel structure will help the city grow more food locally, reducing dependence on imported produce. The new farm is able to produce 1 ton of fresh veggies every other day, which are sold in local supermarkets."
5. The New Republic has a very lengthy article The Mormon Ethic and the Spirit of Capitalism. It offers some interesting insights in to Mormonism's road from communalism to economic individualism, a trajectory followed by many Protestant sectarian movements. Jackson Lears writes:
"Mormons embraced economic individualism and hierarchical communalism;
they distrusted government interventions in business life but not in
moral life; they used their personal morality to underwrite their
monetary success. They celebrated endless progress through Promethean
striving. They paid little attention to introspection and much to
correct behavior. And their fundamental scripture confirmed that America
was God’s New Israel and the Mormons His Chosen People. It would be
hard to find an outlook more suited to the political culture of the
post–Reagan Republican Party."
"A number of students asked foreign policy questions, and then a young woman asked me about the responses I have received to my Atlantic cover story from this past summer, "Why Women Still Can't Have It All."
I answered, and several other young women followed up. After ten
minutes or so, I saw that the roughly 50 percent guys in the room had
gone completely silent. When I commented on the suddenly one-sided
nature of the conversation, one young man volunteered that he "had been
raised in a strong feminist household" and considered himself to be
fully supportive of male-female equality, but he was reluctant to say
anything for fear he would be misunderstood. A number of the other guys
around the table nodded in agreement."
7. French and Spanish legal documents from colonial Louisiana are being digitized, opening up a new window on colonial history in that part of the world. Colonial La. records shed new light on US history
8. People who know me personally know I tend to use sarcasm and double entendre in spoken communication. One of my biggest blogging challenges is editing most of this out of posts. Emoticons can help but some of the biggest misunderstandings I have had came from people not being able to see my wink or big grin as I write certain things. For that reason, I found this interesting: The Strange Science Of Translating Sarcasm Online
"In their new book "Religion and AIDS in Africa" (Oxford University Press), sociologists Jenny Trinitapoli and Alexander Weinreb seek to challenge the widespread view that religious beliefs and communities have unwittingly assisted in the spread of the disease through their resistance to preventative sex education. They also show that not only have religious groups had a largely positive role in AIDS prevention, but also how the epidemic has shaped religious beliefs in unexpected ways."
Ever wonder how far your money goes at the grocery store today compared to decades past?
When you adjust food prices for inflation, you might be surprised to
learn that your dollars go further today compared to 30 years ago -- for
most products at least. Don't believe it? See for yourself with this
grocery shopping simulator that reveals how much your grocery bill
varies over the past three decades.
How it works
You start with $35.46. That's the average weekly grocery budget for an
individual on a thrifty plan for a nutritious diet, according to Census data.
Of course, $35.46 in 2012 is not worth the same as in the past thanks
to inflation. In 2002, that amount (adjusted for inflation) is the
equivalent of $27.57. In 1992, it's $21.50. And in 1982, it's $14.79.
To calculate your grocery budget in the simulator, food prices from the Consumer Price Index have been adjusted for inflation using the Department of Labor's inflation calculator. ...
Go to the website and try out the simulator. Pretty slick.
Jobs going to other countries in China's 'great industry transfer'
Rising wages and shrinking export demand are forcing manufacturers to relocate to neighboring Southeast Asian nations and many that remain are seriously considering moving, a foreign trade official from the Ministry of Commerce said.
The official, who declined to be named, said that "nearly one-third of Chinese manufacturers of textiles, garments, shoes and hats" are now working "under growing pressure" and have moved all, or part, of their production outside China in what he called the great industry transfer.
Favored destinations are usually members of the Association of Southeast Asian Nations, especially Vietnam, Indonesia and Malaysia.
And in all likelihood, "the trend will continue" with more traditional labor-intensive manufacturers transferring production, he told China Daily. ...
