With the latest investment numbers stronger than expected(read more here), it is expected that another round of macro-policies with the aim of cooling off the red hot Chinese economy is in the works.
Today's edition of SCMP reported that, "Yesterday's strong growth numbers and the excessive liquidity in the economy means the central bank must intensify efforts to drain capital from the financial system. With broad money supply having grown 19.1 per cent year on year in May and new lending having nearly doubled, to 209.4 billion yuan, People's Bank of China governor Zhou Xiaochuan said yesterday that the central bank would "fine-tune liquidity"."
Some commentators blame excessive liquidity as the culprit of the rapid lending growth, implicitly endorsed by Zhou as the above quote shows. Is Liquidity really the source of all evil?
China is still a developing country. That implies, at least at its level of development right now, capital is still a relatively scarce factor of production compared with its vast pool of labor. In other words, all that liquidity can be put to good use if the mechanism that allocates capital works reasonably well. Therefore, liquidity in and of itself should not be viewed as the culprit. By implication then, high investment growth should not worry us too much, again this is important, if the mechanism that allocates capital works reasonably well.
Unfortunately, the mechanism that allocates capital in China does not work reasonably well. The culprit, then, is the mechanism that allocates capital and in China's case, where stock market only plays a secondary role, that pretty much means banks, especially the big 4 state-owned banks.
According to Wen Wei Po (sorry no links, and the story is available in Chinese only anyway), about 50% of new loans made in the first quarter of this year were made by the big 4 state-owned banks. With so much capital allocated through state-owned banks, the quality of those loans are indeed questionable.
Bottom Line: Any measures that do not address the weaknesses inherent in China's capital allocation mechanism would not work in helping to lift the quality of its investments.
Thursday, June 15, 2006
Tuesday, June 13, 2006
Why Workers Spend So Much Time in Office
A Russian lady who worked for a local company here in HK told a TV reporter one of the main reasons why she quitted working for somebody and started a business of her own:
She could not stand her colleagues goofing off for most of the day, and starting to work only when the end of the workday looms.
The situation that the Russian lady refers to seems to happen a lot in offices here in HK. And the question is why given that most white collar workers are not paid by the hour?
Part of the answer may be related to the fact that time serves as a proxy for a worker's contribution to the firm, and so by prolonging the workday and given imperfect monitoring, that kind of behavior would help build one's image in the eyes of the supervisor. In any case, I do not have a full answer.
She could not stand her colleagues goofing off for most of the day, and starting to work only when the end of the workday looms.
The situation that the Russian lady refers to seems to happen a lot in offices here in HK. And the question is why given that most white collar workers are not paid by the hour?
Part of the answer may be related to the fact that time serves as a proxy for a worker's contribution to the firm, and so by prolonging the workday and given imperfect monitoring, that kind of behavior would help build one's image in the eyes of the supervisor. In any case, I do not have a full answer.
The Most Touching Blogpost I have Read Today
Sorry folks, in Chinese only.
Here it is:
霍金千遠水路來香港，撞正世界盃，震撼力大減，兼且香港人實際，慣於望地，未有望天。對於講宇宙、談黑洞的霍金，叫座力相信會遜於曹仁超。
那本《時間簡史》，英文版我大學時老早購入，每隻字我都明，串連一齊就有如佛偈，毫無頭緒。但這類經典，總要有一兩本看門口。
講宇宙起源、講時間空間的書，除了是科學讀本，其實是最好的心靈雞湯。
當你心靈破碎，傷心欲絕，坊間各本騙人的、教你如何振作做人十二守則，對人絲毫無效。你應該拿起一本天文物理的普及讀本，例如霍金這本他用眼寫的小書， 發覺在中環以外，並非倫敦紐約，而是木星土星；再望遠一點，是一個黑暗無盡的宇宙。人生匆匆幾十年，只不過是彈指即過。再讀多幾頁，四度空間的space -time，看見那個漏斗型的圖說，頭昏腦脹，更覺得身邊的瑣事，不值一哂。
再合上書，發覺愈看愈糊塗，看見底頁霍金的照片。洩露天機，慘遭重罰，靈魂被困於軀殼之中，與世隔絕。幸好上天還有憐憫之心，獨留雙眼這扇窗讓你透透氣。你沒有浪費生命，就用這扇窗將你所知的逐點逐點向外透露，要告訴世人，究竟宇宙是什麽一回事。
先有宇宙之大，後有不朽英雄，一本《時間簡史》，清洗心靈惆悵。
That is from Fong C Y's blog.
