Nice Things and Why We Can't Have Them

How Some People Ruin 10% of Things for Everybody

Let’s imagine that you, reader, are a janitor, working at a university for several months. While you’re cleaning one of the science labs, you hear an annoying beeping coming from one of the freezers.

Upon inspecting where the freezer is plugged in, you see that a safety lock box has been placed around the plug and socket.

“THIS FREEZER IS BEEPING AS IT IS UNDER REPAIR. PLEASE DO NOT MOVE OR UNPLUG IT. NO CLEANING REQUIRED IN THIS AREA. YOU CAN PRESS THE ALARM/TEST MUTE BUTTON FOR 5-10 SECONDS IF YOU WOULD LIKE TO MUTE THE SOUND.”

How would you feel, if you were in that situation? What if you hadn’t had breakfast that morning?

Well, if you were one of the janitors working at Troy University, you would ignore that warning, travel over to the circuit breaker, and manually shut it down.

We can make a few inferences about the kind of person that did this.

1. They are the sort of person that feels annoyed by repetitive beeping noises.

2. They are the sort of person that understands how to operate circuit breakers, and can properly determine which one corresponds to the device he is trying to deactivate.

3. They are the sort of person who, when encountering instructions written in the plainest of possible English, acts as though those instructions are simply not there.

Those gifted with exceptional pattern recognition skills may be able to narrow down a profile of the kind of person that would have done this.

That little maneuver cost the the school twenty years worth of research in the form of cell cultures and samples, and in their lawsuit against the cleaning contractor, the school sought damages of $1 Million, which one may well equate to the total amount the janitor would have been paid after a lifetime of work at the company.

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Imagine that you were an airport baggage handler. In the course of your work, you walk behind a jet engine, which pushes you with such force that you are nearly knocked over. Your coworker shouts at you to stay away from jet engines until they are finished powering down.

Moments later, the pilot of the plane shouts at you and another coworker on the other side of the plane that the engine is still running. He is leaning out the window because he has been alerted someone has just opened up the cargo hatch in order to begin unloading luggage as quickly as possible.

What would you do in this situation? Would you patiently wait for the jet engine to finish powering down and for the warning light to turn off, and only then begin to do your work?

Or would you decide that fifteen seconds is long enough, you’re basically an entirely different person at this point, and start putting out safety cones even if it means walking right in front of the jet engine that had just pushed you back when you were behind it?

You can see where this is going.

In this case, however, the employer was found liable by OSHA, to the tune of $15,625. This, on top of the loss of the engine, itself worth an estimated $20 Million to replace.

What kind of person is this?

1. A person too impatient to wait for an engine to power down.

2. A person who failed to make the connection between the powerful push forces they felt standing behind something and the powerful pull forces they would likely feel if they were to hypothetically stand in front of it.

3. A person who will not only ignore a warning light, but a verbal warning from their own coworker (an equal), and the pilot (a superior).

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Once more, this time with actual malice.

You’re 17 years old, working as a valet in Houston, at a $40/meal restaurant. At this job, you get to meet celebrities like Travis Scott and 50 Cent, and sit behind the wheel of fancy cars like Bentleys and Infiniti G37s.

You may want to take a seat.

Three fatalities, the car crashed through a fence, a broken leg for the driver, and pending lawsuits against the restaurant.

What is the common theme here?

One person’s negligence, malice, or incompetence destroying significantly more value than their labor was worth.

Economists have a term for that.

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O-Ring Theory¹

This concept originated with an economist named Michael Kremer². An O-Ring Production Process is one with the following features:

1. Production depends on completing a series of tasks, such that failure at one task crashes the value of the entire product.

2. Quantity can’t substitute for quality.

The easiest example of a non O-Ring process would be a chain restaurant. Over or under-salting fries, over or even slightly undercooking meat, too much or not enough sauce, doesn’t mean that the whole platter gets dumped into the trash and the whole dish starts from scratch.

Likewise, even if you don’t hire a Michelin Star Chef, having enough people in the kitchen with a broad awareness of proper procedure who are looking at each other’s work means that really bad mistakes missed by one person probably will probably be caught by someone else before the food reaches the customer.

On the other hand, a single fleck of dust on a microprocessor fabricator ruins the whole thing, and no amount of nurses can substitute for a brain surgeon.³

Increasing Returns to Skill

Consider three groups of workers. Individual members of Group C get things 100% right 90% of the time, and catastrophically fail 10% of the time. Alternatively, they get things 100% right half the time, and 80% right the other half of the time. Either way, expected value from an individual laborer is 90%. In Group B, things are done right 95% of the time, and catastrophic failure occurs 5% of the time. Finally, in Group A, things are done right 99% of the time, and failed 1% of the time.

