The antidumping law is defended as a remedy for market distortions caused by foreign government policies. Yet in actual practice, the methods of determining dumping under the law fail, repeatedly and at multiple levels, to distinguish between normal commercial pricing practices and those that reflect market-distorting government policies.
As a result, antidumping law as it currently exists routinely punishes normal competitive business practices — practices commonly engaged in by American companies at home and abroad. It is therefore not the case that the law guarantees a level playing field for American companies and their foreign competitors. On the contrary, it actively discriminates against foreign goods by subjecting them to requirements not applicable to American products.
Brink Lindsey and Dan Ikenson, Antidumping Exposed: The Devilish Details of Unfair Trade Laws, 2003.
May 14, 2020
QotD: Anti-dumping laws
May 13, 2020
Okay, I’ll be careful not to call this “deceptive advertising” in future
At View from the Porch, Tam explains why digital camera terminology sometimes seems to be deliberately deceptive:
The disconnect comes when you run into the “luxury” or “enthusiast” end of the compact camera market, where the physical size of the 1″ sensor in cameras like Sony’s RX100 line or the Canon PowerShot G7/G9 is touted as a selling point.
Because the sensor itself is not physically an inch in any dimension. For that matter, a tiny 1/2.5″ sensor isn’t two fifths of an inch in any dimension either.
Small CCD/CMOS video sensors are labeled based on the size of video tube they replace. These tubes had a rectilinear imaging surface inside the cylindrical glass vacuum tube. Inside a 1″ tube would be an imaging surface measuring 16mm diagonally, or a little less. When solid state sensors started replacing tubes forty years ago, they were labeled according to the tube they’d replace.
So to this day, a sensor 16mm (or a bit less) diagonally is still called a 1″ sensor.
For that matter, “35mm” film is only 35mm if you measure from edge-to-edge, sprocket holes and all. “Full Frame/35mm” sensors are only about 29mm diagonally; there aren’t any digital sprocket holes.
Just like we still “dial” and “hang up” our cell phones, even though phones with dials and handsets that you hang on the wall are a vanishing memory, digital imaging technology is still named after the analog technologies it supplanted.
May 9, 2020
Sidewalk Labs pulls out of their Panopticon-on-the-harbour project in Toronto
Chris Selley clearly hoped the Google-affiliated Sidewalk Labs would turn out to be a benign addition to the Waterfront:
Sidewalk Labs Toronto demo, 17 April 2019.
Photo by Raysonho @ Open Grid Scheduler / Scalable Grid Engine via Wikimedia Commons.
It would be a mixed-income and family-friendly community: 20 per cent low-income and 20 per cent middle-income, with 40 per cent of units two-bedrooms or larger. It would be fantastically energy-efficient. It would discourage waste production using “pay-as-you-throw chutes” leading to pneumatic tubes that would rocket your trash, recycling and organic waste to the proper facilities.
Some of the details seemed a bit far-fetched, and some of the ideas came to naught at the design stage. But the Google family of companies is not known for wretched failure. To many Torontonians, it was a compelling vision.
Unfortunately, a lot of the very people it was designed to impress hated the hell out of it.
[…]
So there is blame to go around — and to be clear, no one is officially blaming the city bureaucracy or the project’s opponents for scuppering the deal. But the fact is, Sidewalk simply wandered into the wrong saloon. Toronto is an intensely conservative city in the strictest sense of the word. Its establishment doesn’t even believe things that work in other cities would work here. It’s why we pilot-project food carts to death, instead of just allowing food carts. It’s why we’re closing parks and crowding people on sidewalks during the pandemic, instead of following other the lead of other cities and dedicating roads to safely spaced pedestrians and cyclists. When Ontario loosened alcohol regulations, many Torontonians predicted tailgate parties and picnics-with-wine would lead to mayhem — and they really, really meant it.
Sidewalk wanted to do something no other city had ever done. You can imagine the terror and confusion it sowed. And that was over 12 acres — six football fields. Toronto has a great many things going for it. I have argued in the past that its conservatism, broadly speaking, has served it very well. But Sidewalk reminded us what we trade for that. If we can’t take a bit of a chance on 12 acres, it doesn’t bode at all well for the many hundreds of other acres in this city that have been begging for redevelopment my entire lifetime — not if we want them to be at all innovative or memorable, anyway.
May 8, 2020
Fallen flag — the Atchison, Topeka & Santa Fe Railway
This month’s fallen flag article for Classic Trains is the story of the Atchison, Topeka & Santa Fe Railway by George Drury:
Pages from a circa 1937 booklet about the Santa Fe trains The Chief and the Super Chief. The railroad was showcasing the streamlined changes made to its main Chicago to California trains. Super Chief had given up its boxcab locomotives for EMC E1 units. Chief was no longer pulled by the “Blue Goose” steam locomotive, but by EMD diesel locomotives.
