2 comments about The Case for Big Government (The Public Square).

1. Let me start by saying that I am a conservative. I went to the bookstore to find a book about the federal budget. I didn't find one but the title of this book caught my eye. As a conservative I was curious what case could be made for "big government." I'm always eager to challenge my beliefs so I bought it.
   
   I was disappointed. The title of the book suggested to me that a rational case would be made for big government. I didn't find that in the book. It seemed to me that the majority of the book was simply a history lesson on the American economy and where government was part of that history--the history itself was interesting, but I grew impatient for the *case* to be made for big government.
   
   The problem I had with the "history" portions of the book is that, again and again, I felt that the book was assuming that if the reader read how the government did something and the economy did something positive, that was proof that what the government did was good--but there's no logical connection to prove that. The argument is made that since the size of government was growing in the 1900's and the economy was growing, it can be concluded that a growing government does not hinder growth--but that is a non sequitur. I found no real evidence or strong arguments that suggest that the growing economy was because of the growing government, nor no real answer to the belief that the economy could have grown even more had it not been for the growing demands of government.
   
   As a conservative I found pages 136-138 particularly disgusting: The book goes on for three pages essentially fantasizing about all the different ways the government could tax the citizens and how much revenue the government could raise by doing so. Some of the ideas presented are downright confiscatory: Taxing wealth goes beyond the pale. It's bad enough that citizens cannot really own property, but rather are buying the right to rent it from the government (in the form of annual property taxes). The idea of taxing wealth takes that questionable idea to its logical (or illogical) conclusion: Such a tax would essentially mean that people would be working to earn the right to rent wealth from the government. The mind spins. But I digress.
   
   I guess I don't know who the target audience is. I suppose if it's targeted at frustrated liberals that need a little pep talk, perhaps it would serve that purpose. But with a title like "The Case for Big Government" I was expecting the case to be made compelling enough to hopefully convince some skeptics or, at least, explain the liberal rationale to the rest of us.
   
   If the latter was the intent, I think the book failed.



2. This book goes through the ins and outs of what the government can do and how it is best equipped to do it. This shows how the government can have a light at the end of the tunnel for everyone.

5 comments about The Elusive Quest for Growth: Economists' Adventures and Misadventures in the Tropics.

1. I understand that it's a book written to be accessible to people like myself who are not economists and will NEVER be economists, but that does not mean I have to be treated like I am severely unintelligent. The reading level of this book falls far below what any college educated person should be expected to read. I don't think the author of this book is nearly as deserving of the high accolades (not to mention profits) he has been receiving for writing this book. When a book contains the phrase 'I think learning under the right circumstances is a very good thing' you know that the quality of the writing is deficient. It is elementary at best.



2. The Elusive Quest for Growth: Economists' Adventures and Misadventures in the Tropics by William Easterly is an honest answer to part of the question, "why hasn't the world improved like we thought it would?" Easterly conducts a post-mortem conference on western aid programs since the end of World War II, finding that in many cases we should have known better. The incentives created by some nations' economic environment, or the aid programs themselves led national economies into periods of stagnant or negative growth. Easterly's mantra is "people respond to incentives." Ignoring this truth, a central tenet of economics, has led to several irrational choices in the area of development aid, and many failures to achieve our objectives.
   
   While pessimistic at times in his evaluation of what we have done in the West, the truth behind the text is that all these problems are preventable. Overall, a valuable and essential piece of information in understanding the state of the world today in regards to differing economic outcomes and how it has come to be that way.



3. Easterly is a brilliant and talented writer, as one would expect from the World Bank. At times, though, the Bank is isolated from the benefits of being subjected to such talent. Individual efforts are certainly reviewed, but at the end of the day, Stiglitz and others have argued that the very points Easterly makes suggests that the Bank is far off the course set by its mandate. We are therefore left with yet another recommended "fine tuning" of WB programming without a serious reflection over whether the WB is the proper mechanism for fiddling with the intricate clockworks that are national economies. I sign off by asking the Americans, Britons, Australians, French, Swiss and others from "developed" countries what it would take to allow an autocratic, bureaucratic and politically un-accountable (and this series of adjectives in no way lessens the tremendous respect I have for nearly every WB staff member I've met) organization tip-toe into THEIR administrative systems. I argue that the problem with economic tinkering in the Pacific is that it is, and looks to remain, the product of bureaucratic meddling on a scale similar to Mao's China, which undermines both the development of governance systems that can curtail corruption (i.e. local acocuntability for performance based on available resources- NOT (!!!!!!) in any way similar to efforts to make local authorities better subsidiaries of the notably corrupt central governments as is currently being pushed in the Pacific and elsewhere) AND legitimate free market systems. This book is a fantastic read, and I highly recommend it be paired with Stiglitz's "Globalization..." and Jeffrey Sach's "End of Poverty..." for a very ponderous but enriching book club series.



4. Watch Video Here: http://www.amazon.com/review/RN4QXC248QBRO Nathan Kirkland's review was made as part of a critical review assignment for the Fall 2008 Honors Colloquium on Creative Destruction at the University of Nebraska at Omaha, taught by Art Diamond. (The course syllabus stated that part of the critical review assignment consisted of the making of a video recording of the review, and the posting of the review to Amazon.)



5. The Elusive Quest for Growth, precisely lists the main reasons why slow or negative growth per capita has plagued emerging economies. Its thesis statement: people respond to incentives, brilliantly proves how many traditional ways of dealing with low growth economies is misapplied by bad government policies. The book is well structured and develops with great ease. The book is perfect for social entrepreneurs and economists.

