The Secret to Finland's Success With Schools, Moms, Kids—and Everything

The country has cheaper medical care, smarter children, happier moms, better working conditions, less-anxious unemployed people, and lower student loan rates than we do. And that probably will never change.

OLGA KHAZANJUL 11 2013, 8:58 AM ET

A Finnish child being happy, as usual. (Kacper Pempel/Reuters)

It's hard not to get jealous when I talk to my extended family.
My cousin's husband gets 36 vacation days per year, not including holidays. If he wants, he can leave his job for a brief hiatus and come back to a guaranteed position months later.
Tuition at his daughter's university is free, though she took out a small loan for living expenses. Its interest rate is 1 percent.
My cousin is a recent immigrant, and while she was learning the language and training for jobs, the state gave her 700 euros a month to live on.

"Everyone should get a slice of the cake so that they have what they need to realize their life projects."

They had another kid six years ago, and though they both work, they'll collect 100 euros a month from the government until the day she turns 17.
They of course live in Finland, home to saunas, quirky metal bands, and people who have for decades opted for equality and security over keeping more of their paychecks.
Inarguably one of the world's most generous -- and successful -- welfare states, the country has a lower infant mortality rate, better school scores, and a far lower poverty rate than the United States, and it's the second-happiest countryon earth (the U.S. doesn't break the top 10). According to the OECD, Finns on average give an 8.8 score to their overall life satisfaction. Americans are at 7.5.
Sometimes when I'm watching the web traffic for stories here at The Atlantic's global desk, I'll notice a surge in readership in one of a couple of archival stories we have about how fantastic Finland is -- usually thanks to Reddit or a link from another news site. One is about Finland's "baby boxes, " a sort of baby shower the Finnish government throws every mom. A package sent to expecting women contains all the essentials for newborns -- everything from diapers to a tiny sleeping bag. (Want to choose your own baby clothes? You can opt instead for the box's cash value, as my cousin did.)
The other popular story is about Finland's school system, which ranks as one of the world's best -- with no standardized testing or South Asian-style "cramming" but with lots of customization in the classroom. Oh, and students there also spend fewer hours physically in school than their counterparts in other Western countries.
As the U.S. raises student loan rates, considers cutting food stamps, guts long-term unemployment insurance, and strains to set up its first-ever universal healthcare system, it's easy to get sucked into articles about a country that has lapped America in certain international metrics but has also kept social protections in place. Like doting parents trying to spur an underperforming child, American liberals seem to periodically ask, "Why can't you be more like your brother?"

It's a good debate to have, and in some ways, it seems like there's no reason why the U.S. shouldn't borrow from Finland or any other Nordic country -- we're richer and just as committed to improving education and health, after all. Here's the difference: Finland's welfare system was hardwired into its economic development strategy, and it hasn't been seriously challenged by any major political group since. And just as Finland was ramping up its protections for workers, families, and the poor in the 1960s, Americans began to sour on the idea of "welfare" altogether. What's more, some economists argue that it'sbecause of all that American capitalism contributes to the global economy that countries like Finland -- kinder, gentler, but still wealthy -- can afford to pamper their citizens. With actual Pampers, no less.

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Let's start with mandatory maternity leave, a favorite topic among the having-it-all, Leaning-In crowd. The U.S is one of the last countries on earth without it, but the Finnish state mandates four months of paid maternity leave, and on top of that, the mother and father can share an additional six-month "parental leave" period, with pay. After that, kids can either continue staying home with their mothers until they reach school age, or parents can instead send them to a publicly subsidized child-care center, where the providers are all extensively trained. The cost is on a sliding scale based on family income, but the maximumcomes out to about $4,000 a year, compared with $10,000 for comparable care in the U.S.
This is just one of the many reasons Finland is "the best place to be a mom," as the nonprofit Save the Children declared in May.
Can't get a job? Not to worry. Unemployment insurance in Finland lasts for 500 days, after which you can collect a means-tested Labor Market Subsidy for an essentially indefinite period of time. (The unemployment rate is a high-but-not-awful 8.2 percent).
At this point, if you've literally turned green with envy and need to see a doctor, you're in luck! In addition to dirt-cheap universal healthcare, Finland offers compensation for wages you might have lost while you were away from work, as well as a "Special Care Allowance" if you need to take some time off to take care of your sick kids.
All of this adds up to the stress equivalent of living in what is essentially a vast, reindeer-fur-lined yoga studio.
"It seems to me that people in Finland are more secure and less anxious than Americans because there is a threshold below which they won't fall," said Linda Cook, a political scientist at Brown University who has studied European welfare states. "Even if they face unemployment or illness, Finns will have some payments from the state, public health care and education."

