Bollywood star sentenced to 6 years jail

On the last day of an epic 12 year trial, one of Bollywood’s best loved film stars was sentenced to six years in prison today for illegally procuring weapons from the gangsters who masterminded the 1993 Mumbai bombings, one of India’s worst terrorist attacks.

The judgment against Sanjay Dutt was hailed as a strong, if unusual, example of the Indian judiciary’s willingness to stand-up to the country’s rich and powerful.

Mr. Dutt, for decades a pillar of India’s movie industry both as macho action hero and buffoonish comedian, was convicted of illegally holding an automatic rifle and a pistol which were supplied by the men blamed for the 1993 attacks in which 257 people died

-Bollywood Star Sentenced to Prison

Related;
Documentary about Sanjay Dutt- Part 1, Part 2 and Part 3
(via Sepia Mutiny)

The Economy in Pictures- Estonia

Recent Economic Developments- Estonia from the IMF

Background: Overheating is Estonia’s main near-term challenge. Surging domestic demand has widened the external current account deficit and pushed the economy against capacity constraints. Wage increases have begun to erode competitiveness and kept inflation above the Maastricht threshold for euro adoption. There are signs of an incipient slowdown but a resurgence of demand and an eventual hard landing, with growth stagnating, cannot be ruled out. A strong fiscal stance is therefore needed to subdue wage and income expectations, improve the odds of a soft landing, and reassure markets about the continued commitment to euro adoption. It would also position the budget for future age-related costs. Other concerns are banking sector risk stemming from years of rapid credit growth and a less benign external environment in the face of increased regional uncertainties.

Authorities’ views and policies: The authorities are concerned about overheating and have responded by moving from a fiscal framework based on balanced budgets to one based on small surpluses. They have also reaffirmed their commitment to euro adoption and taken steps to increase the odds of meeting the Maastricht inflation criterion by 2010, the earliest they consider feasible. On the financial sector, the authorities emphasize that market discipline has started to slow the pace of credit growth. They view the existing prudential requirements as adequate and are focusing their efforts on strengthening cross-border cooperation in bank supervision and crisis management. The authorities view external competitiveness as broadly adequate and remain strongly committed to the currency board arrangement (CBA), in place since 1992.

Staff views: A more assertive fiscal stance is needed. For 2007 this means saving any revenue overperformance and resisting spending pressures. For the next four years it means going beyond the modest surplus floors in the fiscal strategy. The strategy on euro adoption is appropriate. The authorities’ initiatives to raise public awareness of macroeconomic risks appear to have borne fruit and should be continued. In the meantime, while banks’ risk buffers seem reasonably wide, their adequacy should be reviewed regularly by active use of stress testing and sustained monitoring of credit standards, internal controls, and risk assessment procedures. Cross-border cooperation in bank supervision is indispensable; the recent initiatives in this area are welcome. The CBA is robust. While some indicators point to real exchange rate overvaluation, exports remain competitive. Nevertheless, rising cost pressures underscore the need for labor and product market flexibility to ease external adjustment and sustain growth.

Do you agree with the Fund's analysis?

Related;
Latvia Economy

Understanding National Accounts

A guide from the OECD;

Understanding National Accounts;

This manual explains what GDP and GNI and their components are and what they mean. It shows how they are used and what they are used for. And it does this in an easily understood way. Opening with a chapter showing how national accounts concepts relate to macroeconomics, the books goes on to systematically deal with volume and prices, international comparability, production, final uses, household accounts, business accounts, government accounts, and financial accounts. It also has chapter on how national accounts data are gathered and the history of the national accounts system. Three special chapters examine national accounts in China, India, and the United States. Previously published only in French, this manual has been revised and expanded to have a truly global perspective.

Chapter 1. The Essential Macroeconomic Aggregates-Defining GDP-Deriving GDP in Volume-Defining Demand: The Role of Investment and Consumption-Reconciling Output and Demand-Reconciling Output and Income-How Are These Figures Obtained?-Accuracy of National Accounts-Limitations and Pitfall to be Avoided-ExercisesChapter 2. Distinguishing between Volume and Price Increases-A Word of Caution: Compare Volumes-The Volume/Price Breakdown Applied to Changes over Time-The Difficulties of Aggregation-Volume Indices and Price Indices-Constant Prices-"Chained" Accounts and the Loss of Additivity-Unpleasant Practical Consequences of Chain Linking-Special Cases-ExercisesChapter 3. International Comparisons-Comparison of Growth Rates-Comparison of Ratios: The Example of the Saving Ratio-Comparison of Levels of Variables: GDP per Head in Volume-The Spatial Volume/Price Breakdown: Purchasing Power Parities-Comparison of Variables in Absolute Terms: Household Consumption-ExercisesChapter 4. Production: What it Includes and Excludes-The Production Frontier-The Illegal Economy and the Underground Economy-Measurement of Output and of Value Added-Nomenclatures and Classifications-ExercisesChapter 5. Defining Final Uses of GDP-Final Uses in the National Accounts-Households' Final Consumption Expenditure-Fiunal Consumption Expenditure by Governments-Final Consumption Expenditure of the NPISHs-Moving from Consumption Expenditure to Actual Consumption-Gross Fixed Capital Formation-Changes in Inventories-Net Acquisitions of Valuables-Exports and Imports of Goods and Services-ExercisesChapter 6. The Household Account-The Three Indicators in the Household Account-The Household Sector Accounts-An Alternative Way to Measure Household Disposable Income and Consumption-ExercisesChapter 7. Business Accounts-The Relationship between the Firm and the Corporation-The Structure of Corporate-Sector Accounts-From Corporations to Firms-Consumption of Fixed Capital and Amortisation-Profits and Gross Operating Surplus: Not to be Confused-ExercisesChapter 8. The Financial and Balance Sheet Accounts-The Importance of Household Wealth for the Analysis of the Current Economic Situation-The Principle of Quadruple-Entry Bookkeeping-Financial Assets and Liabilities-The Link between Financial Flows and Stocks-Non-Financial Assets-The Complete Sequence of Accounts of an Institutional Sector-ExercisesChapter 9. The General Government Account-A Simplified Diagram for General Government-Detailed Structure of the General Government Account-What Does General Government Include?-The Principal Public-Finance Indicators-ExercisesChapter 10. The Input-Output Table and Integrated Economic Accounts-The Supply-and-Use Tables-The Aggregated Supply and Final Uses Tables-Intermediate Use Table-The Input-Output Table-The Use of the Input-Output Table for Economic Analysis-From the Sum of the Values Added to GDP-The Integrated Economic Account-The Transition from GDP to National IncomeExercisesChapter 11. The National Accounts Machinery-The Quarterly National Accounts-The Annual National Accounts-The Revisions to the National Accounts and their Precision-Comprehensive Revisions-Other Data Sets Related to the National AccountsExercisesChapter 12. The National Income and Product Accounts of the United States-Background-NIPA Tables-Dissemination of NIPAs-Other NIPA-Related Programmes-Compilation of Quarterly Gross National Product-Methodologies for Preparing Selected Components of GDP-Differences between the NIPA and the SNAChapter 13. China's National Accounts-Introduction-Background-Published National Accounts-Publication Schedule-Classification-Ownership-Data Sources-How is GDP Estimated?-GDP by Type of Economic Activity-Final Expenditure Share of GDP-Estimates at Constant PricesChapter 14. India's National Accounts-Introduction-Background-Some Special Features of India's National Accounts-How Does the CSO Estimate the National Accounts?-Publication of National Accounts-Where to Find Data on India's National AccountsChapter 15. International Systems of National Accounts: Past and Future-From the Very Beginnings-To the First Modern Accounts-The 1953 SNA-The 1968 SNA-The 1993 SNA-The 1996 ESA-And the Upcoming 2008 SNAIndexGlossary