5 comments about Applied Economics: Thinking Beyond Stage One.

1. Alone, this book is a very good, quick read on several important issues of our time for anyone who already understands the most basic economic concepts like prices, supply and demand. I rate it 5 stars based own its own merit, but for those who have already read Sowell's "Basic Economics," little extra can be found here. In this book, Sowell skips the introduction to basic economic concepts and goes directly to briefly analyzing issues like health care, discrimination and the development of nations. While there is some new information to be found, and although I still enjoyed the reading, I had seen most of it before.



2. I studied forensic chemistry in college and I very much enjoyed and was good at it. But, If i chose another discipline to study economics would have been it. Thomas Sowell has brought great enjoyment to a very real and useful subject. Economic thinking is wonderful because you can use it everywhere.
   
   Even though this book comes after Basic Economics, I don't think the first is required to follow this book. Sowell simply takes us into real life examples of "incentive" and "constraint" and the consequences political decision leave on society. The greatest asset of Sowell is his ability to stay so level-headed and not get wrapped up in the drippy pathos of noble intentions. Everything has a cost, how great is that cost going to be on real people?
   
   "Every economic system must operate within the inherent constraint that people's wants will add up to more than they can possibly get: therefore, the quetion is not what is the ideal system, or how do people behave ideally to produce ideal results, the question is what is the best economic system producing the best results, with people behaving as they actually do." (a rough quote of Thomas Sowell)



3. This book is absolutely fantastic. Thomas Sowell is truly an intellectual of the highest breed. His explainations on how economic policies, which look good on paper, can have far reaching and counter productive effects is clear and interesting. Somehow all his books apply to more then the sphere of life he intends to educate. This book likewise contains a message - of looking at long term outcomes - which applies to not only economists and policy makers but the average man as well. Economics, which has been called a dismal science, tells us of the necessary trade offs that people and institutions with vested interests will not.



4. 1. The purpose of economic analysis is not the goals being sought but the incentives and constraints that are created in pursuit of those goals. What we need to know is the characteristics of the processes set in motion and the incentives and constraints inherent in such characteristics rather than judging these processes by their goals. Once we start thinking in terms of the chain of events set in motion by particular policies and follow these events beyond stage one - the world begins to look very different.
   2. Political decisions tend to be categorical, while economic decisions tend to be incremental.
   3. Government subsidized prices force the tax-payer to pay for things that they have not chosen to pay for as consumers.
   4. Most politicians when making economic discussion about policy on a wide range of issues stop at stage one with little thinking about the economic consequences going into decisions at the highest levels.
   5. In high tax cities there is likely to be an increase in the rate at which business go out of business. When new arising companies have option of deciding where to locate their factories or offices, cities and states where high tax rates are likely are to be avoided. The high-tax jurisdictions can begin the process of losing business, even in stage one. But the losses may not be on a scale large enough that they are noticeable. Overseas shifting of production migrates towards locations where taxes are not so high. The reductions in local business in turn beings to reduce the locally earned income. Employees transfer to the new location and hiring new people at the remote location. Eventually, enough companies' desert, high tax city or state, for which, total revenue is less at a higher rate than during the time of lower rates. By this time, many of the politicians that set in motion higher-tax rate processes in motion have moved to higher office in state or national government. Remaining politicians in office are likely to be blamed for declining tax revenues.
   6. New York city was home to 100 of the fastest growing companies in the country. NYC had the highest tax rates in the country and the most expensive real estate per square foot of business office space. Yet the city was spending twice as much per capita as Los Angeles and three times as much per capita as Chicago on a wide variety of municipal programs. The large, spend-and-tax policies had success political outcomes, but negative economic consequences. Killing the golden gooses is a viable political strategy.
   7. Most government agencies are monopolies. Monopoly tends toward self-indulgent inefficiency. Monopoly is a norm for government agencies, whereas, few private firms are able to prevent rival firms from arising.
   8. When government power is used to control price as a way of reducing the cost of various goods and service they are creating shortages. A classic example of controlling prices without controlling costs was the electricity crisis of Californina, 2001-2002. The cost of generating electricity used by California rose for a number of reasons, one being, a year of reduced rainfall and reduced water flow through hydroelectric dams and less electricity production. The cost of electricity of running the generators did not decrease the cost of generating the electricity increased. Electricity from natural gas was rising, so cost of electricity generation from those means increased. Normally, rising costs means rising price, but California politicians imposed legal limits on how high electricity prices would be permitted to rise. The companies generating the electricity passed on cost to the public utilities that distributed the electricity, to the public. The wholesale price was 15 cents per kilowatt and the retail price was 7 cents per kilowatt. "the wholesale prices signaled that electricity was increasingly scarce, but retail prices told consumers that nothing had changed." Blackouts were the inevitable results. The California public utility company went broke. The public companies lacked money and credit with the wholesalers. The governor used state money to buy electricity. In the end Californians paid more for their electricity: billing problems, higher taxes, and depleted surpluses. The rescue attempt was a failure.
   9. Price controls have been causing shortages in countries around the world, and for literally thousands of years of recorded history. Almost all price controls were popular when they were implemented because most people did not think beyond stage one.
   10. When a private or governmental institution that can no longer satisfy its customers are forced out of business. Government agencies, can continue on despite demonstrable failures, and the power of government can prevent rivals from arising.
   11. All economic systems must find ways to restrict and deny the use of both resources and finished products through one mechanism or another.
   12. Central planning is often used to describe an economic system where key decisions are made by political authorities.
   13. Economic planning means the state takes a decisive role in the economy by using inducement and restrictive controls over the private sector.
   14. Central planning put into effect in a variety of countries around the world turned out to be worse than anyone expected leaving planned economies falling behind free market economies. By the twentieth century some socialist and communist have abandoned central planning and selling state owned enterprises to private entrepreneurs.
   15. The USSR is one of the richest endowments of natural resources on the earth, including larger reserves of petroleum than the middle-east, fertile farm ground, well-educated population. While it had the ingredients for prosperity, it was much poorer than the United States. What the USSR lacked was abundant incentives and mechanisms capable of converting its abundant inputs into outputs at a rate comparable to the United States.
   16. The USSR set prices by the central planners. The prices did not reflect the relative scarcities of particular resources and did not correctly reflect the upward or downward movement of price according to supply and demand. The central planners could not have clearly reflected the complex and volatile relative scarcities of 20 million, resources and finished products. This was an impossible task.
   17. In a capitalist economy, the prices of surplus good piled up in warehouse would have fallen because of cut backs on production. This would release labor, in order to avoid losses. On the other hand, shortages would create higher profits, greater demand for labor and material, and larger available supplies. Central planners allowed surpluses and shortages to last for years.
   18. Price move is required to move resources, finished goods, and people where they are in demand.
   19. The Soviet Union had surplus food to export before the government took over agriculture. The Soviet Union later had shortage and starvation and forced to import food, even while fertile soil existed to grow food.
   20. Economic analysis systematically examines the consequences of various economic actions and policies over a period of centuries.



