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Re-educate

2009-11-08T17:05:32Z

Some of you know I'm on the Board of Directors for the Mercer Island School District. For the past couple of years, our District's been guided by our 2020 Vision: Our students will thrive in the cognitive, digital, and global world while sustaining their passion and inspiration for learning. I'm really excited about this direction and all the inspiring teaching and learning that's going on in our District as a result.

For me personally, it means I am constantly on the lookout for books, articles, conversations, expert resources and blogs to expand and shift my thinking about teaching, learning and school to prepare our kids for their futures.

Here's a new blog - Re-educate - that I'm supporting and following. Re-educate's goal is to create a community of people who are inspired to share ideas for changing the way we think about school. The blog's primary author is Steve Miranda, who recently left the most academically successful high school in the Seattle School District to work at a small school that approaches education from a uniquely 21st century perspective. Steve's a great writer and his reflections on the divergent school environments he's inhabited makes me think!

So, check out Re-educate. If this is a topic that speaks to you, follow Re-educate on Facebook and join the conversation!

An iPhone Microscope

2009-11-08T08:27:02Z

Imagine this: You’re exploring the salt ponds of San Francisco, and notice the water isn’t clear — it’s red! You dip a piece of plastic into the water to get a sample and notice lots of small little particles in the droplets.

Then you pull out your iPhone, magnify the sample 100 x and snag a photo. Doesn’t look like anything familiar but…

Maybe #diybio on Twitter would know?

“#diybio, I’m at the salt flats outside San Francisco. Any idea if I’m looking at something like red tide, or is this just algae?” – DIYbioGuy, N 37^o 50′ 55.5” – W 121^o 55′ 53.0”

Fellow citizen scientists take interest…

“@DIYbioGuy — Those algae look active, and wow look at
the chambers on that Foraminifera! It looks like it may be ornamenting itself. #diybio” – wreinhardt

Make this happen — a portable, web-enabled 100x microscope that plugs into an iPhone. The purpose of this article is to document my attempt. To be sure, I had an idea and I tried it out. I did not refine the idea or do very much planning. In place of refining the idea, I used lots of tape. I also didn’t get very far.

Cellscope demo at Critter Salon (SF)

Inspiration: A few weeks ago at the CRITTER Salon in downtown San Francisco, I talked with Amy from UC Berkley about a project called “CellScope“. Their mission — diagnosing diseases in remote areas by hooking a simple microscope up to a cell phone. Snag an image, and send it off to some professions for diagnosis of sickle cell and TB, and other diseases.

I love the idea, I dislike squinting into microscopes (and maybe you do to?). Though I won’t be diagnosing diseases, a portable, web-enabled microscope would be very useful. Extending this project to connect to an iPhone seemed like the obvious choice, so I gave it a shot.

Day 1 – I bought a RadioShack pocket scope tonight. Lining up the microscope with my iPhone while trying to focus was a disaster. I needed to mount the microscope to something flat.

Using the packaging, a whole bunch of tape, and a butter knife for stability, I mounted the microscope to the cardboard. Then I got the microscope to line up with my iPhone’s camera – and snagged this picture of a quarter. It’s pretty tedious to get the scope aligned with the camera, so I called it a night after nabbing a cool picture of the threads from the green Foo Camp shirt I was wearing.

My t-shirt through the Radioshack pocket scope + iPhone

Day 2 – When I returned home after work, I was inspired to make a more permanent mount that wouldn’t go out of alignment as easy. I had a package of moldable plastic beads lying around from Maker Fair. The beads melt in boiling water, forming a big malleable blob. You mold the blob to whatever shape you desire and when it cools, it’s hard plastic. This stuff was great, and you can re-heat and reform it too. After my first attempt at molding a mount, I discovered the problem wasn’t just the mounting. The precise alignment needed between the scope and the phone was too much, I estimate about 1/16″ difference would cause the image on the microscope to move outside of the iPhone’s sight.

