决战1010精英组Economist阅读汇——WeiLi分贴

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The opposition's closing remarks

Mar 26th 2010 | David Sandalow

Let's talk about Google. Amar Bhidé questions government's role.

Google's founders can speak for themselves. In 1998, Sergey Brin and Larry Page published a paper that begins: "In this paper, we present Google, a prototype（原型） of a large-scale search engine…" At page 16, Brin and Page write that their research was "supported by the National Science Foundation", with funding "also provided by DARPA and NASA". All three are government agencies. The paper makes for fascinating reading, for reasons related and unrelated to this debate.

Prof. Bhidé invokes Isaac Newton and other great figures from history, asserting that none received government grants（津贴）. Yes, an apple tree may have been sufficient infrastructure（基础设施） for scientific discovery in the 17th century. Today, a linear accelerator is needed in some fields. Satellites and supercomputers are needed in others. Government funding—beyond the "least" amount possible—makes advances in those fields much more likely.（对比17实际科研基础设施【对牛顿来说就是棵苹果树】和现在的科研需要的经费）

Furthermore, no one is arguing that all innovation depends on government funding.（扩且也没人说科研都是政府挖钱） Knowledge has certainly been created without government support. The motion asks, instead, whether "innovation works best when government does least". The answer is no, because government has unique capabilities and a full toolbox for helping spur the innovative process.

Prof. Bhidé's most interesting argument involves Minitel, the French government-owned monopoly（垄断） that launched an online service in the early 1980s, before the World Wide Web. Minitel was a success at first, providing French customers with online services unavailable to Americans at the time. Then it floundered（挣扎） in the 1990s, in the face of competition from the internet.

However, Prof. Bhidé draws the wrong lesson from this tale. Minitel was a monopoly. Its story stands mainly for the proposition（论点） that monopolies, public or private, do not innovate well. For example AT&T, a private telephone monopoly in the United States, once required its customers to use rotary phones leased from the company. Customers had two options: white or black. Then starting in 1968, other companies were allowed to compete in this market. Not only did the types of phones available increase dramatically, but innovative devices such as modems emerged.

And who has an important role in breaking up monopolies, thereby unleashing innovation? The government. Let us hope the government doesn't do the "least" when it comes to trust-busting.（觉得法国网络的例子只能证明垄断对技术革新不利，另一方用错了例子。反倒是国家能更好的阻止垄断）

The economic case for innovation is overwhelming. Innovation plays a central role in productivity growth and wealth creation. How can government best promote it?

First, by protecting property rights. Intellectual property protection and a stable legal system are the bedrock on which much innovation rests. If we were committed to government doing only the "least", we would stop here.

But government can do much more. How else can government help?

Second, by investing in education. An educated citizenry is the fertile soil from which innovation grows. As Prof. Bhidé correctly argued in his opening statement, this means training young people not just in math, but also in how to think independently and work collaboratively. Providing this education is a classic government function, one for which there are outsized benefits from government spending.

Third, by investing in basic research. For many research tasks, the payout is too long, benefits too dispersed and the scale too large for the private sector. When government steps in, returns can be huge. In the 1980s, for example, the US Department of Energy supported research into recovering natural gas from shale formations. Few companies were interested. But that research led to innovations that are now transforming the natural gas sector in the United States and around the world.

Fourth, by ensuring that social returns are reflected in investment decisions. Public companies have fiduciary（受信托的） responsibilities to their shareholders. In most cases their primary mission is not to clean the air, prevent climate disruption or pursue other public objectives. Governments have a responsibility to promote the public interest, steering capital toward innovations with high social returns.  

Fifth, by protecting public safety, giving consumers the confidence to try innovative products. We expect our vehicles, food and pharmaceuticals to be safe and criticize government regulators if they fail to detect problems. This standard-setting role not only protects the public, it promotes innovation by giving consumers confidence in innovative products.

Sixth, by providing consumers with reliable information. Seventh, by purchasing output from innovators, helping innovative products scale. Eighth, by building infrastructure on which innovators depend (such as interstate highways and electric transmission grids). The list goes on.

