Saturday, June 18, 2005

A fun book meme

Eszter Hargittai has tagged me with John Cole's book meme:

Do you ever read those stuffy book lists you see circulating, like 'List your five most important books,' and think to yourself- no wonder these people are so damned boring. Some of the titles give me a damned headache, they are so dull. Knowing things is great, but fiction makes life bigger and better and in color.

So, in the proud spirit of anti-intellectualism (just kidding), I am going to offer... the five books I liked enough as a teen/young adult to read again as an adult.

Here are my five -- two of which might surprise Cole:

1) Bloom County Babylon, by Berkeley Breathed. The first time I read Bloom County was in my high school freshman physics class. I was laughing so hard that even my teacher -- easily the most absent-minded and clueless instructor I ever had -- appeared to be vaguely aware of my behavior. I didn't care -- Bloom County was just too funny. Opus remains one of my favorite cartoon creations.

2) Ender's Game, by Orson Scott Card. As a young adult, I found the notion that young children have the capacity for evil, brutality and politics to be utterly shocking. As the parent of young children, of course, I am not surprised in the least. This book is also worth re-reading because of Card's prescience in anticipating the Internet's role in political debate.

3) Under the Frog, by Tibor Fischer. An episodic account of life in Hungary from 1944 to 1956. Sounds grim, but it's actually pretty funny -- the chapter with the eating contest always makes me laugh. This was an essential read when I was in Ukraine.

4) Holidays in Hell, by P.J. O'Rourke. I first read this in my junior year in college, when I was studying in London for a semester. There are so many classic essays in this collection -- his voyage on a Soviet cruise ship sponsored by The Nation, his ramble through a Lebanon torn apart by civil strife, his first-person account of student protests in South Korea -- but the all-time classic remains his essay describing what it was like to be trapped in Europe immediately after the U.S. bombed Libya in 1986. O'Rourke, in venting his spleen at the end of that essay, managed to provide catharsis for every American who lived abroad and grew weary of defending their country of origin.

O'Rourke also gets consideration for what he wrote in the preface:

I wanted to know where trouble came from and why the world was such a lousy place. I wasn’t curious about natural disasters—earthquakes, mudslides, floods, and droughts. These are nothing but the losing side of the Grand Canyon coin toss. Okay, it's sad. Now what? I was curious about the trouble man causes himself and which he could presumably quit causing himself at the drop of a hat, or, anyway, a gun. I wanted to know why life, which ought to be an only moderately miserable thing, is such a frightful, disgusting, horrid thing for so many people in so many places.

At a primal level, O'Rourke's rationale was certainly one reason why I got a Ph.D. in political science.

5) Summer of 49, by David Halberstam. I stumbled onto this book one summer (naturally) and was completely hooked, despite the fact that Halberstam's Yankee bias comes through loud and clear. This book (and O'Rourke's) also nicely refutes John Cole's absurd claim that, "Nonfiction and history books may be good for facts, evidence, and showing relationships between people, places and events, but they in many cases tend to make the world smaller.... Fiction, on the other hand, makes the world bigger, more colorful, and more pleasant." No, good writing and a sense of narrative makes the world more alive. I could have easily given this spot to Kennedy's Profiles in Courage, Brinkley's Washington Goes to War, or Hofstadter's The American Political Tradition. However, Summer of 49 best conveys the sweet sadness of what it was like to be a Red Sox fan before 2004.

Readers are encouraged to list their five. I'll tag Daniel Nexon, Megan McArdle, Tyler Cowen, Kevin Drum, and Laura McKenna.

posted by Dan at 11:42 PM | Comments (19) | Trackbacks (1)

Which editor at the Washington Post owes Blaine Harden money?

I ask this question because a personal debt is the only possible explanation for why Harden landed a front-page story in today's WaPo about whether Starbucks is bankrupting America's highly educated youth:

At a Starbucks across the street from Seattle University School of Law, Kirsten Daniels crams for the bar exam. She's armed with color-coded pens, a don't-mess-with-me crease in her brow and what she calls "my comfort latte."

She just graduated summa cum laude, after three years of legal training that left her $115,000 in debt. Part of that debt, which she will take a decade to repay with interest, was run up at Starbucks, where she buys her lattes.

The habit costs her nearly $3 a day, and it's one that her law school says she and legions like her cannot afford....

