A Moral Arguement With Some Big Holes

December 17, 2006

What Should a Billionaire Give – and What Should You?

By PETER SINGER

What is a human life worth? You may not want to put a price tag on a it. But if we really had to, most of us would agree that the value of a human life would be in the millions. Consistent with the foundations of our democracy and our frequently professed belief in the inherent dignity of human beings, we would also agree that all humans are created equal, at least to the extent of denying that differences of sex, ethnicity, nationality and place of residence change the value of a human life.

With Christmas approaching, and Americans writing checks to their favorite charities, it’s a good time to ask how these two beliefs — that a human life, if it can be priced at all, is worth millions, and that the factors I have mentioned do not alter the value of a human life — square with our actions. Perhaps this year such questions lurk beneath the surface of more family discussions than usual, for it has been an extraordinary year for philanthropy, especially philanthropy to fight global poverty.

For Bill Gates, the founder of Microsoft, the ideal of valuing all human life equally began to jar against reality some years ago, when he read an article about diseases in the developing world and came across the statistic that half a million children die every year from rotavirus, the most common cause of severe diarrhea in children. He had never heard of rotavirus. “How could I never have heard of something that kills half a million children every year?” he asked himself. He then learned that in developing countries, millions of children die from diseases that have been eliminated, or virtually eliminated, in the United States. That shocked him because he assumed that, if there are vaccines and treatments that could save lives, governments would be doing everything possible to get them to the people who need them. As Gates told a meeting of the World Health Assembly in Geneva last year, he and his wife, Melinda, “couldn’t escape the brutal conclusion that — in our world today — some lives are seen as worth saving and others are not.” They said to themselves, “This can’t be true.” But they knew it was.

Gates’s speech to the World Health Assembly concluded on an optimistic note, looking forward to the next decade when “people will finally accept that the death of a child in the developing world is just as tragic as the death of a child in the developed world.” That belief in the equal value of all human life is also prominent on the Web site of the Bill and Melinda Gates Foundation, where under Our Values we read: “All lives — no matter where they are being led — have equal value.”

We are very far from acting in accordance with that belief. In the same world in which more than a billion people live at a level of affluence never previously known, roughly a billion other people struggle to survive on the purchasing power equivalent of less than one U.S. dollar per day. Most of the world’s poorest people are undernourished, lack access to safe drinking water or even the most basic health services and cannot send their children to school. According to Unicef, more than 10 million children die every year — about 30,000 per day — from avoidable, poverty-related causes.

Last June the investor Warren Buffett took a significant step toward reducing those deaths when he pledged $31 billion to the Gates Foundation, and another $6 billion to other charitable foundations. Buffett’s pledge, set alongside the nearly $30 billion given by Bill and Melinda Gates to their foundation, has made it clear that the first decade of the 21st century is a new “golden age of philanthropy.” On an inflation-adjusted basis, Buffett has pledged to give more than double the lifetime total given away by two of the philanthropic giants of the past, Andrew Carnegie and John D. Rockefeller, put together. Bill and Melinda Gates’s gifts are not far behind.

Gates’s and Buffett’s donations will now be put to work primarily to reduce poverty, disease and premature death in the developing world. According to the Global Forum for Health Research, less than 10 percent of the world’s health research budget is spent on combating conditions that account for 90 percent of the global burden of disease. In the past, diseases that affect only the poor have been of no commercial interest to pharmaceutical manufacturers, because the poor cannot afford to buy their products. The Global Alliance for Vaccines and Immunization (GAVI), heavily supported by the Gates Foundation, seeks to change this by guaranteeing to purchase millions of doses of vaccines, when they are developed, that can prevent diseases like malaria. GAVI has also assisted developing countries to immunize more people with existing vaccines: 99 million additional children have been reached to date. By doing this, GAVI claims to have already averted nearly 1.7 million future deaths.

Philanthropy on this scale raises many ethical questions: Why are the people who are giving doing so? Does it do any good? Should we praise them for giving so much or criticize them for not giving still more? Is it troubling that such momentous decisions are made by a few extremely wealthy individuals? And how do our judgments about them reflect on our own way of living?

Let’s start with the question of motives. The rich must — or so some of us with less money like to assume — suffer sleepless nights because of their ruthlessness in squeezing out competitors, firing workers, shutting down plants or whatever else they have to do to acquire their wealth. When wealthy people give away money, we can always say that they are doing it to ease their consciences or generate favorable publicity. It has been suggested — by, for example, David Kirkpatrick, a senior editor at Fortune magazine — that Bill Gates’s turn to philanthropy was linked to the antitrust problems Microsoft had in the U.S. and the European Union. Was Gates, consciously or subconsciously, trying to improve his own image and that of his company?

This kind of sniping tells us more about the attackers than the attacked. Giving away large sums, rather than spending the money on corporate advertising or developing new products, is not a sensible strategy for increasing personal wealth. When we read that someone has given away a lot of their money, or time, to help others, it challenges us to think about our own behavior. Should we be following their example, in our own modest way? But if the rich just give their money away to improve their image, or to make up for past misdeeds — misdeeds quite unlike any we have committed, of course — then, conveniently, what they are doing has no relevance to what we ought to do.

A famous story is told about Thomas Hobbes, the 17th-century English philosopher, who argued that we all act in our own interests. On seeing him give alms to a beggar, a cleric asked Hobbes if he would have done this if Christ had not commanded us to do so. Yes, Hobbes replied, he was in pain to see the miserable condition of the old man, and his gift, by providing the man with some relief from that misery, also eased Hobbes’s pain. That reply reconciles Hobbes’s charity with his egoistic theory of human motivation, but at the cost of emptying egoism of much of its bite. If egoists suffer when they see a stranger in distress, they are capable of being as charitable as any altruist.

Followers of the 18th-century German philosopher Immanuel Kant would disagree. They think an act has moral worth only if it is done out of a sense of duty. Doing something merely because you enjoy doing it, or enjoy seeing its consequences, they say, has no moral worth, because if you happened not to enjoy doing it, then you wouldn’t do it, and you are not responsible for your likes and dislikes, whereas you are responsible for your obedience to the demands of duty.

Perhaps some philanthropists are motivated by their sense of duty. Apart from the equal value of all human life, the other “simple value” that lies at the core of the work of the Gates Foundation, according to its Web site, is “To whom much has been given, much is expected.” That suggests the view that those who have great wealth have a duty to use it for a larger purpose than their own interests. But while such questions of motive may be relevant to our assessment of Gates’s or Buffett’s character, they pale into insignificance when we consider the effect of what Gates and Buffett are doing. The parents whose children could die from rotavirus care more about getting the help that will save their children’s lives than about the motivations of those who make that possible.

Interestingly, neither Gates nor Buffett seems motivated by the possibility of being rewarded in heaven for his good deeds on earth. Gates told a Time interviewer, “There’s a lot more I could be doing on a Sunday morning” than going to church. Put them together with Andrew Carnegie, famous for his freethinking, and three of the four greatest American philanthropists have been atheists or agnostics. (The exception is John D. Rockefeller.) In a country in which 96 percent of the population say they believe in a supreme being, that’s a striking fact. It means that in one sense, Gates and Buffett are probably less self-interested in their charity than someone like Mother Teresa, who as a pious Roman Catholic believed in reward and punishment in the afterlife.

More important than questions about motives are questions about whether there is an obligation for the rich to give, and if so, how much they should give. A few years ago, an African-American cabdriver taking me to the Inter-American Development Bank in Washington asked me if I worked at the bank. I told him I did not but was speaking at a conference on development and aid. He then assumed that I was an economist, but when I said no, my training was in philosophy, he asked me if I thought the U.S. should give foreign aid. When I answered affirmatively, he replied that the government shouldn’t tax people in order to give their money to others. That, he thought, was robbery. When I asked if he believed that the rich should voluntarily donate some of what they earn to the poor, he said that if someone had worked for his money, he wasn’t going to tell him what to do with it.

At that point we reached our destination. Had the journey continued, I might have tried to persuade him that people can earn large amounts only when they live under favorable social circumstances, and that they don’t create those circumstances by themselves. I could have quoted Warren Buffett’s acknowledgment that society is responsible for much of his wealth. “If you stick me down in the middle of Bangladesh or Peru,” he said, “you’ll find out how much this talent is going to produce in the wrong kind of soil.” The Nobel Prize-winning economist and social scientist Herbert Simon estimated that “social capital” is responsible for at least 90 percent of what people earn in wealthy societies like those of the United States or northwestern Europe. By social capital Simon meant not only natural resources but, more important, the technology and organizational skills in the community, and the presence of good government. These are the foundation on which the rich can begin their work. “On moral grounds,” Simon added, “we could argue for a flat income tax of 90 percent.” Simon was not, of course, advocating so steep a rate of tax, for he was well aware of disincentive effects. But his estimate does undermine the argument that the rich are entitled to keep their wealth because it is all a result of their hard work. If Simon is right, that is true of at most 10 percent of it.

In any case, even if we were to grant that people deserve every dollar they earn, that doesn’t answer the question of what they should do with it. We might say that they have a right to spend it on lavish parties, private jets and luxury yachts, or, for that matter, to flush it down the toilet. But we could still think that for them to do these things while others die from easily preventable diseases is wrong. In an article I wrote more than three decades ago, at the time of a humanitarian emergency in what is now Bangladesh, I used the example of walking by a shallow pond and seeing a small child who has fallen in and appears to be in danger of drowning. Even though we did nothing to cause the child to fall into the pond, almost everyone agrees that if we can save the child at minimal inconvenience or trouble to ourselves, we ought to do so. Anything else would be callous, indecent and, in a word, wrong. The fact that in rescuing the child we may, for example, ruin a new pair of shoes is not a good reason for allowing the child to drown. Similarly if for the cost of a pair of shoes we can contribute to a health program in a developing country that stands a good chance of saving the life of a child, we ought to do so.

