Review by PAUL KRUGMAN, The New York Times
Published: May 7, 2006

ECONOMIC ideas play a large role in shaping the world. “Practical men, who believe themselves to be quite exempt from any intellectual influences,” John Maynard Keynes said, “are usually the slaves of some defunct economist.” So it’s odd how few popular books have been written describing the social and personal matrix from which economic ideas actually emerge. There have been no economics equivalents of, say, James Watson’s book “The Double Helix,” or James Gleick’s biography of Richard Feynman.

David Warsh has now made a major effort to fill that gap. “Knowledge and the Wealth of Nations” is the story of an intellectual revolution, largely invisible to the general public, that swept through the economics profession between the late 1970’s and the late 1980’s. I’ll come back to the question of how important that revolution really was. But whatever one thinks of the destination, Warsh, a former columnist for The Boston Globe who writes the online newsletter Economic Principals, takes us on a fascinating journey through the world of economic thought — and the lives of economists — from Adam Smith to the present day.

I should mention here that I was a prominent player in some of the events Warsh describes. My closeness to it all makes me aware of, and perhaps oversensitive to, the things Warsh doesn’t get quite right. But let me focus on the book’s virtues before I talk about its minor flaws.

Warsh tells the tale of a great contradiction that has lain at the heart of economic theory ever since 1776, the year in which Adam Smith published “The Wealth of Nations.” Warsh calls it the struggle between the Pin Factory and the Invisible Hand. On one side, Smith emphasized the huge increases in productivity that could be achieved through the division of labor, as illustrated by his famous example of a pin factory whose employees, by specializing on narrow tasks, produce far more than they could if each worked independently. On the other side, he was the first to recognize how a market economy can harness self-interest to the common good, leading each individual as though “by an invisible hand to promote an end which was no part of his intention.”

What may not be obvious is the way these two concepts stand in opposition to each other. The parable of the pin factory says that there are increasing returns to scale — the bigger the pin factory, the more specialized its workers can be, and therefore the more pins the factory can produce per worker. But increasing returns create a natural tendency toward monopoly, because a large business can achieve larger scale and hence lower costs than a small business. So in a world of increasing returns, bigger firms tend to drive smaller firms out of business, until each industry is dominated by just a few players.

But for the invisible hand to work properly, there must be many competitors in each industry, so that nobody is in a position to exert monopoly power. Therefore, the idea that free markets always get it right depends on the assumption that returns to scale are diminishing, not increasing.

For almost two centuries, economic thinking was dominated by the assumption of diminishing returns, with the Pin Factory pushed into the background. Why? As Warsh explains, it wasn’t about ideology; it was about following the line of least mathematical resistance. Economics has always been a discipline with scientific aspirations; economists have always sought the rigor and clarity that comes from using numbers and equations to represent their ideas. And the economics of diminishing returns lend themselves readily to elegant formalism, while those of increasing returns — the Pin Factory — are notoriously hard to represent in the form of a mathematical model.

Yet the fact of increasing returns was always a conspicuous part of reality, and became more so as the decades went by. Railroads, for example, were obviously characterized by increasing returns. And so economists tried, again and again, to bring the Pin Factory into the mainstream of economic thought. Yet again and again they failed, defeated by their inability to state their ideas with sufficient rigor. Warsh quotes Kenneth Arrow, who received a Nobel in economic science for work that is firmly in the Invisible Hand tradition: increasing returns were an “underground river” in economic thought, always there, yet rarely seeing the light of day.

The first half of “Knowledge and the Wealth of Nations” is a history of economic thought from the vantage point of that underground river. It describes how great economists chose to exclude increasing returns from their analyses, even though many of them understood quite well that they were leaving out an important part of the story. It also tells the tale of economists, most notably Joseph Schumpeter, who decided that if increasing returns couldn’t be modeled rigorously, so much the worse for rigor — and who found their literary, nonmathematical versions of economics simply ignored. (Schumpeter was a sad figure in his later years; his canonization as a patron saint of economic growth — based largely on his famous phrase, “creative destruction” — came long after his death.) The second half of the book describes how the underground river finally fountained to the surface.