Here it is:
霍金千遠水路來香港，撞正世界盃，震撼力大減，兼且香港人實際，慣於望地，未有望天。對於講宇宙、談黑洞的霍金，叫座力相信會遜於曹仁超。
那本《時間簡史》，英文版我大學時老早購入，每隻字我都明，串連一齊就有如佛偈，毫無頭緒。但這類經典，總要有一兩本看門口。
講宇宙起源、講時間空間的書，除了是科學讀本，其實是最好的心靈雞湯。
當你心靈破碎，傷心欲絕，坊間各本騙人的、教你如何振作做人十二守則，對人絲毫無效。你應該拿起一本天文物理的普及讀本，例如霍金這本他用眼寫的小書， 發覺在中環以外，並非倫敦紐約，而是木星土星；再望遠一點，是一個黑暗無盡的宇宙。人生匆匆幾十年，只不過是彈指即過。再讀多幾頁，四度空間的space -time，看見那個漏斗型的圖說，頭昏腦脹，更覺得身邊的瑣事，不值一哂。
再合上書，發覺愈看愈糊塗，看見底頁霍金的照片。洩露天機，慘遭重罰，靈魂被困於軀殼之中，與世隔絕。幸好上天還有憐憫之心，獨留雙眼這扇窗讓你透透氣。你沒有浪費生命，就用這扇窗將你所知的逐點逐點向外透露，要告訴世人，究竟宇宙是什麽一回事。
先有宇宙之大，後有不朽英雄，一本《時間簡史》，清洗心靈惆悵。
That is from Fong C Y's blog.
Sunday, June 11, 2006
How much of the rise of Britain to world dominance by 1850 does the Industrial Revolution explain?
Not much, according to professor Greg Clark at UC Davis.
Here is the bottomline:
"Britain's rise to world dominance was a product more of the bedroom labors of British workers than of their factory toil."
Amazing, read the paper here.
Here is the bottomline:
"Britain's rise to world dominance was a product more of the bedroom labors of British workers than of their factory toil."
Amazing, read the paper here.
Best Line I Have Read Today
"M.B.A. programs train the wrong people in the wrong ways with the wrong consequences."
That is from an interesting story in NYT about the value of having a MBA, read more here.
That is from an interesting story in NYT about the value of having a MBA, read more here.
Wednesday, June 07, 2006
Does Education Teach Us Anything?
Yes, but not what you would expect though.
According to David Friedman:"Considerable parts of it appear designed to teach people to pretend to intellectual tastes and knowledge that they do not possess and that there is no good reason why they should possess."
If what Dave said were true, that might provide us with a novel explanation of the wage premium earned by workers with a college degree over those who don't have one. College graduates are simply better actors. Is there a way to test this implication of David's claim?
David's claim is also consistent with the signalling theory of education. We don't go through school because of what we are expected to learn there. So it does not matter if all those who go to school only learn about how to pretend to learn about intellectual tastes and knowledge that they don't have. The mere fact that we go through school is good enough to show that the school-goers have certain qualities, presumably valuable to employers, that non-school-goers do not possess.
And the quote from David can be found on his post: Ideas: Condi Rice and Walt Whitman
According to David Friedman:"Considerable parts of it appear designed to teach people to pretend to intellectual tastes and knowledge that they do not possess and that there is no good reason why they should possess."
