Elkhart Economics - A View from the Sax Section

February 10, 2009
Posted by Jay Livingston

President Obama spoke in Elkhart, Indiana yesterday trying to rally support for his stimulus package. He chose Elkhart because unemployment there has risen rapidly of late. Especially hard hit is the town’s main industry – RVs.

I don’t keep up to date on Indiana economics. When I heard the name Elkhart, I thought of my saxophone.

When I was a in fifth or sixth grade, I started on sax. I used a school-owned instrument. The school system also employed a man who went from school to school giving lessons (Hi, Mr. Prestia, wherever you are). He advised my parents to buy me a good horn, and they did – a Selmer Balanced Action, one of the last ones made. (Selmer was about to come out with an improved model, the Mark VI). Every so often I would look at the fancy engraving on the bell of the horn – the flowery patterns, the name Selmer, and Elkhart, Indiana.

In junior high, I played in the band, and somewhere along the line I noticed that a lot of the other horns – trumpets and saxophones, flutes, baritone horns, clarinets – were also made in Elkhart, even those that were other brands – Buescher, Armstrong, Conn,* and others. It seemed strange to me at the time that all these companies would choose to set up shop in the same small Indiana town that nobody ever heard of.

Economists have a word for this – agglomeration. Usually, it refers to the clustering of industries in a city. I know that in New York if you want to shop for musical instruments, you go to 48th Street. That’s where all the music stores are. Jewelers are on W. 47th and on Canal St. Even wholesalers cluster together too – clothing and accessories in the garment district, cardboard boxes in the west twenties, and so on. But it holds for cities too – Akron was tires, Detroit is (was?) cars. And Elkhart was band instruments.

What happened to Selmer and Conn and the rest in the decades since I got my alto parallels the curve of other industries. Some of the horn makers were bought up and absorbed into larger companies. These companies eventually sent the manufacturing out of the US to countries where labor was cheaper (the Elkhart workers were highly skilled, and they were unionized) – Mexico and Asia. At the same time, the Japanese developed their own high quality horns. Some pros have put down their Selmers and are playing horns made by Yamaha, which along with Yanagisawa also makes solid mid-range instruments. And now even the Japanese saxes may be manufactured in China.


*In the 1950s, Conn ads featured a picture of Robert Preston, who played Prof. Harold Hill in The Music Man (on Broadway and in the movie) in his bandmaster’s uniform with the caption, “The Music Man is a Conn man.” Nice pun. But I always wondered why that show’s song “Gary, Indiana” wasn't “Elkhart, Indiana.”

Obama - President of the World

February 8, 2009
Posted by Jay Livingston

I heard that phrase – “Obama, president of the world”– on some newscast the day after the inauguration. The speaker was some ordinary person in some foreign country. Was it Nigeria, Thailand, Moldova? It could have been anywhere.

A few days later, I got an e-mail from a friend

Greetings from Borobudur. Here in Indonesia, it is once again nice to be a white face. Given our limited Bahasa Indonesian, the conversation is:
Indo: American?
Us: Yes
Indo: OBAMA!! (Big smile and a thumbs up.)

And in France – France!– Parisians demonstrating at the huge general strike last week, were carrying signs like this.

Photo: Lauren Elkin

How much the image of the US has changed in such a short time. George W. Bush was probably the most disliked person in the world, Obama the most beloved. Yet both embody important aspects of American culture. Bush represented American independence and individualism, qualities that, for better or worse, also imply a disdain for external restraints like the UN or the World Court. Obama represents American openness, diversity, and mobility – the idea that the child of an immigrant can rise to the top levels of the society.

Use It and/or Lose It

February 7, 2009
Posted by Jay Livingston

Nearly $4 million dollars – $3.8 million to be precise. That’s the current bid for the virginity of a 22-year-old who goes by the nom de vierge Natalie Dylan. She was also recently offered a live tiger in exchange for the obviously precious commodity. (It’s a tough choice, I know, but I bet she’ll go with the cash.)

She refers to her auction as “a sociological experiment” (with experiments like this, who needs grants?), and one thing it’s already shown is the different ways it can be construed. Dylan herself styles it as feminist:

the value of my chastity is one level on which men cannot compete with men. I decided to flip the equation, and turn my virginity into something that allows me to gain power and opportunity from men. I took the ancient notion that a woman’s virginity is priceless and used it as a vehicle for capitalism.

Brooke Harrington at Economic Sociology is skeptical. Putting your hymen on e-bay doesn’t subvert or even challenge the patriarchal system, but merely exploits it.

But why is it worth so much?

