Here's an interesting WaPost piece on Art.com, a company that illustrates two favorite Postrelian themes: the growing market value of aesthetic goods and the importance of business innovation that streamlines logistics and allows mass customization. (Terry Teachout will no doubt find this link proof that I know and care nothing about art since, after all, I am a libertarian. In the real world, I buy about the same kind of art he does, for similar reasons, though I shop more online.)
Reader Kjell Hagen writes from Oslo:
Thanks for your texts on productivity. I am a Norwegian economist, with an earlier career in a Norwegian oil company, and at the consulting firm McKinsey & Co.
Even at supposedly leading consulting firms, like McKinsey, productivity is a rare subject. Usually the focus is on short-term, "flashy" strategies like M&A, internet strategies etc. It is strange, because systematic productivity gains are usually a super-potent competitive weapon. Just look at e.g. Wal-Mart, Dell, or Toyota.
Looking back a hundred years, the productivity (and therefore the average income) in Western countries has gone up 7 times, in all countries where the politicians have managed to not get in the way. The same 7-fold increase is true for the 100 years preceding, so that we now have approx. 50-fold the average income we had in 1800. That is a pretty big story, and is the one that will be talked about in 500 years. Especially because the productivity gains of humanity were practically zero in the centuries, and milennia before.
Productivity gains are difficult to measure year-by-year, and as you probably know, numbers may be revised later. I think the huge gains in America may be revised somewhat down later, but still it is the biggest story around, because of the direct link between productivity growth and growth in average income.
In a followup email giving me permission to post the note, Kjell writes that "It really is the story of the century, but too 'slow-moving' compared to all the 'instantaneous' news, I guess." I think that's exactly right. By the time productivity increases are visible, they aren't "news." They're just life.
On TechCentral Station, Arnold Kling suggests that the media bias toward negative news probably hurts coverage of productivity gains. That's almost certainly true. His second argument, that anti-Bush bias is at work is far less convincing. This story didn't get coverage during the Clinton administration either. It's not a political story. It doesn't come from Washington. That, not partisan bias, is the political problem.
Finally, Jay Manifold, blogging on Chicago Boyz, ties together a number of recent themes. He also makes an important point, which I mistakenly thought was obvious when I wrote my review of David Brooks's On Paradise Drive: "The trick is to realize that the pursuit of enough trivial goals can add up to an epic quest -- or, rather, that even an epic quest can be broken down into a large number of relatively trivial goals."
I have nothing against great dreams--and certainly nothing against ending starvation, curing cancer, or spreading democracy, all of which I favor. (The means are another story.) What bothers me is Brooks's failure to recognize that the progress of our civilization has in fact depended on incremental improvements and his persistent denigration of quests for excellence that are unmotivated by eschatological visions. Among the narrow specialists Brooks lightly mocks are not just "water choreographers of casino fountains" but also a woman who has "devoted her life to small robots," a man who "dedicates himself to growing nanowires only a few atoms thick," and a woman who "is working on a technique to place new genes at specific spots on plant chromosomes."
I think Brooks's narrow vision also helps explain his peculiar stance on the war in Iraq, first avidly supporting it and then, when it got a little tricky, distancing himself. The glamour of war--great goals achieved by noble means--appealed to him. The reality of war, and of postwar reconstruction, turned out to be a bloodier, more expensive version of the nitty-gritty enterprise he disdains. War turns out to have more in common with Six Sigma quality (a buzzphrase he drops in for laughs, with no apparent knowledge of its meaning) than with debating Plato or erecting monuments.
This Jacob Levy post is typical of growing anti-Bush sentiment among some libertarian hawks. Andrew Sullivan writes something similar just about every day. The general argument is that Bush is bad not just because of his social conservatism but because of his less-than-principled (to say the least) economic policy--a giant new medical entitlement, ag subsidies, tariffs, etc.
Now, there is an argument to be made for sitting out the election. Florida 2000 notwithstanding, your vote probably doesn't count, so why vote for a guy you don't like? There's also an argument that divided government might give us desirable gridlock. Would President Gore have pushed through a new Medicare drug entitlement? (Maybe so. A lot of Republicans were deathly afraid to oppose it.)
But all rationalizations aside, I have a sneaking suspicion that Kerry-leaning libertarian hawks (now that's a small demographic!) are simply kidding themselves in order to stay on the fashionable side of politics. They need to read a couple of recent NYT articles and think hard about their implications. The first is about fashion:
"There's always been a lot of liberal rhetoric that you associate with any arts community, but it usually doesn't translate into action," said Dale Peck, 36, a novelist and critic, who helped organize a reading at Cooper Union to benefit Downtown for Democracy, which included Jonathan Safran Foer, Dave Eggers and Jhumpa Lahiri. "But something about this presidency galvanizes a response."
"The word 'cool' is probably appropriate," Mr. Peck said. "It's 'fashionable' to hate George Bush right now."
More substantively, this Louis Uchitelle article should puncture any fantasies about a Kerry administration being fiscally responsible:
THROUGH months of campaigning, Senator John Kerry has presented himself as a centrist on economic policy, a New Democrat directly out of the Clinton mold. He has pledged to cut the deficit, move the country toward budget surpluses and recreate the booming economy of the Clinton years. As if to underscore the point, he has recruited most of his economic advisers from the former president's administration.