Wikimedia Commons.
The Atchison & Topeka Railroad was chartered in 1859 to join the towns of its title and continue southwest toward Santa Fe, New Mexico.
“Santa Fe” was added to the corporate name in 1863. Construction started in 1869; by the end of 1872 the railroad extended to the Kansas-Colorado border, opening much of Kansas to settlement and carrying wheat and cattle east to markets. The railroad temporarily set aside its goal of Santa Fe — once the trading capital of the Spanish colony in that area — and continued building west, reaching Pueblo, Colorado, in 1876, just in time for the silver rush at Leadville, Colorado.
In 1878, the railroad resumed construction toward Santa Fe, building southwest from La Junta to Trinidad, Colorado, then south over Raton Pass. It chose that route instead of an easier route south across the plains from Dodge City because of Native American attacks and a lack of water on the southerly route and coal deposits near Trinidad, Colorado, and Raton, New Mexico.
The Denver & Rio Grande was also aiming at Raton Pass, but Santa Fe crews arose early one morning in 1878 and were hard at work with picks and shovels when the Rio Grande crews showed up after breakfast. At the same time the two railroads skirmished over occupancy of the Royal Gorge of the Arkansas River west of Canon City, Colorado; the Rio Grande won that battle.
The Santa Fe reached Albuquerque, New Mexico, in 1880 (because of geography the city of Santa Fe found itself at the end of a short branch from Lamy, New Mexico) and connected with the Southern Pacific at Deming, New Mexico, in 1881. The Santa Fe then built southwest from Benson, Arizona, to Nogales, on the Mexican border. There it connected with the Sonora Railway, which Santa Fe interests had constructed north from the Mexican port of Guaymas.
Comparison map showing the Santa Fe Trail and the ATSF Railway, 1922.
Map from By the Way – A condensed guide of points of interest along the Santa Fe lines to California, Rand McNally and Company via Wikimedia Commons.
In 1960 the Santa Fe bought the Toledo, Peoria & Western Railroad, then sold a half interest to the Pennsylvania Railroad. The TP&W cut straight east across Illinois from near Fort Madison, Iowa, to a connection with the Pennsy at Effner, Indiana, forming a bypass around Chicago for traffic moving between the two lines. The TP&W route didn’t mesh with the traffic pattern Conrail developed after 1976, so Santa Fe bought back the other half, merged the TP&W in 1983, then sold it back into independence in 1989.
During the 1960s the Santa Fe explored merger with the Frisco and the Missouri Pacific with no success. By 1980 Santa Fe, which had been the top railroad in route mileage in the 1950s, was surrounded by larger railroads. It was well managed and profitable, and it had the best route between the Midwest and Southern California, but its neighbors were larger, and friendly connections had been taken over by rival railroads. Southern Pacific was in the same situation. In 1980 Santa Fe and SP proposed merger. Approval seemed certain, but in 1986 the Interstate Commerce Commission denied permission because the merger would create a railroad monopoly in New Mexico, Arizona, and California.
The Santa Fe, suddenly the smallest of the Super Seven freight railroads, began spinning off branches and secondary lines and became primarily a conduit for containers and trailers moving between the Midwest and Southern California. In June 1994 Santa Fe and Burlington Northern announced their intention to merge — BN would buy Santa Fe. The deal was consummated in 1995, forming the Burlington Northern Santa Fe, known today as BNSF Railway.
The denied merger between the Southern Pacific and the Santa Fe included an eye-catching proposed “Kodachrome” paint scheme for locomotives, as described in the Wikipedia article:
The holding company controlled all the rail and non-rail assets of the former Santa Fe Industries and Southern Pacific Company, and it was intended that the two railroads would be merged. They were confident enough that this would be approved that they began repainting locomotives into a new unified paint scheme, including the letters SP or SF and an adjacent empty space for the other two (as SPSF, the reverse order of the holding company).
The locomotive livery featured the Santa Fe’s Yellowbonnet with a red stripe on the locomotive’s nose; the remainder of the locomotive body was painted in Southern Pacific’s scarlet red (from their Bloody Nose scheme) with a black roof and black extending down to the lower part of the locomotive’s radiator grills. The numberboards were red with white numbers. In large block letters within the red portion of the sides was either “SP” (for Southern Pacific-owned locomotives) or “SF” (for Santa Fe-owned locomotives). The lettering was positioned on the locomotive sides so that the other half of the lettering could be added after the merger became official. Two ATSF EMD SD45-2s (ATSF #7219 and #7221) were painted with the full SPSF lettering to show what the unified paint scheme would look like after the merger was complete. One Santa Fe caboose was also painted with “SPSF” in a similar situation.