The evolutionary psychology people have an answer, and it’s exactly what you’d expect. Men value female virginity for the same reason they value female chastity and marital fidelity: without those, a man can’t be sure whether it’s really his genes that are being passed on to the next generation.

“Virginity and chastity in pre-menopausal women is fiercely guarded and socially hallowed the world over. Why? To minimise wasted paternal investment.” (Source here.)

The trouble with this idea is that “world over” part isn’t exactly correct. Hunter-gatherers – and that’s what we’ve been for most of the time that our psyches have been evolving on this planet – aren’t much concerned with virginity. That concern is something that arises (and turns into something of an obsession) with the transition to agricultural and pastoral societies. The pastoralist Biblical Hebrews provide an excellent example.

But if this thing be true, and the tokens of virginity be not found for the damsel: Then they shall bring out the damsel to the door of her father’s house, and the men of her city shall stone her with stones that she die, (Deut. 22: 20-21)

And we thought wedding nights in our society could be problematic.*

The high valuation on virginity seems to be part of a cluster of customs found where we also find high levels of inequality, especially inequality between sexes. Those hunter-gatherers besides not worrying much about virginity are also famously egalitarian. And the industrial societies today that are least concerned with virginity are the more egalitarian ones. Like Finland.

From an article by evolutionary psychologist David Buss.

* I wonder how all those Evangelicals and born-agains – the people who quote Deuteronomy to justify discrimination against homosexuals – I wonder how they react to the lack of virginity of brides in their communities. I haven't heard too may calls for stoning (See my earlier post on Bristol Palin.)

From the blogs I glanced at, Christians seem predictably torn about Natalie Dylan's marketing her virginity. On the one hand, she provides confirmation that virginity still has great value. But they really don’t like a girl actually cashing in that value rather than giving it away.

Keynes from My Father

February 4, 2009
Posted by Jay Livingston

Did the War Effort – massive government spending for World War II – bring about the end of the Depression?

That’s not just an academic question for economic historians. The answer lies at the basis of ideas about what to do now in the current economic crisis. Keynesians answer the question with a resounding “yes” and advocate massive government spending. Other economists aren’t so sure. Here’s Tyler Cowen on a recent segment of This American Life devoted to Keynes and his legacy. (The segment on Keynes begins about 36 minutes into the podcast. The quote from Tyler comes about nine minutes after that.)

World War II was a time of economic misery. There was low consumption, there was rationing. Times were tough. It was a continuation of the Great Depression. The numbers for GDP were high because we were making tanks. But it didn’t make people better off. . . . The war made the Depression worse in terms of real standard of living.

I’m not an economist, and I’m not a historian, but I can make one small contribution to this discussion – my own bit of economic history. My father’s really.

“How did you make so much money in the steel business,” I asked him once. He had worked for a small steel company in Chicago, and in 1942 they sent him to head their office in Pittsburgh. Actually, I think he was the Pittsburgh office. It was a small company. They were steel brokers, middle men* between the mills (still in Pittsburgh in those days) and the fabricators.

“Well,” he explained, “a lot of the people in the steel business in those days weren’t very smart.” I asked him what he meant. “OK, here’s an example. You know that steel was rationed. But towards the end of the war, the mills were making more steel than they could sell to the government. Still, because of rationing, they weren’t allowed to sell it all. But the rule was that if a civilian fabricator placed an order, you could fill one-third of it immediately; then you had to wait for approval before you could fill the other two-thirds.

“So I asked some of the salesman, what if we tell the fabricators to place an order for three times as much as they need. We fill the one-third right away, and then later they cancel the rest of the order.

“They thought that was probably illegal, so I said, ‘I’ll go ask the government office in charge of rationing.’ The other salesmen all said, “Oh God no, don’t go to them. Stay away from those guys.’

My father didn’t understand the reason for their fears, he did go to the rationing bureaucrats, and they had no objections to his idea. He wound up selling a lot of steel.

I leave it to the economists to put this in terms of government stimulus, productive capacity, rationing, and consumption. And in the end, Tyler Cowen may be right in general. All I know is that at least in the Livingston family, the last years of the war were decidedly not a continuation of the Depression. Maybe that’s why my father remained a Keynesian to the end of his life – a life which ended before the combination of high spending, high unemployment, and inflation of the late 1970s that caused mainstream economics to shoo Keynes hurriedly into the closet of failed ideas. Now, Obama and $800 billion of stimulus have opened that closet door.

* They were all men. My mother, learning the business by necessity and on the job after my father’s death, was one of the first and one of the few women in the steel business.