Quotulatiousness

December 7, 2012

No, we’re not running out of phosphorus (phosphate) and potassium (potash)

Filed under: Economics, Environment, Media — Tags: , , , — Nicholas @ 09:58

The most recent outbreak of the-sky-is-falling, we’re-at-peak-whatever panic mongering is debunked by Vaclav Smil:

Jeremy Grantham, a well-known presence in the financial world, recently published a World View column in the journal Nature in which he concludes that, “simply, we are running out” of almost all commodities whose consumption sustains modern civilization. There is nothing new about such claims, and since the emergence of a vocal global peak oil movement during the late 1990s, many other minerals have been added to the endangered list. Indeed, there is now a book called Peak Everything. What makes Grantham’s column – published under the alarmist headline “Be Persuasive. Be Brave. Be Arrested (If Necessary)” – worth noticing, and deconstructing, is that he puts his claims in terms more suitable for tabloids than for one of the world’s oldest and most prestigious scientific weekly magazines.

His direst example is “the impending shortage of two fertilizers: phosphorus (phosphate) and potassium (potash). These two elements cannot be made, cannot be substituted, are necessary to grow all life forms, and are mined and depleted. It’s a scary set of statements…. What happens when these fertilizers run out is a question I can’t get satisfactorily answered and, believe me, I have tried.” Well, he could have tried just a bit harder: an Internet search would have led him, in mere seconds, to “World Phosphate Rock Reserves and Resources,” a study published in 2010 by the International Fertilizer Development Center (IFDC) and funded by the U.S. Agency for International Development.

This detailed assessment of the world’s phosphate reserves (that are the part of a wider category of resources that is recoverable with existing techniques and at acceptable cost) concluded that they are adequate to produce fertilizer for the next 300 to 400 years. As with all mineral resource appraisals (be they of crude oil or rare earths), the study’s conclusions can be criticized and questioned, and the statement by the Global Phosphorus Research Initiative is perhaps the best document of that kind. But even the most conservative interpretation of IFDC’s assessment shows that phosphates have a reserve/production ratio well in excess of 100 years, higher than that of many other critical mineral resources.

November 17, 2012

“3D printing will be bigger than the web”

Filed under: Business, Technology — Tags: , , , , — Nicholas @ 12:46

While I’m not quite willing to go as far as Chris Anderson (quoted above), I do think 3D printing is going to be a fantastic development in our very-near future:

Chris Anderson has exited one of the top jobs in publishing — Editor-in-Chief of Wired magazine — to pursue the life of an entrepreneur, making a big bet that 3D printers represent a massive new phase of the industrial revolution.

He spoke at a Wired “Culturazzi” event, at the Marriott Union Square and to sign copies of his latest book: Makers: The New Industrial Revolution.

Mr Anderson is always an excellent speaker and his talk covered the beginnings of the Industrial Revolution, which he picked out as the invention of the Spinning Jenny in 1764 — a hand powered machine for spinning yarn.

I’d have pinned the start of the Industrial Revolution to the invention of the steam engine and its ability to power large numbers of machines thus enabling the first factories — which represented aggregated labor energy. Scale makes factories viable.

But I can see why Mr Anderson would favor the Spinning Jenny as it was a high-tech machine that was kept in a home — just as 3D printers are home based, completing a neat cycle of history.

November 15, 2012

I, Pencil: The Movie

Filed under: Economics, Technology — Tags: , , , — Nicholas @ 11:17

A film from the Competitive Enterprise Institute, adapted from the 1958 essay by Leonard E. Read. For more about I, Pencil, visit www.ipencilmovie.org

November 14, 2012

The “manufacturing fetish”

Filed under: Economics, Media, Politics — Tags: , , , , — Nicholas @ 10:54

John Kay talks about the widespread belief that only manufacturing is “real” in terms of what a national economy produces:

Manufacturing fetishism — the idea that manufacturing is the central economic activity and everything else is somehow subordinate — is deeply ingrained in human thinking. The perception that only tangible objects represent real wealth and only physical labour real work was probably formed in the days when economic activity was the constant search for food, fuel and shelter.