Perhaps, though, our obligation to help the poor is even stronger than this example implies, for we are less innocent than the passer-by who did nothing to cause the child to fall into the pond. Thomas Pogge, a philosopher at Columbia University, has argued that at least some of our affluence comes at the expense of the poor. He bases this claim not simply on the usual critique of the barriers that Europe and the United States maintain against agricultural imports from developing countries but also on less familiar aspects of our trade with developing countries. For example, he points out that international corporations are willing to make deals to buy natural resources from any government, no matter how it has come to power. This provides a huge financial incentive for groups to try to overthrow the existing government. Successful rebels are rewarded by being able to sell off the nation’s oil, minerals or timber.

In their dealings with corrupt dictators in developing countries, Pogge asserts, international corporations are morally no better than someone who knowingly buys stolen goods — with the difference that the international legal and political order recognizes the corporations, not as criminals in possession of stolen goods but as the legal owners of the goods they have bought. This situation is, of course, beneficial for the industrial nations, because it enables us to obtain the raw materials we need to maintain our prosperity, but it is a disaster for resource-rich developing countries, turning the wealth that should benefit them into a curse that leads to a cycle of coups, civil wars and corruption and is of little benefit to the people as a whole.

In this light, our obligation to the poor is not just one of providing assistance to strangers but one of compensation for harms that we have caused and are still causing them. It might be argued that we do not owe the poor compensation, because our affluence actually benefits them. Living luxuriously, it is said, provides employment, and so wealth trickles down, helping the poor more effectively than aid does. But the rich in industrialized nations buy virtually nothing that is made by the very poor. During the past 20 years of economic globalization, although expanding trade has helped lift many of the world’s poor out of poverty, it has failed to benefit the poorest 10 percent of the world’s population. Some of the extremely poor, most of whom live in sub-Saharan Africa, have nothing to sell that rich people want, while others lack the infrastructure to get their goods to market. If they can get their crops to a port, European and U.S. subsidies often mean that they cannot sell them, despite — as for example in the case of West African cotton growers who compete with vastly larger and richer U.S. cotton producers — having a lower production cost than the subsidized producers in the rich nations.

The remedy to these problems, it might reasonably be suggested, should come from the state, not from private philanthropy. When aid comes through the government, everyone who earns above the tax-free threshold contributes something, with more collected from those with greater ability to pay. Much as we may applaud what Gates and Buffett are doing, we can also be troubled by a system that leaves the fate of hundreds of millions of people hanging on the decisions of two or three private citizens. But the amount of foreign development aid given by the U.S. government is, at 22 cents for every $100 the nation earns, about the same, as a percentage of gross national income, as Portugal gives and about half that of the U.K. Worse still, much of it is directed where it best suits U.S. strategic interests — Iraq is now by far the largest recipient of U.S. development aid, and Egypt, Jordan, Pakistan and Afghanistan all rank in the Top 10. Less than a quarter of official U.S. development aid — barely a nickel in every $100 of our G.N.I. — goes to the world’s poorest nations.

Adding private philanthropy to U.S. government aid improves this picture, because Americans privately give more per capita to international philanthropic causes than the citizens of almost any other nation. Even when private donations are included, however, countries like Norway, Denmark, Sweden and the Netherlands give three or four times as much foreign aid, in proportion to the size of their economies, as the U.S. gives — with a much larger percentage going to the poorest nations. At least as things now stand, the case for philanthropic efforts to relieve global poverty is not susceptible to the argument that the government has taken care of the problem. And even if official U.S. aid were better-directed and comparable, relative to our gross domestic product, with that of the most generous nations, there would still be a role for private philanthropy. Unconstrained by diplomatic considerations or the desire to swing votes at the United Nations, private donors can more easily avoid dealing with corrupt or wasteful governments. They can go directly into the field, working with local villages and grass-roots organizations.

Nor are philanthropists beholden to lobbyists. As The New York Times reported recently, billions of dollars of U.S. aid is tied to domestic goods. Wheat for Africa must be grown in America, although aid experts say this often depresses local African markets, reducing the incentive for farmers there to produce more. In a decision that surely costs lives, hundreds of millions of condoms intended to stop the spread of AIDS in Africa and around the world must be manufactured in the U.S., although they cost twice as much as similar products made in Asia.

In other ways, too, private philanthropists are free to venture where governments fear to tread. Through a foundation named for his wife, Susan Thompson Buffett, Warren Buffett has supported reproductive rights, including family planning and pro-choice organizations. In another unusual initiative, he has pledged $50 million for the International Atomic Energy Agency’s plan to establish a “fuel bank” to supply nuclear-reactor fuel to countries that meet their nuclear-nonproliferation commitments. The idea, which has been talked about for many years, is widely agreed to be a useful step toward discouraging countries from building their own facilities for producing nuclear fuel, which could then be diverted to weapons production. It is, Buffett said, “an investment in a safer world.” Though it is something that governments could and should be doing, no government had taken the first step.

Aid has always had its critics. Carefully planned and intelligently directed private philanthropy may be the best answer to the claim that aid doesn’t work. Of course, as in any large-scale human enterprise, some aid can be ineffective. But provided that aid isn’t actually counterproductive, even relatively inefficient assistance is likely to do more to advance human wellbeing than luxury spending by the wealthy.

The rich, then, should give. But how much should they give? Gates may have given away nearly $30 billion, but that still leaves him sitting at the top of the Forbes list of the richest Americans, with $53 billion. His 66,000-square-foot high-tech lakeside estate near Seattle is reportedly worth more than $100 million. Property taxes are about $1 million. Among his possessions is the Leicester Codex, the only handwritten book by Leonardo da Vinci still in private hands, for which he paid $30.8 million in 1994. Has Bill Gates done enough? More pointedly, you might ask: if he really believes that all lives have equal value, what is he doing living in such an expensive house and owning a Leonardo Codex? Are there no more lives that could be saved by living more modestly and adding the money thus saved to the amount he has already given?

Yet we should recognize that, if judged by the proportion of his wealth that he has given away, Gates compares very well with most of the other people on the Forbes 400 list, including his former colleague and Microsoft co-founder, Paul Allen. Allen, who left the company in 1983, has given, over his lifetime, more than $800 million to philanthropic causes. That is far more than nearly any of us will ever be able to give. But Forbes lists Allen as the fifth-richest American, with a net worth of $16 billion. He owns the Seattle Seahawks, the Portland Trailblazers, a 413-foot oceangoing yacht that carries two helicopters and a 60-foot submarine. He has given only about 5 percent of his total wealth.

Is there a line of moral adequacy that falls between the 5 percent that Allen has given away and the roughly 35 percent that Gates has donated? Few people have set a personal example that would allow them to tell Gates that he has not given enough, but one who could is Zell Kravinsky. A few years ago, when he was in his mid-40s, Kravinsky gave almost all of his $45 million real estate fortune to health-related charities, retaining only his modest family home in Jenkintown, near Philadelphia, and enough to meet his family’s ordinary expenses. After learning that thousands of people with failing kidneys die each year while waiting for a transplant, he contacted a Philadelphia hospital and donated one of his kidneys to a complete stranger.

After reading about Kravinsky in The New Yorker, I invited him to speak to my classes at Princeton. He comes across as anguished by the failure of others to see the simple logic that lies behind his altruism. Kravinsky has a mathematical mind — a talent that obviously helped him in deciding what investments would prove profitable — and he says that the chances of dying as a result of donating a kidney are about 1 in 4,000. For him this implies that to withhold a kidney from someone who would otherwise die means valuing one’s own life at 4,000 times that of a stranger, a ratio Kravinsky considers “obscene.”

What marks Kravinsky from the rest of us is that he takes the equal value of all human life as a guide to life, not just as a nice piece of rhetoric. He acknowledges that some people think he is crazy, and even his wife says she believes that he goes too far. One of her arguments against the kidney donation was that one of their children may one day need a kidney, and Zell could be the only compatible donor. Kravinsky’s love for his children is, as far as I can tell, as strong as that of any normal parent. Such attachments are part of our nature, no doubt the product of our evolution as mammals who give birth to children, who for an unusually long time require our assistance in order to survive. But that does not, in Kravinsky’s view, justify our placing a value on the lives of our children that is thousands of times greater than the value we place on the lives of the children of strangers. Asked if he would allow his child to die if it would enable a thousand children to live, Kravinsky said yes. Indeed, he has said he would permit his child to die even if this enabled only two other children to live. Nevertheless, to appease his wife, he recently went back into real estate, made some money and bought the family a larger home. But he still remains committed to giving away as much as possible, subject only to keeping his domestic life reasonably tranquil.

Buffett says he believes in giving his children “enough so they feel they could do anything, but not so much that they could do nothing.” That means, in his judgment, “a few hundred thousand” each. In absolute terms, that is far more than most Americans are able to leave their children and, by Kravinsky’s standard, certainly too much. (Kravinsky says that the hard part is not giving away the first $45 million but the last $10,000, when you have to live so cheaply that you can’t function in the business world.) But even if Buffett left each of his three children a million dollars each, he would still have given away more than 99.99 percent of his wealth. When someone does that much — especially in a society in which the norm is to leave most of your wealth to your children — it is better to praise them than to cavil about the extra few hundred thousand dollars they might have given.

Philosophers like Liam Murphy of New York University and my colleague Kwame Anthony Appiah at Princeton contend that our obligations are limited to carrying our fair share of the burden of relieving global poverty. They would have us calculate how much would be required to ensure that the world’s poorest people have a chance at a decent life, and then divide this sum among the affluent. That would give us each an amount to donate, and having given that, we would have fulfilled our obligations to the poor.