Intuition tells us that all three of these groups are “A” students. There’s a whole world of mediocrity below a 90% success rate. How big a difference can there be?

Well, let’s say you have a line of production with ten workers, each one performing one of ten equally difficult productive steps. If everything is done perfectly, a single production run yields a value of 10.

So you pull 10 members of Group C. The first member does his part. He has a 10% of messing it up. The next member also has a 10% chance of messing up. As does the person after him. What are the odds that not one of your 10 workers will make a mistake that crashes the value of the product?

The expected value of this entire production run is not 10, but 3.49.

What about the members of Group B? For 10 of them on the same process, the expected value is 5.99.

And for the members of Group A, who only mess up 1% of the time, the expected value is 9.04.

A 10% increase in the individual success rate yields a near tripling of output from teamwork.

Consider the other direction. Imagine a set of 10 workers, each of whom had a 50/50 chance of dropping whatever you handed them. What are the odds of getting heads on a coin ten times in a row? Just shy of one tenth of a percent. Expected value of a production run using this team, then? 00.0098, out of a possible 10.0000 if everything was done right. In other words, a complete waste of time.

Putting Together a Team

Is it better to pair good workers with good, and bad workers with bad, or good with bad?

Let’s imagine two types of workers. High quality (q=1) workers, and low quality (q=.5) workers.

If good workers work with good workers, their productivity is 1*1=1. Bad with bad, their productivity is .5*.5=0.25. Total Productivity between the two of them: 1.25

What happens if we mix these two teams? Each good with bad team produces 1*0.5=0.5. Total Productivity between the two of them: 1.00.⁴

They Do Things Different There

Higher Output means Higher Wages, and small increases in quality means huge increases in output.

What do two countries look like if there are small differences in individual worker quality?

First, watch this video of woks being produced in a Japanese factory. Take in the details. How many people are working at each station? How often is work inspected, and by whom?

Next, observe another factory, making almost the exact same product, but this time in Pakistan.

Pakistan is not a starving-child-25-cents-a-day sort of country. Pakistan has over two hundred universities, the supermajority of which were constructed after independence from colonization. Pakistani soldiers are quite capable of shooting straight, and in fact Pakistani peacekeepers were pivotal in rescuing the US soldiers trapped in Mogadishu during the Black Hawk Down incident. Not only does Pakistan have nuclear weapons, but one of their native born scientists, Abdel Qader Khan, pioneered the gas centrifuge method that other countries copy from them. What I’m saying here is that Pakistan is a serious country with competent people.

What do we see here? Pile of scrap aluminum, sharp edges pointed every which way, pushed down by (thickly gloved) hands to be crushed into pointy bricks. Men in literal flip flops pouring molten aluminum. Two, three, sometimes four men at a station, pressing and cutting sheets of metal by eyeballing the thickness and length of the cuts. Eyeballing may be too charitable. Sometimes they don’t even seem to be looking at their work at all. See, at the 3:10 mark, that not one of the squares of metal is the same size as another.

When the sheets of metal are cut into circles, the scrap is not so much thrown as it is launched into a growing pile of sharp aluminum that at the point of filming is actually intruding into the workspace itself.⁵ Occasionally, the man gives the metal a second look to see if the circle he’s just cut matches the one he cut before. Yet when the metal is pressed into concavity at 3:10, none of the edges are smooth. Compare to the same step at 1:50 of the Japanese video.

What else? A workspace absolutely flooded with scrap metal. It’s on the floor. It’s on the tables. In some places, it’s actually still bouncing around in the machines, including resting on parts that are rapidly spinning. Men are wearing three of four layers of thick, woolen gloves as they pull metal parts off of machines that are still in motion.

At the 6 minute mark, we see a man cleaning the pots, not only wearing gloves, but for some reason a mask, a hard hat, and a safety vest.

Fifteen seconds later, we see that he is walking around barefoot.

Yet finally we see in the end, the handles are attached, the rim is indented for easy pouring, and we are left with hundreds if not thousands of perfectly good milk pots as the final product. There is no reason to believe that this factory is not profitable, and since the labels applied are in English, it is more than likely that pots made in this factory, or one just like it, are on Wal-Mart shelves in the US right this moment, where they will perform their role honorably for years if not decades.

