Developing space, profitably

It's pretty exciting watching the emerging space industry literally get off the ground (MITTechReview):

The Explorers Club event provided a snapshot of what may be a new industry in the making. In an era when NASA no longer operates its own spacecraft and government funding for unmanned missions is tight, a host of startups—most funded by space enthusiasts with very deep pockets—have stepped up in hope of filling the gap. In the past few years, several have proved themselves. Elon Musk’s SpaceX, for example, delivers cargo to the International Space Station for NASA. Both Richard Branson’s Virgin Galactic and rocket-plane builder XCOR Aerospace plan to perform demonstrations this year that will help catapult commercial spaceflight from the fringe into the mainstream.

The advancements being made by space companies could matter to more than the few who can afford tickets to space. SpaceX has already shaken incumbents in the $190 billion satellite launch industry by offering cheaper rides into space for communications, mapping, and research satellites.

However, space tourism also looks set to become significantly cheaper. “People don’t have to actually go up for it to impact them,” says David Mindell, an MIT professor of aeronautics and astronautics and a specialist in the history of engineering. “At $200,000 you’ll have a lot more ‘space people’ running around, and over time that could have a big impact.” One direct result, says Mindell, may be increased public support for human spaceflight, especially “when everyone knows someone who’s been into space.”

US economy becoming less entrepreneurial, more businesses being destroyed than created

Not good (WashingtonPost).

If the decline persists, "it implies a continuation of slow growth for the indefinite future." This lack of economic dynamism, particularly the steep drop since 2006, may be one reason why our current recovery has felt like much less than a recovery. As Matt O'Brien noted on Wonkblog last week, annual job growth rates have stubbornly refused to budge above 2 percent for the duration of the recovery.

The authors of the Brookings study dug beyond the national numbers to look at the change in new firms at the state and metro levels and found that they generally mirrored the national trends.

The carbs that divide the north and south in China

I'm a bit skeptical but apparently people in the north and south of China have different personality traits driven by the staple carbs they have historically cultivated (WSJ):

A study published Friday by a group of psychologists in the journal Science finds that China’s noodle-slurping northerners are more individualistic, show more “analytic thought” and divorce more frequently. By contrast, the authors write, rice-eating southerners show more hallmarks traditionally associated with East Asian culture, including more “holistic thought” and lower divorce rates.

The reason? Cultivating rice, the authors say, is a lot harder. Picture a rice paddy, its delicate seedlings tucked in a bed of water. They require careful tending and many hours of labor—by some estimates, twice as much as wheat—as well as reliance on irrigation systems that require neighborly cooperation. As the authors write, for southerners growing rice, “strict self-reliance might have meant starvation.”

A bit of warranted skepticism from Sarah Hoyt guest blogging at Instapundit: "’d need to see a lot more studies done before I thought it was even a major influence. Also, culture is not genetic. Yes, certain propensities might be genetic, but the human individual can still shape himself to a great degree."

A randomized study comparing cash and food transfers

Interesting study (SSRN via Chris Blattman):

Drawing on data collected in eastern Niger, we find that households randomized to receive a food basket experienced larger, positive impacts on measures of food consumption and diet quality than those receiving the cash transfer. Receiving food also reduced the use of a number of coping strategies. These differences held both at the height of the lean season and after the harvest. However, households receiving cash spent more money on agricultural inputs. Less than 5 percent of food was sold or exchanged for other goods. Food and cash were delivered with the same degree of frequency and timeliness, but the food transfers cost 15 percent more to implement.

Using the word "so" undermines your credibility

According to Hunter Thurman (FastCompany):

Beginning your sentence with “so” orients your message and subconsciously alerts your audience that what you’re about to say is different than what you’ve been talking about up until this point.

Why we should fear China's economic implosion...

What you should know about entrusted loans (WSJ) and the potential slowdown to commodity purchases globally (Seattle Intelligencer) but also why we needn't fear (WSJ).