What might that fair amount be? One way of calculating it would be to take as our target, at least for the next nine years, the Millennium Development Goals, set by the United Nations Millennium Summit in 2000. On that occasion, the largest gathering of world leaders in history jointly pledged to meet, by 2015, a list of goals that include:

Reducing by half the proportion of the world’s people in extreme poverty (defined as living on less than the purchasing-power equivalent of one U.S. dollar per day).

Reducing by half the proportion of people who suffer from hunger.

Ensuring that children everywhere are able to take a full course of primary schooling.

Ending sex disparity in education.

Reducing by two-thirds the mortality rate among children under 5.

Reducing by three-quarters the rate of maternal mortality.

Halting and beginning to reverse the spread of H.I.V./AIDS and halting and beginning to reduce the incidence of malaria and other major diseases.

Reducing by half the proportion of people without sustainable access to safe drinking water.

Last year a United Nations task force, led by the Columbia University economist Jeffrey Sachs, estimated the annual cost of meeting these goals to be $121 billion in 2006, rising to $189 billion by 2015. When we take account of existing official development aid promises, the additional amount needed each year to meet the goals is only $48 billion for 2006 and $74 billion for 2015.

Now let’s look at the incomes of America’s rich and superrich, and ask how much they could reasonably give. The task is made easier by statistics recently provided by Thomas Piketty and Emmanuel Saez, economists at the École Normale Supérieure, Paris-Jourdan, and the University of California, Berkeley, respectively, based on U.S. tax data for 2004. Their figures are for pretax income, excluding income from capital gains, which for the very rich are nearly always substantial. For simplicity I have rounded the figures, generally downward. Note too that the numbers refer to “tax units,” that is, in many cases, families rather than individuals.

Piketty and Saez’s top bracket comprises 0.01 percent of U.S. taxpayers. There are 14,400 of them, earning an average of $12,775,000, with total earnings of $184 billion. The minimum annual income in this group is more than $5 million, so it seems reasonable to suppose that they could, without much hardship, give away a third of their annual income, an average of $4.3 million each, for a total of around $61 billion. That would still leave each of them with an annual income of at least $3.3 million.

Next comes the rest of the top 0.1 percent (excluding the category just described, as I shall do henceforth). There are 129,600 in this group, with an average income of just over $2 million and a minimum income of $1.1 million. If they were each to give a quarter of their income, that would yield about $65 billion, and leave each of them with at least $846,000 annually.

The top 0.5 percent consists of 575,900 taxpayers, with an average income of $623,000 and a minimum of $407,000. If they were to give one-fifth of their income, they would still have at least $325,000 each, and they would be giving a total of $72 billion.

Coming down to the level of those in the top 1 percent, we find 719,900 taxpayers with an average income of $327,000 and a minimum of $276,000. They could comfortably afford to give 15 percent of their income. That would yield $35 billion and leave them with at least $234,000.

Finally, the remainder of the nation’s top 10 percent earn at least $92,000 annually, with an average of $132,000. There are nearly 13 million in this group. If they gave the traditional tithe — 10 percent of their income, or an average of $13,200 each — this would yield about $171 billion and leave them a minimum of $83,000.

You could spend a long time debating whether the fractions of income I have suggested for donation constitute the fairest possible scheme. Perhaps the sliding scale should be steeper, so that the superrich give more and the merely comfortable give less. And it could be extended beyond the Top 10 percent of American families, so that everyone able to afford more than the basic necessities of life gives something, even if it is as little as 1 percent. Be that as it may, the remarkable thing about these calculations is that a scale of donations that is unlikely to impose significant hardship on anyone yields a total of $404 billion — from just 10 percent of American families.

Obviously, the rich in other nations should share the burden of relieving global poverty. The U.S. is responsible for 36 percent of the gross domestic product of all Organization for Economic Cooperation and Development nations. Arguably, because the U.S. is richer than all other major nations, and its wealth is more unevenly distributed than wealth in almost any other industrialized country, the rich in the U.S. should contribute more than 36 percent of total global donations. So somewhat more than 36 percent of all aid to relieve global poverty should come from the U.S. For simplicity, let’s take half as a fair share for the U.S. On that basis, extending the scheme I have suggested worldwide would provide $808 billion annually for development aid. That’s more than six times what the task force chaired by Sachs estimated would be required for 2006 in order to be on track to meet the Millennium Development Goals, and more than 16 times the shortfall between that sum and existing official development aid commitments.

If we are obliged to do no more than our fair share of eliminating global poverty, the burden will not be great. But is that really all we ought to do? Since we all agree that fairness is a good thing, and none of us like doing more because others don’t pull their weight, the fair-share view is attractive. In the end, however, I think we should reject it. Let’s return to the drowning child in the shallow pond. Imagine it is not 1 small child who has fallen in, but 50 children. We are among 50 adults, unrelated to the children, picnicking on the lawn around the pond. We can easily wade into the pond and rescue the children, and the fact that we would find it cold and unpleasant sloshing around in the knee-deep muddy water is no justification for failing to do so. The “fair share” theorists would say that if we each rescue one child, all the children will be saved, and so none of us have an obligation to save more than one. But what if half the picnickers prefer staying clean and dry to rescuing any children at all? Is it acceptable if the rest of us stop after we have rescued just one child, knowing that we have done our fair share, but that half the children will drown? We might justifiably be furious with those who are not doing their fair share, but our anger with them is not a reason for letting the children die. In terms of praise and blame, we are clearly right to condemn, in the strongest terms, those who do nothing. In contrast, we may withhold such condemnation from those who stop when they have done their fair share. Even so, they have let children drown when they could easily have saved them, and that is wrong.

Similarly, in the real world, it should be seen as a serious moral failure when those with ample income do not do their fair share toward relieving global poverty. It isn’t so easy, however, to decide on the proper approach to take to those who limit their contribution to their fair share when they could easily do more and when, because others are not playing their part, a further donation would assist many in desperate need. In the privacy of our own judgment, we should believe that it is wrong not to do more. But whether we should actually criticize people who are doing their fair share, but no more than that, depends on the psychological impact that such criticism will have on them, and on others. This in turn may depend on social practices. If the majority are doing little or nothing, setting a standard higher than the fair-share level may seem so demanding that it discourages people who are willing to make an equitable contribution from doing even that. So it may be best to refrain from criticizing those who achieve the fair-share level. In moving our society’s standards forward, we may have to progress one step at a time.

For more than 30 years, I’ve been reading, writing and teaching about the ethical issue posed by the juxtaposition, on our planet, of great abundance and life-threatening poverty. Yet it was not until, in preparing this article, I calculated how much America’s Top 10 percent of income earners actually make that I fully understood how easy it would be for the world’s rich to eliminate, or virtually eliminate, global poverty. (It has actually become much easier over the last 30 years, as the rich have grown significantly richer.) I found the result astonishing. I double-checked the figures and asked a research assistant to check them as well. But they were right. Measured against our capacity, the Millennium Development Goals are indecently, shockingly modest. If we fail to achieve them — as on present indications we well might — we have no excuses. The target we should be setting for ourselves is not halving the proportion of people living in extreme poverty, and without enough to eat, but ensuring that no one, or virtually no one, needs to live in such degrading conditions. That is a worthy goal, and it is well within our reach.

Peter Singer is the Ira W. DeCamp professor of bioethics at the Center for Human Values at Princeton University. He is the author of many books, including most recently “The Way We Eat: Why Our Food Choices Matter.”

Copyright 2006 The New York Times Company

Enjoy The Capital Account Surplus

Embrace the Deficit

By DAVID MALPASS December 21, 2006; Page A16

For decades, the trade deficit has been a political and journalistic lightning rod, inspiring countless predictions of America's imminent economic collapse. The reality is different. Our imports grow with our economy and population while our exports grow with foreign economies, especially those of industrialized countries. Though widely criticized as an imbalance, the trade deficit and related capital inflow reflect U.S. growth, not weakness -- they link the younger, faster-growing U.S. with aging, slower-growing economies abroad.

Since the 2001 recession, the U.S. economy has created 9.3 million new jobs, compared with 360,000 in Japan and 1.1 million in the euro zone excluding Spain. This despite our trade deficit and their trade surpluses. Like the U.S., Spain (3.6 million new jobs) and the U.K. (1.3 million new jobs) ran trade deficits and created jobs rapidly in this five-year period. Wages are rising solidly in these three. The economics is clear (for once) that a liberal trading environment allows more jobs with higher wages as people specialize.

The latest data on growth in jobs, retail sales and housing starts, and the record level of household savings, underscores the solid economy described by Fed Chairman Ben Bernanke last month. Supporting the "solid-growth" view are rising global stock markets, strong growth of corporate profits, the narrow credit spread between Treasurys and riskier bonds, and low interest rates relative to inflation and to growth -- nominal growth in the 12 months through September was 6%, yet the Fed funds rate, usually in line with nominal growth, only averaged 4.6%.

The trade deficit and a low "personal savings rate" are key parts of the bond market's multi-year pessimism about the U.S. growth outlook. But just as the high level of U.S. savings is likely to add to future growth -- the savings rate is only low if you arbitrarily exclude gains -- the trade deficit and heavy capital inflows are also positive parts of the growth outlook. Rather than signaling a slowdown, the inversion of the yield curve -- "Greenspan's conundrum," in which bond yields are low despite solid growth and rising inflation -- is probably the result of this deep underestimate of the U.S. growth outlook, plentiful liquidity, and a backward-looking deflation premium for bonds, the reverse of the backward-looking inflation premium that kept bond yields unusually high in the 1980s.

The common perception is that Americans drive the trade deficit in an unhealthy way by spending more than we produce. To make up the difference, foreigners ship us things on credit. This sounds bad, but should be evaluated in terms of our demographics, low unemployment rate, attractiveness to foreign investment and rising household savings.