... China's labor costs have surged recently by 15 to 20 percent annually, squeezing margins and driving some companies to bankruptcy.
According to the Ministry of Human Resources and Social Security, from January to June the minimum wage was raised, on average, by 20 percent in 16 provinces.
The minimum wage in Shenzhen now stands at 1,500 yuan ($238) per month, setting the highest standard for the whole Chinese mainland.
Many developing countries in Southeast Asia have lower labor costs.
The monthly wage for manufacturing jobs in Vietnam was, on average, 600 yuan in 2011, equivalent to the level of 10 years ago in Dongguan, an industrial town in South China's Pearl River Delta....
...But lower costs in other countries could soon change, some said.
"The advantage (of labor and production costs) in Southeast Asian countries will only last for a few years," said Chen Jian, a general manager of a garment company headquartered in Foshan, on the Pearl River Delta.
"The trend is just like what happened some 10 years ago when many manufacturing industries in Hong Kong and Taiwan moved to the Pearl River Delta to chase cheap labor. But now you can see how much our labor costs have gone up."
Camille Paglia on why a new generation has chosen iPhones and other glittering gadgets as its canvas.
Does art have a future? Performance genres like opera, theater, music
and dance are thriving all over the world, but the visual arts have been
in slow decline for nearly 40 years. No major figure of profound
influence has emerged in painting or sculpture since the waning of Pop
Art and the birth of Minimalism in the early 1970s. ...
... But there is a larger question: What do contemporary artists have to
say, and to whom are they saying it? Unfortunately, too many artists
have lost touch with the general audience and have retreated to an
airless echo chamber. The art world, like humanities faculties, suffers
from a monolithic political orthodoxy—an upper-middle-class liberalism
far from the fiery antiestablishment leftism of the 1960s. (I am
speaking as a libertarian Democrat who voted for Barack Obama in 2008.) ...
... It's high time for the art world to admit that the avant-garde is
dead. It was killed by my hero, Andy Warhol, who incorporated into his
art all the gaudy commercial imagery of capitalism (like Campbell's soup
cans) that most artists had stubbornly scorned. ...
... For the arts to revive in the U.S., young artists must be rescued
from their sanitized middle-class backgrounds. We need a revalorization
of the trades that would allow students to enter those fields without
social prejudice (which often emanates from parents eager for the false
cachet of an Ivy League sticker on the car). Among my students at art
schools, for example, have been virtuoso woodworkers who were already
earning income as craft furniture-makers. Artists should learn to see
themselves as entrepreneurs.
Creativity is in fact flourishing untrammeled in the applied arts,
above all industrial design. Over the past 20 years, I have noticed that
the most flexible, dynamic, inquisitive minds among my students have
been industrial design majors. Industrial designers are bracingly free
of ideology and cant. The industrial designer is trained to be a
clear-eyed observer of the commercial world—which, like it or not, is
modern reality.
Capitalism has its weaknesses. But it
is capitalism that ended the stranglehold of the hereditary
aristocracies, raised the standard of living for most of the world and
enabled the emancipation of women. The routine defamation of capitalism
by armchair leftists in academe and the mainstream media has cut young
artists and thinkers off from the authentic cultural energies of our
time.
Over the past century, industrial design has steadily gained on the
fine arts and has now surpassed them in cultural impact. In the age of
travel and speed that began just before World War I, machines became
smaller and sleeker. Streamlining, developed for race cars, trains,
airplanes and ocean liners, was extended in the 1920s to appliances like
vacuum cleaners and washing machines. The smooth white towers of
electric refrigerators (replacing clunky iceboxes) embodied the elegant
new minimalism. ...
... Young people today are avidly immersed in this hyper-technological
environment, where their primary aesthetic experiences are derived from
beautifully engineered industrial design. Personalized hand-held devices
are their letters, diaries, telephones and newspapers, as well as their
round-the-clock conduits for music, videos and movies. But there is no
spiritual dimension to an iPhone, as there is to great works of art.