Humanitarians, for a price

The cynical side of me wonders how this is any different than normal. But it does seem at least considerably cheaper and more innovative than the way things have been done in the past (NPR):

When a famine swept through Somalia in 2011, it was hard for aid workers to get food distributed. Most of the country was too dangerous for non-Somalis to do the work. Instead, the United Nations looked at satellite images of camps filling up with tents and dispatched locals to deliver the food. A local industry around distributing aid and sheltering the poor sprung up.

On today's show, we visit a country with almost no government, but a lot of entrepreneurs. And we see what happens when locals decide to make money by becoming humanitarians for profit.

Nobel Prize winning economist Gary Becker (1930-2014)

One of the greatest economists of the last century, passed away today. Sad (WashingtonPost via Instapundit). More from Greg Mankiw.

Update: More from Freakonomics. Also ASI.

Why inequality isn't a problem but a sign of progress

With, I think, the qualifier of a relatively free market governed by rule of law and property rights (Telegraph via Instapundit):

almost all inequality in developed economies does not arise by the wealth of almost anyone else declining. (That does happen in less socially and politically developed societies, in which wealth arises from political control of resources or access to corruption.) In modern developed economies inequality arises when someone – a Gates or Zuckerberg or Cowell or Ronaldo or Rowling or just an ordinary businessman or professional – finds some way (some skill or invention or investment) that adds considerable value, and that value is not then shared equally.

In our modern globalised economy, the gains from a new idea or skill can now be leveraged over enormously more people. Instead of your new and better mousetrap being sold just to the fair folk of Wolverhampton, the whole world beats a path to your door. In such a world, improved added value creates large inequalities. But that is precisely because the added value of a Windows or Facebook or awesome evening's football skill benefits so enormously many people – even if each only benefits a little compared with the huge aggregate benefits benefits taken by the value-creator.

Average U.S. household spends more on federal regulations than for health care, food or transportation

Troubling - but to be fair, this presumes that there are zero benefits to regulation as well (WashingtonExaminer via Instapundit):

Crews estimates the annual cost of compliance with the record number of new federal rules and regulations issued under President Obama at $1.863 trillion.

That works out to a $14,974 “hidden tax” every year for the average U.S. household. That’s 23 percent of the $65,596 annual average household income in America.

Why does 1% of history have 99% of the wealth?

A reasonable question to ask (YouTube via Instapundit):

Entrepreneurs power the best economies

Should this be surprising? (Telegraph)

Indeed, entrepreneurialism is strongest in countries that share the English common law tradition – five times higher than those with a French legal origin. There is also a strong correlation between high rates of entrepreneurship in a country and low taxes. Equally, a low regulatory burden correlates strongly with high rates of entrepreneurship. On the other hand, those government and supranational programmes that politicians love to announce to encourage entrepreneurship – such as the EU’s Lisbon Strategy – tend to fail.

The lesson is clear: to encourage innovation and entrepreneurialism, governments should do as little as possible, beyond cutting taxes and regulations.

Longtime US politician "discovers the profit motive"

Among other things. Kind of a neat story (WashingtonPost):

Bonior said if he had the power, he would lighten up on pesky regulations.

“It took us a ridiculous amount of time to get our permits. I understand regulations and . . . the necessity for it. But we lost six months of business because of that. It’s very frustrating.”

Bridging the gap between economists and ecologists

Written by an ecologist turned economics journalist: And why we're not running out - (WSJ):

In 1972, the ecologist Paul Ehrlich of Stanford University came up with a simple formula called IPAT, which stated that the impact of humankind was equal to population multiplied by affluence multiplied again by technology. In other words, the damage done to Earth increases the more people there are, the richer they get and the more technology they have.

Many ecologists still subscribe to this doctrine, which has attained the status of holy writ in ecology. But the past 40 years haven't been kind to it. In many respects, greater affluence and new technology have led to less human impact on the planet, not more. Richer people with new technologies tend not to collect firewood and bushmeat from natural forests; instead, they use electricity and farmed chicken—both of which need much less land. In 2006, Mr. Ausubel calculated that no country with a GDP per head greater than $4,600 has a falling stock of forest (in density as well as in acreage).