***

Eero Järnefelt, Burning the Brushwood, 1893. (Wikimedia Commons)

The Finns didn't always have it this good. For much of the early 20th century, Finland was agrarian and underdeveloped, with a GDP per capita trailing other Nordic countries by 30 to 40 percent in 1900.
One advantage Finland did have, however, was enlightened policies towards gender. The country focused on beefing up child and maternal care in large part because women were at the core of Finland's independence and nation-building efforts at the turn of the 20th century. Finnish women were the second in the world to get the vote in 1906, and they were heavily represented in the country's first parliament.
Ellen Marakowitz, a lecturer at Columbia University who studies Finland, argues that because women helped form modern Finland, things like maternity leave and child benefits naturally shaped its welfare structure decades later.
"You have a state system that was built on issues concerning Finnish citizens, both men and women, rather than women's rights," she said. "Government was created in this equal footing for men and women."

BBC

Finland's strong trade unions pioneered its initial worker protections, but the state soon took those functions over. Today, roughly 75 to 80 percent of Finnsare union members (it's about 11 percent in the U.S.), and the groups dictate the salaries and working conditions for large swaths of the population.
And as the country worked to industrialize in the 1960s, its economic policymakers took on a mentality similar to that of CEOs at tech companies with awesome employee perks like free string cheese and massages.
"The thinking was, 'for a country of 5 million, we don't have many resources to waste. If people are happy, they'll maximize their work ethic, and we can develop,'" says Andrew Nestingen, a professor who leads the Finnish studies program at the University of Washington. The theory of the welfare state was that "everyone should get a slice of the cake so that they have what they need to realize their life projects."
The country's unemployment and disability system was in place by 1940, and subsequent decades saw the expansion of child benefits and health insurance.
Meanwhile, thanks to the country's strong agrarian tradition, the party that represents the rural part of Finland pushed through subsidies for stay-at-home (or stay-on-farm, in their case) mothers -- thus the current smorgasbord of inexpensive child-care options.
Over time, Finland was able to create its "cake" -- and give everyone a slice -- in large part because its investments in human capital and education paid off. In a sense, welfare worked for Finland, and they've never looked back.
"In the Finnish case, this has really been a part of our success story when it comes to economic growth and prosperity," said Susanna Fellman, a Finn who is now a professor of economic history at the University of Gothenburg in Sweden. "The free daycare and health-care has made it possible for two breadwinners -- women can make careers even if they have children. This is also something that promotes growth."
With this setup, Finns have incredible equality and very little poverty -- but they don't get to buy as much stuff. The OECD gives the U.S. a 10 when it comes to household income, the highest score, while Finland gets a measly 3.5.
And there are some major lifestyle differences: Finns live in houses and apartments that are about half the size of Americans', and their taxes on the wealthy, like those on capital gains, are much higher than ours. (Hence why taxesmake up a huge chunk of their GDP.) Professionals such as doctors make far less there, which helps medical care to stay reasonably priced. (The conservative Heritage Foundation ranks Finland as downright "repressed" in some categories, like government spending, on its "Index of Economic Freedom.")

Tax Policy Center

It's also worth noting that Finland isn't a total economic Wonderland, either: It's not growing very fast and will probably have issues with its aging population in coming years. The Bank of Finland recently predicted that the country might soon exceed the 60 percent debt-to-GDP ratio mandated by the European Union -- a common problem in Europe these days.
Some of Finland's more conservative politicians have suggested cutting public benefits there in the wake of the economic downturn -- but even with those cuts, social protections there would still be far more generous than ours.
And the economic redistribution there doesn't always work perfectly. Some municipalities inevitably find themselves with lower-quality hospitals and day cares, even when they're supposed to be roughly identical, and recently some pro-business groups have tried to edge the country toward greater privatization (though unions have pushed back.)
Still, the country's small, well-educated population and investments in technology have allowed it to avoid some of the problems currently plaguing other, similarly socialist European countries. Overall, most Finns love the welfare system that loves them back.
I asked my cousin's husband, Reijo, why he was willing to support such an arrangement even though he works full time.
"Money isn't everything. We value equality, not inequality," he said. Fair enough. But does he have any gripes about the Finnish way? Anything he would change? Perhaps kick some of those freeloaders off their indefinite unemployment?
No, he said, but he did point to one small issue: "I think that for university students it is not yet good enough. Many students have to work while they are studying."