Thus we live in a strange and contradictory culture, where the most
talented college students are ideologically indoctrinated with contempt
for the economic system that made their freedom, comforts and privileges
possible. In the realm of arts and letters, religion is dismissed as
reactionary and unhip. The spiritual language even of major abstract
artists like Piet Mondrian, Jackson Pollock and Mark Rothko is ignored
or suppressed.
Thus young artists have been betrayed and stunted by their elders
before their careers have even begun. Is it any wonder that our fine
arts have become a wasteland?
Strolling down the main shopping drag in this working-class Rio de
Janeiro suburb, it's not the second-skin dresses in shocking pink
spandex that catch the eye or even the strapless tops with strategically
placed peekaboo paneling.
The newest look can instead be found in stores like Silca Evangelical
Fashion, where the hot items are the demure, long-sleeved frocks with
how-low-can-you-go hemlines and the polyester putty-colored potato sack
dresses.
In the birthplace of the "fio dental" or dental floss string bikini,
so-called evangelical fashion has emerged as a growing segment of the
country's $52 billion-a-year textile industry, catering to the
conservative sartorial needs of Brazil's burgeoning numbers of
born-again Pentecostals.
Once so difficult to procure that evangelical women tended to make much
of their own clothes themselves, the modest garb is now popping up all
over Brazil.
On the tiny high street of Rio suburb Itaborai, not one but two
evangelical clothing stores compete to dress the faithful. M&A
Fashion got its start two decades ago as a conventional clothing shop,
selling the short, tight styles favored in this tropical country, but
shifted to evangelical offerings five years ago. Silca Evangelical
Clothing, two doors down, opened in March. ...
Jump is just one of some 15,000 teachers currently marketing their original classroom materials through the online marketplace, TeachersPayTeachers
(TPT). Since signing on to the site, she has created 93 separate
teaching units and sold 161,000 copies for about $8 a pop. “My units
usually cover about two weeks’ worth of material,” she says. “So if you
want to teach about dinosaurs, you’d buy my dinosaur unit, and it has
everything you need from language arts, math, science experiments, and a
list of books you can use as resources. So once you print out the unit,
you just have to add a few books to read aloud to your class, and
everything else is there, ready to go for you.”
To be fair, no one
else on TPT has been as wildly successful as Jump, but at least two
other teachers have earned $300,000, and 23 others have earned over
$100,000, according to site founder Paul Edelman. “Of the 15,000
teachers who are contributing, about 10,000 make money in any given
quarter,” he adds. ...
I've been reading Taking You Soul to Work by Paul Stevens. In Chapter Eleven, he presents the Ladder of Charitable Giving as articuled by the 12th Century Jewish mystic Maimonides. Nine hundred years later, too many of us have not learned from his important insights. Here is the ladder from the lowest form of charity to the highest form.
A person gives, but only when asked by the poor.
A person gives, but is glum when giving.
A person gives cheerfully, but less than he or she should.
A person gives without being asked, but gives diretly to the poor. Now the poor know who gave them help and the giver, too, knows whom he or she benefited.
A person throws money into the house of someone who is poor. The poor person does not know to whom he or she is indebted, but the donor knows who has been helped.
A person gives a donation n a certain place and then turns his or her back in order not to know which of the poor has been helped, but the poor person knows to whom he or she is indebted.