OECD Health Data 2007

Specialists now account for more than half of all physicians in most OECD countries, with the exceptions of Australia and Belgium, where GPs continue to outnumber specialists, and France, Portugal, New Zealand and Turkey, where their numbers are equal.

Income levels, a determining factor in the supply of doctors, vary a lot across OECD countries. Specialists generally earn substantially more than GPs, partially explaining the changing specialist/GP balance and the resulting concerns about GP shortages in several countries. Specialists’ incomes are high relative to average national income in the Netherlands, Belgium and the United States, but quite low in Hungary and the Czech Republic. GPs have high incomes (also in comparison with average national income) in the United States, New Zealand and the United Kingdom, and relatively low incomes in Hungary and the Czech Republic.

-OECD

Conversation with Nayan Chanda

Watch the video on Google Video

Author of Bound Together: How Traders, Preachers, Adventurers, and Warriors Shaped Globalisation

Related;
Conversations with History

Yale Centre for the Study of Globalisation

Perspectives on German Economy

German recovery: it’s the supply side- Michael Burda

Can Germany be saved? The malaise of the world’s first welfare state-Hans-Werner Sinn

The German economy: be careful what you ask for-Barry Eichengreen


Related Books;
The European Economy since 1945: Coordinated Capitalism and Beyond by Barry Eichengreen

Breaking News

Kevin Brancato buys Tyler Cowen's 'Discover Your Inner Economist', before it is released.

Related;
Hire Yourself
Who Wants to Be a Cultural Billionaire?

Hamas gets CIA's Intelligence Equipments

Michael Scheuer, a former top CIA counterterrorism analyst who left the agency in 2004, said the U.S. had provided the Fatah-controlled Palestinian Authority with "substantial help" in training as well as computers, other equipment and analytical tools. Other former intelligence officials confirmed that the U.S. gave Fatah-controlled services sophisticated intelligence-gathering equipment, including eavesdropping technology, though these officials wouldn't provide more precise details about the technology.

This kind of technology, along with the knowledge it yields, is broadly known in intelligence circles as "Sigint," which is shorthand for "signals intelligence." It can include eavesdropping equipment, devices used for intercepting radio, microwave and telephone communications and telemetry technology that allows the user to pinpoint the location of someone holding a communication device, such as a cellphone.

"The United States invested a lot of effort in setting up this system in Gaza -- construction, equipment, training… filings, the logistics, the transportation. It was a big operation, and it's now in the hands of the other side," said Efraim Halevy, who formerly headed both the Mossad, which is Israel's foreign-intelligence agency, and Israel's National Security Council. Mr. Halevy said, however, that he didn't want to overemphasize the value of Hamas's potential intelligence gains.

Avi Dichter, Israel's public-security minister and the former head of Shin Bet, the domestic intelligence-and-counterterrorism agency, also said he didn't want to overemphasize the potential benefits to Hamas. But he confirmed that the Islamist group seized Sigint technology and expertise during its Gaza sweep. He declined to provide specifics, but said it had been provided by the Americans, the British and the French.

Mr. Dichter, who left the Shin Bet when his five-year term as its chief ended in 2005, also said the potential damage goes beyond Hamas's ability to turn the technology against its enemies. Now, he said, the militants could gain an understanding of how such technology is used against them, allowing them to adopt more sophisticated counter measures.

"It's not only the tools. It's also the philosophy that's behind them," he said.

-Hamas to Show an Improved Hand

Death is not extinction

In his 1994 book, “The Physics of Immortality,” Frank J. Tipler, a specialist in relativity theory at Tulane University, showed how future beings might, in their drive for total knowledge, “resurrect” us in the form of computer simulations. (If this seems implausible to you, think how close we are right now to “resurrecting” extinct species through knowledge of their genomes.) John Leslie, a Canadian who ranks as one of the world’s leading philosophers of cosmology, draws on quantum physics in his painstakingly argued new book, “Immortality Defended.” Each of us, Leslie submits, is immortal because our life patterns are but an aspect of an “existentially unified” cosmos that will persist after our death. Both Tipler and Leslie are, in different ways, heirs to the view of William James. The mind or “soul,” as they see it, consists of information, not matter. And one of the deepest principles of quantum theory, called “unitarity,” forbids the disappearance of information. (Stephen Hawking used to think you could destroy your information by heaving yourself into a black hole, but a few years ago he changed his mind.)

If death is not extinction, what might it be like? That’s a question the Harvard philosopher Robert Nozick, who died five years ago, enjoyed pondering. One of the more rococo possibilities he considered was that the dying person’s organized energy might bubble into a new universe created in that person’s image. Although his reflections were inconclusive, Nozick hit on a seductive maxim: first, imagine what form of immortality would be best; then live your life right now as though it were true. And, who knows, it may be true. “Life is a great surprise,” Vladimir Nabokov once observed. “I do not see why death should not be an even greater one.”

