Business
-

Alberto Alesina is the Nathaniel Ropes Professor of Political Economics and the Taussig Research Professor of Economics at Harvard University. He is a leader in the field of economics and has published extensively in all major academic journals in economics. His work has covered a variety of topics, including political business cycles, integration, stabilization policies in high inflation countries, and differences in the welfare state in the U.S. and Europe.

Professor Alesina is associate editor of the Journal of Economic Growth. His most recent books are The Future of Europe: Reform and Decline, published by MIT Press in 2006, and Fighting Poverty in the U.S. and Europe: A World of Difference, published by Oxford University Press in 2004.

Abstract of Alberto Alesina's "Technology and Labor Regulations":

Many low skilled jobs have been substituted away for machines in Europe, or eliminated, much more so than in the U.S., while technological progress at the "top," i.e. at the high-tech sector, is faster in the U.S. than in Europe. This paper suggests that the main difference between Europe and the U.S. in this respect is their different labor market policies. European countries reduce wage flexibility and inequality through a host of labor market regulations, like binding minimum wage laws, permanent unemployment subsidies, firing costs, etc. Such policies create incentives to develop and adopt labor saving capital intensive technologies at the low end of the skill distribution. At the same time technical progress in the U.S. is more skill biased than in Europe, since American skilled wages are higher.

Sponsored by the Forum on Contemporary Europe and the Political Economics group at the Graduate School of Business.

Encina Ground Floor Conference Room

Alberto Alesina Professor of Political Economics Speaker Harvard University
Seminars

N/A

0
Visiting Scholar 2007-2008<br />CDDRL Pre-Doctoral Fellow 2006 - 2007
David_Yang___website.jpg

David is our inaugural, and hopefully annual, fellow in CDDRL's new Democracy in Taiwan program. He is finishing a cross-country comparative study entitled The Social Basis of the Third Wave: Class, Development, and the Making of the Democratic State in East Asia. He looks in particular at late authoritarian Taiwan and contemporary Singapore. David is interested in the social basis of pro-democratic opposition movements and the political implications of various developmental strategies - corporatist versus pluralist, for example. David has been advised on his thesis by Lynne White, and Atul Kohli at Princeton, as well as Andy Nathan and Sheri Berman at Columbia and Barnard respectively. Before entering the doctoral program at Princeton, David completed an MBA in Economics and International Business at NYU, and a BSc in Computer Science at Brown.

-

Anwar Ibrahim was deputy prime minister of Malaysia in the 1990s. He also served as Malaysia's minister of finance. A sharp disagreement with then-Prime Minister Mahathir Mohamad led to Anwar's dismissal, prosecution--many would say outright persecution--and imprisonment.

Upon regaining his freedom, Anwar took up his current role as an opposition voice. He is currently a distinguished visiting professor at Georgetown University's School of Foreign Service. Since his release he has also held lectureships at St. Anthony's College (Oxford) and the School of Advanced International Studies (Johns Hopkins). He has advised the World Bank on questions of governance and accountability. Recently he was appointed honorary president of AccountAbility, a London-based organization that advocates socially responsible business practices.

This event is co-sponsored by the Southeast Asia Forum at the Walter H. Shorenstein Asia-Pacific Research Center and the Abbasi Program in Islamic Studies.

Bechtel Conference Center

Anwar Ibrahim Former Malaysian Deputy Prime Minister, Finance Minister Speaker
Conferences
-

For many Koreans, their country's "northern regions" are locked in memory and even mystery. Families that once lived in North Korea still think of their lost hometowns with longing and nostalgia. Wherever they have ended up--in South Korea, America, Europe or elsewhere--and in succeeding generations, there remains an unceasing sense of unrequited loss.

It may seem strange, but Westerners who once lived in North Korea--as missionaries, traders, and, oddly enough, refugees--also share something of these sentiments. They think of missionary childhoods, lost stakes in business, Korean friends, and the special physical qualities of the landscape as part of their own emotional experience.

Donald Clark addressed this foreign experience in his book entitled Living Dangerously in Korea: the Western Experience, 1900-1950 (EastBridge, 2003). This lecture is based on materials in the chapters that deal with foreign life in the north, particularly P'yongyang, in the gold mines in the Unsan district, and in the Russian refugee colony on the northeast coast. It is illustrated from family albums of people who lived there in the 1930s.

Philippines Conference Room

Donald N. Clark Professor Speaker Trinity University
Seminars

From an unprecedented number of start-ups to a rising class of billion-dollar giants going global, high technology companies in China have a dramatically increasing need for effective leadership. Since 1999, founders have led 24 Chinese firms to IPOs on NASDAQ, ranging from portals such as Sina and AsiaInfo in 2000 to mobile hardware makers and service providers like Hurray!, Vimicro, and Techfaith in 2005.

