March 30, 2016


Prominent MIT economist and dean Lester Thurow dies at 77 : Scholar and public intellectual examined globalization and its consequences. (Peter Dizikes, 3/30/16,  MIT News Office )

The influential MIT economist and public intellectual Lester Thurow, whose work addressed the many consequences of an increasingly global economy, died on Friday at his home in Westport, Massachusetts. Thurow, who also served as dean of the MIT Sloan School of Management, was 77 years old. [...]

In many years of engagement with the public and government officials -- and in a series of bestselling books -- Thurow advocated a distinctive set of policy ideas that defied simple political labeling.

He was just lucky that there are no consequences for intellectuals when everything they say turns out to be wrong, Zero-Sum Fallacies (Rich Karlgaard)

At the dawn of the U.S. economic boom in 1980 MIT economist Lester C. Thurow looked backward into the dark night. He called his sad new book The Zero-Sum Society: Distribution and the Possibilities for Economic Change. Here is a description on Amazon:

"Interpreting macroeconomics as a zero-sum game, Thurow proposes that the American economy will not solve its most trenchant problems-inflation, slow economic growth, the environment-until the political economy can support, in theory and in practice, the idea that certain members of society will have to bear the brunt of taxation and other government-sponsored economic actions."

That yawner of a 58-word sentence gives you the flavor of the book. Nevertheless, the famed Harvard economist John Kenneth Galbraith called Zero-Sum Society "an extraordinarily good and lucid examination of current economic difficulties." Galbraith was wrong about prose and prophecy. It was a horrible book and a crimped way of looking at economics and the human spirit. President Ronald Reagan neglected to read it. One assumes the founders and backers of Apple, Sun Microsystems, Microsoft, Dell, Oracle, Cisco, Palm, Yahoo and Google passed on it, too.

Zero-sum implies no net progress in human affairs. The facts scream otherwise. Global production in 2006 amounted to $66 tril-lion, or $10,200 per person. Two hundred years ago per capita income was about $300. Five thousand years ago it was equivalent to $200. For the mass of mankind there was no detectable economic progress for 4,800 years. Then came the Industrial Revolution with its hockey-stick curve in income and life span.

Yet the zero-sum myth lives on. Like a retrovirus it burrows and hides and waits. In 1968 it popped up in the form of a bestselling book by Paul R. Ehrlich entitled The Population Bomb. As investor Gary Alexander recounted in a recent speech: "[Ehrlich] opened famously by saying, 'The battle to feed [all of] humanity is over. In the 1970s and 1980s hundreds of millions of people will starve to death in spite of any crash programs embarked upon now.' Writing in Ramparts magazine, Ehrlich went even further, 'Millions of people will soon perish in smog disasters in New York and Los Angeles … the oceans will die of DDT poisoning by 1979 … the U.S. life expectancy will drop to 42 years by 1980, due to cancer epidemics.' Hepatitis and dysentery would sweep America by 1980 and nearly all of us would wear gas masks. Over 65 million Americans would starve in the 1980s, leaving only 22.6 million starved Americans alive in 1990."

Then, to Ehrlich's apparent dismay, the inventive human spirit intervened.

While Ehrlich was gnashing his teeth, Alexander writes, "Dr. Norman Borlaug was launching the Green Revolution, which has managed to feed billions more people on moderately more arable soil than in the 1960s. Instead of starving against our will, millions of us are trying to starve voluntarily-by dieting. Food is far cheaper, relative to the overall growth of the cost of living, than in the 1960s. From 1977 to 1994 food costs fell 77% in real terms."

Posted by at March 30, 2016 7:07 PM