The Invisible Forces–the invisible hand, the invisible foot, and the invisible handshake–stem from Adam Smith, who  discussed the invisible hand in The Wealth of Nations (1776), Book IV, Chapter 2.  This idea was subsequently extended to “the invisible forces” by economist David Colander in Microeconomics, 2nd ed. (1995), pp. 17-19.

According to Colander:

the invisible hand refers to economic forces that influence human behavior

the invisible foot refers to legal and political forces that influence human behavior

the invisible handshake refers to social and historical forces that influence human behavior

Simply put, the invisible forces comprise a system that influences and is influenced by human behavior.  Since this behavior takes place in a physical and biological environment, and influences that environment, matters relating to the physical and biological environment are also relevant.  It is this broader view of economics that The Invisible Forces Weekly illustrates and explores.

The Invisible Forces Weekly is produced and published by Bruce Larson.  You may contact him at:


Proximate Origins and Purposes

The BCE Model with the Invisible Forces

The BCE Model with the Invisible Forces Fully Extended

Notes on Entrepreneurship

The Invisible Forces Weekly (1-260)











283 (21 September 2016)

Welcome to week 283!  The articles below caught my attention this week.  Please note that what are intended to be relatively objective “briefs” are preceded by dashes (——–), whereas additional material or relatively subjective comments are preceded by asterisks (********).  The links to articles preceded by [SR] require a subscription to be read in their entirety, although complete articles may frequently be found by an Internet title search.

(10 September 2016): “Free exchange: All in the family” (

********This article takes a look at the work of Heather Boushey, an economist on the transition team of Hillary Clinton, which puts her “in line for a top job in a Clinton administration.”  Boushey has made “inequities in the labour market the focus of her research. . . . In ‘Finding Time: The Economics of Work-Life Conflict’ . . . Ms Boushey argues that America’s labour-market troubles are largely the result of its failure to grapple with changes in family structures.”  This is something to consider because “American is an extraordinary outlier in the quality of its safety net for families.  It does not require firms to provide any paid family leave (when, for example, a child is born).  The average in the OECD, a club of mostly rich countries, is 54 weeks.”  You can learn more about Finding Time and some of her other work at:  There is also a Q&A with a reporter from The Wall Street Journal at:

(15 September 2016): “Winemakers Toil to Beat the Heat of Climate Change” [SR](

——–Grapes are ripening much earlier in the Clare Valley of South Australia.  According to Neil Paulett, a winemaker there, grapes “are ripening a month earlier than when he started the wine label that carries his name in the 1980s.”  As a result, “Some of Australia’s largest wine companies, along with academics and researchers, are investigating ways to mitigate the impact.”  Mitigation involves alternative pruning methods as well and new strains of yeast that are “less efficient at turning sugar into alcohol.”  More alcohol “is a problem not only for flavor, but also because some jurisdictions tax wine at a higher rate if it has more alcohol.”

********The three-minute video accompanying the article contains much of the content of the article and is available without a subscription.  A good opportunity to hear some Australian English.  What is missing from the video, and which I found so dramatic, was the graph that shows “The day grapes hit a certain level of ripeness each year since 1993.”  It provides information for Cabernet Sauvignon, Chardonnay, and Shiraz.  Each grape had very similar behavior, with dramatically shortening of time to ripeness.  “Cabernet Sauvignon grape ripened about 7 weeks earlier than it did in 1993.”  Clearly, those who grow grapes and make wine are confronting big challenges.  The graphs is the WSJ are largely reproduced at:

********Wine production in Australia is responding to climate change but wine production in Russia is responding to international sanctions against the country as well as the Russian annexation of Crimea.  With regard to the latter, we have “In Russia, Patriotism Now Comes in a Wine Glass” [SR](  “Russian wine production—on the wane before the Ukrainian conflict—jumped nearly 25% in 2015 from the year before . . . and vintners say it is on the rise again this year.”  Although wine may be enjoying a renaissance in Russia, it hasn’t been easy to find wines of sufficient quality for some in the restaurant business.  “Konstantin Pilberg, the chief sommelier at Lavka-Lavka, a farm-to-table restaurant that boasts locally sourced cuisine, said he tried 550 Russian wines before finding 33 that made the cut to be on the restaurant’s rotating wine list.”  History has been one of the factors that has held back the development of an indigenous wine industry.  “In the 1980s, Soviet leader Mikhail Gorbachev launched a sobriety campaign, in which most of the country’s grape vines were cut down.”

(17 September 2016): “Buttonwood: Trust busting” (

********A concise statement of the role trust plays in economic and political affairs.  It points to the challenges posed by a decline in trust.  The paragraph that follows ties things up nicely.

——–“Trust is built into the heart of almost all economic activity.  Once humans specialized, they required others to produce what they themselves did not—the farmer needed the blacksmith to produce his tools, the blacksmith need the farmer to supply his food. . . . Any hint of a general erosion of trust—of a retreat to the kind of economic nationalism that marked the 1930s—would be a very worrying sign.”

********Trust is a topic that has received increasing attention in economics and neighboring disciplines in recent decades.  The book that came first to mind is Trust: The Social Virtues and the Creating of Prosperity (, by Francis Fukuyama, although a glance at the Table of Contents does not suggest that he discusses changes in trust within a society.  The author of Buttonwood concludes by noting “Today’s economy and financial system depend on global co-operation; today’s political system is one where such co-operation is increasingly seen by voters as intrinsically suspicious.  That is a dangerous disconnect.”

(17 September 2016): “The superstar company: A giant problem” (

——–“Disruption may be the buzzword in boardrooms, but the most striking feature of business today is not the overturning of the established order.  It is the entrenchment of a group of superstar companies at the heart of the global economy. . . . As our special report this week makes clear, the superstars are admirable in many ways. . . . But they have two big faults.  They are squashing competition, and they are using the darker arts of management to stay ahead.  Neither is easy to solve.  But failing to do so risks a backlash which will be bad for everyone.”  The increasing concentration of economic activity “is at its most worrying in America.  The share of GDP generated by America’s 100 biggest companies rose from about 33% in 1994 to 46% in 2013.”  Furthermore, “The five largest banks account for 45% of banking assets, up from 25% in 2000.  In the home of the entrepreneur, the number of startups is lower than it has been at any time since the 1970s.”

********The Special Report referred to above can be found at:  It seems that antitrust thinking (and political will) has not kept up with globalization and the network economies of the internet.

(19 September 2016): “Drugmakers fight state opioid limits amid addiction crisis” (

——–“The makers of prescription painkillers have adopted a 50-state strategy that includes hundreds of lobbyists and millions in campaign contributions to help kill or weaken measures aimed at stemming the tide of prescription opioids, the drugs at the heart of a crisis that has cost 165,000 Americans their lives and pushed countless more to crippling addiction.”

********This is the first of two articles resulting from a joint investigation by the Associated Press and the Center of Public Integrity.  It was accompanied, in a sense, by a Guest Commentary by Jill Westmoreland Rose, who is the “U.S. Attorney & Chief Law Enforcement Officer for the 32 westernmost counties in” North Carolina.  You can find it at:  The second installment of the two-part investigation can be found here:  This site can also be used to access the first installment of the series.  Valuable background for the Commentary by the U.S. Attorney and the two installments is provided by the invaluable Dreamland: The True Tale of America’s Opiate Epidemic (, by Sam Quinones.

(21 September 2016): “Warehouse Workers of the Near Future” (

——–“When Target Corp. decided to revamp one of its biggest California distribution centers, it had a choice.  It could build a new warehouse, it could install established technologies for picking products off shelves or it could take a risk on a new breed of robots from a reclusive billionaire.  Target went with the billionaire’s bots.  Target’s new automatons are from Symbotic LLC, part of a grocery empire run by New England billionaire Rick Cohen. . . . His sales pitch to grocery chains and retailers, including Target, Coca-Cola Co. and Wal-Mart Stores Inc. is simple: Symbotic’s automation system includes autonomous robots that can travel untethered among storage racks in a distribution center. . . . That is in contrast to many other warehouse-automation systems, in which the robots tend to be bolted down or limited to fixed routes or tracks and are less flexible in what they can do.”  Cohen notes, “What we’re doing with autonomous bots is not that dissimilar from what Google is doing with autonomous cars . . . I think within five years, it’ll change distribution.”  In the low-margin grocery business, automation provides an opportunity to control “the three big costs of conventional human-staffed distribution centers—labor, time and real estate.”