Stabilizing the pocket scope

Over the next few days, I attempted to enlarge the image using eyeglasses from a Dollar store, and other types of magnifying lenses, none of which helped. At this point, I had a good understanding for the challenges ahead. I wrote Amy back to see what a copy of the Cellscope would cost, but the parts she suggested were about $300. I decided to let the project settle and moved on to something else. Then I met the Hackteria team…

Turning a $20 webcam into a 200x USB microscope

At the DIYbio + iGEM meeting last week at MIT, a team from Hackteria (Bangalore) showed us how it’s done. Mac brought a $20 USB webcam to the meeting for us to hack. Basically just unscrew the case, flip the little lens around, and there you have it, a 200x USB microscope. Of course, focusing is still a manual process and somewhat tricky.

Above: A video from Hackteria’s USB webcam project

Summary: Overall, I went through a lot of crummy ideas to get to some ok ones. Many of my best “discoveries” were simply stumbling upon the great work of others, like the Cellscope and Hackteria! Turning a USB webcam into a microscope is great for innovation in low cost labs. The next step is mobility – hooking one of these up to an iPhone, either through the USB port or just relying on the built in camera. Check out the Hackteria blogpost, here.

Challenges: A portable iPhone microscope

1. Low cost magnification – solved

USB webcam or Manual pocket scope

2. Digitizing and recording images — getting there

Standard desktop software for USB webcam
unknown for pocketscope + iPhone

3. Connecting a USB webcam to an iPhone – ??

4. Obtaining and positioning the sample — ??

This is the most challenging part of the project. How would you use an iPhone microscope? Do you want to keep it in your pocket? If you want to look at a leaf, how do you hold the scope + sample so that they stay in focus? Do you need to keep slides with you as well, in order to quickly mount your sample?

After reading this, you might get the initiative to try building something of your own. Go for it! Fail fast. Fail frequently!

I’ve started a discussion in the DIYbio Forums, and would love to hear about your thoughts, ideas, and progress!

– Tito Jankowski is a founder of Pearl Biotech. His interests include building better hardware for biology.

Sources –
Hackteria: DIY USB microscope
Instructables: 30 minute USB microscope
Critter Salon
CellScope

Accessing Apple’s App Store on new China Unicom iPhone

2009-11-02T22:14:56Z

iPhone A1325

The mobile techies over at ChinaByte have done a thorough analysis of the new iPhone 3GS for China Unicom – Model A1325 (comparison versus a grey-market iPhone 3GS) and have highlighted what’s new with the “for China” iPhone. As expected, there are far more similarities than differences. The primary change is that the new China model is fully localized and comes pre-loaded with ten (10) special apps for China consumers. The China iPhone also features the Wo Portal with China Unicom’s value-added services, such as music downloads, mobile TV, e-books, news, etc.

Consumers who buy the official China iPhone won’t have to pay a back of the shop “unlocking free” (common for grey-market purchases) or have to worry about “bricking” their iPhone when installing Apple’s software upgrades (another major issue for grey-market iPhone owners). There is no hacking necessary on the official iPhone and it comes with a real warranty!

Are there any hardware differences? Yes … There is the issue of “no WiFi.” The official iPhone has its WiFi chip removed, and no simple software hack can enable this function. For power WiFi users, this may be a reason to shop the grey-market. For many others, 3G speeds will be sufficient.

iPhone developers might be interested to know that China iPhone owners will have access to Apple’s China App Store for app and game downloads and to iTunes for synching/updates. iPhone owners will need to set up an iTunes account if they want to buy music and videos via iTunes.

China iPhone owners will not immediately find the Apple App Store icon on their China Unicom iPhone. Yes it’s there, but new iPhone owners will need to change a setting in their iPhone to find Apple’s China App Store.

Wo Portal

The issue of whose apps/services would be prominently featured on iPhone was likely the subject of some “back and forth” discussion during iPhone deal negotiations. China Unicom won that round. The Wo Portal is front and center. Finding Apple’s App Store requires one easy setting change. I suspect the word (how to access the App Store) will be rapidly disseminated on iPhone forums in China. Here is the explanation in Mandarin from the ChinaByte post

For a complete review, please see the extensive ChinaByte comparison analysis:

Since the fate of Response Point is up in the air

2009-10-22T05:06:00Z

http://www.cigear.com/support/2009/10/21/aastra-releases-rp-to-sip-conversion-firmware-for-aastralink-rp-phones/ Aastra released an RP to SIP conversion firmware today. This is designed to help customers of AastraLink RP phones to re-use their existing phones with standard SIP based phone systems and soft switches. The Aastralink RP phones were originally designed to work only with Microsoft Response Point phone systems including the Aastralink Pro RP system. Since the fate of Response Poi

Why Silicon Valley won The Tech War with Boston

2009-10-31T22:05:34Z

Just a kid, that's all I was in the early eighties in high school as I took a class in BASIC. I was always fascinated by all things electronic and whether it was video games or advanced scientific calculators, I couldn't get enough. At Westhill high School, they had a Prime minicomputer and it was on this machine where I was instructed how to program. I also had a Commodore 64 at home and with it I wrote my own video games at night and on weekends.