"A latte a day on borrowed money? It's crazy," said Erika Lim, director of career services at the law school.

Absolutely correct, it's a waste of money.... unless you believe that gourmet coffee generates efficiency improvements in human capital formation.... and student loans usually have lower-than-average interest rates.... and the income boost provided by law school massively outweighs the cost of Starbucks consumption.... and question whether after racking up over $115,000 in debt, it's really the extra thousand or two rom coffee consumption that affects career choices... and you believe Harden's underlying, unproven premise that too many students consume too many lattes.

I could go on, or ask caffienne addict Brad DeLong or Starbuck enthusiast Virginia Postrel to go on, but I see that David Adesnik has already addressed this issue -- go check him out.

posted by Dan at 09:45 PM | Comments (9) | Trackbacks (3)

Friday, June 17, 2005

How whirlpool does globalization

Louis Uchitelle has a nice case study of how one U.S. multinational deals with global sourcing questions in the New York Times:

Globalization is often viewed as a rootless process of constantly moving jobs to low-wage countries. But the issue is more complex, as illustrated by Whirlpool's worldwide operations. What attracts Mr. Fettig and other chief executives is a relatively new form of globalization that emphasizes first-rate centers of production and design in various countries - including the United States.

Whirlpool's global network, a work in progress, includes microwave ovens engineered in Sweden and made in China for American consumers; stoves designed in America and made in Tulsa, Okla., for American consumers; refrigerators assembled in Brazil and exported to Europe; and top-loading washers made at a sprawling factory in Clyde, Ohio, for American consumers, although some are sold in Mexico.

Read the whole thing. One interesting result is that despite the fact that globalization supposedly flattens the world, geography (in the form of shipping costs) and history (in the form of past investments) still matter a great deal.

posted by Dan at 05:54 PM | Comments (4) | Trackbacks (0)

A very important post about.... Katie Holmes


For the past month I've been fighting my instinct to blog about the future Mrs. Tom Cruise. Even though the infamous Oprah video bothered me, and even though Cruise's comments about psychiatry in general and Brooke Shields in particular bothered me, my superego said this wasn't a blogworthy topic.

With the announcement of their engagement at the bottom of the Eiffel Tower, I think the question needs to be asked -- what is it about this coupling that provokes people into creating elaborate Free Katie web sites?

[Maybe it's the age gap--ed. If that was true, then Catherine Zeta-Jones' marriage to Michael Douglas should have provoked more outrage -- the gap in their ages is twenty years. Same with Warren Beatty and Annette Bening. Hell, I think the public's opinion of Ashton Kutcher went up after he started dating Demi Moore. Also, is anyone really shocked by a generational difference among celebrity couples anymore?]

[Maybe it's the Scientology?--ed. Well, Scientology certainly has its critics. But then again, so do most other religions. And frankly, why should we care if Ms. Holmes decides to leave the Catholic Church? Besides, the furor over their relationship began before any discussion of conversion entered into the mix.]

My hunch is that it's some syncretic combination of a bunch of factors, including the age gap, the Scientology, and the fact that, according to the Associated Press, "The former star of television's 'Dawson's Creek' grew up with a poster of Cruise on her bedroom wall and has said she grew up wanting to marry him." But I'm not sure.

So I will put it to the readers -- what is it about this relationship that weirds so many people out?

posted by Dan at 04:15 PM | Comments (42) | Trackbacks (4)

Unsung examples of U.S. soft power

A common meme among foreign affairs cognoscenti across the policy spectrum is that the U.S. needs to do more to improve its public diplomacy and "soft power" activities. This is a nice assertion to make -- I'm sure I've made it myself -- but it usually overlooks the fact that the U.S. government already has a lot of programs that try to advance this goal. We just don't hear about them all that often.

The Chicago Tribune's Mary Ann Fergus has a front-page story on one of these programs:

In a vanguard California high school, Nazifa Jafary organizes her digital portfolio on a laptop, writes poetry based on class skits and calls her teachers by their first names.

Students eat, drink and break out in song during classes, and Nazifa studies it all with warm green eyes and a ready smile.

Now, none of it surprises her. Not even the girl with the house key dangling from her loop earring.