********The key word in the paragraph above is ‘untethered’ and the important note is that untethered bots are like autonomous cars.  It is amazing to see how the easier movement of information is now enabling easier movement of things, and this will become more prevalent.  Frank Bruni, the vice president of supply-chair operations for Kroger’s, made a telling comment when he said, “Every project we look at, we look at automation as a potential part of it.”

********The article includes a link to a three-minute video that provides an inside look at a warehouse using a variety of bots.  The general manager of the warehouse makes an important point, also mentioned in the article, that whereas human beings like the same things to be located in the same place, that is not the case for bots.  Consequently, it is possible to store the same things in different places, often times economizing on space.  Thus the potential for real estate savings.  You can learn more about Symbotic at:

********A counterpoint to the more mechanized developments with regard to warehousing is provided by grass-fed beef.  The Wall Street Journal explores this in “Why Grass-Fed Beef Is on a Roll” [SR](  Reporters Ellen Byron and Sarah Nassauer write that “When many people eat beef, they want to know I the cow ate grass.  Grass-fed beef, once a niche luxury, is now sold at ballgames, convention centers and nearly every Wal-Mart in the U.S.”  Such beef is perceived by many consumers to be “a healthier, higher-quality alternative to conventional beef and are willing to pay more for it, no matter that labeling—and flavor can be inconsistent.”  Although grass-fed beef “comprised just 1.4% of the $18 billion fresh-beef market in the U.S. in 2015, . . . its growth rate has far outpaced conventional beef in recent years . . . Last year, sales of grass-fed beef rose nearly 40% over the year before, while conventional beef grew 6.5% in the same period.”  In thinking about the two articles, one on moving packages and one on beef, in one instance we are moving toward something that is more mechanized and in the other less so.  Both seem to be responding to the preferences of “the ultimate consumer” for lower prices (moving packages) and higher perceived quality (grass-fed beef) but it seems like we care about how cattle are raised but not care about how packages are moved.

May you have a good week!


282 (14 September 2016)

Welcome to week 282!  The articles below caught my attention this week.  Please note that what are intended to be relatively objective “briefs” are preceded by dashes (——–), whereas additional material or relatively subjective comments are preceded by asterisks (********).  The links to articles preceded by [SR] require a subscription to be read in their entirety, although complete articles may frequently be found by an Internet title search.

(8 September 2016): “Killing Off American Cows to Keep Milk Prices High” (

——–“Although American demand for dairy has risen steadily for almost 40 years, some farmers tried to limit the supply of milk by killing off their own cows. . . . This mysterious state of affairs was revealed in a nationwide class-action lawsuit against dairy cooperatives, groups of farmers who pool their supplies but, as a whole, serve as middlemen between the farmers and dairy processors.  In this case, lawyers from one of the premier U.S. plaintiffs’ firms alleged on behalf of American consumers that the cooperatives paid farmers to prematurely turn hundreds of thousands of cows into burgers in a sprawling scheme to prop up dairy prices.”  This week the defendants settled for $52 million.  The antitrust case “pulls the curtain back on a highly complex sector of the U.S. agricultural economy.”  The initiative that led to the premature deaths of many dairy cows, known as the “herd retirement program,” was spearheaded by “Cooperatives Working Together, run by the lobbying group National Milk Producers Federation, and supported by farms producing almost 70 percent of America’s milk.”

********Of course, it is easy to understand that an individual dairy farmer, when confronted by low prices for milk, may wish to sell his cows.  What was at issue in this case, however, was that “cooperatives paid above-market prices for dairy cows owned by member farmers, and sent them to be slaughtered before they would have otherwise.”  It was this collective action managed through the cooperatives that ran afoul of the 1922 Capper-Volstead Act.  You can learn more about the Act at:

(8 September 2016): “Private Prisons Have a Problem: Not Enough Inmates” (

——–“With overall violent crime rates falling nationally and fewer people getting sentenced to long stretches behind bars, private prison companies see a potentially catastrophic decline in demand for their services.  Their response: diversify into everything from halfway houses to neighborhood check-in centers for drug offenders.”  The primary reason for the decline is the curtailment of “harsh mandatory-minimum sentences and other changes in criminal justice policies have combined to reduce federal and state inmate head counts.”  Although recent announcements by the federal government indicate a move away from private prisons [(], the same is not true at the state level.  As a result, “state-issued private prison contracts appear to be more secure because state penal systems remain more crowded than their federal counterparts.”

********The stock prices of Corrections Corp. of America and Geo Group, both large providers of prison services, “have each sunk by more than 30 percent . . . Thus the drive for diversification.”  How would public prisons and prison systems respond to such a decline?  It is useful to note that it is the legal system is a central factor in creating the demand for prison services.  Just as legislation can decrease the demand for services, so can in create it.  An illustration of this point is provided by “Inmate Populations Rise Again in Some States” [SR](  Contributing to these localized increases is an “epidemic of opiate addiction and a handful of high-profile crimes.”  Arkansas, in particular is an example of a state that “in 2011 passed a landmark law to reduce harsh drug sentences, as a way to curb costs from overcrowded prisons.”  The result was a 10% drop in prison population over two years.  But a 2013 carjacking and shooting by a parolee led state officials to tighten parole policies.  Now “Arkansas’s prisons are more crowded than they were before the 2011 legislation.”

********On a related topic, inmates across the country recently protested their pay and living conditions at the time of the 45th anniversary of Attica.  More detail is provided in “Prisoners Stage Coordinated Strikes in Several States” (  According to the article, the pay level at one prison ranges from “74 cents a day to $3.34 a day.”

(9 September 2016): “Chinese Billionaire Linked to Giant Aluminum Stockpile in Mexican Desert” (

——–“Two years ago, a California aluminum executive commissioned a pilot to fly over the Mexican ton of San José Iturbide . . . and snap aerial photos of a remote desert factory.  He made a startling discovery.  Nearly one million metric tons of aluminum sat neatly stacked behind a fortress of barbed-wire fences.  The stockpile, worth some $2 billion and representing roughly 6% of the world’s total inventory . . . quickly became an obsession for the U.S. aluminum industry.  Now it is a new source of tension in U.S.-Chinese trade relations.  U.S. executives contend that the mysterious cache was part of a brazen scheme by one of China’s richest men to game the global trade system.”  It is argued that billionaire Liu Zhongtian “tried to evade U.S. tariffs by routing aluminum through Mexico to disguise its origins, a tactic known as transshipping.”  Subsequently, as series of developments has resulted in the reduction of the size of the “giant pile of aluminum . . . plans are afoot to ship the metal stash to a Vietnam site owned by Global Vietnam Aluminum Co.”

********Wikipedia has a brief article about transshipment (, noting that it “is normally fully legal and an everyday part of world trade.  However, it can also be a method used to disguise intent, as is the case with illegal logging, smuggling, or grey-market goods.”  This is another article where consistency among statements on the same thing is hard to find.  For that reason, it might be beneficial to take a look at “The post-truth world: Yes, I’d lie to you” (

(13 September 2016): “How the Sugar Industry Shifted Blame to Fat” (

——–“The sugar industry paid scientists in the 1960s to play down the link between sugar and heart disease and promote saturated fat as the culprit instead, newly released historical documents show.  The internal sugar industry documents, recently discovered by a researcher at the University of California, San Francisco, and published Monday in JAMA Internal Medicine, suggest that five decades of research into the role of nutrition and heart disease, including many of today’s dietary recommendations, may have been largely shaped by the sugar industry. . . . The documents show that a trade group called the Sugar Research Foundation, known today as the Sugar Association, paid three Harvard scientists the equivalent of about $50,000 in today’s dollars to publish a 1967 review of research on sugar, fat and heart disease.  The studies used in the review were handpicked by the sugar group; and the article, which was published in the prestigious New England Journal of Medicine, minimized the link between sugar and heart health and cast aspersions on the role of saturated fat.”

********There is no surprise that an organization would “go shopping” for people and arguments that support its interests.  All this is effectively illustrated in Merchants of Doubt and is the lifeblood for lobbyists and the organizations that employ them.  What is surprising, though, is three Harvard researchers were caught up in the effort.  Although many journals now require disclosure of funding sources, it is easy to see why Dr. Walter Willett, the chair of the nutrition department of the Harvard T.H. Chan School of Public Health, says that the situation serves as a reminder of “why research should be supported by public funding rather than depending on industry funding.”  This comes, though, at a time when public support of universities is declining.