-Eternity for Atheists

Economics Podcasts

The Best;

Energy Crisis: Resource Scarcity Oil Wars and Climate Change
Speaker(s): Professor Mary Kaldor; Yahia Said; George Soros; Professor Sir Nicholas Stern

Henderson on Disagreeable Economists

Protecting the global poor
What does economic history tell us about how rich countries got wealthy? Cambridge academic Dr Ha-Joon Chang believes most of them did so by protecting infant industries and limiting foreign investment. Yet these countries are now denying poor ones the same chance to grow
Also in the same podcast Remembering Milton Friedman

Interview with Thomas Sargent

And the rest;

Attitudes on Globalization, featuring Brink Lindsey

Realities of Globalization, featuring Indur M. Goklany

Global Tax Competition, featuring Daniel J. Mitchell

How to Hike College Tuition, featuring Neal McCluskey

The Age of Abundance, Part I, featuring David Brooks
The Age of Abundance, Part II, featuring Brink Lindsey

Coercion, State, and the Minimum Wage, featuring Richard A. Epstein

Africa's development
“It's the politicians, stupid—political reform, not aid or trade, is the key to Africa's development”

Sustaining Growth and promoting inclusion in India's Economy and Society
Speaker(s): Sir Nicholas Stern

Liquidity Asset Prices and Market Efficiency
Speaker(s): Professor Jiang Wang;
Chair: Professor Dimitri Vayanos

Democracy or Dictatorship? Emerging Political Crisis in Pakistan
Speaker(s): Imran Khan;
Chair: Dr Purna Sen

Contracts Reference Points and the Theory of the Firm
Speaker(s): Professor Oliver Hart;
Chair: Professor Leonardo Felli

Collapse of the Soviet empire - reflections from an insider
Speaker(s): Andrei Grachev;
Chair: Professor Odd Arne Westad

Financial Reform in China: what next?Speaker(s): Howard Davies;
Chair: Dr Lawrence Saez


The European Union and the Challenge of Globalisation
Speaker(s): Matti Vanhanen;
Chair: Professor Kevin Featherstone

David King on Science and Governance

Louka Katseli on Migration and Development

Global Health Care: Medical Travel and Medical Outsourcing
Milica Bookman, Professor of Economics, Saint Joseph’s University
Rudy Rupak, President and Founder, PlanetHospital

Global competition is an emerging trend in the health care industry, as a growing number of high-quality health care facilities in developing countries have begun catering to so-called "medical tourists" or "medical travelers" from other countries. Uninsured patients and those from countries where care is rationed by waiting are also attracted to high-quality health care that is up to 80 percent less expensive than the cost of care in the United States. The speakers are Prof. Milica Bookman, Saint Joseph’s University , author of a new book, "Medical Tourism in Developing Countries," and Rudy Rupak, founder and CEO of PlanetHosptial, a firm dedicated to connecting patients with health care facilities abroad.

“How Information Technology is Transforming Industries: Lessons from the Past”
James Cortada, IBM Institute for Business Values

“Death Spirals, Summer Swoons, Volcanic Rebounds and All That--Whither Goes Steel?”

500 Years of Female Portraits

Have a nice weekend!

The Hottest Mathematician

"McKellar headed to college intending to study writing and directing, but ended up putting her numerical skills to use instead, earning a math degree summa cum laude and co-authoring a research paper that solved a statistical mechanics problem involving magnetism in two dimensions—a solution now known as the Chayes-McKellar-Winn theorem.

From her math classes, McKellar learned that solving probabilities wasn’t going to solve the biggest math problem in the United States: “Girls fear math,” she says. Although girls and boys in fourth and eighth grades have similar math and science proficiency scores, a national survey recently found that girls are less likely than boys to agree with the statements “I like mathematics” and “I like science.” Teachers often unknowingly foster this preference, which, McKellar claims, isn’t helped by the feeling among young girls that they need to act ditzy in order to get boys to like them. The negative attitudes girls hold for math translate into career choices later on in life: Four times as many men as women hold full-time university faculty positions in mathematics, science, and engineering. And as McKellar sat in a sea of male classmates in her advanced classes she realized she was living the direct repercussions of these early gender inequalities.

McKellar plans to change these statistics by putting some of her other skills to work. “Math doesn’t have good PR. I’m going to do my best to do great PR for math,” she says. As a spokesman for the National Council of Teachers of Mathematics, she testified to a Congressional subcommittee in 2000 about the country’s need to better prepare math teachers and draw more young girls toward math, especially at the age when they tend to start avoiding the subject. “Not only is middle school a time in life when girls are dealing with so much emotionally, it’s also when math gets harder.”


To help girls struggling with the complexity that comes with seventh-grade math, McKellar has penned Math Doesn’t Suck: How to Survive Middle School Math Without Losing Your Mind or Breaking a Nail, which hits shelves this August. The book hones in on middle school’s trickiest points-––like fractions, ratios, and percentages—and presents them in a style that’s appropriate for the cool kids’ lunch table. Figure out your “type” in boys and you’ll understand greatest common factors. All of those iced lattes celebrities drink make multiplying fractions tasty. Plus, savvy shopping requires killer decimal skills."

- Math Wonder

Related;
Danica McKellar's Mathematical Theorem

Sexual Ethics and Islam

See a timely new journal on Contemporary Islam;

“Sexual ethics and Islam: feminist reflections on Qur’an, Hadith, and jurisprudence” by Kecia Ali;

“And the problem, as I currently see it, is this: meaningful consent and mutuality, both of which I believe to be critical for a just ethics of sexual intimacy, are structurally impossible within the constraints of lawful sexuality as defined by the classical Muslim scholars, whose views – drawing from and building on Qur’an and sunnah – permeate all Muslim discourses. It is possible to rethink Islamic sexual ethics to accommodate these values and there are resources within Muslim texts, both revealed and interpretive, for doing so. Nonetheless, an egalitarian sexual ethics cannot be constructed through pastiche; a methodology of picking-and-choosing, combining isolated elements in expedient ways, will prove insufficient to resolve the core issue at stake. We need, instead, a serious consideration of what makes sex lawful in the sight of God” (p. 151).

So argues Kecia Ali in a refreshing analysis of sexual ethics in Islam with a focus on relevance to contemporary Muslims in the West. Apart from the characterization of Islam as a violent religion, nothing is as problematic in discussions about contemporary Islam as the debate over sexuality and gender. Western stereotypes of Muslim women as veiled slaves of the harem are often countered by Muslim scholars who claim that women are afforded more respect and security in Islam than in other religions. The truth, as measured subjectively in real time, lies in between the polarized ideals. In this book Kecia Ali addresses sexual ethics in Islam as an American feminist Muslim scholar with, as she notes from the start, “the luxury of deciding whether and how to apply religious doctrine in my own life – whether to arrange my affairs to follow the dictates of one or another school of jurisprudence, or the regulations in the Qur’an, or to follow civil law” (p. xxii). The result is a no-taboo-barred commentary on perennial ethical concerns (marital relations, sexual practices) past acceptable practices (slavery, concubinage, stoning of adulterers, clitoridectomy, the Prophet’s marriages) and contemporary critical social issues (spousal abuse, homosexuality and same-sex marriages). While the author revisits the arguments of classical Muslim jurists and commentators, the overall goal is to analyze their relevance for Muslims today.