Nazifa is one of 13 girls and 26 boys from Afghanistan who have studied in U.S. high schools this year. They are the first group of foreign-exchange students from Afghanistan to come to America in more than 30 years, and their year here is coming to an end.

Nazifa's serene expression changes as she considers describing her days as a sophomore at High Tech High International to the folks back home.

"Even if I told them, they might think that is not school," Nazifa says, shaking her head and laughing. "They would think you would have gone somewhere else."

Just as her new life begins to feel normal, Nazifa prepares for home. The students, here through a U.S. State Department program called Youth Exchange and Study, are to return to Afghanistan in late June....

The students will become members of an alumni program, also sponsored by the State Department, in which they can share their experiences and work to improve their country. In August, another group of 40 Afghans, including 19 girls, will begin to study in America.

Read the whole thing. One interesting and unanticipated side-effect of the program has been the effect it has had on the different Afghan representatives:

While the program's main objective was to expose Afghan students to American ideals and education, it also built unity within the group, which represents six provinces in a nation with long-established divisions. To prepare for America, the group spent a month in Kyrgyzstan, where they bonded, regardless of gender or ethnic background, before going to places like Southern Pines, N.C., and Longview, Wash.

Click here for more information on the State Department's Partnerships for Learning, Youth Exchange and Study: "During academic year 2004-2005, 450 students joined the program from: Afghanistan, Algeria, Bangladesh, Egypt, Indonesia, Iraq, Israel (Arab Community), Jordan, Kuwait, Lebanon, Malaysia, Morocco, Nigeria, Oman, Pakistan, Philippines, Syria, Tunisia, Turkey, West Bank/Gaza, and Yemen."

posted by Dan at 09:43 AM | Comments (7) | Trackbacks (3)

Thursday, June 16, 2005

Projecting the demand for offshore labor

Peter Marsh writes in the Financial Times about what the global market for service jobs will look like with the rise in offshore outsourcing:

Growth in outsourcing of service jobs from rich countries is likely to be constrained because only one in seven workers in low-wage nations has the skills needed to work for multinationals, according to a McKinsey study published on Thursday.

“Offshore employment [in services] will grow gradually, making no sudden impact on labour markets overall in developed countries,” says the report by the McKinsey Global Institute, a research arm of the strategy consultancy.

It says the trend will have “little effect” on wages in rich countries, scotching the idea that offshoring could help hold down inflation in those nations....

One reason for [the slow pace of offshoring] is multinationals' attitudes to recruitment, McKinsey says. The consultancy conducted 83 interviews with human resources managers working for multinationals and found that, presented with workers from emerging economies with appropriate academic qualifications, they were likely to reject 87 per cent on other grounds.

The main reasons for the low likely take-up were poor language skills, “the low quality of significant portions of the educational system [in developing nations]” and cultural differences. Diana Farrell, director of the institute, said multinationals often failed to take up offshoring because of initial costs and other hurdles.

Marsh has another story about the MGI report here. One interesting bit:

Even though the supply of young people in low-wage economies with good educational qualifications is likely to increase substantially in the next decade, demand for employing them in their own nations in jobs transferred from rich countries is likely to be muted, the report says.

On top of this, many young professionals in the 28 low-wage countries studied by the institute even though they may have university degrees lack the work-related experience and aptitude that foreign companies are looking for.

“A lot of developing countries are churning out new graduates but not giving enough thought to the practical skills they will need if they are to work for multinational companies,” says Diana Farrell, director of the institute.

The report indicates that even though many manufacturing jobs have migrated from rich countries to emerging economies over the past 10 years, due to cost-cutting pressure, the service sector is unlikely to see the same trend.

This last point is stressed in the executive summary of the McKinsey report:

At a country level, our observation is that labor markets in developed economies are experiencing and will continue to experience the trend toward offshoring as a slow, evolutionary change. It will have less impact on patterns of employment than the decline in manufacturing employment developed economies have experienced recently. In the United States, for example, the share of manufacturing jobs in overall employment fell by 11 percentage points to 21 percent in the 30 years to 2002. By contrast, the total number of service jobs in the United States that could in theory be filled remotely represents 9 percent of total current employment.

The moderate impact and generally slow pace of offshoring will not soften the blow for those individuals in developed countries who do lose their jobs as a result. However, most are college graduates, and therefore likely to be more amenable to retraining than manufacturing workers. And in the United States, growth rates in both wages and jobs in the computer and data processing services sector, where offshoring is prevalent, are higher than in the economy as a whole.

