Brad DeLong

Brad DeLong (1997): The Corporation as a Command Economy: Wednesday Hoisted from The Archives from 17 Years Ago Weblogging

Introduction:

Most of us spend more than one-third of our waking lives working for large, modern corporations: organizations where we do not know personally either those at the top or the bulk of those at the bottom of the organization's administrative hierarchy. This is a striking change from two centuries ago, when a productive organization of more than thirty was unusual, and one of more than three hundred an extreme oddity.

Why do so many of us work for large modern corporations? And what impact does working for large modern corporations have on our lives? The second is much too broad a question, and is moreover a question that I--a narrow-minded professional economist--feel unqualified to address. So I am going to focus on the economic side of the modern corporation. I am not going discuss the political or sociological or ethical implications of large modern corporations. I am not going to discuss their historical development, or the contrasts between different countries' styles of corporate life.

Interesting how many lawyers and how few economists think Bork's "The Antitrust Paradox" is really good...

 

Matthew Yglesias: Apple vs. Microsoft in Historical Perspectiv

Agglomeration Economies and Industrial Policies

Paul Krugman:

Motor City Stories: Brian Palmer has a nice summary of the reasons behind the concentration of car companies in Michigan… historical accident perpetuated by agglomeration economies. What he doesn’t say is that there is a close relationship between such stories and the case for the auto bailout. Agglomeration economies exist because… the network of suppliers, the skills, the interchange of knowledge supported by a geographical industry concentration in turn gives firms in that industry concentration an advantage…. Now, the existence of important agglomeration economies immediately implies that there are social consequences to the success or failure of an individual firm that aren’t captured by the profit and loss statement of that firm alone. Let General Motors fail, and the resulting collapse of its suppliers will hurt other firms too, possibly driving them out of business too. You don’t want to overuse this sort of argument…. But it was surely a major consideration for the auto bailout — and a reason why hard-line opposition to any such action was bad economics.

Econ 1: Spring 2012: U.C. Berkeley: Lecture Slides for March 14, 2012

Econ 1: Spring 2012: U.C. Berkeley: Lecture Slides for March 14, 2012:

• Lecture Slides

Agglomeration Economies and Industrial Policies

Paul Krugman:

Motor City Stories: Brian Palmer has a nice summary of the reasons behind the concentration of car companies in Michigan… historical accident perpetuated by agglomeration economies. What he doesn’t say is that there is a close relationship between such stories and the case for the auto bailout. Agglomeration economies exist because… the network of suppliers, the skills, the interchange of knowledge supported by a geographical industry concentration in turn gives firms in that industry concentration an advantage…. Now, the existence of important agglomeration economies immediately implies that there are social consequences to the success or failure of an individual firm that aren’t captured by the profit and loss statement of that firm alone. Let General Motors fail, and the resulting collapse of its suppliers will hurt other firms too, possibly driving them out of business too. You don’t want to overuse this sort of argument…. But it was surely a major consideration for the auto bailout — and a reason why hard-line opposition to any such action was bad economics.

Brian Palmer:

Why are all the big American car companies based in Michigan?: Detroit and its environs had a lot to offer the nascent auto industry around the turn of the 20th century. Iron ore… timber… [r]ail and water routes…. And Detroit already hosted heavy industry like machine shops and stove works…. Detroit’s eventual dominance probably had more to do with a couple of historical accidents than any geographic advantage. First, innovators like Henry Ford and Ransom Olds happened to live in Michigan. Second, automotive executives in early-20th-century Detroit behaved a lot like Silicon Valley executives today: They regularly switched companies and launched spinoffs and startups. This culture of cross-pollination spread innovative manufacturing and design ideas among the Detroit manufacturers. Distant competitors couldn’t keep up with Motown’s research and development….

[N]one of the 69 companies that entered the auto industry (PDF) between 1895 and 1900 was located in Detroit. Olds Motor Works became the city’s first major carmaker when it relocated from Lansing in 1900. Ransom Olds then made a decision that would shape the course of the industry—rather than creating hundreds of small components in-house for his Curved Dash Runabout, he subcontracted much of the work…. The people who built the car’s parts eventually learned so much about automotive manufacturing that they went on to launch their own brands….

The number of U.S. carmakers peaked at 272 in 1909, including major manufacturers in New England and Ohio. During the 1910s, however, the Detroit brands pulled away. In 1915, 13 out of the country’s 15 most popular car brands were in Detroit. Motor City executives, particularly Ford, invested heavily in research and development, distancing their products from the out-of-towners…

Francisco Pérez-González: "Inherited Control and Firm Performance"

http://aeaweb.org/articles.php?doi=10.1257/aer.96.5.1559

Adobe Flash Is Dead on Smartphones and Tablets

Steve Jobs wins another one:

Jason Perlow: Exclusive: Adobe ceases development on mobile browser Flash, refocuses efforts on HTML5: Summary: Adobe has briefed developers on the impending cessation of mobile flash browser plugin development.

Sources close to Adobe that have been briefed on the company’s future development plans have revealed this forthcoming announcement to ZDNet:

Our future work with Flash on mobile devices will be focused on enabling Flash developers to package native apps with Adobe AIR for all the major app stores. We will no longer adapt Flash Player for mobile devices to new browser, OS version or device configurations. Some of our source code licensees may opt to continue working on and releasing their own implementations. We will continue to support the current Android and PlayBook configurations with critical bug fixes and security updates.

Additionally, the e-mail briefing to Adobe’s partners has been summed up as follows:

• Adobe is Stopping development on Flash Player for browsers on mobile.
• Adobe is now focusing their development efforts on:
  • Applications for mobile
  • Expressive content on the desktop (in and out of browser)
  • Increasing their investments in HTML5 in general

The full content and scope of the announcement is expected to be posted on the Adobe web site in the next day.

Impressive demonstration of network externalities in action…

Outside of the Bowl of San Francisco Bay...

... The AT&T iPhone is truly a marvelous device.

That is all.

Brynjolfsson, Gans, Greenstein: Digitopoly--Competition in the Digital Age

http://www.digitopoly.org

One "n", one "f", two "s"es, one "n". One "n", one "f", two "s"es, one "n". One "n", one "f", two "s"es, one "n". One "n", one "f", two "s"es, one "n"…

Karl Smith: Sticky Wages Are a Side Issue

Karl Smith:

Sticky Wages, Sticky Prices, Sticky Debt «  Modeled Behavior: Tyler Cowen calls sticky wages a weak and embarrassing paradigm:

Often when this topic comes up I feel I am playing a game of whack-a-mole.  Most of all, I am struck by how little attention people pay to their own sticky nominal wage hypotheses…. [Y]ou might expect people to blog the microfoundations of nominal wage stickiness very, very often…. Dozens, no hundreds of blog posts on the all-important microfoundations of the #1 social problem of our time…. [T]he sticky nominal wage theory is an embarrassment….