The recent surge in the U.S. trade deficit reflects, in part, the unprecedented shift in the demographics of the world's large economies. The under-60 U.S. population is expected to grow for at least 50 years while the under-60 populations in Japan and Europe are already declining and in China will turn down within a decade. They need bonds while Americans need capital. They want to save more than they invest in their own economies, and are eager to help us invest more heavily (through their purchase of bonds.) This makes good demographic sense. Older investors (concentrated abroad) need steady returns, lending to younger generations through bank deposits, bond purchases and life insurance premiums (which are reinvested in growth). Younger people (concentrated in the U.S.) need cash and debt for college degrees, houses and business startups. This creates a healthy synergy across generations and across borders.

Like young households, many companies also spend more than they produce, using bonds and bank loans, some from foreigners, to make up the difference. They add employees, machines, supplies and advertising before they produce. Growing corporations are expected to be cash hungry. This leverage is treated as a positive for companies but a negative for countries, a key inconsistency in popular economics. Rather than paying the debt back, the growing company rolls the debt over and adds more, just as the U.S. has been doing throughout most of its prosperous economic history. Part of each additional bond offering puts the company and the U.S. in the position of investing more than we save, drawing in foreign investment and contributing to the trade deficit.

With all the negativism about the U.S. economy, it's easy to forget its attractiveness. Foreigners are as eager to invest in the U.S. as we are to buy goods and services from them -- it's a two-way street. Our 10-year government bonds yield 4.6% per year versus 1.6% in Japan, while our government debt is 38% of GDP versus 86% in Japan. The comparisons with Europe are not as extreme as Japan's, but still heavily favor the U.S.

While the net foreign debt of the U.S. is growing (the result of capital inflows), household net worth is growing faster, meaning foreigners are investing in the U.S. too slowly and conservatively to keep up with our growth. Their capital mingles with domestic savings, providing $2.7 trillion of net international capital to combine with $27 trillion in net U.S. household financial savings as of Sept. 30.

The already-large foreign demand for investments in the U.S. is likely to grow from here, putting upward pressure on the trade deficit even if foreign growth continues to accelerate. The U.S. offers a relatively high and steady return on investment -- high because of the innovation and growth taking place here, steady because the commodity and manufacturing parts of many businesses are increasingly done abroad, reducing the volatility in U.S. growth. Equally important, the demographics of the world's large economies are shifting rapidly in favor of the U.S.

The trade deficit is the mechanism allowing consumption and investment in the U.S. to grow faster than in Europe and Japan. The issue for the U.S. is whether it's worth the interest costs. It's the same question facing a small business: Should it borrow money to expand the payroll, train employees, buy land and machines, conduct R&D, build inventory? Profit and credit-worthiness help make the decision.

The post-election dollar weakness pleased those who still think the U.S. is heading in the wrong economic direction. They advocate a weaker dollar as medicine for the trade deficit, often blaming it for more economic problems than we actually have.

But the trade deficit, around for hundreds of years of solid American growth, doesn't justify the inflation risk from dollar weakness or the growth risk from protectionism. And the trade deficit probably wouldn't respond to a weaker dollar anyway -- yen strength hasn't dented Japan's trade surplus, and it took a recession to create our last trade surplus in 1990-1991.

The swing vote on the dollar, and probably the controlling vote, is Fed policy. For now, this leaves unresolved the market debate over whether the U.S. will encourage dollar weakness and inflation in an effort to fight the trade deficit. More likely the Fed will fight inflation, strengthening the dollar, and leaving the trade deficit dependent on U.S. growth and demographics -- right where it should be.

Mr. Malpass is Bear Stearns's chief economist.

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But do we know what we don't know?

Learning to Keep Learning By:Thomas L. Friedman December 13,2006

I recently attended an Asia Society education seminar in Beijing, during which we heard Chinese educators talk about their “new national strategy.” It’s to make China an “innovation country” — with enough indigenous output to advance China “into the rank of innovation-oriented countries by 2020,” as Shang Yong, China’s vice minister of science and technology, put it.

I listened to this with mixed emotions. Part of me said: “Gosh, wouldn’t it be nice to have a government that was so focused on innovation — instead of one that is basically anti-science.” My other emotion was skepticism. Oh, you know the line: Great Britain dominated the 19th century, America dominated the 20th and now China is going to dominate the 21st. It’s game over.

Sorry, but I am not ready to cede the 21st century to China yet.

No question, China has been able to command an impressive effort to end illiteracy, greatly increasing its number of high school grads and new universities. But I still believe it is very hard to produce a culture of innovation in a country that censors Google — which for me is a proxy for curtailing people’s ability to imagine and try anything they want. You can command K-12 education. But you can’t command innovation. Rigor and competence, without freedom, will take China only so far. China will have to find a way to loosen up, without losing control, if it wants to be a truly innovative nation.

But while China can’t thrive without changing a lot more, neither can we. Ask yourself this: If the Iraq war had not dominated our politics, what would our last election have been about? It would have been about this question: Why should any employer anywhere in the world pay Americans to do highly skilled work — if other people, just as well educated, are available in less developed countries for half our wages?

If we can’t answer this question, in an age when more and more routine work can be digitized, automated or offshored, including white-collar work, “it is hard to see how, over time, we are going to be able to maintain our standard of living,” says Marc Tucker, who heads the National Center on Education and the Economy.

There is only one right answer to that question: In a globally integrated economy, our workers will get paid a premium only if they or their firms offer a uniquely innovative product or service, which demands a skilled and creative labor force to conceive, design, market and manufacture — and a labor force that is constantly able to keep learning. We can’t go on lagging other major economies in every math/science/reading test and every ranking of Internet penetration and think that we’re going to field a work force able to command premium wages. Freedom, without rigor and competence, will take us only so far.

Tomorrow, Mr. Tucker’s organization is coming out with a report titled “Tough Choices or Tough Times,” which proposes a radical overhaul of the U.S. education system, with one goal in mind: producing more workers — from the U.P.S. driver to the software engineer — who can think creatively.

“One thing we know about creativity is that it typically occurs when people who have mastered two or more quite different fields use the framework in one to think afresh about the other,” said Mr. Tucker. Thus, his report focuses on “how to make that kind of thinking integral to every level of education.”

That means, he adds, revamping an education system designed in the 1900s for people to do “routine work,” and refocusing it on producing people who can imagine things that have never been available before, who can create ingenious marketing and sales campaigns, write books, build furniture, make movies and design software “that will capture people’s imaginations and become indispensable for millions.”

That can’t be done without higher levels of reading, writing, speaking, math, science, literature and the arts. We have no choice, argues Mr. Tucker, because we have entered an era in which “comfort with ideas and abstractions is the passport to a good job, in which creativity and innovation are the key to the good life” and in which the constant ability to learn how to learn will be the only security you have.

Economics is not like war. It can be win-win. We, China, India and Europe can all flourish. But the ones who flourish most will be those who develop the best broad-based education system, to have the most people doing and designing the most things we can’t even imagine today. China still has to make some very big changes to get there — but so do we.

Refusing to learn

Dismal Science

By WILLIAM EASTERLY November 15, 2006; Page A18

Scientific American, in its November 2006 issue, reaches a "scientific judgment" that the great Nobel Prize-winning economist Friedrich Hayek "was wrong" about free markets and prosperity in his classic, "The Road to Serfdom." The natural scientists' favorite economist -- Prof. Jeffrey Sachs of Columbia University -- announces this new scientific breakthrough in a column, saying "the evidence is now in." To dispel any remaining doubts, Mr. Sachs clarifies that anyone who disagrees with him "is clouded by vested interests and by ideology."

This sounds like one of those moments in which the zeitgeist of mass confusion about national poverty, world poverty and prosperity comes together in one mad tragicomic brew.

Hayek: Sachs appeal

First, Mr. Sachs disses the great Hayek by repeating the old canard that Hayek thought any attempt at taxpayer-funded social insurance would put us all on the "Road to Serfdom." This is an especially strange charge, since Hayek (while certainly opposed to the social engineering that proponents of a full-blown welfare state usually have in mind) himself calls for some form of taxpayer-funded social insurance against severe physical deprivation on pages 133-134 of "The Road to Serfdom." Mr. Sachs, who is currently best known for his star-driven campaign to end world poverty, has apparently spent more time studying the economic thinking of Salma Hayek than that of Friedrich.

Second, if he had studied (Friedrich) Hayek, Mr. Sachs would realize what "The Road to Serfdom" is really about, and how it is of great relevance to Mr. Sachs's own current work, which has ironically little to do with what he wrote about in Scientific American. Hayek's great book is all about the dangers of large-scale state economic planning, courageously written in 1944 when Soviet central planning, technocratic socialism and administrative control of the wartime economy appealed as a peacetime model to many New Dealers, celebrity economists and policy wonks of all stripes.

The countries that are now rich subsequently listened enough to Hayek and to common sense to avoid the road to serfdom. Yet today, Mr. Sachs (in his book "The End of Poverty") is peddling his own administrative central plan -- 449 steps in all -- to end world poverty. In his plan, the U.N. secretary-general (to whom he is an adviser) would supervise and coordinate thousands of international civil servants and technocratic experts to solve the problems of every poor village and city slum everywhere. Mr. Sachs is not in favor of central planning as an economic system, but he offers it as a solution, anyway, to the multifold problems of the world's poorest people. If you want the best analysis of why the approach of Mr. Sachs and his confreres in Hollywood and the U.N. will fail to end world poverty this time (as similar efforts failed over the past six decades), you can find it in Hayek.

Third, Mr. Sachs's attempt to make the case for his best possible society, the Scandinavian welfare state, is a little shaky. If this is what passes for the scientific method in Scientific American, American science is in even worse shape than we thought. Economics is usually about the incentives that cause people to solve their own or other peoples' problems, but to Mr. Sachs, problem-solving seems always to be about raising more public money for whatever cause he is concerned with at the moment. (To give the celebrity economist his due, he does successfully raise the profile of genuinely tragic problems which compassionate people everywhere would like to see alleviated.)