5. Dr. Sowell picks up here where he left off with "Basic Economics." For the average person who would like to learn more about economics on a practical and not just theoretical level, start with "Basic Economics" and then move on to "Applied Economics." The author does a wonderful job in both books of explaining concepts and giving practical examples to illustrate the concepts. There is a good chance you will walk away from this book with a brand new perspective on certain accepted policies and ideas. Dr. Sowell is especially adept at making the point that politicians and much of the public live in the world of short term thinking, while economics forces you to think beyond stage one.

2 comments about One Economics, Many Recipes: Globalization, Institutions, and Economic Growth.

1. I might not agree with significant parts of the book, but it is interesting and, as is true with Rodrick's work generally, it makes one think. I suppose that the most problems that I had were with Chapter 4 on industrial policy. Take the issue of Coordination Externalities. There are large areas of the US market economy where these activities have been coordinated without government involvement (e.g., gasoline stations and cars, bee hives and farms or groves, the development of private highways during the first century and a half or so of US history, radio and television (coordinating stations and people who can listen to them), coordinating telephone exchanges, etc). Often government intervention has slowed or harmed that coordination. Do I agree that in theory that greenhouses and electrical grids go hand in hand? Sure. But it is not clear to me why the problem isn't that in some places the government is the one making these decisions. To me that would have been the hard question to answer. Anyway, I found the book interesting.



2. This is a terrific book. It begins with a good and troubling question: If economists are so smart, why have the most prominent success stories in economic development in recent decades been in countries (China, India, South Korea, Taiwan, Singapore) that ignored our advice? Rodrik's answer is that the advice - mainly Washington Consensus and then its follow-ons - was not so much wrong as a) premature and b) insufficiently flexible. His analysis of recent experience suggests that there are many ways to get growth started in a stagnant economy, and that it takes a very specific, informed, and open-minded local analysis - what he terms "growth diagnostics" - to determine what exactly are the binding constraints in each setting. Furthermore, policies that address those constraints must be politically viable, and that may mean tailoring them so that they create better incentives at the margin without destroying or transferring existing rents.
   
   Once economic growth has started, THEN some of the more standard policy prescriptions, introduced carefully and gradually, may be appropriate and even necessary in order to make growth sustainable. Thus, for example, Rodrik argues that both China and India are moving now in more orthodox policy directions, and appropriately so, but that both relied on quite unorthodox measures to make their initial way out of stagnation.
   
   There are many other issues addressed, including the importance of political arrangements that allow local needs and preferences to be expressed and the case for international trade policies that allow for diversity in national institutional arrangements. The book closes with a detailed and (to me) quite persuasive critique of the focus of the WTO on increasing trade for the sake of trade rather than considering more carefully which changes in trade policy actually make a difference in the lives of the world's poor. His analysis of the Doha Round suggests that, contrary to the received wisdom, a general worldwide liberalization of agricultural markets and removal of developed country subsidies would lead to only small reductions in poverty, and in fact would likely harm many poor consumers in many countries.
   
   I recommend this book highly to anyone interested in globalization and development. It is extremely well written, though some sections may be slow going for non-economists. The overall analysis should be quite readable and thought-provoking for the general reader wishing to get a fresh perspective on these important issues.

5 comments about The Sovereign Individual: Mastering the Transition to the Information Age.

1. From the back cover:
   "In the Sovereign Individual, Davidson and Rees-Mogg explore the greatest economic and political transition in centuries - the shift from an industrial to an information-based society."
   
   The book was first published in 1997. It is now 2008 and I was struck by how prescient and relevant "The sovereign individual" is, several of the changes described in the book are already happening.
   