I’ve never seen anyone write as well as Warsh about the social world of economic research, a world of brilliant, often eccentric people who bear no resemblance to the dreary suits you see discussing the economy on CNBC. It’s a world of informal manners yet intense status competition, in which a single seminar presentation can suddenly transform a young man or woman into an academic star.

For about a decade, starting in the late 1970’s, many of those star turns involved increasing returns. Economists had finally found ways to talk about the Pin Factory with the rigor needed to make it respectable. One after another, fields from industrial organization to international trade to economic development and urban economics were transformed.

Warsh does a superb job of conveying the drama of it all. He also tells us about a number of remarkable people and what they did later in their lives — because many of the once-young men (alas, there are few women in the story) who made that revolution have had very interesting second acts.

There are some flaws. The work of the economists who brought increasing returns to international trade, a group that included yours truly, receives flattering treatment, yet Warsh’s account misrepresents that work in subtle but important ways.

Maybe that slight sloppiness reflects Warsh’s relative lack of interest in applications of increasing returns other than the one he believes to be most crucial: as an explanation of economic growth. He portrays a famous 1990 paper about increasing returns and growth by Paul Romer of Stanford University as a sort of pivot around which the whole way economists see the world changed.

Now “Romer 1990” is a terrific paper — I wish I had written it, which is the highest praise one economist can give to another. Yet I don’t think it can bear the weight Warsh places on it. Nor is it clear that increasing returns really did transform our understanding of economic growth. In fact, Warsh seems to concede as much. “So there is a new economics of knowledge. What has changed as a result? The answer, it seems to me, is not much.”

Never mind. If you like reading stories of high intellectual drama, if you want to know the origin of ideas that, as Keynes said, “are dangerous for good or evil,” this book is for you.


nucifera: 这回关于这报导nucifera并没有转载其文章,而只是当中的两张照片,但这已足矣。中国人说“画意能达万言”,这话后来经翻译后演变至英文的“A picture is worth a thousand words”。至于下来的照片,语意应当超过了万言。


Published: May 28, 2008

A memorial service for hundreds of students of Juyuan Middle School in Dujiangyan, where a mother held a picture of her son, turned into an angry protest on Tuesday. Some parents said local officials had known for years that the school was unsafe but refused to take action. Others recalled that two hours passed before the rescue workers showed up; even then, they stopped working at 10 p.m. on the night of the earthquake and did not resume their search until 9 a.m. the next day.

Two girls looked at the remains of the Juyuan Middle School. Although there is no official casualty count, parents say only 13 of the school’s 900 students came out alive.

Photo: Shiho Fukada for The New York Times

nucifera: 这是一篇难得的文章,不禁让我想起过去的小小心愿,就如爱因斯坦所说:Opening up yet another fragment of the frontier of beauty(为开拓人类美感再下一城)



Jerome Weidman



过了不久,我意识到周遭的人都在鼓掌,心想打开耳朵应该无妨了。就在此时,我听到右边传来一阵温和而出奇清晰的声音。“你喜欢巴哈?” 那个声音说。

身为作家,我对巴哈的了解跟我对核分裂的认识差不多。但我确实人的这张世界上最有名的脸, 包括那一头众所周知的白色乱法,以及嘴里永远咬着的烟斗。 我竟然坐在爱因斯坦旁边。

“呃…… ”我很不自在的嗫嚅着。人家不过是随口问问, 我只要同样随口答应即可。但看着他那不凡的眼神, 我知道他并不只是敷衍地跟我客气;不论我如何看待这段对话,他那方面显然是很重视的。尤其是我觉得对这个人你不应该说谎,无论是多么微不足道的谎言。




我赶紧说“并非我不欣赏巴哈,但我是音盲,或几近音盲。 我从来没有把任何音乐真正听进去。

老人脸上出现关切的表情, 突然说:“请跟我来好吗?


“好,”他歉然一笑 ,“请告诉我,你对音乐有这种感觉有多久了?”













“胡说,当然可以!你还记得在学校第一次上算术课吗? 假想你第一次接触数字 ,老师要你做很艰难的题目,譬如长除法火分数,你会做吗?”






