If what Dave said were true, that might provide us with a novel explanation of the wage premium earned by workers with a college degree over those who don't have one. College graduates are simply better actors. Is there a way to test this implication of David's claim?
David's claim is also consistent with the signalling theory of education. We don't go through school because of what we are expected to learn there. So it does not matter if all those who go to school only learn about how to pretend to learn about intellectual tastes and knowledge that they don't have. The mere fact that we go through school is good enough to show that the school-goers have certain qualities, presumably valuable to employers, that non-school-goers do not possess.
And the quote from David can be found on his post: Ideas: Condi Rice and Walt Whitman
Tuesday, June 06, 2006
Is Democracy Needed for Rule of Law?
I had long believed that rule of law alone is sufficient for the maintenance and preservation of personal liberty. I had a long-held suspicion that democracy is not a prerequisite for rule of law to exist. But I was not 100% sure about my belief though, especially in the face of many arguments which claim that rule of law is a by-product of democracy.
That's until I read this yesterday:
"To regard the rule of law, surely one of the most crucial positive externalities an economy can possibly enjoy, as a by-product of democracy is simply erroneous and is belied by history.
The rule of law has prevailed in England from the end of the 17th century onwards. It dominated some aspects of civil and even public life in France under the absolute monarchy of the Bourbons. It established itself in Prussia in the 18th and in Austria-Hungary in the 19th century. None of these countries waited for democracy before submitting to the rule of law.
Democracy may produce a favourable climate for the rule of law to take root. However, it does not always do so, as witness some Latin American countries that adopted universal suffrage and majority voting as their means of choosing governments in the second half of the 20th century. Saying that they are not really democracies because they do not have the rule of law would be to turn the relation of the two into an empty tautology."
Read the whole thing here.
That's until I read this yesterday:
"To regard the rule of law, surely one of the most crucial positive externalities an economy can possibly enjoy, as a by-product of democracy is simply erroneous and is belied by history.
The rule of law has prevailed in England from the end of the 17th century onwards. It dominated some aspects of civil and even public life in France under the absolute monarchy of the Bourbons. It established itself in Prussia in the 18th and in Austria-Hungary in the 19th century. None of these countries waited for democracy before submitting to the rule of law.
Democracy may produce a favourable climate for the rule of law to take root. However, it does not always do so, as witness some Latin American countries that adopted universal suffrage and majority voting as their means of choosing governments in the second half of the 20th century. Saying that they are not really democracies because they do not have the rule of law would be to turn the relation of the two into an empty tautology."
Read the whole thing here.
Saturday, June 03, 2006
The Best Blog Post I have Read Today
1. Teaching Math In 1960
A logger sells a truckload of lumber for $100. His cost of production is 4/5 of the price. What is his profit?
2. Teaching Math in 1970
A logger sells a truckload of lumber for $100. His cost of production is 4/5 of the price, or $80. What is his profit?
3. Teaching Math In 1980
A logger sells a truckload of lumber for $100. His cost of production is $80. Did he make a profit?
4. Teaching Math In 1990
A logger sells a truckload of lumber for $100. His cost of production is $80 and his profit is $20. Your assignment: Underline the number 20.
5. Teaching Math In 2000
A logger cuts down a beautiful forest because he is selfish and inconsiderate and cares nothing for the habitat of animals or the preservation of our woodlands. He does this so he can make a profit of $20. What do you think of this way of making a living?
6. Teaching Math In 2010
Un hachero vende una carretada de maderapara $100. El costo de la produccion es $80. om
That's from Eric Ramusen at Indiana University.
A logger sells a truckload of lumber for $100. His cost of production is 4/5 of the price. What is his profit?
2. Teaching Math in 1970
A logger sells a truckload of lumber for $100. His cost of production is 4/5 of the price, or $80. What is his profit?
3. Teaching Math In 1980
A logger sells a truckload of lumber for $100. His cost of production is $80. Did he make a profit?