This jibes with data and analysis of the U.S. economy in recent years. In terms of employment, a glance at Bureau of Labor Statistics data shows that manufacturing has suffered far more than services (though in both cases the extent to which offshore outsourcing has been blamed has been much greater than its actual causal effect). Similarly, the figures for which service sector jobs are theoretically likely to be outsourced match up with Ashok Bardham and Cynthia Kroll's study from 2003.

Click here to access McKinsery's three-part series of reports on the issue.

Thanks to George Adair for the link.

posted by Dan at 12:12 PM | Comments (27) | Trackbacks (0)

The biggest threat to Moneyball

With all of the debate over the business logic underlying Michael Lewis' Moneyball, there was a simple underlying assumption behind the book -- baseball teams that are successful on the field are also successful at the gate.

Erik Ahlberg had a front-pager in yesterday's Wall Street Journal suggesting that this assumption doesn't necessarily hold for the Chicago White Sox:

The Chicago White Sox have the best record in baseball, and their best chance in years of ending an 88-year drought of World Series championships. But here in one of America's great sports towns, hardly anyone seems to care.

The team has tried almost everything to lure fans, including half-price tickets on Mondays, $1 hot dogs, and roving bands of cheerleaders who give free tickets to anyone who happens to be wearing a White Sox hat or jersey. Still, the Sox are averaging only 23,000 fans a game -- a tad more than half the capacity of their South Side home, U.S. Cellular Field. When the Sox recently faced another first-place team, the Los Angeles Angels, only about 20,000 showed up, despite delightful weather and a 2-for-1 ticket special.

"I've always said that the PR department should just hand out tickets to the upper deck -- they'd at least get the money for parking," Sox pitcher Mark Buehrle says. Despite his 7-1 won-loss record, the 6-foot-2-inch lefthander says he rarely gets recognized around town....

At the heart of the Sox's troubled wooing of Chicago lies a conundrum worthy of Yogi Berra: They haven't been good enough to win, and they haven't been bad enough to tap into baseball's romance with hapless losers....

as of yesterday afternoon, the Sox led the American League's Central Division by five games. They've built their 42-21 record on strong pitching, speedy base-running and late-inning comebacks. Mirroring the South Side's rough-and-tumble image, the team consists mostly of scrappy, low-priced, no-name players.

Some blame attendance problems on owner Jerry Reinsdorf, who threatened to move the team to Florida in the 1980s and was a leading hard-liner in the 1994 baseball strike, which began when the Sox happened to be in first place in their division.

Some fans say Tribune Co., which owns the Cubs and two of Chicago's biggest media outlets -- the Chicago Tribune and WGN-TV -- slights the Sox in its coverage. Mike North, a local sports-radio host, says the Sox get the most ink when there's a crime near their ballpark. Tribune sports editor Dan McGrath says, "We try to be as fair and balanced as we can."

Many people fault Comiskey Park, which one local columnist has described as having the feel of West Berlin during the Cold War. The park, which replaced the old Comiskey in 1991 and was renamed U.S. Cellular Field in 2003, is bordered by a rust-stained concrete wall, train tracks and an interstate highway. Some of Chicago's toughest housing projects loom beyond the outfield fence. There are only a few bars within walking distance....

The Cell, as the team's ballpark is often called here, was one of the last efficient but unappealing fields built before stadiums in Pittsburgh, Milwaukee and San Francisco showed how to design a park that's equal parts ballfield and tourist attraction. In response to fan complaints, the White Sox have spent $80 million over the past five years to make their stadium cozier, adding shapely awnings, tearing off the uppermost rows and, for opening day next year, switching seats from blue to forest green.

There are advantages to attending a Sox game. Bathroom lines are short and foul balls are easier to nab. But many Chicagoans prefer the cozy confines of historic Wrigley Field, with its ivy-covered outfield walls, hand-operated scoreboard and neighborhood teeming with saloons. Despite a mediocre performance most of the year, the second-place Cubs have played to 98% capacity, and nearly had a sellout April 23 when they lost to the lowly Pittsburgh Pirates in near-freezing temperatures with 25-mile-an-hour winds blasting off Lake Michigan.

