Philip Greenspun’s Weblog

I’m about to reread A Farewell to Alms, by Gregory Clark. The book challenges the conventional wisdom of economists about how and why economies grow. Ask a typical economist for an economic growth recipe and he or she will say “low taxes, property rights, security and stability.” Clark has assembled amazing quantities of data on wages, prices, and rents going back to the year 1200 in England. He demonstrates that England circa 1300 had all of the things that a modern economist says are sufficient to guarantee economic growth and yet its economy stagnated for centuries.

Clark starts with a defense of Malthus. In most societies at most times in human history, Malthus was right. The population expanded until everyone was living at a subsistence level. Given an improvement in technology or health care the long-term result was not that people on average had an improved standard of living, but rather a population of increased size living at an even lower material standard. You had to be robust in filthy Europe to survive infections, but even an underfed weakling was relatively safe from disease in hygienic Japan and China. The consequence was that China and Japan were more densely populated and strikingly poor by European standards right up to the Industrial Revolution.

If Malthus and Clark are right, foreign aid is the ultimate career path for a young person. Western donors are motivated by images of people living in poverty. Money flows in. Even after subtracting for the overhead of running all of the NGOs, a certain amount of food and health care aid reaches the unfortunates. You might expect the NGOs to suffer a reduction in demand and a reduction in donations as the unfortunates begin to look less unfortunate. Malthus would predict that the former unfortunates will have a lot of children and eventually the larger population will be worse off than before, which will result in more dramatic TV images of starving people, more donations, and more job opportunities for our young NGO careerist.

Population growth combined with personal income growth is an anomaly, according to Malthus and Clark. The U.S. population has been growing steadily in recent years and our average inhabitant is no better educated than before. Politicians stand up and angrily ask why average personal income hasn’t grown. The real question is why average personal income hasn’t shrunk.

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A few insights from Omnivore’s Dilemma by Michael Pollan…

Virtually everything that we Americans eat is a form of corn. Cows, chicken, farmed fish, and pigs are fed from corn, resulting in meat, eggs, and milk from corn. Most of the ingredients in processed food come from corn, including the lecithin, the mono-, di-, and triglycerides, the coloring, the citric acid, and the “natural raspberry flavor” (need not come from a raspberry, only from something “natural”… such as corn).

Cows are designed to eat grass, not corn. If you feed a cow corn she will tend to get sick and require massive doses of antibiotics. Most of America’s cows are in fact sick and pumped full of antibiotics. In some cases the antibiotics are necessary to prevent bacteria from turning the corn in their stomachs into a gas that would literally explode the cow. Humans were adapted to eat meat from grass-fed animals. Steak from a corn-fed animal is probably not as healthful and the heart disease that we get from eating steak might well be caused by eating corn-fed cows.

Whole Foods is a scam. “Organic beef” is corn-fed beef from cows that are crammed together in filthy feedlots. They might get lighter doses of antibiotics or skip out on eating protein derived from dead animals, but the steaks at Whole Foods don’t come from what you would recognize as a traditional farm. [I went into a local Whole Foods and asked if they had any grass-fed beef; the clerk looked in one little corner of a case where such beef sometimes was stocked and came back to report that they were out.] “Free range” chickens are produced in vast chicken houses where the chickens are locked in for all but the last two weeks of their life. During those last two weeks a couple of doors are opened onto small side yards. The chickens could in theory go out these doors and walk around a bit, but they don’t because they’ve no experience with leaving the big chicken house.

Farmed salmon is a scam. People fall in love with salmon because it has a lot of nutrients and omega-3 fatty acids. Most of those properties are side-effects of the natural life of a salmon. A farmed salmon that is fed on corn is literally “chicken of the sea” and there is no reason to believe it is more healthful than a corn-fed chicken.

Pollan visits a farm that runs more or less naturally, Polyface. The cows munch the grass, the chickens run through the pastures and eat insects that would become pests, the surrounding forest cools and waters the pastures, the manure from all of the animals fertilizes. This is more or less how things work in Nature and it is nothing like the “organic” farms that supply supermarkets. Industrial farming is always a monoculture, which means that you need to bring chemical fertilizers in to replace nitrogen and pesticides to control insects. When the animals are fattened in feedlots their manure becomes a waste product to be treated rather than a fertilizer for the fields where they eat grass.

Organic produce sold at supermarkets is 99% as bad for the environment as standard produce because it is grown on massive monoculture farms and all of the inputs, such as fertilizer, must be trucked in from far away. Pest control is a serious problem with any monoculture and it becomes even more of a challenge with an “organic” monoculture because the farmers aren’t permitted to use modern weed- and insect-killers.

Food, especially meat, is a lot cheaper than it was in the 1960s. Pollan shows that it might look the same but it really isn’t the same food.

[Penguin published the book at $20 originally. That apparently wasn’t enough for them to pay an editor to notice that Pollan consistently misuses the term “begs the question” to mean “raises the question”.]

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Sikorsky flew its prototype counterrotating helicopter yesterday (press release). Typical helicopters, however expensive, are limited to about 165 knots of cruise speed. When the helicopter is moving faster than that, the “retreating blade” is not getting enough airflow, i.e., the blade is going backward about as fast as the helicopter is going forward. This results in a loss of lift on half of the disk. With two rotor systems rotating in opposite directions you still get retreating blade stall but it happens to both rotors at the same time and on opposite sides of the helicopter. Instead of the helicopter pitching and rolling it should just keep flying. The goal with this style of helicopter is to achieve cruise speeds closer to 250 knots, albeit probably at Sikorsky prices starting at $20 million.