***

Like Finland, the U.S. also set up massive safety-net programs, in the form of Medicare and Medicaid, in the 1960s. But paradoxically, many Americans began developing a deep aversion to government handouts at the same time.

The 1960s saw a rise in poverty and children born out of wedlock, particularly in urban communities. Sensational media stories about families "abusing" welfare -- especially when the putative abusers were portrayed as African-American -- helped cement opposition to public assistance. One study found that in the early 1970s, nearly three-quarters of magazine stories about welfare or poverty featured images of African-Americans, even though African Americans comprised only about a third of welfare recipients.
"I do think that racial divisions are an important factor here -- the sense among many people that universal benefits will take from 'us' and give to 'them' -- to a part of society that is seen as different, less deserving, imagined as racially different," Cook, from Brown University, said. "I think that many middle-class Americans favor social benefits for what they see as 'deserving' people who have worked and earned them -- so Medicare is good -- but universal health care would provide benefits for people who are imagined as not deserving."
In a 1976 speech, Ronald Reagan made mention of supposed "welfare queens" who make six-figure salaries while drawing government funds, stoking a sense of outrage over perceived waste in public assistance. (It was later shown that he used an exaggerated anecdote). Arguing that social insurance dis-incentivized work, and prioritizing markets and individual liberty, the growing new conservative movement eventually joined together businesses and working-class voters in pushing for cuts in government programs.
Though we seemingly support spending on the sick, poor, and elderly, in 2006,46 percent of Americans still thought the government spent "too much" on welfare, even 10 years after a total structural overhaul of welfare had passed.

***

Jefferey Sellers, a University of Southern California political scientist, foundanother key difference between the two nations: Finland has much more powerful local governments than the U.S., and they're tasked with executing the myriad functions of the welfare system -- from helping the poor to operating the day cares. Municipal taxes are redistributed and supplemented with grants, thus largely eliminating the problem of under-resourced areas. Local public expenditures are 20 percent of GDP in Finland, but just 10 percent in the U.S., he points out.
"The national government provides local governments with the financial means, legal powers, and the expertise to perform well," he said. Meanwhile, "Fiscal redistribution among local governments assures equality in how those services are distributed."
What's more, some economists argue that the only way countries like Finland can be so well-off and yet so cushy is because countries like the U.S. create the technology that powers the rest of the world -- with huge rewards for success but few safety nets in the case of failure.
"The entire world benefits because of Apple's iPhones," said Daron Acemoglu, an economist at MIT, admitting it was a relatable but not necessarily optimal example (Finland gave us Nokia and Linux's Linus Torvalds, after all). "If the United States did not provide incentives for Apple to come up with and develop the iPhone, then the entire world economy would lose the benefits it obtains from this product. The cutthroat reward structure in the United States is encouraging the creation of many products and technologies like this."
If America were to adopt some of Finland's "cuddly" benefits, the thinking goes, the entire world economy might slow down. For Finns, it would be out with the baby boxes, in with the subsistence farming again.
So what about education reform, then? Finnish school expert Pasi Sahlberg has written that Finnish schools are based on "improving the teaching force, limiting student testing to a necessary minimum, and placing responsibility and trust before accountability."
It's true that Finnish teachers design their own curricula and don't have to deal with test-score-based evaluations, but school officials there are also placing young minds in very well-equipped hands: All teachers have graduate degrees in education and their subject areas of expertise. And schools are funded based on need, so the most struggling schools get the most resources. There is no "Teach for Finland," as Sahlberg has said.
But in some ways, even the Finnish way of educating requires a strong welfare system as a foundation. The country has an extremely low child-poverty rate, which likely makes teaching without testing or score-keeping much easier. And how many American teachers would love to get a master's degree but aren't willing to take on the student loans that come with it?
"The easiest [explanation] is to say that Finland seems to be a well-performing system overall, as far as the international rankings are considered," Sahlberg told me. "So, it is no wonder the education system also works well."
The no-testing model also makes sense for a culture that's low on one-upmanship: "I think one of the more important things is that there's less of an emphasis on competition in Finland," Marakowitz said. "Many Finnish children don't know how to read before they go to school, and you need a certain kind of cultural setting for that. Some U.S. parents would be quite freaked out."

