globalization

Rare Earth Elements: Stockpile or Markets?

Warren Gibson Economics , , , , , , , , , ,

Quick, what do you know about lanthanum, praseodymium, neodymium, or dysprosium? If you said they are chemical elements, you are right: numbers 57, 59, 60, and 66, to be exact. They and their neighbors on the periodic table, collectively “rare earths,” were once mere curiosities tucked in between barium and tungsten. Now they’re having their day in the sun, thanks to new technology, as did uranium and plutonium when atomic energy was developed. The military may begin stockpiling them.

Good idea or not?

My first encounter with these elements was a project that developed high-tech shock absorbers to protect a replacement camera for the Hubble telescope during the camera’s rough ride to orbit. These devices, called M-Struts, pioneered the use of permanent magnets for shock mitigation. The only material our team found that would provide sufficient magnetic flux density (a measure of the strength of a magnetic field at a given point) was a rare earth alloy, NdFeB (neodymium-iron-boron). This material could only be procured from China.

M-Struts were a one-off project that had no discernible effect on the demand curve for neodymium. But now the demand curve is crowding up against the supply curve largely because of rare earth applications in “green” energy devices such as wind turbines (extra points if you knew that). Continue reading →

Gold and Money, II

Warren Gibson Economics, Liberty , , , , , ,

Last [blog post], we examined some propositions about gold as money, drawing from theory and history. [In] this [blog post] we ask whether and how gold might once again serve a monetary function.

Money of any sort, commodity-based or not, derives its value in large part from what economists call a “network effect.” Like a fax machine, whose value depends largely on how many other people have fax machines, we value money because other people value it. We feel confident our money will buy us what we need tomorrow. A strong network effect means that something drastic has to happen before people will give up their familiar form of money.

Something drastic was happening when U.S. Rep. Ron Paul’s Gold Commission was set up in 1979. By the time the commission’s report was issued in 1980, inflation had reached alarming levels: The consumer price index was at 14 percent and rising. The prime rate was over 20 percent, and in 1980 silver exploded to $50 an ounce and gold surpassed $800 (about $2,300 in today’s dollars). Bestselling books urged people to buy gold, silver, diamonds, firearms, and rural hideouts.

We now know that inflation was peaking and that the silver price spike was a fluke caused by a failed attempt to corner the silver market. But none of this was apparent at the time, so it was reasonable to wonder whether our monetary system would survive. What did happen, of course, was that the new Fed chairman, Paul Volcker, stepped on the monetary brakes hard enough to break the back of inflation. Two back-to-back recessions resulted but were followed by a long period of recovery in which both inflation and interest rates dropped steadily. The Gold Commission was largely forgotten, though the U.S. Mint did get into the business of producing gold coins in a big way. Continue reading →

Methodology, Theory and “Real” Sociology

Brandon Christensen Links , , , , ,

Co-blogger Jacques Delacroix writes the following (in 1995!):

Organizational ecology is the other major open system school of thought. Organizational ecology (sometimes called “population ecology”) is built around the concept of structural inertia. In the ecological view, organizations in general have little latitude for effective structural change. Indeed, accoriding to some ecologists, important structural forms are often recipes for disaster and more likely lead to organizational demise than to organizational adaptation, as assumed by managerial schools of thought […] Continue reading →

One Sure Thing About Globalization – The American Motion Pictures Industry World Hegemony Part 5

Jacques Delacroix Economics , , , , ,

[Editor’s note: this lecture was delivered to the Leavey Institute of Santa Clara University in 2003. You can find it reproduced in whole here]

The Virtuous Global Effects of American Motion Pictures Hegemony

If one concedes the possibility that screen products generate or encourage violence, one must also accepts the possibility that they may affect behavior in socially desirable ways. (One can’t have it both ways: Television and, by extension, the cinema are either impotent or they may exercise a virtuous influence, as well as a pernicious one.) Thus, Curtin (1999) argues that satellite television circulates globally beneficently subversive (i.e. non-traditional), images of femininity, and therefore, alternative ways of being a woman. A moving testimony comes from the Albanian novelist Ismail Kadaré (1999): During the long night of Albanian communism (Albania was the most isolated country on Earth for forty years. Its paranoiac regime ended up cutting off relations with all countries except North Korea), Kadaré comments at length on how frequent exposure to garden–variety Western television courtroom drama ultimately induced among Albanians a distaste for personal blood feuds as old- fashioned or un-modern.

So, I pose the question: What virtuous influence may the ubiquitous American movies have on the rest of the world and, in particular, on the poor and on the downtrodden everywhere?