Will government sometimes make mistakes? Of course. So does the private sector. Innovation is about taking risks. There may be times when government should do less, but there will never be a time when it should do the "least". Government has unique and powerful abilities to promote innovation. We should recognize and embrace them.

It has been almost 45 years since Bob Taylor first convinced his bosses at DARPA, a government agency, to invest in a new idea for computer communications. That led to the internet and, eventually, to The Economist online. It led to the clever managers of this site combining a classic debate format with 21st-century technologies and, in turn, to our discussion today. Many thanks to The Economist, to Prof. Bhidé and especially to all of you reading this dialogue.

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Winner announcement

March 28, 2010

Mr Vijay V. Vaitheeswaran

Dear readers, it has certainly been a thrilling ride this past week. Even by the standards of our heated online debates, our current one on the government's role in innovation has proved fiery. With every thrust and parry(唇枪舌剑) of the debaters swung the pendulum, and the outcome remained uncertain until the very last moment.

What is the reason for this? One might be that our intellectual heavyweights were equally matched. They both certainly proved aggressive combatants, drawing cleverly from academic theory, economic history and very fine-grained business cases to bolster（支撑） their arguments. The better explanation, though, may be the one offered by our expert commentator John Kao (whom this newspaper declared to be "Mr Innovation" in a Face Value column a decade ago). Mr Kao pointed out the fundamental dilemma: "Government has an inevitable role in shaping innovation. At the same time, we would be right not to trust omniscient（无所不知的） technocrats（技术专家）." Perhaps this wise observation explains the split vote.

Amar Bhidé did a fine job defending the motion, and David Sandalow argued well against the motion. In the end, the house was evenly divided over whether innovation works best when government does least. Congratulations to both debaters, and thanks to you, our readers, for participating in this vigorous battle of wits.

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Gauging voters' views

Not only politicians fudge the issues

Be careful of offering people what they claim to want

Apr 22nd 2010 | From The Economist print edition

IT SOUNDS easy. In a democracy, the party that offers the public more of what it wants ought to win elections. Reality, inevitably, is much more complicated. People are often unclear about what exactly it is they do want.

New polling for The Economist by Ipsos MORI illustrates the point. We asked Britons their views on issues ranging from more local control of public services to better equipment for soldiers and the need to cut the national debt, clamp down on boozing and discourage air travel to reduce greenhouse-gas emissions. Four sets of answers are shown below (full data can be found at here).

A striking trend emerges. Many voters agree strongly with each of the original propositions in their pure form. But, when the downsides of those policies are pointed out to them, support drops off sharply. The fall is particularly big when it comes to kitting out British soldiers with better equipment: 83% of respondents agreed strongly with the general principle, but only 46% once it was suggested that, other things being equal, more guns abroad would mean less butter at home.

The Conservatives might wish to examine in particular the responses to the question on beefing up local control over public services. The party has based its election campaign on the notion that ordinary citizens can be recruited to improve schools, hospitals, policing and so forth. (The Tory manifesto is styled “an invitation to join the government of Britain”; the idea is that the state needs to be smaller and society bigger.) And, at first blush, it looks popular: 54% of respondents are strongly in favour. But when they are reminded that meaningful local control will inevitably lead to differences of provision in different places, only 29% retain their original enthusiasm. Strong opposition rises from 2% to 10%.

The question on deficit-trimming reveals why no political party has yet come clean about the fiscal pain that must follow the election. Although more respondents agree than disagree that cuts in spending are needed, when they are reminded that those cuts will affect them directly, the positions reverse: only 19% are strongly in favour of trimming debt, whereas 27% are strongly opposed. Those claiming to offer the public “honesty” about the fiscal situation is playing with fire: real honesty and popularity seem not to be coterminous.

Only alcohol (and climate change, not shown in the chart) buck the trend. When asked, 32% of respondents want the government to try to limit people’s boozing by taxing alcohol more. That number does not fall when people are reminded that they will end up paying more for their own beer; indeed it rises slightly, though the increase is still within the statistical margin of error.

