Offshoring: The Next Industrial Revolution?

Foreign Affairs is the preeminent political science journal. Brad DeLong is pointing his students to an article there:

Foreign Affairs - Offshoring: The Next Industrial Revolution? - Alan S. Blinder

...Although there are no reliable national data, fragmentary studies indicate that well under a million service-sector jobs in the United States have been lost to offshoring to date. (A million seems impressive, but in the gigantic and rapidly churning U.S. labor market, a million jobs is less than two weeks' worth of normal gross job losses.) However, constant improvements in technology and global communications virtually guarantee that the future will bring much more offshoring of 'impersonal services' -- that is, services that can be delivered electronically over long distances with little or no degradation in quality.

That said, we should not view the coming wave of offshoring as an impending catastrophe. Nor should we try to stop it. The normal gains from trade mean that the world as a whole cannot lose from increases in productivity, and the United States and other industrial countries have not only weathered but also benefited from comparable changes in the past. But in order to do so again, the governments and societies of the developed world must face up to the massive, complex, and multifaceted challenges that offshoring will bring. National data systems, trade policies, educational systems, social welfare programs, and politics all must adapt to new realities. Unfortunately, none of this is happening now.

This theme has emerged in a few places recently. The direct impact of offshoring has been small to date, but the future impacts appear to be inevitably enormous. Even today the indirect impacts have been large -- computer science departments in the US are emptying out. Students are bailing not because of the current job situation, but rather because they correctly evaluate the future job situation. Unfortunately it's not clear what the better options are. Accounting? No. Law? No. Medicine? No. Industrial ontology? Uhh, no. Engineering? Surely you jest. Fast food clerk? No -- it's being outsourced and robotocized. Butler? Ignore the search results, look at the AdWords.

I'd love to read the rest of the article. Alas, it's payware. I'll look for postings that quote more extensively and link to what I find.

PS. It's not true that the world as a whole can't lose. That's only true if you assume continous functions. If the US or Europe convulses in widespread social disruption, then the world as a whole does lose. It's like flying a big jet. You win if you change your flight plans to a better destination, but if the required maneuver is too challenging the wings fall off.

Dan Brown is ravished by Crooked Timber

Crooked Timber doesn't like Dan Brown's 'Angels and Demons'. I'm sure Brown is quivering in his hot tub, but the comments are a lot of fun. I've not read any of this stuff, so I've no other opinion. A fun read. (BTW, Cryptonomicon is a marvelous book, but the first 100 pages are hard going.)

Great DeLong discussion on economic policy

DeLong is discussing economic policy with Greg Mankiw, who chairs Bush's council of economic advisors. Here's how he summarizes Mankiw's response:

Brad DeLong's Semi-Daily Journal: National Saving

... To summarize: Greg wants to: (i) raise taxes, (ii) cut government spending, and so (iii) balance the budget, (iv) shift the tax code to be yet more friendly toward savings, and (v) reform ERISA so that employer-sponsored defined-contribution pension plans are the default option rather than requiring opt-in. I would buy into all four of those, with a footnote about how (iv) needs to be implemented in a way that does not reduce progressivity and make America a yet more unequal place.

In fact Mankiw's response is less direct than this. He leaves open the option of massive cuts in government services such as social security and medicare. DeLong is translating Mankiw's statement into something that's reality based.

The comments are excellent. One comment notes that a consumption tax is a great way to punish those who save, especially those who save in tax deferred accounts. It makes a mockery of the 401K for example. Read the comments.

DeLong wants a progressive tax code, presumably Mankiw doesn't care about that as much ...

Zing!

Wow. Two references to tobacco in two zingers on DeLay, Frist and Boehner. Not bad as vitriol goes.

Political Crackups

... One cannot regret the fall of Tom DeLay, who combined a mastery of politics with a complete indifference to its purpose. Really, what did this man seek public office for? It's said that he was inspired by his conviction that the Environmental Protection Agency is like the Gestapo, but I suspect this theory is too kind. Unlike Newt Gingrich, who bristled with policy ideas, DeLay never seemed to care about anything beyond counting votes and cultivating links to the moneybags on K Street.

Still, in the absence of a functioning administration and a powerful House boss, nobody is running the asylum. Senate Majority Leader Bill Frist, a physician who "diagnosed" Terri Schiavo by watching her on video, is as charismatic as a stethoscope and as principled as a cigarette salesman. I doubt many Americans could even recognize DeLay's successor as House majority leader, John Boehner, let alone say what he stands for. His most memorable moment came in 1995, when he chose the House floor as a suitable venue for distributing checks from tobacco lobbyists.