"Even if we win the World Series this year, Wrigley will still sell out next year," Sox first baseman Paul Konerko says. "But I can't guarantee we'd be sold out here."

As it turns out, last night I took my father to a pretty exciting game at the Cell -- and would have to concur that the West Berlin answer makes the most sense. The park itself is actually quite nice -- it's not Wrigley, mind you, but it's fan-friendly. However, there is simply nothing (in the way of shops, restaurants, bars, etc.) surrounding the ballpark.

UPDATE: As has been pointed out in the comments, there is a double irony in all of this -- most sabermetric analysts predicted that this year's White Sox team -- built on speed and pitching -- would crash and burn.

posted by Dan at 12:54 AM | Comments (26) | Trackbacks (0)

Wednesday, June 15, 2005

It's a strange day in the blogosphere....

Matthew Yglesias agrees with John Derbyshire about the fallout of Michael Jackson's trial.

I agree with Derbyshire about the fallout from the results of Terry Schiavo autopsy.

And Ana Marie Cox agrees with Derbyshire about homosexuality -- no, just kidding on that last one.

But Wonkette does factor into the general cultural weirdness of my day by contributing "Wonkette on Wonkette" for the University of Chicago Magazine -- in which I discovered the following:

[M]y first significant paycheck came from—believe it or not—Hustler, for a story of mine they published in Barely Legal magazine. I wrote it because a friend of mine was interested in getting actual women (as opposed to men pretending to write as women) writing for them. I wrote under the pseudonym Ana Marie Dix.

After all this, hearing that Katie Holmes will convert to Scientology really doesn't faze me that much (though if you are still fazed, click here).

posted by Dan at 03:32 PM | Comments (11) | Trackbacks (2)

What to make of this corporate trend?

Tobias Buck reports in the Financial Times on the growth of an interesting corporate trend:

More than half of the world's biggest companies reveal details of their environmental and social performance, according to a KPMG survey that provides fresh evidence of business leaders' support for corporate social responsibility.

The survey, published every three years, found that CSR reports for 2005 now cover a much wider range of issues, and that many companies also provide CSR information in their annual financial reports. Fifty-two per cent of the top 250 companies in the Fortune 500 list published separate reports on corporate social responsibility, up from 45 per cent three years ago.

George Molenkamp, chairman of KPMG's sustainability services, said the growth of CSR reporting had proved the sceptics wrong. “When we started observing these issues, many people argued this was just a fashion that would disappear as soon as the economic situation got worse. But the economic situation has deteriorated, and still more and more companies are doing this.”

Click here for the actual KPMG report. Among the interesting facts:

What are the business drivers behind corporate responsibility? In their corporate responsibility reports almost 75 percent of companies state that these are economic reasons, while over 50 percent give ethical reasons and talk about integrity and values....

The typical industrial sectors with relatively high environmental impact continue to lead in reporting. At the global level (G250), more than 80 percent companies are reporting in electronics & computers, utilities, automotive and oil & gas sectors, whereas at the national level (N100), over 50 percent of companies are reporting in the utilities, mining, chemicals & synthetics, oil & gas, oil & gas and forestry, paper & pulp sectors. Most remarkable is the financial sector which shows more than a two-fold increase in reporting since 2002....

The survey analyzed how companies select the issues discussed in the reports and whether the users of the report are systematically consulted during the process. The survey revealed that report content is most commonly decided based on GRI [Global Reporting Initiative) guidelines (40 percent) with only a fifth (21 percent) mentioning stakeholder consultation. About a third of the companies (32 percent) invite stakeholder feedback on the report.

If I'm working for an NGO devoted to corporate social responsibility, I'd be very, very happy with these results.

[Why? These corporations are primarily reporting to advance their own self-interest--ed. Yes, and that's a self-perpetuating mechanism, which is much better that corporations acting against their own self-interest. This might be a case where NGOs have managed to reconstitute how corporations define their interests]

posted by Dan at 12:43 AM | Comments (2) | Trackbacks (1)

Activating the Kurdish SEP field

Continuing the theme from my last post is this story by Steve Fainaru and Anthony Shadid in the Washington Post about what's going on in Kirkuk:

Police and security units, forces led by Kurdish political parties and backed by the U.S. military, have abducted hundreds of minority Arabs and Turkmens in this intensely volatile city and spirited them to prisons in Kurdish-held northern Iraq, according to U.S. and Iraqi officials, government documents and families of the victims.