An example of the author’s reform-minded approach is the relevance of dower (mahr) in contemporary Islam, especially in Western contexts where Islamic law is voluntary rather than state authorized. Noting that Islamic legal rulings on dower modify existing compensation arrangements in pre-Islamic Arabia, Ali suggests that there is room to further modify the existing legal rules according to the pragmatic living conditions of modern Muslims (p. 4). Although mahr has often been regarded as a form of economic security for a bride in case of her husband's death or divorce, today in the United States most dower amounts are miniscule and enforcement of payment after divorce (generally a civil proceeding) is rare. Thus, the ethical function of the dower changes when both wife and husband work or have access to civil law for divorce proceedings.

A major part of Ali’s exegetical message is the need to think outside the literalist box. The case of slavery, accepted as legitimate in classical Islamic sources, shows that moral issues once regarded as religiously justified have in fact been reinterpreted by virtually all Muslims to conform to social change. Ali argues, “Outside of accepting that slavery is a just and therefore not problematic practice (or insisting, against the clear sense of the text, that the Qur’an never actually allowed it), the only possible response is to suggest that the Qur’anic text itself requires Muslims to sometimes depart from its literal provisions in order to establish justice” (p. 55). Probing further on a contemporary issue in many Muslim countries, Ali asks if it is still necessary to insist that polygyny is an Islamic right for all time, given that slavery has been abolished (p. 156). As part of her feminist project, not unlike the earlier work of Fatima Mernissi, precedence is given to the Qur’an’s broad principles of justice rather than “specific, time-bound commands” (p. 53).

Although Islam has long been touted as a “sex-positive” religion, the adaptability of Qur’anic and fiqh sexual ethics to contemporary social conditions is fraught with difficulties. While recognizing the need to counter misogynist interpretations, a task already well under way in Christian and Jewish theological discourse, Ali is keenly aware of the difficulty in simply rewriting the rules. “Feminist exegetes,” she warns, “must take care not to be blinded by the commitment to equality, and the presumption that equality is necessary for justice, as classical exegetes were by their assumptions about the naturalness of male superiority and dominance in family and society” (p. 133). Unfortunately this moral quandary is not resolved in the text. Simply challenging the contradictions and limitations of male-dominated discourses does not in itself create an alternative vision of gender equality. But this work, by staunchly refusing to adopt a secular feminist stance, highlights the critical need for further interpretive efforts to rescue the moral precepts of the Qur’an and Islamic tradition from dogmatic inertia. For too long debates over sexuality and religion have lapsed into a “don’t ask-don’t tell” state of mind. Professor Ali is willing to ask the tough questions. Clearly there is much left to tell.

Some other interesting articles and book reviews from the Journal;
Messages to the world: the statements of Osama Bin Laden
Understanding political Islam in Somalia

The Egyptian movement for change: Intellectual antecedents and generational conflicts

The Muslimwoman

A theory of Islamic political radicalism in Britain: sociology, theology and international political economy

Know Your Former Presidents

Robert Dallek talks about his recent book, Nixon and Kissinger, on the Daily Show;

The Jewish Community. Nixon's deep antipathy toward Jews is well known, and he took a strange satisfaction in having Kissinger in his inner circle, where he could periodically taunt him. Nixon told Haldeman and Ehrlichman, according to the transcript of a conversation, that "anybody who is Jewish cannot handle" Middle Eastern policy. Henry might be "as fair as he can possibly be, [but] he can't help but be affected by it. Put yourself in his position. Good God … his people were crucified over there. Jesus Christ! Five—five million of them popped into big ovens! How the hell's he feel about all this?" Kissinger acquiesced in Nixon's anti-Semitism, and more. He took care not to bring too many Jewish N.S.C. staff members to meetings with the president. On one occasion, speaking with Leonard Garment, a special consultant to the president on such issues as Israel and Jewish affairs, Kissinger asked, according to a transcript of the telephone conversation, "Is there a more self-serving group of people than the Jewish community? … You can't even tell the bastards anything in confidence because they'll leak it."

Vietnam. Using language that has a painfully contemporary echo, Kissinger and Nixon very quickly came to private conclusions about Vietnam that they never revealed publicly and denied entertaining. "In Saigon the tendency is to fight the war to victory," Nixon told Kissinger, according to the transcript of a 1969 phone conversation. "But you and I know it won't happen—it is impossible." Even so, according to Haldeman's unpublished diaries, Nixon later urged that Democratic critics making this same point should be labeled "the party of surrender." When someone told Kissinger that Nixon could not be re-elected, because of Vietnam, he disputed it and added, according to a memo of a conversation, that "anytime we want to get out of Vietnam we can," and that "we will get out of Vietnam before the [1972] election." Nixon wanted to plan the removal of all U.S. troops by the end of 1971, but Kissinger cautioned that, if North Vietnam then de-stabilized Saigon during the following year, events could have an adverse effect on the president's campaign. According to Haldeman's diaries, Kissinger advocated a pullout in the fall of 1972, "so that if any bad results follow they will be too late to affect the election." He apparently had nothing to say about the American lives that would be lost by deliberately prolonging the war. Just before a peace treaty was signed, Kissinger in a phone conversation advised Nixon against stating that this was a "lasting peace or guaranteed peace because this thing is almost certain to blow up sooner or later."

Mental Health. Nixon confided to Haldeman, according to the unpublished diaries, that he was "quite shocked" at how Kissinger had "ranted and raved" at Alexander Haig during a 1971 phone conversation, telling Haig that he "had handled everything wrong," and calling U.N. ambassador George H. W. Bush "an idiot." Nixon believed that something more serious was going on, and it is known that he once mused to Ehrlichman that Kissinger might need psychiatric help. The subject of Kissinger's stability came up again in 1972. Having read The Will to Live, by Dr. Arnold Hutschnecker, his former psychotherapist, Nixon recommended it to Haldeman as providing a road map to what Nixon, according to Haldeman's unpublished diary notes, called "K's suicidal complex." Haldeman went on: "He also wants to be sure I make extensive memoranda about K's mental processes and so on, for his file."

Related;
Review of Robert Dallek's Nixon and Kissinger
Book says Kissinger delayed telling Nixon about Yom Kippur War
Another interview with Dallek
Drunk and Heavily Sedated Nixon;

PRESIDENT Richard M. Nixon was so drunk one night after the Yom Kippur War broke out in 1973 that his secretary of state, Henry Kissinger, wouldn't allow him to take a call from the British prime minister. The story is told in 20,000 pages of telephone transcripts and nearly 1 million pages of national security records gone over for the last four years by historian Robert Dallek, whose new book, "Nixon and Kissinger: Partners in Power," is excerpted in Vanity Fair. On Oct. 11, 1973, at 7:55 p.m., Brent Scowcroft called from the National Security Council and told Kissinger that British P.M. Edward Heath wanted to talk to Nixon within the next 30 minutes. "Can we tell them no?" Kissinger responded. "When I talked to the president, he was loaded." Elsewhere in the book, Nixon says of the press he famously loathed for most of his career: "Goddamn newspaper ----. They're a bunch of sluts."