   In the first chapter they describe four stages for society:
   1- hunting and gathering societies
   2- agricultural societies
   3- industrial societies
   4- information societies
   
   Most of the book is devoted to explaining the transition from the industrial to the information society. Chapter 2 "Megapolitical Transformation in Historic Perspective" provides a useful framework for understanding the four stage of society and it's transitions:
   1- Topography
   2- Climate
   3- Microbes
   4- Technology
   
   According to the authors technology is the most important factor, because of it's impact on the means of production and on the use of force.
   
   They spend quite a bit of time discussing the importance of violence in each of the four stages of society in shaping the political and social organization.
   
   They share their views on how the information-aged society will impact:
   
   - politics and violence (weakening of the nation-state and the rise of organized crime)
   - wealth creation and distribution (unequal and unequal)
   - the changes to morality, especially among the elite
   
   The book is written in a friendly but somewhat dark tone. 'Join us on a tour of the past, present and future' they might say. Read it.



2. A provocative book that aims to forecast the technological, political, and financial shape of things to come. The authors draw upon lessons of history and economic and sociological theory to offer strong opinions about the steps necessary to master the dynamic and, in their view, often chaotic transition to the information age. Among their predictions: the devolution of the governments of the Western industrialized nations, the creation of a cybercurrency initially linked to the gold standard and protected by unbreakable encryption technology, and nationalist reactionary policies fueled by protests from segments of society left behind by the advances of the information age.
   
   The writing is suffused with dry British wit, sarcasm, and an unflinching sense of realism (some might call it hyperbole). Combined with the occasional right-of-center rant, this might be a too much for some readers, especially for those with left-of-center sensibilities. However, the book's transformative value and intellectual heft more than compensate for the stylistic foibles of its authors. Highly recommended.
   
   [...]



3. "Are you ready to free your mind, Neo?"
   
   Just as Morpheus set about freeing captured minds from the grasp of The Matrix, James Dale Davidson has been passionate about showing people the real world political and financial MATRIX around them...and how it is used to control them and their ability to amass a fortune. He has done this quite well in several of his books, including this one.
   
   I am well versed with James Dale Davidson's writing. I started off with The Great Recogning, subscribed to his private newsletter, went to see him in person, spent a weekend at one of his seminars (EXCELLENT) and went on an investment tour with him. James is the real deal...a thinking man that knows alot about wealth creation and wealth protection. His major thrust has been for individuals to NOT see themselves as citizens of one particular country or governmental structure, but to see themselves as free entities who CHOSE which governmental structure best serves THEIR interests...because the greatest threat to your wealth and financial security is GOVERNMENTS (see Bankrupcy 1995 for statistics of what happens when a country becomes insolvent).
   
   Thus the concept of the Sovereign Individual.
   
   This book is an introduction to the world of being sovereign. If you read The Great Recogning and/or Blood In The Streets, you are very familiar with the concepts and really, not much new is offered by this book. If you haven't read those other books, then this book is a GOOD place to start. Then quickly move to The Great Recogning - because it is for THIS reason above all esle, that you will want to position yourself as sovereign and protect your family, your freedom and your lifestyle.
   
   IF freedom is important to you, if you feel a little uneasy with what is going on with the American economy and concerned about its imminent collapse...or America's POTENTIAL for collapse, this book is a MUST read for you.
   
   Buy it now!



4. Keep in mind that this book was written around 1997, before 9/11/2001.
   It is summer 2008 and the "US empire" is in decline.
   The US debt is quickly approaching the $10 trillion mark.
   (that is a one with thirteen zeros behind it)
   The US dollar is in decline.
   The US financial markets are in meltdown mode.
   The FDIC has taken over IndyMac, more banks to follow.
   The government is talking about a bailout of Fannie Mae and Freddie Mac.
   (how high can the US deficit go?)
   The government has enacted the so called "patriot act".
   The government has expanded the FISA rules.
   The housing market is in deflation mode.
   The commodities market is in inflation mode (oil approaching $150).
   
   Here are few quotes from the book:
   Page 20: "Governments will violate human rights, censor the free flow of information, sabotage useful technologies, and worse".
   
   Page 23: "All nation-states face bankruptcy and the rapid erosion of their authority".
   
   Page 29: "We forecast and explained why militant Islam would displace Marxism as the principal ideology of confrontation with the West".
   
   Page 137: "You can expect to see crises of misgovernment in many countries as political promises are deflated and governments run out of credit".
   
   Page 196: "Governments that tax too much will simply make residence anywhere within their power a bankrupting liability".
   
   Page 197: "Paper money also contributed significantly to the power of the state, not only by generating profits from depreciating the currency, but by giving the state leverage over who could accumulate wealth".
   
   Page 198: "Control over money will migrate from the halls of power to the global marketplace".



5. This is a very interesting book with disturbing implications: the authors contend that, in our lifetimes we will see the messy demise of nation states, with the most advanced of the Western democracies falling the farthest and hardest. The grim future they depict is essentially that of Stephenson's "Snow Crash" or Gibson's "Neuromancer".
   
   In making their case, the authors draw an interesting and convincing parallel between today's concepts of patriotism and national duty, and the Church in late medieval Europe.
   
   I'd fault the book for its hyped up rhetoric and excessive repetition of the same historical factoids. Also, the dire predictions of this 1997 book are somewhat undermined by the predictions of the scope of the Y2K computer failures, and also by the odd depiction of Peruvian ex-dictator Fujimori as the wave of the future.

