Month: October 2003
French cultural protectionism
…the homogenization in question, which today is perceived most often as Americanization, is (insofar as it exists) American only in its most superficial and least durable aspects. It is above all the vehicle for popular culture–the entertainment, clothing styles, and fast foods favored by the young, and popular music (but not all of it, by any means). Here the word “culture” is being used in the rather loose sense that has prevailed because it is the entertainment industry that leads the choir in lamenting American influence. This influence may present a problem, but to identify the whole of cultural life with entertainment is a travesty.
Contrary to what Jacques Chirac maintained, globalization is not a “cultural steamroller.” It is and always has been an engine of enrichment. Think, for example, how the French artistic sensibility was revitalized by the discovery–or rather fuller knowledge–of Japanese painting afforded at the end of the nineteenth century, or by the arrival in France of African art ten or twenty years later. There are plenty of similar cases.
This is Jean-Francois Revel, writing in the latest New Criterion.
It is hard to tell you just how much I liked this article. Consider this:
And if the French film industry in 2001 has recaptured market leadership at home and found successes abroad, this is not because it is more subsidized than formerly, but because it has managed to produce a handful of films whose quality was appreciated not only by their auteurs, but by the public. A commercially successful French cinema, with international appeal, evidences a more authentic diversity than the kind preached by tedious diversity-mongers.
This article is just full of excellent bits:
…in the domain of languages too, globalization leads to variety, not uniformity. The spread of English facilitates communication and mutual influence between cultures; it is hardly a trivial matter when, thanks to the lingua franca, Japanese, Germans, Filipinos, Italians, Russians, French, Brazilians, etc., can participate in the same colloquium, sharing information and ideas.
Or how about this:
…the endowment of Harvard, certainly not the largest university in America, is close to $20 billion–more than twice the annual expenditure of France on its entire university system.
Here is another:
Giancarlo Pajetta, an important Italian Communist leader, once said: “I have finally understood what pluralism is; it’s when lots of people share my point of view.”
Highly recommended, go through the full text yourself, and prepare for the forthcoming book, entitled Anti-Americanism.
Facts about trade
Poor nations are more protectionist than are rich nations, even when it comes to textiles. Agricultural subsidies hurt rich nations more than they hurt poor nations. Protectionism often hurts the environment more than does free trade. For more, read here.
Getting off the grid
In a few short months we have had major blackouts in New York City, England, Italy, and Scandinavia, see Lynne Kiesling’s blog for a running analysis of energy and electricity events. In each case critics have charged that ill-conceived deregulations have led to underinvestments in power grids.
To what extent could we avoid these problems by decentralizing electricity supply altogether? Why not just pull off the grid and have your own generator? How practical will this be in the future? More than ten percent of the American power supply is already produced this way.
These are exactly the kind of engineering questions that I have little sense of. But I have just read the most detailed case for decentralization to date. The authors argue:
Dispersed [electricity] generation has long been economically viable, with technology making it even more so. Natural monopoly is a myth.
The authors also give numerous details about how current regulations hinder such a decentralized market solution.
One of the authors, Alvin Lowi, is an engineer with numerous patents to his name and forty years experience. The article is in a Cato book edited by Fred Foldvary and Daniel Klein, The Half-Life of Policy Rationales, or click here for the Amazon.com link. Here is the Cato press release about the book, which looks about how new technologies can make government interventions unnecessary. Again, I cannot evaluate the arguments, but this is definitely an advance in the debate.
Where are all the new drugs?
The NYTimes reports that “introductions of new drugs plummeted last year to 17 from a high of 53 in 1996, despite a near doubling in annual research spending, to $32 billion.” The Times blames lost lab productivity from mergers. Based on close second-hand experience – my wife is a microbiologist who worked at a pharmaceutical firm as it underwent a merger – I can attest to the fact that mergers create havoc. Reaping the potential economies of scale and scope that drive the merger requires that product lines be discontinued and new lines of hierarchy established. But the power struggles involved in the transition are dissipative and disheartening. It’s not uncommon for some research programs to be canceled and then started again as new coalitons form. The uncertainty alone is draining. The best of the researchers have no stomach for this ordeal and jump ship.
The Times gets a number of things wrong, however. It can take a dozen or more years to research, develop and get a new drug approved so it makes no sense to compare this year’s research spending with this year’s output. The fact that research spending is up even though current output is down is a positive signal of potentially better things to come.