***

When Americans hold up Finland as a model, their arguments are usually dismissed with two indisputable facts: Finland is indeed much smaller than the U.S., making it easier to disperse generous benefits on a national scale. It's also far more homogeneous, making disputes over payouts less frequent and less racially charged.
Still, Cook says, the claims of homogeneity are a bit over-stated. Finland has both sizeable Swedish- and Russian-speaking communities, and right-leaning parties like the "True Finns" want to pare back the little immigration the country does have. (Even the True Finns, though, love the welfare state.)
Building on the success of Finland's local governments, individual U.S. states could conceivably be more like mini-Finlands -- just look at Massachusetts, which had a comprehensive health-care system before the rest of the nation. But creating and enforcing 50 separate safety nets would require a level of oversight the U.S. federal government just doesn't have. Even Obamacare was challenged aggressively in court and has faced opposition from some two dozen states.
Fellman described Finland's welfare state as a "virtuous circle" -- Finns' social cohesion props up the welfare state, which in turn promotes greater harmony. But in a way, America's economic competitiveness, focus on innovation, and lack of safety net all reinforce one another, too.
The very reason we're so frequently googling what we can learn from "Finland's school success," after all, is that we want to stay one step ahead.

7 Ways The Utensils You Use Change The Taste Of Food

THE SHAPE, WEIGHT, AND COLOR OF YOUR CUTLERY CAN SIGNIFICANTLY ALTER THE WAY YOU PERCEIVE THE FUNDAMENTAL ASPECTS OF FOOD, FROM HOW SWEET IT TASTES TO HOW MUCH YOU THINK IT COSTS.

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Has anyone ever eaten a wonderful meal with a spork? No? Is that because it’s only drab cafeteria food that comes with sporks? Or is there something inherent about the hybrid utensil that’s capable of souring an otherwise delicious meal?

A new study (PDF) published in Flavour, by Oxford University’s Vanessa Harrar and Charles Spence, reveals that your utensils can very much affect the way you experience everything from the sweetness to the expensiveness of food. We chewed down the academic paper to its seven best bites:

1. LIGHTER UTENSILS MAKE FOOD SEEM RICHER

By adding weights to the same plastic spoon, the researchers were able to tell how utensil heft alone impacted the flavor of food. Testing with yogurt, participants reported that the sample was both denser and more expensive when eaten from a lighter spoon. It seems like a no-brainer, then, that we should just make spoons as light as possible. But there’s a catch:

2. HEAVIER UTENSILS MAKE FOOD SEEM SWEETER

That’s right. The largest, heaviest tablespoon in the study (weighing three times its normal amount), also seemed to serve the sweetest yogurt. Researchers found this was due to both the larger size and the heavier weight. As you might expect, its yogurt was also reported to be the cheapest and least dense.

Interestingly enough, there may be an anthropological play here. From the paper:

Small spoons are often used for desserts, or to stir sugar into coffee or tea. There might be an expectation that food tasted from a small spoon would normally be sweeter than food tasted from a larger tablespoon (more often used for savoury dishes such as soups).

3. BLUE UTENSILS, ESPECIALLY, MAKE FOOD TASTE SALTIER

For the next part of the study, researchers put white and purple yogurts onto red, blue, green, black, and white spoons. They found no perceived differences in expressiveness, sweetness, or general liking of the yogurts, but they did find that the purple yogurt placed on the blue spoon tasted significantly saltier. This is in line with an earlier study that showed popcorn tasted saltier in a blue bowl.

There was one strange asterisk, though, in that the white yogurt was actually reported to be far less salty than the purple. The researchers hypothesize this is because we generally expect salt when we see white on blue and the yogurt didn’t answer with enough salinity to appease that expectation.

4. BLACK UTENSILS TREND TO SWEET, WHITE UTENSILS TREND TO SALTY

In both these cases, the results were borderline significant (meaning they may or may not be within a meaningful margin of error), but yogurt tasted on black spoons tended to trend to the sweeter, and yogurt on white spoons trended toward the saltier.

5. CLASHING, CONTRASTING FOOD AND UTENSILS AFFECT HOW MUCH PEOPLE LIKE FOOD

This might surprise no one, but people reported liking the same pink and white yogurts more or less depending on their spoon color. White yogurt on a white spoon was a hit, as was pink yogurt on a black spoon.

6. KNIVES MAKE FOOD TASTE SALTIER

When cheese was sampled from a fork, spoon, knife, and a toothpick, the cheese tasted largely the same--except the knife made it taste saltier. This seems strange. At first I thought the knife might just give the cheese more surface area on your tongue--and while that may be true compared to a fork or spoon, that toothpick nulls my argument. Researchers were generally stumped by this result.