5 comments about The Commanding Heights : The Battle for the World Economy.

1. This book was rather fun to read but I am not convinced that the authors have as deep an understanding of the phenomena they are writing about as they would like the readers to believe. The book reads like a narrative, full of assertions that are not backed by rigorous analysis of hard evidence. The authors do not critically explore causal relationships, nor do they talk about research that has done so. They present only one particular perspective on the unfolding of events, and they do not defend this perspective against potential criticism.
   
   My experience with economics has always reinforced the idea that causality can be difficult to establish, and can often operate in unexpected ways. An economist must proceed skeptically, being careful to explore alternative explanations and being prepared to defend assertions with theory and data. The authors do not seem to share this view, taking instead a more naive approach.
   
   Maybe I was expecting too much; after all this book is meant to be accessible to non-economists. However, making a book more accessible does not necessitate a lack of rigour or the absence of critical thought; the authors could have removed some of the redundancy in the book (their writing is far from concise!) and replaced it with explorations of alternative perspectives. The book would be greatly enriched by adding more discussion of research that supports (or opposes) their views.



2. That's the central message of this book. But to know why it happened, how it happened, and the geographic extent of this outcome, you need to read this fascinating book.
   
   Now if we can just get our own federal government to realize this . . .
   
   Also read what could be a good companion book: The Mystery of Capital: Why Capitalism Triumphs in the West and Fails Everywhere Else



3. &Both the book DVD are excellent. It is one thing to have lived through global change, it is another thing to understand the interconnections and long-term effects. The focus in several countries is a centrally planned or market-driven economy. Chile, Argentina, Bolivia, China and the United Kingdom are examined in detail for their success and failure. The Soviet Union - Russia, tried to retain dictatorial control and continues to have problems. The "Chicago School of Economics" celebrates its wisdom, models and planning in country after country. However, in every country and economics system, the sustainable natural resource base is overlooked. Keynes may be the "father" of market economics, but Keynes is a short-term perspective. We are approaching Peak Oil and Peak Water and 6.6+ billion people all striving for a USA standard of living. The USA standard of living is based on cheap oil and cheap water and we are entering the "Crude Awakening."
   
   Commanding Heights is an appropriate title, reinforced by knowledgeable people from Harvard, Washington DC and around the world. Commanding heights are about to come tumbling down in country after country as human population exceeds carrying capacity and countries compete for resources and food. The authors did an excellent job, but need to follow-up in light of resource, water and food limits.



4. If you want to understand globalization, this book is required reading. This book provides a full overview and history of 20th century globalization. It discusses the economic choices that third-world countries were making in order to become integrated into the first and second-world international trade system. It discusses the international financial institutions, the newly industrializing economies, market economic policies vs. state controlled economies, trade liberalization, trade policy decisions, and global economics and trade. I found this book to be much better than Thomas Friedman's The Lexis and the Olive Tree (which was also excellent). Although, I would also recommend that students of globalization should also read The Lexis and the Olive Tree and all of Thomas L. Friedman's books.
   
   There was a PBS series of the same name (Commanding Heights) that was based on this book. The PBS series is good, but it is not as good as the book. If you like The Commanding Heights book, you will also like Daniel Yergin's previous book called The Prize which is a history of the oil industry. The Prize is also excellent. It is the definitive history of the oil industry. In fact, I believe it is better than Command Heights. Although both books are excellent. The PBS series or special on the oil industry which was based on the book The Prize was excellent, but again it was not as good as the book.



5. A book from Dr. L's class that help to shape my belief in freedom in the marketplace. A very good historical overview of the economics of the middle and late 20th Century. There are wonderful historical explanations of the rise of socialism in the west and communism in the east as well as the two grand economic schools in the west which were the products of Keynes and Hayek.

2 comments about The West the Railroads Made.

1. More than any other single factor, railroads made the West the way it was and is in many respects today. The Federal government undeniably had a major role too. But the Louisiana Purchase, offers of free land, troops for security, and such, were government measures related mostly to setting the stage. It was the railroads which accounted for the details of Western development; details which caused settlers to lead their lives in certain ways and make decisions about which opportunities to pursue. Thus did the railroads play an incomparable role in how the West was developed. "The railroad was foreground, everything else was background," is the way the authors put it.
   
   The co-authors steeped in Western history with academic and professional backgrounds go into all aspects of the railroad's effects. Railroad lines not only determined the location of towns, but also the layout of them. In their earliest stages, roads in Western towns were oriented toward the railroad depot. Furthermore, the railroad depot was the first experience settlers and immigrants had of a town; and as a place for the receiving and shipping of goods, a town's economy and in some cases its existence depended on the depot.
   
   Railroads adapted as they changed the West by their presence. The original few early lines tied all parts of the West together internally and with the cities and states of the eastern parts. The value of land, the farms growing corn and wheat in such quantities that it affected the diet of all Americans, mountains of ore for Midwestern and Northern factories, and transport of large numbers of persons for rapid growth in many inviting areas were all major economic and sociological developments directly related to the railroads. As the West became more developed and their original roles faded, the railroads adapted by promoting tourism based on the natural wonders of the West and travel to major cities and other vacation areas.
   