A particularly silly expression of manufacturing fetishism can be heard from the many business people who equate wealth creation with private sector production. They applaud the activities of making the pills you pop and processing the popcorn you eat in the interval. The doctors who prescribe the pills, the scientists who establish that the pills work, the actors who draw you to the performance and the writers whose works they bring to life; these are all somehow parasitic on the pill grinders and corn poppers.

When you look at the value chain of manufactured goods we consume today, you quickly appreciate how small a proportion of the value of output is represented by the processes of manufacturing and assembly. Most of what you pay reflects the style of the suit, the design of the iPhone, the precision of the assembly of the aircraft engine, the painstaking pharmaceutical research, the quality assurance that tells you products really are what they claim to be.

Physical labour incorporated in manufactured goods is a cheap commodity in a globalised world. But the skills and capabilities that turn that labour into products of extraordinary complexity and sophistication are not. The iPhone is a manufactured product, but its value to the user is as a crystallisation of services.

[. . .]

Most unskilled jobs in developed countries are necessarily in personal services. Workers in China can assemble your iPhone but they cannot serve you lunch, collect your refuse or bathe your grandmother. Anyone who thinks these are not “real jobs” does not understand the labour they involve. There is a subtle gender issue here: work that has historically mostly been undertaken by women at home — like care and cooking — struggles to be regarded as “real work”.

October 19, 2012

Vegemite: it’s not just Australian for Marmite

Filed under: Australia, Cancon, Food, History, WW1, WW2 — Tags: , — Nicholas @ 00:01

BBC News celebrates the 90th birthday of that uniquely Australian spread, Vegemite:

Vegemite and Marmite
Photo via Wikimedia

Vegemite started as a wartime substitute for Marmite, but it’s now as symbolic of Australia as Sydney Harbour Bridge and the koala. How did this salty spread become so popular?

What’s the link between German U-boats, the beer industry, processed cheese and the Men At Work’s 1983 hit, Down Under?

The answer is, they all played a part in turning Vegemite from a humble yeast spread into an Australian icon. Stop any Aussie on any street, anywhere in the world, and they will have a view on Vegemite – for, or against.

Now, on the eve of its 90th birthday, the first official history has just been published. The Man Who Invented Vegemite is written by Jamie Callister, grandson of the man who created it.

[…]

Walker put Callister on the case in 1923, and by the end of the year, the pair were confident they had a finished product. Walker decided to launch a competition so the public could name it and claim a £50 prize. Hundreds entered and it was Walker’s daughter Sheila who pulled the word Vegemite out of a hat.

Like the product itself, the name stuck. But sales were sluggish.

Walker had heard about an ingenious Canadian called James Kraft, who had perfected what came to be known as processed cheese. It was a sensation, as it allowed people who couldn’t afford fridges to store cheese for much longer periods.

In 1924, Walker met Kraft in Chicago. The two men got on well and Walker persuaded Kraft to grant him rights to sell his cheeses in Australia.

[…]

As World War II unfolded, Vegemite became associated with the national interest. Posters put up in Australia had pictures of it with the slogan, “Vegemite: Keeping fighting men fighting fit.”

For Vegemite, the war was a turning point, marking its entry deep into the hearts and consciousness of the Australian public.

September 11, 2012

Manufacturers may follow the music industry pattern

Filed under: Business, Law, Liberty, Technology — Tags: , , , , , — Nicholas @ 00:03

An interesting article in The Economist:

As an expert on intellectual property, Mr Weinberg has produced a white paper that documents the likely course of 3D-printing’s development — and how the technology could be affected by patent and copyright law. He is far from sanguine about its prospects. His main fear is that the fledgling technology could have its wings clipped by traditional manufacturers, who will doubtless view it as a threat to their livelihoods, and do all in their powers to nobble it. Because of a 3D printer’s ability to make perfect replicas, they will probably try to brand it a piracy machine.

[. . .]

As with any disruptive technology — from the printing press to the photocopier and the personal computer — 3D printing is going to upset existing manufacturers, who are bound to see it as a threat to their traditional way of doing business. And as 3D printing proliferates, the incumbents will almost certainly demand protection from upstarts with low cost of entry to their markets.