********A valuable complementary piece form “The Opinion Pages” is “The Shady History of Big Sugar” (  It provides a look at how the industry has, over 150 years, “shaped government policy in order to fuel our sugar addiction.  Today’s sugar industry is a product of the 1th century, when the key federal sugar policy was not a dietary guideline but a tariff on sugar imports.”  The Opinion is by David Singerman, an historian of science.  He wrote with such authority and ease that I gathered he had written about the subject previously.  Indeed, his doctoral dissertation is “Inventing purity in the Atlantic sugar world, 1860-1930” (  A recent book on by April Merleaux, Sugar and Civilization: American Empire and Cultural Politics of Sweetness (, seems to provide a nice complement.  The desire for “sweetness” is imaginatively examined by Michael Pollan in the first chapter of his book The Botany of Desire (  There the apple is the source of sweetness, at least for those non-Native Americans who settled what is now the United States.

********An article that is related to the one on the sugar industry is “Can ExxonMobil Be Found Liable for Misleading the Public on Climate Change?” (  The relationship I have in mind is the concealment of information that is contrary to the interests of an organization, as well as the intentional promotion of information that is contrary to the information being concealed.  I guess this tends to fall under the categories of secrecy and lying.  As it turns out, Sissela Bok has written effectively and interestingly on both topics.  With regard to the former, there is Secrets: On the Ethics of Concealment and Revelation (, with regard to the latter, there is Lying: Moral Choice in Public and Private Life (  In the ExxonMobil article, the Racketeer influenced and Corrupt Organizations Act (RICO Act), plays an important role.  If you read the first paragraph of the Wikipedia article on it (, you will be able to get a sense of its importance for the sugar article and the ExxonMobil article.  The RICO Act played an important role in the earlier prosecution of cigarette companies.

May you have a good week!


281 (7 September 2016)

Welcome to week 281!  The articles below caught my attention this week.  Please note that what are intended to be relatively objective “briefs” are preceded by dashes (——–), whereas additional material or relatively subjective comments are preceded by asterisks (********).  The links to articles preceded by [SR] require a subscription to be read in their entirety, although complete articles may frequently be found by an Internet title search.

(27 August 2016): “The Mundell-Fleming trilemma: Two out of three ain’t bad” (

********This is the sixth of six briefs on economics.  (Somehow I failed to include it last week.)  It focuses on the Mundell-Fleming trilemma, also known as the “impossible or inconsistent trinity” that says “a country must choose between capital mobility, exchange-rate management and monetary autonomy . . . Only two of the three are possible.”  This brief is a little longer than the previous ones, perhaps because of its importance and the explanation devoted to making the trilemma plausible.  Toward the end of the article the work of French economist Hélène Rey is discussed, the most notable statement being “What is clear from Ms Rey’s work is that the power of global capital flows means the autonomy of a country with a floating currency is far more limited than the trilemma implies.”  Policy makers and politicians please take note.

********All six briefs of economics, along with a wealth of related material, can be accessed at:  For example, there are two earlier articles dealing with the Mundell-Fleming trilemma and its consequences for economic policy.

(1 September 2016): “Where American Public Schools Came From” (

——–“As kids return to school this fall, consider the remarkable fact that we all contribute to the education of our neighbors’ kids.  While taxpayer-funded college and healthcare are controversial, you rarely hear the argument taxes shouldn’t pay for elementary and high schools.”  In “The Local Property Tax for Public Schools: Some Historical Perspectives,” Billy D. Walker explores how this happened.  The story begins “long before the American Revolution.  Universal, compulsory, free education for children was a Reformation idea, partly a result of Protestants’ desire to let people read scripture for themselves, and partly an effort to wrest control of educational systems from the Catholic schools.  In the 1500s, German states began funding public schools.”  Puritans led the way in England “but the 1660 restoration of the monarchy set the project back for more than a century.  Meanwhile, Puritans were bringing their ideas to North America.  In 1647, Massachusetts Bay Colony passed a law saying that the state could require towns to establish schools under control of public officials, make children attend them, and levy taxes to support them.”

********The link to a pdf of the Walker article is included at the bottom of the post.  The role of religion (the invisible handshake) in the development of the law (the invisible foot) enabling the public financing of education (the invisible hand) is striking.  The historical background provides a new perspective on current discussions of public education, especially as it relates to vouchers.

(2 September 2016): “This small Indiana county sends more people to prison than San Francisco and Durham, N.C., combined.  Why?” (

********As stated by Wikipedia, in 2013 “there were . . . 3,143 counties and county-equivalents in the United States.”  Each county, subject to state law, has its own judicial and law enforcement system, with the ability to be elected and re-elected playing an important role in the rigor of enforcement.  As a result, as the article points out, there are dramatic “disparities” in the “admission rates” to correctional facilities and sentence length among the various counties.  The article dramatically shows that the location of a conviction matters greatly, e.g., “rural, mostly white and politically conservative counties” tend to have higher rates of “admission” and longer sentences.  Leading the way in the U.S. is Dearborn County, Indiana; in North Carolina, Martin County, in the north-east part of the state, leads the way.

********The article has two graphics that are especially enlightening.  One is of the U.S. as a whole, at least the lower 48, from which you can find information on “admission rates” and rates of increase between 2006 and 2013 by an appropriate click for any county.  The other, “A Growing Divide,” shows that inmates per thousand have fallen dramatically in Populous counties, fallen substantially in Midsized counties, and risen slightly in Small counties.  Visually impressive, to be sure.

********The words ‘disparity’, as used above, and ‘difference’ carry important shades of meaning that are developed at:  As I understand it, a disparity is a difference that is unjust.  That suggests that some differences are not unjust, i.e., just.  Of course, some people who use the term ‘disparity’ may not make such a distinction.  I intend to be careful in my usage.

(3 September 2016): “A Lobbyist Wrote the Bill.  Will the Tobacco Industry Win Its E-Cigarette Fight?” (

——–“The e-cigarette and cigar industries have enlisted high-profile lobbyists and influential congressional allies in an attempt to stop the Food and Drug Administration from retroactively examining their products for public health risks or banning them from the market. . . . The bipartisan effort has featured a former senator who did not register as a lobbyist before going to work for the cigar companies and a former Obama administration official, now a private consultant, who is trying to undo his earlier work reviewing the rule.  In addition, one member of Congress introduced industry-written legislation without changing a word of it.”

********Unsurprisingly, companies are not interested in legislation that will decrease the demand for their products.  The article is especially interesting, though, for the documents it provides showing how some legislation gets developed and the lobbying efforts that support it.  A related article “Big Tobacco Wants to Turn Japan’s Smokers Into Vapers” ( shows the international dimension of legislative efforts.  In light of this, I’d like to call attention to The Cigarette Century: The Rise, Fall, and Deadly Persistence of the Product that Defined America (, by Allan M. Brandt.  This book is near the top of my reading list as I seek to learn more about the legal and illegal sale of addictive drugs and the products that serve as their delivery vehicles.

(5 September 2016): “No Sailors Needed: Robot Sailboats Scour the Oceans for Data” (

——–Saildrone, of Alameda, California, manufactures and rents autonomous robotic sailboats that are used for a variety of scientific purposes.  In a recent application it was counting haddock in the Bering Sea, tracing “lawn-mower style paths across” its violent surface.  The company charges a daily fee of $2,500 for the data it produces.  Saildrone got its start with funds from Google executive chairman Eric Schmidt and his wife Wendy Schmidt, as well as three socially-minded venture capital firms.  Although Saildrone makes the boats, their scientific instrumentation tends to come from those who rent them.  As Christian Meining, the director of engineering of the National Oceanic and Atmospheric Administration’s Pacific Marine Environmental Laboratory notes, “Richard [Jenkins, Saildrone’s CEO,] had a great boat but no scientific sensors on it, and we had sensors but no boat.”  Saildrone boats are now being used to help study “the El Nino arm-water pattern in the Pacific Ocean.”  Ultimately, Jenkins contends, “a fleet of robot sensors spread across an ocean like the Pacific will make a huge difference in both weather and climate predictions.”

********You can learn more about Saildrone at its very informative website:  Given that the oceans currently cover about 71 percent of the surface of Earth ( and that the percentage will almost certainly increase with climate change, it appears like the company has a bright future.  An interesting and important related article is “Flooding of Coast, Caused by Global Warming, Has Already Begun” (  The idea of “sunny-day flooding,” i.e., flooding that takes place that is not the result of a hurricane, tropical storm, or some other weather event is one to remember.  Contained within it is a link to an interactive graphic ( that examines sunny-day flooding up and down the East Coast, including Wilmington, North Carolina and Charleston, South Carolina.  As the graphic says, Wilmington “and points nearby have been among the worst-hit parts of the country by the increase in tidal nuisance flooding.”