[T]he [real] story [is] sticky-prices… firms with some measure of market power… [that] want to sell more at the market price than the market will demand…. [A]lmost no business seems indifferent to more customers. A perfectly competitive firm would not really care at the margin if it had more customers…. The question is why would prices stick… menu costs… adjusting prices often imposes real costs for customers… limited attention… price increases trigger search.

Another [reason] is that there are some prices which are especially sticky for special reasons and this sticks the whole system – that’s part of my interest in real estate.

Another is that debt is nominal and solvency constraints cause stickiness. Lower your prices too much and you can’t pay your debt…

Isn't This What We Designed Corporations to Do?

Dan Kuehn points us to DARPA:

Facts & other stubborn things: The Defense Advanced Research Projects Agency (DARPA) has initiated a study to inspire the first steps in the next era of space exploration—a journey between the stars. Neither the vagaries of the modern fiscal cycle, nor net-present-value calculations over reasonably foreseeable futures, have lent themselves to the kinds of century-long patronage and persistence needed to definitively transform mankind into a space-faring species.... We are seeking ideas for an organization, business model and approach appropriate for a self-sustaining investment vehicle. The respondent must focus on flexible yet robust mechanisms by which an endowment can be created and sustained, wholly devoid of government subsidy or control, and by which worthwhile undertakings—in the sciences, engineering, humanities, or the arts—may be awarded in pursuit of the vision of interstellar flight...

I kinda think this problem has already been solved: all you need to do is draw the corporate charter to insulate the corporation's decisions from speculative short-termism, and you are there.

Paul Krugman: A Weaker Dollar Is in America's Interest

In my view, Krugman is right:

Paul Krugman: Making Things in America: I don’t want to suggest that everything is wonderful about U.S. manufacturing. So far, the job gains are modest, and many new manufacturing jobs don’t offer good pay or benefits. The manufacturing revival isn’t going to make health reform unnecessary or obviate the need for a strong social safety net. Still, better to have those jobs than none at all. Which brings me to those right-wing critics.

First, what’s driving the turnaround in our manufacturing trade? The main answer is that the U.S. dollar has fallen against other currencies, helping give U.S.-based manufacturing a cost advantage. A weaker dollar, it turns out, was just what U.S. industry needed. Yet the Federal Reserve finds itself under intense pressure from the right to make the dollar stronger, not weaker. A few months ago, Paul Ryan, the chairman of the House Budget Committee, berated Ben Bernanke for failing to tighten monetary policy, declaring: “There is nothing more insidious that a country can do to its citizens than debase its currency.” If Mr. Bernanke had given in to that kind of pressure, manufacturing would have continued its relentless decline.

And then there’s the matter of the auto industry, which probably would have imploded if President Obama hadn’t stepped in to rescue General Motors and Chrysler. For those companies would almost surely have gone into liquidation, closing all their factories. And this liquidation would have undermined the rest of America’s auto industry, as essential suppliers went under, too. Hundreds of thousands of jobs were at stake. Yet Mr. Obama was fiercely denounced for taking action. One Republican congressman declared the auto rescue part of the administration’s “war on capitalism.” Another insisted that when government gets involved in a company, “the disaster that follows is predictable.” Not so much, it turns out.

So while we still have a deeply troubled economy, one piece of good news is that Americans are, once again, starting to actually make things. And we’re doing that thanks, in large part, to the fact that the Fed and the Obama administration ignored very bad advice from right-wingers — ideologues who still, in the face of all the evidence, claim to know something about creating prosperity.

Could Microsoft Please Hire Some Programmers? A Few, at Least?

So my Mac has been very sluggish today.

And now I find out why.

I opened up one of Feynman's "Character of Physical Law" lectures this morning, and then paused it.

Now I find that Microsoft Silverlight Safari plug-in has been burbling away in the background, chewing up 30% of CPU time all day--doing absolutely nothing except waiting for me to click and shift it from "pause" back to "play".

Why does this company still exist? Why can't the market deal it the sudden, immediate, and merciful death it so clearly deserves?

I owe Dan Rubinfeld a big apology for ever doubting his judgment that the breakup of Microsoft would be an enormous economic win for the world...

$1700 Per Capita per Year in Consumer Surplus from Personal Computers...

That's an increment to net worth of about $10 trillion nationwide--roughly a fifth of the value of our physical capital stock from the ideas involved in making personal computers.

Mark Whitehouse reports:

Number of the Week: $1,700: The annual benefit the average American derives from personal computers.... Karen Kopecky and Jeremy Greenwood... calculate how much value, or “utility”, American consumers derive from a given amount of computing power. They then looked at how much we actually paid for that computing power, in the form of desktop PCs, laptops, notebooks , software and so on. The difference, known as the “welfare gain”, is the benefit we get from personal computers above and beyond what we pay for them. Back in the days of magnetic-tape memory, the annual benefit was pretty small — somewhere between zero and about $6 for the average American, adjusted for inflation, depending on the method of calculation. But by 2009, the price of computing power had fallen more than 99.8% and personal computers had become a lot better and more widely used. As a result, the welfare gain rose to somewhere between $1,300 and $2,100 per person, the economists’ estimates suggest. Ballpark average: $1,700.

On-the-Job Training for Boeing's Senior Executives Is Very Costly

Michael Hiltzik:

Boeing 787: 787 Dreamliner teaches Boeing costly lesson on outsourcing: The airliner is billions of dollars over budget and about three years late. Much of the blame belongs to the company's farming out work to suppliers around the nation and in foreign countries:

The 787 has more foreign-made content — 30% — than any other Boeing plane.... That compares with just over 5% in the company's workhorse 747 airliner. Boeing's goal, it seems, was to convert its storied aircraft factory near Seattle to a mere assembly plant, bolting together modules designed and produced elsewhere as though from kits. The drawbacks of this approach emerged early. Some of the pieces manufactured by far-flung suppliers didn't fit together. Some subcontractors couldn't meet their output quotas, creating huge production logjams when critical parts weren't available in the necessary sequence. Rather than follow its old model of providing parts subcontractors with detailed blueprints created at home, Boeing gave suppliers less detailed specifications and required them to create their own blueprints. Some then farmed out their engineering to their own subcontractors, Mike Bair, the former head of the 787 program, said at a meeting of business leaders in Washington state in 2007. That further reduced Boeing's ability to supervise design and manufacture. At least one major supplier didn't even have an engineering department when it won its contract, according to an analysis of the 787 by the European consortium Airbus, Boeing's top global competitor.