When I was a very young man , just beginning to make my way, I was invited to dine at the home of a distinguished New York philanthropist. After dinner our hostess le us to an enormous drawing room. Other guests were pouring in , and my eyes beheld two unnerving sights : servants were arranging small gilt chairs in long, neat rows; and up front, leaning against the wall, were musical instruments . Apparently I was in for an evening of chamber music.

I use the phrase “in for ” because music meant nothing to me. I am almost tone deaf –only with great effort can I carry the simplest tune, and serious music was to me no more than an arragement of noises. So I did what I always did when trapped: I sat down and when the music started I fixed my face in what I hoped was an expression of intelligent appreciation, closed my ears from the inside and submerged myself in my own completely irrelevant thougths.

After a while, becoming aware that the people around me werer applauding, I concluded it was safe to unplug my ears.At once I heard a gentle but surprisingly penetrating voice on my right. “ You are fond of Bach?”the voice said .

As a writer, I knew as much about Bach as I know about nuclear fission. But I did know one of the most famous faces in the world, with the renowned shock of untidy white hair and the ever-present pipe between the teeth.I was sitting next to Albert Einstein.

“Well ,” I said uncomfortably, and hesitated. I had been asked a casual question. All I had to do was be equally casual in my reply. But I could see from the look in my neighbour’s extraordinary eyes that their owner was not merely going through the perfunctory duties of elementary politeness. Regardless of what value I placed on my part in the verbal exchange , to this man his part in it mattered very much . Above all, I could feel that this was a man to whom you did not tell a lie, however small.

“I don’t know anything about Bach,” I said awkwardly. “I’ve never heard any of his music.”

A look of perpleded astonishment washed across Einstein’s mobile face.

“You have never heard Bach?”

He made it sound as though I had said I’d never taken a bath.

“It isn’ t that I don’t want to like Bach ,” I replied hastily. “It’s just that I’m tone deaf, or almost tone deaf, and I’ve never really heard anybody’s music.”

A look of concern came into the old man’s face. “ Please ,”he said abruptly. “you will come with me?”

He stood up and took my arm. I stood up. Resolutely he led me upstairs. He obviously knew the house well. On the floor above he opened the door into a book-lined study, drew me in and shut the door.

“Now ,” he said with a samll, troubled smile. “You will tell mle, please how long you have felt this way about music?”

“All my life,” I said , feeling awful. “I wish you would go back downstairs and listen, Dr Einstein. The fact that I don’t enjoy it doesn’t matter.”

He shook his head and scowled, as though I had introduce an irrelvance.

“Tell me , please, ” he said. “ Is there andy kind of music that you do like ?”

“Well ,” I answered , “I like songs that have words, and the kind of music where I can follow the tune.”

He smiled and nodded, obviously pleased. “You can give me an example, perhaps?”

“Well , ”I ventured , “almost anything by Bing Crosby.”

He went to a corner of the room , opened a phonograph and started pulling out records. I watched him uneasily. At last he beamed. “Ah!” he said.

He put the record on and in a moment the study was filled with the relaxe, lilting strains of Bing Crosby ’s “When the Blue of the Night Meets the Gold of the Day”.Einstein beamed at me and kept time with the stem of his pipe. After three or four phrases he stooped the phonograph. “Now ,”he said . “Will you tell me, please, what have just heard?”

The simplest answer seemed to be to sing the lines. I did just that, try desperately to stay in tune and keep my voice from cracking . The expression Einstein’s face was likle the sunrise.

“You see!” he cried with delight when I finished . “You do have an ear!”

I mumbled something about this being one of my favourite songs , something I had heard hundreds of times, so that it didn’t really prove anything.

“Nonsense !”said Einstein. “It proves everything!Do you remember your first arithmetic lesson in school? Suppose , at your very first contact with numbers, your teacher had ordered you to work out a problem in say , long division or fractions. Could You have done so?”

“No, of course not.”

“Precisely!”Einstein made a triumphant wave with his pipe stem. “It would have been impossible and you would have reacted in panic. You would have closed your mind to long division and fractions. As a result, because of that one small mistake by your teacher , it is possible your whole life you would be denied the beauty of long division and fractions.”The pipe stem went up and out in another wave. “But on your first day no teacher would be so foolish. He would start you with elementary things-then, when you had acquired skill with the simplest problems , he would lead you up to longd division and to fractions.