Seized off the streets of Kirkuk or in joint U.S.-Iraqi raids, the men have been transferred secretly and in violation of Iraqi law to prisons in the Kurdish cities of Irbil and Sulaymaniyah, sometimes with the knowledge of U.S. forces. The detainees, including merchants, members of tribal families and soldiers, have often remained missing for months; some have been tortured, according to released prisoners and the Kirkuk police chief.

A confidential State Department cable, obtained by The Washington Post and addressed to the White House, Pentagon and U.S. Embassy in Baghdad, said the "extra-judicial detentions" were part of a "concerted and widespread initiative" by Kurdish political parties "to exercise authority in Kirkuk in an increasingly provocative manner."

The abductions have "greatly exacerbated tensions along purely ethnic lines" and endangered U.S. credibility, the nine-page cable, dated June 5, stated. "Turkmen in Kirkuk tell us they perceive a U.S. tolerance for the practice while Arabs in Kirkuk believe Coalition Forces are directly responsible."

....Abdul Rahman Mustafa, the Kurdish governor of Kirkuk province, said the reports of abductions were "not true," although prisoners were often transferred to other provinces to relieve crowding. Jalal Jawhar, who heads the Patriotic Union of Kurdistan in Kirkuk, said some suspects were transferred to prisons in Irbil and Sulaymaniyah with the "complete cooperation" of the U.S. military.

"This is a normal procedure," Jawhar said.

Maj. Darren Blagburn, intelligence officer for the 116th Brigade Combat Team in Kirkuk, acknowledged that Arab and Turkmen detainees were surreptitiously transferred to Kurdish prisons without judicial oversight. He denied any U.S. role in the transfers and said they were necessary because of crowding in Kirkuk's jails.

Blagburn said he and other U.S. officers intervened with Kurdish leaders after discovering the practice nearly a month ago. He said he was "pretty sure" the practice had ended.

posted by Dan at 12:23 AM | Comments (5) | Trackbacks (0)

Tuesday, June 14, 2005

Activating the Saudi SEP field

If you study international relations, you quickly become very aware of the power of an SEP field:

An SEP field can be erected on, or projected around a bizarre and unbelievable scene so that the unconscious minds of the observers instantly abdicate responsibility for its existence, assert that it's "somebody else's problem", and therefore don't perceive it at all.

This Associated Press report by George Jahn makes me wonder just how many governments will be deploying an SEP field:

Saudi Arabia is defying the United States, the European Union and Australia by resisting U.N. efforts to verify that it has no nuclear assets worth inspecting, according to a confidential EU document obtained by The Associated Press on Tuesday....

While the Saudi government insists it has no interest in having nuclear arms, in the past two decades it has been linked to prewar Iraq's nuclear program and to the Pakistani nuclear black marketeer A.Q. Khan. It also has expressed interest in Pakistani missiles capable of carrying nuclear warheads, and Saudi officials reportedly discussed pursuing the nuclear option as a deterrent in the volatile Middle East.

Over the past few weeks, the United States, the European Union and Australia urged the Saudis in separate diplomatic notes to either back away from the small quantities protocol or agree to inspections.

But the EU briefing memo - made available to AP by a diplomat accredited to the agency who insisted on anonymity because he was not authorized to release it - reported Saudi unwillingness to bow to the Western pressure.

It quoted the Saudi deputy foreign affairs minister, Prince Turki bin Mohammed bin Saud al-Kabira, as telling EU officials in Riyadh that his country would be "willing to provide additional information'' to the IAEA "only if all other parties'' to the protocol did the same.

posted by Dan at 04:20 PM | Comments (14) | Trackbacks (1)

Debating grand strategy

Diplomatic History is "the sole journal devoted to the history of U.S. diplomacy, foreign relations, and national security," according to both its publisher and its editor. In a laudable attempt to generate topical scholarship, the journal has recently asked eminent historians to write about current American grand strategy from a historical perspective.