In a process like pan manufacturing, the differences in the quality of the final product may not be notable, but the differences in the quality of the workers are obvious.

An outcome of this difference is that GDP/Capita in Pakistan in 2019 was $4,690.

In Japan, it was $41,429.

Small differences in quality. Huge differences in output.⁶

It’s easy for those with an intermediate economics understanding to say that the differences in output per capita is because of the fact that Japanese workers are, because of their skill, or their low error rates, simply more efficient. That is, because it takes fewer Japanese people to produce a pot, that frees up Japanese workers to perform other tasks. It is undeniable that this is a factor at play, but what is important here is that with some processes, it doesn’t matter how many workers are freed up, because every individual task needs to be done right the first time.

You could have a thousand of these Pakistani factories working in parallel for a thousand years and never make a space shuttle, because you can’t make a space shuttle by eyeballing it, and you can’t make a space shuttle in flip-flops.

Investing In Quality

I find that this next part is the hardest for students to appreciate. Workers doing “same task” are still more productive when working at high skilled firm, and will be paid more, than in a low-skilled firm.

In a situation where anybody’s mistake, anywhere in the chain, can crash the value of a high-value product, we should expect that even the most apparently menial positions will be staffed with the best people, paid at the highest wages in their relevant field.

Imagine that you are the secretary for a dentist, and you misplace a file, causing an appointment to not be logged correctly. The client shows up, discovers that his appointment was double booked, and storms away. Depending on the procedure, a mistake like that could cost the office $5,000 if he never comes back. In the worst case, if he might have otherwise brought his wife, kids, and referred a friend, then you’re looking at a total nominal loss of $50,000.

Now imagine you are the secretary for the largest real estate developer in New York. He owns buildings all over the place, model agencies, the Miss Universe pageant. Worse still, the low-IQ haters and losers over at the Department of Justice are treating him very terribly, absolutely terribly, it’s awful. Nobody has ever been so mistreated. It’s a total witch hunt, is what they’re doing. They’re searching his dumpsters, did you know that? These people, they’re disgusting. OK? And you’re his secretary. And you misplace a file. What are the consequences?

Obviously, you’re fired.

But your mistake even a small one, could mean the loss of millions and millions of dollars. Maybe even jail time.

So you would expect that this very stable genius would hire the absolute best secretaries around. Not only the best secretaries, but the best lawyers, as well. Anything he does, he hires the best, he buys the best, he expects the best. When you’re moving money like that, you know, you can’t settle for little mistakes, because little mistakes can have Big League consequences.

But this doesn’t just apply to secretaries, this also applies to janitors. What sorts of janitors would you expect to be hired at a university working on twenty-year old cell samples? Probably one that can follow instructions written in English, right?

What about valets? If you had a fancy restaurant, that regularly had influential celebrities eating there, buying expensive meals and bringing their expensive cars, where one scratch could cost thousands, what kinds of valets would you hire? Probably not some youth with low impulse control who would take a client’s whip for a joyride, right?

For firms like that, you’d expect highly skilled, highly paid employees, even at those low level positions. So that nobody makes any expensive mistakes.

There are other investment patterns one could predict here. Let’s imagine a crazy alternate universe where people not only varied in their skills, but varied in their ability to become skilled, and that this difference could be identified in one’s formative years. And you are facing the choice. You could undergo a costly process of becoming highly skilled, or you could cheaply stay low-skilled for the rest of your life.

High quality workers are paid more when there are more high quality workers to work with. Which means the more high quality people are in your economy, the stronger your incentive to invest in improving your quality, since, again, the returns to quality are higher by virtue of their presence. But if there are no high quality workers around, becoming high quality is a waste of time.

Before we continue, this is a perfect time to remind you that life isn’t fair. Some countries are just richer than other countries. And they keep getting richer year after year after year. And they’re richer in everything. The food is better, the people are more productive, wages are higher, their militaries are stronger, the people have higher living standards by every measure, their cultural output is stronger, their people are more educated and produce more research. Some girls are beautiful and they have wonderful personalities, and that’s that.

Imagine a Haitian, in Haiti, blessed with the right combination of intelligence, diligence, conscientiousness, and luck to become a qualified brain surgeon, perhaps even the greatest brain surgeon in the history of the universe, were he to pursue the education.

He still has a bit of a problem. Brain surgery is not a solo activity.

Even if he were to undergo the required education and training, highly qualified brain surgeons need teams of highly qualified regular surgeons, and highly qualified nurses.