Mr. Sachs's empirical analysis purports to show that Nordic welfare states are outperforming those states that follow the "English-speaking" tradition of laissez-faire, like the U.K. or the U.S. Poverty rates are indeed lower in the Nordic countries, although the skeptical reader (probably an ideologue) might wonder if the poverty outcome in, say, the U.S., with its tortured history of a black underclass and its de facto openness to impoverished but upwardly mobile immigrants, is really comparable to that of Nordic countries.

Then there is the big picture, where those laissez-faire Anglophones in, first, the U.K. and, then, the U.S., just happened to have been the leaders of the ongoing global industrial revolution that abolished far more poverty over the past two centuries than a few modest Scandinavian redistribution schemes. Mr. Sachs apparently thinks the industrial revolution was led by IKEA. Lastly, let's hear from the Nordics themselves, who have been busily moving away from the social welfare state back toward laissez-faire. According to the English-speaking ideologues that composed the Heritage Foundation/Wall Street Journal Index of Economic Freedom, Denmark, Finland and Sweden were all included in the 20 countries classified as "free" in 2006 (with Denmark actually ranked ahead of the U.S.). Only Norway missed the cut -- barely.

Mr. Sachs is wrong that Hayek was wrong. In his own global antipoverty work, he is unintentionally demonstrating why more scientists, Hollywood actors and the rest of us should go back and read "The Road to Serfdom" if we want to know what will not work to achieve "The End of Poverty." Hayek gave the best exposition ever of the unpopular ideas of economic freedom that somehow triumph anyway, alleviating far more national and global poverty than more fashionable Scandinavia-envy and grandiose plans to "make poverty history."

Mr. Easterly, professor of economics at New York University, is the author of "The White Man's Burden: Why the West's Efforts to Aid the Rest Have Done So Much Ill and So Little Good" (Penguin, 2006).

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Effective tax systems

Tax Epiphany November 13, 2006; Page A16

A bright light descended from the sky last week and shone upon the world's economic planners. It came courtesy of the World Bank, of all unlikely places; its toiling economists have discovered that simplified tax systems promote economic growth.

In a report titled "Paying Taxes -- The Global Picture," the World Bank and its co-authors at PricewaterhouseCoopers make the case for simplifying business taxes. Burdensome rules and multiple levies, they argue, promote tax evasion even when individual corporate tax rates are low. Make the system transparent and simple, and the private sector will pony up. It's an argument that could be made for personal income taxes, too.

Released as an elaboration of the Bank's broader and valuable "Doing Business Report," the survey examines the tax regimes of 175 countries between April and July this year. It looks at the administrative tax burden that a hypothetical, limited liability company with 60 employees would face.

The Bank's findings echo that of the flat-tax camp; namely, simple tax regimes promote compliance and efficiency. By "simple," the Bank doesn't just mean unifying rates; it includes making the forms easy to read, understand and file. World-wide it takes an average of 332 hours a year for businesses to comply with tax requirements, ranging from 2,600 hours in Brazil to 325 in the U.S. to 68 in Switzerland. There's no reason a tax form can't fit on a few pages, as in Hong Kong, or be filed over the Internet, as in Singapore.

Tax simplification also means trimming the tax regime itself. The Bank found that corporate income taxes compose only 36%, on average, of businesses' annual tax burden. Property, dividend, capital gains, municipal, and social security taxes, among others, make up the rest -- not to mention the various loopholes carved out for certain industries. Countries such as Egypt, which unified its corporate tax rates and eliminated about 3,000 corporate exemptions and tax holidays last year, saw tax filings double. Russia implemented a flat tax in 2004 and saw tax revenues soar.

The Bank pulls no punches for its main clientele: poor countries that have trouble raising funds. Many make the mistake of setting high tax rates. By doing so, they tacitly encourage tax evasion and create opportunities for corruption. Little wonder that the bottom 30 countries in the "Doing Business" survey "are twice as likely as those in the top 30 to report that bribery is a problem."

If only the high-tax prophets at the International Monetary Fund were paying attention. In a recent working paper, three Fund economists -- writing in a "personal" capacity -- put out an anti-flat tax screed. We don't have the space to dissect the entire paper here, but in essence they wave away the experience of Hong Kong and Russia and argue that the pro-market signals flat taxes send won't do any good for developed nations.

We never thought we'd say this, but perhaps the World Bank can lend the Fund a few economists for some re-education assistance. The IMF bias has long been to elevate balanced budgets as the highest fiscal priority, with tax levels and tax incidence as secondary matters. The Bank business tax survey implicitly exposes the error of the Fund's ways. Combined with President Paul Wolfowitz's long-needed campaign against corruption, the tax report also marks a welcome turn at the Bank in a pro-growth direction.

The Bank's report should also inspire a more thoughtful debate over the virtue of value-added taxes, or VATs. More than 130 countries have adopted VATs, with the IMF pushing hard for its implementation in places like Hong Kong. The VAT is a highly efficient tax and in that way has an advantage over a corporate income tax regime with high rates but many loopholes. But that very efficiency also makes a VAT dangerous as an engine of bigger government because its incidence tends to be hidden and politicians are tempted to raise the rate whenever they want a little more revenue. Some built-in restraint on that political impulse is needed.

The overriding goal of any tax system should be to raise the revenue that governments need for public purposes with the least amount of economic distortion and evasion. The lesson of the World Bank report is that the more transparent and simple a tax scheme, the more it will achieve that purpose.

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Failing to get it right!

See a Good Idea. See It Run Into Trouble.

By PAUL BESTON November 9, 2006; Page D6

In 1991, a New York State teacher of the year, John Taylor Gatto, wrote an op-ed for The Wall Street Journal in which he announced his departure from public school teaching after 30 years. He was no longer willing to "hurt kids" in a broken system where political pressure snuffed out worthy efforts for change. By now, he wrote, "even reformers can't imagine school much different."

Indeed, the first priority of education reformers is often not success but the preservation of methods with which they are already comfortable. As Harold Henderson writes in "Let's Kill Dick and Jane," the American educational establishment possesses "an uncanny ability to transform golden ideas for change -- from left, right, or center -- into a leaden sludge." Mr. Henderson, a longtime staff writer for the Chicago Reader, describes the fate of one textbook company -- Illinois-based Open Court -- as it tried to bring its share of golden ideas to a resistant school system.

Some teachers, complained a consultant, had 'all the spirit and excitement of baked halibut.'

The book's title refers to the basal readers that were once a mainstay in American schools: Dick and Jane, created by advocates of the "Look-Say" theory of reading instruction in which children were taught to memorize the appearance of words at the expense of phonetic understanding. The theory has since been discredited, at least in part by the publication in 1955 of Rudolf Flesch's best-selling "Why Johnny Can't Read," which urged a return to phonics instruction.

Blouke Carus and his wife, Marianne, Americans with strong German roots and a familiarity with the exacting standards of the German gymnasium, read Flesch's book and formed Open Court in 1962. Together with a small band of dedicated educational theorists and consultants, they created innovative materials with the goal of educating the American masses as rigorously as the elites of Europe. Providing both a history of this remarkable company and a withering portrait of the education culture, Mr. Henderson's book is more compelling than any lay reader could reasonably expect.

The vision of Open Court was to break down what Mr. Henderson calls "the false dichotomy between traditionalist 'skills' and progressivist 'meaning'" and focus simply on what worked. Incorporating the traditionalist emphasis on skills (particularly phonics) and the progressive insight that different children learned differently, the company managed to attract opposition from both sides.

But the most vigorous objections came from progressive advocates of Whole Language. This theory rejected specific skill instruction in favor of "meaningful contexts" for reading. Some of its practitioners believed that reading could be learned as easily as talking; others feared that a systematic focus on skills was somehow akin to cultural and economic oppression. Dismissing these chimeras, Open Court argued that depriving children of such skills was the true act of oppression in a society where the boundaries of opportunity were drawn mostly by ignorance.

A recurring theme of "Let's Kill Dick and Jane" is the anti-intellectual rigidity of the educational establishment, which continually resisted the research-based methods that Open Court employed. The effectiveness of Open Court's pedagogy, to the extent that it was measured, indicated that Blouke and Marianne Carus knew what they were doing. The overt resistance of professional educators lessened somewhat over time, only to take on more subtle forms. Even when the educational system seemed ready to respond to cries for reform, as in California in the 1980s -- where Open Court's materials were found to be the only ones that met the state's promising new standards -- bureaucracy and the status quo ultimately prevailed.

The publishing company was eventually worn down by organizational and financial difficulties. It never commanded more than a small percentage of the textbook market and was finally sold, in 1996, to McGraw-Hill, which has doubled the sales of its materials. But the question of what might have been lingers. For all of the challenges the company faced, perhaps the most insurmountable was securing the commitment of teachers: They were often too deeply attached to their established routines, which were much less demanding than what Open Court was asking of them.

Their resistance, Mr. Henderson stresses, was caused more by inertia than ideology: "They have all the spirit and excitement of baked halibut," complained one Open Court consultant on a school visit. Contrast this dull conformity with the passion of consultants and creators of Open Court, one of whom says simply: "If you teach a child to read, you never have to do another right thing in your life."

And therein lies a fundamental dilemma. In the U.S., such dedication is more typically associated with those who work in business or the more lucrative professions. Despite decades of reforms, an unanswered question hangs over the education debate: how to find enough spirited, and gifted, people to do vital work that does not pay especially well and that has none of the glamour bestowed by success in the private sector.

The American education culture, Mr. Henderson concludes, "can assume a veneer of progressivism or traditionalism as the times dictate, but its routines lie deeper than ideology." The founders of Open Court, and education reformers before and since, can testify to the truth of those words.

Mr. Beston is a writer in Beacon, N.Y.