Bobby Duffy of Ipsos MORI points out that drinking is seen as a moral issue in a way that local control of services, for example, is not. Because of that, people may give unusually upright responses to pollsters, particularly in telephone interviews such as these. A less elevated interpretation is that voters grasp from the start that higher alcohol taxes mean more expensive booze and do not change their views when reminded of the fact. More abstract issues may be harder to think through initially.

The results reveal a quirk of human behavior that psychologists (and economists) have long been familiar with: that people’s first responses may not be their “real” ones, and that pointing out the implications of a decision, particularly if it involves a direct cost to the individual, can alter preferences. It is popular at dinner parties to castigate politicians for their euphemisms and evasions. But the public’s contradictory opinions present them with a tricky challenge: they must appear to be honest, while at the same time finessing the unpalatable decisions that voters themselves are not keen to make.

Comment:
After reading this article, in my opinion, the fall after the following additional choice means voters can’t think a issue carefully and clearly. Even a coin has two face, voters should have an idea of what things good or bad will come together with the change. It also means governors should always obey the people’s need but have their own thinking and make the right choice, for sometimes citizens’ claim is not suitable and appropriate and even citizens themselves don’t know the things or policies they want are what. However, the government should improve the quality of education to make citizens have the ability to think comprehensively to make the right decision, only government, which presents the capitalist class in most of the countries in the world, is harmful to the development of the country and the advancement of civilization.

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A special report on television

Changing the channel

Television is adapting better to technological change than any other media business, says Joel Budd

Apr 29th 2010 | From The Economist print edition

ONE evening last year Steve Purdham noticed something odd. The flow of data into and out of We7, a British music-streaming website he runs, had abruptly slowed. An hour later it returned to normal. Such a sharp fluctuation usually means a server is malfunctioning—a potentially ruinous problem. But when engineers checked the computer system they found nothing wrong. So what could have happened between 8pm and 9pm on a Saturday night to cause such a sudden drop in use? Suddenly it dawned on Mr Purdham: “Britain’s Got Talent” was on television.

At its peak that show drew 68% of all British TV viewers and notched up the biggest audience for any programme since 2004, when the English football team played Portugal in the European championship. It also turned Susan Boyle, a middle-aged Scot, into an international star. Video of Miss Boyle singing “I Dreamed a Dream” ricocheted around the internet and caught the attention of news outlets. The singer became a fixture of talk shows and tabloid newspapers, which dubbed her “SuBo”. Her first album sold more quickly in America than any other by a female artist since Nielsen Soundscan began tracking music sales in 1991.

When it comes to mobilizing a mass audience, nothing can touch television. On February 7th this year 106m Americans watched the New Orleans Saints defeat the more favoured Indianapolis Colts in the Super Bowl. The nation spent more time glued to that one match than it spent on YouTube, the most popular video-streaming website, during the entire month, according to ComScore. Remarkably, television can deliver these huge audiences even though it provides more choice than ever.

In 1992 Bruce Springsteen, a rocker from New Jersey, released a song called “57 Channels (and Nothin’ On)”. There are now hundreds of channels. A quick channel-surf through a basic cable-TV package in America turns up a weighty history of the civil war, a South Korean melodrama, a college basketball game, a Hispanic talent show, a congressional hearing, a zombie film, European football, an evangelical sermon and a documentary about a “half-ton teen”. Many more options are available on demand with a few clicks of the remote control. The offerings are decidedly mixed, but there is always something on.

“There are not many genres that are not addressed any more,” says Philippe Dauman, CEO of Viacom, a media conglomerate. “We try to think of new ones all the time.” And where America has led, others have followed, often much more quickly. Until the early 1990s India had two state-run television channels, Doordarshan 1 and Doordarshan 2, which were best known for their amateurish dramatisations of Hindu epics. It now has more than 600. In Britain the proportion of homes that receive multi-channel television has risen from 31% to 89% in the past ten years.