-

Against the backdrop of export-led growth of some economies -- most notably China and India -- human development issues in Asia tend to be overlooked. The 2006 report Trade on Human Terms, produced by the United Nations Development Programme, finds that trade has contributed to further increasing the inequality both between and within countries. In addition, it warns that many of the region's open economies, particularly the East Asian success stories, are creating far fewer jobs, especially for youth and women, and experiencing "jobless growth." Many of the developing countries in the Asia-Pacific are now net importers of agricultural products; food security has thus become an emerging issue.

While Asia and the Pacific have embraced globalization, the regions poor are being left behind and will be so without determined action by governments. The report recommends that those countries adopt bold new policies that harness trade and economic growth, suggesting an "eight-point agenda" that includes investing for competitiveness; adopting strategic trade policies; restoring a focus on agriculture; combating jobless growth; and others.

Dr. Hafiz A. Pasha will discuss the findings and recommendations of this ground-breaking and thoughtful report which can be viewed at:

Asia - Pacific Human Development Report 2006

Dr. Hafiz A. Pasha is UN assistant secretary-general and UNDP assistant administrator and director of the Regional Bureau for Asia and the Pacific. He has served as the commerce and trade minister, minister for finance and economic affairs, deputy chairman of the Planning Commission, and education minister in three government administrations in Pakistan.

Prior to his government work, Dr. Pasha was the vice chancellor/president of the University of Karachi and dean and director of the Institute of Business Administration in Karachi, Pakistan.

Dr. Pasha has published extensively in the fields of trade, public finance, social development, and poverty reduction. He has an M.A. from Cambridge University and a Ph.D. from Stanford University.

Pasha was recently awarded the Congressional Medal of Achievement by the Philippines Congress in recognition of his work on poverty reduction, achievement of the Millennium Development Goals (MDGs) by the Asia-Pacific countries and his role in leading UNDP's response to the 2004 tsunami tragedy.

Philippines Conference Room

Hafiz A. Pasha UN Assistant Secretary General and Director of the Regional Bureau for Asia and the Pacific Speaker The United Nations Development Programme
Seminars

Shorenstein APARC
Stanford University
Encina Hall E301 MC 6055
Stanford, CA 94305-6055

(650) 725-0121 (650) 723-6530
0
SPRIE Visiting Scholar
lin_bouwen.jpg PhD

Bou-Wen Lin is Professor of Institute of Technology Management at National Tsing Hua University, Taiwan. He gained his doctorate in Management of Technology in 1998 from Rensselaer Polytechnic Institute, Troy, New York. He is a teacher and writer in the fields of international technology transfer, new product development, real options, and strategic management of technology.

Lin is author of articles in several journals including IEEE Transactions on Engineering Management, Journal of Business Research, R&D Management, International Journal of Human Resources Management, and Technological Forecasting and Social Change. His current research interests include technology valuation, interfirm collaboration, knowledge management in manufacturing firms, and new venture management.

Authors
News Type
Commentary
Date
Paragraphs

The National Security Agency is a riddle wrapped in a mystery inside a code. Secrets lie within. Located in Fort Meade, Md., it dwarfs the CIA. Its budget is black, unknown. And, most disturbing of all, it is the world's largest employer of mathematicians.

One of its secrets, recently revealed, is that it's monitoring millions of phone calls to learn just who was calling whom. (Technically, only telephone numbers are being recorded, but you don't have to be Q from James Bond to get a name from a number.) This information was being used to determine who might be a terrorist.

Legal or not, the spying program isn't worth violating our civil liberties for. The information one can glean will hardly help us win the war on terror.

With the NSA data, you can draw a picture with nodes or dots representing individuals, and lines between nodes if one person has called another. Mathematicians who work with pictures like this are called graph theorists. The field of social network analysis deals with trying to determine information about a group from such a graph, such as who the key players are or who the cell leaders might be.

But even when you know everyone in the graph is a terrorist, graphs don't contain information about the order or hierarchy of the cell. Researchers look instead for graph features like centrality: They try to identify nodes that are connected to a lot of other nodes, like spokes around the hub of a bicycle wheel. Monterey Naval Postgraduate School researcher Ted Lewis, in his textbook "Critical Infrastructure Protection," defines a critical node to be such a central hub.

There are two problems. First, the central player might not be as important as the hub metaphor suggests. Jafar Adibi of the University of Southern California looked at e-mail traffic between Enron employees before Enron collapsed, and drew the graph. He found that if you naively analyzed the graph, you could mistakenly conclude that one of the central players was CEO Ken Lay's ... secretary. But that wasn't the person who ran the company into the ground.

Second, as the journal Studies in Conflict and Terrorism reported in 2003, you can kill all the central players in a terrorist cell and still leave the cell with a complete chain of command -- still capable of carrying out a devastating attack.