********One thing that struck me about the “No Sailors” article was a comment by the venture capitalist Chamath Palihapitiya, who said: “My interest in Saildrone is very practical . . . Let’s stop arguing about what is happening, and let’s measure.  Once you have data and it’s statistically significant and valid, then we can get to the next step, which is to find what the structural reforms are that need to happen.”  This contrasts greatly with the willful ignorance of some political bodies that forbid the use of governmental funds for such matters as climate science or gun-based homicides.  In relation to this, I was taken by two in a review of The Dream of Enlightenment ( Sapere aude (dare to know).  Immanuel Kant used them in his 1784 essay “An Answer to the Question: What is Enlightenment?”  You can learn more about the history of the expression at:  One translation of the essay can be found at:

(6 September 2016): “A Labor Day Look at the Future of Work” (

——–“Labor Day is often the moment when we look back at the history of the trade union movement . . . But it is also a moment to look forward, and the consider the forms of worker advocacy and social support we will need in the years ahead.  At this moment, that means thinking very carefully about the relationship between income inequality, computerization, and unionization.  The three are closely related, as Tali Kristal argues” in a recent article.  According to hear research, “It’s not computerization that drives down workers’ share of national income, relative to the share that is earned by . . . company owners and investors . . . Rather, it’s the way that computerization affects unionization rates: by weakening unions, technology has changed the balance of power between labor and capital, and allowed the owner/investor class to claim a larger share of income.”

********In addition to the work of Tali Kristal cited in the article, articles by well-known and respected economist historian of technology Joel Mokyr (and others) and Sara Horowitz are discussed and linked.  I’m not aware of people who have looked carefully at the relationship between unionization, computerization, and inequality, so Kristal’s work sounds like it could be worth a closer look.  It was a good idea to couple Kristal’s work with the longer perspective of Mokyr, et al.  A related story, see “In the Land of the Robot [Japan], Androids Are on the March” (  It contains a 30-second video of the robot “Chihira Junco, a tourist greeter at a shopping mall in Tokyo.”  The producer of Ms. Junco plans “to develop 1,000 more androids in 2017.  By 2020, it hopes to make 10,000 a year.”  Luddites ( take note.

********While we are taking a look at how computerization has been disrupting the labor market, it is worthwhile drawing attention to a book that examines how digitization has disrupted the entertainment industry: Streaming, Sharing, Stealing: Big Data and the Future of Entertainment (, by Michael D. Smith and Rahul Telang.  According to Hal Varian, the Chief Economist of Google, “Smith and Telang have long been recognized as leading experts on the economics of the entertainment industry. . . . Anyone who wants to understand the uneasy relationship between tech and entertainment should read this book.”  The book is usefully reviewed at:

(7 September 2016): “The New Face of American Immigration” (

********This is a striking interactive graphic showing migration patterns in the U.S. from 2005 through 2014.  It took me awhile to learn how the interactive features worked, but it was worth the effort.  The things I noticed were (1) the absolute and relative decrease in immigrants from Mexico; (2) the absolute and relative increase in immigrants from China and India; and (3) the predominance in every year of the Other category, i.e., most immigrants come from countries other than China, India, and Mexico.  The source of the map appears to be the Integrated Public Use Microdata Series ( of the Minnesota Population Center of the University of Minnesota.  While exploring the site I ran across a link to an article in The New York Times that provides vivid time series of “Where people born in . . . [name of state or D.C.] have moved to” for every state from 1900 through 2012 (  For example, in 2012, 75% of the people born in North Carolina lived in the state, while 3% of the people born in North Carolina lived in Virginia.  North Dakota is more dramatic.  In 2012, 47% of the people born there lived there, while 13% of the people born there lived in Minnesota.  One could learn a lot by reflecting on these maps, especially the one for the District of Columbia.

********This is probably the place to draw attention to “Schumpeter: Leaving for the city” (, which discusses the return of many business headquarters from the suburbs, and in doing so draws attention to The Big Sort: Why the Clustering of Like-Minded America is Tearing Us Apart (, by Bill Bishop.  I wonder what the regional and urban maps would show if developed on a pattern for those on the state level?

May you have a good week!


280 (31 August 2016)

Welcome to week 280!  The articles below caught my attention this week.  Please note that what are intended to be relatively objective “briefs” are preceded by dashes (——–), whereas additional material or relatively subjective comments are preceded by asterisks (********).  The links to articles preceded by [SR] require a subscription to be read in their entirety, although complete articles may frequently be found by an Internet title search.

(22 August 2016): “Putting Garbage Out of Sight” (

——–“For years, much of the recycling Americans set out at our curbs has ended up in less wealthy countries like China and India, but not these countries are putting more limits” on the industry.  Indeed, the history of scrap sellers and recyclers is replete with recognition of the danger and undesirability of working in the industry, as well as the ease of entry into the business.  Because it was “an easy business for immigrants with few other options to enter . . . scrap dealers were largely Jewish immigrants” by the early twentieth century.  Intense competition among many small dealers merged with “anti-immigrant and anti-Semitic stereotypes” contributed to the general distrust of junk sellers among the public.  This distrust led to increased regulation of scrap sellers and drove their businesses away from public view, indeed, across the world in recent years.  “But the growing resistance from foreign governments may force us to pay more attention to this dirty work.”

********This concise summary draws upon all three invisible forces: competition among dealers (Invisible Hand), regulation (Invisible Foot), and prejudice (Invisible Handshake).  For more detail, see the base article “Dirty Work: How Hygiene and Xenophobia Marginalized the American Waste Trades, 1870-1930,” by Carl Zimring.  The full reference is provided at the link.

********As I thought about this, I wondered “How does Zimring’s work connect with environmental racism?”  Having asked the question, I did a search and found that he had just published a book on the subject, Clean and White: A History of Environmental Racism in the United States.  You can learn more about it at:

(25 August 2016): “The ginseng web” (

——–The discovery of ginseng in North America grew out of a 1711 letter from a Jesuit missionary in China who speculated, upon his knowledge of the climatic conditions in China, that “if ginseng were found growing wild in any other part of the world, it likely would be Canada.”  The circulated widely in Jesuit circles and Joseph-François Lafitau, who was stationed near Quebec, searched and found ginseng “growing close by a mission lodge.”  As a result of his discovery, “International trade would never be the same.”  This story, related by Harvard historian Shigehisa Kuriyama, appears in the forthcoming book The Botany of Empire in the Long Eighteenth Century.  “The book examines how the growing global traffic in plants—for medical, economic, and scientific purposes—shaped colonial expansion in the 1700s.”

********You can learn more about the book, and the Symposium upon which it is based, at:  A related and well-known book is Ecological Imperialism: The Biological Expansion of Europe, 900-1900 (, by Alfred W. Crosby.  It brings to mind, too, The Botany of Desire: A Plant’s-Eye View of the World (, by Michael Pollan.

(28 August 2016): “Feds use Rand formula to spot discrimination.  The GOP calls is junk science” (

——–Marc Elliott, a statistician who works for the Rand Corporation, is the developer of an algorithm that is used to estimate “the probability that someone is white, black, Asian or Hispanic based only on their address and last name.”  The algorithm employs Bayesian Improved Surname Geocoding (BISG) and has been used in a variety of contexts in which discrimination was expected.  Most recently it was employed by the Consumer Financial Protection Bureau (CFPB) and resulted in an $80 million payment by Ally Financial due to its lending history.  In fact, “The CFPB has used BISG “to accuse some of the country’s largest auto lenders, including the financing arms of Toyota and Honda, of discrimination.”

********You can learn more about the CFPB’s use of BISG in the 37-page pdf “Using publicly available information to proxy for unidentified race and ethnicity: A methodology and assessment” (  The original 2009 research paper by Elliott, et al., is referenced in the pdf.  As Elliott notes in the article, the algorithm is intended to be used for groups, not individuals.  Thus the problem arises that discrimination might be found but the particular people discriminated against may be difficult to identify.  That is evidently part of the reason why some legislators have called the BISG-based work of the CFPB “junk science.”  This problem of identification was mentioned in “U.S. Government Uses Race Test for $80 Million in Payments” [SR](  Giving the present, and likely future, interest in all types of discrimination, we can expect to see broader use of the Elliott algorithm.