This paint scheme, combining yellow, red and black, has come to be called the Kodachrome paint scheme due to the colors’ resemblance to those on the boxes that Kodak used to package its Kodachrome slide film (which was heavily used by railfans of the time). After the ICC’s denial, railroad industry writers, employees of both railroads and railfans alike joked that SPSF really stood for “Shouldn’t Paint So Fast”.
May 7, 2020
Interesting change in shipping patterns … to avoid the Suez canal
Colby Cosh linked to this story at gcaptain.com which would have been an unbelievable one in the pre-epidemic world:
A column of ships along the Suez Canal on 3 December, 2011.
Photo by https://web.archive.org/web/20161022104657/http://www.panoramio.com/user/2433337?with_photo_id=64163879 via Wikimedia Commons.
The Suez Canal Authority (SCA) is set to lose over $10m in revenue from container lines routing vessels via the Cape of Good Hope rather than its waterway.
According to new Alphaliner research, “the number of containerships that have opted to use the Cape route and bypass the Suez Canal has risen to a historic peace-time high,” including at least 20 sailings on the Asia-Europe, Europe-Asia and North America east coast-Asia trades.
“A unique combination of a container tonnage surplus and rock-bottom bunker prices has increasingly prompted ocean carriers to avoid the canal – and thus its fees,” the analyst noted today.
“Rather unusually, even three westbound Asia-Europe headhaul sailings have opted for the Cape route, all operated by CMA CGM.
“Carriers very rarely choose this longer route for the time-sensitive headhaul, but the low bunker price and lack of demand in European markets, hit by the Covid-19 lockdowns, have suddenly made such moves viable,” it added.
May 6, 2020
Essential private sector workers and non-essential government workers
A couple of articles at the Foundation for Economic Education look at the arbitrary division of peoples’ jobs into two broad categories:
In a recent TV appearance with Dana Perino on The Daily Briefing, [Mike] Rowe made it clear he’s not a fan of the terms “essential” and “non-essential” worker. The problem with such a view, Rowe said, is that such terms have little actual meaning and the economy makes no such distinction.
“There’s something tricky with the language going on here, because with regard to an economy, I don’t think there is any such thing as a nonessential worker,” Rowe said. “This is basically a quilt … and if you start pulling on jobs and tugging on careers over here and over there, the whole thing will bunch up in a weird way.”
Rowe’s message is precisely what FEE president and economist Zilvinas Silenas was getting at in a recent article published at Townhall.
Allowing politicians to decide which businesses and products are “essential” is an invitation for disaster. If we continue to deny these businesses the ability to do the one essential thing they are best at — providing goods and services to millions of everyday Americans — we risk more than unemployment or recession of stock price plunge. We deprive ourselves of the best resource — our people — during the time of need.
The truth is, all workers are essential.
Unfortunately, all too often what is deemed “essential” is simply what’s convenient to state leaders making the decisions. Few would suggest that liquor store owners are inherently more essential than pizza parlor owners — except perhaps state revenue collectors. No doubt this is the same reason Michigan Gov. Gretchen Whitmer concluded that lottery tickets are essential, but gardening seeds are not.
Liquor stores and lottery tickets aren’t especially “essential” to Americans, just state budgets. But as one Washington State sheriff noted in April, this seems to be the criteria state leaders often use to determine what is “essential” and “non-essential”: whether it helps the government’s bottom line.
When the state picks winners and losers it’s not only unfair, however. It’s also destructive.
In the other piece, J. Kyle deVries points out that government cannot be immunized from the economic harm the shutdown has and continues to inflict on the private sector:
So far millions in the private sector have lost their jobs or have been furloughed — but not many in government have. Many government employees continue to get salaries and benefits despite not working. Their agencies most certainly will not have as much work to do since major portions of the economy are closing down. Many agencies won’t even be needed any longer, but you better believe they will continue to be funded and probably expanded over time. That is outrageous. As we suffer economically, government should not be exempted.
This phenomenon is truly confounding and unfair. After all, government does not exist without taxes and taxes can only come from people who produce and earn a living — in other words, the private sector. The private sector supports government employees who, on average, receive higher pay, better perquisites and much better retirement plans. That should change. As we restructure our economy in the wake of the coronavirus, government should be restructured as well.