The box that delivers all this stuff has evolved, too. Televisions used to be squat cubes. Gradually they have flattened and turned into panels, and their screens have become sharper and brighter. They have spread to bedrooms, kitchens and even bathrooms (with heated screens to ward off condensation). The latest devices from Samsung and Sony are as thin as laptop computers. Television has gone online and become mobile. This year it will expand into the third dimension.

Predictions of TV’s imminent demise(逼近的消亡) have come and gone like fast-forwarded advertising breaks. In 1990 George Gilder, an American writer, claimed that by the end of the 20th century traditional television would be extinct because technology would enable consumers to track down programmes that catered to their particular interests. Bass fishermen would watch endless shows about bass fishing. Even the technological futurists found it hard to imagine the explosion of websites, social networking and mobile phones that was to come. Yet these things have not displaced television. Rather, they have squeezed around it.

More of everything

Look at Japan, a country that leads many technological trends. Last year Tokyo residents spent an average of 60 minutes a day at home consuming media on the internet or a mobile phone, up from just six minutes in 2000. But they also spent more time in front of the television: an average of 216 minutes, up from 206 minutes. Among young women, the group that advertisers most want to reach, television-watching went up more steeply. Admittedly their attention was not always fixed on the box. Many teenage girls send text messages on their mobile phones while watching television. “In Japan we like to do two things at the same time,” explains Ritsuya Oku of Dentsu, an advertising agency.

Or take American teenagers. In 2004 the Kaiser Family Foundation reported that the average person aged 8-18 was spending almost six-and-a-half hours a day taking in some kind of media—television, films, music, video games and so on. By multitasking, they were able to cram eight-and-a-half hours of media consumption into that time. The researchers concluded that young people were “filled to the bursting point” with media. Whatever, responded their subjects. When the study was repeated in 2009, young Americans were spending more than seven-and-a-half hours with media each day, an hour more than they had done five years earlier (see chart 1). Into that space they packed an astonishing 10 hours and 45 minutes of consumption. Among other things, they were watching more television.

“Report: 90% of waking hours spent staring at glowing rectangles,” read a headline in the Onion, a satirical newspaper, last year. The joke contains a profound truth. Distinctions between glowing and rectangular television sets, computers and mobile phones are gradually disappearing. Televisions have long doubled as monitors for video-game consoles. More recently they became digital radios. Now they are turning into gateways to the internet. People who buy high-end televisions this year will discover that their new toys can obtain all sorts of things, from stock quotes（股票报价） to weather forecasts.

At the same time TV is moving beyond the living room. Many programmes can be viewed on computers, mobile phones and tablet devices like Apple’s iPad. Video-streaming websites are becoming more professional, meaning they are both better designed and contain more proper television. Services like iPlayer, which carries BBC television shows, and Hulu, which distributes programmes from America’s ABC, Fox and NBC, have grown in popularity. At first this success delighted people who earn their living from TV. Gradually they have become more alarmed.

Every media business that the internet has touched so far has come off badly. Recorded music sales have fallen steeply in value since Napster, a file-sharing website, appeared in 1999. The internet has drawn classified advertising away from local and regional newspapers, turning once highly profitable businesses into basket cases（四肢不全的人）. Book publishers have watched helplessly as online retailers and e-readers have driven down prices.

The internet tends to disaggregate media products, breaking music albums into tracks and splitting magazines into their constituent articles. It also disintermediates by bringing content directly to consumers, sometimes by means of piracy. Online, people can pick and choose the content that interests them without paying much for it. One of the most harmful things about the internet as it has evolved in the past few years, says Jeff Bewkes, the boss of Time Warner, one of the world’s biggest media firms, is the assumption that charging for content is hostile to the consumer. As the saying goes, content wants to be free—or, at least, paid for only by advertising. “We already tried that,” says Mr Bewkes. “It was known as the wasteland.”

In 1961 Newton Minow, chairman of the Federal Communications Commission, told a room full of television executives that they had created a “vast wasteland” of uninspired shows. At that time America had three broadcast networks, which operated on the principle that the least objectionable shows would draw the biggest audiences and the most advertising revenue. As Minow predicted, competition improved matters. In the 1970s cable and satellite television began to spread. New subscription channels like HBO, which had to please viewers rather than advertisers, were able to take risks. Broadcasters raised their game in response.