Even if he boasted a personal competency rating of 99.9999%, setting up shop in a Haitian hospital would be a complete waste of his time, energy, and talents. It is terribly unlikely that he would be paid as a brain surgeon expects to be paid, because there is terribly low market demand for brain surgery from Haitian hospitals. Even if he were to assure the public of his divinely endowed proficiency, few people would trust the hospital’s administration, nor his fellow surgeons, nor his nurses.

But all isn’t lost for our friend! He’s smart, diligent, conscientious, and lucky. And Miami is a plane ticket away! If he’s really lucky, word of his talents will reach the medical establishment in the US, and what will happen? If he can prove he truly is all he says, what will they promise him, if he chooses to work at their hospital?

“We’ll pay you the best, and we’ll put you with the best team!”

Haiti’s loss, America’s gain, right?

But that’s not the whole story.

If becoming a doctor in Miami or wherever is a viable career path, then investing in medical training remains a viable option for any Haitian with the capacity, no matter how crappy Haiti’s hospitals are. And any Haitians that can’t cut in in America will have to work in Haiti’s hospitals, which will become better by their own presence, increasing the returns to education for other Haitians.

Now, in real life, Haiti has not become a doctor-factory, but from my own experience in New York City, Haitian-American immigrants, like my grandmother, make up a highly disproportionate share of nurses. And the Philippines has become the largest worldwide supplier of nurses. And India of computer programmers. High-Skilled Humans can be a very valuable resource for export.⁷

And that’s before we get to physical capital. Remember, capital doesn’t substitute for skill, it complements it.

Robert Lucas asked in a 1990 paper, published in the American Economic Review, “Why doesn't Capital Flow from Rich to Poor Countries?”. Your standard Solow Growth Model says that rich countries with high rates of capital per worker should be hitting diminishing returns on investment, while poor countries, which by definition have low levels of capital per worker, should have extremely high returns to capital investment. So why do we not see an equalization of investment?

Well. The Solow Growth Model assumed that all labor was fungible. It isn’t.

Just as you wouldn’t invest in becoming a doctor in a country with no competent nurses (unless you planned to emigrate to one that did), you wouldn’t invest in a semiconductor factory in a country where people where pile up scrap metal, wear extra thick gloves to more safely stick their hands into moving machinery, and walk around an aluminum foundry wearing flip-flops come on.

You will only buy the most expensive machines if you have the best workers. There’s no point in buying high quality equipment for low quality workers. The better the workers are, the better the equipment they get.

Like the Marxists say, some people don’t have anything to sell but their labor. And if we count Human Capital as Capital, then not only do we not see capital flowing from rich countries to poor, we see the exact opposite.

Simple Jobs for Simple Workers

Let’s imagine three production lines: one with five steps, one with ten, and one with fifty, all steps of equal difficulty across industries. Bikes, Cars, and Airplanes.

And we have our three groups of workers. Let’s take our Group C workers, the ones who get things right 90% of the time, our 95% accurate Group B workers, and our 99% accurate Group A workers.

Further, let’s say that no line of production is worth doing if it isn’t successful at least half the time.

If Group C specializes in producing bikes, they will output 59% of the time. If Group B specializes in cars, they will also output 59% of the time. If Group A specializes in Airplanes, they will output 60% of the time.

It should be emphasized here that this means that everyone at the Airplane Factory, even the janitors, are members of Group A. Of the fifty employees, five members of Group B are enough to drive success rates below 50%, as are a mere three members of Group C.

Of course, if trade were not possible, Group B could produce bicycles AND cars, and Group A could happily produce all three.

But for those of you who’ve only done your intro to micro econ courses, this is where that comparative advantage stuff really gets to shine. High quality workers aren’t infinite. In fact, they’re very precious, because of the goods that only they can produce.

It makes good economic sense to specialize each group in the best thing they can produce, and trade for the rest. Imagine if bikes were so scarce that the Wright Brothers decided that Wilbur should spend two thirds of his time making them.

It’s also natural to expect that members of Group A will be paid a lot more than Group C, no matter what it is they’re doing. If five members of Group A decided to break off and start their own bike company, their output would be 50% higher than members of Group C making identical bicycles.

Bottlenecks and Trade

Now imagine a highly networked economy, with any N number of industries.

And let’s say that there are two industries where quality falls in half. The power becomes spotty, employees (even a small fraction) start stealing.

Immediately, that double dose of x0.5 is applied to everything in the economy. Output falls immediately by 75%.