In the early eighties, Route. 128 in Boston was the stuff of legend... It is where all the minicomputer companies lived - Wang, Prime Computer, DEC and many others. Prime was my link to this area and it seems like it was yesterday when I wrote a math quiz program on the schools's minicomputer which I used to better prepare me for the math portion of the SAT. Today, Rt. 128 is a distant second to Silicon Valley in terms of technology and of course all the minicomputer companies missed the PC altogether and are gone.

If you are wondering why Silicon Valley took the lead over Boston, you may want to refer to this article from Vivek Wadhwa which discusses how the Valley follows a more open model where innovation is more readily shared with small companies and moreover spread through job hopping. In addition, he points out a book from AnnaLee Saxenian (which was published in 1994 predicting that Boston would be the loser in the tech race

Here is an excerpt from the article:

She noted that Silicon Valley had an amazing dynamism about it. There were extensive professional networks, job hopping was the norm, information was exchanged openly, and the culture encouraged risk taking. The Silicon Valley ecosystem supported entrepreneurial experimentation and collective learning. In other words, Silicon Valley was a very open network--a giant social networking site working in analog before the concept of such a thing even existed.

This organizational mechanism was in sharp contrast to that of Route 128. Dominated by large, vertically integrated, and secretive minicomputer producers such as DEC, Wang, Prime, and Data General. Technology, skill, and know-how were trapped within the boundaries of the large corporations.

The differences were evident at many levels: venture capitalists in Silicon Valley had deep roots in local networks and were far more nimble than their east coast counterparts; educational institutions and research labs in the West partnered with local startups as well as more established firms, while those in the East worked only with the largest corporations; and the meritocratic openness of Silicon Valley made it a magnet for non-traditional talent and immigrants.

By the mid-1990s the east had missed the shift from minicomputers to personal computers as the flexible Silicon Valley ecosystem sped ahead with innovation across a diversifying range of components and systems going from chips, routers, and application software to ecommerce and search engines. Today Silicon Valley is the leading location for cleantech venture activity, an area widely considered to be the next big value creation engine for the U.S. and the world.

Boston, however, is no slouch. The Route 128 community remains the second biggest in the U.S. in terms of venture funds committed. Boston has powerful research institutions, still, and lots of very strong companies. In some areas, such as biotech, Boston may even rival Silicon Valley. But overall, its pretty clear that the Valley has not only won but is racing further ahead.

Most entrepreneurs and engineers that come to Silicon Valley, come to experience this network and to embrace the culture it has created. That's why I came, too. Network effects don't just work for fax machines. But then again, most of them knew that intrinsically. University guys like me need to do a bunch of surveys to figure it out. They voted with their hearts and feet.

At this point the game is even tougher to win if you aren't in Silicon Valley due to the propensity for exit strategies to present themselves more readily where the acquirers are. Yahoo, Google, Cisco and Oracle are just a few of the companies responsible for billions of dollars worth of M&A dollars. And as this these companies have grown, they have made so many millionaires that they in turn go out and launch new companies and/or invest in others which are nearby.

If you are looking for a lesson here it is that a company which mirrors Silicon Valley and is more open, flexible and shares information more readily will likely always beat the company which is inflexible and contains many silos.

Tags: annalee saxenian, boston, california, commodore, data general, financial, google, microsoft, oracle, prime, route 128, san jose, santa clara, silicon valley, venture capital, vivek wadhwa, wang, westhil, yahoo

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TrackBacks | Comments | Tag with del.icio.us | Communications and Technology Blog - Tehrani.com Home | Permalink: Why Silicon Valley won The Tech War with Boston

Comments on this Entry:

(richardsprague on Nov 1, 2009 3:52 AM) I think you have to look at the role of government policy as well. A state that elects very pro-government-intervention leaders like Barney Frank, Ted Kennedy or Tip O'Neill will not be very sympathetic to the importance of private enterprise. Contrast that with California (Ronald Reagan, Ed Zchau, Pete Wilson) in the 70's and 80s -- you can tell that the electorate in each state felt differently about business. It's not over, by the way. Today's Californians look a lot more like Massachusetts residents of the 70's and 80s: sympathetic to high taxes and government services.