Economists Helping Bookstores

Via Tyler,
Bilogists Helping Bookstores

I've also wondered how they arrange books on the shelves of bookstores- I found Easterly's The White Man's Burden in the anthropology section of a major Barnes and Noble bookstore in NY.

Fact of the Day- World's Tallest Buildings

Data from The Council on Tall Buildings and Urban Habitat.

One Sheik's Dream

Watch the latest Foreign Exchange;

English Grammer

On reason why BBC is great;

I was wondering if you could tell me why in these sentences after 'stop' there's an infinitive, "After playing football for two hours he stopped to have lunch"

Sometimes I can see this verb with an infinitive and sometimes with a gerund. Thanks for your help

You'll have information on almost any topic

An economist and a neuroscientist podcast

Interview with Thomas Sargent
Thomas Sargent, an economics professor at New York University, talks about historical contributions to economics, the state of the U.S. economy, Federal Reserve policy and inflation targeting.


Oliver Sacks talks about his new book.

Bees are overworked are overworked in US!

Science podcast-lessons for Austrlia from state of US bees;

Australian bees are doing very nicely. They are in huge demand here for pollinating local almond orchards and in huge demand overseas because they are disease free. But unless we're careful problems plaguing American hives could turn up here. Colonies are collapsing in the US because the bees are overworked, poorly managed, and have a bug called varroa destructor, which is said to look like a baked bean with fangs. Quarantine is tight to make sure it doesn't enter Australia as a stowaway

Quote of the Day

"From the age of 16 onward (in 1929), I read many books by Freud and his followers, but I could see that Sigmund was especially obsessed with the sexual “origins” of disturbance, especially with the ubiquitousness of the Oedipus complex. I could also see that he was an overgeneralizer and a dogmatist, and therefore a poor scientist. But psychoanalytic details about sex helped to loosen me up; I came to consider practically all forms of noncoercive sex permissible. In fact, at the age of 15, I had my first and only homosexual episode — with my 13-year-old brother no less!

ALBERT ELLIS, “The Albert Ellis Reader”

*Albert Ellis wrote more than 75 books.

A scary fact on health

"The federal Centers for Disease Control and Prevention projected this year that one of every 22 patients would get an infection while hospitalized — 1.7 million cases a year — and that 99,000 would die, often from what began as a routine procedure. The cost of treating the infections amounts to tens of billions of dollars, experts say"

-Swabs in Hand, Hospital Cuts Deadly Infections

Caption Contest- Economists' Photos

The link from here.

More Puzzles from Amazon

International Economics: Theory and Policy (6th Edition) (Hardcover) by Paul R. Krugman (Author), Maurice Obstfeld (Author)

Used Hardcover starts at $4Used Paperback at $14

So as I had told before used hardcovers seems cheaper

Paul Krugman on Colbert Report

A bit old video, anyway;

Foreign Direct Investment: Analysis of Aggregate Flows

Draft chapters of the above book by Assaf Razin

Two Cool Economists

E. Glen Weyl- Tyler has more on him

ASSAF RAZIN

Death of a blog

Is the Anti-Becker-Posner blog dead?

Imam Zaid Shakir on Bill Moyers Journal

Interesting discussion with Bill Moyers;

BILL MOYERS: Which is stronger in America, culture or faith?

IMAM ZAID SHAKIR: I think as the American Muslim community itself becomes more integrated and more mature, faith will probably trump culture. And, you have a new culture emerging. You have an American Muslim culture emerging, which is very important, because then you can get a unique understanding of the religion that would allow the American Muslim to take his or her rightful place amongst the various Muslim communities of the world.

BILL MOYERS: How do you define that American Muslim community? What's it's profile?

IMAM ZAID SHAKIR: It's profile is African Americans, increasingly large numbers of Latino Americans and European, Caucasian Americans, and immigrants - South Asians, Pakistanis, Arabs and others. And, collectively I think you'll see a common American Islamic culture emerge. It's already happening....

IMAM ZAID SHAKIR: All right. I hope you-- I hope you air this segment. I condemn all of the lunatics that are killing innocent people, be they in pizza houses in Tel Aviv, be they innocent Muslims, Christians or others being slaughtered senselessly in Iraq as strongly as I condemn people getting in the planes flying halfway around the world to bomb innocent people into oblivion for no crime that those people have committed. I condemn all of it.

Colbert Takes on Nepal

All New Zealanders need to see this

Latest Daily Show

Puzzles from Amazon

Better than Plowing and Other Personal Essays by James Buchanan

The price range for used books range from $9 to 191$- it's crazy.

Anybody who figures it out deserves a Nobel- by the way the book is very highly recommended.

Lawyers and Lectures

Why's that many lawyer academicians don't put their lectures online?

A course in Microeconomics

Assorted links;

Microeconomics (working title), T. Nechyba, South Western/Thomson, 2008 (expected publication)- draft chapters, treatment very good

Intermediate Applied Microeconomics, MIT
Text book used is Microeconomic Theory: Concepts and Connections
To referesh maths see their backgrounder

14.04 Intermediate Microeconomic Theory, Fall 2003

Varian, Hal R. Microeconomic Analysis

14.121 Microeconomic Theory I, Fall 2005

Mas-Colell, Andreu, Michael Whinston, and Jerry Green. Microeconomic Theory. This is the recommended text
Jehle, Geoffrey, and Philip Reny. Advanced Microeconomic Theory.
This book is more readable
Kreps, David. A Course in Microeconomic Theory. Princeton, NJ: Princeton University Press, .
This text provides more intuition.
Varian, Hal. Microeconomic Analysis. 3rd ed. New York, NY: W.W. Norton, 1992. ISBN: 0393957357.
This text is more concise

14.122 Microeconomic Theory II, Fall 2002
The recommended primary text for the course is Drew Fudenberg and Jean Tirole's text, Game Theory (MIT Press, 1991). The text covers all the material in the course and much more, but has less in the way of intuition and examples than some students would like. For this reason, students might alternatively wish to use Robert Gibbons' Game Theory for Applied Economists (Princeton University Press, 1992) as their primary reference. Gibbons' book contains more readable discussions of the material and a lot of nice examples, but omits a few of the topics we'll cover

14.123 Microeconomic Theory III, Spring 2005

Kreps, D. A Course in Microeconomic Theory. Princeton, NJ: Princeton University, 1990. ISBN: 0691042640.

Varian, H. Microeconomic Analysis. 3rd ed.
Mas-Colell, A., M. Whinston, and J. Green. Microeconomic Theory. New York, NY: Oxford University Press, 1995. ISBN: 0195073401.

14.124 Microeconomic Theory IV, Spring 2003
I will follow the textbook by MasColel, Whinston and Green. It strikes the right balance between the dry text of Varian and the verbose text of Kreps. If you prefer to read these other books you are welcome to do so, but do note that some of the material I will cover is poorly covered by these texts.