Wages in every other sector fall, which further reduces incentive to invest in quality, which reduces output even more later!

This has political implications, by the way. Even without specialized political knowledge, or within systems that are highly undemocratic, the people of advanced industrial economies are inherently more sensitive to the effects of bad government policies on their lives.

This is also why competition and international trade are important. If one firm drops in quality by half, it is important to be able to switch inputs to another firm that is 95% as good as the first firm was.

It is also possible, and mutually beneficial, for countries with high failure rates to handle parts of complex production chains only for a few steps at a time. For example. It may not be feasible to print semiconductors in Pakistan, but it is possible to assemble computers and other electronics there out of already completed parts, then ship it out of the country before anyone has a chance to mess anything up. Consider again that there are countries which specialize in the production of programmers for computers they cannot build and nurses working in hospitals assisting procedures they cannot perform. For every world class chef, there is a 21 year old apprentice who is only trusted to make the sauces.

I repeat myself: life isn’t fair, and man is an unequal creature. Unequal people get unequal incomes, and there’s nothing that will change that.

The Foolproof Sector

Consider the difference in income between a Japanese in Japan and an Pakistani in Pakistan. Very large.

Now put those people both in America. Japanese-American per capita income is $50,317. Pakistani-American per capita income is $33,322. Not even a twofold difference in the US, but nearly a tenfold difference when comparing them in their home countries. How do these differences which make such a huge difference internationally, make a comparatively small difference individually?

Garett Jones (2012) explains that this is because not all industries are O-Ring industries, and the size of an economy’s O-Ring sector depends on the number of high quality workers. O-Ring Industries are contrasted with the Foolproof Sector, where output depends on the average skill level of the group, and no one person can crash the value of the whole product, though there are diminishing returns to scale. More workers in the foolproof sector pushes wages down. Furthermore, high quality workers can choose to work in either sector, if the pay is good enough. Low quality workers are stuck in foolproof jobs.

So let’s imagine a society composed homogeneously of Group A, and the O-Ring Sector consists of 10-step tasks. Everybody is placed at first into the O-Ring sector, earning 0.904. But in this economy, there is a foolproof sector, with zero workers, and worker pay only depends on the average value. So there’s a job posting, offering pay of 0.99, more than the 0.904 being paid in the O-Ring sector. A-ha! Everybody has been so busy making automobiles in this scenario that there’s nobody to make the sandwiches, which pays almost 10% more than making cars. Who are we to ignore the hand of the market? Members of Group A, begin to move out of auto production, into sandwich making and barista-ing and lawn mowing, until the pay in those foolproof jobs is pushed down to something like 9.04.

If you imagine the same situation with Group B, then starting O-Ring wage is 0.599, while starting foolproof wage is 0.95. An even greater share of workers gets out of the auto plants to make coffee, until wages are pushed down to match the wages at the auto plant. Group C, with a starting auto worker wage of .349, and an average barista pay of 0.9, sees an avalanche of employees leave the business of making substandard cars into the business of making perfectly decent caramel machiattos.

So worker skill doesn’t just determined the productivity of O-Ring jobs, it determines the share of workers that will choose to take these O-Ring jobs.

So what happens when a Group B worker, quality 0.95, making something like .599, moves to the land of the Group As? Obviously, nobody is going to let him work in the car factory when he’s 5 times more likely to break things than everyone else. But what if he said he wanted to mow lawns? Anyone can do that. And since he’s just one guy, his effect on the average skill level is a drop in the bucket. Wages don’t go down much, if at all. And if they start to, a few of the Group A go back to the automobile factory, where the pay is good, there are no diminishing returns to competence, and the Group Bs can’t follow them.

So let’s bring the family, and the family’s family, and so on. Each time a member of Group B takes a Foolproof job, a highly member of Group A is forced into the high skill sector, making planes, trains, and high quality automobiles to be sold all around the world, and wages don’t even budge in the foolproof sector so long as there’s a single member of Group A working a cash register. If he got tired of not understanding his coworkers in the kitchen and went to the car factory, cashier wages would creep up past auto worker wages by a few cents, and another auto worker would gladly take the higher wage for an easier job.

One more Group B immigrant comes in, he undercuts the wage of the last blue-collar Group A, who goes back to the car factory, and we basically have a perfect caste system. Highly skilled people doing highly skilled work, while an army of reasonably competent foreigners shines shoes, mows the lawn, and does the dry cleaning, making almost three times as much as they did back home. Small differences in worker quality. Huge differences in national incomes. No difference in wages within the country. National output, higher than ever.