Boeing executives now admit that the company's aggressive outsourcing put it in partnership with suppliers that weren't up to the job. They say Boeing didn't recognize that sending so much work abroad would demand more intensive management from the home plant, not less. "We gave work to people that had never really done this kind of technology before, and then we didn't provide the oversight that was necessary," Jim Albaugh, the company's commercial aviation chief, told business students at Seattle University last month. "In hindsight, we spent a lot more money in trying to recover than we ever would have spent if we tried to keep many of the key technologies closer to Boeing. The pendulum swung too far."...

That's not to say that outsourcing never makes sense — it's a good way to make use of the precision skills of specialty manufacturers, which would be costly to duplicate. But Boeing's experience shows that it's folly to think that every dollar spent on outsourcing means a cost savings on the finished product.Boeing can't say it wasn't warned. As early as 2001, L.J. Hart-Smith, a Boeing senior technical fellow, produced a prescient analysis projecting that excessive outsourcing would raise Boeing's costs and steer profits to its subcontractors. Among the least profitable jobs in aircraft manufacturing, he pointed out, is final assembly — the job Boeing proposed to retain. But its subcontractors would benefit from free technical assistance from Boeing if they ran into problems, and would hang on to the highly profitable business of producing spare parts over the decades-long life of the aircraft. Their work would be almost risk-free, Hart-Smith observed, because if they ran into really insuperable problems they would simply be bought out by Boeing.

What do you know? In 2009, Boeing spent about $1 billion in cash and credit to take over the underperforming fuselage manufacturing plant of Vought Aircraft Industries, which had contributed to the years of delays. "I didn't dream all this up," Hart-Smith, who is retired, told me from his home in his native Australia. "I'd lived it at Douglas Aircraft.... I warned Boeing not to make the same mistake. Everybody there seemed to get the message, except top management....

Albaugh and other executives acknowledge that they've blundered. "We didn't want to make the investment that needed to be made, and we asked our partners to make that investment," Albaugh told his Seattle University audience. The company now recognizes that "we need to know how to do every major system on the airplane better than our suppliers do." One would have thought that the management of the world's leading aircraft manufacturer would know that going in, before handing over millions of dollars of work to companies that couldn't turn out a Tab A that fit reliably into Slot A. On-the-job training for senior executives, it seems, can be very expensive.

Will Wilkinson Says That the Executive of the Modern State Is But a Committee for Managing the Affairs of the Ruling Class...

Didn't somebody else say that, sometime?

Will:

The prevalence of corporatism: Jon Chait's regulatory-capture denialism | The Economist: I should clarify that I did not mean to be pointing out a huge hole in the logic of liberal redistribution. Rather, I was pointing out a problem for the classical progressive idea of the regulatory state as a check on concentrated economic power. In any case, I must say I'm dazzled by the audacity of Mr Chait's claim that the "private capture of public functions" is rare. My reading of the economic and political history of the United States is that regulation is very, very, very often turned into (or originally fashioned) as a weapon of business power.... Mr Chait's regulatory-capture denialism is especially notable when the matter at hand is the Washington-Wall Street nexus, as the case for a significant degree of corporate control over financial regulation is extremely compelling. Indeed, that this revolving door is so well-trafficked constitutes perhaps the most impressive piece of evidence that financial regulators are too bound up socially, professionally, and ideologically with their regulatees to offer impartial oversight in the public interest.... [F]inancial markets are not the only ones largely regulated in the interests of dominant firms.... The federal government's role in radio and television from the 1920s through the 1960s, for instance, was nothing short of a disgrace...

Hoisted from the Archives: Greg Clark: The Secret History of the Industrial Revolution

Greg Clark:

The modest productivity growth rates of the Industrial Revolution owed mostly to productivity gains in one sector, textile manufacture. It was accidents of demand, demography, and trade that allowed innovations in this sector to have a much bigger impact than previous innovations of similar magnitude in terms of [aggregate economy-wide] productivity gains.... The southern two thirds of England saw almost no growth in output per capita or productivity growth in the Industrial Revolution.... Other places in Europe in the years 1200 to 1760 saw similar episodes of productivity growth that were as substantial as those in England from 1760 to 1860. Thus between 1550 and 1650 the Netherlands saw significant productivity advance.

The appearance that the Industrial Revolution in England represented a decisive break from the past is largely a product of the unusual demographic experience... demographic growth would have spurred industrialization absent any productivity advance... by driving up land rentals and creating urbanization... [spurring] enclosure of common lands, improvements in transportation, the expansion of coal mining, and perhaps also the fall in interest rates...

[...]

The aggregate productivity growth rate is just the sum of the productivity growth rates of individual sectors weighted by their share in national outputs.... The cotton textile industry experienced very rapid productivity growth in the Industrial Revolution era.... The estimated total factor productivity in spinning and weaving cotton cloth increased 22 fold from the 1770s to the 1860s, implying an annual productivity growth rate of 3.1% per year... cotton, and the associated industries of linen (assumed to have the same productivity growth as cottons) and woolens to overall TFP growth... of 0.26% out of 0.40%. Thus nearly two thirds of the productivity growth rate can be explained by essentially one set of innovations, and by industries that employed less than 10% of the labor force in 1851. The great mass of the economy, including agriculture, construction, services, and most manufacturing saw very little productivity increase. The gains in income per capita were thus the result of a lucky technological advance in one area....

Even with a textile revolution the effects of productivity growth in textiles on the TFP of the whole economy crucially depended on the ability of Britain to export these products on a large scale. Even though the share of cottons and woolens was never large, this share was only attained because of very substantial exports of cotton and woolen goods. Thus by the 1860s at least two thirds of English cotton goods output was exported, and about one third of woolens. These exports were traded in world markets for foods and raw materials demanded by England’s rapidly growing population. Had these industries produced only for the home market then the productivity growth rate from 1765 to 1865 would have dropped by a third....

[T]his ability to export textiles was a purely adventitious thing. Textile products were tradable, and the growing population of Britain required large imports of food and raw materials which had to be paid for by manufacturing exports....

[T]he effects of individual technical advances on aggregate productivity depend crucially on such accidental factors as the size of the sector affected and the price elasticity of demand. The nature of technological advance is generally that some new idea leads to a long period of productivity advance in an industry as the consequences of the new technique are played out. If demand is price inelastic then reductions in prices created by the early phase of a technological advance will limit or even reduce the share of expenditure on the good, so reducing the general productivity gains from further advances. Advances in cotton textiles in the Industrial Revolution had big impacts because textiles were a substantial share of expenditure by the 1760s and demand was price elastic....

Suppose that prior to the Industrial Revolution innovations were occurring randomly across various sectors of the economy - innovations such as guns, spectacles, books, clocks, painting, new building techniques, improvements in shipping and navigation – but that just by chance all these innovations occurred in areas of small expenditure and/or low price elasticities of demand. Then the technological dynamism of the economy would not show up in terms of output per capita or in measured productivity.