Haiti is 98% deforested and literally brown on satellite images, compared with its green, well-forested neighbor, the Dominican Republic. The difference stems from Haiti's poverty, which causes it to rely on charcoal for domestic and industrial energy, whereas the Dominican Republic is wealthy enough to use fossil fuels, subsidizing propane gas for cooking fuel specifically so that people won't cut down forests.

Part of the problem is that the word "consumption" means different things to the two tribes. Ecologists use it to mean "the act of using up a resource"; economists mean "the purchase of goods and services by the public" (both definitions taken from the Oxford dictionary). [...] human activities actually increase the production of green vegetation in natural ecosystems. Fertilizer taken up by crops is carried into forests and rivers by wild birds and animals, where it boosts yields of wild vegetation too (sometimes too much, causing algal blooms in water). In places like the Nile delta, wild ecosystems are more productive than they would be without human intervention, despite the fact that much of the land is used for growing human food. If I could have one wish for the Earth's environment, it would be to bring together the two tribes—to convene a grand powwow of ecologists and economists. I would pose them this simple question and not let them leave the room until they had answered it: How can innovation improve the environment?

Not a coincidence?

Heh. Chris Blattman notes the overlap between the CIA's SOP for civilian operatives on sabotaging enemies with bureaucracy and the UN's SOPs (Chris Blattman).

How culture does matter

Heh. Communication patterns around the world (BusinessInsider via SwissMiss).

A good discussion on startup culture

Starting with the advice to one startup from Peter Thiel: Don't f*** up the culture (HN).

Psychological traits of successful startup founders

Makes sense (Stanford, PDF via DavidJaxon):

Personal Exceptionalism. Definition: A macro sense that you are in the top of your cohort, your work is snowflake-special, or that you are destined to have experiences well outside the bounds of “normal”; not to be confused with arrogance or high self-esteem. Benefit: Resilience, stamina, charisma. Deadly risk: Assuming macro-exceptionalism means micro exceptionalism; brittleness.

Dichotemous Thinking. Definition: Being extremely judgmental of people, experiences, things; highly opinionated at the extremes; sees black and white, little grey. Benefit: Achieves excellence frequently. Deadly risk: Perfectionism.

Correct Overgeneralization. Definition: Making universal judgments from limited observations and being right a lot of the time. Benefit: Saves time. Deadly risk: Addiction to instinct and indifference to data.

Blank Canvas Thinking. Definition: Sees own life as a blank canvas, not a paint-by-numbers. Benefit: No sense of coloring outside the lines, creates surprises. Deadly risk: “Ars gratis artis”, failure to launch, failure to scale.

Schumpeterianism. Definition: Sees creative destruction as natural, necessary, and as their vocation. Benefit: Fearlessness, tolerance for destruction and pain. Deadly risk: Heartless ambition, alienation.

Related: 35 habits of highly productive people (with a somewhat dizzying infographic). (Entrepreneur)

In blind test, soloists prefer new violins over old

In a way it's sad (as an erstwhile violinist), it's kind of romantic to think that the history some of these old violins have seen, resonate in the music they carry. On the other hand, it's massively democratizing (phys.org).

In praise of inconvenience?

Services that provide convenience or rich experiences give people a reason to pay more for products or services. But would you pay more just because it's local? Posts like this from the swissmiss strike me as silly. Not only does she infer that ordering from services like Amazon is something to "feel guilty" about, she bemoans the convenience its new Amazon Dash adds.

Certainly it's her right and prerogative to support local businesses - but all things being equal, isn't that rewarding them for their lack of efficiency, their lack of differentiation and an admission of expectations that they can't actual provide anything else of value for their customers? What's next? Trashing automated looms because they destroy jobs? (Wikipedia)

While I celebrate her freedom to choose, I can't help but wonder if she would do the same for other consumers when it comes to stores like Walmart.