A person gives anonymously to a fund for the poor. Here the poor person does not know to whom he or she is indebted, and the donor does not know who has been helped. But, the highest is this:
Money is give to preven another from becoming poor, such as provdiding him or her with a job, teaching the person a trade, or setting up the person in business. Thus, the recipient will not be forece to the dreadful alternative of holding out a hand for charity. This is the highest step and the summit of charity's golden ladder. (78)
Pope John Paul II said that poverty isn't so much about money as it is about being excluded from networks of productivity and exchange. There are many today who bemoan materialism as expressed in our modern day consumerism. Yet many of those who protest consumerism take a materilistic view of the poor. Their primary objective is to redistribute wealth away from those who have more than enough to consume (wasting it on things like jets and yachts) so that others can have more to consume (on things like food and health care). This view of poverty sees people primarily as consumers. We are not. We are stewards. We were made to participate in our own care and to participate in networks of productivity and exchange that benfit the community. That doesn't mean that wealth redistribution isn't a piece of addressing poverty but an anthropology that sees poverty primarily as is an issue of consumption is materialistic and dehumanizing.
Russia has just declassified news that will shake world gem markets to their core: the discovery of a vast new diamond field containing "trillions of carats," enough to supply global markets for another 3,000 years.
The Soviets discovered the bonanza back in the 1970s beneath a 35-million-year-old, 62-mile diameter asteroid crater in eastern Siberia known as Popigai Astroblem.
They decided to keep it secret, and not to exploit it, apparently because the USSR's huge diamond operations at Mirny, in Yakutia, were already producing immense profits in what was then a tightly controlled world market.
The Soviets were also producing a range of artificial diamonds for industry, into which they had invested heavily.
The veil of secrecy was finally lifted over the weekend, and Moscow permitted scientists from the nearby Novosibirsk Institute of Geology and Mineralogy to talk about it with Russian journalists.
According to the official news agency, ITAR-Tass, the diamonds at Popigai are "twice as hard" as the usual gemstones, making them ideal for industrial and scientific uses.
The institute's director, Nikolai Pokhilenko, told the agency that news of what's in the new field could be enough to "overturn" global diamond markets. ...
Gavin Kennedy offers observations in response to a piece by Peter Foster in the Financial Times about Smith's two famous uses of the "invisible hand" metaphor, once in the Theory of Moral Sentiments and in the Wealth of Nations. Read Kennedy's whole post for more context.
... In Moral
Sentiments, Smith was not glibly crediting “the rich” with “spread[ing] the
wealth despite themselves”. The
plain fact was that the “proud and unfeeling landlords” had absolutely no
choice but to share their crops with the landless labourers as their sole source
of basic subsistence because without food neither the labourers nor their families would survive a week
– they had no other source of sustenance – and without food the labourers could
not work and their families would not grow up to replace them, and the
landlords would also starve. It was this dependence on their labourers which
“led” them to order that they be fed, metaphorically expressed as the landlords
being led by an invisible hand”. Moreover, given that agriculture, upon which
societies depended and had done so since it was introduced 11,000 years ago as
humans left the forests, their distributions of food, which had continued
through many regimes, mostly tyrannical, were managed by the landlords’
overseers, not noted for their humanity.
Of the accumulated wealth of the rich – basic conveniences and dressage
of their castles – next to nothing was shared with the poor.
In Wealth Of
Nations, the blanket term, “businessmen” also hides an important point made by
Smith, namely the fact that he was referring to the specific case of some, but
not all merchants, who were characterised by their felt insecurity for the fate
of their capital if they sent it abroad.
Instead, this sub-set of all businessmen, were “led” by that insecurity,
metaphorically expressed as “an invisible hand” – insecurity in the man’s head
could not be seen, i.e., it was “invisible” – to do what they chose to do out
of their fears. By so doing,
unintentionally they were led to add to the arithmetical size of national
“revenue and employment”, which was a public good.
In both cases, the
immediate cause of their doing a public good (the propagation of the species
and an addition to the arithmetical total of “revenue and employment”) was
metaphorically described by Smith as them being “led by an invisible
hand”. He made no claims to nosense
that there was an actual “invisible hand” present and working miraculously in
“markets”, through “supply and demand”, the “price system”, “general
equilibrium”, or any of the other nonsense wromgly in his name. ...
... Smith also taught
how self-interested individuals could act in disregard of the consequences of
their actions, for which he gives over 80 examples in Wealth Of Nations, which
did not add to the public good.