Manufacturers are likely to behave much like the record industry did when its own business model — based on selling pricey CD albums that few music fans wanted instead of cheap single tracks they craved — came under attack from file-swapping technology and MP3 software. The manufacturers’ most likely recourse will be to embrace copyright, rather than patent, law, because many of their patents will have expired. Patents apply for only 20 years while copyright continues for 70 years after the creator’s death.

[. . .]

In that, the record industry was remarkably successful. Today, websites and ISPs have to block or remove infringing material whenever they receive a DMCA takedown notice from a copyright holder — something that happens more often than actually justified. Google reckons that more than a third of the DMCA notices it has received over the years have turned out to be bogus copyright claims. Over a half were from companies trying to restrict competing businesses rather than law-breakers.

Rallying under the banner of piracy and theft, established manufacturers could likewise seek to get the doctrine of “contributory infringement” included in some expanded object-copyright law as a way of crippling the personal-manufacturing movement before it eats their lunch. Being free to sue websites that host 3D design files as “havens of piracy” would save them the time and money of having to prosecute thousands of individuals with a 3D printer churning out copies at home.

September 8, 2012

Gamers are not superstitious (all the time) about their “lucky dice”

Filed under: Gaming — Tags: , , — Nicholas @ 00:19

Many gamers are highly protective of the “lucky D20” they use for certain die rolls. In some cases, that’s not superstition at all, it’s taking advantage of a manufacturing flaw in polyhedral dice:

One of the biggest manufacturers of RPG dice is a company called Chessex. They make a huge variety of dice, in all kinds of different colors and styles. These dice are put through rock tumblers that give them smooth edges and a shiny finish, so they look great. Like many RPG fans, I own a bunch of them.

I also own a set of GameScience dice. They’re not polished, painted or smoothed, so they’re supposed to roll better than Chessex dice, producing results closer to true random. I like them, but mostly because they don’t roll too far, and their sharp edges look cool. I couldn’t tell you if they truly produce more random results.

But the good folks over at the Awesome Dice Blog can. They recently completed a massive test between a Chessex d20 and a GameScience d20, rolling each over 10,000 times, by hand, to determine which rolls closer to true.

In a video from a few years back, Lou Zocchi explains why his dice are the best quality in the business:

August 12, 2012

The (long awaited) growth in Indian manufacturing

Filed under: Business, Germany, History, India, Technology — Tags: , , , , , — Nicholas @ 08:59

The Economist on the relatively slow development of India’s manufacturing sector:

If India is to become “the next China” — a manufacturing powerhouse — it is taking its time about it. “We have to industrialise India, and as rapidly as possible,” said the country’s first prime minister, Jawaharlal Nehru, in 1951. Politicians have tried everything since, including Soviet-style planning. But India seems to prefer growing crops and selling services to making things you can drop on your foot.

Manufacturing is still just 15% of output (see chart), far below Asian norms. India needs a big manufacturing base. No major country has grown rich without one and nothing else is likely to absorb the labour of the 250m youngsters set to reach working age in the next 15 years. But it can seem a remote prospect. In July power cuts plunged an area in which over 600m people live into darkness, reminding investors that India’s infrastructure is not wholly reliable. And workers boiled over at a car factory run by Maruti Suzuki. Almost 100 people were injured and the plant was torched. The charred body of a human-resources chief was found in the ashes.

Yet not all is farce and tragedy. Take Pune in west India, a booming industrial hub that has won the steely hearts of Germany’s car firms. Inside a $700m Volkswagen plant on the city’s outskirts, laser-wielding robots test car frames’ dimensions and a giant conveyor belt slips by, with sprung-wood surfaces to protect workers’ knees. It is “probably the cheapest factory we have worldwide”, says John Chacko, VW’s boss in India. In time it could become an export hub. Nearby, in the distance it takes a Polo to get to 60mph, is a plant owned by Mercedes-Benz.

The initial demand for a domestic manufacturing base was more political than economic: it would serve to reinforce the newly won independence of India by showing that India could make its own goods rather than importing from the UK or other major manufacturing nations. It was also economic, in that it would provide relatively high-paying jobs for India’s rapidly urbanizing population.