4. Teaching Math In 1990
A logger sells a truckload of lumber for $100. His cost of production is $80 and his profit is $20. Your assignment: Underline the number 20.
5. Teaching Math In 2000
A logger cuts down a beautiful forest because he is selfish and inconsiderate and cares nothing for the habitat of animals or the preservation of our woodlands. He does this so he can make a profit of $20. What do you think of this way of making a living?
6. Teaching Math In 2010
Un hachero vende una carretada de maderapara $100. El costo de la produccion es $80. om
That's from Eric Ramusen at Indiana University.
How Businesses Fend Off Regulators
Today's edition of NYT has a fascinating story about how eBay helps curb government regulations, read the story here.
Two points are noteworthy about the story...
1) How Government Regulations are Out-of-tuned with Rapid Pace of Technological Change
In Lousiana, which is the focus of the story, those affiliated with eBay who had got their licenses had to go through a course which supposedly would inform them about their trade. What did they got instead?
"Ninety-nine percent of the course had nothing to do with our business...It was about traditional auctioneering, cattle and land and firearms."
2) How Good Intentions May Backfire
Louisiana Auctioneers Licensing Board, the agency which attempted to get eBay affiliates to be licensed, says its mission is to protect the public from "unqualified, irresponsible or unscrupulous individuals."
While the effectiveness of such license is questionable, given eBay's interests to protect its brandname and thus renders the on-line market a self-regulating one, the regulation does have an undesirable unintended consequence: job losses for those affiliated with eBay.
As the story has it: "[M]any eBay sellers do their trading part time or in addition to another job. "If they are overregulated by licensing fees...they will abandon their eBay business."
Hence the irony is this: the regulators kill the very market that it attempts to regulate.
Two points are noteworthy about the story...
1) How Government Regulations are Out-of-tuned with Rapid Pace of Technological Change
In Lousiana, which is the focus of the story, those affiliated with eBay who had got their licenses had to go through a course which supposedly would inform them about their trade. What did they got instead?
"Ninety-nine percent of the course had nothing to do with our business...It was about traditional auctioneering, cattle and land and firearms."
2) How Good Intentions May Backfire
Louisiana Auctioneers Licensing Board, the agency which attempted to get eBay affiliates to be licensed, says its mission is to protect the public from "unqualified, irresponsible or unscrupulous individuals."
While the effectiveness of such license is questionable, given eBay's interests to protect its brandname and thus renders the on-line market a self-regulating one, the regulation does have an undesirable unintended consequence: job losses for those affiliated with eBay.
As the story has it: "[M]any eBay sellers do their trading part time or in addition to another job. "If they are overregulated by licensing fees...they will abandon their eBay business."
Hence the irony is this: the regulators kill the very market that it attempts to regulate.
Cooling China's Property Market, More Difficult than You Think
Over the last few months, Chinese government is increasingly concerned about its red-hot property market, and has launched a series of measures (read more here and here) in order to orchestrate a soft-landing.
Now of course a red hot property market is an outcome, a result of the interactions between and among different individuals and groups participating in an economy.
They are played by a set of rules governing their behaviour. So, before we can evaluate whether the problem in the property market can be properly addressed by the latest government policies, we have to figure out what those rules are.
China has a de facto federal system with substantial power, mostly economic, vested at the local level. Under the current fiscal system, land is the major source of revenue for local governments. Economic perfomance of the areas under their rein is one of the most important criteria for evaluating local officials' performance. Combining the two, then it should not be too difficult to understand why it is the interest of the local officials to see a boom in their local property markets.
The central government thinks differently, of course. For it's concern is mainly the stability of the overall economy. In other words, the rules that are now in place (fiscal rules, and those governing how local officials are evaluated) generate conflicting objectives between the local and the central governments.
Unless those rules are altered, it is hard to see how policies annouced by the central government can effectively deal with the red-hot property market.
Now of course a red hot property market is an outcome, a result of the interactions between and among different individuals and groups participating in an economy.
