Repurpose

The wealth that was lost in the crash of 2008 never actually existed. That's why the crash fundamentally doesn't matter.

The U.S. isn't recovering from the bust, it's recovering from the boom. Fear-mongers and ponzi-schemers joined forces to distract a nation for a debilitating decade.

Remember the Black Friday financial panic of 1869? Happened the same year the Transcontinental Railroad was completed. Which do we remember? There's a reason.

There is no Left. There is no Right. There's backward, and there's forward. That's it.

There is not a single institution more than a decade old in the United States of America that is not ready to be repurposed.

Go.

The Real Story

If you're interested in education, Pakistan, entrepreneurship, or just the experience of being an engaged, compassionate human being, do yourself a favor and listen to Seema Aziz describe how she built one of the most successful textile companies in Pakistan ...

[direct link to MP3]

... at the same time that she built an organization that today educates one out of every 200 of Pakistan's children:



[direct link to MP3]

When you're done, check out Beacon House and The Citizen's Foundation and learn more about their work, and their founders.

This is the real story.

Summary of Every Paul Krugman Column Ever

1. Republicans are idiots.
2. I told you so.

It's Groundhog Day for Oil Fears

On Wednesday the New York Times published a lengthy piece by Clifford Krauss on the topic of U.S. energy independence titled "Can We Do Without the Middle East?" Here's how it starts:

Imagine a foreign policy version of the movie “Groundhog Day,” with Bill Murray playing the president of the United States. The alarm clock rings. Political mayhem is again shaking the Middle East, crude oil and gasoline prices are climbing, and an economic recovery is under threat...

In a Twitter post last month I also employed a Groundhog Day reference in the context of oil price volatility, but somewhat differently:

With oil prices heading up again, oil alarmists are digging out all their old, stale, material. Groundhog ... Day.

 Here's the message I just sent to Krauss:

I enjoyed your lengthy piece on oil independence on Wednesday. Your answers to the question posed in the title were current and interesting.   

I did, however, find the framing of the article truly disconcerting. The various pronouncements you cited regarding the need for "energy independence" prove only that a strong and diverse political constituency exists in the U.S. to support the proposition that reliance on foreign oil is a national security threat that requires urgent action; those pronouncements do not, however, prove that the proposition is true. (You also mention balance of payments. Parallel arguments hold for other imports as well--including other non-renewables whose price trajectories have closely tracked those of oil since the 1980s. So that line of reasoning doesn't lead to proof either.)  

The real Groundhog Day here relates to the overwhelming tendency of politicians and journalists alike to take for granted the oil insecurity proposition itself. A rare exception was this recent piece in The Boston Globe. I have written on this topic as well (links below).  

The significant recent developments in the Middle East call for a reassessment of old assumptions and a questioning of reasoning-by-force-of-habit. The topic of U.S. energy insecurity related to oil imports is certainly a case in point.  

There is one "o" word that should come to mind when thinking of the Middle East in 2011: It's not "oil", it's "opportunity." Time for U.S. journalists, political leaders, and policymakers alike to wake up to that fact.

If you'd like elaboration, listen the talk that Fadi Ghadour gave at the Skoll World Forum two days ago (link here, scroll to "Closing Plenary," starts at 59:00).

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Issues in Science and Technology Policy (National Academies of Sciences), Summer 2006
"The Myth of Energy Insecurity"

Boston Globe, January 23, 2007
"Let's call an end to oil alarmism"

The American Interest, May-June 2007 
"The Irrelevance of the Middle East"

Development in Three ... Words

Over the weekend, @bill_easterly very generously posted to this to the @AidWatch blog, with the title "Development in 3 Sentences":

I liked this formulation from the blog The Coming Prosperity, posted today as a link on Twitter:

"If solutions are known, need $$. If solutions are knowable, need evaluations. If solutions are evolving, need entrepreneurs."

In response, @calestous, a colleague of mine at the Kennedy School's Belfer Center (where I'm an external associate), wrote this:

 @auerswald @bill_easterly Problems and solutions are always evolving.

Put these two together, and what do you get?

In my view, you get development in three words: Entrepreneurship, technology, and innovation.

I am not claiming this is original. In fact, it is downright old school. In my next three posts I'm going to look into each of these, one at a time, and how they add up to "development." But before I do, let me just note again how strong the consensus among economists is around this general framing. In the last century alone (much written of relevance before that!): Joseph Schumpeter, A.O. Hirschman, F.A. Hayek, Robert Solow, Karl Shell, Jane Jacobs, Mancur Olson, Paul Romer, to name but a few. All have articulated variants of this theme. Even apparent intellectual adversaries @jeffdsachs and Easterly agree on this. The Jeffrey Sachs version:

I believe that the single most important reason why prosperity spread, and why it continues to spread, is the transmission of technologies and the ideas underlying them. (The End of Poverty, p. 41)

And Easterly:

Historically, industrialization arose in initially poor countries which have since become rich, with the common theme of a heavy reliance on both domestic and international market opportunities and decentralized private entrepreneurship.

Good that we can all agree on something.

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Note: Thanks to @m_clem for previous shout out about the same three sentences (above). They sum up core point of The Coming Prosperity.

The Enemy of My Enemy is ... My Next Enemy

1941-1945: To oppose the Nazis, the United States allied with the Soviets. (ref. ... the Cold War)

1979-1989: To oppose the Soviets, the United States supported and funded the Mujahideen. (ref. ... emergence of al-Qaeda, 9/11 attacks)

ca. 1986: To oppose the Sandanistas, the United States supported and funded Manuel Noriega. (ref. ... U.S. invasion of Panama.)

1980-1988: To oppose the Islamic Republic of Iran, the United States supported and funded Saddam Hussein. (ref. ... Iraq Wars I and II)

1981-2011: To oppose the Muslim Brotherhood, counter "Islamist" movements elsewhere in the Middle East, and enhance regional stability, the United States supports Hosni Mubarak.(ref. ...  #Jan25, #Jan28, #Feb2 ...)

The enemy of our enemies turns out, more often than not, to become our next enemy.

Perhaps the time has come to rethink this strategy.

The Bottleneck is at the Top of the Bottle

The momentous events of the past week have reminded me repeatedly of an outstanding essay published nine years ago by GrameenPhone founder and Innovations journal co-editor Iqbal Quadir titled "The Bottleneck is at the Top of the Bottle." Iqbal's point in this essay--a key part of our shared motivation for starting  Innovations together--is that information and communications technologies (ICTs) don't just benefit societies by lowering transactions costs and making work more efficient. They also disperse power and create the preconditions for political change:

Countries are impoverished in the first place because their governments have historically been unable to adopt beneficial policies. The attitudes of these governments towards ICTs are likely to be consistent with their past record of failing to take advantage of development opportunities. The real question worth discussing is whether ICTs can transform governments so that they are compelled to pay more attention to their citizens’ broader priorities. By influencing governance, these technologies can release resources trapped beneath vested interests. This impact is far greater than the conveniences for which such technologies are ordinarily known.

Along similar lines, I highly recommend this talk that Iqbal gave at the Long Now Foundation a couple of years ago. (Starts at 4:14.)