The June 2005 issue has a roundtable on "The Bush Administration’s Foreign Policy in Historical Perspective," led off by Melvyn Leffler. His thesis:

My argument is that there is more continuity than change in the policies of the Bush administration. Bush’s rhetoric and actions have deep roots in the history of American foreign policy. Understanding these roots is important because they help to illuminate the different trajectories that inhere in the American diplomatic experience. The possession of immense power and the belief in a universal mission have the potential to produce great good and great harm. Given this dynamic mix of power and ideals, there is no substitute for the exercise of good judgment.

While stressing continuities, there has also been important change. Change, however, does not constitute a revolution. The change I see constitutes a recalibration in the complicated interaction between the assessment of threat, the calculation of interest, the enunciation of values, and the mobilization of power. In the history of U.S. foreign policy, threats, interests, ideals, and power always have had a dynamic and changing relationship with one another. At times of heightened threat perception, the assertion of values mounts and subsumes careful calculation of interests. Values and ideals are asserted to help evoke public support for the mobilization of power; power, then, tempts the government to overreach far beyond what careful calculations of interest might dictate. The genius of American foreign policy is the capacity to recalibrate the relationships between these variables; the nightmare of American foreign policy is that the relationships forever remain unstable, subject, as they should be, to changing perceptions of threat.

The editors of Diplomatic History then did something really provocative -- they asked non-historians to comment on Leffler's hypothesis.

This is a longwinded way of saying you can read my take on Leffler's hypothesis by reading my rejoinder, "Values, Interests, and American Grand Strategy." If you're pressed for time, here's the gist of it:

First, it is far from clear that the dichotomy of ideas and interests is as stark as Leffler presents. Second, time is a powerful constraint on the push for value-heavy foreign policies. American grand strategies are constantly revised over time—and even during periods of heightened threat perception, the power of ideational factors in determining grand strategy wanes as uncertainty about the state of the world decreases. Third, the distinction between rhetoric and action needs to be stressed—and on the latter account, it is unclear just how value laden the Bush administration’s foreign policy really is.

Click here for a summary of the issue -- other contributors include Robert Kagan, Walter L. Hixson, Carolyn Eisenberg, Arnold A. Offner, and Anna Kasten Nelson (plus a final reply from Leffler).

More importantly, congratulations to Diplomatic History for generating a useful and policy relevant debate -- and for giving me the guilty pleasure of publishing outside my disciplinary boundaries.

posted by Dan at 11:34 AM | Comments (11) | Trackbacks (3)

Monday, June 13, 2005

Why is GM still in business?

Following up on my last post, there's an interesting question to be asked about General Motors -- why is it still in business?

If that sounds heartless, it's not meant to be -- it's because I much of the past week's commentary sounds awfully familiar. For those who can remember the very early nineties, many were asking whether GM could survive -- at one point it had filed the biggest quarterly loss in the history of American business. GM may not be in great shape now -- but it's been 15 years and they're still the largest single producer of automobiles purchased in the United States.

The Economist has a story that touches on this question:

To both its admirers and its enemies, the most awe-inspiring feature of capitalism is its ruthless efficiency. In theory, poorly performing firms are shown no mercy. They are crushed and cast aside as fitter rivals come up with superior goods and services or cheaper methods of production. In fact, the system is nothing like as ruthless as it is cracked up to be. Plenty of suppliers fail to deliver goods on time. Lots of firms are slow to adopt new technology. Many managers are hopeless at motivating their staff. And badly run firms can survive for years, even in the same industry as state-of-the-art companies.

All of this has long had economists pondering two questions. First, why are there such wide differences in the productivity of competing companies? Second, why do these differences persist, rather than being squeezed to nothing by the remorseless market? They ascribe some of the gaps to differences in the quality of capital equipment, or in workers' skills, or in the development and installation of new technology. But there has long been a suspicion that quite a lot of the discrepancy between fit and flabby firms has to do with the quality of management.

The difficulty lies in putting a number on it. If economists are to explain company performance in terms of management practices, these must somehow be quantified. But how do you measure the “quality” of the layout of a shop floor, communication with workers or incentives for employees? An intriguing new study by Nick Bloom and John Van Reenen, of the London School of Economics, and Stephen Dorgan, John Dowdy and Tom Rippin, all consultants at McKinsey, attempts to do just that, and goes on to examine why badly run firms survive.

