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Timothy Taylor writes,

The single most costly trade barrier concerns rules against importing ethanol. The fact that such rules exist at all, of course, strongly suggests that the key issue in ethanol policy is not how much gasoline we can replace, but instead how much of a subsidy can find a justification for sending to farmers.

2. From a Gallup poll:

Nearly 8 in 10 students (77%) in grades 5 through 12 say they want to be their own boss, 45% say they plan to start their own business, and 42% say they will invent something that changes the world.

These data raise more questions than they answer. Pointer from WSJ blog.

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COMMENTS (7 to date)
Becky Hargrove writes:

As to the inability to match aspiration to actuality: there is a disconnect of wealth creation at local levels of community. In many small towns, look at what creates monetary wealth, it might be tourism and a local natural resource such as lumber or a quarry. How many (potential link-ups to money) does the average high school student actually have in the present, outside employment in a local restaurant or work with the natural resource? But in the individual household, human capital potential comes closer to matching the dynamics of economic potential the world over. What we consume in terms of entertainment,and yes, education (outside formal school systems)currently has no way of being reflected at local levels because they are forced, like economies the world over, to distill human capital through all the agreed-upon institutions. To make a long story short, more wealth creation potential often exists in the individual household than the community itself. How might local communities capture economic wealth with the dynamism of world potential?

hutch writes:

re: #1, i thought a similar thing when i saw this story on a wsj blog:

basically the energy dept doesn't want chinese firms to buy patents from a bankrupt solar company that will have the effect of lowering manufacturing costs. the reason is that if they did, it would further lower the prices of solar panels. if you care about more widespread use of solar panels, you want lower prices so more people can afford them. if you want something other than that, you want to keep prices high.

N. writes:

Becky --

I think the short answer is, geographically speaking, they can't. Which is why truly ambitious young people uproot and move to where the action is, wherever that may be.

However, I would also point out that with the innovation of programs like Kickstarter I would argue it is actually easier for potential entrepreneurs to get seed funding, at the margin, than it ever has been before.

Another way to say it is that the 'agreed-upon institutions,' far from being static, are already in flux.


I like your points. I'm suspicious of the data aon new business formation and their employment figures. I think the barriers of entry have gotten small enough that it's harder to measure when one is being created. However, that's much more true in some sectors than others.

If I had to make one outlandish prediction that I would bet money on, it will be that traditional schooling will die of asphxyiation in the next 30 years.

If you look at the gap between the types of workers the world needs, and the types of students it produces, it's huge. The developed world has run out of ways to soften this discrepancy.

I'm very much involved in this world right now, and my intuition is that ordinary people are sensing that higher education is a waste of time.

When I tell my liberal friends that I think college is a waste of time, they actually approvingly agree with me. To my surprise.

When I talk to them about starting a business, their initial reaction is curiousity, not skepticism.

Becky Hargrove writes:

N, There are a number of reasons why "anywhere" wealth creation has become such a mental challenge for me. First, I'm not the only baby boomer that looks over the past (almost) four decades and says, Darn! If only I had chosen the right town - city - state, whatever. But in the larger sense, people are losing mobility for the constant moves to the next 'hot' spot.

Jonathan, I like the prediction about traditional schooling. In the past, local wealth came from what was produced at home, which globalization does much better now. That is precisely what frees people to recreate knowledge wealth at local levels. It could be done in ways that few would know where "school" ends and entrepreneurship begins.


I'm very optimistic about education in the future, but very pessimistic about formal schooling as it is today.

I think for knowledge based occupations specific hubs will always have a large relative advantage (Austin, SF, NY), but at the bottom there is some diffusion going on.

For example, I'm from Columbus, which is not known as a startup hub, but in the last 3-5 years the resources available to you for starting a business have grown exponentially and startups are beginning to pop up. But I imagine the SF/Columbus startup ratio has stayed the same or gotten worse.

D Spencer writes:
"but instead how much of a subsidy can find a justification for sending to farmers."

While it may be correct that the subsidy is justified as being sent to farmers (or consumers), it of course does not benefit farmers or consumers.

Farmers and consumers will compete away any potential benefit they would get from a subsidy. The benefit of the subsidy will go to anyone with an inelastic factor: The owners of the land and capacity-constrained (or constraining) processors.

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