Can dogs get gluten-sensitive enteropathy?

Our husky-lab-? mongrel has had liquid stools since she came home at about 10 weeks. After 8 weeks of the scattershot therapies typical of veterinary practice we eliminated Gluten. A week later she was better.

Irish Setters get gluten-sensitive enteropathy but it's supposed to be a relatively mild condition compared to human Celiac disease and it isn't usually diagnosed until about age 6 months. So maybe it's just something that looks like GSE.

Fortunately losing wheat is not a big deal for a carnivore ...

I got my settlement check: Microsoft-Minnesota

It's little compensation for suffering beneath the Microsoft Monopoly, but my Microsoft Minnesota Class Action Settlement check came in. I'd submitted the receipt for my G5 iMac and I received $106 back [1]. I'll put it towards Aperture 1.1 if Apple is able to get that thing working, otherwise Elements 4.0.

At least we got cash, some states settled for Microsoft software vouchers. That would be an insult of the first order.

[1] The theory is that Microsoft's illegally earned monopoly affected the cost of all software and hardware, not just their own products. That's what monopolies do.

Microsoft must perish: OLE embedding

I've been much too kind to Microsoft.

Today I needed to paste some portions of an Excel spreadsheet into a Word document. I'm using Office 2003, latest SPs and fixes, reasonably modern laptop with a GB or so of RAM.

I didn't like the look of the default paste (HTML), so I tried embedding as OLE. It's been years since I've tried that. Excel OLE embedding in Word has always been a disaster (PowerPoint handles OLE embedding quite a bit better). What the heck, maybe 3 years of patches has helped.

It was awful. Truly awful. It sort of worked once, then my machine went on sabbatical.

I tried paste as RTF. Still looked bad.

Ok, I'll try Word's old metafile vector format. Word sat and thought for a while. Then it complained it couldn't locate my network printer.

I pasted as a bitmap.

A bitmap.

That's so retro.

Really, the kindest thing would be to put Microsoft out of its misery. It's a festering sore.

PS. The word on the street is that Win2K works quite well as an OS X Boot Camp option, and you don't have to pay XP fees. Most of us have an old copy of Win2K lying about, and of course for those who feel they've already paid Microsoft in blood for their monopoly there is no Win2K activation requirement ... For running the odd Microsoft app Win2K is just fine ...

Cheap havoc: bio-weapons via eBay

In the fall of 2001 I wrote about the "falling cost of havoc". As you'll see from clicking on the above link, the phrase has not caught on.

Slashdot has a thread today about the falling cost of bio-weaponry. This is what 9/11 was all about. Terrorism, hatred, fanaticism -- all old news. Primate stuff.

Cheap havoc -- that's new. That's big. That's why we now have an undeclared 'surveillance society'. That's why 'Big Brother' is here to stay -- as long as we have an industrial state.

Incidentally, what would I have done about this sort of thing that the GOP (the one party ruler of America) hasn't done? Consider the inescapable NSA watch lists. If we can't avoid watch lists, we need to manage the consequences. We need epidemiologists to evalute predictive value of watch list criteria. We need review boards to look for injury due to false positives. We need compensation mechanisms to help people and families who's lives are damaged by false conviction without trial. We need penalties for misuse -- severe enough to make government be very careful. We need to ensure that the powerful are as vulnerable and as "watched" as the weak.

There are many things we as a people can do to make 'life in a bubble' less miserable than it has to be. It's not the freedom we used to know, but it could be a good life.

Bush, Cheney and their ilk are not doing these things -- and we as a people are not discussing the fundamental issues. The blame for where we are going falls upon them, upon their political supporters, and upon those who remain silent.

Anthropologist needed: Why Orkut in Brazil but nowhere else?

Google seems to take a statistical approach to product development. They try a lot of things and see what sticks.

In the US the social networking application Orkut failed, but the rival myspace.com is popular. (Everything I read about myspace.com suggests it's about adolescent display and mating, so why isn't that explicitly discussed? No, I've never visited it ...).