Businesses have no guarantee they will remain in business — they must provide their customers with a quality product or service at a competitive price or they will go bust. But government agencies remain in place for life, even if they continue to provide lousy services at outrageous expense. Government needs to show us they are with us during this fight. Part of doing so is to take a hard look at various agencies and departments to see if they can be improved or if they need to be eliminated. Before you say that would be difficult, let’s look at some obvious choices.
April 28, 2020
Robber Barons and the Battle of the Tunnel
The History Guy: History Deserves to Be Remembered
Published 1 Feb 2019During the gilded age ruthless businessmen fought for control of railway lines. The Albany and Susquehanna railroad was another battlefield in the “Railroad wars.” In this episode, The History Guy remembers “the Battle of the Tunnel”.
This is original content based on research by The History Guy. Images in the Public Domain are carefully selected and provide illustration. As images of actual events are sometimes not available, images of similar objects and events are used for illustration.
All events are portrayed in historical context and for educational purposes. No images or content are primarily intended to shock and disgust. Those who do not learn from history are doomed to repeat it. Non censuram.
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The History Guy: History Deserves to Be Remembered is the place to find short snippets of forgotten history from five to fifteen minutes long. If you like history too, this is the channel for you.
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April 27, 2020
The NFL may have a problem … everyone seems to have liked the virtual draft better than the “real” thing
It is usually difficult to muster much sympathy for the National Football League, but the record-setting popularity of the 2020 draft is a huge surprise:
The unique presentation of the 2020 NFL Draft established new all-time highs for media consumption in every category. With over 600 camera feeds from homes across the United States, all telecasts of the 2020 NFL Draft reached more than 55 million total viewers across Nielsen-measured channels over the three-day event, up +16% vs. 2019. An average audience of over 8.4 million viewers watched all three days of the 2020 NFL Draft across ABC, ESPN, NFL Network, ESPN Deportes, and digital channels easily breaking the previous high of 6.2 million viewers in 2019 (+35%).
Each day of the 2020 NFL Draft established new highs as an average audience of over 15.6 million viewers watched Round 1 on Thursday (+37% vs. 2019), over 8.2 million viewers watched Rounds 2 & 3 on Friday (+40% vs. 2019), and over 4.2 million viewers watched Rounds 4-7 on Saturday (+32% vs. 2019).
All seven rounds of the 2020 NFL Draft were presented across ABC, ESPN, and NFL Network – the second straight year that The Walt Disney Company partnered with the National Football League to offer a multi-network presentation of the entire Draft.
“I couldn’t be more proud of the efforts and collaboration of our clubs, league personnel, and our partners to conduct an efficient Draft and share an unforgettable experience with millions of fans during these uncertain times,” said NFL Commissioner Roger Goodell. “This Draft is the latest chapter in the NFL’s storied history of lifting the spirit of America and unifying people. In addition to celebrating the accomplishments of so many talented young men, we were pleased that this unique Draft helped shine a light on today’s true heroes – the healthcare workers, first responders, and countless others on the front lines in the battle against COVID-19. We are also grateful to all those who contributed to the NFL family’s fundraising efforts.”
“This year’s NFL Draft clearly took on a much greater meaning and it’s especially gratifying for ESPN to have played a role in presenting this unique event to a record number of NFL fans while supporting the league’s efforts to give back,” said ESPN President Jimmy Pitaro. “The success of this year’s Draft is a testament to the unprecedented collaboration across the NFL, ESPN, and The Walt Disney Co. in the midst of such a challenging time.”
The unique situation of having the vast majority of televised sports activities suspended clearly made a big difference — when you’re the only game in town, you can expect a wider audience — but the online draft seems to have been popular even among people who normally would have tuned in for the event anyway.
April 24, 2020
Prizes, patents, and the Society of the Encouragement of Arts, Manufactures and Commerce
In the most recent Age of Invention newsletter, Anton Howes explains why the Society of the Encouragement of Arts, Manufactures and Commerce (now the Royal Society of Arts) wasn’t a fan of the British patent system and preferred to award prizes in areas that were unlikely to generate monopoly situations:
The back of the Royal Society of Arts building in London, 25 August 2005.
Photo by C.G.P. Grey (www.CGPGrey.com) via Wikimedia Commons.
… the Society’s early members had an aversion to monopolies, and patents are, after all, temporary monopolies. But there was actually a more practical reason to not give rewards to patented inventions. In fact, quite a few active members of the Society were themselves patentees, and patents for inventions were not generally lumped together for condemnation with practices like forestalling and engrossing. The practical reason for banning patents was that there was no point giving a prize for something that people were already doing anyway. Patents were expensive in the eighteenth century — depending on how you account for inflation, it could cost about £300,000 in modern terms to obtain one — so the fact that there was a patent for a process was a clear indication that it might be profitable. The Society, by contrast, was supposed to encourage things that would not otherwise have been done.