********Although only indirectly related, this is a good opportunity to mention Weapons of Math Destruction: How Big Data Increases Inequality and Threatens Democracy, a review of which can be read at:  Its author, Cathy O’Neil, has a Ph.D. in mathematics from Harvard but left academia for the, supposedly, much more lucrative career in the financial industry.  Her timing was less than perfect and WMD chronicles her “odyssey from math-loving nerd clutching a Rubik’s Cube to Occupy Wall Streeter pushing for banking reform; along the way, she learns how algorithms—models used by governments, schools, and companies to find patterns in data—can produce nasty, or at least unintended, consequences.”  The book will be released in hardcover on September 6th.

(29 August 2016): “Odd Lots: How Watching Seinfeld Can Teach You About Economics” (

********This edition of Odd Lots by Bloomberg editors Joe Weisenthal and Tracy Alloway provides a 22-minute interview with economist Alan Grant, who is responsible for website “The Economics of Seinfeld” (  Grant has gone through all nine seasons of “Seinfeld” and pulled out video clips illustrating a wide array of economic concepts.  As the website notes, “It is the simplicity of Seinfeld that makes it so appropriate for use in economics courses.”  I confess that I was not a follower of Seinfeld but I viewed a few of the roughly 100 clips on the website and found them entertaining and appropriate illustrations of economic concepts.  In addition, they provide students with a sense of the broader issues often assumed away in the relatively spare models that economists typically teach.  In addition to “Seinfeld,” Grant mentions “The Wire” as a good example of a TV series that lends itself to economics instruction, e.g., the price elasticity of demand.

********In the spirit of economics in TV shows, this week’s copy of The Economist has a bit more to say, at least indirectly.  In “Schumpeter: Mafia management” ( has a bit to say about the Italian show “Gomorrah” that just began showing on Sundance TV.  The series is “a drama of Italian gangs known as the Camorra that runs a criminal empire from their base in Naples.”  Evidently the program is “far darker” than the much-watched series “The Sopranos,” “The Wire,” and “Breaking Bad.”  Still, the program “has been Italy’s most talked-about-television series since its release two years ago.”  I thought the article made an excellent point when it indicated that where it is difficult to do legal business, illegal business will thrive.  This seems like a testable hypothesis.  The article mentions the World Bank’s ease-of-doing-business table (, which would seem to be an important element in such a national study.  Of course, the invisible foot varies greatly from country to country.  Consequently, it might be easier to test the relationship between business ease and illegal activity using states (in the U.S.) or comparable geographical units for other countries.  Is there a credible ranking for each state of the U.S. on the ease-of-doing business?

********What role does trust play in doing legal and illegal business?  That is hard to say, but clearly trust is one of those “lubricants” that make transactions take place more easily.  The issue of trust is dealt with this week in The Economist in “Free exchange: Believing is seeing” (  For additional information, in which the article is embedded, take a look at the Free Exchange blog:

********By the way, economist Kenneth S. Rogoff thinks that one of the factors supporting illegal activity is the $100 bill and that it is time to get rid of it, then the $50 and $20 bills.  As he writes in “The Sinister Side of Cash” [SR](, “There is little debate among law-enforcement agencies that paper currency, especially larger notes such as the U.S. $100 bill, facilitates crime: racketeering, extortion, money laundering, drug and human trafficking, the corruption of public officials, not to mention terrorism.  There are substitutes for cash—cryptocurrencies, uncut diamonds, gold coins, prepaid cards—but for many kinds of criminal transactions, cash is still king.  It delivers absolute anonymity, portability, liquidity and near-universal acceptance.”  You can learn more about his book The Curse of Cash at:  Rogoff is on the faculty of Harvard University and was formerly the chief economist at the International Monetary Fund.

(29 August 2016): “Which State Is a Big Renewable Energy Pioneer?  Texas” [SR](

——–Traditionally strong in oil and gas, Texas is adding renewables to its energy portfolio.  The state “has added more wind-based generating capacity than any other state, with wind turbines accounting for 16% of electrical generating capacity as of April.  Now Texas is anticipating a huge surge in solar power.  At a time when debate is raging between political parties over climate change, and critics charge that ‘green energy’ is little more than a government creation, Texas has taken an approach that works within the state’s free-market-based electricity system.”  The present situation dates back “to 1999, when then-Gov. George W. Bush and a Republican-dominated legislature overhauled the Texas power market.  The free market-oriented deregulation broke the grip of most monopoly utilities that controlled generation, transmission and retail sales of electricity and introduced competitive auctions for wholesale power.”

********Texas is well-suited for electricity generated by both wind and solar.  No doubt the use of these resources was hastened by deregulation, although it surely also enabled the Enron scandal (, which was “revealed in October 2001.”  Andrew Fastow was involved in the Enron debacle and he figures prominently in a forthcoming book by Eugene Soltes, Why They Do It: Inside the Mind of the White-Collar Criminal.  You can learn more about the book and “why they do it” at:

********The electricity market is, of course, undergoing massive transformation, with more on the way.  The further development of electrical storage by batteries is part of that transformation, and it is explored in “Energy storage is taking on a greater role in the power grid.  But how big can it get?” (  Better batteries will, among other things, enable electric cars to assume a larger share of the auto market.  This is developed at some length in the column by Christopher Mims, “Why Electric Cars Will Be Here Sooner Than You Think” (  I thought Mims made a valuable point when he said that mass adoption of “electric vehicles is coming, and much sooner than most people realize.  In part, this is because electric cars are gadgets, and technological change in gadgets is rapid.”  This article seems to have struck a nerve, at least it got people writing, as it had more than 900 comments on the first day of its publication.

(29 August 2016): “FAA Forecast: 600,000 Commercial Drones Within the Year” (

——–According to an estimate of the Federal Aviation Administration, there “will be 600,000 commercial drone aircraft operating in the U.S. within the year as the result of new safety rules that opened the skies to them on Monday.”  In addition to a variety of rules for operating the unmanned aircraft, “Drone operators must also pass a test of their aeronautical knowledge administered by the FAA.”  More than 3,000 people “had registered with the FAA to take the test as of Monday.”

********The University of North Dakota offers a B.S. in Aeronautics with a Major in Unmanned Aircraft Systems Operations (  Presumably the FAA’s new rule will further increase the demand for the degree.  You can learn more about the new drone rules at:

(31 August 2016): “Employers Find ‘Soft Skills’ Like Critical Thinking in Short Supply” (

——–“The job market’s most sought-after skills can be tough to spot on a résumé.  Companies across the U.S. say it is becoming increasingly difficult to find applicants who can communicate clearly, take initiative, problem-solve and get along with co-workers.  Those traits, often called soft skills, can make the difference between a standout employee and one who just gets by.”  These skills are especially important now that “Companies have automated or outsourced many routine tasks, and the jobs that remain often require workers to take on broader responsibilities that demand critical thinking, empathy or other abilities that computers can’t easily simulate.”

********I was especially struck by this paragraph in the article:

In a Wall Street Journal survey of nearly 900 executives last year, 92% said soft skills are equally important or more important than technical skills.  But 89% said they have a very or somewhat difficult time finding people with the requisite attributes.  Many say it’s a problem spanning age groups and experience levels.

How, then, can these “soft skills” be spotted on the résumé?  I doubt that there is an easy answer.  More than likely, these become evident only through face-to-face interaction over time, rather than through some sort of document, e.g., a test or curriculum vitae.  Perhaps that is why personal interviews play such an important role in hiring processes.  I can’t help but think that the distinction between tacit and explicit knowledge is relevant to the discussion.  A thorough, though challenging, discussion of the discussion is presented in Tacit and Explicit Knowledge (, by sociologist Harry Collins.

May you have a good week!


279 (24 August 2016)

Welcome to week 279!  The articles below caught my attention this week.  Please note that what are intended to be relatively objective “briefs” are preceded by dashes (——–), whereas additional material or relatively subjective comments are preceded by asterisks (********).  The links to articles preceded by [SR] require a subscription to be read in their entirety, although complete articles may frequently be found by an Internet title search.

