Thursday, July 19

A tale of sales

Manhattan was purchased from Native Americans (Lenape Tribe) in exchange for trade goods valued at 60 guilders, roughly $1000 in today’s money in 1626 AD.

In 1668 AD, not so far off, the British East India Company got hold of Mumbai for a cost of £10 per year from the British State (who inherited it as part of a dowry of a Portuguese Princess, who won it from the Gujarat Sultanate who won it from the Delhi Sultanate who won it from King Bhimdev and and and you get the idea).

Sultan Hussein Mohammad Shah sold Singapore as a trading place to Sir Stamford Raffles of the British EIC in 1819 for and I quote:

Sultan Hussein Mohamed Shah - To receive 5,000 Spanish Dollars annually
Temenggong Abdul Rahman - To receive 3,000 Spanish Dollars annually

Spanish Dollars, also famously known as pieces of eight. Did you know USA used this as legal tender till 1857? So Sultan would have got about $120,000 per year and a bit less for Abdul Rahman. Pricey, eh?

Nothing common other than these little places were sold for peanuts and now are worth and generating billions and trillions of dollars. Interesting random linkages…

Wednesday, July 18

Killing the future

You must have heard about how the Islamist rage boys are rampaging around in India, Yemen,  Afghanistan and Pakistan, blowing up schools and poisoning girls? Here is a good article on what happens when schools are targeted. So the solution?

First punish the bastards. I quote:

To this end Zama Coursen-Neff, chairperson of the Global Coalition to Protect Education from Attack and children's rights director at Human Rights Watch, has welcomed the inclusion of parties guilty of attacks on schools on the UN's new "list of shame".

She said: "From now on, warring parties who target schools, students, and teachers should know that they will land on the Security Council's radar and could face targeted sanctions."

The Security Council may also refer them to the International Criminal Court for investigation and possible prosecution.

Second tack, try the soft approach:

The other avenue is to ensure better steps are taken to prevent the targeting of education and ensure timely recovery once conflicts are over.

The global Education Cluster, a UN body that co-ordinates and guides education responses in conflicts and other crises, is working with humanitarian agencies and government officials in countries affected by conflict to pilot training in how to protect education.

Measures include improving community defence of schools, encouraging armed forces and armed groups to avoid using schools in the battlefield, changing unfair education policies that provoke ethnic tension and can make schools a target for attack.

They could also change the curriculum to ensure that education works for peace and ensure adequate support is provided to help children and teachers cope with stress and trauma.

At a piloting session in Pakistan, education and development officials simulated negotiations between leaders of a village, teachers, religious leaders and the local Taliban commander.

Their mission was to reach agreement that locals schools should not be blown up - or attacked in any other way.

More than 1,200 schools have been damaged or destroyed in their country in the past few years and mostly in the north-west, where Taliban groups have been fighting the Pakistan army and retain a strong influence in some areas.

Unbelievable, 1200 schools targeted. What kind of children are going to come out of that area in Pakistan for the next generation?

Did you know that 258 schools have been destroyed by Naxalites in just 3 states in 2011 in India? Not that the schools were good in the first place, but at least something is better than nothing.

Still, going after these morons and bastards is good. Ideological morons, these Islamists, Naxalites and and and. May their groins be infested with hungry dung beetles

Tuesday, July 17

How to increase wages?

Restrict supply.

What do you think will happen if the supply is restricted while demand for services will grow? Prices will go up.

Mario Monti is trying to liberalise professions in Italy and is facing fierce resistance.

Keep an eye out on the professional guilds and groups, one of the reasons why your medical costs, your legal costs, your transportation costs, your healthcare costs, your house costs, etc. etc. are going up is because the professional bodies restrict entry into their professions…

Let my people go!

Monday, July 16

Economists find evidence for famous hypothesis of ‘comparative advantage’

Proving old Ricardo’s concept of “comparative advantage” is interesting.

I quote:

David Ricardo’s concept of “comparative advantage” is one of the most famous and venerable ideas in economics. Dating to 1817, Ricardo’s proposal is that countries will specialize in making the goods they can produce most efficiently — their areas of comparative advantage — and trade for goods they make less well, rather than making all kinds of products for themselves.
As a thought example, Ricardo proposed, consider cloth and wine production in England and Portugal. If English manufacturers are relatively better at making cloth than wine, and Portugal can produce wine more cheaply than England can, the two countries will specialize: England will concentrate on making cloth, Portugal will focus on making wine, and they will trade for the products they do not produce domestically.

So how did they do it?

To arrive at this conclusion, Costinot and Donaldson identified a data source that let them quantify nations’ potential productivity: The Food and Agriculture Organization (FAO), an arm of the United Nations, analyzes farming conditions globally, estimating potential agricultural productivity based on factors such as soil type, climate and water availability.
Costinot and Donaldson looked at the numbers from an FAO model of yields of 17 crops on 1.6 million plots of land in 55 countries to examine whether countries specialize in the way Ricardo believed. That is, if a country’s terrain allows it to grow wheat more productively than grapes, comparative advantage suggests that specialization will occur. So Costinot and Donaldson compared the predicted output of crops in each of the 55 countries (based on the FAO data and on prevailing prices) with the actual output of those crops.
The numbers show that Ricardo was right — to an extent, anyway. Costinot and Donaldson analyzed the results so that if the real world worked just as Ricardo supposed, the correlation between productivity and output would be 1.000. Instead, the logarithmic correlation they found was 0.212, with a margin for error of 0.057.

Cool, eh? I will be using this in my own business anyway. Pretty neato…I work in the business of financing international trade, so this will help me identify where we can concentrate matters Smile