7. FANCY UTENSILS DON’T MAKE FOOD TASTE ANY BETTER

For a bit of fun, researchers tossed one “fancy spoon” with a metal tip and an ornate handle into the mix. Tasters didn’t report food being any tastier or more expensive when consumed from this spoon.

In other words, whereas we’ve all eaten our fair share of bad meals with a spork, they probably wouldn’t have tasted much better with the finest of silver.

Conleth Hill & Michelle Fairley will find that life w/ the firm may be more cutthroat than they're used to.

Medicine's Fading Traditions of Generosity

What is the mission of a hospital?

RICHARD GUNDERMANJUL 9 2013, 8:55 AM ET

Sterilizing surgical supplies at Methodist Hospital in Indianaopolis, ca 1920 (Methodist Health Foundation)

It is difficult to fathom the dramatic changes that have taken place in hospitals over the past three-quarters of a century. Recently a friend shared with me a 70-year-old hospital pamphlet that was distributed to patients when they were admitted to Methodist Hospital of Indianapolis, which at the time was the sixth largest hospital in the United States. Its pages call to mind the remarkable progress that has taken place in medicine over seven decades, as well as painful reminders of some things that hospitals and their patients are losing.

Hospitals do well to look not only forward to a future of ever more sophisticated and remunerative care, but also back to a rich tradition of service and generosity.

On the upside, hospital care has been transformed by major scientific and technological advances in medicine. Thanks to MRI, CT, ultrasound, and endoscopy, physicians can now see much more clearly what is going on inside the body without cutting it open. A number of new therapeutic agents are available, such as ACE inhibitors for blood pressure, statins for serum lipids, and proton pump blockers for peptic ulcer disease. And new forms of surgery have been introduced, including cataract extraction and lens implant, hip and knee replacement, and organ transplantation.
The contemporary hospital experience also boasts far more creature comforts. Rooms are climate controlled and smoke free. Patients need not eat whatever is served to them, but can order from a full menu. Television and Internet access are available in each room. Hospitals now compete with one another in pampering their denizens, offering such amenities as high-thread-count sheets, concierge services, gourmet chefs, and on-site spa facilities. Some even boast that their staffs have been trained by the likes of the Disney Institute to deliver customer-pleasing service.

Nurse Florence French at Methodist Hospital, ca 1925 (Methodist Health Foundation)

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Of course, such opportunities come at a price, and increasing price represents one of the major drawbacks of the progress over the past 70 years. Back then, several types of accommodation were available, including a ward bed with a half-dozen or more other patients, a two- or three-bed room, a private room, or even a deluxe room with a private bath. The daily price for even the latter option was only $25, a private room varied between $6 and $8.50, and a ward bed cost just $3.50. These charges covered not just the room but also meals, nursing, house physician, and surgical dressings.
The dollar today not being what it was 70 years ago, of course these numbers need to be multiplied by at least 10 to put them into contemporary terms. Nonetheless, hospital care was a bargain compared with today, when a day in the hospital, not counting the fees for physicians, medications, and procedures, generally runs at least $2,000. And it deserves repeating that many of the services we now take for granted, including tests such as mammography, drugs such as SSRIs and newer antidepressants, and procedures such as laparoscopic surgery, were not available then at any price.
Another big change concerns the people running the hospital. Back then, the administrator in charge of day-to-day operations was called the superintendent, and he was a Methodist minister. The pamphlet bears a handwritten note from his desk, expressing the hospital's intention to provide the "very best care" and urging patients in need to phone his office, whose primary purpose was to minister to the sick. Today the administrator typically bears a business title such as CEO, and he or she is flanked by a CFO, a COO, and a legion of other staff whose degrees are far less likely to be in ministry than business.
The hospital also now employs large divisions of people in fields such as billing and coding, regulatory compliance, and marketing who barely existed 70 years ago. Whole new layers of management have been introduced, with the result that the hospital devotes a much smaller proportion of its much greater revenues directly to patient care.
When the superintendent was a clergy person, the hospital tended to be more focused on its religiously inspired charitable mission. It had been founded by people who saw service to the community not only as a duty but a privilege, and for whom business concerns were secondary. For example, the pamphlet states that "an entrance deposit is kindly requested (not demanded)," and "it is not our policy to disturb the patient regarding bills unless absolutely necessary." Patients were explicitly requested not to tip the staff.
How many contemporary patients, facing today's health-care costs, would even think of tipping the hospital staff? Now unless patients presenting to hospitals are suffering from an immediately life-threatening condition, they are unlikely to get much past the front door unless they prove their ability to pay for the facility's services. The first thing we biopsy is not the lesion but the wallet. Today it is sometimes truer to say that hospital are businesses whose product happens to be health care than health-care organizations that need to operate according to sound business practices.