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Vouchers and choice

Vouchers in Black and White November 8, 2006; Page A22

One frequent, and nasty, argument against school vouchers is that they will end up resegregating public schools. It's all the nastier because the truth is the opposite, as some new evidence shows.

The liberal Urban League has charged that school vouchers -- which go mostly to minority families -- would "subsidize segregation." And the theme has been picked up by no less than Senator Hillary Rodham Clinton, who according to Newsday explained her opposition to school choice this way to liberal activists in the Bronx earlier this year: "First family that comes and says 'I want to send my daughter to St. Peter's Roman Catholic School,' and you say, 'Great, wonderful school, here's your voucher.' Next parent that comes and says, 'I want to send my child to the school of the Church of the White Supremacist . . .'"

Yes, she really said that. We doubt many inner-city black and Latino families that benefit from vouchers are demanding that their kids attend white supremacy schools, even if there were such schools. Come to think of it, what specific schools is Mrs. Clinton referring to? She and her husband of course sent their daughter to one of Washington, D.C.'s most elite, and mostly white, private schools.

She can't mean the schools in Milwaukee and Cleveland, where a new study by Greg Foster of the Milton and Rose Friedman Foundation finds that vouchers have allowed students to move to more racially integrated private schools. The Friedman Foundation favors school choice, but its data here seem unassailable and the Foundation is challenging anyone to refute it. The study finds that in 2003 private voucher schools in Milwaukee were 13% more racially diverse, and the Cleveland voucher schools 18% more diverse, than their public school counterparts.

America's inner-city public schools remain highly segregated primarily because the neighborhoods and school districts are themselves divided by race or ethnicity. The public urban schools, Mr. Foster finds, tend to "reproduce the segregation that arises from housing patterns." Vouchers increase racial mixing in schools, the study concludes, because "they break down geographic barriers, drawing together students across neighborhood boundaries in a way the government school monopoly cannot match even when it tries to do so."

In the 50 years since Brown v. Board of Education, educators have thought that if they could integrate the schools, even using such detested strategies as forced busing, school quality would improve. It hasn't. School vouchers give inner-city and other kids a chance to escape failing public schools, and it's a nice bonus to know that this choice will produce classrooms that, to borrow a famous phrase, look like America.

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The not-so-jobless recovery

The Worker Rally October 9, 2006; Page A18

The Labor Department released its September jobs report on Friday, and some wags are calling it the "whoops" report. The "whoops" is a reference to the upward revision of 810,000 previously undetected jobs that Labor now says were created in the U.S. economy in the 12 months through March 2006.

So instead of 5.8 million new jobs over the past three years, the U.S. economy has created 6.6 million. That's a lot more than a rounding error, more than the number of workers in the entire state of New Hampshire. What's going on here?

Our hypothesis has been that, due to the changing nature of the U.S. economy, the Labor Department's business establishment survey has been undercounting job creation from small businesses and self-employed entrepreneurs. That job growth has been better captured in Labor's companion household survey, which reported 271,000 new jobs in September after 250,000 new jobs in August, and a very healthy total of 2.54 million new jobs in the past year.

The household survey is what is used to determine the unemployment rate, which fell in September to 4.6%, the lowest level in five years. The establishment survey, meanwhile, is used to announce the monthly "new jobs" numbers. Every year the Labor Department revises its job estimates from the previous year, in essence reconciling the figures from the two surveys, and the missing 810,000 jobs was the result through March 2006.

Getting out of the statistical weeds, the news here is that the U.S. has a very tight labor market -- which is now translating into significant wage gains. Over the past 12 months wages have climbed by 4%, which is the biggest gain since 2001 and which economist Brian Wesbury points out is higher than the 3.3% average annual wage growth of the last 25 years.

Most of the media has ignored all this and instead focused on the disappointing 51,000 "new jobs" number from the establishment survey for September. But even in that survey, the jobs number for August was revised upward by 62,000 and the U.S. jobs machine continues to roll out an average of about 150,000 additional hires each month. Even the loss of residential construction jobs in September, due to the housing market slowdown, was nearly matched by payroll gains in commercial construction.

This boom in employment started in August of 2003, roughly coincident with the economy's growth acceleration in the wake of the Bush Administration's 2003 tax cuts on dividends, capital gains and in the top marginal income rate on the highest earners. Yet on the same day that the Labor Department discovered 810,000 new jobs, Nancy Pelosi promised that if she becomes Madam Speaker next year, within 100 hours of taking the gavel the House will vote to repeal those tax cuts and raise the minimum wage. Never underestimate the ways that Washington politicians can do economic harm.

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Net Payments - but what does it really mean?

U.S. Foreign Debt Shows Its Teeth As Rates Climb

Net Payments Remain Small But Pose Long-Term Threat To Nation's Living Standards

By MARK WHITEHOUSE September 25, 2006; Page A1

Over the past several years, Americans and their government enjoyed one of the best deals in international finance: They borrowed trillions of dollars from abroad to buy flat-panel TVs, build homes and fight wars, but as those borrowings mounted, the nation's payments on its net foreign debt barely budged.

Now, however, the easy money is coming to an end. As interest rates rise, America's debt payments are starting to climb -- so much so that for the first time in at least 90 years, the U.S. is paying noticeably more to its foreign creditors than it receives from its investments abroad. The gap reached $2.5 billion in the second quarter of 2006. In effect, the U.S. made a quarterly debt payment of about $22 for each American household, a turnaround from the $31 in net investment income per household it received a year earlier.

The gap is still small within the context of the $13 trillion American economy. And the trend could reverse if U.S. interest rates decline. But economists say America's emergence as a net payer illustrates an important point: In years to come, a growing share of whatever prosperity the nation achieves probably will be sent abroad in the form of debt-service payments. That means Americans will have to work harder to maintain the same living standards -- or cut back sharply to pay down the debt.

"Our net international obligations are coming home to roost," says Catherine Mann, a senior fellow at the Institute for International Economics. "It's as if on our personal MasterCards we have run up large obligations and never had to make payments. You can't believe that's going to last forever."

If the trend persists, it could also raise concerns about the nation's creditworthiness, putting pressure on the U.S. currency. "It's an additional challenge for the dollar," says Jim O'Neill, chief economist at Goldman Sachs in London. "Economists have been warning about this for so long that people have gotten bored, but now we're starting to see the deterioration."

Since the end of 2001, when the current economic expansion began, the nation's consumption, investment and other outlays have exceeded income by a cumulative $2.9 trillion -- the largest gap on record. That current-account deficit contributes directly to the nation's total foreign debt, the value of all the U.S. stocks, bonds, real estate, businesses and other assets owned by non-U.S. residents. As of the end of 2005, total U.S. foreign debt stood at $13.6 trillion -- or about $119,000 per household. Net foreign debt, which excluded the $11.1 trillion value of U.S.-owned foreign assets, was $2.5 trillion.

Exactly how the U.S. has managed to load on so much debt without seeing its net payments rise remains something of a mystery. Even in the second quarter, the U.S., in effect, was paying only a 0.4% annualized interest rate on its net debt. "It's still quite a good deal," says Pierre-Olivier Gourinchas, an economics professor at the University of California, Berkeley.

In a recent paper, Harvard economists Ricardo Hausmann and Federico Sturzenegger went so far as to suggest that the U.S. might not be a net debtor at all. Instead, they surmised, the U.S. might actually have income-producing assets abroad, such as know-how transferred to foreign subsidiaries, that have evaded measurement -- assets they call "dark matter," after a similarly elusive quarry in physics. Mr. Sturzenegger says the latest data haven't changed his view.

Most economists, however, see a more prosaic explanation: Foreigners have been willing to accept a much lower return on relatively safe U.S. investments than U.S. investors have earned on their assets abroad. Take, for example, China, which since 2001 has invested some $250 billion in U.S. Treasury bonds yielding around 5% or less -- part of a strategy to boost its exports by keeping its currency cheap in relation to the dollar.

By contrast, U.S. direct investments abroad -- which would include things like glass maker Corning Inc.'s liquid-crystal display plants in Taiwan or Intel Corp.'s chip-making subsidiary in Ireland -- have returned an average 8% since 2001, according to U.S. Commerce Department data. Meanwhile, U.S. investors in emerging-market stock funds earned an average annual return on their investments of 22.3%, according to financial-research firm Morningstar Inc. (The Commerce Department counts only part of that as income).

Because the U.S. has tended to borrow in bonds and similar interest-bearing instruments while investing in stocks and longer-term foreign projects, it has benefited vastly from the low interest rates of recent years. "The U.S. has been exceptionally lucky," says Goldman's Mr. O'Neill, "It's like the world's biggest hedge fund. It's borrowing cheap money and getting leveraged returns from the things it's investing in."

Foreigners' willingness to lend at low rates has also encouraged Americans and their government to borrow and spend. By buying U.S. Treasurys, foreign investors put up more than four-fifths of the $1.3 trillion the federal government has borrowed since 2001 to help pay for tax breaks, the new Medicare prescription-drug benefit and wars in Afghanistan and Iraq. Over the same period, foreigners put more than $700 billion into various types of U.S. mortgage-backed securities, providing the money for millions of Americans to buy new homes -- or extract cash from their existing homes to spend on goods such as washing machines and Hummers.

Now, the interest-rate picture is changing. Long-term rates remain low, but the Federal Reserve has raised short-term rates to 5.25% from a low of 1% in June 2004. As a result, payments on U.S. government debt, much of which is short-term, have risen. In the second quarter, for example, the government's debt payments to foreigners rose 10% to $36 billion, accounting for most of the change in the balance of income.

The nation's growing debts have made its finances more vulnerable to interest-rate changes. Cedric Tille, an economist at the Federal Reserve Bank in New York, estimates that a mere one-percentage-point rise in the relative return on U.S. foreign debt would increase the country's net debt payments by 1.1% of gross domestic product. Back in 1995, when the U.S.'s foreign liabilities were smaller, the effect would have been only half a percentage point.