The Times also misses the fact the FDA was approving drugs faster in the late 1990’s than for many decades previously. The FDA got burned, however, as Pulitzer prize-winning critics accused it of endangering the public. Sadly, the FDA learned its lesson and slowed down. (See here for more on FDA incentives and why the Pulitzer prize committee did us all a disservice.)
Finally, the Times says nothing about why the mergers are taking place. One reason is the rising cost of pharmaceutical research. It now costs $900 million dollars to bring the average new drug to market. Firms are merging in order to better control these costs and diversify their risks. FDA reform could lower these costs.
The new Stiglitz book
Last night I read my newly-arrived copy of Joseph Stiglitz’s The Roaring Nineties: A New History of the World’s Most Prosperous Decade. As you might expect from Stiglitz, it is well-written and smart.
His key theme is that, although the nineties were a wonderful time economically, they also brought some dangerous trends. Most of all, the capital market ruled resource allocation, and economic policy, like never before. We misallocated resources on a tremendous scale, such as with the telecommunications boom and bust. Stiglitz also argues against the deregulation of the nineties, as too little was done to reign in corporate abuses, such as Enron. He also believes that the Clinton administration was too obsessed with balancing the budget.
My hesitations about this book are simple: We are never given much of a recipe for how things could have been better. Stiglitz opposes the repeal of Glass-Steagall, and the Clinton telecommunications reforms. To be sure, these policies were problematic in some regards, but they did not drive the excesses of the 90s. To what extent can government policy limit a dot.com or fiber optic boom? To what extent can government policy, as opposed to intra-firm institutional reforms, limit corporate conflicts of interest? We do not get much of an inkling on these critical issues.
Occasionally Stiglitz gets specific, but his examples do not help his case: “Would the bubble have been averted if only we had only supported better accounting of executive stock options? We will never know the answer.” But the answer is almost certainly “no,” most commentators regard the option accounting issue as a red herring, here is one treatment of many.
It is OK to write a pure critique, rather than a recipe for change, but the book promises “a coherent and convincing alternative.” That is precisely what we do not get. The final chapter “Toward a New Democratic Idealism” also does not move beyond the vague. It is not enough to say we had too much deregulation and forgot our concern with social justice.
Stiglitz also expresses concern that the Clinton administration pushed “market fundamentalism” on the poorer countries of the world, while rejecting it at home. I cannot agree here. Even if you take the Stiglitzian worldview as correct and given, the quality of government in the developed countries is much higher than in the developing world. Admittedly the quality of the market is often higher as well, but why promote a regulatory regime that will bring corruption and privilege? Most poorer countries simply cannot count on good and honest regulation, and they don’t have Joe Stiglitz as the main economic advisor to their Presidents.
Are conservatives happier than liberals?
In the 1998-2002 GSS [General Social Survey], extreme conservatives are much more likely to report being “very happy” than extreme liberals–47.1% to 31.6%. Earlier years show a similar pattern.
This conservative happiness carries over into most other aspects of life as well. Conservatives usually report being happier in their jobs than liberals. In the 2002 GSS, for example 65.2% of extreme conservatives report being “very satisfied” with their jobs in general, while only 50% of extreme liberals report being very satisfied. When the question is broadened to satisfaction with job or housework, a similar pattern obtains. In the 1998-2002 GSS, 61.0% of extreme conservatives reported being very satisfied, compared to 53.6% of extreme liberals.
As to finances, in the 1998-2002 GSS 34% of extreme conservatives report being satisfied with their finances compared to 26.4% of extreme liberals. More extreme liberals (34.5%) than extreme conservatives (25.8%) report being “not at all satisfied” with their finances.
Conservatives usually tend to report less marital unhappiness than liberals.
I am not endorsing this link, though I do find it intriguing. But might conservatives feel a greater need to claim that all is well? For the full story, pursue this link.
Doomsday scenarios collide!
Oil and gas will run out too fast for doomsday global warming scenarios to materialise, according to a controversial analysis presented this week at the University of Uppsala in Sweden. The authors warn that all the fuel will be burnt before there is enough carbon dioxide in the atmosphere to realise predictions of melting ice caps and searing temperatures.
The full story is from The New Scientist.
Torts and Crimes in Mississippi
Tyler noted how the rotten court system in Jefferson County Mississippi is finally being investigated by the FBI. At the heart of the investigation are contributions by lawyers to elected judges. It also doesn’t help that Jefferson has a large and poor minority-population. See the links for why this is important. Email me if you want copies of the papers and don’t have a subscription to the journals.