Even if one subscribes to the idea that movies don’t do much directly to alter either the values or the behavior of viewers, they inadvertently carry factual information, in their settings, as well as in the mundane aspects of their plots. I don’t see how some of that information cannot cumulatively have a liberating effect on those who live under less fortunate circumstances. American movies are shot mostly in the US (sometimes in Canada).They are directed mostly by American directors (or by Americanized Brits). Although Hollywood is one of the world centers of political correctness and of left-wing piousness, Hollywood films cannot help but convey to global audiences important realities of American life (and generic features of life in Western, secular, democratic, capitalist societies, in general). Among these: Continue reading →

Life Under Fatwa

Brandon Christensen Current Events, History, Links , , , , , ,

I did once visit Iran when I was 21 years old, during the time of the shah. It was wonderful. I had just graduated from university, and such was the world at that time, 1968, that I was able to drive with a friend from London to South Asia across the world. I mean, try driving across Iran and Afghanistan now! I remember it being a very cosmopolitan, very cultured society. And it always seemed to me that the arrival of Islamic radicalism in that country, of all countries, was particularly tragic because it was so sophisticated a culture — which is not to defend the shah’s regime, which was appalling. But it was one of the tragedies of history that an appalling regime was replaced by a worse one.

From Salman Rushdie.

At first I found his praise for the Obama administration to be typical of Left-wing establishment figures, but then I remembered that Rushdie is an Indian and had probably had to deal with racist legislation in one form or another while growing up. While the period of colonialism (roughly coinciding with the end of the Napoleonic Wars and the beginning of World War I) did indeed open up more places to markets, the Jim Crow-like legal barriers that European states erected no doubt helped to foster part of the suspicious climate that now pervades most globalization skeptics worldwide.

This is a shame for two reasons: Continue reading →

One Sure Thing About Globalization – The American Motion Pictures Industry World Hegemony Part 4

Jacques Delacroix Economics, Liberty , , , , ,

[Editor’s note: this lecture was delivered to the Leavey Institute of Santa Clara University in 2003. You can find it reproduced in whole here]

Just another National Specialization

The massive asymmetry in films exports between the US and the rest of the world may be the result of any number of factors. The fact that foreign movies occasionally do well in the US market ( in recent years, “Life is Beautiful”, from Italy, “Amélie”, from France. The first, 1999, Pokemon cartoon from Japan grossed US$85.7 , million, according to WSJ 7/19/02:w11, and, as forecasted by same – “Read my Lips”, also from France, will do well) suggests that public preference, and possibly language barriers, are more likely to be issues than American distribution superiority, for example. Yet, language barriers may be less significant than one would guess. Luc Besson’s “Jeanne d’Arc” (“The Messenger”) released in 1999, purportedly produced in English to make it accessible to the polyglot EU markets and to the US market, registered 3.07 million admissions in the European Union in that year, against, 40 million for American-made “ Star Wars Episode 1”, 23 million for “Tarzan”, almost 21 million for “The Matrix” , and 7.4 million for “American Pie”. Even the obscure, American-made “Patch Adams” did better ( EAO 2001: 100). “The Messenger” flopped so badly in the American market that admissions and revenue figures are hard to find. For 1999 also, only one British production and two UK-US co-productions, all in English of course, figure among the top worldwide 50 admission getters. In Belgium where practically the whole population understands French , French-made movies obtain usually less than 10% market share, against an 80% share for American-made movies. (EAO 2001: 96). Finally, the foreign successes of Indian movies, almost all in languages understood hardly anywhere outside India and not everywhere in India, suggest again that language may be a small constraint. Continue reading →

One Sure Thing About Globalization – The American Motion Pictures Industry World Hegemony Part 3

Jacques Delacroix Economics, History , , , , ,

[Editor’s note: this lecture was delivered to the Leavey Institute of Santa Clara University in 2003. You can find it reproduced in whole here]

Broken Promises

Harm to the poor on a considerable scale occurs when rich countries suddenly violate the principles of free trade they publicly support, on the main. The US government and those of other post-industrial countries will periodically make a show of vaunting the merits of free trade on stages (such as the World Trade Organization) that guarantee worldwide publicity. These actions must encourage at least some of the most enterprising poor in poor countries to produce for distant markets they are not in a position to understand.

When the governments of rich and large entities, such as the US, Japan and the European Union, suddenly inhibit the free movement of products, those enterprising poor people in poor countries suffer, and suffer disproportionately. Thus, the recent passing of new American farm subsidies legislation (in 2002) makes it difficult or impossible for small farmers in the Sahel area of Africa to compete on the world ‘s cotton markets with American growers (Thurow and Kilman, 2002)(6). The steel tariffs erected by the Bush administration – with the full complicity of Congress – must have similar effect on steelworkers in some of the Third World and Eastern European steel-producing countries.