(16 August 2016): “As Coal Industry Sputters, Some Miners Are Moving On” (

——–A new study by “the Federal Reserve Bank of Cleveland finds laid-off coal miners are beginning to bow to the inevitable and train for jobs in other industries.  The study . . . says a program called Hiring Our Miners Everyday [HOME] . . . has had success in moving coal miners into new jobs, although not in big numbers yet. . . . ‘As of March 2016, the HOME program has enrolled more than 3,000 laid-off coal miners and their spouses.  Of those enrolled, 1,449 have received support while training for new careers.  More than 1,100 have obtained new employment, while 90 participated in internships through the HOME program.’”  Employers have been enthusiastic about the retrained miners: “Ex-coal miners have a reputation for being safety-conscious and dependable.”

********The article goes to note that “Coal-mining employment in eastern Kentucky has fallen from 67,000 in 1950 to 7,000 in 2014.”  The study notes, though, that “helping coal miners move on isn’t easy . . . because ‘the job of a coal miner is much more than just a job: It’s an identity.’”  The link to the study is provided in the article.  Click on Case Study 5 “Transitioning Workers from Coal to Other Careers: Hiring Our Miners Everyday.”  The case study is 12 pages long.

********While we are on the topic of exit, it is noteworthy that the National Mining Association and the American Coalition for Clean Coal Electricity are losing members, including some of the largest energy utilities in the United States.  You can learn more in the article “Coal Lobbying Groups Losing Members as Industry Tumbles (

(17 August 2016): “Walmart’s Out-of-Control Crime Problem Is Driving Police Crazy” (

——–“Police reports from dozens of stores suggest the number of petty crimes committed on Walmart properties nationwide this year will be in the hundreds of thousands.  But people dashing out the door with merchandise is the least troubling part of Walmart’s crime problem.  More than 200 violent crimes, including attempted kidnappings and multiple stabbings, shootings, and murders, have occurred at the nation’s 4,500 Walmarts this year, or about one a day, according to an analysis of media reports.”  All this is happening “more than a year into a corporate campaign to bring down crime—a campaign Walmart says is succeeding. . . . [But police] chiefs and their officers on the ground says that’s just not so.”  At a Walmart in Tulsa, Oklahoma, police sergeant Robert Rohloff “says there’s nothing funny about Walmart’s impact on public safety.  He can’t believe . . . that a multibillion-dollar corporation isn’t doing more to stop crime.  Instead, he says, it offloads the job to the police at taxpayers’ expense.”  Rohloff notes: “I may have half my squad there for hours.”  The current level of crime is “the direct, if unintended, result of corporate policy.”  Cost-cutting stemming back to 2000 removed greeters, “taking away a deterrent to theft at the porous entrances and exits” and “Self-checkout scanners replaced many cashiers.”

********As the article points out, the amount of crime is not inevitable.  Store size, location, hours of operation, and the observable presence of security guards can and do make a difference, as the experience of Target shows.  Crime at Walmart can be reduced, of course, but it will require the hiring of additional employees that may well reduce profitability.  Consequently, the public safety officers in Tulsa and elsewhere provide those services instead.

********The article includes links to an 11-minute radio broadcast and a four-minute video with the reporter of the story.

(18 August 2016): “Big Alcohol Tries to Go on a Health Kick” (

——–“Alcoholic beverage companies have steered clear of the health-and-fitness trend that’s overtaken virtually every consumer category from food to clothing.  Now that’s changing as millennials, especially women, obsess over everything they ingest.  Big alcohol players, including Diageo and MillerCoors, are trying to cater to the so-called athleisure-wearing customer.  Their challenge: to give fitness-chic stat to a product more associated with binge drinking and addiction.”  As a result, new products are being marketed.  “MillerCoors is releasing two alcoholic drinks with healthy-sounding names.”  Easy Tea, a “refined, brisk and less sweet iced tea” and Zumbida Mango, “the first of several fruit-flavored fermented drinks.”  Diageo will “soon sell a Smirnoff Spiked Sparkling Seltzer line.”  Even Boston Beer, the producer of Sam Adams, is getting in on the action.

********The world of beverages containing alcohol is in a state of flux.  As the article notes, the characteristics of the beverages are changing, but so are the packages in which the products are contained.  Witness the expanded use of cans for craft beer ( and the increased sale of wine in cans (  Clearly the delivery systems for alcohol are changing.  Perhaps they must.  In addition to the desire for companies to expand sales, there is a lingering—some producers sense a growing—concern of losing sales.  This is addressed directly in “With Moderate Drinking Under Fire, Alcohol Companies Go on Offensive” [SR](  At a spring brewers’ conference, the managing director of the American Beverage Institute, Sarah Longwell, told the attendees that “The industry . . . was in danger of losing its ‘health halo.’” as “policy officials around the world scrutinize their previous advice in the light of research pointing to possible cancer risks.”  If there is the possibility of losing the health halo, perhaps an extra dose of something perceived to be health will restore it.

(20 August 2016): “Game theory: Prison breakthrough” (

********This is the fifth of six briefs on economics.  It focuses on game theory, in particular John Nash’s Nobel Prize-winning idea of Nash equilibrium.  In its exposition the familiar two-by-two matrix of the Prisoner’s Dilemma is discussed.  As the article shows, the game theory that was the original brain child of John von Neumann and Oskar Morgenstern had to undergo significant development in order to reach its current position in economics and other disciplines, including political science, management, even biology.

********John Nash will be known to many from the movie “A Beautiful Mind” and possibly Sylvia Nasar’s book of the same name (  You can learn more about Nash and his work at:

(22 August 2016): “Rent-to-Own Homes: A Win-Win for Landlords, a Risk for Struggling Tenants” (

——–Vision Property Management is one of a growing number of companies that are blurring “the line between what it means to be a renter and a homeowner.  These companies do not offer regular leases or mortgages—they offer ‘rent to own’ contracts on homes that require tenants to make all repairs, no matter how big or small.”  According to Vision’s Alex Szkaradek, the firm is “bringing the dream of homeownership to Americans who lack good credit or are too poor to qualify for mortgages. . . . But these rent-to-own agreements reside in a gray area of the law. . . . interviews with housing lawyers and more than a dozen of Vision’s customers across the country, found that these deals are risky, lack consumer protections and may not be enforceable in some states.”

********As the article points out, it is not unusual for customers to make substantial property repairs only to end up with nothing.  Concerns such as these have led seven U.S. Senators to write to the new Consumer Financial Protection Bureau regarding “the lack of protections for low-income home buyers.  The article includes a three-minute video and a copy of the rent-to-own documents of a Vision customer.  You can learn more about Vision at:  It appears that VPM does not have houses in North Carolina, but it does in Georgia, Kentucky, South Carolina, Tennessee, and Virginia.\

(23 August 2016): “The Nation’s First Soda Tax Is Working.  Can Its Success Last?” (

——–According to a study just published in the American Journal of Public Health, “Minority and low-income residents of Berkeley, Calif., drank 21 percent less of the sugary stuff after the city implemented an excise tax . . . Researchers compared sugary drink sales in Berkeley from the four-month period of April 2014 through July 2014 to a five-month period the next year, just after the tax went into effect.  During that same period, soda sales in San Francisco and Oakland to minorities and low-income residents . . . ticked up 4 percent.”  The tax, which was implemented in March 2015, “charges distributors an additional penny per ounce of sugar-sweetened beverages such as soda, sports drinks, and sweet teas.”  It has been estimated that “Nearly 70 percent of that cost is then passed on to consumers.”

********This is a clear example of the impact of the invisible foot—legal and political forces—on consumption behavior.  Evidently the imposition of an excise tax such as this tend to be accompanied by campaigns that “inform people of the dangers of soda.”  The source article appears to be “Higher Retail Prices of Sugar-Sweetened Beverages 3 Months After Implementation of an Excise Tax in Berkeley, California.”  You can learn more at:

May you have a good week!


278 (17 August 2016)

Welcome to week 278!  The articles below caught my attention this week.  Please note that what are intended to be relatively objective “briefs” are preceded by dashes (——–), whereas additional material or relatively subjective comments are preceded by asterisks (********).  The links to articles preceded by [SR] require a subscription to be read in their entirety, although complete articles may frequently be found by an Internet title search.

(11 August 2016): “Orangutan able to guess a taste without sampling it, just like us” (

——–“Without having tasted a specific new juice mix before, an orangutan in a Swedish zoo has enough sense to know whether it will taste nice or not based on how he recombined relevant memories from the past.  Only humans were previously thought to have this ability of affective forecasting, in which prior experiences are used to conjure up mental pictures about totally ne situations, says Gabriela-Alina Sauciuc of Lund University in Sweden, in Springer’s journal Animal Cognition.