Thus... consider the introduction of the printed book by Gutenberg in 1445, again in the period where we can find no evidence of aggregate productivity growth, at least in England.... Output per worker increased by roughly 30 fold from manuscript production in the fourteenth century till the early nineteenth century... greater than the productivity advances achieved in the cotton textile industry over the Industrial Revolution period, though it took place over a much longer period. But the impact of these productivity gains in printing on the economy as a whole was unmeasurably small because the share of the economy devoted to printing always remained small... in 1851 only 0.8% of the population was employed in the paper making and printing businesses....

Another dramatic change in the years before 1600 was improvements in shipping and navigation which allowed access to the East by an all sea route. This was reflected in a dramatic fall in the sixteenth century in the price of eastern spices.... The price of pepper relative to English farm output prices fell to about one fifth its earlier level between 1570 and 1660. Yet again though this decline represented a host of technical and organization changes the economic impact was negligible given the dietary habits of the English....

If we want to locate the Industrial Revolution as the beginning of the era of sustained productivity growth then the [sixteenth-century] Dutch have as good a case as the British. If we want to locate it in the era of very widespread productivity growth affecting large sectors of the economy, then the US in the after the 1870s is the best candidate....

[...]

[T]he conclusion is that there was little productivity growth in the Industrial Revolution era beyond that explained by the technological revolution in textiles... the accident that textiles were exported on a large scale by 1800, explained by the need to import large quantities of food and raw materials given English population growth after 1760, accounts for a substantial fraction of the gains in productivity. The Industrial Revolution becomes very narrow. It can then be interpreted as just another isolated technological advance as European economies had been witnessing since at least the fifteenth century.

---

England had low transport costs to France and the Netherlands even in the middle ages... wages and output in England will be determined not by the land/labor ratio in England, but by the land/labor ratio in Europe as a whole. The English land/labor ratio will predict real wages and real output only in so far as it moves in sympathy with the European land/labor ratio. Otherwise if England ends with more labor compared to land than other European economies it will not experience a decline in output per worker with a constant technology, but will trade labor intensive products in exchange for land intensive products from elsewhere....

In the years 1300 to 1750 there is a remarkable concordance in the population movements across Western Europe, and English wages, output per head and population [appear to be] linked. But the Industrial Revolution was notable for England’s rapid population growth compared to the rest of Europe, and in particular compared to the Netherlands and France.... English population increased by 187% between 1770-9 and 1860-9 while a wide group of other European countries saw population increase by only 79%....

At the same time the addition of the acreage of North America, and improvements in the transport system that brought grain and timber from the East and South to Western Europe effectively expanded the land base of the whole continent.... The population fed and clothed by English agriculture did not expand from 7.5 million to 21 million between 1760 and 1860... but instead grew from 7.5 to 9.6 million... even this calculation does not take into account the effect of the expansion of the coal industry in substituting for the use of land to produce energy in the pre-industrial economy through growth of wood and furze. In combination imports and the coal industry effectively tripled the land area of England by the 1860s....

Thus England's economic growth looked so spectacularly different from the past after 1760 for three reasons: the demographic accident of the differential movement of population in England relative to the rest of Europe, the expansion of the land area effectively available to all of Europe through the opening up of the American Midwest and of the eastern Europe, and the expansion of the domestic coal industry...

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Files for November 3 Lecture: Monopolistic Competition

Files for November 3 Lecture: Monopolistic Competition:

• Slides

How Can I Not Drop Everything and Spend the Rest of Today Reading This Book?

From Francis Spufford, Red Plenty (Faber and Faber):

In the twentieth century Russians stopped telling skazka. And at the same time they were told that the skazka were coming true. The stories' name for a magic carpet, samolet, 'self-flyer', had already become the ordinary Russian word for aeroplane. Now voices from the radio and the movie sreen an television began to promise that the magic tablecloth samobranka, 'self-victualler', would soon follow after. "In our day" Nikita Khrushchev told a crowd in the Lenin Stadium of Moscow on 28 September 1959:

the dreams mankind has cherished for ages, dreams expressed in fairtytales which seemed sheer fantasy are being translated in to reality by man's own hands...

He meant, above all, the skazka's dreams of abundance. Humanity's ancient condition of scarcity was going to end, imminently. Everybody was going to climb the cabbage stalk... and arrive in the land where millstoners revolved all by themselves.

Whenever they gave a turn, a cake and a slice of bread with butter and sour cream appeared, and on top of them a pot of gruel.

Now, instead of being the imagined compensation for an empty belly, the sour ream and the butter were truly going to flow.

And, of course, Khrushchev was right. That is exactly what did happen in the twentieth century, for hundreds of millions of people.... But Khrushchev believed that the plenty of the stories was coming in Soviet Russia, and coming because of something Soviet Russia possessed and the hungry lands of capitalism lacked: the planned economy. Because the whole system of production and distribution in the USSR was owned by the state... it could be directed, as capitalism could not, to the fastest, most lavish fulfilment of human needs. Therefore it would easily out-produce the wasteful chaos of the marketplace. Planning would be the USSR's own self-turning millstone, its own self-victually tablecloth.

This Russian fairytale began to be told in the decade of famine before the Second World War, and it lasted officially until Communism fell. Hardly anyone believed it, by the end.... But once upon a tiem the story of red plenty had been serious: an attempt to beat capitalism on its own terms, and to make Soviet citizens the richest people in the world. For a short while it looked--and not just to Nikita Khrushchev--as if the story might be coming true. Intelligence was invested in it, as well as foolishness: a generation's hopes, and a generation's intellectual gifts, and a tyrannys guilty wish for a happy ending. This book is about that moment. It is about the cleverest versino of the idea, the most subtle of the Soviet attempts to pull a working samobranka out of the dream country. It is about the adventures of the idea of red plenty as it came hopefully along the high road...

Worth Reading #6: Jeff Matthews: How Not to Manage Microsoft…Like a Car Company (March 22, 2010)

Jeff Matthews:

Jeff Matthews Is Not Making This Up: How Not to Manage Microsoft…Like a Car Company: As far back as April, 2006 we here at NotMakingThisUp reported on Microsoft CEO Steve Ballmer’s refusal to spring for iPods for his children, and his insistence that they not use Google.... “No, I do not. Nor do my children.... I’ve got my kids brainwashed: You don’t use Google, and you don’t use an iPod.”... We likened Ballmer’s approach to that of the old car companies, thusly:

Such a blinders-on, head-in-the-sand, not-invented-here mindset has heretofore been more closely associated with Detroit, where auto executives drive only their own company’s best cars. Small wonder the bigs at GM, Ford and Chrysler failed to grasp, before it was too late, the quality and innovation that allowed Toyota and other imports to eat their collective lunch.