Expert Kathleen Carley of Carnegie Mellon was able to correctly predict -- twice -- who would take over Hamas when its leaders were assassinated, and her analysis used detailed information about the individuals in the organization, not just what anonymous nodes were linked with what. The moral is that the graph theory approach is inadequate. For useful results, it's important to utilize the lattice theory approach, which takes into account order and hierarchy.

The other questionable aspect of the NSA spying program is that it seeks to work out who might be a terrorist based on their calling patterns. While I agree that anyone calling 1 (800) AL-QAEDA is probably a terrorist, guilt by association is not just bad law, it's bad mathematics, for three reasons.

The simplest reason is that we're all connected. Not in the Haight-Ashbury/Timothy Leary/late-period-Beatles kind of way, but in the sense of the Kevin Bacon game. Sociologist Stanley Milgram took individuals unknown to each other, separated by a continent, and asked one person to send a package to the other -- but only by sending the package to an individual he or she knew, who could then only send the package to someone he knew, and so on. While Milgram's interpretation of the results has since been questioned, the conclusion that emerged is that it took only six mailings, on average, for each package to reach its intended destination.

For example, President Bush is only three steps away from Osama bin Laden. And terrorist hermits like the Unabomber might be connected only to very few people. So much for guilt by association.

The second reason the NSA methodology is flawed is the concept "strength of weak ties," made famous by Stanford sociologist Mark Granovetter. Robert Spulak of the Joint Special Operations University puts it this way: You might not see your college roommate for 10 years, but if he were to call you up and ask to stay in your apartment, you'd let him. This is the principle under which sleeper cells operate: There is no communication for years. The links between nodes that the NSA is looking for simply might not exist for the real threats.

Formal concept analysis, a branch of lattice theory, helps rectify this situation. Individuals who share many of the same characteristics are grouped together as one node, and links between nodes in this picture, called a concept lattice, indicate that all the members of a certain subgroup, with certain attributes, must also have other attributes. For instance, you might group together people based on what cafés, bookstores and mosques they attend, and then find out that all the people who go to a certain cafe also attend the same mosque (but maybe not vice versa). While this tool has in fact been used by researchers at Los Alamos National Laboratory to sift through hundreds of terrorism-related reports, it's still dangerous to rely on the math.

The NSA data mining is flawed because, as Kennedy and Lincoln buffs know, two people can be a lot alike without being the same person. Even if there is only a 1 in 150 million chance that someone might share the profile of a terrorist suspect, it still means that, in a country the size of the United States, two people might share that profile. One is just minding his own business. The other is Cat Stevens.

This isn't to say mathematicians are useless. In September 2004 -- 10 months before the July 7 bombing of the London Underground -- mathematician Gordon Woo warned that London was a hotbed of jihadist radicalism. But Woo, who works for the Bay Area company Risk Management Solutions, didn't anticipate the bombings using math. He used his knowledge and experience of London, especially the Wood Green area. That's what law enforcement officials should be doing.

As for tracking terrorist financing, it may already be too late. The terrorism of the future, according to mathematician Stefan Schmidt of the Technical University in Dresden, Germany, may be the terrorism of the futures -- when bombs explode, the stock market drops. Schmidt wants to quantify the impact on the market of a terrorist incident. The only people who know when a bomb will explode are the terrorists. By playing the market, they may already have obtained as much money as they need -- in perfectly legitimate ways -- thus stifling Treasury Department efforts to cut off the source of their funding.

Math is just a tool. Used wisely, math can indeed help win the Battle of Britain (by breaking the German codes). But used unwisely -- as seems to be the case in the NSA telephone caper -- your approval rating might just hit an all-time low.

Hero Image
nsa seal
All News button
1
Authors
News Type
News
Date
Paragraphs
CISAC faculty member Lawrence M. Wein works at solving mathematical problems posed by potential terrorist attacks.

It's been said that World War I was the chemists' war and World War II the physicists' war, but that World War III is destined to be the mathematicians' war.

With the gravest threat to U.S. security now posed by rogue terrorists who simultaneously hold a grudge and have access to weapons of mass destruction, some of this country's prime human calculators are on the case.

Combatting terrorism not with mortars and missiles but with mathematical models, they intend to prove this theorem: There literally is safety in numbers.

In their vanguard is an amiable Stanford University professor who, by devoting himself to the application of math principles to doomsday scenarios, is beginning to acquire the nickname "Dr. Doom." The attacks of Sept. 11 inspired mathematician Lawrence Wein to channel his expertise into some of the most compelling questions of our time.

He has ciphered the risks of our "woefully inadequate" inspection of container ships, assessed the effectiveness of border-control fingerprint checks to spot terrorists, and performed what may well be the first math analyses of hypothetical botulism, anthrax and smallpox contaminations.