Self-interest also led merchants to favour tariffs, prohibitions, and
‘jealousy of trade’ ...
Nima Sanandaji has written an interesting paper about Sweden.
It largely points to the same historical facts that I have mentioned in
my previous writings, namely that Sweden during its most free market
oriented era, from 1870 to 1950, had the highest rate of per capita
economic growth in the world. After massive tax and spending increases
during the 1950s and 1960s, Sweden stopped outperforming other
countries, and after a dramatic leftist shift in economic policies
implemented by Socialist Olof Palme
after he became prime minister in 1969, Sweden started to seriously
lagg other countries. However, free market reforms implemented in the
1990s, and in recent years, have enabled Sweden to once again outperform
other Western countries in growth.
He also discusses possible cultural factors, and also points out that
Sweden in 1920 had a relatively low level of economic inequality,
despite the fact that government spending and taxation at that time was
only 10% of GDP.
Scandinavian societies have developed a unique culture with a strong work ethic and strong ethical attitudes regarding the claiming of welfare benefits. There are also high levels of trust and social cohesion. This social capital, which was built up before the advent of the modern welfare state, has played an important role in the success of Scandinavian countries.
For many decades, this pre-existing culture, allowed countries such as Sweden to have extensive welfare systems without the social difficulties, rise in worklessness and other effects that many would have predicted. Scandinavian countries have also reaped the rewards of relatively free market policies in some areas of economic life to reach impressive levels of wealth creation.
To characterise the Swedish model either as a social democratic utopia or a failed socialist experiment is a mistake. Sweden is a successful country in terms of having a low poverty rate and long life expectancy. However, these factors have much to do with non-government facets of Swedish society that pre-existed the welfare state.
As Milton Friedman has previously noted, the millions of US residents of Swedish descent also display low rates of poverty. They combine this with a living standard that is significantly better compared with Swedes living in Sweden. The transformation of Sweden from an impoverished agrarian society to a modern industrialised nation is a rarely mentioned, but quite significant, example of the role of free markets in lifting a country out of poverty and into prosperity. Low levels of inequality and low levels of government spending characterised this period of economic transformation. The golden age of Swedish entrepreneurship - when one successful firm after another was founded in this small country and gained international renown – occurred at a time when taxes and the scope of government were quite limited.
Sweden shifted to radical social democratic policies in the 1960s and 1970s, with a gradual reversal beginning in the mid 1980s. The social democratic period was not successful, as it led to much lower entrepreneurship, the crowding out of private sector job production and an erosion of previously strong work and benefit norms. The move towards high taxes, relatively generous government benefits and a regulated labour market preceded a situation in which Swedish society has had difficulty integrating even highly-educated immigrants, and where a fifth of the population of working age are supported by various forms of government welfare payments.
It is also important to remember that Sweden, like other Scandinavian nations, has compensated for policies of high taxes and welfare benefits by improving economic liberty in other fields. Some reforms, such as the partial privatisation of the mandatory pensions system and voucher systems in schools and healthcare surpass reforms in most developed nations. Since these reforms, and the reduction in taxes from the very-high levels of the 1970s to mid 1980s, Swedish relative economic performance has improved.
Swedish society is not necessarily moving away from the idea of a welfare state, but continual reforms are being implemented that increase economic liberty and incentives for work within the scope of the welfare system. Such trends are also visible in Finland and Denmark, with only oil-rich Norway being an exception.
But these are fairly predictable answers. So here's something weirder
and more colorful: As economics went global, job creation went local.
That sounds totally backward. But it's true. ...