The first motorized ambulance in Indianapolis, 1910 (Methodist Hospital Foundation)

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In the past, hospitals were teeming with volunteers - pink ladies, candy stripers, the women's auxiliary. For example, 70 years ago the White Cross gift shop at Methodist Hospital was operated by the women's guild, an organization of over 2,000 volunteers. As the pamphlet states, "all receipts above cost go to the Free Bed Fund to pay for helpful service to the poor." Beyond raising money, the gift shop aspired to be "a happy place to visit, not just because it is most beautiful and served by the lovely White Cross women, but because it is an ideal of social helpfulness for the benefit of the sick."
Many contemporary hospitals - protestant, Catholic, Jewish, and non-sectarian - share such a charitable heritage. And in many, there are still volunteers manning the information desks, distributing reading materials, and shepherding patients and families around facilities. But the spirit of volunteerism in hospitals has diminished. Health care is now a huge business, generating more than 20 times its former levels of revenue in real dollars. Today people laboring in health-care institutions expect to be handsomely compensated for their work. If the work is truly important, many reason, the hospital will pay for it.
The Methodist Hospital pointed with special pride to its emblematic beacon, a lighthouse, perched atop its roof. It was intended "to remind every passerby that the hospital is a haven of safety, beaming out the truth of the unity of science, religion, and philanthropy to save humanity from its ills." In its past, the hospital espoused the view that medical science and technology can achieve their full fruition in patient care only if wedded to dedication to a higher calling and the belief that we exist not to enrich ourselves but to serve others.
These were noble sentiments then, and they are no less so today. The very wordhospital comes from the same root as hospitality, and it was widely understood throughout most of the history of hospitals that their mission is to serve, to serve as a sanctuary and place of healing, and to serve as such a sanctuary above all for those in greatest need, regardless their financial circumstances. While the practical pursuit of such noble aspirations is in many respects more complicated and difficult today than 70 years ago, its worthiness has in no way diminished.
Hospitals administrators are often hired, fired, and rewarded according to their institution's number of beds, the sum of its net revenues, and its local andnational rankings -- the sorts of measures that board members and community leaders find most readily comparable. At their best, however, hospitals are not merely successful businesses. They are service organizations, embodying some of the noblest human impulses of any age. As such, hospitals do well to look not only forward to a future of ever more sophisticated and remunerative care, but also back to a rich tradition of service and generosity
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The Great Wall of Texas: How the U.S. Is Repeating One of History's Great Blunders

Today's immigration debate has an eerie precedent in the mistakes that brought down great empires from Rome to Britain.