The result, beginning in the late 1990s and continuing today, has been a golden age for television. It can be argued that Hollywood makes less impressive films these days than it did in the 1970s (or the 1930s), but that is not true of television. Modern TV shows like “The Sopranos”, “The West Wing”, “Mad Men” and “Modern Family” are so superior to what went before—so much better written, better acted and better shot—that they almost seem to belong to a different medium.

Sir Howard Stringer, Sony’s boss, fears television will return to the wasteland. The danger is not lack of choice, as Minow found, but a surfeit of choice. So much content will be available on so many digital platforms that audiences will become too small to pay for good programmes. The internet already competes strongly for advertising. In Britain more money is now spent online than on television (see chart 2), although some of this can be blamed on artificial restrictions on TV advertising rates.

Even so, this special report will argue that television’s encounter with technology is turning out quite differently from the experience of other media businesses. Although growing choice and the profusion of platforms is indeed crushing smaller shows, it is helping the biggest ones thrive. Televised sport is stronger than ever. Viewers have embraced some innovations but roundly rejected efforts to transform the living-room set, puzzling and frustrating some of Silicon Valley’s best minds.

Television is not about to suffer the fate of music or newspapers, yet the next few years will be dangerous nonetheless. A handful of upstart websites, with audiences smaller than many channels at the bottom of the programme guides, have already rattled the giant TV industry.

Commentary:

With the incredible development of modern technology, once popular and charming television now is gradually replaced by other strategies of medias, such as newspaper, broadcast and internet. Especially the Internet, which is growing fast and becoming cheaper, makes life more convenient, simplify the way we get information and lower the cost concomitantly. So the fate of Television is not optimistic and it is hard to compete with Internet. In my opinion, when I was a kid, everyday at night I was eager to watch TV programmes, which couldn’t satisfy my curiosity only one hour per day. And now I can spend many hours on the Internet doing what I want. I even believe television is a production from last century.

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Greece's debt crisis

On the edge of the abyss

Europe's leaders must act fast to stop Greece’s market contagion（败坏） spreading

Apr 28th 2010 | From The Economist online

IF A sense of panic has started to grip Europe over the potential for Greece to default on its debts, and the contagion to spread rapidly to the continent’s other struggling economies, it has not yet struck Herman Van Rompuy, the president of the European Council. He insisted on Wednesday April 28th that there was “no question” of Greece's debts being restructured. He also said leaders of the euro-zone countries would meet next month to consider how to activate their proposed joint lending programme with the IMF to support Greece. Jean-Claude Trichet, president of the European Central Bank, delivered an almost identical message, saying that a Greek default was “out of the question”.

The calm demeanour(行为举止) of Mr Trichet and Mr Van Rompuy is not shared by the markets. On Wednesday Greece said that it would ban the short-selling of shares for two months to prevent speculators doing further damage to the country’s banks. The previous day, shares in Greek banks had plunged by nearly 10% and the Athens stockmarket as a whole fell by 6% on fears that the country would soon suffer another downgrade of its debts. Those fears proved entirely justified. After the markets closed Standard & Poor’s heaped indignity on Greece by cutting the rating of its sovereign bonds to “junk” status. It also cut Greece's banks to “junk” because of their hefty exposure to government debt.

The markets still see the risk of a Greek default as high

Although the move to ban short-selling steadied Greece's stockmarket somewhat on Wednesday, the chances of the country defaulting on its debts were still perceived by the bond markets as high. Spreads on Greek government bonds (the risk premium compared with German bonds) reached a 13-year high as investors worried that the proposed rescue plan for Greece could stall. Talks between Greece, the European Union and the IMF got under way last week.

Greece was initially seeking up to

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Financial information in Vietnam

Who will watch the watchmen?