Ironically, now that the manufacturing sector seems to be on the upswing, the one thing it isn’t going to do for India is provide lots and lots of jobs: as with the rest of the world, manufacturing “things” is being done with fewer workers every year (even when the total output increases, fewer workers are needed to produce that output).

May 9, 2012

Stephen Gordon explains that Dutch Disease is merely “economic hypochondria”

Filed under: Cancon, Economics — Tags: , , , — Nicholas @ 09:17

Politicians and newspaper columnists have a fetish about manufacturing. In the Globe and Mail Economy Lab, Stephen Gordon explains why it’s not the crisis we’re constantly being told it is:

The appreciating Canadian dollar has little to do with the decline in manufacturing; employment has been declining worldwide for decades. Changes in relative prices are more important. Producer prices for manufactured goods have increased by about 15 per cent since 2002, while the Bank of Canada’s commodity price index has more than doubled. Any attempt to promote manufacturing exports by depreciating the dollar is doomed to fail, since a lower Canadian dollar will also benefit resource exporters. Capital and labour will always move from sectors where prices are soft to sectors where demand is strong, regardless of what the exchange rate is doing.

But what about those 500,000 lost jobs? An underappreciated fact of the Canadian labour market is the size of the flows in and out of employment. More than 100,000 workers are laid off every month, and even more are hired. Before the recession, the fall in employment manufacturing was largely the result of attrition — workers who quit were not replaced. The loss of 500,000 manufacturing jobs since 2002 has been more than offset by the creation of 2.5 million jobs in other sectors.

[. . .]

Penalizing exports of raw resources could create processing jobs, but those gains will be more than offset by losses elsewhere. If processing in Canada were profitable under world prices, no government intervention would be necessary. The only way policy can generate significantly more processing jobs is by forcing producers of raw materials to accept lower prices or by forcing provincial governments to accept lower royalties. This would be a simple redistribution of income if production is held constant. But it is much more likely that producers would respond to these lower prices by reducing output. Total output and income would fall.

[. . .]

The shift away from manufacturing is part of a process that has increased incomes across Canada. “Dutch disease” is not a problem that needs solving.

April 8, 2012

The Military-Industrial Complex lives

Filed under: Military, Politics, USA — Tags: , , , , — Nicholas @ 10:55

From Strategy Page, where the US Army doesn’t want any more tanks right now, but the politicians (and their crony capitalist “friends”) want the tanks to continue to be built and upgraded:

The U.S. Army is fighting the politicians to avoid having to buy more M-1 tanks, or upgrade some older ones that do not need upgrades. What it comes down to is that the politicians want to keep the only American tank manufacturing plant open. It’s all about political posturing, votes and getting reelected. But the army wants to spend its shrinking budgets on things that will save lives in the next battle. At stake is several billion dollars. The generals cannot openly say that this is about buying votes versus buying lives, but that’s what it comes down to.

So far, over 9,000 American M-1 tanks have been produced and most of them subsequently updated at least once. But the army, seeking to save a billion dollars, wants to close the plant that builds and modifies the M-1. The closure would be for three years, and when it was reopened there would be a backlog of upgrades and parts orders to fill to keep the plant open until, perhaps, an M-1 replacement comes along. At the moment the generals do not have any firm plans for an M-1 replacement.

Politicians and the operators of the plant want to keep the plant open in order to save jobs, votes, and operating profits. This is basically a largely political decision that involves getting the money (from the taxpayers) to stay open by pretending that the army wants this. But the army leadership has not cooperated and has openly opposed this plan. How long the plant will remain in business is uncertain, as is the future of the M-1 tank.

February 5, 2012

This is where all the manufacturing jobs have gone

Filed under: Britain, Economics, Education, History, Technology — Tags: , , — Nicholas @ 11:44

Jackart explains that they’ve not so much been “outsourced” as they’ve been compressed, optimized, economized, and made more efficient. Fewer workers are now required to produced more things, and this is unequivocally a good thing:

A small cadre of highly skilled professionals do the jobs with enormous machines once done by vast armies of peasant labourers; which is what’s happening to manufacturing. British industrial production is rising barring recessionary glitches, UK industrial production has kept rising for most of the last 100 years. We are still producing lots of things that can be dropped on a foot. It’s just it’s no longer done by the descendants of those peasants who left the land during the industrial revolution to seek work in factories. Those factories still exist, but they employ a small number of highly paid people to operate machines which do the riveting, welding, assembling and polishing. Each machine takes does the job of hundreds of people.