“So it is with music.” Einstein picked up the Bing Crosby record . “This simple, charming little song is like simple addition or subtraction. You have mastered it. Now we go on to something more complicated.”

He found another record and set it going. The oglden voice of John McCormack singing “The Trumpeter” filled the room . After a few lines Einstein stooped the record.

“So!”he said. “You will sing that back to me , please ?”

I did-with a good deal of self-consciousness but with, for me , a surprising degree of accuracy . Einstein stared at me with a look on his face that I had seen only once before in my life : on the face of my father as he listened to me deliver the valedictory address at my high school passing –out ceremony.

“Excellent!”Einstein remarked when I finished . “Wonderful! Now this!”

“This ” proved to be Caruso in what was to me a completely unrecognizable fragement from “Cavalleria Rusticana ,”a one-act opera. Nevertheless, I managed to reproduce an approximation of the sound the famous tenor had made. Einstein beamed his approval.

Caruso was followed by at least a dozen others. I could not shake my feeling of awe over the way this great man,into whose company I had been thrown by chance, was completely preoccupied by what we were doing , as though I were his sole concen.

We came at last to recordings of music without words, which I was instucted to reproduce by humming. When I reached for high note, Einstein’s mouth opened and his head went back as if to help me attain what seemed unattainable. Evidently I came close enough, for he suddenly turned off the phonograph.

“Now , young man ,” he said , putting his arm through mine. “We are ready for Bach!”

As we returned to our seats in the drawing room , the players were tuning up for a new selection. Einstein smiled and gave me a reassuring pat on the knee.

“Just allow yourself to listen ,” he whispered “That is all.”

It wasn’t really all, of course . Without the effort he had just poured out for a total stranger I would never have heard , as I did that night for the first time in my life, Bach’s “Sheep May Safely Graze ”I have heard it many time sice. I don’t think I shall ever tire of it . Because I never listen to it alone . I am sitting beside a small, round man with a shock of untidy white hair , a dead pipe clamped between this teeth, and eyes that contain in their extraodinary warmth all the wonder of the world .

When the concert was finished I added my genuine apphause to that of the others.

Suddenly our hostess confronted us. “ I’m sorry,Dr Einstein ,” she said with an icy glare at me , “that you missed so much of the perfomance .”

Einstein and I came hastily to our feet. “I am sorry, too”, he said. “My young friend here and I, however, were engaged in the greatest activity of which man is capable.” She looke puzzled . “ Really ?”she said . “And what is that?”

Einstein smiled and put his arm across my shoulders. And he uttered ten words that –for at least one person who is in his endless debt –are his epitaph:

“Opening up yet another fragment of the frontier of beauty.”

Albert Einstein , whose birthday falls on March 14th , was passionately fond of music. He once said:”If I were not a physicist, I would probably be a musician.”Jerome Weidman was an American novelist.

This story first appeared in a 1955 Reader’s Digest

Published: May 20, 2008

When older people can no longer remember names at a cocktail party, they tend to think that their brainpower is declining. But a growing number of studies suggest that this assumption is often wrong.

Instead, the research finds, the aging brain is simply taking in more data and trying to sift through a clutter of information, often to its long-term benefit.

The studies are analyzed in a new edition of a neurology book, “Progress in Brain Research.”

Some brains do deteriorate with age. Alzheimer’s disease, for example, strikes 13 percent of Americans 65 and older. But for most aging adults, the authors say, much of what occurs is a gradually widening focus of attention that makes it more difficult to latch onto just one fact, like a name or a telephone number. Although that can be frustrating, it is often useful.

“It may be that distractibility is not, in fact, a bad thing,” said Shelley H. Carson, a psychology researcher at Harvard whose work was cited in the book. “It may increase the amount of information available to the conscious mind.”

For example, in studies where subjects are asked to read passages that are interrupted with unexpected words or phrases, adults 60 and older work much more slowly than college students. Although the students plow through the texts at a consistent speed regardless of what the out-of-place words mean, older people slow down even more when the words are related to the topic at hand. That indicates that they are not just stumbling over the extra information, but are taking it in and processing it.