Here is his graph showing job creation by year:
Here is his conclusion:
About half of the jobs created between 1990 and 2008 (before our
current downturn) were created in education, health care, and
government. What do those sectors have in common? They're all local. You
can't send them to Korea. As Michael Spence has explained,
corporations have gotten so good at "creating and managing global
supply chains" that large companies no longer grow much in the United
States. They expand abroad. As a result, the vast majority (more than 97
percent, Spence says!) of job creation now happens in so-called
non-tradable sectors -- those that exist outside of the global supply
chain -- that are often low-profit-margin businesses, like a hospital,
or else not even businesses at all, like a school or mayor's office.
It is both ironic and unavoidably true that the era of globalized
profits has dovetailed with the era of localized job creation in low
value-added industries, and that the upshot of this has been massive
gains at the top and slow overall income growth for the rest of us.
PITTSBURGH (AP) — In a surprising turnaround, the amount of carbon dioxide being released into the atmosphere in the U.S. has fallen dramatically to its lowest level in 20 years, and government officials say the biggest reason is that cheap and plentiful natural gas has led many power plant operators to switch from dirtier-burning coal.
Many of the world's leading climate scientists didn't see the drop coming, in large part because it happened as a result of market forces rather than direct government action against carbon dioxide, a greenhouse gas that traps heat in the atmosphere.
Michael Mann, director of the Earth System Science Center at Penn State University, said the shift away from coal is reason for "cautious optimism" about potential ways to deal with climate change. He said it demonstrates that "ultimately people follow their wallets" on global warming.
"There's a very clear lesson here. What it shows is that if you make a cleaner energy source cheaper, you will displace dirtier sources," said Roger Pielke Jr., a climate expert at the University of Colorado.
In a little-noticed technical report, the U.S. Energy Information Agency, a part of the Energy Department, said this month that energy related U.S. CO2 emissions for the first four months of this year fell to about 1992 levels. Energy emissions make up about 98 percent of the total. The Associated Press contacted environmental experts, scientists and utility companies and learned that virtually everyone believes the shift could have major long-term implications for U.S. energy policy.
While conservation efforts, the lagging economy and greater use of renewable energy are factors in the CO2 decline, the drop-off is due mainly to low-priced natural gas, the agency said. ...
My take on CO2 has been that we incentivize conversion to natural gas in the short to medium term. That will provide intermeidate relief. Continue to let the market do its thing on finding alternative energy options and less carbon producing production processes in manufacturing. Longer term, but starting now, move to nuclear power. There goes your CO2 problem. I'm glad to see that the first phases of the Kronicler's plan to save the world are being implemented. ;-)
... In the 1950s, one out of every 20 U.S. jobs required a state license. Since then, our economy has evolved from one based on manufacturing to one dominated by service professions. Today, almost 1 in 3 American occupations requires a license.
Concern about workplace over-regulation began as a fringe issue. Thanks to the recession, it's now firmly in the mainstream as more and more Americans, facing often involuntary career changes, bump into unexpected regulatory obstacles.
Progressives are joining what had been a strictly libertarian cause out of concern that excessive licensing requirements disproportionately hurt poorer Americans and newly arrived immigrants -- people who might hold down high-tech office jobs but have practical skills to contribute.
"A lot of these restrictions were put in place with good intentions, but now they actually hinder the push for sustainability," said Clark Williams-Derry, research director with the Sightline Institute, a progressive think tank in Seattle whose director recently noted in a report that getting a license to style hair in Washington takes more instructional time than becoming an emergency medical technician or a firefighter.
"Some of these laws have evolved to the point that they now protect the industry rather than the public," he said.
Traditional African braiding -- the art of weaving hair into tight snakelike rows, often with extensions or beads -- has become a common battle ground in the war over occupational licensing. Braiding is a skill many women of color learn as children and offers easy entry into the business world because so few tools are required. Braiders don't use chemicals, heat or scissors.
... Two new books, however, say local food isn't necessarily more eco-friendly, even though it travels fewer miles. They cite research showing long-distance transportation accounts for only about 4% of the greenhouse gas emissions in food production; most occur at the farm itself through the use of tractors and other equipment and materials.