Thus, when a patent had already been granted for a process the Society had been considering giving a premium for, it purposefully backed down — not because the prize would infringe on the patent, but because its encouragement was no longer necessary. And so the effect of the ban on patented inventions was that the Society received, even unsolicited, exactly the kinds of inventions that there was less monetary incentive to invent. Occasionally, this meant trivial improvements — minor tweaks, here and there, to existing processes. An engineer might patent one invention, but not see it worth their time patenting another — through the Society’s prizes, they might at least get a bit of cash for it, or some recognition. The improvement would also be promoted through the Society’s publications. Or, the Society received inventions that were far from trivial, like the scandiscope for cleaning chimneys [here], but which were not all that profitable: inventions that saved lives, or had other beneficial effects on the health and wellbeing of workers and consumers. And finally, the Society received innovations that could not be patented, such as agricultural practices and the opening of new import trades. In the early nineteenth century the Society awarded its prizes to a whole host of naval officers, including an admiral, who came up with flag-based signalling systems between ships — early forms of semaphore.
Another effect of the ban on patents was that the Society also attracted submissions from different demographics. Many of its submissions came from people who were too poor to afford patents, as well as from those who were too rich — wealthy aristocrats for whom commercial considerations might seem vulgar. The poor would generally go for the cash prizes, and the aristocrats for the honorary medals. And the prizes were used by people who might otherwise be socially excluded from invention. In 1758, for example, the Society instructed its members in the American colonies to accept submissions from Native Americans. It also allowed women to claim premiums (just as it allowed them to be members). My favourite example is Ann Williams, postmistress at Gravesend, in Kent, who won twenty guineas from the Society in 1778 for her observations on the feeding and rearing of silk-worms. She kept them in one of the post-office pigeon-holes, referring to them affectionately as “my little family” of “innocent reptiles”. Unlike other elements of society, the Society of Arts accepted, as she put it to them, that “curiosity is inherent to all the daughters of Eve.”
The Society thus encouraged the kinds of inventions that might not otherwise have been created, and catered to the kinds of inventors who might not otherwise have been recognised. Rather than competing with the patent system, it complemented it, filling in the gaps that it left. The Society operated at the margins, and only at the margins, to the better completion of the whole. It found its niche, to the benefit of innovation overall.
Mauser-Norris Prototype: Origins of the Mauser Legacy
Forgotten Weapons
Published 10 Jan 2020http://www.patreon.com/ForgottenWeapons
https://www.floatplane.com/channel/Fo…
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Today we are looking at one of the rarest and earliest rifles built by Paul and Wilhelm Mauser, a design which would set in motion all the events that led to the Mauser company becoming one of the great world leaders in small arms. The Mauser brothers were born in Oberndorf am Necker in the Kingdom of Württemberg, sons of a gunsmith. They would take up their father’s trade and were creative and intelligent boys, but opportunities were limited in the small, rural town of Oberndorf. In 1865 they presented a rifle to the Austrian Army in Vienna for trials, where it was rejected. However, it was noticed by an American sales rep for the Remington Company, a man named Samuel Norris. Norris saw the potential in the Mauser brothers’ design to convert needlefire rifles to metallic cartridges, and he signed a deal with the brothers to further develop the system.
The Mausers moved to Liege Belgium to do their work, and within just a few years they were making rifles for Norris. This example is based on a Chassepot, as Norris hoped to sell the conversion system to the French Army. That deal was rejected, however (the French were happy sticking with paper cartridges as of 1868), and Norris’ plans began to unravel when the Remington company discovered that he was making dealings in his own name instead of for them. The Mauser brothers ended up walking away from the deal with ownership of the patents they had filed with Norris, and when they submitted the design to the Prussians a process began which would result in the Mauser Model 1871 being adopted. From there, their talents would lead to the whole line of Mauser repeating rifles culminating in the Model 1898, arguably the pinnacle of the bolt action military rifle.
Thanks to the Liege Arms Museum for access to film this for you! If you are in Belgium, definitely plan to stop into the museum, part of the Grand Curtius. They have a very good selection of interesting and unusual arms on display. Further thanks to the Paul Mauser Archive for helping to arrange this filming!
http://www.paul-mauser-archive.com
Contact:
Forgotten Weapons
6281 N. Oracle #36270
Tucson, AZ 85740
April 16, 2020
Canada’s temporary foreign workers
Chris Selley points out some of the weirdness of Canada’s claimed dependence on temporary foreign workers because “Canadians still need to eat.”:
Temporary foreign workers picking fruit in a Canadian orchard.