That’s what happened in Agriculture, and is happening in Manufacturing. And THIS IS A GOOD THING. Because all those people not employed in riveting in Tyneside shipyards or Scything Lincolnshire corn fields are employed doing something else for someone else. All that productive labour has been freed, but we’re still getting the food produced, in abundance the Lincolnshire harvestman would have thought impossible.

The majority of Western economies are now services. Even the Germans, who’ve a niche in Machine tools and Automobiles have only 21% of their economy in making things they can drop on their feet.

And this reflects another point. Manufactured products are getting cheaper, so to have material wealth unimaginable to our Lincolnshire harvestman requires far fewer hours of Labour to achieve. Thus cars, the most expensive manufactured products most of us buy, are getting cheaper relative to average earnings, decade by decade. A reliable runaround would have been beyond the means of a WW2 factory worker, but is available to a cleaning lady now. So the same car forms a smaller part of the economy. Having spent less on the car, we can spend more on clothes, shoes, music, computers, kitchen appliances etc, and in so doing provide jobs to people supplying those things. Above all we can pay for people do do things for us – cut our hair, serve us food in restaurants, mediate for us legally, invest our surplus production into other productive activities, heal our illnesses and so on.

[. . .]

The next challenge is to banish stress and misery from our lives. I suspect this will be harder. The only caveat is that I have a great deal more faith in Adam Smith’s “invisible hand” (a much maligned and misunderstood idea) than the idiotic ideas of politicians. Politicians still seem to think manufacturing jobs are special, which suggests they don’t understand why we’re rich. The only limitless resource is man’s ingenuity. Markets aren’t an ideology, they’re simply what works in the absence of one, by deploying that one limitless resource to everyone’s benefit.

February 3, 2012

The end of London’s diesel locomotive plant

Filed under: Cancon, Economics, Railways — Tags: , , , , — Nicholas @ 12:10

I’ve updated my earlier post on the labour dispute at London’s EMC plant now that the current owners have announced the closure of the facility.

Update, 5 February: Mike P. Moffatt at Worthwhile Canadian Initiative debunks some of the media coverage of the closure:

After the U.S.-Canada Free Trade Agreement, GM Diesel closed their La Grange, Illinois plant and consolidated their production to the London plant, though kept the head office, research, design, and manufacturing of some components in La Grange. EMD London was a direct beneficiary of the U.S.-Canada Free Trade agreement, something I have yet to hear in the media. The domestic locomotive market, by itself, would not have supported the level of production we have seen over the last two decades.

In 2005, GM Diesel sold the Electro-Motive Division (including the GM Diesel plant in London and the head office in La Grange) to a couple of U.S. private equity firms, who re-named it Electro-Motive Diesel. In 2010, those firms sold EMD to Caterpillar.

[. . .]

We need to keep in mind that:

  1. EMD has always been a U.S. corporation.
  2. The intellectual property from research and design, etc. was from the head office in La Grange, Illinois.

So that leaves “know-how” which Cohn mentions in a follow-up paragraph. On Twitter, Colby Cosh asked: “Cohn talks about “know-how” but (a) know-how isn’t IP and (b) Cat doesn’t seem to have much use for the workers who have it, do they?” Caterpillar, however, did send a number of employees from London to their new plant in Muncie, IN, to train newly hired workers. I am Facebook friends with an EMD worker and I remember him objecting loudly to this last fall. But did Caterpillar really buy EMD so that it could obtain the talents of a dozen guys to teach advanced welding techniques?

There are a lot of narratives to this story, many of them unpleasant. A narrative about a U.S. company buying Canadian IP at 15 cents on the dollar does not pass the sniff test, however.

Update the second, 7 February: Andrew Coyne gets his inconvenient, yucky facts in our lovely flag-waving, anti-capitalist nationalistic fantasy:

EMD never received any subsidies from the federal government; certainly not since Caterpillar bought it. Indeed, looking through the hundreds of pages of “grants and contribution” in the Public Accounts, it may be the only company in the country that didn’t. The Harper visit to which Olive refers was to promote a tax break for the purchasers of locomotives, not the manufacturers. The visit occurred in 2008, two years before the Caterpillar purchase.