Little did we know that Steve Ballmer’s father once worked for Ford. That’s right. In “Forbidden Fruit: Microsoft Workers Hide Their iPhones” the weekend Wall Street Journal describes—and we are not making this up—“the perils of being an iPhone user at Microsoft”:

Kevin Turner, chief operating officer…said he discouraged Microsoft's sales force from using the iPhone... "What's good for the field is good for Redmond," Mr. Turner said, recalls one of the people who heard his comments. Mr. Ballmer took a similar stance at the meeting. He told executives that he grew up in Detroit, where his father worked for Ford Motor Co., and that his family always drove Fords, according to several people at the meeting.

Ballmer’s father, of course, was not alone. All the car companies used to feed spanking-new, smokin’-hot, top-of-the-line models to ‘the suits.’ That’s why the suits never saw the Japanese coming. And Ballmer—like father, like son, it would seem—is doing the same for Microsoft.... Seems to us that if Bill Gates is as smart as Warren Buffett thinks, and if Bill Gates really wants to see his legacy survive, he should buy Steve Ballmer an iPad and an iPhone and an iPod...

Les Flaneurs vs. the Philosophers

Matthew Yglesias:

Matthew Yglesias » Home Page: Having read some excerpts (e.g.) from Chris Anderson’s Free and also Malcolm Gladwell’s takedown review, I think the whole subject could stand to benefit from a little less good writing and a bit more plodding distinction-drawing...

Republicans: The Really, Really, Really Stupid Party

John Stuart Mill did not know the half of it.

Publius, of Obsidian Wings:

Obsidian Wings: The Regulatory Origins of the Internet: Patrick Ruffini argues that Obama's alleged regulatory overreaching could (or at least should) move Silicon Valley back into the Republican camp.  I'm not really diving into that, but I wanted to quibble with this statement:

The irony here is that many of the entreprenuers who succeeded in the most unregulated environment possible -- the Internet -- are at once hyper-capitalist and socially-liberal Obama voters. (Good luck creating Twitter or Facebook in any industry as tightly regulated as the auto or banking sectors in the Age of Obama.)

This really can't be repeated enough -- the Internet was regulated.  Regulation is what made it work.  Indeed, the Internet's phenomenal success stemmed directly from the underlying common carrier regulation that made it possible. There was no immaculate conception.  The Internet came about because of sustained federal funding for research and development.  Originally, the data services that ultimately evolved into what we now call "the Internet" depended entirely on access to the underlying phone networks. And so when these data services got going, the federal government faced a choice.  A crossroads, if you will.  The government could ensure that Internet/data services had nondiscriminatory access to the underlying phone networks on which they "rode."  Or, it could have allowed the phone companies (i.e., AT&T) to dictate the terms of access.  (This is basically how most wireless service in America works -- it's the "walled garden" approach.  And don't you loves it?).

Wisely, in the Computer Inquiries proceedings, the FCC opted for open, nondiscriminatory access.  The Twitters of yesteryear didn't need permission from AT&T to start their business.  The nondiscriminatory access that made the Internet successful didn't happen because AT&T was full of benevolent, far-seeing souls.  It was because of government regulation.  (On an aside, that's why the fight over net neutrality is actually a battle to maintain a ridiculously successful status quo).

Given that the Internet is probably the single greatest advance of mankind since the printing press, you could plausibly argue that the Internet is regulation's crown jewel.

Hoo Boy: We Need Better Senators Badly

Pat Garofolo on Senator Blanche Lincoln:

Think Progress: Lincoln’s $250 billion estate tax plan would cut taxes for only 60 ’small businesses.’: Last week, 10 Democrats in the Senate joined all 41 Republicans in voting for a $250 billion proposal to cut estate taxes, designed by Sens. Blanche Lincoln (D-AR) and Jon Kyl (R-AZ). More than 99 percent of this cost would go to the inheritors of estates worth over $7 million. Touting the tax cut in a press release, Lincoln claimed that it was “aimed at farms and small businesses.” However, according to an analysis by the Tax Policy Center, Lincoln’s $250 billion proposal would save just 60 small businesses or farms from the estate tax:

An always charged issue is how the estate tax affects small farms and family-owned businesses. We estimate that under the Obama proposal, 100 family farms and businesses [a year] would owe tax.... The Lincoln-Kyl proposal would cut the number to 40.

According to the Congressional Budget Office, “almost all such estates are able to pay the tax bill without having to sell business assets.”

Antitrust Protectionism

Alex Tabarrok observes that if Microsoft-Yahoo really were anticompetitive and likely to generate monopoly rents for the merged entity, Google would be being very quiet right now:

Marginal Revolution: Antitrust Protectionism: Best evidence that the merger between Microsoft and Yahoo will increase competition?

Publicly, Google came out against the deal, contending in a statement that the pairing, proposed by Microsoft on Friday in the form of a hostile offer, would pose threats to competition that need to be examined by policy makers around the world.

James Fallows vs. The Redmond Horror

This is the second person who has run screaming in terror from Windows Vista. The other one said that Windows Vista had managed to make his modern Viao laptop as slow as the XT he took to college in the mid-1980s:

James Fallows | Author and Journalist » Blog Archive » Is Windows Vista the monster that’s eating my hard drive?: This spring I bought a new laptop, as I end up doing every two years or so. By that time, the older one is showing its road wear, after being hammered on and toted around all day, every day. Defective pixels start to pock the screen. Half the keys on the keyboard have had their lettering worn off, the N always first to go. (Research project: paint or decals for keys that doesn’t abrade off so quickly.) And by that time, what’s available in the new models — bigger disks, faster processors, better screens — is worth the shift.

This time I got a ThinkPad T60, maybe the dozenth ThinkPad I’ve bought over the decades and the first with a Lenovo label. I am loyal to ThinkPads despite what I learned early this year while reporting my article on Shenzhen — that virtually all the laptop computers in the world, whether they are sold as Dells or Sonys or HPs or ThinkPads, come from the same handful of no-name Taiwanese factories based in southern China. (Details at end of this post, after the jump.) I like the ThinkPad keyboard, even when the lettering is gone; ThinkPads have rarely done me wrong; I illustrate brand loyalty.

And — practicing what I preached in the Atlantic last year — I waited to buy this ThinkPad until I could get it pre-installed with Windows Vista, Microsoft’s latest operating system. Why not just stick with WinXP, by now a tried, true, and stable platform? With the other laptops scattered around the house, that’s what I’ve done. But within the lifetime of this newest machine, I expect that I’ll be forced or tempted to move to Vista, for compatibility reasons. So I’d rather start out with it installed, despite the inevitable bugs in early release, than later have to install Vista myself.

(Why don’t I just use a Mac? I do. I’ve always had one around, currently an iBook.)

But really, there seems to be something basically wrong with Vista. Not crashes — I haven’t had a single blue-screen-of-death episode, nor a hung-up program that forced me to reboot. And I’m not even worried about a perverse kind of compatibility problem — some of my existing apps don’t recognize Vista yet and refuse to run under it. This will get worked out. The real problem is what is known in the business as “performance” — how fast the system runs, and how many resources it demands.