********I wasn’t aware there was a journal devoted to cognition in non-human animals but I’m glad there is.  In microeconomics agents play a central role—they make things happen by way of making decisions in line with their preferences.  It has been easy to assume that only human beings have preferences but anyone who shares a life with a bird, cat, llama, or mule knows that they have preferences, too.  What is different here is that some researchers have devoted time and effort to demonstrating these preferences.  Here is the link to the original article, “Affective forecasting in an orangutan: predicting the hedonic outcome of novel juice mixes” (

********The term ‘affective forecasting’ is a new one for me.  It is “an ability that allows the prediction of the hedonic outcome of never-before experienced situations, by mentally recombining elements of prior experiences into possible scenarios, and pre-experiencing what these might feel like” (Abstract of the article at the link).  The description of the methods of the studies indicates that preferences are constructed (forecasted) from preferences for simpler items and then combined in some way.  All this has something to say about experience goods ( and the experience economy (  If non-human beings have preferences, do they trade, too?  Something more to consider on the way to creating an economics that considers all sentient beings.  Time to revisit Gordon Tullock’s The Economics of Non-Human Societies (

********Gordon Tullock passed away on election day (4 November 2014), a synchronistic event for someone who wrote so much about the political process, including voting.  He is one of those people who made great contributions to economics even though he reportedly took only one economics course during his life.  Many argue that he should have received the Nobel Prize in Economics in 1986, when his long-time collaborator James Buchanan was so recognized.  There is less information about Tullock’s life and work than there should be, in my estimation.  Two obituary notices provide a hint of his accomplishments.  One is from The Washington Post ( and another is from Forbes (

******** For the record, I was alerted to the orangutan story by the daily Economist Espresso:

(13 August 2016): “Fiscal multipliers: Where does the buck stop?” (

********This is the fourth of six briefs on economics.  It deals with the notion of the multiplier, which stemmed from the 1931 writings of Richard Kahn and was given currency by John Maynard Keynes in The General Theory of Employment, Interest, and Money (1936).  Kahn noted that “public spending would yield both the primary boost from the direct spending, but also ‘beneficial repercussions’.  If road-building, for instance, took workers off the dole and led them to increase their own spending, . . . then there might be a sustained rise in total employment as a result.”  As this article points out, the existence and size of multipliers continues to be a point of contention among economists to this day.  This controversy is focused on macroeconomic (national) multipliers rather than regional multipliers.  There is no argument that regional multipliers, say for the Asheville, North Carolina Metropolitan Statistical Area (, exist and can be substantial.

********Last week Bloomberg mentioned the first brief on economics, which dealt with “the lemons problem” ( in “The Dirty Little Secret of Finance: Asymmetric Information” (  It’s worth a look, as it notes: “The upshot of all this . . . is that asymmetric information, which is nothing more than a nuisance in most markets, is at the core of finance.  It’s key to the way traders, including high-frequency traders, make their profits.  And it’s probably at the root of why markets break down and crash.”  All this circles back to the controversy about the existence and size of multipliers.  I suspect that in the multipliers are larger in the presence of asymmetric information.

(13 August 2016): “Where We Spend Is Upending Traditional Retail” (

——–“U.S. retail sales barely budged in July according to data released Friday, capping a week of tepid earnings results from department stores and underlining a seismic shift in consumer spending.  Americans are still splashing out, but they are splurging less on goods such as apparel and electronics and more on entertainment, travel and health care. . . . Retail now represents only a slice of household outlays, with consumption of services making up about two-thirds of all personal expenditures.”

********The article points to a dramatic shift in consumer purchases from goods to services, as well as pointing toward a continuing movement from concrete-and-mortar stores to online for the purchase of goods.  I was especially intrigued by the graphic “Twenty Years of Spending” that accompanies the article.  It took me awhile to figure it out but it shows how the ranking of various consumer categories have changed over time.  The most dramatic change has been the climb of the percentage of spending on Nonstore (mostly interest) spending, shown in gray.  Also noteworthy are the fluctuations for Gasoline stations and Home and garden.  This is definitely worth a look.

(15 August 2016): “It’s Getting Harder and More Expensive to Make Cars in Mexico” [SR](

——–Labor costs at auto-manufacturing plants in Mexico are increasing.  As a result, “Retention and retraining programs are becoming the norm as are bonuses for employees who agree to stay in place, especially those with valued skills. . . . The pressure isn’t yet so severe that it is undermining the rationale for moving production to Mexico.  But it is an unexpected sticker shock—labor is one of the few costs manufacturers can control—and threatens both profitability and production quality.”  Labor competition is “most pronounced in Mexico’s industrial strongholds—cities such as Juárez in the north of Mexico—and in the central, heartland states of Guanajuato, Aguascalientes and San Luis Potosi.  In Guanajuato, manufacturers including Honda and Mazda Moto Corp are busing workers from as many as two hours away, labor recruiters.”

********The pressure on the internal labor markets of Mexico is much reminiscent of the pressure on the internal labor markets of China.  In both cases, increased demand for labor services due to increased manufacturing output has resulted in increased wage rates.  I suspect that one result of this in Mexico will be, as it has been in China, the relocation of some production facilities to (rural) areas where wage rates are lower.  The article made me think of Boom, Bust, Exodus: The Rust Belt, the Maquilas, and a Tale of Two Cities (, by Chad Broughton.

********Even the most locally rooted businesses, for example, the Hershey Co. of Hershey, Pennsylvania, must be alive to the possibility of the migration of their signature businesses.  An examination of that possibility appears in “Hershey, Pa., Is the Town That Chocolate Built” [SR](  On June 30th Mondelez International Inc. offered “to buy Hershey for $23 billion.  Hershey’s board rejected the bid.”

(15 August 2016): “Economic Slump Sends Big Ships to Scrap Heap” (

——–“Up until a year ago, the shipping industry was ordering ships in droves.  This year, orders of new vessels have fallen to a record low and companies can’t get rid of ships fast enough.”  This year about “1,000 ships that have the combined capacity to haul 52 million metric tons of cargo . . . will be dragged onto beaches, cut into pieces and sold for scrap metal this year.  That is second only to the record amount of capacity of 61 million so-called dead weight tons that were scrapped and recycled in 2012.”  According to Basil Karatzas of New York-based Karatzas Marine Advisors Co., “Given the tremendous overcapacity, it will take much more recycling and at least two to three years of no growth in capacity to see some balance between supply and demand.”  As a result of the increasing number of scrapped ships, the price of scrap steel has fallen significantly.  Two years ago “India, Pakistan and Bangladesh were paying about $460 a ton of steel.  Last year it was $300 and it is now roughly $250. . . . South Asian scrapyards recycle about three-quarters of all ships every year.  The remainder goes to yards in China and Turkey.”

********Evidently the business that reduces ship to scrap is called “ship breaking.”  The shipping industry seems like it should be very interesting to analyze.  There are freight rates to consider, as well as the prices of new ships and scrap.  Then there is the durability of ships, not to mention their vintage.  With the seeming rise anti-trade sentiment in the U.S., there will be many people looking to understand these (adaptive) relationships more carefully.

May you have a good week!


277 (10 August 2016)

Welcome to week 277!  The articles below caught my attention this week.  Please note that what are intended to be relatively objective “briefs” are preceded by dashes (——–), whereas additional material or relatively subjective comments are preceded by asterisks (********).  The links to articles preceded by [SR] require a subscription to be read in their entirety, although complete articles may frequently be found by an Internet title search.

(4 August 2016): “The Hottest Start-Up Market?  Baby Boomers” (

——–“With an estimated 74.9 million baby boomers, according to Pew Research Center, the biggest market opportunity for start-ups is older Americans rather than hip millennials.  As members of the generation that defined rock ‘n’ roll grow older, they are adding a wide range of goods and services to their lifestyles.”  Boomers are a large part of the so-called “longevity” market, i.e., “the over-50 demographic . . . whose annual economic activity currently amounts to $7.6 trillion, according to AARP. . . . The staggering size of the total longevity economy . . . has been attracting more entrepreneurs, deep-pocketed financiers and places to pitch new ideas in the past few years.”  Boris Mordkovich is one of those entrepreneurs.  He and his brother Yevgeniy founded the electric bike company Evelo, which is profitable and is projected to double its revenue to $4 million.  Regarding the bike, he notes: “Electric bikes are an equalizer . . . They let the rider decide how much or how little they will pedal.”  Funding for start-ups, like Evelo, seems to be readily available as more venture capitalists recognize the opportunities provided by the longevity market.