Image from http://www.yorkfeed.com/apple-picking-urgently-canada/
If all goes as it should at Canada’s airports, temporary foreign workers will be informed of their responsibilities. They should be made aware of their employers’ responsibilities as well. And there’s no particular epidemiological reason to worry about them more than anyone else landing on a Canadian runway from abroad — or domestically, for that matter. The vast majority of temporary foreign workers are from Mexico, Jamaica or Guatemala, which have reported 39, 25 and nine COVID-19 cases per million residents. Canada’s tally works out to 713 per million.
But the official advice to employers provides little comfort. It doesn’t prohibit putting people up in shared accommodations; it merely says residents must be able to keep two metres from each other at all times. We know the limitations of such measures from experience in seniors’ homes and homeless shelters. It’s not necessarily “the state’s duty” to quarantine arriving temporary foreign workers, as Bloc Québécois leader Yves-François Blanchet argued this week. But the state could certainly do far more than it is.
For one thing, the cities in which workers typically first arrive are much better suited to proper self-isolation — i.e., in a hotel or motel room — compared to the farm country they are eventually headed for. Sourcing 45,000 hotel rooms is a huge job even in cities — that’s roughly how many rooms there are in the entire Greater Toronto Area — but it will never be easier than right now. It would prevent any bad-actor employers from breaking the rules. It would be much more reassuring than a government cheque for what works out to less than $80 per worker per day of isolation.
The whole situation is completely bizarre, though — one of several longstanding, bizarre and sometimes embarrassing Canadian situations that COVID-19 has highlighted. Economically speaking, the idea of temporary foreign workers essentially amounts to cheating. It reaches peak absurdity when businesses like Tim Hortons outlets claim to need them — that is, when they’re being brought in to do work that Canadians are demonstrably willing to do. It’s just a skeevy way to artificially depress wages and the price of fast food. People seemed to sense that back in 2014, when the government tightened the rules.
In agriculture, however, the idea seems thoroughly entrenched. Perhaps it’s a case of out of sight, out of mind. But it’s the same absurdity: If you can identify a group of 45,000 people without whose labour we literally wouldn’t be able to feed ourselves — or so we are told — then on what possible grounds are we denying them a path to Canadian citizenship? In 2017, the Toronto Star profiled a 66-year-old Saint Lucian man who had busted his hump on Canadian farms for 37 years in a row, with his paycheques deducted for income tax, EI and CPP, but who had no claim to stay. The highly skilled and educated immigrants we compete to attract bring many important things to Canada’s table; they don’t bring anything more important than food. And food is something COVID-19 has very much taught us not to take for granted. Who would have thought supermarket checkout clerks would achieve hero status?
April 14, 2020
QotD: The Edict of Diocletian, 301 AD
There was a massive increase in the armed forces and military spending; a huge building project was started in the form of a planned new capital for the Roman Empire in Asia Minor (present-day Turkey) at the city of Nicomedia; he greatly expanded the Roman bureaucracy; and he instituted forced labor for completion of his public works projects.
[…]
Diocletian also instituted a tax-in-kind; that is, the Roman government would not accept its own worthless, debased money as payment for taxes owed. Since the Roman taxpayers had to meet their tax bills in actual goods, this immobilized the entire population. Many were now bound to the land or a given occupation, so as to assure that they had produced the products that the government demanded as due it at tax collection time. An increasingly rigid economic structure, therefore, was imposed on the whole Roman economy.
But the worst was still to come. In A.D. 301, the famous Edict of Diocletian was passed. The Emperor fixed the prices of grain, beef, eggs, clothing, and other articles sold on the market. He also fixed the wages of those employed in the production of these goods. The penalty imposed for violation of these price and wage controls, that is, for any one caught selling any of these goods at higher than prescribed prices and wages, was death.
Realizing that once these controls were announced, many farmers and manufacturers would lose all incentive to bring their commodities to market at prices set far below what the traders would consider fair market values, Diocletian also prescribed in the Edict that all those who were found to be “hoarding” goods off the market would be severely punished; their goods would be confiscated and they would be put to death.
In the Greek parts of the Roman Empire, archeologists have found the price tables listing the government-mandated prices. They list over 1,000 individual prices and wages set by the law and what the permitted price and wage was to be for each of the commodities, goods, and labor services.
A Roman of this period named Lactanius wrote during this time that Diocletian “… then set himself to regulate the prices of all vendible things. There was much blood shed upon very slight and trifling accounts; and the people brought no more provisions to market, since they could not get a reasonable price for them and this increased the dearth [the scarcity] so much, that at last after many had died by it, the law was set aside.”
