Niall Ferguson points to several key institutional innovations that were key to the rise of the West, compared to the rest of the world:
The West first surged ahead of the Rest after about 1500 thanks to a series of institutional innovations that I call the “killer applications”:
1. Competition. Europe was politically fragmented into multiple monarchies and republics, which were in turn internally divided into competing corporate entities, among them the ancestors of modern business corporations.
2. The Scientific Revolution. All the major 17th-century breakthroughs in mathematics, astronomy, physics, chemistry, and biology happened in Western Europe.
3. The Rule of Law and Representative Government. An optimal system of social and political order emerged in the English-speaking world, based on private-property rights and the representation of property owners in elected legislatures.
4. Modern Medicine. Nearly all the major 19th- and 20th-century breakthroughs in health care were made by Western Europeans and North Americans.
5. The Consumer Society. The Industrial Revolution took place where there was both a supply of productivity-enhancing technologies and a demand for more, better, and cheaper goods, beginning with cotton garments.
6. The Work Ethic. Westerners were the first people in the world to combine more extensive and intensive labor with higher savings rates, permitting sustained capital accumulation.
For hundreds of years, these killer apps were essentially monopolized by Europeans and their cousins who settled in North America and Australasia. They are the best explanation for what economic historians call “the great divergence”: the astonishing gap that arose between Western standards of living and those in the rest of the world.
Comments Off on Niall Ferguson on the West’s “killer applications”
Nicole Gelinas points out that the Long Island Rail Road (LIRR) pension scam is only part of the problem:
Last week, the feds indicted 11 Long Island Rail Road retirees and their alleged associates in a “massive fraud scheme” to steal a billion dollars through fake disability claims. But the bigger outrage is that for decades the LIRR has held state taxpayers and riders hostage — thanks to outdated Washington labor laws.
The first inkling of the scandal came in 2008, when a press report noted that nearly every LIRR worker retired early, getting an MTA pension and a federal benefit. Looking into the anomaly, federal prosecutors unearthed evidence that at least two doctors and other “facilitators” had for years signed off on fake injuries and ailments so that workers could take their pensions.
[. . .]
The state’s fear of an LIRR strike helps drive up the railroad’s costs. Last year, the Empire Center reported, the average LIRR worker pulled in $84,850 — not including benefits.
That’s more than anywhere at the MTA except headquarters — and 23 percent more than subway and bus workers make. Seven of the top 10 people who made more in overtime than they did in regular wages hailed from the LIRR — including one conductor who tripled his $75,390 salary. Plus, workers pay nothing for health benefits.
Comments Off on Long Island Rail Road: “The scandal isn’t what’s illegal — but what’s legal“
Lester Haines conjures up exactly the right image to illustrate the absurdity of the “Canadian national symbol” argument:
A Canadian politician has rather deliciously insisted that vast tracts of his nation were opened by “the relentless pursuit of beaver”, an agreeable concept that for some reason conjures an image of Silvio Berlusconi furiously paddling a kayak through white water rapids in pursuit of a fleeing supermodel.
The description of Canada’s beaver-hunting past comes from New Democratic Party MP Pat Martin, who isn’t too impressed with Ontario senator Nicole Eaton’s proposal to replace the beaver with the polar bear as the country’s national emblem.
Eaton reckons the polar bear, with its “strength, courage, resourcefulness and dignity” is a more appropriate emblem for the 21st century than the “dentally defective rat” that has symbolised the nation since 1975.
While I don’t think the symbol needs to be changed, it might be best if our politicians are busy in this sort of snark hunt rather than inflicting further intrusive regulations and distortions into the economy.
Comments Off on Beaver versus Polar Bear
When governments try to rig markets to achieve certain goals, they often end up getting results they didn’t foresee:
The Alberta Gaming and Liquor Commission presumably had good intentions in mind when it brewed up a policy to lend a helping hand to small breweries. Namely, beer companies qualify for substantially reduced beer tax rates on the first 200,000 hectolitres sold in Alberta. The explicit aim was to help small players compete against industry leviathans such as Molson and Labatt. And, implicitly, the tax break would entice craft breweries to set up shop in the province.
However, eight years after the reduced beer tax rates—estimated by one analyst to total about $200 million in savings—were first implemented, little in the Alberta beer business has worked out the way the AGLC envisioned. Only five small breweries have opened for business in Alberta since the policy was implemented. And in that time Alberta has, in fact, become a market characterized by discount beer. And at least one of the breweries taking advantage of the AGLC policy doesn’t even brew in the province, let alone Canada.
[. . .]
Alberta’s small brewer system would appear to be yet another case of the law of unintended consequences—especially when a government agency tinkers with the free market economy. From a dearth of craft brewers to a helping hand for American jobs, the AGLC’s beer tax policy is enough to drive a teetotalling Albertan to drink.
Comments Off on Alberta’s policy to help small breweries has unintended consquences
I’m much happier with my results this week, although it only helps me regain some of the ground I’d lost over the previous two weeks. I’m now sharing a three-way tie for tenth spot in the AoSHQ pool (six points behind the leader, but only two points out of second place).
√ @Tennessee 27 Indianapolis 10
∅ New Orleans 21 @St. Louis 31
√ @New York (NYG) 20 Miami 17
√ @Carolina 21 Minnesota 24
√ @Baltimore 30 Arizona 27
√ @Houston 24 Jacksonville 14
√ @Buffalo 23 Washington 0
√ Detroit 45 @Denver 10
√ New England 17 @Pittsburgh 25
√ @San Francisco 20 Cleveland 10
√ Cincinnati 34 @Seattle 12
∅ @Philadelphia 34 Dallas 7
∅ San Diego 20 @Kansas City 23
This week 10-3 (8-5 against the spread)
Season to date 74-42
Comments Off on NFL week 8 results