How new is this idea? The U.S. military tried this around 1970 and gave up due to uncontrollable vibrations. The Russians built and flew some helicopters like this, also around 1970, but never went into large scale production.

What makes it practical today when it wasn’t practical in 1970? Better computer systems that can run active vibration dampening (like noise-canceling headsets but for vibration).

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The September 2008 Boston magazine has a cover story on high school education in the Boston area. Cambridge is #1.. in cost, having spent $24,467 per year per student. That’s up from $20,637 in 2005. SAT scores, meanwhile, have fallen from 481 verbal/500 math to 465/468, well below the nationwide average for 2007 of 502/515. Cambridge has the lowest student-teacher ratio of any school in the state and the most non-teacher staff (100 administrators for the 1541 students).

Brookline is right across the river and has a similar proximity to Boston and density of housing. They spent $15,098 per student and the average SAT scores were 571/587.

Lincoln-Sudbury, right near Hanscom Field, proves that Gulfstream exhaust is good for learning. They spent $14,500 per student and the SAT scores were 573/600. MCAS scores were excellent as well.

A separate article in the same magazine covers the new high school building in Newton, Massachusetts. The old school building had a flakey HVAC system. To rectify the problem, the town hired Graham Gund, a prestige architecture firm, and the result is throwing out the old building in favor of the most expensive public school project in the United States. By the time it opens in 2010 it will have cost more than $200 million. The Harvard design school graduates at Graham Gund apparently did not read the Massachusetts school guidelines and therefore the classrooms are going to be slightly smaller than the regulatory minimum. Newton taxpayers are going to be paying for this for the next 30 years via bonds that start out with very small payments but balloon to $10 million/year starting a few years hence (just like a subprime mortgage!).

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Walking around U.S. cities, one is amazed at how many mobile phone stores occupy the most expensive retail space. How can Sprint, T-Mobile, AT&T, and Verizon afford to waste so much money on retail stores? Wouldn’t they be better off using the money to add some towers to provide more coverage, e.g., at the JFK airport?

The most thought-provoking economics book of recent times, A Farewell to Alms, has an answer to this on page 288:

The increasing returns to scale inherent in most modern production processes imply that for the typical transaction the price is much greater than the marginal cost … That means that modern markets for industrial products … are imperfectly competitive. … The difference between price and marginal cost means that producers have an incentive to spend resources in trying to sell more product at the current price, through trying to get customers to choose their products rather than the nearly identical products of their competitors. Selling is a huge part of modern economies…

Mobile phone service is the ultimate in discrepancy between marginal cost and price. The cost of serving one additional user on an existing network is just about zero; the price collected from that user is $50 per month.

This is the least interesting insight from the book, but it is one of the simplest to relate in a Weblog.

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Airplanes: New Yorker one-pager on airline fees.

Trains: New York Times review of new book by Paul Theroux.

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Barack Obama promises to “give every child access to high quality pre-kindergarten programs”. Adjusted for expenditures on public education, America already has the world’s dumbest children. Obama now proposes to extend an American child’s exposure to the public school system.

What would happen if kids didn’t go to school early? They could end up like students in Finland, who start at 7 and finish way ahead of American kids in achievement. They could end up staying home with their parents, like John Stuart Mill who hung out with his dad and was able to read Greek and Latin by age 3.

It is unclear what new powers would need to be granted to the federal government to enable a U.S. president to force states to add a couple of years to their public school systems, but perhaps Obama will be able to get this through..

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In “Unequal America”, the cover story of the alumni magazine distributed to Harvard graduates, the U.S. comes up short, and unequal, compared to Japan, Finland, and some other places where the citizens and public policy are more virtuous. Nowhere in the article does the author consider the fact that the U.S. has more immigration than Japan and Finland. A great proportion of our population growth is derived from immigration and the children of recent immigrants. Somehow this fact never seems to make it into our public discussion of income distribution.

We could make our statistics look more like Japan’s if we accepted only very well-educated high-ability high-income immigrants. Would that make the U.S. a kinder and gentler place?

One interesting statistic from the article…

“In 1950, the average tuition price at a private college was roughly 14 percent of the U.S. median family income; public college tuition was even lower (only 4 percent). Percentages for both types of institutions fell further in the ensuing decades, bottoming out around 1980, but then rising steeply ever since. In 2005, the cost of attending the average public college was 11 percent of median family income; for private colleges, the average was 45 percent.”

Harvard, of course, charges more than 100 percent of median family income, a fact not noted in the article, but elsewhere in the magazine there is a report that the university’s $40+billion wealth is growing nicely….

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I wake up most days feeling fat, lazy, and out of shape. Watching sports on TV generally makes me feel even worse because I’m sitting on the sofa getting fatter and more out of shape, munching on Doritos, while watching the trim and fit get trimmer and fitter. Every four years I make an exception and watch a bit of the Olympics. If I’m not as flexible or talented as a 16-year-old girl, it doesn’t bother me. This year, however, I learned that one of the Olympians, Dara Torres, is a 41-year-old Jewish mother (source). Time to turn off the TV, get off the couch, and go to the gym…

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Here’s a funny aero-news.net story about the TSA inspectors at O’Hare climbing up on some $20 million regional jets by grabbing hold of the total air temperature (TAT) probe. The government employees broke 9 airplanes and inflicted further misery on 40 canceled flights full of passengers. It is unclear what the purpose of the exercise was. The TSA claims that they were trying to see if someone could open the main cabin door, yet the main cabin door is designed to be opened by someone standing on the ground.

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