Minute by minute, Vista seems no slower, but also no faster, than XP. Startup and shutdown are another matter. It takes what seems a lifetime, and in reality is two or three minutes, to boot the system up and, much worse, to shut it down or even “hibernate” it. Twenty-five years into the personal computer age, this is crazy. Actually, it’s unacceptable.

And disk use!!!! This latest ThinkPad came with a 110-gigabyte hard drive installed. We take that for granted, but it’s astonishing. The first PC-XT I got, also 25 years ago, came with a 10 megabyte hard drive — or 1/11,000th as much as this new machine.

Here is what is more amazing: the new disk is almost full!!

Let’s do the math. We start with 110 gigabytes. Apparently a vast recovery-and-repair partition is built in, which takes about 10 gigabytes. Then I have all my junk — programs; installation files; gigantic CAB files for installing the likes of Microsoft Office (whose new version I like very much); every digital photo I’ve ever taken; music and audio files; twenty years’ worth of email; bloated PDFs; vast index files for the X1 search program and Microsoft’s built-in indexer; backups and versions of all kinds of things.

As best I can calculate, ALL of that together - every single file on the disk, as shown by Windows Explorer or utilities like ExplorerPlus — takes up at most 32 gigabytes. That should leave at least 65 gigs free on my disk. So why does my new computer show only 4 gigs free on the hard disk? Yesterday it had 10 — bad enough in itself. But where did 6 gigs go in one day? (OK, I used Windows Update overnight. But if that devours 6 gigs per time, no one will use it for very long.) The computer is now exhibiting all the symptoms of being short on disk space — mainly, a whole lot of churning disk activity and general slowdown as it has to swap material in and out of a small amount of available storage.

How can this be? Backup and un-install files? Snapshots of the configuration at a certain point, so you can go back to a previous system-state if new programs cause new problems? I couldn’t say. But one way or another, the problem would have to involve the operating system. Can Vista really be this profligate and sloppy?

Bonus point: Here is a passage from the Shenzhen article talking about the miracle of notebook-computer brands:

Inventec [is] one of five companies based in Taiwan that together produce the vast majority of laptop and notebook computers sold under any brand anywhere in the world. Everyone in America has heard of Dell, Sony, Compaq, HP, Lenovo-IBM ThinkPad, Apple, NEC, Gateway, Toshiba. Almost no one has heard of Quanta, Compal, Inventec, Wistron, Asustek. Yet nearly 90 percent of laptops and notebooks sold under the famous brand names are actually made by one of these five companies in their factories in mainland China. I have seen a factory with three “competing” brand names coming off the same line.

Mark Thoma Is Irate This Morning: Modelling the Social Value of Microsoft

Mark Thoma's ire is roused by Robert Barro, in the Wall Street Journal. Mark sends us to an article in which Barro attributes the entire consumer plus producer surplus of the personal computer industry to Bill Gates:

Economist's View: Robert Barro: Bill Gates' Charitable Vistas: Mr. Gates delivered a commencement address that focused... on his own personal philanthropy. His implicit theme was that so far what he has accomplished may have been good for him and Microsoft shareholders, but it has been no great contribution to society. He suggested that with a personal fortune of about $90 billion... it is time for him to give something back.

I find this perspective hard to understand.... Microsoft has been a boon for society and the value of its software greatly exceeds the likely value of Mr. Gates's philanthropic efforts. Here is a sketch of a simple model of Microsoft's social value....

In 2006, its revenue was $44 billion, with earnings of $13 billion. This money was generated by creating something consumers value.... [T]he social value... comes from the increase in productivity created when businesses and households use [Microsoft] software. The social benefit equals the value of the extra product, less the total paid for the software..... A conservative estimate... is that the social benefit of Microsoft's software is at least the $44 billion Microsoft pulls in each year... capitalized... a valuation of $970 billion.... Mr. Gates is creating a benefit to the rest of society of about one trillion dollars -- or more than 10 times his planned donations. And this counts only the likely future benefits, giving no weight to the past....

Mr. Gates's plan is ... to use the Bill and Melinda Gates Foundation to reduce world poverty, with an emphasis on advances in health. This is a noble goal. But it will likely just supplement the much larger existing programs... that have been carried out for many years by international organizations and governments... a checkered record. Although Mr. Gates is probably smarter and more motivated than the typical World Bank bureaucrat, he likely won't do much better....

[T]he key question for poverty alleviation is how to get Africa to grow like China and India... opening up to markets and capitalism.... [F]oreign aid had nothing to do with the successes [at reducing poverty] and did not prevent the African tragedy.... Perhaps the Gates Foundation will run more efficient aid programs than we've seen in the past, but I wonder.... [Gates] is kidding himself if he believes that the efforts of the Gates Foundation are likely to provide society anything like the past and future accomplishments of Microsoft...

The problem, of course, is that although Barro's model is a simple model, it is the wrong model.

In the absence of Microsoft, people would not sit in front of dark screens and do all calculations and sorts by hand. In the absence of Microsoft, its programmers would work for other computer companies--IBM, Sun, ATT, Digital Research, Apple, Go, et cetera. In the absence of Microsoft, its customers would buy operating systems and office suites from other computer companies as well. In the absence of Microsoft, production would in all likelihood be somewhat less efficient--in the absence of a single dominant software near-monopolist like Microsoft, more programmers would spend more time essentially duplicating one another's work as competitors went head-to-head with directly competing products. In the absence of Microsoft, margins would be lower because of lower market power--and so distribution would be somewhat more efficient. In the absence of Microsoft, invention and innovation in software might be faster (because a dominant, innovative monopolist can break the lockin effect created by obsolete standards) and might be slower (because a dominant, non-innovative monopolist that has a reputation for predatory pricing like Microsoft can create a "death zone" around it in which no profit-seeking firm dares innovate).

Whether the net social value of Bill Gates is positive or negative depends on his impact in creating and shaping Microsoft: relative to its competitors and to its alternative paths of development, did he make it more of a lockin-breaking innovator or a death zone-creating predator? Did he do more to make Microsoft a company that takes advantage o economies of scale or more to make Microsoft a company that raises profit margins? I'm on the side that thinks that Microsoft has been a considerable net plus. But others I respect see it is a net minus. And my judgment that the net social value of Bill Gates is large and positive is not because I attribute the total producer plus consumer surplus in the industry to him and him alone: I am not that naive, and not that slow-witted.