It’s not clear how the foreign investment laws could have been invoked to cover a purchase of an American company by another American company, or if they could, why this should be the pretext for “demanding job guarantees.” Presumably if it is wrong for a firm to close a plant or lay off workers, it is just as wrong whether it has recently been the object of a foreign takeover bid or not. Perhaps you will say we should bar all companies from closing a plant. Okay: why would they ever open one? If workers, once hired, cannot ever be laid off, why would they ever be hired?

Of course, there’s always Olive’s suggestion of a punitive tariff, through which the cost of keeping jobs in London locomotive plants could be shared by consumers and businesses across the country. (You’re welcome.) This would recreate the system of foreign branch plants that existed in the days before free trade, small factories producing exclusively for the domestic market. Rather than lament at foreigners stealing our jobs and technology, the nationalists could once again lament at being tenants in our own land.

January 1, 2012

Bargain hunting: pay only $103,000 for a car costing $2.2 million

Filed under: Economics, Environment, Government, Technology — Tags: , , , , , — Nicholas @ 12:41

They’re pretty exclusive: so far they’ve only made 239 of them, and they start at $103,000 per unit. They have, however, taken on a bit of US federal government funding:

It’s another example of USA tax dollars at work — in Finland:

From ABC News, Oct 20th, 2011:

    With the approval of the Obama administration, an electric car company that received a $529 million federal government loan guarantee is assembling its first line of cars in Finland, saying it could not find a facility in the United States capable of doing the work.

    Vice President Joseph Biden heralded the Energy Department’s $529 million loan to the start-up electric car company called Fisker as a bright new path to thousands of American manufacturing jobs. But two years after the loan was announced, the company’s manufacturing jobs are still limited to the assembly of the flashy electric Fisker Karma sports car in Finland.

Let’s do the math.

239 cars produced for 2012 model year.

$529,000,000 USD in Government loans

That works out to $2,213,389 (2.2 million) per car.

Selling price $103,000 USD, that leaves only $2,110,389 in taxpayer funded overhead per vehicle. And, they’ve only sold 50 so far.

Such a deal.

Of course, when your promotion strategy revolves around a sitcom based on Charlie Sheen, such things are bound to happen

August 27, 2011

US government moves swiftly to crush guitar industry

Filed under: Bureaucracy, Government, Law, USA — Tags: , , , — Nicholas @ 09:46

The US federal government, not satisfied with the state of the economy, is now targeting smaller industries for regulatory SWAT raids and asset confiscation:

The Justice Department raided the Memphis and Nashville offices of a guitar manufacturing company this week, seizing several pallets of wood, electronic files and guitars as part of a crackdown on illegally harvested hardwoods from protected forests, The Wall Street Journal reported.

But Henry Juszkiewicz, the chairman and chief executive of Gibson Guitar, defended his company’s manufacturing policies and accused the Justice Department of overreaching.

“The wood the government seized Wednesday is from a Forest Stewardship Council certified supplier,” he said in a statement to the newspaper, suggesting the Feds are using the aggressive enforcement of overly broad laws to snare the company.

The Justice Department refused to speak to the newspaper.

The raid prompted Iowahawk to connect the dots between this raid and the “Fast and Furious” operation:

Today’s uncovering of secret multi-agency program for shipping illegal Gibson guitars to Mexican drug cartels left red-faced officials of the U.S. Department of Justice scrambling for an explanation amid angry calls for a Congressional investigation.

“I have ordered all agency personnel to fully cooperate in any Congressional inquiries, including all reasonable document request, as soon as we can redact them with Sharpie pens and lighter fluid,” said U.S. Attorney General Eric Holder.

The secret program came to light early this morning in the border town of Nogales, Arizona, after what was described as a wild battle of the bands between members of the Sinaloa cartel and Los Zetas, two of Mexico’s most notorious violent drug gangs.

“Usually these guys are armed with Mexican Strats and Squires, Epiphones, small caliber stuff like that,” said Pedro Ochoa, 36, an eye witness to the sonic melee. “This time they were packing the heavy firepower.”