The economics of classical music
A search on Amazon.com yielded 276 distinct performances of Beethoven’s 5th symphony, many at bargain prices. Attendance at classical concerts is steady or slightly up. The classical share of the CD market is roughly constant at 3 to 5 percent. On the other hand, many orchestras are experiencing financial difficulties, and some are closing.
Complaints about the economic fate of classical music have been common for many decades. In fact parts of the 1980s and 1990s — not long ago — were a financial golden age for the classics, driven by The Three Tenors, Gorecki, and replacing albums with CDs. The entire story comes from the Federal Reserve Bank of Boston, click here.
In my view, the biggest single dilemma is whether the next generation of philanthropists will have any loyalty to classical music institutions.
How about classical music on the radio?
Classical music stations have disappeared in many cities; one-third of the nation’s top 100 radio markets do not have a classical station. After 63 years, ChevronTexaco’s radio broadcast from the Metropolitan Opera House will be off the air next year.
I suspect that the future of classical music on the radio lies in satellite radio, read this article from today’s Washington Post. XM satellite radio has about one million subscribers and its classical stations are excellent, long pieces with high sound quality, not just another rendition of a Telemann shortie or a Boccherini guitar quintet.
Thanks to William Sjostrom for the pointer to the article.
Addendum: Kevin Brancato tells us that fewer than one percent of American symphony orchestras have gone bankrupt in recent years.
Most Amish kids have cell phones
At least once they turn sixteen, or so I learned from the recent DVD release The Devil’s Playground, a 77-minute award-winning documentary, which I rented at my local Hollywood video. An Amish ritual called “rumspringa” (“running around,” note that the link shows, among other things, Amish youth drinking beer) allows youths to sample the previously forbidden delights of the outside world to their heart’s content. At this age Amish youth start having wild parties (organized by cell phone), premarital sex, and often hard drugs as well. The Amish elders believe that the youth must be allowed to sow their wild oats, if they are ever to become good Amish later. One Amazon.com reviewer wrote:
I was not prepared to see a trailer full of Amish teens drugged up to their eyeballs right on Amish land. The Amish Rumspringa teens careen around and throw such wild parties that people come from all over America to attend. Apparently, it is well known (except by me) that “Amish kids have the best parties.”
Ninety percent of Amish youth later decide to join the church and give up such wanton ways. Never before in history has a higher percentage of the Amish remained in the fold.
Muzak
It’s not surprising that background music can have a significant effect on how people shop (fast versus slow has the expected effect on shopping and dining time, for example). I am amazed, however, that the style of music can affect what people buy. British researcher Adrian North (includes many abstracts of North’s music research) and colleagues split up a wine shelf into French and German wines. On alternate days they played French and German music.
When the tape deck wafted French accordion tunes down the aisle, shoppers bought a total of 40 French wines and only eight German wines. On days when the pounding beat of a German oompah band greeted shoppers, they bought only 12 French wines but 22 bottles of German wine.
The economic importance of glass
Without glass:
…there can be no light switch, for there is no glass for the light bulb…There are no contact lenses or spectacles to help us.
There is no clear mirror in the bathroom to shave by, no bottles of ointment or glass for our toothbrush. There is no television in the living room, for with no screen it cannot exist. When we look out of the windows we see no cars, buses, trains or aeroplanes, for without windscreens none of them can operate (and they almost certainly have not been developed anyway). The shops in town have no window displays…
…There would almost certainly be no electricity, since its first generation depended on gas or steam turbines, which required glass for their development…Our fields would produce less than one twentieth of their current yield without the fertilisers discovered by chemists using glass tools…Telescopes, microscopes and spectacles let us see the distant and the near in ways which the human eye unaided cannot do.
From The Glass Bathyscaphe, by Alan Macfarlane and Gerry Martin (these links on the authors are more interesting than usual), a distinguished historian and an industrial expert on glass, note that Martin is also Macfarlane’s patron.
The authors examine twenty critical experiments that changed our world, chosen at random, fifteen of them could not have been performed without glass. For largely accidental reasons, glass manufacture was rising in the West while it was declining in China, Japan, and the Islamic world. Better use of glass, and better science, led to a spiral of technological improvements that enabled the rise of modern science and the Industrial Revolution. Here is a short summary article by Macfarlane.
The authors offer an on-line essay on glass in India. Here are some film clips on the importance of glass in history. Here are press reviews of the book. The authors are properly subtle and qualify their thesis in the required ways, the book is also well-written and entertaining, recommended reading.