GLENN HUBBARD AND TIM KANEJUL 9 2013, 11:15 AM ET

Reuters

Before their empire fell, the Romans built walls.
They began by erecting barriers along the border following the death of the Emperor Trajan in 117 A.D., notably Hadrian's Wall, which belted Britain. Later emperors erected internal walls, even around the great city itself, to ward off barbarians. After 300 A.D., the Emperor Diocletian effectively converted the entire Roman populace into feudal serfs, walling them off from internal movement in a vain effort to stabilize the chaotic economy.
Despite the cautionary tale of Rome, building walls, both literal and figurative, has remained a habit of great powers in decline -- the fateful course taken not only by Ming China, but also Soviet Russia, and even Great Britain.
Sadly, many Americans are all too eager to repeat history.
Witness the immigration bill slowly making its way through Congress, and the feverish reactions it has inspired. In exchange for granting undocumented workers a path to citizenship, Republicans have demanded a so-called "border surge" that would double the number of patrol agents in the Southwest and build an extra 700 miles of fencing. Due to bipartisan prejudice against so-called "low-skill" migrants, the legislation is also loaded with dangerous new government controls over the labor market. The Senate bill, for example, requires employers to post new jobs on a Labor Department website, certify that no citizen is displaced, and surrender wage-setting to bureaucrats. Nevertheless, the conventional wisdom is that the bill will open a floodgate of foreigners. The Heritage Foundation issued an outlandish warning about the supposed multi-trillion-dollar fiscal burden of new immigrants, practically suggesting that the Statue of Liberty be melted down for the border fence.
Isolationism, unfortunately, is not limited to one policy or one party. Liberals have been skeptical of free trade for decades now. Less than 10 percent of House Democrats voted for the Central American free trade agreement in 2004. And Democratic politicians, including President Obama during his re-election campaign, routinely hype the danger of multinational firms outsourcing jobs.
Before the Fall, a Wall
The psychological impulse to protect a nation's wealth and culture from foreign contamination is an example of what behavioral economists call "loss aversion" - the idea that people are more concerned about what they might forfeit than gain from change. History tells us that with great power comes great loss aversion.
Take the fate of Ming China, the world's most fabulously wealthy civilization in the 15th century. The empire cut itself off from foreign trade after the 1430s, an action urged by Mandarin bureaucrats in order to clip the power of the merchant class, their rivals at court. Court intrigue is also revealed by the extension of China's Great Wall, and the abrupt termination of the voyages of Admiral Zheng He, both reflecting the Confucian attitude that foreign barbarians offered nothing of value. The following centuries saw China transform into a weak and isolated time capsule.
Or consider the Berlin wall, the manifestation of the "Iron Curtain" that hid the stagnancy of Soviet power from 1961 to 1989. Unlike Roman or Ming walls, the communist walls blocked emigration rather than immigration, which is an even more destructive strain of inwardness. At least 246 East Germans were killed trying to escape to West Berlin, but millions more were imprisoned in a failing communist economic model. In its defense, GDP per capita in the Soviet Union rose from $4000 to $7000 per person during the final decades of the Cold War, but that compared poorly to British incomes, for example, that rose from $8900 to $16,400.
Britain itself is a particularly interesting frontrunner to the U.S., but not because of its reputation as the birthplace of free market economics. During the peak years of empire, Britain's Parliament neglected to extend citizenship to its colonial subjects not once, but twice. The first time it fumbled a continent full of human capital was in North America in the 1770s. The second time was in the 1880s, when a fear of declinism stymied progress.
Prime Minister William Pitt (the elder), who led Britain during the 18th century, recorded his own expansive dream of a Greater Britain in his personal papers. Pitt's "scheme for better uniting" proposed that there be four members of Parliament to represent Virginia, four for Pennsylvania, four for Massachusetts, three for Jamaica, three for New York, two for Canada, and so on. Adam Smith'sThe Wealth of Nations made the same appeal. And yet it never came to pass. In 1707, the English Parliament added Scotland's representatives to its chamber. Northern Ireland was given direct representation in 1800. Conspicuously absent was an offer to the Americas during the decades in between, or the Indians later.
Later, at the dawn of the 20th century, the British Empire was fading relative to other European nations. British economic power was roughly double that of France and triple that of Germany in 1820, a lead that eroded over the following century. Leaders in Parliament were puzzled by the relative decline, and began to question their historical "laissez faire" policies. Rather than reform its colonial structures, as Cambridge professor John Seeley called for, prime ministers debated which trade barriers to erect and how high. Decline followed.
Open the Gates
The real dilemma for American growth is not ignorance about good economics, but the quagmire of bad politics. Simple-minded protectionism in terms of trade or migration is being exploited by populists in both major parties. What our leaders need to understand is that the only existential threat facing America is not embodied by barbarians at the gates, but by American isolationism. To continue the miraculous American growth story, we need to continue the traditions of constant innovation, diversity, and openness to the world.
The last thing we need is a wall.

Government Destroys $170k of Hardware in Absurd Effort to Stop Malware

This is a story about government incompetence on the grossest, most unforgivable scale. Here's how the Economic Development Administration unnecessarily spent $2.75 milion to fight a common case of malware. Warning: much innocent hardware was lost. Yes, even the mice.

In December 2011 the Economic Development Administration (an agency under the US Department of Commerce) was notified by the Department of Homeland Security that it had a malware infection spreading around its network. These things happen, but what came next was truly exceptional. The EDA's IT people—including its CIO—had a meltdown.

