Daily Archives: 17 April 2004

Burma, TotalFinaElf, and Bernard Kouchner

A blog I only recently discovered via Belmont Club, the Last of the Famous International Playboys, posted back in January a long, detailed, and nuanced report on a scandal involving Kouchner, Total & Burma:

Good people make mistakes, too. Someone I very much admire, founder of Médecins sans frontiéres Bernard Kouchner, has drawn the wrath of right-thinking people down on his head.In his long career, the popular Kouchner (click on “afficher ma sélection” to plot his rising and falling poll numbers) has been a champion of human rights and was one of the only public figures in France to express support for the removal of Saddam Hussein.

But according to a few articles, France’s illustrious former socialist Minister of Health, Kouchner, has been accused of whitewashing the matter of the complicity of French oil giant Total (which recently merged with its highly corrupt and rapacious competitor Elf, forming the fourth largest oil company in the world) in alleged human rights abuses as part of the construction of a pipeline in the Yadana region of Myanmar.

On 7 April, the “tenth anniversary of the first full day of slaughter in the Rwandan genocide,” Last of the Famous posted another long, detailed, and nuanced retrospective on Rwanda, with a follow-up on 11 April. Both fascinating, but grim reading.

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Filed under Burma, France, industry, NGOs

19th-Century IT Improvements and Noncorporate Whaling

Alaska-based econoblogger Ben Muse posted a couple of interesting historical observations recently, one on the 19th-century IT revolution and another on why whaling ventures didn’t adopt corporate structures.

The first post summarizes data from the book, The New Financial Order: Risk in the 21st Century, by Robert Shiller.

  • The cost of paper for record storage drops as a paper making machine is invented in 1800, and the use of wood pulp for making paper is introduced in 1865.
  • The cost of data transmission drops when standardized envelopes are introduced in 1849, and as “street addresses proliferated in the late nineteenth century …”
  • The cost of making copies drops with the invention of the letter press in 1780 (“Letters … were placed before the ink was fully dry between the tissue-paper pages of a blank book, and the book closed and placed in a letter press, which pressed the pages tightly together. The special ink used to write the letter left a mark on the blank page, thereby generating a copy, which, although backward on the tissue paper, could be read normally from the other side.”), of carbon paper in 1806, and photographic document copying in 1900.
  • “The invention of the typewriter in 1868 was significant not only for the increased speed of data entry but also for the increased reliability of typewritten records …”
  • Industry for producing forms emerges in the 19th Century; carbon forms available by the 1880s.
  • Document sizes become standardized.
  • In the 1880s and 1890s development of mechanical calculators “sped the operation of the addition of numbers by about six …”
  • Filing systems improved (Dewey Decimal system introduced in 1876).

And then, there is the vertical file: “The vertical file with the associated cardboard file folders appeared at the 1893 world’s fair, the Columbian Exposition in Chicago, where it won a gold medal …”

The second post summarizes data from a working paper by Eric Hilts, “Incentives in Corporations: Evidence from the American Whaling Industry,” NBER w10403, March 2004.

U.S. whaling began in the 17th Century as small groups of colonists set out from shore after targets of opportunity. Gradually the business shifted to whaling ships with crews of 30 taking world wide trips lasting years at a time. Despite the 19th Century IT revolution, management of an enterprise like this would pose big challenges.

In the typical whaling enterprise a small group owned shares in the vessel. These persons delegated most management decisions to agents, who themselves had significant shares in the operations. [The agents and owners also tended to know each other very well, both personally and professionally.] …

In the 1830s some whaling firms incorporated in an apparent effort to become more attractive to large numbers of small investors. But look at what happened to management’s incentives. To a great extent oversight responsibility shifted from the investors to a board of directors. These, in turn, delegated management responsibility to an agent….

The corporate structure never became very important in the whaling business. The whaling industry survived into the later 19th Century, but “Of the whaling corporations that were chartered in the 1830s and early 1840s, none survived past the 1840s.” [Hilts, p. 12] …

Hilts thinks the reason is the different incentives faced by agents under the alternative forms of organization. He sought confirmation in a data set on 874 whaling voyages from 1830 to 1849; the data set covered almost 20% of the voyages during that time. For each voyage he calculated a productivity index. Hilts thinks the reason is the different incentives faced by agents under the alternative forms of organization. He sought confirmation in a data set on 874 whaling voyages from 1830 to 1849; the data set covered almost 20% of the voyages during that time. For each voyage he calculated a productivity index. Statistical analysis of the relation between the index and voyage characteristics found that, both statistically, and practically, corporate voyages were less productive that non-corporate voyages. (As a practical matter, organization as a corporation had a greater adverse impact on productivity than the death of the captain on the voyage. [Hilts, p. 23])

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Filed under economics, industry, Pacific