The European Economy Since 1945

Sheri Berman on Barry Eichengreen's The European Economy since 1945:

The European Economy Since 1945: Eichengreen argues that the key to understanding Europe's initial triumphs and later troubles lies in recognizing that the recipe for growth varies.... In the years after 1945, Europe needed to recover from the war and catch up with the United States. This involved what economists call "extensive growth"... increasing the number of workers doing familiar kinds of jobs. Extensive growth requires adopting existing technology, using labor more efficiently and generating high levels of investment. After the war, Europe developed a variety of institutions well suited to these tasks. Large trade unions, employer organizations and corporatist arrangements.... Unions agreed to hold down labor costs and in return were given either representation on corporate boards (Germany), influence over government planning and policy making (Sweden and France... providing workers with generous benefits to offset their wage restraint and the unemployment generated by industrial restructuring. Schools and training programs.... Banks developed long-term relationships with their corporate clients....

All this worked just as it was supposed to, generating prosperity across the continent. By the early 1970s, however, the potential for extensive growth had been largely exhausted.... At this point, Eichengreen says, "the continent had to find other ways of sustaining its growth. It had to switch from growth based on brute-force capital accumulation and the acquisition of known technologies to growth based on increases in efficiency and internally generated innovation."... The problem, of course, was that Europe was now saddled with institutions ill suited to the creativity and flexibility that intensive growth demands.... [T]he same structures and practices that had led to the continent's golden age have now produced a malaise....

So what should the nations of Europe do now?... Eichengreen suggests that international competition is compelling Europe to abandon its distinctive model and become more flexible. This will not be easy. Eichengreen himself stresses the difficulty of institutional change.... Yet thanks to political will and creative policymaking, as Eichengreen points out, some countries on the continent, particularly the Nordic ones, have managed to adapt successfully. They are keeping themselves internationally competitive even while continuing to provide social benefits in health, education and social insurance far above American standards. Others, like France and Germany, will have to follow their lead. Otherwise, they will probably face the decline the pessimists have long been predicting.

A Short Dialogue on Santa Clara County v. Southern Pacific Railroad Company

John of Salisbury: I see that Brad DeLong is getting smacked down from the left and from the right.

Thrasymakhos: Something that would make the world a better place if it happened more often, but about what, exactly?

John of Salisbury: Well, DeLong wrote down an off-the-cuff list of ten "constitutional moments" when American judges had changed the law. Fourth on his list is:

• The post-Civil War empowering of corporations with exorbitant privileges of citizenship and limited liability at the expense of government regulators and creditors.

Justinian: And?

Edward Coke: Nathan Newman accused him of Amnesia on the Death of Reconstruction--when the Grant administration was trying to suppress the anti-Negro terrorist insurgency in the U.S. South in the 1870s, the Supreme Court betrayed it and broke the legal tools it was using. Because the Supreme Court threw its weight onto the scales, Newman argues, the terrorists won.

Thrasymakhos: And what does DeLong say?

John of Salisbury: He wimps out. Something about the Supreme Court being a bit player--the main actors being executive and legislative.

Thrasymakhos: But the Supreme Court was active?

John of Salisbury: Very.

Thrasymakhos: Seems like Nathan has a fair point.

Justinian: And what else?

John of Salisbury: This is interesting. I can't claim to fully understand it. From the right, Stephen Bainbridge cheered on by Glenn Reynolds, takes aim at DeLong's example number 4:

I assume that DeLong's talking about the post-Civil war cases [like Santa Clara County v. Southern Pacific Railroad Company].... Congress substituted the word "person" for the word "citizen" [in the text of the Fourteenth Amendment] precisely so that the provisions so affected would protect not just natural persons but also legal persons, such as corporations, from oppressive legislation.... (Admittedly... the legislative history is not uncontroverted.)...

The... cases establishing the corporation as a legal person with constitutional rights were (a) required by the legislative history of the 14th amendment and (b) made good policy sense. Hence, my conclusion that's you're "wrong" was intended to suggest that # 4 doesn't belong on your list. It was also intended to suggest that your rehetorical claim that the post-Civil War cases provided corporations with "exorbitant" privileges was, frankly, over the top. I should have thought that was apparent...

Justinian: I don't understand. Is Bainbridge defending the ruling of the Supreme Court in Santa Clara County v. Southern Pacific Railroad Company because the Court had a choice as to how to rule and chose the just result--the one that made "good policy sense"--or because the Court had no choice as to how to rule, being contrained by the plain meaning of the text?

Thrasymakhos: Neither.

Justinian: Neither?

Thrasymakhos: Neither. Notice that Bainbridge claims not that the Court was constrained by the meaning of the text, but by the legislative history of the amendment. He can't claim that the text requires his interpretation: it doesn't. And notice that Bainbridge cannot claim that justice alone--the fact that this interpretation would make "good policy sense"--is sufficient to justify his interpretation. That would mean that good judges are "activists" because they can make choices, and Bainbridge is certain that good judges aren't activists.

Edward Coke: No, that's not it at all. What good judges do is that they understand the law at a deeper level than other people. They see more clearly than others what the law always meant--but what their predecessors were too blurry-eyed to see.

Thrasymakhos: But the Fourteenth Amendment was then only sixteen years old.

Edward Coke: But the real Constitution--the Constitution that is true justice--had always included a Fourteenth Amendment. The drafters in 1787 had simply failed to see that it did. The life of the law, after all, is reason. The law that is written down is simply crystalized reason itself, to the extent that we can understand and follow it. So it had to be the case that true justice required and the properly-interpreted Fourteenth Amendment required that corporations be persons with the right to the equal protection of the laws. Anything else would be unreasonable.

John of Salisbury: Are you Edward Coke or G.F.W. Hegel?

Justinian: But this "required"? How can claims made about legislative history that are "not uncontroverted" "require" anything?

Edward Coke: Got me.

Justinian: How does this Fourteenth Amendment read?

Edward Coke: Like this:

Section. 1. All persons born or naturalized in the United States and subject to the jurisdiction thereof, are citizens.... No State shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States; nor shall any State deprive any person of life, liberty, or property, without due process of law; nor deny to any person within its jurisdiction the equal protection of the laws.

Section. 2. Representatives shall be apportioned... counting the whole number of persons in each State....

Justinian: So if you have more corporations in your state, you get more representatives in the legislature?

John of Salisbury: No, no, no! "Persons" in Section 2 refers only to human beings...

Edward Coke: And "persons" at the start of Section 1 refers only to human beings...

John of Salisbury: Only "persons" at the end of Section 1 refers to legal persons, i.e. corporations, as well as human beings...

Justinian: If anybody had tried to place such a strained interpretation on one of my laws...

John of Salisbury: Yes. Justices Hugo Black and William O. Douglas had things to say about Bainbridge's "required":

Wheeling Steel Corporation v. Glander , 337 U.S. 562 (1949): Mr. Justice DOUGLAS, with whom Mr. Justice BLACK concurs, dissenting.