MasColel, A., M. Whinston, and J. Green. Microeconomic Theory. Oxford University Press, 1995.

Kreps, D. A Course in Microeconomic Theory. Princeton University Press, 1990.

Varian, H. Microeconomic Analysis. 3rd ed. W.W. Norton Company, 1992.


Quantum Microeconomics with calculus


Steven M. Goldman-Lecture Notes


Microeconomics- Berkeley- see his lectures online

The truth about Prohibition?

The standard, schoolbook history of alcohol prohibition in the United States goes like this:

Americans in 1920 embarked on a noble experiment to force everyone to give up drinking. Alas, despite its nobility, this experiment was too naive to work. It soon became clear that people weren't giving up drinking. Worse, it also became clear that Prohibition fueled mobsters who grew rich supplying illegal booze. So, recognizing the futility of Prohibition, Americans repealed it in 1934.

This popular belief is completely mistaken. Here's what really happened:

Read the entire column by Don Boudreaux

Who will pay?

Japan's changing demography;

By 2015 the proportion of elderly will have risen to one in four of the population, or more than 30m. This is thanks mainly to an unusually large baby-boom generation passing into the ranks of the old. Between 1947 and 1949, 2.7m children a year on average were born to surviving Japanese soldiers who returned from war, married and settled down—about a third more than in previous years. This year, the baby-boom generation began to retire (at present, 60 is the mandatory retirement age at most companies). The size of their pensions obligations has funding implications both for companies and for government. But there is another dimension to the baby-boomers' retirement: these workers drove Japan's economic transformation of the 1970s and 1980s. They are a reservoir of technical and managerial skills.

Who to pass these on to? Japan's birth rate fell below the replacement rate of 2.1 in the early 1970s. It slid to a low of 1.26 in 2005, before inching up last year to 1.32—nobody calls it a recovery. In 2005 Japan's population began to fall in absolute terms, despite increasing life expectancy. It is about to shrink at a pace unprecedented for any nation in peacetime. The National Institute of Population and Social Security Research estimates a total population of 95m by 2050, with the elderly accounting by then for two-fifths of the total.

Dictator's Central Bank

Intersting article from The Economist;

Last month Hilary Benn, who then headed Britain's Department for International Development (DFID), said that “the UK does not give direct funding to the government of Zimbabwe. All DFID's bilateral funding is channelled through NGOs and UN agencies, much of it programmed jointly with other donors.”

But here lies the rub: providing funds that bypass the government is easier said than done. By Zimbabwean law, all official foreign-currency transactions must go through the central bank. With hyperinflation, a gap of around 10:1 has opened up between the official exchange rate operated by the bank and the true rate reflected in the black market. Were donor agencies fully to comply with this requirement and transact their aid at the official rate, around 90% of the value of their aid would be captured by the central bank, which would be purchasing the aid dollars at around a tenth of their value.

Faced with this dilemma, most donors, including DFID, have negotiated special rates with the central bank—usually around the mid-point between the official rate and the black-market rate, though even this implies that the central bank captures around half of official aid.

But Norway's aid agency has gone even farther. Apparently it feels obliged by its principles of good governance to transact all its aid at the official rate, at times inadvertently handing most of its aid to the central bank. As conventional tax revenues to the finance ministry have dwindled in the face of economic collapse, the central bank has increasingly become the locus of government finance, thanks both to its capture of foreign exchange and its printing of money. It must be the world's only central bank that itself imports tractors.

Markets in Everything-Demand for 'corpse brides'

Parts of rural China are seeing a burgeoning market for female corpses, the result of the reappearance of a strange custom called “ghost marriages”. Chinese tradition demands that husbands and wives always share a grave. Sometimes, when a man died unmarried, his parents would procure the body of a woman, hold a “wedding” and bury the couple together.

The custom has a long history. In the legends of the classical romance of the “Three Kingdoms”, the warlord Cao Cao finds a corpse bride for his son who died in 208 AD at the tender age of 13.

The communists discouraged burials and suppressed ghost marriages as “feudal superstition”. Yet ancient beliefs die hard. As Marxism wanes, burials are reappearing—and so are corpse brides.

The practice is most common in the northern provinces of Shanxi, Hebei and Shandong. This is China's coal-mining heartland. In mountainous Shanxi, pit accidents kill many men too young to marry. Compensation to the family is spent on giving their son a wife in the afterlife.

A black market has sprung up to supply corpse brides. Marriage brokers—usually respectable folk who find brides for village men—account for most of the middlemen. At the bottom of the supply chain come hospital mortuaries, funeral parlours, body snatchers—and now murderers.

On March 7th this year, a local newspaper, Huashang Bao, reported that demand for corpse brides had led to sustained inflation. A top-quality piece of “wet” (recently deceased) merchandise that the newspaper said would have sold for a few thousand yuan four years ago now goes for 30,000-40,000 yuan ($4,000-5,300). In contrast, “dry goods” (long buried) fetch just 300-500 yuan down the Shanxi coal mines.

-China's corpse brides

Idiots Guide to Statistics

How juries are fooled by statistics

Oxford mathematician Peter Donnelly explores the common mistakes we make in interpreting statistics, and the devastating impact these errors can have on the outcome of criminal trials. Statistical uncertainty and randomness, he says, confound many of our assumptions about the world. He shares the case of a British woman wrongly convicted of murdering her two infants -- a verdict reached, in part, by the misuse of statistics

Costs and Benfits of Minimum Wages

Minimum wages are a long-standing tradition in many other OECD countries. A minimum wage was first introduced in New Zealand in 1894, and followed a few years later by Australia. The US federal minimum wage was passed into law in 1938. Japan and Korea now have minimum wages, while in Europe, so do France, Greece, Portugal, Spain, the Benelux countries and many countries in central and eastern Europe. Ireland and the UK (not for the first time) introduced national minimum wage systems in the 1990s.

Today 21 of the OECD’s 30 member countries have statutory minimum wages, and in just over half of these countries minimum wages have risen slightly faster than average wage levels in recent years. Only in the US have the real earnings of workers on the minimum wage dropped sharply in recent years, and there is strong pressure to raise them again.

What are the pros and cons of having a minimum wage? Wage floors dissuade employers from pocketing tax concessions aimed at improving take-home pay of low-wage workers or passing on any payroll taxes by lowering wages. They can improve equity by lifting the incomes of lower paid workers and encourage those on the edge of the labour market, such as the low-skilled, to hunt for a job. If set too low, they lose this usefulness. However, if set too high, minimum wages will stop employers from hiring lower skilled workers, and may end up protecting the “insiders” with the jobs.