********This article addresses the consumption habits of Baby Boomers.  In a related article, “For Economy, Aging Population Poses Double Whammy,” by Wall Street Journal columnist Greg Ip [SR](, some of the negative consequences of Boomers retirees are examined.  He notes, “Economists have long expected an aging population to hamper growth for the simple reason that it means a smaller labor force.  But new research has identified a potentially more powerful impact: Rapid retirements deprive companies of critical experience and knowledge, which undermines productivity across the entire economy.”  An examination of the consequences of an aging population is provided by “a new paper by Nicole Maestas of Harvard University and Kathleen Mullen and David Powell of the Rand Corp., a think tank.  Because the 50 states are aging at different rates, they were able to tease out the impact of aging on economic growth.  Their conclusion: On average, every 10% increase in the share of state’s population over the age of 60 reduced per capital growth in [state] gross domestic product by 5.5%.”

********The article by Maestas, Mullen, and Powell is “The Effect of Population Aging on Economic Growth, the Labor Force and Productivity” can be read at:

(5 August 2016): “Colombia’s New, Legal Drug Barons Focus on Medical Marijuana” (

——–“Like many drug barons in Colombia, Federico Cock-Correa wants to sell his product globally.  Just 15 miles outside Medellin, Mr. Cock-Correa is looking to replace vast acres of flowers with marijuana plants, with plans to export the harvest.  But unlike the brutal heroin and cocaine trade that once flourished nearby, his operation has the government’s stamp of approval.”  During the last year Colombia overhauled 30-year-old drug laws, formally legalizing medical marijuana for domestic use and allowing “the commercial cultivation, processing and export of medical marijuana products—like oils and creams—although not the flower, the part of the plant normally rolled into a joint.”  One company looking to benefit from the legal change is Toronto-based PharmaCielo, which has received a license “to manufacture cannabis products . . . [and] is still waiting for licenses for cultivation. . . . Once it receives approval, PharmaCielo will start growing marijuana and then process the material into medical products that can be exported to Canada and other countries that allow the importation of medical cannabis.  The United States, for now, remains a long way off.”  When production is fully underway, “PharmaCielo expects to produce a gram of marijuana flowers for about 5 cents.  The same amount costs at least 10 times as much to produce in the United States and Canada.”

********The cost differences for growing marijuana flowers are dramatic and stem from geography, climate, and soil.  Since the equator runs through Colombia, as it does for Ecuador and Brazil (and some other countries), days and nights tend to be near 12 hours each, thereby keeping plants in the vegetative state in which flowers grow for longer periods of time and without artificial lighting.  To achieve the same results in the U.S. or Canada, extensive use of artificial lighting must be made, hence one dimension of the production cost differential.

********There is, of course, an extensive back story to this article, one that includes Colombia’s historical role in the production of cocaine, Colombia’s role as a large supplier of cut flowers, e.g., and the slow evolution of legal marijuana, medical and otherwise, in the U.S. and Canada.  As Colombian growers redeploy their resources from cut flowers to marijuana, no doubt the short-run effect will be higher flower prices, although longer term some flower production will likely increase elsewhere.  Likewise, it is easy to see a day when a U.S. marijuana trade group lobbies hard against the importation of marijuana into the country, possibly even seeking to increase penalties on those who smuggle it into the country.  I’ve been reading, as part of my efforts to become better informed on the global market for illegal drugs, Cocaine: An Unauthorized Biography (, by Dominic Streatfeild, and it does a nice job of providing background for the development of cocaine products and Colombia’s role in it.  It has been an engaging read and shows many of the impacts that the cocaine trade has had in the U.S. and globally.

(5 August 2016): “This Company Has Built a Profile on Every American Adult” (

——–“The most important tools for America’s 35,000 private investigators are database subscription services.  For more than a decade, professional snoops have been able to search troves of public and nonpublic records . . . and condense them into comprehensive reports costs as little as $10.  Now they can combine that information with the kinds of things marketers know about you, such as which politicians you donate to, what you spend on groceries, and whether its weird that you ate in last night, to create a portrait of your life and predict your behavior.  IDI, a year-old company in the so-called data-fusion business, is the first to centralize and weaponized all that information for its customers.”  According to its CEO, Derek Dubner, the company has “already built a profile on every American adult.”  He says that the “personal profiles include all known addresses, phone numbers, and e-mail addresses; every piece of property ever bought or sold, plus related mortgages; past and present vehicles owned; criminal citations, from speeding tickets on up; voter registration; hunting permits; and names and phone numbers of neighbors.  The report also includes photos of cars taken by private companies using automated license plate readers—billions of snapshots tagged with GPS coordinates and time stamps to help PIs surveil people or bust alibis.”

********You can learn more about IDI (Interactive Data Intelligence) at:  The expression ‘data fusion’ seems useful and is widely used in a variety of contexts.  Its Wikipedia entry is suggestive:  One can only imagine what a really determined organization with extensive resources could pull together for one person.  Private investigators in North Carolina are licensed.  You can learn more at:

(6 August 2016): “Tariffs and wages: An inconvenient iota of truth” (

********This is the third of six briefs on economics.  It explores the eponymous Stolper-Samuelson Theorem of international trade and relates it to current economic deliberations.  The presentation is probably as easy as it gets, although not exactly easy.  Among other things, it points to the relatively ease that goods have in moving from country to country and the relatively difficulty that labor has in doing the same thing.  It was the movement of labor, of course, that was one of the issues behind the recent Brexit vote in the UK.

(6 August 2016): “Think You Bought Red Snapper?  Don’t Be So Sure” (

——–Three years ago the environmental group Oceana studied whether those buying fish were getting what they paid for.  “Scientists performed DNA tests on more than 1,200 samples from nearly 700 different stores and restaurants in 21 states.  One out of three fish were mislabeled . . . and the numbers were even worse in big cities such as New York, Los Angeles and Boston.  The poster child for the problem is red snapper, which many experts cite as the most faked species.”  According to researcher Mark Stoeckle, of Rockefeller University, “When you buy [red snapper], you almost never get it.”  Behind the broader issue is that “Seafood uniquely lends itself to fraud.  The supply chain for it is opaque and convoluted, and most white-fleshed fish—which is to say, most fin fish—looks similar when filleted.  For unethical suppliers, it is easy to substitute a lower-cost fish for a pricier one.”

********The article concludes with some suggestions on how to avoid fish fraud.  The final suggestion might have come from one of the cows in the (old) Chick-fil-A ads: “it might be smart to order the chicken instead.”

(9 August 2016): “Maple Syrup Cartel Battles a Black Market Rebellion” (

——–“After eight years of tightly limiting output to keep prices high, the Federation of Quebec Maple Syrup Producers next year will boost its quota by 12 percent for 13,500 sap farmers who operate in the Canadian province.  The goal is twofold: Reclaim the 10 percent of market share lost to the U.S. over the last decade, and quell a rebellion by producers increasingly turning to black market sales for growth.”  Output restrictions had frustrated some, leading them “to sell on the black market.”  According to Simon Trepanier, executive director of the Federation, “If we allow producers to add more taps . . . , they will not be interested in selling on the black market . . . It will help to have a clean market, instead of a black market.”  Farmer Jim Dempsey of Inverness, Quebec, indicated that “looser restrictions may not work as planned.  He’s concerned that the additional syrup will end up in the group’s strategic reserve, unless the federation can find more markets to sell into or lowers its prices, which he believes they won’t do.”

********The concerns voiced by Jim Dempsey are real ones.  The article caught my attention because the shifting of the output restriction moves the boundary between legal and black markets.  In the short run, that boundary will undoubtedly reduce the size of the black market as more existing producers with their existing production participate in the legal market.  In the long run, however, the incentives that led some to access the black market will return and the size of the black market will increase once more.

********Nicely connected to the last comment above is the expression “For every regulatory action, there is a reaction.”  This is the first sentence of “A Payday-Loan Rival Gains Ground” [SR](  The instance examined in the article notes: “The latest example: A government effort to crack down on payday loans has given new energy to installment loans.”  Restrictions on the availability of payday loans will almost surely lead to more installment loans which, although they may also have high interest rates, have longer repayment lengths.  All this is reminiscent of the ecological saying “You cannot do only one thing.”  This is true of all adaptive systems, of which markets are a prime example.

May you have a good week!