Let’s bring in one more, shall we?

He applies for a job mowing lawns. The average wage is .904 and there aren’t any openings. That’s OK. He’s used to making 0.599 back home. He’ll happily work for .903 here. He’s hired.

The first immigrant from Group B feels a disturbance in the force. He looks up from his lawnmower and sees the line of his countrymen at the border. As he looks ahead, he is filled with foreboding. He applies for a job at the auto factory. Absolutely not. He’ll break something, silly! Go back to the laundromat or whatever it is you people do.

Next month, even more Group B’s show up. At this point, this is still a sweet deal for Group A (because Group A has no low-skilled members). More food trucks, more laundromats, more shoe shiners, and all getting cheaper with every new arrival, too! These immigrants are competing with each other, depressing each other’s wages, but doing no economic harm to the local population. They’re doing the bad jobs.

If permitted this could continue until foolproof wages in the Land of the Group A hit down to .599, like it is for the best and brightest of the Land of Group B.

Now let’s toss in ten members of Group C. Their skill level is 0.9. The wages in their country are 0.349. And the wages in the Land of Group As are, after years of immigration, 0.599 for unskilled workers. They all look for jobs, absolutely willing to work for 0.598. But once they do. 10 workers from Group B shake their heads, and march right over to the auto factory, and express their willingness to make mid-level cars, for 0.599. An entirely new, lower level O-Ring industry has been created, into which members of Group B will flock any time a member of Group C tries to undercut them. Which means that the wages of Group C will stay consistent with the wages of Group B, for as long as there are members of Group B in the foolproof sector ready to switch over to making mid-level cars for export.

In the example above, with one industry, and homogeneity within groups, immigration causes wages in the foolproof sector to plateau until saturation, fall, then plateau again as workers start new O-Ring work, then eventually fall again once Group C pushes all of Group B into the O-Ring sector.

Of course, in real life, groups are diverse in their skill levels. It more likely that most members of Group A are at skill level 0.99, with a few at 0.999 and other at 0.95. Likewise with Group B, it’s more likely that most are at skill level 0.95, with a few at 0.99 and others at 0.9. And so on all the way down.

And likewise, economies have a diversity of jobs in the O-Ring sector, at different levels of complexity and length. And so in real life, O-Ring industries are like rungs in a ladder. The very top workers hold onto the top rung. Those slightly below them in skill work in the foolproof sector below that ladder, until that market is saturated, when they grab hold of the O-Ring ladder rung right below, and so on, for all levels of skill, all the way down.

When high-skilled immigrants arrive from countries where their talents were wasted because they were surrounded by mediocrity, they find their place with similarly skilled workers, earning wages many times greater than at home, but still slightly less than those more skilled workers just above them on the ladder. Because the goods they produce are so valuable, they raise the wages of those below them, and increase the productive opportunities of those alongside them. The material benefits of this delicate productive arrangement are clear to every enterprise in a capitalist system.

The challenge is in avoiding the disasters to life, liberty, and property that emerge from skill mismatches.

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Main Sources and Further Reading:

Kremer (1993) The O-Ring Theory of Economic Development

Jones (2012) The O-Ring Sector and the Foolproof Sector

Karlin (2018) The Idiocy of the Average

Hive Mind by Garett Jones

1. Named for the explosion of the Challenger shuttle, caused by the failure of a rubber piece to properly expand because of the extreme cold, causing a fuel leak.

2. Those who have taken Economics courses may know Kremer for his work on population growth, where he posits that pre-1400s Afro-Eurasia was more productive than Australia because the Supercontinent had a larger population.

3. I actually use “can quantity substitute for quality” as an easy test for skilled vs unskilled labor, allowing me to easily resist claims that there is no such thing as unskilled labor because of a video of a farmhand flipping a box.

4. For the general proof: First. qh>ql. Therefore. (qh-ql)^2>0. Foil it out, move the negative to the right, qh^2+ql^2 >2qhql. High Quality with High Quality plus Low Quality with Low Quality is greater than two instances of High Quality with Low.

5. We don’t see the exact process by which metal is recycled in the Japanese factories. However, in the second one, we see at the 2 minute mark that scrap aluminum is practically filed away. So it’s safe to say that no part of the process involves flip flops

6. To see an even smaller step down in worker quality from Japan, consider this video from a Korean pot factory.

7. Which is why rich societies are able to sustain de-industrialized suburbs that send their laborers to nearby cities during daylight hours.