They are played by a set of rules governing their behaviour. So, before we can evaluate whether the problem in the property market can be properly addressed by the latest government policies, we have to figure out what those rules are.
China has a de facto federal system with substantial power, mostly economic, vested at the local level. Under the current fiscal system, land is the major source of revenue for local governments. Economic perfomance of the areas under their rein is one of the most important criteria for evaluating local officials' performance. Combining the two, then it should not be too difficult to understand why it is the interest of the local officials to see a boom in their local property markets.
The central government thinks differently, of course. For it's concern is mainly the stability of the overall economy. In other words, the rules that are now in place (fiscal rules, and those governing how local officials are evaluated) generate conflicting objectives between the local and the central governments.
Unless those rules are altered, it is hard to see how policies annouced by the central government can effectively deal with the red-hot property market.
Sunday, May 28, 2006
Would it be Helpful in Keeping a Job if Your Teacher were a Nobel Laureate?
The Washington Post reported:
"Treasury Secretary John W. Snow, who has presided during a period of strong economic growth but at times seemed out of sync with President Bush, has informed the White House that he will resign in the coming days after three years as the nation's chief economic officer, a source close to Snow said..."
Read the story here.
Apparently, being a student of Nobel Prize winner Jim Buchanan back in the 60s at UVA did not help Snow keep his job. Here is an old story which mentions John as Jimmy Buchanan's student.
"Treasury Secretary John W. Snow, who has presided during a period of strong economic growth but at times seemed out of sync with President Bush, has informed the White House that he will resign in the coming days after three years as the nation's chief economic officer, a source close to Snow said..."
Read the story here.
Apparently, being a student of Nobel Prize winner Jim Buchanan back in the 60s at UVA did not help Snow keep his job. Here is an old story which mentions John as Jimmy Buchanan's student.
Marvel of the Market System
Uncle Bus Goes Global
This is from NYT:
HONG KONG (AP) -- A six-minute film showing a grumpy man scolding a fellow Hong Kong bus rider for interrupting his phone call has become one of the most popular videos online.
''Bus Uncle,'' as the film is commonly known, has been viewed nearly 1.7 million times on the video Web site Youtube.com -- the second most-viewed video on the site in May as of Thursday -- spawning spoofs and new slang drawn from the ranting subject's emotionally charged soliloquy...
Read the whole story here.
See also my previous posts on this theme, here and here.
HONG KONG (AP) -- A six-minute film showing a grumpy man scolding a fellow Hong Kong bus rider for interrupting his phone call has become one of the most popular videos online.
''Bus Uncle,'' as the film is commonly known, has been viewed nearly 1.7 million times on the video Web site Youtube.com -- the second most-viewed video on the site in May as of Thursday -- spawning spoofs and new slang drawn from the ranting subject's emotionally charged soliloquy...
Read the whole story here.
See also my previous posts on this theme, here and here.
Game Theory, More Abstract than You Think
Is game theory useful? Yes, you say, at least knowing it got you an A in your graduate micro course. May be, and just may be, working in this area may help you publish in one of those high-fashion magazines (a term coined by UCLA economic professor Axel Leijonhufvud) like JET or Econometrica one day.
OK let me try this, is game theory useful in the real world, like helping us make better business decisions...
Uuuu...Mmmm...Well....Let's see...I am sure that there are examples...but I cannot recall at the moment...
Those are the exact responses of a panel of game theory pros when confronted with such a question, read more here.
HT to Pete Klein for the pointer.
OK let me try this, is game theory useful in the real world, like helping us make better business decisions...
Uuuu...Mmmm...Well....Let's see...I am sure that there are examples...but I cannot recall at the moment...
Those are the exact responses of a panel of game theory pros when confronted with such a question, read more here.
HT to Pete Klein for the pointer.
Thursday, May 25, 2006
Wednesday, May 24, 2006
Corruption: Does Culture Matter?