Recall the agitation last year over warnings that the nation's milk supply was vulnerable, based on the calculation that one terrorist with a few grams of botulinum could contaminate a tanker and potentially poison 100,000 gallons of milk? That's just one of many tidings of comfort and joy brought to you by Wein.

Another such upper is that just about 6 percent of containers shipped into U.S. ports will be categorized as suspicious and subjected to tests for a nuclear device, based on a system that relies largely on reporting by the shipper. The rest, Wein noted, "just waltz right into the country without an inspector laying an eye on them."

At Stanford's Graduate School of Business, he teaches a core course in operations, and he says the parallels are strikingly similar: Just as McDonald's needs a well-designed distribution system to get its hamburgers out quickly, so the government needs a well-designed distribution system to get vaccines and antibiotics to citizens who might sicken or die from a bioterror attack. In math lingo, some of these computations rest on "queueing theory" -- the notion that a lot of needy people must line up behind a limited number of distributors.

And what do we do after crunching millions of numbers to arrive at specific prescriptions? Wein has taken on the role of necessary nag to a torpid federal bureaucracy and recalcitrant industries.

In fact, the feds scrambled to try to suppress publication of his damning milk study as a threat to national security -- an argument the journal Proceedings of the National Academy of Sciences rejected before publishing the work.

These days, Wein regularly testifies at congressional hearings, addresses scientific forums and pens op-ed pieces in national newspapers about precisely what the government should be doing -- and where it is falling short.

"I believe my work demonstrates that numbers really matter, and we need to pay attention to what they tell us," said Wein, a critic of the federal government's homeland security failures in key areas, particularly at the ports. "I really don't bring my own personal political views into this -- I would be just as critical of the federal bureaucracy if a Democrat were in the White House.

"Bureaucracy just isn't designed to respond nimbly."

On the other hand, politicians are eager to do something, anything, that might thwart a terror attack or save lives. But in an information vacuum, that makes them easy prey for entrepreneurs hawking all kinds of safety gadgets.

So, much of Wein's math analysis goes beyond documenting threats to assess the most effective, cost-efficient remedies.

Take the milk scare, for example. Wein urged the government to mandate that milk tanks and trucks be locked, that two people be present when it is transferred along each part of the supply chain, and that milk truck drivers use a 15 minute test to detect any toxins. The estimated cost of all this: 2 cents per gallon.

Some other experts disputed Wein's assumptions, and dairy industry groups insisted they already had taken extra steps such as raising pasteurization temperatures to secure the milk supply. They dismissed the scenarios Wein described as "highly unlikely or impossible."

To avoid being victimized by a radioactive device aboard a tanker -- otherwise known as a "poor man's missile" -- he and colleague Stephen Flynn of the Council on Foreign Relations advocate using techniques such as gamma-ray imaging to screen 100 percent of containers. They calculate the cost at $7 per container.

Some of Wein's calculations have translated into real reform.

In 2004, he presented to the White House his findings that the system of collecting only two fingerprints from incoming foreign visitors ran a high risk of missing terrorists because so many prints turned out to be of poor quality. His solution was simple: Take prints from all 10 digits. The government adopted it.

His 2003 research into the most effective response to an anthrax attack prompted pilot programs that are now testing his finding that the best way to widely distribute antibiotics would be by mail carriers, who already go door to door.

Albert Einstein once observed: "As far as the laws of mathematics refer to reality, they are not certain; and as far as they are certain, they do not refer to reality."

And sure enough, one of the impediments to fighting terrorists with mathematics is the paucity of hard data.

An anthrax scenario illustrates the point. Estimates of fatalities per kilogram of poisonous agent released vary from a low of zero to a high of 660,000. That's because of variables: the dose required to cause infection, the percentage of people who survive infection, the degree of aerosol dispersion, the density of the population, the environmental stability of the agent and the effectiveness of a public health system response.

As Wein acknowledges, "It's not like we can do massive clinical trials on this."

The trail of what-ifs is so convoluted that in 2002 the National Academy of Sciences cited "an irreducible uncertainly of several orders of magnitude in the number of people who will be infected in an open-air release."

This makes some experts suspicious of anybody's calculations, even from a researcher with a pedigree like Wein's.

"With so much uncertainly surrounding the outcome of a bioweapons attack, it does not make sense to plan extensive biodefense programs when more-certain public threats, particularly those involving nuclear weapons, require attention," argued Allison Macfarlane, research associate in the Science, Technology and Global Security Working Group at MIT.

But Wein is undeterred, and is busy on new assessments. Yet he insists his work has not impaired his ability to sleep soundly.

"People really are much more likely to suffer from cancer than a terrorist attack, but that doesn't merit the same attention," he said. "We should do what makes sense to protect ourselves from both."

Hero Image
graph logo
All News button
1
Subscribe to Business