The 15 Greatest Jazz Albums?
Norman Geras lists his fifteen favorite jazz albums and solicits a reader poll. Tom Runnacles of CrookedTimber.org offers his selection. My number one pick is Thelonious Monk’s Solo Monk, followed by lots of Sun Ra and then Cecil Taylor’s Silent Tongues.
What goes around, comes around
The FBI is investigating Jefferson County in southwestern Mississippi, a poor area with fewer than 10,000 residents. Apparently the county is known for its very high tort settlments. For instance, when the makers of fen-phen were sued, the five plaintiffs from that county received $150 million. The 800 other fen-phen cases received a total of about $400 million.
One source notes:
Since 1995, lawyers say, Mississippi juries have returned at least 19 verdicts of $9 million or more, including 5 that exceeded $100 million each, although plaintiffs sometimes settle for less as the appeal process proceeds. Lawyers seek clients through aggressive advertising.
Mississippi state now has limited suit rewards by law, but there remain many cases filed before the relevant deadline for this limitation. One settlement recipient remarked that juries “awarded these people this money because they felt as if they were going to get a cut off of it.”
The above link offers this jaw-dropping fact:
Jefferson, with 9,740 residents, is a small county, but litigation there is a big business. An affidavit filed in June by a researcher in one case, who combed the files of the Circuit Court, said that more than 21,000 people were plaintiffs in Jefferson County from 1995 to 2000.
The possible corruption runs deep:
Bankston Drug Store, the only pharmacy in Jefferson County, has been named in hundreds of suits since the fen-phen settlements as a way for mass claims to be filed in the county.
Hilda Bankston, the pharmacy’s former owner, was subpoenaed earlier this year by the same grand jury that indicted…the others.
Bankston was asked to turn over, along with customers’ personal and prescription histories, customer and pharmacy records “that appear to be false or not produced by your company.”
Something is rotten in the state of Denmark, as they say.
Organ trafficking
I learned the following today:
1. Most sales of body organs involve kidneys.
2. Patients who receive a kidney from a living donor have a much better chance of surviving.
3. In the developing world the going rate for a kidney is between $1000 and $2000.
4. In the Philippines there is essentially a free market in bodily organs. The “grey market” is growing rapidly in many countries.
5. Two different studies suggest that kidney sellers do not benefit in the long run. Most sellers pay off debts with the money, and end up back in debt, their acts of desperation do not succeed. Many end up with long-run health problems, or can no longer perform heavy labor.
From this week’s New York Review of Books (electronic subscription required), “The Organ Market,” by Sheila and David Rothman. The authors are involved with an “organ watch” movement, which seeks to stop organ sales abuses.
My take: I can believe the “behavioral irrationality” argument that most kidney sellers do not benefit very much, if at all. But the Rothman piece never tries to estimate how many lives are saved by the practice. Furthermore, many of the selling “victims” might have performed some other desperate act instead. So the organ selling idea, although repugnant to many people, in my mind remains in the running as a serious policy proposal.
There is a moral hazard problem, namely hospitals and doctors may take kidneys from people when they shouldn’t. Or a hospital or doctor may let a patient die, to harvest the kidneys. Are more lives lost through the moral hazard problem than are saved through the kidney sales? I doubt it. Do the kidney buyers benefit more than the kidney sellers lose? Probably.
Utilitarian calculations are not the only value at stake here, but so far they point toward allowing organ sales. The best argument against is to cite the likelihood of accompanying rights violations, which are real, and claim that such a factor outweighs the utilitarian benefits of the practice.
Addendum: On point number two, the authors write: “patients who receive an organ from a living donor have far better prospects than those who receive an organ from a cadaver.” Co-blogger Alex sends me the following link, which shows a correlation of about ten percentage points more of survival, if you receive an organ from a living donor, the causal relationship may be weaker, given the differing ages of various recipients. Alex wonders if allowing kidney demanders to “buy from the dead” would reduce the problems of sale from the living. This is a good point, but I am not sure it eliminates the basic problem. First, sales from the dead may not displace sales from the living; I cannot determine whether the Philippines (not to mention other locales) restricts sales from the dead but it is not obvious that such differential restrictions exist. Second, many of the buyers are relatively wealthy. If a “live kidney” raises the chance of survival by only a single percentage point, they may still pay for that, which would continue to prop up the market in kidneys from the living. Kidney middlemen may find it easier, and more profitable, to buy from the living for a thousand or two, rather than pursue cadavers, where the quality of the kidney is presumably harder to determine.