   The work is based on innumerable facts colorfully related; which facts were taken from the authors' scholarly knowledge and interest in Western history. Another part of the book's popular style are the hundreds of illustrations enhancing the text. A map of one early Western town, for instance, demonstrates the town's streets leading in straight lines from the railroad depot so people and goods can move easily to and from this hub. Color travel posters complement text on the different railroad lines' playing up the West as a tourist destination. Railroad documents, prints, and photographs are other sorts of illustrated materials. The assorted visual matter is so bountiful it spills over into the back matter of notes, bibliography, and index.



2. The innovation of railroads in the early nineteenth century transformed America from a nation covering the eastern seaboard to the country it is today spanning from Maine to Southern California. "The West The Railroads Made" is an anthology of stories, illustrations, and photographs (some of which are color) to tell the tale of how the pioneers of this technology were essential in transforming America in the country it is today. "The West The Railroads Made" is highly recommended for locomotion enthusiasts everywhere, and for any community library collection for Railroads or American history.

5 comments about The Wealth and Poverty of Nations: Why Some Are So Rich and Some So Poor.

1. Landes is the man, and this book pretty much sums it up. His primary thesis, that when humans are given the freedom to be innovative and pursue their own interest, is familiar from Adam Smith, but Landes does it better, it's a convincing argument. Culture is the determining factor in the success and failure of nations, not chance, not geography, not even resources, and Landes makes it obvious, it seems.



2. A good and informative read, more so, the second time around. Landes, raises many excellent points for debate between socio-economics and cultural influences of peoples and their leaders, more ofter imposed upon them, as opposed to chosen to lead.
   
   The book chosen for an economics class just finished at Lund University, Lunds, Sweden. As, a retired American ex-patriot with a background in international finance, still interested in learning, this book is highly recommended for anyone seeking to gain a better understanding on the question "how did we get to where we are?" And divides the world's peoples into three catagories: those that spend billions yearly on losing weight; those that eat to live; and, those who don't know where their next meal is coming from! That our wealth (the West) is dependent on others less fortunate. What they can't make, they will take! That wealth is, in and of itself, a magnet for exporting of commodities or products, but when all else fails or is denied -- people (migration) will be the end product that swamps the west.
   
   We'd better wake-up and understand our need to declare World War III, not nation on nation, region on region, or religion against another religion, but a unified "War on Poverty" led by the west.



3. Landes provides an interesting and credible explanation of the differences in income/capita (now about 400:1, about 5:1 250 years ago) between the richest and poorest nations. En route, Landes also provides a useful perspective on today's globalization debate.
   
   Most of the differential is attributable to cultural values. Some, however, is geographical. If one marks off a belt a couple thousand miles in width circling the earth at the equator, one finds within it no developed countries. Year-round heat encourages proliferation of disease and parasites. Poor soils and extreme dry areas are added problems, as well as the debilitating heat's effect on workers.
   
   From about 750-1100, Islamic science and technology far surpassed those in Europe - then something went wrong and science became denounced as heresy by religious zealots. Similarly, state control allowed Chinese innovations to fall into disuse. China's flotillas far surpassed Europe's. The biggest ships were about 400' long and 160' wide (Columbus' Santa Maria was about 85' long), and the fleet totaled 317 vessels and 28,000 men. Then new leadership brought an emphasis on agriculture and all ocean-going ships were destroyed in 1525.
   
   Europe enjoyed a monopoly on corrective lenses for 3-400 years, beginning in the 1300s, more than doubling the availability of skilled craftsmen and allowing the further development of microscopes and telescopes around 1600.
   
   Cotton from India proved capable of multiple washings (vs. wool), thereby transforming standards of cleanliness and health.
   
   "Easy money" (eg. gold from Spanish colonies, Holland's discovery of North Sea natural gas) makes for a lazy economy that fails to develop the talents of its people.
   
   The Protestant Reformation gave a big boost to literacy, and spawned dissents that are at the heart of scientific endeavor. Data show a much greater percentage of scientists from Protestant vs. Catholic backgrounds. Unfortunately, after Luther, cleanliness became a particular cause for suspicion of heresy, and smuggling non-approved books led to the death penalty. Thus, the fate of Catholic southern Europe was sealed for 300-some years. Sicily also suffered from intolerance and superstition of Jews, forced them out, and imposed a backwardness in trade on itself.
   
   Landes then goes on to ask "Why did the Industrial Revolution occur in England?" Protestants were persecuted and expelled from France. Weavers from the southern Netherlands sought refuge in England and brought trade secrets with them, while Jews from Spanish persecutions brought networks of trade connections. England also had a much better system of roads, along with an emphasis on transport speed and time in general. Meanwhile, France was undergoing the upheaval of the French Revolution, India's craftsmen avoided using iron and steel (had made no progress in scientific knowledge for centuries), while Russia was hobbled by serfdom's tying peasants to the land to do forced labor. China and Japan had walled themselves off from the rest of the world - in fact, China lost many of its early innovations through disuse.
   
   Another problem for Russia was that serfdom left so much wealth in the hands of the nobility that overall consumer demand was limited. Russia's poor industry was only able to produce inferior rifles, resulting in enormous losses in the Crimean War (1854-56), the war with Japan (1904-05), and WWI. Finally, the Baltic states remained poor because they were tangled in an endless struggle for freedom.
   
   Regardless, once started, the Industrial Revolution proved difficult to copy because division of labor complicated industrial espionage. Across the Atlantic, scarcity of labor in the early U.S. led to high wages and a push for innovation. Thus, European devices were copied and imported, and skilled European craftsmen encouraged to move to high American wages. (Side Note: By the time of the Civil War, firearms production in the North vs. Confederacy was 32:1 due to the South's emphasis on agriculture.)
   