Even without any major changes in rates, economists expect the burden of foreign-debt payments to rise. Estimates of that burden 10 years from now range anywhere from 0.5% to 2% of GDP, depending largely on whether the U.S. manages to curb its current-account deficit. If the deficit expands significantly and the U.S. stops earning a premium on its investments abroad, the burden could reach 5% of GDP, according to calculations made by John Kitchen, an economist in the White House's Office of Management and Budget.

The size of the nation's debt payments matters because it represents a share of income that American consumers, companies and government won't be able to spend or save. The higher the debt payments, the harder it will be for the U.S. to prosper.

"Your standard of living is going to be reduced unless you work much harder," says Nouriel Roubini, chairman of Roubini Global Economics. "The longer we wait to adjust our consumption and reduce our debt, the bigger will be the impact on our consumption in the future."

To be sure, by some measures the U.S. foreign debt is still relatively manageable. As a share of GDP, for example, the nation's net debt stood at about 20% at the end of 2005, compared with the 15% average of the 12-nation euro zone. The United Kingdom's net debt is 17% of GDP. Mexico's is 44%.

Among economists' biggest concerns, though, is the fast pace at which the U.S. is accumulating new debt. As that leads to larger interest payments, it will make the current-account deficit harder to control -- a vicious cycle that could accelerate if worried foreign investors demand higher interest rates to compensate for the added risk.

"You end up having to pay more and borrow more," says the University of California's Prof. Gourinchas. "Things could get out of hand very quickly."

Write to Mark Whitehouse at mark.whitehouse@wsj.com¹

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The Future of Freedom

Supply Side 300,000,000

By STEPHEN MOORE October 3, 2006; Page A26

The Census Bureau tells us that some time in the weeks ahead the U.S. population will reach 300 million. This means that there will be roughly three times as many people as there were a century ago, and twice as many as in 1950. Americans have been bringing a new baby into the world roughly every eight seconds and a new immigrant arrives every 30 seconds -- the equivalent of a new Chicago every year.

This demographic milestone is not cause for alarm -- as some prophets of doom would have it. Rather, it is cause for celebration. We 300 million Americans are on balance healthier and wealthier and freer than any population ever: We breathe cleaner air, drink cleaner water, earn higher incomes, have more leisure time, and live in less crowded housing. Every natural resource we depend on -- water, food, copper and, yes, even oil -- is far more abundant today measured by affordability than when our population was 100 million or even 30 million.

Thanks to the rapid pace of technological progress, there's every reason to believe these resources will be still more abundant when our population reaches 400 million -- which should happen about 40 years from now. As the late economist Julian Simon reminded us, thanks to our free market capitalist system, the history of America is one of leaving the storehouse for every successive generation more endowed with wealth, knowledge and natural resources.

Yes, skeptics will ask: What about the inevitable headaches of crowded classrooms, highways and all the other problems associated with more people sharing a finite land area? In the short term, more people can mean more congestion. But anyone who has bothered to look out the window of a plane on a trip from the West to the East Coast knows that America remains a vast, unpeopled land. Texas alone is so large that we could put every U.S. family of four in the state and give them two acres to call their own -- and the rest of the country would be deserted. Our farmers grow about three times as much food on one-third as many acres and a third fewer man-hours as 75 years ago -- and we have the technological capacity to feed a population many multiples of what we have today.

Our population is rising mainly because early childhood death rates in the U.S. have fallen by 90% in the last century, and continue to fall: A child born today in the U.S. is four times more likely to live to adulthood than one born in 1950, and 12 times more likely than one born in 1900. And these children will live longer, as the nearby chart shows. Life expectancy has increased by more than 30 years in the last century.

This good news is an eloquent rejoinder to 40 years of seemingly endless jeremiads issued by neo-Malthusians from Paul Ehrlich to Al Gore. In the early 1970s, when the U.S. head count was one-third less than today, the then-president of the World Bank, Robert McNamara, famously proclaimed that overpopulation was a danger on par with nuclear war. Many highly credentialed demographers actually compared uncontrolled human copulation with the reproduction behavior of Norwegian field mice. School children in the 1960s and '70s were warned that an impending nightmare of geometric population growth would mean standing room only on the globe and the need to wear gas masks to breathe.

Instead, as nations have grown richer over the past 50 years, birth rates around the globe have fallen by half. Human beings don't breed like field mice -- they can and do control their fertility. Ironically, even Thomas Malthus came to realize that humans control their breeding as a result of the "superiority in their reasoning faculties" and a capacity to "calculate distant consequences."

Apocalyptics in the Club of Rome -- who complained that America has the "grossest national product" and whose famous screed, "The Limits to Growth," asserted that economic growth could not continue because of limited natural resources -- were wrong. Growth brought about through the free market isn't a planetary curse at all, but rather the ultimate contraceptive and ecological protector.

Sadly, many policy makers still believe in the science fiction of overpopulation. The alleged threat of "too many Americans" crowding the country is one of the reasons that many in Congress want to build a wall around the U.S. to keep out immigrants. But even with continued immigration, the U.S. population is expected to grow for the next 50 years and then stabilize. By contrast, Japan and many European nations are expected to experience a debilitating absolute decline in their populations by between 10% and 25% over the next 50 years. Fortunately, the combination of immigration and slightly higher birth rates in the U.S. will help us avert that kind of population implosion here.

"Americans are the first best hope for the human race," as the historian Paul Johnson put it. That there are now 300 million of us -- and growing -- suggests that the future of freedom is in good hands.

Mr. Moore is a member of The Wall Street Journal's editorial board.

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Corruption, but of course!

Is Brazil Nuts -- Or Just the System?

By MARY ANASTASIA O'GRADY September 29, 2006; Page A17

"Corruption is a regular effect of interventionism."

-- Ludwig von Mises "Human Action," 1949

As Brazilians go to the polls on Sunday to elect a president for the next four years, most pundits are hedging their bets as to whether Luiz Inácio "Lula" da Silva of the Workers' Party (PT) can win re-election in the first round of voting.

A serious allegation of fraud inside the Lula campaign has become the main issue in the race over the past two weeks. Added to a host of other corruption charges implicating PT members close to the president in the past year, this latest scandal has the potential to force a run-off.

Lula may well be innocent, as he claims, of any involvement in the plethora of scandals now swirling around his party. But it is also true that if corruption has blind-sided him, he has only his own politics to blame. It has been the life work of Brazilian socialists -- of which the PT are among the most hardcore -- to empower the state, without limits, as an enforcer of "social justice" through the wholesome work of politicians and bureaucrats. Now they are reaping what they've sowed: a system that breeds corruption by its very nature, as von Mises warned more than a half-century ago.

The odds of a run-off remain slim. On Wednesday polling companies Datafolha and IBOPE released polls that suggest, after statistically adjusting for nullified ballots, that Lula will finish with 53% of the vote versus 35% for his next closest challenger, the two-term governor of São Paulo, Geraldo Alckmin. Yet with mud from scandal splashing higher every day, Alckmin supporters are holding onto the hope that Lula will fall short of the 50% plus one needed to avoid a second round.

Even then, an incumbent victory is fully expected. Lula is a charismatic populist who, in his first term, had enough common sense to avoid messing with the macroeconomic stability he inherited from predecessor Fernando Henrique Cardoso. He has also raised the minimum wage and expanded the welfare rolls to solidify his base. Brazil's majority poor heavily favor him.

Yet real damage may have been done to his second term. Even if he wins in the first round, the hard-left PT is expected to lose seats in the congress; if that happens, Lula will likely have to give up cabinet posts to coalition allies. While the PT is not the only party in Brasilia tarnished by charges of gross dishonesty, in recent years it seems to have elevated to an art form sophisticated practices of vote buying in congress, kickbacks on government procurement and, most recently, a fraudulent plan to commission and purchase a fake report designed to frame a political rival.

Brazilian disgust with the political class is widespread these days, but one wonders whether the more profound lesson is being learned. Long before von Mises wrote his masterpiece "Human Action," Founding Father James Madison warned that governments without limits are bound to become abusive. "All men having power ought to be mistrusted," he wrote. "If angels were to govern men, neither external nor internal controls on government would be necessary."

Brazil's runaway corruption is not due to an unusual collection of greedy politicians in Brasilia. Indeed, it is likely that Brazilian politicians, like their American counterparts, fit well within the bell curve when it comes to human frailty. The trouble is that under the 1988 constitution, mere mortals are trusted to behave like angels.

The constitutional project began in 1987 with good intentions. Fundamentally, it was an attempt to right the wrongs of the military government by securing democracy. But when socialist ideologues piled into a room with an untold number of narrow special interests, the outcome was a roadmap to tyranny, no longer with guns but with the "law." As Mr. Cardoso recalled in his memoir, "Brazil was trying to create a welfare state at the precise moment in history when the welfare states of Europe were collapsing."

Slow economic growth and corruption are but two offspring of the monster government in Brasilia that has badly damaged Lula's legacy. Von Mises predicted it: "The advocates of interventionism pretend to substitute for the -- as they assert, 'socially' detrimental -- effects of private property and vested interests the unlimited discretion of the perfectly wise and disinterested legislator and his conscientious and indefatigable servants, the bureaucrats." In the world of the anticapitalists, he explained, "only those on the government's payroll are rated as unselfish and noble."

Von Mises anticipated the outcome: "Unfortunately the office-holders and their staffs are not angelic. They learn very soon that their decisions mean for the businessmen either considerable losses, or -- sometimes -- considerable gains." In other words, buying influence is normal when influence has a cash value. This is what one Brazilian family did when it allegedly paid kickbacks to politicians who helped it secure contracts for medical equipment.