The EDA's IT crowd determined that its network had been infected with a persistent, nation-state attack on its systems. So they isolated their department's hardware from other government networks, cut off employee email, hired an outside security contractor, and started systematically destroying $170,000 worth of computers, cameras, mice, etc. It gets crazier. From the report, prepared for the Dept. of Commerce:

EDA’s CIO concluded that the risk, or potential risk, of extremely persistent malware and nation-state activity (which did not exist) was great enough to necessitate the physical destruction of all of EDA’s IT components. 20 EDA’s management agreed with this risk assessment and EDA initially destroyed more than $170,000 worth of its IT components,21 including desktops, printers, TVs, cameras, computer mice, and keyboards. By August 1, 2012, EDA had exhausted funds for this effort and therefore halted the destruction of its remaining IT components, valued at over $3 million. EDA intended to resume this activity once funds were available. However, the destruction of IT components was clearly unnecessary because only common malware was present on EDA’s IT systems.

Destroying cameras? And mice? Over malware? Are you serious?

Worse, the EDA continued destroying components until it could no longer afford to destroy them. In fact, the agency intended to continue destroying gear just as soon as it got more funds approved to do so. Uhh... okay!

And no, it does not end there. It turns out the malware infection was absolutely routine. All the EDA had to do was isolate the affected components, remove the malware, reconnect the hardware and move on. NOAA, which received a notice at the same time as EDA, completed this operation in one month.

The overall cost of EDA incompetence? $2.75 million—approximately half of the agency's IT budget. Here it is, neatly enumerated into smaller idiotic segments:

Malware is scary, so in a way, we're sympathetic to the government agency that got infected and had a bit of a panic attack. But our sympathy disappears when we learn that its response to the malware betrayed a basic misunderstanding of malware and how it works. And remember, kids! Those are your tax dollars working hard in all the wrong places. 

IN RUSSIA, CHECKOUT COUNTERS CHECK YOU

http://www.fastcompany.com/3013741/tech-forecast/in-russia-checkout-counters-check-you

RUSSIAN COSMETICS CHAIN ULYBKA RADUGI IS TESTING NEW CHECKOUT COUNTERS THAT USE MACHINE VISION TO TRACK CUSTOMERS' EMOTIONAL STATES--AND OFFER THEM CUSTOMIZED DISCOUNTS.

BY: NEAL UNGERLEIDER

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Customers at one of Russia's largest cosmetics chains are about to encounter something different: Checkout counters that read their facial expressions and register their emotions whenever they make a purchase. The 280-location strong Ulybka Radugi chain is partnering with marketing tech firm Synqera for the project. Cameras and emotion recognition software append information on a customer's mood to an information package that also includes purchase records and loyalty card numbers. Once this data is on record, it helps Ulbyka Radugi create custom campaigns and promotions aimed at individual shoppers.

Synqera's COO, Filipp Shubin, told Fast Company in a telephone conversation that the project's goal was to “make the consumer experience more compelling than shopping online.” Showrooming is just as much a problem in Russia as it is in the United States, and the company's solution is to take facial recognition and use it to offer special promotions that online retailers can't match. More importantly, they also tie a customer's emotional state to the type of cosmetics they wear.

While facial and emotion recognition analytics are being tested on a limited basis by American retailers, a mixture of legal, technological, and cultural factors mean foreign chains have been the ones to mainly try them out. Although the Federal Trade Commission (FTC) issued best practices for retail facial recognition technology last year, Japanese, Russian, and Chinese chains have been at the forefront of emotion-reading retail.

When Ulybka Radugi shoppers are at the point of payment, sensors read their facial expressions and funnel them through a mixture of computer vision library code and in-house software. Shubin said that the software then combines the data insights with real-time analytics; using information from facial expressions, shoppers can be targeted with SMS text messages offering discounts or ads as soon as they leave the store.

Synqera plans to bring this technology to America, of course. The company recently opened a New York office and their English-language press materials focus mainly on their product's potential appeal to retailers trying to keep customers away from online retailers. Their platform, called Simplate, also offers optional gamification and survey-taking components--the payment stations are designed specifically to help retailers learn as much about their customers as possible.

So will emotion-reading analytics come to your local drugstore, shopping mall, or big box chain in the near future? Highly likely. Although the FTC's report begins with the laziest of all emerging technology clichés--a comparison of Minority Report to everyday life--the tech behind it is new. While the government is urging retailers to put up cameras high enough so that children's faces don't register and to avoid facial recognition tech in medical offices or bathrooms, they also say that adoption by retailers is a foregone conclusion. One possible use, the FTC says, is replacing store loyalty cards with facial recognition cameras that also integrate emotion analytics. Surprisingly, the FTC is also open to the idea of consumers using technology that foils facial recognition.

Ulybka Radugi will begin rolling out the technology in July 2013.