   The Spanish in South America kept Protestants and Jews out; independence came not because of the settlers' strength, rather Spain's weakness. Spain also brought a macho society attitude that adulthood brought males complete independence and idleness; South American immigrants were also less educated than those in North America and the immense landownings lent themselves to simple ranching enterprises. (American immigrants created a squatters' rights culture, with small landownings and a high motivation for self-sufficiency.)
   
   China and Japan both resisted foreigners; the latter persecuted Christians and their converts after being told these groups were part of Spain's control mechanism. Following a period of anti-foreigners, Japan committed to learning from and copying the U.S. and Europe. (The Chinese did also, but much, much later.)
   
   Muslims (Ottoman Empire) cut themselves off from the mainstream of knowledge via banning the printing press - had a problem with a printed Koran. Another major limiter was their diminishment of women. (The Japanese did also, but to a much more limited extent - eg. girls were well educated, they worked until married, and continued to work afterwards if their income was needed.)
   
   The Japanese realized they lost WWII because of greater U.S. industrial output. Landed attributes this to their support for a large, exporting auto industry - American occupiers saw no need for such an industry (comparative disadvantage). Japan's auto producing disadvantages (small market, lag in technology) were turned into advantages through the Toyota Production System.
   
   Landes points out that today's comparative advantage rationality can easily become tomorrow's mistake. His example is Germany - the British economist John Bowring lamented that the foolish Germans wanted to make iron and steel instead of sticking to wheat and rye and buying their manufactures from Britain. Had they heeded him, they would have pleased the economists and ended up a lot poorer. Similarly, the Japanese.
   
   Bottom Line: The most successful cures for poverty come from within. Educated, eyes-open optimism pays; pessimism only offers the empty consolation of being right. Gains from trade are unequal. Some activities are more lucrative and productive than others.



4. The historian who hates facts
   
   David Landes' The Wealth and Poverty of Nations is at once an impressive display of scholarship and a mortally flawed analysis of, as the author put the question "why some nations are wealthy and others desperately poor." The reason why I say it is flawed is not because I disagree with the main thesis - that attitudes towards innovation and openness to new ideas determine wealth - but rather that the way this thesis is argued is completely a-scientific, if not anti-scientific. In particular, David Landes' contempt for quantifiable facts, banishes the book from the land of scientific inquiry to the land of pure ideology.
   
   Historians who despise facts are nothing new. Marxist historians insisted for half a century, even in the face of the highest economic growth rates seen in human history, that the internal contradictions of capitalism were dragging it to its grave. Professor Landes' contempt for numbers, though, is much more damning than that of the Marxist historians. While they based their analysis exclusively on Marxist theory, and thus had no problem trumpeting their contempt for "bourgeois statistics," he stakes his analysis on the same facts he disparages throughout the book. The Wealth and Poverty of Nations is one long account of experiences of economic growth (or lack thereof) of various nations and thus one would expect it to be empirical.
   
   Professor Landes' disdain for numbers that do not agree with his theory is a recurrent theme throughout the book. It begins with an affirmation that Western Europe is the best place for agriculture because it receives more rainfall than any other area that flies in the face both of rainfall data and agricultural production data. Professor Landes seems especially disgusted by cliometrics. Now cliometrics is one of the most interesting developments in historical analysis. It is the application of the best and most sophisticated statistical methodologies to historical facts in order to shed new light upon historical process than is possible with the paltry pre-existing data. It is, of course, imperfect and cliometricians argue amongst themselves over many of their findings. However, cliometrics is one of the most interesting developments of historical inquiry, showing many pre-existing interpretations to be incoherent with the facts.
   
   When confronted with cliometrical evidence, instead of judging his thesis against this historical evidence, Professor Landes chooses instead to disqualify it, behaving exactly like the Marxist historians he (rightly) criticizes. One passage is particularly illustrating:
   
   "Some historians would argue that these strangers saw and understood less than they thought, or that they blackened the Indian picture by way of brightening the European. A few have even asserted - on the strength of estimates of food intake - that the Indian ryot lived better than the English farm laborer.
   
   Such calorimetric cliometrics seem to me implausible in the light of the gulf between European and Asian techniques. Nor am I persuaded by efforts to project twentieth-century comparative income estimates back to the eighteenth century. The opportunities to distort the result are endless, and the leverage of even a small mistake extended over two hundred years is enormous.
   
   In these speculative exercises, the numbers deserve credence only if they accord with the historical context. That context, for India, was one of limited property rights and technological backwardness. Western Europe, well on its way to the Industrial Revolution, was inventing and improving ingenious, labor-saving devices, in particular, both hand- and power-driven machines. It had long since passed Asia by. It's as simple as that: more productive techniques translate into higher incomes."
   (page 165 of the paperback edition)
   
   The numbers deserve credence only if they accord with the historical context. In other words: My analysis is, by hypothesis, correct. Therefore, any evidence to the contrary must be wrong. Dr. Goebbels could not have said it better. No matter that there is a reasonable literature stating that Europe did not have the most productive techniques nor the most complete property rights. (see China Transformed: Historical Change and the Limits of European Experience by R. Bin Wong and The Great Divergence: China, Europe, and the Making of the Modern World Economy by Kenneth Pomeranz). No matter that various stories can, and have been, told in which the economy with the higher wages is not necessarily the one that surges ahead. If it disagrees with me, it is wrong. It's as simple as that.
   