The study is based on interviews with managers at more than 730 manufacturing companies (none of them McKinsey clients), ranging from 50 employees to 10,000, in America, Britain, France and Germany. The interviewees knew only that they were taking part in a “research” project, not that their management practices were being appraised.

You can see the paper and the executive summary by clicking here. The takeaway points from the paper:

1. Product market competition, at the national sector level, plays a key role in determining the level of management practice, with higher competition likely to increase the exit rate of badly managed firms so improving average management practices. We find little evidence for any additional “effort” effect of competition in getting managers to work ‘harder’

2. Older firms, controlling for selection effects, have poorer management practices. This is consistent with the idea that new entrants find it easier to adopt the better management practices of the era they were founded than their older counterparts.

3. Stronger labour-market regulation significantly impedes good management practice, particularly in firms with longer tenured employees. This suggests that regulation impedes the adoption of new management practices.

Reason #1 would explain GM's persistence -- global competition has increased in the auto sector, but it's still not a model of perfect competition.

[Hey, wasn't this done by management consultants?--ed. In part, yes, but their methodology seems sound.]

posted by Dan at 04:52 PM | Comments (21) | Trackbacks (1)

Sunday, June 12, 2005

Who wins from GM's misfortunes

The announcement by General Motors that it planned to 25,000 or more assembly-line jobs over the next few years would seem to advance the hypothesis that the United States suffers from expanding international trade.

Gregg Easterbrook does a nice job of pointing out why that's not true in the New York Times today:

The announcement last week that General Motors would cut 25,000 jobs and close several factories is yet another blow to the Goliath of automakers and its workers. But only if you work for G.M. is the company's decline a worry. For consumers, the decline can be seen as a symbol of healthy competition....

In the 1950's, General Motors had 46 percent of the American auto market, Ford and Chrysler 44 percent, and everyone else combined just 10 percent. Today, G.M. sells 27 percent of the cars bought in America, Ford and DaimlerChrysler combined sell 32 percent, and other automakers add up to 41 percent.

This means that the international competition, once trivial compared with General Motors, is now bigger than General Motors. Intense competition within the auto industry has resulted in steady improvements in the workmanship, performance, safety and design of cars, while holding down prices. That's the ideal outcome for consumers but not for General Motors, which, as the largest automaker, had the most to lose....

General Motors also declined because of poor quality. But in this spring's influential J. D. Power & Associates automotive workmanship rankings, General Motors rose to No. 2, trailing only Toyota for overall quality. The Buick and Cadillac divisions ranked ahead of Mercedes.

Yet even if a new generation is drawn to G.M.'s products, recovery of its former position seems unlikely. Other brands have improved, too: J. D. Power estimates that for the auto industry overall, manufacturing defects declined 32 percent since 1998 alone.

There is also great pressure to hold prices down, which is bad for companies like G.M. with vast amounts of overhead. According to the consumer price index, new cars and light trucks today cost less in real-dollar terms than in 1982, despite having air bags, antilock brakes, CD players, power windows and other features either unavailable or considered luxury options back then.

This means that during the very period that General Motors has declined, American car buyers have become better off. Competition can have the effect of "creative destruction," in the economist Joseph Schumpeter's famous term, harming workers in some places, while everyone else comes out ahead.

[Yeah, but life is still bad for workers in the auto indistry, right?--ed.] Well, that depends on where you live. Easterbrook points out some other employment trends in the automobile sector beyond General Motors:

[T]he same week that G.M.'s cut made the front pages, DaimlerChrysler announced it would invest $40 billion in North American operations over the next five years, including building a new assembly plant in Illinois and expanding factories in Ohio and Michigan.

According to a study by the Association of International Automobile Manufacturers, non-Detroit automakers have in the last two years created 55,000 new factory jobs in the United States. Today just under 50 percent of the "foreign" cars sold in America are made here, with BMW, Honda, Nissan, Toyota and others operating large factories in Alabama, California, Indiana, Kentucky, Mississippi, Ohio and Tennessee. About 800,000 passenger vehicles are expected to be manufactured this year in Alabama, all for global brands; cars have become to the state's economy what cotton once was.

AIAM's press release about that report also mentions, "When the number of jobs created by the new American automakers is combined with related new vehicle dealership employment, this sector of the industry has generated 1.8 million jobs in the U.S. economy."

posted by Dan at 03:00 PM | Comments (29) | Trackbacks (0)