For some firms, the cost of taking on extra staff, even at the minimum wage, can be a hurdle. In fact, social contributions and other payroll taxes add, on average, around 18% to the cost of employing minimum-wage workers. Most countries charge similar rates for minimum-wage labour and higher-earning employees, but preferential rates are found in Belgium, France, Hungary, Ireland and the UK.

If several countries with legal minimum wages have low unemployment rates, it is largely because the level is deliberately set so as not to constrain job growth. In the UK, a special commission has been quite effective to date in ensuring that the minimum wage keeps up with living costs and growth, while not rising too high.

On balance, the evidence shows that an appropriately-set minimum wage need not have large negative effects on job prospects, especially if wage floors are properly differentiated (e.g. lower rates for young workers) and non-wage labour costs are kept in check. But what about the goal of boosting incomes among lower paid workers? Do wage floors “make work pay”?

- The minimum wage: Making it pay, OECD

Podcasts of the Day

Paul Krugman lectures from LSE;

Trade and Inequality Revisited
Manufactured imports from developing countries have risen sharply since the mid-90s, when the effects of trade on inequality were a major political issue. Should we be reconsidering the link between globalisation and inequality?

Globilisation and Welfare
Progressive free-traders - people who believe both in domestic equity and in the promise of globalisation - are feeling chastened these days. What's left of the case for globalisation? How can we make it work?

Help Predict the Climate

Climateprediction.net is the largest experiment to try and produce a forecast of the climate in the 21st century. To do this, we need people around the world to give us time on their computers - time when they have their computers switched on, but are not using them to their full capacity

The reach of American Globalization

Thriller performed by Phillipines convicts(via FP blog)


Indian Thriller


Carving out a living: A corner of Africa that's forever Springfield

Arabs Learn Free Markets

The latest edition of Foreign Exchange

Global Growth at 5 percent

Things are going good for the world economy;

Webcasts;
Update to the April 2007 World Economic Outlook
Update to the April 2007 World Economic Outlook

More on Puzzles from Amazon

As I had said before used hardcover books are cheaper- more evidence;

Money, Exchange Rates, and Output by Guillermo A. Calvo
Used Hardcover for $4.99
Used Paperback for $13.72

Open economy:tools for policymakers in developing countries

Useful Material for teaching intermediate development economics;

Open economy : tools for policymakers in developing countries

Policymaking in the open economy : concepts and case studies in economic performance

Policies to move from stabilization to growth

Lecture Notes on Development Macroeconomics

New Open Economy Macroeconomics

And keep reading Dani Rodrik's blog

Some Recent Reports from World Bank

Ukraine : Public Financial Management Performance Report 2006


Lesotho - Managing government finances for growth and poverty reduction

Mongolia - The enabling environment for social accountability in Mongolia

Lao - Private sector and investment climate assessment : reducing investment climate constraints to higher growth

Lao PDR - Public expenditure review integrated fiduciary assessment

East Asian FTAs in services

Policy challenges for education and economic growth in the Slovak Republic

Cambodia - Sharing growth : equity and development in Cambodia

Bosnia and Herzegovina - Pension system note

Monitoring and evaluating projects : a step-by-step primer on monitoring, benchmarking, and impact evaluation

Fertility regulation in Kazakhstan : the role of providers and the public financial cost

Poverty and environment : understanding linkages at the household level

Mongolia - Building the skills for the new economy

Bangladesh - Strategy for sustained growth

Budgeting and budgetary institutions

Dancing with the giants: China, India, and the global economy

Assorted

Nobody Expects the Spanish Inquisition—or Do They?

The Structure of Scientific Revolutions

Applied Numerical Methods in Economics

Links via a new economics blog-genericface

The Policy Challenges of Globalization: Trade and Industrial Policy

A course on globalization by Rodrik;

1. Where are we in globalization?
2. How large are the economic gains from globalization?
3. Why do countries export what they do?
4. Does it matter what countries specialize in?
5. Is outsourcing different from regular trade?
6. Is globalization bad for inequality and poverty?
7. What do we know about the impact of trade policy on economic performance?
8. What do successful strategies of international integration look like?
9. Is China a threat or opportunity?
10. What are the benefits (and costs) of regional trade agreements?
11. Does the WTO work as it should?

Any body can learn Quantum Mechanics

"Why bother with things like paranormal phenomena and spoon-bending and power of crystals when you’ve got quantum mechanics"

-Quantum physicist JIM AL-KHALILI

Listen to the documentary from BBC- podcast available for a week.

Related podcast from Guardian Science

Does Protection Work?

The US followed the British example. In fact, the first systematic argument that new industries in relatively backward economies need protection before they can compete with their foreign rivals—known as the "infant industry" argument—was developed by the first US treasury secretary, Alexander Hamilton. In 1789, Hamilton proposed a series of measures to achieve the industrialisation of his country, including protective tariffs, subsidies, import liberalisation of industrial inputs (so it wasn't blanket protection for everything), patents for inventions and the development of the banking system.

Hamilton was perfectly aware of the potential pitfalls of infant industry protection, and cautioned against taking these policies too far. He knew that just as some parents are overprotective, governments can cosset infant industries too much. And in the way that some children manipulate their parents into supporting them beyond childhood, there are industries that prolong government protection through clever lobbying. But the existence of dysfunctional families is hardly an argument against parenting itself. Likewise, the examples of bad protectionism merely tell us that the policy needs to be used wisely.

In recommending an infant industry programme for his young country, Hamilton, an impudent 35-year-old finance minister with only a liberal arts degree from a then second-rate college (King's College of New York, now Columbia University) was openly ignoring the advice of the world's most famous economist, Adam Smith. Like most European economists at the time, Smith advised the Americans not to develop manufacturing. He argued that any attempt to "stop the importation of European manufactures" would "obstruct… the progress of their country towards real wealth and greatness."

Many Americans—notably Thomas Jefferson, secretary of state at the time and Hamilton's arch-enemy—disagreed with Hamilton. They argued that it was better to import high-quality manufactured products from Europe with the proceeds that the country earned from agricultural exports than to try to produce second-rate manufactured goods. As a result, congress only half-heartedly accepted Hamilton's recommendations—raising the average tariff rate from 5 per cent to 12.5 per cent.

In 1804, Hamilton was killed in a duel by the then vice-president Aaron Burr. Had he lived for another decade or so, he would have seen his programme adopted in full. Following the Anglo-American war in 1812, the US started shifting to a protectionist policy; by the 1820s, its average industrial tariff had risen to 40 per cent. By the 1830s, America's average industrial tariff rate was the highest in the world and, except for a few brief periods, remained so until the second world war, at which point its manufacturing supremacy was absolute.