So if you want to buy local food for its freshness or to support area farmers, fine, but don't do it to save the planet, conclude researchers from the Union of Concerned Scientists, an environmental group. Their two-year study, "Cooler Smarter," was published this spring. ...
... Another book goes even further in debunking local-food "myths." Its title, The Locavore's Dilemma: In Praise of the 10,000-mile Diet, plays off Michael Pollan's best seller, The Omnivore's Dilemma.
Co-author Pierre Desrochers, a geography professor at the University of Toronto-Mississauga, says large farms growing crops suited to their region are better for the environment because they use less energy per item and grow more food on less land. He says they offer economic benefits, too: lower prices.
Desrochers, who says he has received no funding from agri-business, has no problem with hobby farmers but doesn't want government supporting local food (or, for that matter, ethanol and sugar). Though kids may learn from community gardens, he says, they're better off learning computer and job skills. ...
There are good reasons for wanting to eat local food but reducing carbon footprints isn't one of them. It may actually increase carbon outputs. Large agricultural firms have streamlined the costs of getting food from field to market. A big part of that is reducing energy costs in transportation. Shipping a semi load or rail car load of produce over hundreds of miles is much less expensive and less energy intensive per item than having forty pickup trucks driving produce around to local small markets ... where, I might add, buyers then have to make a trip in addition to their visit to the grocery store, thus adding even more carbon output. Not thinking through the secondary and tertiary impacts of economic choices often has unintended consequences but romantic notions of bucollic bliss frequently overwhelm cool heads.
The Minneapolis-based Target Corporation makes a big deal about its "caring for the community" and brags on its website and in its stores that "since 1946, Target has given 5% of our income - which today totals more than $3 million a week - to our communities" ...
... Bottom Line: Isn't Target's strategy just a deceptive publicity stunt or public relations gimmick that allows it to overcharge customers with high prices and/or underpay its employees with low wages, under the guise of a "caring corporation"?
I'd love to see this advertisement from a retail giant:
"Our rock-bottom prices are so low and our wages are so high that we give money directly back to our communities daily through our "everyday low prices" and "everyday high wages." We believe that's a more effective, direct and honest strategy of serving our communities than if we were to over-charge customers with high prices and/or under-pay employees with low wages and then generate publicity by bragging about how we give back 5% of our inflated profits to the community. Our goal is to cut out the charitable foundation middlemen with expensive overhead, bureaucracy, and administrative costs, and serve our communities by giving money directly to our customers and employees through low prices and high wages. Our commitment to publicized community giving is 0%, because we've already given everything we can through low prices and high wages, and after a normal rate of return for our shareholders, we've got nothing left to give back." ...
... The convergence of smartphone technology, social-media data and futuristic technology such as 3-D printers is changing the face of retail in a way that experts across the industry say will upend the bricks-and-mortar model in a matter of a few years.
"The next five years will bring more change to retail than the last 100 years," says Cyriac Roeding, CEO of Shopkick, a location-based shopping app available at Macy's, Target and other top retailers.
Within 10 years, retail as we know it will be unrecognizable, says Kevin Sterneckert, a Gartner analyst who follows retail technology. Big-box stores such as Office Depot, Old Navy and Best Buy will shrink to become test centers for online purchases. Retail stores will be there for a "touch and feel" experience only, with no actual sales. Stores won't stock any merchandise; it'll be shipped to you. This will help them stay competitive with online-only retailers, Sterneckert says.
Branding strategist Adam Hanft says this all might sound futuristic, but much of it is rooted in reality. He says satellite stores will open in apartment buildings and office centers. FedEx and UPS will delve deeper into refrigerated home delivery. Google trucks will deliver local services. Clothing — even pharmaceuticals — will be produced in the home via affordable 3-D printers.
"Every waking moment is a shopping moment," says Steve Yankovich, head of eBay's mobile business, which expects to handle $10 billion in transactions this year. "Anytime, anywhere."