Such simple observations from classical thinkers have been routinely dismissed as "ideological" by both Latin American socialists and fascists -- that is, by the left and right. Yet the wisdom has proven timeless and universal, and there is no shortage of oppressed citizens who can attest to its veracity. At a World Bank panel to discuss corruption last week, Dele Olojede (an award-winning journalist from Nigeria) had this to say about the problem: "We should recognize that in societies where the bureaucracy is vast, the press is weak, the private sector operates under the yolk of government, these are the clearest indications of corrupt societies, and you cannot begin to fight corruption if you have all powerful government in any society."

Whether or not the equality of outcomes sought by the Brazilian Constitution is morally defensible, experience shows that the power required by the state to achieve it produces highly undesirable consequences. Despite all of socialism's moralizing, when those clamoring for justice make their way to the seat of unchecked power, a portion of them turn out to be no better than their predecessors. Do-gooders too have clay feet. It is a lesson Brazil is learning the hard way.

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Humanity's Greatest Achievement

Humanity's Greatest Achievement

By JOHAN NORBERG October 2, 2006; Page A11

Think for a moment about what this morning would have looked like if it were 150 years ago. You wouldn't have had electric light, running water or indoor sanitation. You couldn't have gone to work by car, bus or train. You couldn't have used a computer, which performs calculations in seconds that would take decades with pen and paper. In short, you would probably not have found this morning very comfortable or enjoyable -- if you had been alive to experience it. Back then, the global average for life expectancy was around 30 years.

We tend to take our opportunities for granted, but our ancestors could not have imagined what we now have. In the last 100 years, we have created more wealth than in the 100,000 years before that, and not because we work more. To the contrary: In the last century, work hours have been halved in the Western world. It is because new ideas have made it possible for us to work smarter and find easier ways to satisfy our needs and demands.

The people we should thank are the innovators and entrepreneurs, the individuals who see new opportunities and risk exploring them -- the people who find new markets, create new products, think out new ways to handle commodities commercially, organize work in new ways, design new technology or transfer capital to more productive uses. The entrepreneur is an explorer, who ventures into uncharted territory and opens up the new routes along which we will all be traveling soon enough. Simply to look around is to understand that entrepreneurs have filled our lives with everyday miracles.

Entrepreneurs are serial problem-solvers who search out inefficiencies and find more practical ways of connecting possible supply with potential demand. In that way, they constantly revolutionize our economy, and have made it possible for average people today to live longer and healthier lives, with more access to technology than the kings had in previous generations.

Had this radical improvement of our lives been accomplished by political leaders and central planning, it would have been celebrated as humanity's greatest achievement. But that is not how entrepreneurs are perceived, to say the least. For a hint of how the popular culture thinks of the innovators, take a look at any Hollywood film. Chances are that the villain is either a mad scientist or a greedy businessman. That is slightly ironic, since we would have neither film technology without scientists nor a film industry without businessmen. This is to say nothing of our political culture.

The ingratitude toward those who have given us almost everything seems strange. But perhaps there is a historical explanation. Wealth and innovation are recent phenomena. During about 3,999,800 of the perhaps 400 million years that hominians have existed, life has been a zero-sum game for most people. The invention of new technology was extremely slow and there was no surplus to invest, so the average homo habilis or homo erectus didn't see an increase of wealth during his lifetime. What other tribes hunted or gathered, you lost. If someone gained, it was reasonable to be suspicious of him -- because he probably did it at your expense. Under such circumstances, human nature, our instincts and our attitudes, developed.

Today we live in a very different world. The system of reward in the free market is the complete opposite. You don't gain by stealing from others, but by giving them goods and services that they want. Our suspicion and our envy, however, remain the same. What was once a way to avoid being exploited by brutes, kings and knights now becomes a way of exploiting those who create new value.

So we are probably not well adapted to understand the modern economy. Whenever we see wealth we have gotten used to thinking that someone somewhere else has lost out. The history of socialism can be interpreted in this light. Marx said that the wealth of the capitalists came at the expense of the workers. But even in his lifetime, the average worker in Britain increased his income threefold. Then Lenin saved socialism by saying that the original hypothesis might be wrong, but only because someone else had to pay the price -- poorer countries that were exploited by trade and investments. Today, once again, we know that the opposite is true. Since 1950, extreme poverty has been reduced to 20% from 60% in developing countries. The reduction has been led by the countries that have the most trade and investment links with us, whereas those that have been shut out, such as sub-Saharan Africa, have stagnated.

Later, socialists like the economist Robert Heilbroner admitted that capitalism and trade were superior for creating wealth, even for developing countries, but stood by the basic conclusion that someone or something must lose. Heilbroner thought the environment would. Today most people realize that wealth and technology give countries both the will and the means to deal with environmental problems, and that the worst problems are those in poor nonmarket economies -- the fact that five million people die every year from unsafe water, for example.

That the anticapitalists' particular concerns have been proven wrong again and again doesn't help for long, because soon they find a new excuse to condemn free markets. The latest variety is Marx on his head: He said that capitalism is bad because it actually creates poverty and slavery. Today, critics say that capitalism creates wealth and freedom -- but this is bad for well-being because we become stressed up, frustrated by the constant demand to choose, working too hard and consuming too much to keep up with the Joneses.

Don't expect the critics of capitalism to change their minds any time soon. As long as they don't believe in the creative ability of mankind or that the market is a plus-sum game, they will continue to think that someone, somewhere, is victimized whenever and wherever we see growth and innovation. Unless this disparagement of entrepreneurs is tamed, people will allow government, with its arsenal of taxes and regulations, to take their place.

Mr. Norberg, a senior fellow at the Center for the New Europe, is author of "In Defense of Global Capitalism" (Cato, 2003).

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Power of Nature

This post by Gregg Easterbrook is shown below.

Cosmic Thoughts -- Bummer Edition: Recently, I was creeped out by this supernova. Detected Feb. 18 by Swift, a satellite launched to look for gamma-ray bursts, the exploding star already was the 24th supernova discovered at that early point in 2006. As instruments improve, exploding stars appear more common than cosmologists had expected, and that's not the best news we might have heard. Coded GRB 060218, this star detonation began as a gamma-ray burst that lasted 33 minutes -- absolutely stunning because previous gamma-ray bursts from space have lasted a few seconds at the most. The gamma rays came from 470 million light-years away. That was discomfiting because strong gamma-ray bursts usually emanate from what astronomers call the "deep field," billions of light-years distant and thus billions of years back in the past. A distance of 470 million light-years means the GRB 060218 supernova happened 470 million years ago. That is ancient by human reckoning, but many cosmologists had been assuming the kind of extremely massive detonations thought to cause strong gamma-ray busts occurred only in the misty eons immediately after the Big Bang. The working assumption was that since life appeared on Earth, there had been no stellar mega-explosion. Now we know there has.

For several days as the giant dying star GRB 060218 collapsed, this single supernova shined brighter than all 100 billion other suns in its galaxy combined. The detonation was so inexpressibly luminous that, though 470 million light-years distant, it could be seen by telescopes on Earth. And not just fancy telescopes at the tops of mountains: A few days after the Swift satellite detected the gamma-ray surge, an amateur astronomer in the Netherlands sighted the forming supernova through a backyard telescope. The stellar coordinates hit the Web -- it was at RA: 03:21:39.71 Dec: +16:52:02.6 -- and soon amateur astronomers the world over were marveling at the glistening beacon from the cosmic past. This explosion released so much energy that it happened 470 million years ago yet the light could travel for that protracted period, plus pass through the gas and dust of roughly a hundred galaxies along the way, and still illuminate mirrors of backyard telescopes on Earth.

Now here's what creeped me out: had GRB 060218 happened in our galaxy, life on Earth would have ended Feb. 18.

Gamma rays are a deadly form of radiation. Routine gamma-ray bursts course through the Milky Way, our galaxy, all the time, and the threat from them appears small. Recently Krzysztof Stanek, a professor of astronomy at Ohio State and one of the hot names in astronomy -- reader Jim Yrkoski of Warsaw, Poland, notes I missed one "z" in Stanek's name the last time I cited him -- calculates that a regular supernova causing a routine gamma-ray burst would need to detonate within about 3,000 light-years of Earth to expose our world to enough radiation to cause a calamity. Only a small portion of the Milky Way, and none of the larger universe beyond, is within 3,000 light-years of our world.

Extinct, just like the Wing T.

This does not rule out "nearby" gamma-ray bursts as causes of past extinctions. About 340,000 years ago, a supernova called Geminga exploded 180 light-years from Earth, which is much too close. Calculations suggest Geminga was bright enough to rival the full moon; our Homo erectus ancestors must have looked up on it in wonder. The Geminga supernova is believed to have blown off much of the ozone layer, exposing Earth to solar and cosmic radiation that killed many mammals, including many of those ancestors. Another supernova, Vela, about 1,500 light-years away, detonated 11,300 years ago. About the same time, several large mammals of North America and Eurasia fell extinct: among them, the woolly mammoth, the giant sloth and the glyptodon, an armadillo larger than a bear. There's a lively archeological debate about whether these extinctions were triggered by climate change or by people armed with new hunting tools such as bow and arrow. Maybe the extinctions were caused by the supernova bathing Earth in gamma rays.

At any rate, Vela and Geminga were normal supernovas that caused relatively mild gamma bombardments lasting just seconds. If a 33-minute, incredibly powerful gamma-ray burst similar to the one associated with GRB 060218 happened anywhere in the Milky Way or any nearby galaxy, Earth would be sterilized; any life that might exist on other planets in our galaxy and nearby galaxies also would end. Most likely, the gamma radiation from GRB 060218 ended all life in numerous galaxies near the explosion. After GRB 060218, a team of astronomers led by Andrew Fruchter of the Space Telescope Science Institute calculated that the class of extremely massive blue star that caused this mega-supernova probably is not found in the Milky Way. That's some consolation. But February's ultimate supernova tells us nature has a doomsday weapon -- and that creeps me out.