-Protecting the Global Poor

Related;
For a discussion see the Prospect blog
The Real Lessons for Developing Countries from the History of the Developed World

Listen to an interview on BBC

More good sense from Martin Wolf

From NBER

Neoclassical Factors

The Basic Public Finance of Public-Private Partnerships

Which Model for Africa- Indian or Chinese?

Relying on a recently published book titled "In Spite of the Gods" by Edward Luce, this article attempts to draw some lessons for Uganda from the economic organisation of post-independence India, initially organised around policies of import substitution (Mohandas Gandhi's handspun and homespun cotton substitute for Manchester-manufactured, imported yarn), self-reliance and tight state control....

The bigger question, though, is this: As a former British colony, with a decent higher education system (at least prior to recent changes), our economy is more akin to India than China. Yet we seem determined to follow a China-type model of development. Is this wise? Are not government policies (such as not teaching English until Primary Four) in a world where English is the coin of the globalised realm misguided?

-Uganda: Country Must Learn From Indian Lesson

Authors, Books and Podcasts

Napoleon Bonaparte
More than anything else, the myth-making talents of Napoleon Bonaparte ensured his appeal and lasting reputation as a fearless and decisive military leader. But the early years showed no indication of the future destiny of France's first Revolutionary Consul. A new biography of the first thirty years of Napoleon's life has just been completed by Philip Dwyer from the University of Newcastle

Albert Ellis and Rational Emotive Behaviour Therapy

Charm Offensive: How China's Soft Power is Transforming the World

Lex Populi: The Jurisprudence of Popular Culture

JK Rowling's Harry Potter and the Deathly Hallows (review)

Islam and terrorism; British ex-Muslims; Interchurch dialogue

"Einstein: His Life and Universe."

The Obesity Virus

Obesity can spread from person to person, much like a virus, researchers are reporting today. When one person gains weight, close friends tend to gain weight, too.

-- NYT

Related;
The Spread of Obesity in a Large Social Network over 32 Years

Background The prevalence of obesity has increased substantially over the past 30 years. We performed a quantitative analysis of the nature and extent of the person-to-person spread of obesity as a possible factor contributing to the obesity epidemic.

Methods We evaluated a densely interconnected social network of 12,067 people assessed repeatedly from 1971 to 2003 as part of the Framingham Heart Study. The body-mass index was available for all subjects. We used longitudinal statistical models to examine whether weight gain in one person was associated with weight gain in his or her friends, siblings, spouse, and neighbors.

Results Discernible clusters of obese persons (body-mass index [the weight in kilograms divided by the square of the height in meters], 30) were present in the network at all time points, and the clusters extended to three degrees of separation. These clusters did not appear to be solely attributable to the selective formation of social ties among obese persons. A person's chances of becoming obese increased by 57% (95% confidence interval [CI], 6 to 123) if he or she had a friend who became obese in a given interval. Among pairs of adult siblings, if one sibling became obese, the chance that the other would become obese increased by 40% (95% CI, 21 to 60). If one spouse became obese, the likelihood that the other spouse would become obese increased by 37% (95% CI, 7 to 73). These effects were not seen among neighbors in the immediate geographic location. Persons of the same sex had relatively greater influence on each other than those of the opposite sex. The spread of smoking cessation did not account for the spread of obesity in the network.

Conclusions Network phenomena appear to be relevant to the biologic and behavioral trait of obesity, and obesity appears to spread through social ties. These findings have implications for clinical and public health interventions

Back Story With The Times’s Gina Kolata

Global Obesity- a documentary from BBC; Part One, Part Two

The obesity epidemic
A researcher in the United States claims that the reason for the obesity epidemic is more than just the calories we eat and the lack of exercise. It's a substance that food manufacturers are widely using.

Democrats Legislative Priorities

-Democrats Pushing to Avoid a ‘Do-Nothing’ Label

Why Isn't the Whole World Developed?"

Tyler Cowen reviewed a book worth pre-ordering;

In “A Farewell to Alms: A Brief Economic History of the World” (forthcoming, Princeton University Press,... Gregory Clark, an economics professor at the University of California, Davis, identifies the quality of labor as the fundamental factor behind economic growth. Poor labor quality discourages capital from flowing into a country, which means that poverty persists. Good institutions never have a chance to develop.

Professor Clark’s pessimistic view is that most forms of policy advice or financial aid do not solve the problem of economic development. Unless the quality of labor rises, those would-be remedies are addressing symptoms, not causes.

Professor Clark’s analysis counters Jared M. Diamond, who in his “Guns, Germs and Steel” (W. W. Norton & Company, 1999) located the ultimate sources of European advantage in geography, like safety from tropical diseases, and a greater number of available animals that could be domesticated.

A simple example from Professor Clark shows the importance of labor in economic development. As early as the 19th century, textile factories in the West and in India had essentially the same machinery, and it was not hard to transport the final product. Yet the difference in cultures could be seen on the factory floor. Although Indian labor costs were many times lower, Indian labor was far less efficient at many basic tasks.

For instance, when it came to “doffing” (periodically removing spindles of yarn from machines), American workers were often six or more times as productive as their Indian counterparts, according to measures from the early to mid-20th century. Importing Western managers did not in general narrow these gaps. As a result, India failed to attract comparable capital investment.

Professor Clark’s argument implies that the current outsourcing trend is a small blip in a larger historical pattern of diverging productivity and living standards across nations. Wealthy countries face the most serious competitive challenges from other wealthy regions, or from nations on the cusp of development, and not from places with the lowest wages. Shortages of quality labor, for instance, are already holding back India in international competition.

An independent estimate by two economics professors at the University of Wisconsin, Madison, Rodolfo E. Manuelli and Ananth Seshadri, (“Human Capital and the Wealth of Nations,” (http://www.ssc.wisc.edu/~manuelli/research/humcapwealthnation5_05.pdf) suggests that if variations in the quality of labor across nations are taken into account, other productivity factors need differ by only 27 percent to explain differences in per capita income.

Professor Clark argues that as late as the 18th century, most Europeans had not exceeded the standard of living in hunter-gatherer societies. Until recent times, the early advantages of Europe did not allow it to escape what economists call the Malthusian trap, in which rising populations periodically offset temporary gains in living standards.

The turning point came when England, and some other parts of Europe, managed a small but persistently positive rate of growth, starting around the 17th century. Pro-business values spread through English society. The Industrial Revolution was not so much a revolution as a continual building of small improvements, and indeed its history shows the difficulty of achieving regular growth. The explosion of technology came only in the late 19th century, well after many incremental gains.

Via Economic History of the World blog

Related;
WORLD ECONOMIC HISTORY- Course taught by Gregory Clark

Prices of 22 domestic farm products, 1500-1914 wheat, barley, oats, rye, peas, beans, potatoes, hops, straw, hay, beef, mutton, pork, bacon, tallow, milk, cheese, butter, wool, eggs, faggots (firewood), timber