The steady barrage of power chords and piercing solo attacks attracted the attention of nearby U.S. Border Patrol agents, who arrived at the scene just as Los Zetas broke into Led Zeppelin’s ‘Immigrant Song.’ By the time the dust had cleared, U.S. Border Patrol Agent Oscar Jimenez was found in a catatonic state of headbanging. He was later flown to University of Arizona Hospitals, where his condition is listed as seriously rawked.

Jon, my former virtual landlord, sent me a link to the press release from Gibson and a link to this Wall Street Journal article with more information.

John Thomas, a law professor at Quinnipiac University and a blues and ragtime guitarist, says “there’s a lot of anxiety, and it’s well justified.” Once upon a time, he would have taken one of his vintage guitars on his travels. Now, “I don’t go out of the country with a wooden guitar.”

The tangled intersection of international laws is enforced through a thicket of paperwork. Recent revisions to 1900’s Lacey Act require that anyone crossing the U.S. border declare every bit of flora or fauna being brought into the country. One is under “strict liability” to fill out the paperwork — and without any mistakes.

It’s not enough to know that the body of your old guitar is made of spruce and maple: What’s the bridge made of? If it’s ebony, do you have the paperwork to show when and where that wood was harvested and when and where it was made into a bridge? Is the nut holding the strings at the guitar’s headstock bone, or could it be ivory? “Even if you have no knowledge — despite Herculean efforts to obtain it — that some piece of your guitar, no matter how small, was obtained illegally, you lose your guitar forever,” Prof. Thomas has written. “Oh, and you’ll be fined $250 for that false (or missing) information in your Lacey Act Import Declaration.”

March 2, 2011

Why “Buy American” or “Buy Canadian” campaigns are bad economics

Filed under: Economics, History, Liberty, USA — Tags: , , , , , — Nicholas @ 12:26

Daniel Ikenson takes ABC to task for their misleading propaganda against international trade:

Back in the “golden age” of 1960, when imports were oddities to marvel over in a disdainful way, the per-capita U.S. income was $2,914. In 2009, with imports ubiquitous, per-capita income was $46,411. (Economic Report of the President, 2010, Tables B-1 and B-34). In real, inflation-adjusted terms, even with a U.S. population increase from 181 million to 307 million, per-capita incomes in 2009 were almost triple what they were in 1960 ($42,277 vs. $15,669 in 2005 dollars — ERP, 2010, Tables B-2 and B-34). Oh, if only we could replicate the relative poverty, the limited consumer choices, the inefficient production processes, the massive trade barriers that compelled Americans to buy American, and the uneconomic work rules and wages commanded by once-powerful private sector labor unions. In 1960, before real economic liberalization spawned cultural and social liberalization, Diane Sawyer would never have dreamed of being a network news anchor, if she even dared to entertain the concept of working outside of the home. How can she pine for such an era?

It’s frustrating that so much research refuting the myth of manufacturing decline and supporting the conclusion that U.S. manufacturing is thriving — and is in fact leading the world in terms of value of output — is simply neglected by a media that is more committed to scaring than informing. Today Americans are less likely to find in their homes products manufactured in the United States because U.S. manufacturers have moved on to producing higher value products. American manufacturing isn’t focused on products that consumers find in retail stores, like furniture, hand tools, sporting goods, flatware, draperies, carpeting and clothes. American factories produce more value than any other country’s factories by focusing on producing the highest value products: pharmaceuticals, chemicals, airplanes, sophisticated componentry, technical textiles, and other items often sold directly to other businesses.

I and others have been making these points for several years, as U.S. manufacturing continues to thrive in every metric . . . except employment. Manufacturing employment peaked in 1979 and has been on a downward trajectory ever since. But that is the point that eludes ABC and everyone else who thinks U.S. manufacturing’s best days are in the past. Making more with less is the goal! That’s how an economy grows! The political imperative of “putting people back to work” regardless of the economic value of that work — remember the so-called stimulus? — spits in the face of economics. The fact that Americans are unemployed speaks to a mismatch of skills demanded and skills available, as well as to a business and regulatory environment that dissuades investment and hiring.

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