When both groups were later asked questions for which the out-of-place words might be answers, the older adults responded much better than the students.

“For the young people, it’s as if the distraction never happened,” said an author of the review, Lynn Hasher, a professor of psychology at the University of Toronto and a senior scientist at the Rotman Research Institute. “But for older adults, because they’ve retained all this extra data, they’re now suddenly the better problem solvers. They can transfer the information they’ve soaked up from one situation to another.”

Such tendencies can yield big advantages in the real world, where it is not always clear what information is important, or will become important. A seemingly irrelevant point or suggestion in a memo can take on new meaning if the original plan changes. Or extra details that stole your attention, like others’ yawning and fidgeting, may help you assess the speaker’s real impact.

“A broad attention span may enable older adults to ultimately know more about a situation and the indirect message of what’s going on than their younger peers,” Dr. Hasher said. “We believe that this characteristic may play a significant role in why we think of older people as wiser.”

In a 2003 study at Harvard, Dr. Carson and other researchers tested students’ ability to tune out irrelevant information when exposed to a barrage of stimuli. The more creative the students were thought to be, determined by a questionnaire on past achievements, the more trouble they had ignoring the unwanted data. A reduced ability to filter and set priorities, the scientists concluded, could contribute to original thinking.

This phenomenon, Dr. Carson said, is often linked to a decreased activity in the prefrontal cortex. Studies have found that people who suffered an injury or disease that lowered activity in that region became more interested in creative pursuits.

Jacqui Smith, a professor of psychology and research professor at the Institute for Social Research at the University of Michigan, who was not involved in the current research, said there was a word for what results when the mind is able to assimilate data and put it in its proper place — wisdom.

“These findings are all very consistent with the context we’re building for what wisdom is,” she said. “If older people are taking in more information from a situation, and they’re then able to combine it with their comparatively greater store of general knowledge, they’re going to have a nice advantage.”

Published: May 11, 2008

TO JUDGE from the news out of NASA these days, you might think we are witnessing the last gasps of the space age. The agency has announced that it will phase out its aging fleet of space shuttles by the year 2010, and the next iteration of the space program, known as Constellation, isn’t likely to be sending people into orbit before 2015. Back in 2004, President Bush exhorted NASA to return humans to the moon (and then continue on to Mars), but precious little has been heard from the White House on the matter since. The American enthusiasm for space travel that accompanied the first footprints on the lunar surface seems less ardent with each year that separates us from that one small step.

Yet human space flight hardly tells the whole story about launching pads and orbits. In addition to NASA’s current robotic missions — including the Hubble Space Telescope, the Mars landers and the Cassini spacecraft — there is also a large market for sending satellites into space. Between 1998 and 2007, 421 satellites were sent skyward. Government programs, commercial launchings and consumer products tied to satellites make up a $251-billion-a-year industry, according to the Space Foundation, a group that tracks the global space economy. The technologies in orbit serve the needs of television and radio; Internet and telephone service; imaging systems for military and intelligence operations (as well as commercial services like Google Earth); and the global positioning systems that help guide planes, boats and automobiles from Point A to Point B. Last year, according to the consulting firm Futron, about 70 orbital satellites were launched into space: roughly 25 by the United States and 30 by Russia. Of the 41 commercial launchings in 2006, about half belonged to the United States. Periodically, the U.S. military continues to test unarmed missiles that are designed to carry warheads.

The photographer Simon Norfolk has documented a series of military and commercial launchings, as well as the respective launching sites. He observes that rockets are “built on earth and live in the heavens” and in both stages exist largely out of sight (and out of mind). But for 90 seconds, when it is “launched in fire between two worlds,” he says, a rocket becomes a quintessentially observable object, a leaping, shrieking arc of beauty and unnerving fascination — “an explosion,” as he describes it, “that goes in one direction, rather than all directions.” An exhibition of Norfolk’s photos, which have appeared often in these pages in recent years, will take place at the New York Photo Festival, May 14-18.

John Schwartz is a science reporter for The New York Times.