Game-shifting tech — such as smartphones, location-based services, augmented reality and big data, which makes sense of all the data on mobile devices and social networks — will most assuredly upend several multibillion-dollar retail markets, forcing retailers to adapt or die, say venture capitalists and analysts.
Eventually, 3-D printers will let consumers produce their own towels, utensils and clothes. While in their infancy, the devices have been used to print hearing aids, iPad cases and model rockets, says Andy Filo, an expert on 3-D printers. The technology is several years away, however, from being widely available and affordable, he says.
And almost all of it will be paid with … your phone. ...
... Driving the future
All of this will be possible within several years because of:
•Smartphones. Location-based services and the growing adoption of Near Field Communication — a wireless technology standard for one-tap payment — will turn consumers' phones into stand-ins for credit, debit and loyalty cards, says Bill Gajda, head of mobile at Visa. Meanwhile, Nordstrom, among many, is phasing out cash registers this year in favor of smartphones with store-designed apps for purchases and inventory.
•The death of cash. If credit cards diminished use of cash in the 1950s, powerful smartphones and tablets will hasten its demise. Both are reshaping the relationship between merchant and customer as newfangled wallets, and each is edging toward becoming credit card readers and (cash) registers.
"Cash has dug in its heels for small-value transactions, but with the arrival of each new tech offering (providing) an alternative way to pay for little stuff — text your parking payment, Starbucks mobile app, Square, etc. — cash is being further and further marginalized," says David Wolman, author of the book The End of Money.
•Augmented reality. The increasingly popular technology adds a visual layer of information on top of surfaces such as a mirror. One breakthrough might come at the mall, with AR mirrors that let consumers shop based on data projected on glass, say social-media experts such as Brian Solis.
Another intriguing option is Google Glass, which puts computer-processing power, a camera, a microphone, wireless communications and a tiny screen into a pair of lightweight eyeglasses. Ultimately, Google hopes the "smart" glasses — which are a few years away — will be able to access information in real time, including the ability to identify locations and provide additional information about your whereabouts.
Harnessing social media
As smartphones and tablets grow in popularity, retailers are trying to get their hands around Facebook, Twitter and social media, and cater to consumers, says Niraj Shah, CEO of Wayfair, an e-commerce company that recently passed Crate & Barrel to become the No. 2 Internet retailer of home products. It racked up a record $500 million in revenue last year.
Only 8% to 13% of retail shopping in the USA is done online. Impressive as future retail technology might look, it will take good old-fashioned customer service to boost those figures, says Will Young, who heads Zappos Labs. ...
... For many politicians, “outsourcing” is a four-letter word because it involves jobs leaving “here” and going “there.” But for many C.E.O.’s, outsourcing is over. In today’s seamlessly connected world, there is no “out” and no “in” anymore. There is only the “good,” “better” and “best” places to get work done, and if they don’t tap into the best, most cost-efficient venue wherever that is, their competition will.
For politicians, it’s all about “made in America,” but, for C.E.O.’s, it is increasingly about “made in the world” — a world where more and more products are now imagined everywhere, designed everywhere, manufactured everywhere in global supply chains and sold everywhere. American politicians are still citizens of our states and cities, while C.E.O.’s are increasingly citizens of the world, with mixed loyalties. For politicians, all their customers are here; for C.E.O.’s, 90 percent of their new customers are abroad. The credo of the politician today is: “Why are you not hiring more people here?” The credo of the C.E.O. today is: “You only hire someone — anywhere — if you absolutely have to,” if a smarter machine, robot or computer program is not available.
Yes, this is a simplification, but the trend is accurate. The trend is that for more and more jobs, average is over. Thanks to the merger of, and advances in, globalization and the information technology revolution, every boss now has cheaper, easier access to more above-average software, automation, robotics, cheap labor and cheap genius than ever before. So just doing a job in an average way will not return an average lifestyle any longer. ...
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