Brilliant political economist from the Columbia Business School Ray Fisman's answer to that question is YES.
Here is the abstract of his paper:
Corruption is believed to be a major factor impeding economic development, but theimportance of legal enforcement versus cultural norms in controlling corruption is poorlyunderstood.
To disentangle these two factors, we exploit a natural experiment, the stationing ofthousands of diplomats from around the world in New York City. Diplomatic immunity meansthere was essentially zero legal enforcement of diplomatic parking violations, allowing us toexamine the role of cultural norms alone. This generates a revealed preference measure ofcorruption based on real-world behavior for government officials all acting in the same setting.
We find tremendous persistence in corruption norms: diplomats from high corruption countries(based on existing survey-based indices) have significantly more parking violations.
And here is the paper.
Here is the abstract of his paper:
Corruption is believed to be a major factor impeding economic development, but theimportance of legal enforcement versus cultural norms in controlling corruption is poorlyunderstood.
To disentangle these two factors, we exploit a natural experiment, the stationing ofthousands of diplomats from around the world in New York City. Diplomatic immunity meansthere was essentially zero legal enforcement of diplomatic parking violations, allowing us toexamine the role of cultural norms alone. This generates a revealed preference measure ofcorruption based on real-world behavior for government officials all acting in the same setting.
We find tremendous persistence in corruption norms: diplomats from high corruption countries(based on existing survey-based indices) have significantly more parking violations.
And here is the paper.
Hayek must have this in mind when he coined the term Spontaneous Order
Picture the following scene:
A young guy, a middle-aged man, both riding on a bus. The young guy patted the shoulder of the middle-age guy trying to let him know that he was talking way too loud. The middle-aged man became all worked up, stood up and started yelling at the young guy not knowing that everything was taped by a fellow passenger on the bus...
Pretty lame stuff you say. Sure, but that is exactly the point that I am trying to make here.
How come such a lame movie has so far viewed by more than 2 million pairs of eye-balls?
The reason is that, without anyone doing the planning, a proliferatoin of different versions of the original video is created soon after the original video is uploaded on the net. Now the video has a rap-song version, one with English subtitle...Watching the video has now become an artistic event for fellow internet viewers as a result of this collective creative exercise without a central art director.
That very phenonmenon must be what Hayek has in mind when he coined the term spontaneous order.
For those readers who do not understand Chinese, here is the version with English subtitles. (Warning: Strong language)
A young guy, a middle-aged man, both riding on a bus. The young guy patted the shoulder of the middle-age guy trying to let him know that he was talking way too loud. The middle-aged man became all worked up, stood up and started yelling at the young guy not knowing that everything was taped by a fellow passenger on the bus...
Pretty lame stuff you say. Sure, but that is exactly the point that I am trying to make here.
How come such a lame movie has so far viewed by more than 2 million pairs of eye-balls?
The reason is that, without anyone doing the planning, a proliferatoin of different versions of the original video is created soon after the original video is uploaded on the net. Now the video has a rap-song version, one with English subtitle...Watching the video has now become an artistic event for fellow internet viewers as a result of this collective creative exercise without a central art director.
That very phenonmenon must be what Hayek has in mind when he coined the term spontaneous order.
For those readers who do not understand Chinese, here is the version with English subtitles. (Warning: Strong language)
Sunday, May 21, 2006
Lies, Damn Lies and Statistics
Gerald W. Bracey dug out the source behind three numbers in today's WP: 600,000, 350,000 and 70,000. These are, allegedly, the number of engineers produced in 2004 in China, India and the United States, respectively.
His conclusion:
"Statistics that end up as conventional wisdom even when they're wrong usually become popular by being presented as fact in a highly visible and respected source -- such as a cover story in Fortune or a National Academies report."
Read more here.
But who is to blame?
The news reporters who do not bother to check the accuracy of their numbers. Or the consumers of those numbers, like you and me?