   Mr. Landes' lack of proficiency with numbers is evident even with regard to those that are not at odds with his thinking. For example, when analyzing the war between Paraguay and the Triple Alliance he states that 70% of Paraguay's male population died as a result of the brutality of allied occupation. While the brutality of the occupation is beyond dispute, the number is preposterous. The occupation of Poland for five years by Nazi Germany resulted in 20% reduction of the Polish population. The idea that the Brazilian and Argentinean occupation troops could be 3 ½ more efficient than the Nazi death machine with no concentration camps, machine guns, airplanes or even roads, trucks and railroads for that matter, really makes very little sense. These silly numbers have been re-estimated by more recent historians and cliometricians and have been shown to be much smaller.
   
   Ernest Rutherford is quoted as saying "All science is either empirical or stamp collecting." (actually, he used the word physics, but physics at the time meant empirical). Professor Landes' book is quite an impressive stamp collection, but fatally flawed empirical analysis.



5. We're reading this in my Business in World History class. The book makes me want to stab my eyes out and jump off of a sky scraper. Yay! :)

1 comments about Capitalism with Chinese Characteristics: Entrepreneurship and the State.

1. Professor Huang has written a brilliant critique of China's economic development (and of necessity, debunks much of what others have written about China's economy). He shows that China's development started in the 1980's with government programs focused on the rural economy, with programs designed to encourage rural entrepreneurs. Unfortunately with the Tiananmen Square crackdown, the new government leaders (technocrats from Shanghai) focused on major programs for urban areas, including massive construction projects and encouragement of foreign investment. Rural enterprises (and their required informal and official funding networks) were shut down. Although there was a proliferation of highrise buildings and massive construction projects (Three Gorges Dam, Shanghai's maglev, the Olympics,...) the result was slower income growth (especially in the rural areas), increasing illiteracy (parents could not afford to pay rapidly increasing tuitions), declining health care (hospitals, like schools, also became profit centers for local bureaucrats), expropriation of farmers' land, and much much more corruption, all of which has led to increasing social disorder among peasants who are finding themselves worse off. Party cadres' pay has rapidly increased and there are now far more of them. And productivity growth has declined or has even straight-lined. A return to the policies of the 1980's is clearly in order, but the current leaders, while trying to fix things, are still relying on top down commands and controls, and they have a much larger bureaucracy to keep happy.
   Anyone trying to understand China's economic development over the last thirty years must read this. The causes of China's growth are badly misunderstand; too many economists and analysts have been overwhelmed by the vision of Shanghai's massive development without understanding the tremendous cost and waste involved, and the penalties paid by the common people (income for the poorest Shanghaiese has actually been going down).
   The book should also be a lesson for Western politicians who think that China's methods of centralized planning and control of industrial policy can be applied in the West. Or maybe our politicians also understand how government control can lead to huge payoffs for politicians (as with Countrywide Credit's payoffs of at least two senators and lots of others politically connected, not to mention the huge salaries paid to Democrat politicians 'working' at Fannie Mae).
   Read this book if you have any interest in China or economic development!

5 comments about Flipping the Switch...: Unleash the Power of Personal Accountability Using the QBQ!.

1. I used this book for our annual staff retreat. It is great for employee development of personal accountability. This book has made a difference in the lives of my employees and subsequently in the culture of our company!



2. I think the book is so great that I purchased several copies for my employees to help them see what I saw...personal responsibility starts with ME! This books teaches you how to practically apply "giving" and "serving." It's about ME. I also think our politicians should read this book to learn what REAL personal responsibility is so that they can stop blaming the government for not doing enough.
   
   I'm responsible. It's about me. I change! It's not about them. It's MY life and I can change.



3. I liked the first book and it really got me thinking of all those IQ's in my life and how to get rid of them. I think I expected the same thing with this book but for whatever reason I came away feeling let down. It just seemed like less substance than the first and more of a fluff of highlights while trying to cling on to book 1. NOT a bad read but not as inspiring as the first.



4. Flipping the switch is a very enjoyable read in which the author John Miller is basically asking the question: Would you rather be part of the problem or the solution? To be part of the solution, all it takes, according to him, is a shift in perspective. Instead of asking "why me?" switch to "what can I do?". It is a simple shift, which takes you from the victim's chair into the driver's seat and allows you to experience satisfaction and transformation in all areas of your life.
   
   In this respect the book reminded me very much of the work of Ariel and Shya Kane Working on Yourself Doesn't Work: A Book About Instantaneous Transformation , How To Create a Magical Relationship and Being Here: Modern Day Tales of Enlightenment. The Kanes also present the idea that a shift in perspective can transform your life instantaneously and take you from the realm of working on yourself and thinking, to the realm of being yourself and being enlightened. Instantaneous Transformation is accessible when you flip the switch and choose to be present in the moment rather than lost in your thoughts.
   
   I highly recommend both the work of John Miller and Ariel and Shya Kane to anybody looking to live a "bright" life!



5. Flipping the Switch is a great follow up to QBQ. The concept of QBQ is great but to really make it a core value, it takes follow up and understanding on the part of the leaders. This book helps leaders to understand what is needed to make personal accountability a core value. It is a little more to think about than QBQ, but very helpful. It will be part of the whole package of personal accountability for me.