Neither of these policies nor the broken promises they imply, can be easily defended on moral or rational grounds. Directly, it can probably be shown that the economic actors of poor countries who embraced free trade end up worse off than they would be if they had toed to a more parochial (“autarkic”) line. Indirectly, such breaches of faith by powerful rich countries contribute to the stagnation of the Third World by seeming to prove wrong those who adopted a stance leading most surely to economic development: embracers of production for worldwide markets. (In my experience, well-educated defenders of national economic ”self-sufficiency” rarely care to argue against free trade in principle; instead, they rely on evidence that there is no real free trade but a poisonous international game where the dice are loaded against the poor in poor countries. Sometimes, they have a point.)

The American Motion Pictures Industry’s Hegemony Continue reading →

One Sure Thing About Globalization – The American Motion Pictures Industry World Hegemony Part 2

Jacques Delacroix Economics , , , , ,

[Editor’s note: this lecture was delivered to the Leavey Institute of Santa Clara University in 2003. You can find it reproduced in whole here]

Poverty, some International Trends

Now, let’s look for objectionable new facts in the worldwide distribution of income. (It’s too difficult to get international data on wealth.) In the nineteen-fifties, the total of the national incomes of all other countries in the world barely equaled the national income of the US alone (Delacroix, 1974). Today, the US GNP constitutes less than one third of the sum of all countries’ GNPs (World Bank, 2002:4.2), although the US has experienced healthy economic growth since the fifties. It’s true that a number of countries are mired in deep poverty and that some are even regressing. (See below.) It seems to me those are all countries with exceptionally corrupt or tyrannical governments, such as Haiti on the one hand and North Korea, on the other, or stand-alone plutocratically-run former colonies such as the so-called “Democratic Republic of the Congo” (formerly Zaire), or Sierra Leone (where, incidentally, the bulk of the population was almost certainly better off under European colonialism), or that they have especially poor access to current information (because of high illiteracy and other reasons, including government censorship or even deeply entrenched cultural facts [4]), such as Afghanistan (but no hard data are available). By far the worst economic performers in the past ten years are the European countries that have been trying to recover from their cruel experiment in state socialism (“communism”), not the Third World countries.

In spite of loose talk of “globalization” somehow deepening the poverty of the Third World (5), the following countries experienced higher average Gross Domestic Product rates of annual growth than the US (and higher than any Western European country, except one; see below) between 1990 and 2000: Continue reading →

One Sure Thing About Globalization – The American Motion Pictures Industry World Hegemony Part 1

Jacques Delacroix Economics , , , , ,

[Editor’s note: this lecture was delivered to the Leavey Institute of Santa Clara University in 2003. You can find it reproduced in whole here.]

The word “globalization” is often used as shorthand to suggest that the world as recently shrunk for many purposes (Friedman, 1999). At first blush, this would seem to be good news, facilitating the spread of literacy, the diffusion of useful technologies, and socioeconomic progress, in general. However, a large segment of public opinion, in this country and, apparently, a larger segment in Europe and certain other countries (such as India), takes a jaundiced view of this shrinkage. This view is propagated by numerous websites as well as by professional intellectuals such as Noam Chomsky (who is often heard on National Public Radio). It contains a large anti-American component (Menand, 2002). It is widespread – at various levels of sophistication – in American universities. (1) In recent years, it has been dramatically acted out by rioters in Seattle, Quebec and Genoa, among other places. For left-wing opinion, “globalization” seems to imply that there is something radically new under the sun that is also economically nefarious for the poor and for the weak. For the same left-wing opinion, the word often suggests a sinister plot implicating in turn, “big corporations”, the World Trade Organization, the International Monetary Fund, and other organizations little understood by the general public. (For a broad, business-oriented and mildly liberal classification of the many sins the word “globalization” covers, see Eden and Lenway, 2001.) That new something entails a clandestine hegemony, or hegemonies, of some sort, dedicated to the further “exploitation” of the already poor and weak by the already rich and powerful. In this presentation, I develop the idea that there is little that is both radically new and nefarious,
and that what is new is likely to have largely beneficial effects. I rest my argumentation on readily available, public evidence.

Note: If you don’t think such a perspective on globalization exists, or you believe it’s inconsequential, you may want to stop reading. It is very difficult to find anywhere assertions about globalization displaying at once the following features: Continue reading →

The Dutch on Exhibit

Brandon Christensen Culture, Current Events, History, Links , , , , ,

UCLA’s library has an online exhibit (i.e. nothing too fancy) up on some of their archive material from the Dutch Golden Age. I thought I’d pass it along.

Again, there is nothing too fancy or long-winded here, but I do recommend checking them out. I would also highly recommend picking up a good book on Dutch history sometime before the summer ends. Simon Schama’s The Embarrassment of Riches… or Johnathan Israel’s The Dutch Republic… Both are magnificent and far-sighted.

The Dutch republic also plays an important role in American history, as it is the political structure of this small republic that really influenced Madison and other federal framers. Its rebellion from the Spanish monarchy and its rule over Britain cannot be discounted in the historical legacy of the United States either.