In Brazil, however, Orkut is huge. There are 12 million regular net users in Brazil, and 11 million are said to be Orkut users:

A Web Site Born in U.S. Finds Fans in Brazil - New York Times

... In general, though, Orkut fanatics seem undisturbed by illegal activity on the site, which most of those interviewed said they had never come across personally. They were more interested in finding long-lost classmates and friends, one of the site's most lauded abilities. Schools, workplaces, even residential streets have "communities" joined by people who have studied, worked or lived there.

And everyone has stories of romance foiled by a telltale posting. Ms. Makray once found the page of a man who had flirted with her in a club. "He hadn't told me that he had children or that he was married," she said. "I discovered it on Orkut."

Erika Laun, 23, checks Orkut every day from work to keep an eye on her boyfriend. "When we were first going out," she said, "a girl who liked him was always sending messages and making fun of the messages that I sent him." The rival's sister, whom he didn't even know, helped out, sending messages like "Hey big boy, love you, 1,000 kisses."

"I was really angry," Ms. Laun said.

No one quite knows why Orkut caught on among Brazilians and not Americans, although the fact that it is an invitation-only network might explain why it exploded in Brazil. In a 2005 interview with the newspaper Folha de São Paulo, Mr. Buyukkokten said it might be because Brazilians were "a friendly people," and perhaps because some of his own friends, among the first to join the network, had Brazilian friends.

Fascinating. Why did Jerry Lewis become huge in France, even as he disappeared in the US? Why are some movies flops in the US, and winners abroad? Is it all culture, or is some of this simply chance -- that Orkut reached a 'critical mass'/'tipping point' in Brazil that it never reached in the US? (Social networking applications have a non-linear value, just like email. Their value is a power function of users, not a linear function. So they can be worthless below a certain user threshhold, then quickly become very valuable.)

A great sociology paper should lie here, but the topic probably crosses the boundary between anthropology, sociology and economics. Hard to publish.

It's noteworthy that the examples given in the article are all about mating ...

Drug reps and their whores - the commercialization of medicine

A successful drug rep ("pharmaceutical sales representative") will commonly earn over $150,000 a year. They know which physicians prescribe what, and they adjust their targeting appropriately. The AAFP attempted to block an organization that fights the corruption of physicians from appearing at the annual scientific assembly (this brain-dead decision was reversed when the membership began to howl). The most common strategy to corruption is to start small (pens, sponsored books) and then gradually ramp up -- the slippery slope is shallow at first.

The Atlantic is doing well these days; this article on the buying of physicians and the work of the drug rep is among the best of a good lot. Carl Elliott is a U of MN professor who lectures medical students about reps; here he writes sympathetically about both the drug reps and their physician partners. He makes a convincing case that both physicians and drug reps are increasingly similar cogs in the market machine of modern medicine.

Their are some simplifications. He writes as though most physicians believe they are not influenced by drug reps. I suspect many are more realistic, and know they've sold a bit of their soul. I'd like to read a study that asked three questions: "Do you accept gifts and samples from drug reps?" "Are your colleagues influenced by drug rep gifts?", and "Are you influenced by drug rep gifts and visits?". I think the most common answer would be yes, yes, no and next would be yes, yes, yes.

Drug reps know which physicians prescribe boringly, following the Medical Letter party line. They're polite to those physicians, but they don't spend a lot of time on them. They favor those who like the fashionable trends, and they leverage direct-to-patient marketing to make being fashionable ever more appealing. Back before they had that data, when I was in practice, they already knew not to bother with me and my partners -- but we were space aliens. Most of our colleagues were more welcoming, but I think they knew they were supping with a pleasant devil.

It's a fascinating tale of how commerce works, and how good people go sort-of-bad. I work in industry now, and I don't believe I'm incorruptible either. It's a tricky world, no doubt, and sales folks are a lot of fun ....

Update 4/16/06: The study I wished for has been done.

A 2001 study of medical residents found that 84 percent thought that their colleagues were influenced by gifts from pharmaceutical companies, but only 16 percent thought that they were similarly influenced.

The above quote came from a behavioral economics paper. I'd like to see if the percentage who realize they're influenced by gifts rises with years of practice or if it's a persistent result of a fixed personality trait (ie. insight).

When government goes mad: Cheney

Emphases mine. The usual liars will continue to tell the usual lies, but basically Cheney, with Bush's support, used fraudulent data to justify the invasion of Iraq, then used the powers of government to attack a critic of his fraud (emphase mine).