It has been implicit in all of our decisions since 1886 that a corporation is a 'person' within the meaning of the Equal Protection Clause of the Fourteenth Amendment. Santa Clara Co. v. South. Pacific R. Co.... [I]t wrote no opinion on the point.... There was no history, logic, or reason given to support that view.... The Fourteenth Amendment became a part of the Constitution in 1868. In 1871... Mr. Justice Woods (then Circuit Judge) held that 'person' as there used did not include a corporation.... [I]n 1873. Mr. Justice Miller... adverted to events 'almost too recent to be called history' to show that the purpose of the Amendment was to protect human rights--primarily the rights of a race which had just won its freedom....

[W]hat was clear to these earlier judges was apparently plain to the people who voted to make the Fourteenth Amendment a part of our Constitution.... There was no suggestion in [the amendment's] submission that it was designed to put negroes and corporations into one class and so dilute the police power of the States over corporate affairs....

[H]ow strained a construction it is of the Fourteenth Amendment so to hold.... It requires distortion to read 'person' as meaning one thing, then another within the same clause and from clause to clause....

History has gone the other way..... But now that the question is squarely presented I can only conclude that the Santa Clara case was wrong and should be overruled...

Edward Coke: And things get worse. If you look in Justice John Marshall Harlan's opinion in Santa Clara Co. v. South. Pacific R. Co. you see no holding that a corporation is a "person." The Court does not reach the question:

Santa Clara County v. Southern Pacific Railroad Company: The special grounds of defense by each of the defendants were: (1) That its road... a... franchise... derived from the United States, cannot, without their consent, be subjected to state taxation. (2) That the provisions of the constitution and laws of California... are in violation of the fourteenth amendment... denying to it the equal protection of the laws....

Mr. Justice FIELD overruled the first of the special defenses... but sustained the second.... The propositions embodied in the conclusions reached in the circuit court... belong to a class which this court should not decide unless their determination is essential.... [If not,] there will be no occasion to consider the grave questions of constitutional law....

[T]he court below might have given judgment... upon the ground that the assessment... included property... the state board was without jurisdiction to assess.... As the judgment can be sustained upon this ground, it is not necessary to consider any other questions...

Justinian: So Harlan writes explicitly that the Supreme Court is not deciding this question, and people like Bainbridge assert that the Supreme Court did decide the question?

Edward Coke: Yep.

Justinian: Wow.

[Pause]

Justinian: But Bainbridge talks about the legislative history. He says the legislative history requires his reading of the Fourteenth Amendment.

John of Salisbury: Now we get to the interesting case of Roscoe Conkling. Roscoe Conkling claimed that the drafters of the Fourteenth Amendment had used the word "persons" in the equal protection clause so that subsequent courts could use it to protect corporations from legislatures--and that the drafters had kept this secret throughout the ratification process, and that he was only now in 1882 revealing the true meaning of what the states had ratified.

Justinian: Under what theory of ratification is a Court "required" to adopt a secret meaning of a law--a meaning unknown to those who adopted it?

Edward Coke: Got me.

Justinian: If Roscoe Conkling had written an extra clause on the original of the Amendment text in invisible ink, and the Amendment had then been ratified, would Bainbridge say that the invisible ink text was a valid part of the Constitution?

Edward Coke: Got me.

Justinian: Is Bainbridge serious when he writes that this claim by Conkling "requires" that judges adopt Conkling's reading of the Fourteenth Amendment?

Edward Coke: Apparently.

Thrasymakhos: It gets worse: Conkling appears to have misquoted his own diary, and to have done so deliberately: Howard Jay Graham (1938) "The 'Conspiracy Theory' of the Fourteenth Amendment," Yale Law Journal.

Justinian: Your modern jurisprudents appear to be a scurvy lot.

Edward Coke: I cannot disagree.

John of Salisbury: It's your fault.

Edward Coke: My fault?!

John of Salisbury: Yes. You started this practice of pretending that what judges wanted to do was in fact what precedent demanded that they must do. You with your "Great Charter" business--the rights of Englishmen against arbitrary arrest dating back to 1215. If anybody had shown up before Queen Elizabeth I demanding that someone she held in the Tower be released because of the "Great Charter"--well you, you as her Speaker blocked a proposed reaffirmation of it, didn't you? But you wanted to curb the power of a Scottish-born king, and pretending that Magna Carta had always been good law since 1215, and that it had always applied not just to barons with knights in the field but to all crown subjects was just the tool you needed. Modern lawyers have a nasty habit of making false claims about the past--that such and such a reading is "required" because of the past--in the hope that their claims will be true about the future. And it's your fault.

Justinian: I'm still stuck at this "required by the legislative history" business...

Thrasymakhos: It doesn't make "sense." It's not supposed to make sense. It's simply a way of avoiding admitting that the post-Civil War Supreme Court made choices about how American corporate law was to develop, and those choices could have gone different ways...

J. Bradford DeLong (1998), "Rules, Old and New, for the Twenty-First Century Economy"

J. Bradford DeLong (1998), "Rules, Old and New, for the Twenty-First Century Economy," Worldlink: The Magazine of the World Economic Forum.

http://www.j-bradford-delong.net/Econ_Articles/Reviews/Information_Rules.html

J. Bradford DeLong (1992), "J. P. Morgan and His Money Trust"

J. Bradford DeLong (1992), "J. P. Morgan and His Money Trust," Wilson Quarterly 16:4 (Fall), pp. 16-30.: Archive Entry From Brad DeLong's Webjournal

http://www.j-bradford-delong.net/pdf_files/Morgan_WWQ.pdf

J. Bradford DeLong and Marco Becht (1991), "'Excess Volatility' in the German Stock Market, 1876-1990" (Cambridge, MA: Harvard University Department of Economics). : Archive Entry From Brad DeLong's Webjournal

J. Bradford DeLong and Marco Becht (1991), "'Excess Volatility' in the German Stock Market, 1876-1990" (Cambridge, MA: Harvard University Department of Economics).

http://www.j-bradford-delong.net/pdf_files/German_Volatility.pdf http://www.j-bradford-delong.net/pdf_files/German_Volatility_Appendix.pdf

J. Bradford DeLong (1991), "Did J. P. Morgan's Men Add Value?: An Economist's Perspective on Financial Capitalism."

J. Bradford DeLong (1991), "Did J. P. Morgan's Men Add Value?: An Economist's Perspective on Financial Capitalism," in Peter Temin, ed., Inside the Business Enterprise: Historical Perspectives on the Use of Information (Chicago, IL: University of Chicago Press for NBER), pp. 205-36.

a href="http://www.j-bradford-delong.net/pdf_files/Morgan_Temin.pdf">http://www.j-bradford-delong.net/pdf_files/Morgan_Temin.pdf

J. Bradford DeLong (1991), "The Great American Universal Banking Experiment."

J. Bradford DeLong (1991), "The Great American Universal Banking Experiment," International Economy 5:1 (January/February), pp. 68-71.