Richard M. Ebeling, “How Roman Central Planners Destroyed Their Economy”, Foundation for Economic Education, 2016-10-05.
April 13, 2020
James J. Hill, US railroading’s premier “market entrepreneur”
Dane Stuhlsatz outlines the story of US federal government subsidies and other interventions into the 19th century railroad industry and the one tycoon who avoided the lure:
Postcard photo of the Great Northern Railway’s “Empire Builder” streamliner between Everett and Seattle, Washington, circa 1963.
Great Northern Railway postcard via Wikimedia Commons.
Burton W. Folsom, Jr. outlined this story in his book, The Myth of the Robber Barons, identifying two models of entrepreneurship; the “political entrepreneurism” of lines like the Union Pacific and Central Pacific versus the “market entrepreneurism” of James J. Hill and his Great Northern Railway.
Canadian-born James J. Hill (1838-1916) in 1914.
Photo from Famous Living Americans, edited by Mary Griffin Webb and Edna Lenore Webb via Wikimedia Commons.As Folsom details, the former chased government largesse, ultimately in exchange for loss of control of their business, while the latter chased profits through prudent business decisions. Hill’s success juxtaposed with UP’s and CP’s failure is due in no small part to his steadfast refusal to accept any federal subsidies. In short, UP’s and CP’s government subsidized incentives were vastly different from Hill’s profit driven incentives, which lead to vastly different outcomes.
Federal subsidies incentivized speed, not efficiency. The subsidies were paid in the form of both land grants and direct payments. For each mile of track laid, the UP and CP would receive 20 acres of land and either $16,000 (for track on flat land), $32,000 (for track on hilly terrain), or $48,000 (on mountainous terrain). This incentive for speed resulted in winding, inefficient, routes built with inferior materials, ultimately culminating in a federal price tag of 44,000,000 acres and $61,000,000 (astronomical sums in the 1860s-70s). Despite all this federal assistance, shortly after the golden spike was driven on May 10, 1869 at Promontory Summit, Utah, the UP and CP were nearly bankrupt and required further assistance to stay afloat.
The lines which were born and brought up on federal aid needed federal aid to continue. This led to the passage of the Thurman Law in 1874 which forced UP to pay 25% of its earnings a year to pay its federal debt.
UP’s profitability decisions were also subject to government approval. Branch lines — smaller lines off the main line into rural communities — which could have helped UP’s bottom line, were often not approved by federal bureaucrats. Additionally, the federal Bureau of Railroad Accounts required constant checking of UP’s books. All these measures stifled the ingenuity that UP so desperately needed to make its line profitable. UP quickly found out that the power to subsidize was the power to destroy.
Hill’s line on the other hand was methodically surveyed and built, on the shortest routes possible, with the least gradient possible, and using the best steel and other materials on the market at the time. Rather than political largess, Hill made his decisions based on profit and loss. But, for all the efficiency that Hill built into his line — he was able to transport across the country faster, cheaper, and with less maintenance costs than could the UP and CP — arguably the most important aspect for the viability of his business was the freedom to conduct business untethered by the strings that accompanied government subsidies.
While Hill was free to build when and where he wanted so long as he reached voluntary agreements with landowners, consumers, and employees, UP was tied up in red tape. As Hill’s line grew evermore profitable and reliable for customers, the UP and CP struggled along on federal aid, until they ultimately went bankrupt in 1893.
For his part, Hill’s line was the only transcontinental railroad to never go bankrupt.
Route map from the Great Northern Railway, circa 1920. Red lines are the GN route; dotted lines are other railroads. Created from the Map Maker at nationalatlas.gov and routes drawn in, using a 1920 map as a reference.
Map by Elkman via Wikimedia Commons.
April 8, 2020
Debunking the claim that “80% of America’s drugs come from China”
Eric Boehm tries to sort out where the startling claim came from … because it’s not true:
While reading about the COVID-19 outbreak, you’ve probably encountered this particularly shocking statistic at one time or another: 80 percent of America’s pharmaceutical drug supply comes from China.
It’s a statistic that has made the rounds in right-wing publications for a while — offered as proof that China-heavy global supply chains are putting Americans at risk — but it has also popped up in mainstream outlets, including in pieces published in Politico and The Atlantic. Wherever it is deployed, the stat carries an unstated implication: What if China decides to cut us off in the middle of a pandemic? Could America face a dramatic shortage of key pharmaceutical drugs at the moment when we are most in need? And that distorted claim that says America has been too reliant on China has been seized by politicians like Sen. Josh Hawley (R–Mo.) as evidence that globalization has undermined America’s pandemic response.