A 'Concerted Effort' to Discredit Bush Critic

... Fitzgerald reported for the first time this week that "multiple officials in the White House"-- not only Libby and White House Deputy Chief of Staff Karl Rove, who have previously been identified -- discussed Plame's CIA employment with reporters before and after publication of her name on July 14, 2003, in a column by Robert D. Novak. Fitzgerald said the grand jury has collected so much testimony and so many documents that "it is hard to conceive of what evidence there could be that would disprove the existence of White House efforts to 'punish' Wilson".

The White House went off the rails some time ago.

A conspiracy for fantasy: Moussaoui

Dahlia Lithwick has the perfect summary of the Moussaoui "trial":

When You Wish Upon a Scar By Dahlia Lithwick

... This was what negotiators describe as a Pareto-optimal result: a win-win, in which Moussaoui, the government, and Americans craving vindication all got what they wanted. In the end, the verdict's only casualties are a few impossible-to-explain facts. Facts that should have added up to just this: We don't execute people for fanciful happenings that may have followed from imaginary conversations.

Nobody will dispute that Moussaoui would have happily done anything at all to help the 9/11 plot succeed. But he did nothing to help it succeed because, as everyone but Moussaoui now agrees, he was flaky, wifty, and weird. It's not a capital crime to be flaky, wifty, or weird. Nor is it a capital crime to wish you were a hero instead of a dud.

Yet because of Moussaoui's false testimony, the government's nutty conspiracy theory, and the nation's need for closure, Moussaoui's name will be in the history books and the law books for all time; inextricably linked with 9/11, just as it has always been in his dreams. And perhaps we will all sleep better for believing that if Moussaoui had come forward and told what little he knew, we could have stopped those terrible attacks, just as it happens in our own dreams.

Richard Reid, that sad retarded schizophrenic, was to have been the copilot with Moussaoui. It's the perfect note of mocking hilarity for the musical that will be written about the trial and execution.

Our national state is now passing pathetic.

Saletan takes the prayer study seriously

I've blogged previously on the recent prayer study. Turns out someone else is considering the results seriously: The Deity in the Data By William Saletan.

Saletan is not my favorite writer, but credit where credit is due. The article is uneven; he starts out as though the study showed prayer had no effect. In fact, of course, the study seemed to show that prayer was harmful. He finally touches on the theological implications of toxic prayer, so he gets full credit.

I've been wondering how the Satanists and religious fundamentalists would spin this - were they to take it seriously. I suspect neither would have any trouble. For the fundamentalists this is very biblical -- "don''t measure God" (though wouldn't they expect the scientists to suffer rather than the patients?). The Satanists would suggest another deity should have been consulted.

It's a bigger challenge for believers in a benevolent omnipotent God. I'd love to know what Ratzinger is thinking ... Probably that the results are spurious (which is also what I believe, and I'm sticking to that story ...)

The 13 most corrupt members of congress

Two democrats (Waters and Jefferson), 11 republicans including Bill Frist.

It's good to have a handy list.

The odd history of recovered artifacts: The Judas gospel

An early christian text called the 'gospel of Judas' has resurfaced. It's historically and theologically interesting, but the story of its recovery reminds me of famous novels that just barely get published. I always wonder how much is almost found, but at the last moment is lost forever.

'Gospel of Judas' Surfaces After 1,700 Years - New York Times:

... The entire 66-page codex also contains a text titled James (also known as First Apocalypse of James), a letter by Peter and a text of what scholars are provisionally calling Book of Allogenes.

Discovered in the 1970's in a cavern near El Minya, Egypt, the document circulated for years among antiquities dealers in Egypt, then Europe and finally in the United States. It moldered in a safe-deposit box at a bank in Hicksville, N. Y., for 16 years before being bought in 2000 by a Zurich dealer, Frieda Nussberger-Tchacos. The manuscript was given the name Codex Tchacos.

When attempts to resell the codex failed, Ms. Nussberger-Tchacos turned it over to the Maecenas Foundation for conservation and translation.

Mr. Robinson said that an Egyptian antiquities dealer offered to sell him the document in 1983 for $3 million, but that he could not raise the money. He criticized the scholars now associated with the project, some of whom are his former students, because he said they violated an agreement made years ago by Coptic scholars that new discoveries should be made accessible to all qualified scholars.

The manuscript will ultimately be returned to Egypt, where it was discovered, and housed in the Coptic Museum in Cairo.