But centrism is an easier position to maintain when the economy is in trouble, as it seemed to be in the early days of the campaign. Back then, Mr. Kerry could convincingly denounce President Bush as a miserable manager of the American economy. That argument is harder to make now that a stronger economy has been generating jobs, although at a slower rate in June. So Mr. Kerry is talking more boldly about policy.
Of course, the centrism still comes through loud and clear in speeches and in interviews. But in the heat of the policy debate, deficit reduction appears to be taking a back seat to what is easily Mr. Kerry's most significant economic proposal: an expensive expansion of government-financed health insurance.
He says he would subsidize health insurance for millions of people not covered now. That is the jewel of his economic plan. An omnibus health insurance bill would be the first legislation sent to Congress in a Kerry presidency, he says. But while the centrist Kerry still advocates shrinking the budget deficit, a bolder Kerry, less noticeable so far in the campaign rhetoric, adds that if the deficit threatens to rise rather than fall, well, so be it - he'll go ahead with his health plan anyway.
"Health care is sacrosanct," Mr. Kerry said in a telephone interview, offering the most explicit commitment to date to a program that he estimates would cost $650 billion. That is an amount greater than the cost of all his other economic proposals combined.
"Listen," he said, "if worse comes to worst, you make adjustments accordingly in other priorities."
And not in health care? Mr. Kerry says that he will not have to face that choice, and that in his overall economic plan there is leeway for deficit reduction and expanded, subsidized health insurance. But if a choice has to be made, deficit reduction will have less priority. "Health care is too important," he said.
The cost of health-care entitlements is always underestimated, so $650 billion is almost certainly low. And that's just the spending side. New entitlements also bring new regulations and further distortions in a system that's already horribly distorted.
John Edwards won't carry the South, or even North Carolina, for John Kerry, but he may cost the Republicans some votes, as they misunderestimate him--and wildly overestimate the unpopularity of his profession. "Jacksonian America," a.k.a. Bush's base, loves trial lawyers. Nick Lemann made this smart observation in a 2000 New Yorker profile of Edwards:
It's no accident that the heartland of trial-lawyer influence, and also of powerful opposition to trial lawyers, is the South. A hundred years ago, the South was a poor, defeated, overwhelmingly rural and agricultural region. During the Great Depression, its poverty became truly desperate. What proved to be its economic salvation was building electric power grids and recruiting low-wage, high-power-consuming, labor-intensive industries from the North, notably textile mills. All over the upper South, families left played-out farms and moved to company-owned mill villages of the kind where John Edwards grew up. And many of their children went to college and wound up living in brand-new subdivisions, as Edwards did.
In most places, liberal politics rests on labor unions--but not in the South, because it is a region where unions are weak, and where industries came, in part, to avoid unions. Non-economic liberalism, based on causes like environmentalism, legal abortion, and gun control, doesn't work in the South, either, because it is such a socially conservative region. The South does, however, still have a deeply ingrained underdog consciousness, and one place where that manifests itself is in the personal-injury courtroom. Throughout much of the South, trial lawyers are, in effect, the left: an influential group that, instead of converting populist sentiment into redistributionist legislation, converts it into big rewards for a small number of people who have stories of having been screwed by powerful, uncaring figures. Big jury verdicts in tort cases are what the South has instead of unions. It does not seem at all far-fetched to imagine that this version of liberalism could someday reach a national audience. The country is moving more and more toward a courtroom-style politics of anecdote.
On television, traditional evening-news broadcasts have lost viewers, and "news-magazine" shows often have the feeling of news as tort law, featuring narratives of individuals fighting back against doctors and corporations. Tort-law movies like "Erin Brockovich" and "A Civil Action" are a popular new genre. The airwaves are full of conservative populists railing against the liberal elite, and their force is much more a function of how dramatic their stories and their rhetoric are than of their actual circumstances. (Bill O'Reilly is no less effective as a populist for being rich than John Edwards is.) A climactic moment in every State of the Union Message is the introduction of the heroic "real people" sitting in the gallery next to the First Lady.
Presidential campaigns are always presented as being about the larger-than-lifeness of the candidate, but they embody something going on in the society, too. Edwards is a political novice who aims at communicating to people one wouldn't ordinarily think of as populists--middle-class and lower-middle-class suburbanites--that he completely gets it ("it" being the way the big guys are messing with their lives), and that he's going to do something about it. As a candidate, he is placing a bet that there's much more aggrievement around in the lone superpower than most people think. No matter how his candidacy turns out, he may well be betting right.
On National Review Online, my old friend John Hood, who knows everything about North Carolina politics, warns the GOP that Edwards could in fact hurt the party in the South.
In my recent Boston Globe article, I wrote about how operations research would show up in nearly every aspect of a family trip to Disney World. Now a Texas engineer has taken the process a step further: using O.R. techniques to chart the most efficient course for riding every single ride at Walt Disney World's Magic Kingdom--a total of 41--in one day. The Dallas Morning News tells the story.
In today's New York Post, I review David Brooks's latest book, On Paradise Drive.