[…]
How much is a lot? “In all, 80 percent of the U.S. supply of antibiotics are made in China,” [Politico contributors Doug Palmer and Finbarr Bermingham] wrote, linking back to a press release from Sen. Chuck Grassley (R–Iowa).
But that’s not what the press release says.
Grassley’s statement was publicizing a letter Grassley sent on August 9 to the Department of Health and Human Services (HHS) and the FDA, asking them to conduct more inspections of foreign drug manufacturing facilities to make sure they meet American standards.
“Unbeknownst to many consumers … 80 percent of Active Pharmaceutical Ingredients are produced abroad, the majority in China and India,” Grassley wrote.
There’s the first bit of context collapse: the authors of the Politico piece merged Grassley’s “80 percent … are produced abroad” into “80 percent … are made in China.”
All of this also raises another question: Where is Grassley getting that information? His letter sources that claim to a 2016 Government Accountability Office report which itself cited FDA data on pharmaceutical manufacturers around the world. And that report makes it clear that the U.S. has a diverse supply chain for drugs that goes well beyond India and China.
“Nearly 40 percent of finished drugs and approximately 80 percent of active pharmaceutical ingredients (API) are manufactured in registered establishments in more than 150 countries,” is how the GAO summed up America’s pharmaceutical supply chain.
In two jumps, we’ve gone from “80 percent of American drugs are manufactured in more than 150 countries around the world” to “80 percent of drugs come from two countries” to “80 percent of drugs come from China.”
Now, a further complication. The FDA only tracks drug manufacturing facilities — not the supply chains of specific drugs.
That “lack of structural transparency and available supply chain data about drugs,” researchers at the University of Minnesota researchers wrote last month, is one of the reasons why making accurate assessments about potential drug shortages is difficult. Indeed, it was this same bit of missing information that Grassley was encouraging the FDA to address back in August.
Source: FDA; Safeguarding Pharmaceutical Supply Chains in a Global Economy, October 2019.
April 4, 2020
The media’s grasp of modern logistics
Kurt Schlicter — who, spoiler, isn’t a fan of our news media in general — on the demands by newsbeings for the impossible to be done immediately:
We Americans are truly blessed by having a mainstream media full of brilliant renaissance men, women, and gender non-specific entities who are masters of so many varied and intermittently useful skills and who are eager to share their knowledge with us benighted souls. The pandemic has revealed that every urban Twitter blue check scribbler, MSNBCNN panelist, NYT/WaPo doofus, and barely legal “senior editor” of a website you never heard of, is a Nobel Prize-winning epidemiologist, a master logistician, and a diversity consultant to boot.
[…]
Another hitherto unknown skill that the media believes it possesses is logistics. “Why hasn’t Trump commanded a million ventilators to appear?!” the reporters demand. It’s pretty easy to see where they might have gotten the idea that the moment one articulates a desire to possess something that it magically appears. Capitalism has pretty much made that a reality. If you want something, you can go to a store and get it 24/7, or you can go on Amazon and it’ll be at your Manhattan apartment in 48 hours. Since they have never built anything or transported anything or distributed anything, only benefited from the labor of the unhip people who do those things, it’s only natural that the delayed adolescents who make up our media class imagine that material goods can be simply wished into being. After all, for all practical purposes during normal times, because of the efforts of Americans they look down upon, material goods pretty much can be simply wished into being. But prosperity takes work, not that the media would know.
[…]
Apparently, the media class thinks there are giant warehouses with an endless supply of goods just sitting there, somewhere, waiting. They have no idea about how logistics work, how goods flow quickly from producer to market and how expected resupply levels need a few days to adjust from a 10 percent daily turnover to a 30 percent daily turnover. They have zero appreciation for inventory management because no one they know does unglamorous stuff like that.
It’s all much easier in a socialist command economy. You get nothing and like it. Or don’t like it. Whatever. Here’s your weekly bean allowance. Workers of the world unite. You have nothing to lose but access to toothpaste and toilet paper.
The best part is when the media – the same media that was collectively soiling its Dockers because that mean old Trump was barring direct flights from China because of racism and stuff – demands to know why, back in December, Trump was not commanding a zillion Wuhan Flu tests, a zillion masks, and a zillion ventilators be created, while locking down all of America. Leaving aside the whole lack of an enumerated power to do that thing, in what world would have Trump have convinced anyone – least of all the media that was slobbering over his bogus impeachment at the time – that some bat soup-derived pathogen in BumFoo, China, was going to black swan all over America’s economy? The lack of seriousness by the people who presume to be reporting the news to us is more breathtaking than the damn ChiCom grippe.