If the responsibility is on us, the consumers, to verfiy the authenticity of the numbers, how much time can we spare each day for doing that? Time constraints imply that we are extremely easy to be misled by such statistics. Our decisions which are based upon at least partially on those statistics will be similarly affected as well.
Will competition among different papers ensure that reporters do their checking but citing statistics? One can only hope so, but I doubt it.
Also puzzling is why reporters are not as diligent in checking their numbers as one would expect.
To build up credibility and reputation (or simply to protect these attributes in the case of renown reporters), one would expect the reporters have the right incentives to do their checking. Is it because a number that is intended to stir up emotions of the readers matters much more in boosting sales than an accurate one? Afterall, the readers have no time to figure out the number's authenticity anyway.
His conclusion:
"Statistics that end up as conventional wisdom even when they're wrong usually become popular by being presented as fact in a highly visible and respected source -- such as a cover story in Fortune or a National Academies report."
Read more here.
But who is to blame?
The news reporters who do not bother to check the accuracy of their numbers. Or the consumers of those numbers, like you and me?
If the responsibility is on us, the consumers, to verfiy the authenticity of the numbers, how much time can we spare each day for doing that? Time constraints imply that we are extremely easy to be misled by such statistics. Our decisions which are based upon at least partially on those statistics will be similarly affected as well.
Will competition among different papers ensure that reporters do their checking but citing statistics? One can only hope so, but I doubt it.
Also puzzling is why reporters are not as diligent in checking their numbers as one would expect.
To build up credibility and reputation (or simply to protect these attributes in the case of renown reporters), one would expect the reporters have the right incentives to do their checking. Is it because a number that is intended to stir up emotions of the readers matters much more in boosting sales than an accurate one? Afterall, the readers have no time to figure out the number's authenticity anyway.
Wednesday, May 17, 2006
Hobbsian Jungle, Russian Style
"In Russia's early transition days, amid the collapse of authority and resulting lawlessness, organized crime groups wielded great influence. Teams of armed thugs used to carry out takeovers, arriving at a businessman's door with little to back them up but the threat of violence, even murder. Indeed, contract murders reached a frequency of more than one a day in the mid-1990's.
Later, law enforcement, from the tax police to special forces units, played a role in forcing transfers of property in the scramble for assets of the former Soviet state.
In what became known as "masky shows," police officers, their faces often hidden behind ski masks, swarmed into a business to intimidate employees and force concessions from owners. The headquarters of the Yukos oil company, for example, were the scene of a series of high-profile masky shows. .
Now, the trend in business crime in Russia is decidedly white-collar — with the faking of documents, hiring of lawyers or payoff of judges — but no less insidious, Mr. Matthews and other business owners say."
That is from a story in NYT, read more here.
Questions I have:
1) What prompted the change in the form of property takings? Was it endogenous to some other changes in institutions?
2) Why companies did not hire private protective agencies to protect them from predators? One answer might be that only large firms had the resources to do so, but not for most mid and small size concerns...
Later, law enforcement, from the tax police to special forces units, played a role in forcing transfers of property in the scramble for assets of the former Soviet state.
In what became known as "masky shows," police officers, their faces often hidden behind ski masks, swarmed into a business to intimidate employees and force concessions from owners. The headquarters of the Yukos oil company, for example, were the scene of a series of high-profile masky shows. .
Now, the trend in business crime in Russia is decidedly white-collar — with the faking of documents, hiring of lawyers or payoff of judges — but no less insidious, Mr. Matthews and other business owners say."
That is from a story in NYT, read more here.
Questions I have:
1) What prompted the change in the form of property takings? Was it endogenous to some other changes in institutions?
2) Why companies did not hire private protective agencies to protect them from predators? One answer might be that only large firms had the resources to do so, but not for most mid and small size concerns...
Monday, May 15, 2006
A Tale of Entrepreneurship and Success
In this fascinating story, the tale of the rise and success of Southwest Airline is told through the recollections of its founders.
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