The central bank shuts down a rating agency （中心银行把评价机构关了。。。）

May 2nd 2010 | HANOI | From The Economist online

VIETNAM CREDIT is the only independent Vietnamese company publishing comprehensive credit ratings of Vietnamese banks. Or it was, until April 15th, when a new decree（政令） came into force which bars independent agencies from rating banks unless they meet a series of restrictive conditions. The decree was issued hastily by the State Bank of Vietnam after Vietnam Credit issued its first comprehensive ratings of Vietnamese banks in December, a report which gave low marks to some of the country’s largest state-owned banks. The government’s de facto crackdown on（打击） Vietnam Credit has people wondering whether Vietnam is not yet prepared to accept the freedom of commercial information that investors demand in an advanced financial economy.

Vietnam Credit was in founded in 2001 by three brothers named Le, all in their 30s and graduates of Hanoi’s prestigious（有名望的） Foreign Trade University and Hanoi Law University. It was just as Vietnam was gearing up for its second major push towards market reforms. Vietnam Credit started out investigating and rating Vietnamese companies for private clients, mainly foreigners. Their report on banks, says Le Dinh Quan, one of the brothers, was a response to the bewildering proliferation（令人困惑的增值） of new banks that has sprung up in the past five years. Of the 48 domestic banks it rated, just one, Asia Commercial Bank (ACB), qualified for an A. The country’s largest bank, state-owned Agribank, was given a BB: “vulnerable to adverse changes（对不利变化很敏感）”.

Within days, the Vietnam Banking Association (VNBA) had issued an indignant protest. The report, they said, relied on data from 2008, when banks were buffeted by the global financial crisis; it was deceptive of Vietnam Credit to use those data in the more favorable conditions in 2009. VNBA’s secretary-general, Duong Thu Huong, called the report “illegal”, saying only the State Bank had the authority to rate banks.

In February, the State Bank agreed. It barred Vietnam Credit from marketing its ratings altogether—pending an upcoming circular which is to lay down the new rules for credit-rating agencies. A draft of the circular, obtained by The Economist, states that agencies would need to obtain the assent of at least 20 banks to act as their exclusive rating agency. Also that they would need to be headed by graduates of the Banking University, which, it so happens（碰巧~）, the three brothers Le are not.

Some bankers are unhappy with the State Bank’s move. Dam Van Toan at ACB, which received the top ranking, says Vietnam Credit’s controversial report seemed generally accurate. If it erred in any way, Mr Toan ventures, it was being overgenerous to some banks. Mr Toan’s assessment jibes with ratings that Moody's, an international rating agency, issued last year. Like Vietnam Credit, Moody’s gave ACB the highest marks in Vietnam; state-owned Techcombank and BIDV rated lower. Moody's gave none of the banks it rated in Vietnam anything higher than Ba2 issuer ratings (BB; two notches below investment grade), though it did rate ACB as having the highest financial strength of the bunch.

It is unclear how the new circular（通知） might affect the Vietnam operations of foreign rating agencies, like Moody’s and Fitch. But the willingness of the State Bank to block domestic rating agencies comes as a worrying sign at a time when Vietnam needs to build investors’ trust. That will be hard to do if well-connected insiders can enforce a monopoly on commercial information. Mr Toan says that the requirement that each bank be watched exclusively by a single rating agency would create perverse incentives for the agencies. But that may be an idle concern. In a field that is expected to shrink soon to fewer than 40 banks, requiring that each agency find a minimum of 20 clients would seem to leave room for just one agency: the State Bank’s Credit Information Centre.

“According to this draft decree, it seems like there will be only one organization that can do credit ratings,” says Vietnam Credit’s Le Dinh Quan. “And that’s the organization that prepared the draft decree.”

Commentary:

It is definitely true that monopoly in commerce is same as autarchy in politics, which will curb the development of a country. In my views, monopoly always happens in Asian countries, which have a long history of feudal rule. The remains of that corrupt culture are still in many people’s minds. I think why an effective reform can’t be accomplished successfully is for the sake of its profits to many governors and aristocrats who control the country’s policy. If normal persons can question the country and veto decrees one day, the country will be a peaceful and harmonious paradise.