(Rich Tehrani on Nov 1, 2009 6:57 PM) Very good point -- sadly the same can be said about Obama's policies versus past presidents. I wonder if people realize their ability to find a job has a great deal to do with who they vote for.

iPhone on sale in China at 1,000+ distribution points in 30 provinces

2009-11-01T00:38:28Z

iPhone was formally launched in China on October 30th. The main launch ceremony was in Beijing at The Place. 30 provinces across China staged their own launch day events. Sales commenced immediately following the ceremonies. iPhone will be sold through several distribution partners, including: Gome (610 stores), Carrefour (139 stores in China), Suning, Best Buy China, Dazhong Electric and last but not least, Apple Stores in Beijing – Sanlitun and soon at Qianmen. Apple’s online store in China will provide full iPhone marketing info and refer buyers to the Apple Store or to China Unicom’s Vsens.com site should they opt to make an online purchase. There were also rumors that iPhones might eventually be sold through Wal-Mart China and Dixintong “D-Phone” (largest handset distributor in China).

Last night some 1,000+ queued up to buy iPhone at China Unicom’s “Wo” store adjacent to The Place. Braving the cool rainy weather, several hundred iPhone buyers were also in line to buy iPhone at the Apple Store in Beijing’s Sanlitun Village. The video below shows the festivities at The Place in Beijing.

The Beijing News has a report today noting that 140,000 iPhone pre-orders were received online between October 1 and October 29.

Click > here to watch VIDEO (English) – Note: pricing announced by anchor in this video is not accurate – there are four (4) price/plan options that reduce iPhone price to $0.00 (free)

Click > here to watch VIDEO (Mandarin)

Apple VP Greg Joswiak delivers a speech at the Oct 30 launch event

Schwarzenegger Gives California Legislature A Hidden Finger

2009-10-28T09:05:59Z

There is absolutely no way I’ll be able to make this relevant to tech. But I’m posting it anyway. Our Governator, Arnold Schwarzenegger, vetoed a California legislative finance bill – AB 1176. The letter is terse and to the point. And the first letter of each line in paragraphs 2-3 are even terser and more to the point.

Schwarzeneggers battles with the state legislature are epic. But this just goes way beyond epic. It’s something for the history books.

I wish I had the time to do this kind of thing in my posts here on TechCrunch.

See the SF Chronicle for all the quotes and denials.

Now, back to our regularly scheduled programing.

Crunch Network: CrunchBoard because it’s time for you to find a new Job2.0

A vast Jesuit missionary ginseng conspiracy

2009-10-31T05:49:37Z

At Salon, Andrew Leonard explains how ginseng came to North America:

Ginseng exports have a long history in North America -- in fact, one could argue that ginseng, as possibly the first trade item ever exported to Asia from the Americas, was a key factor in embedding the colonies in what passed for globalization in the 18th century.

Link picked by Danwei.org

10.6: Solve a repetitive font optimization issue in Office

2009-10-30T14:30:02Z

After upgrading to OS 10.6, I noticed that Microsoft Word and Excel were slow to launch. They would each go through the 'Optimizing Font Menu Performance' task every time they were launched; normally this is done only after the apps are installed or updated. The problem turned out to be duplicate fonts installed on the system, and this can be easily resolved using the Font Book application.

If any duplicate fonts are present, they will be identified by a yellow warning triangle in the Font column, and these can be safely disabled. The easy way to do that is to choose Edit » Select Duplicated Fonts (to select all duplicates) and then Edit » Resolve Duplicates (to disable the duplicates).

Note that Snow Leopard has changed font handling in many ways; that link contains deta...

China rule of the day

2009-10-26T18:05:00Z

Salute every passing car on your way to and from school.

That's only in one town. There's also this one:

Another county in Guizhou Province in southern China compelled state workers last year to help inflate the number of tourists visiting the ruins of an ancient village. Every government office was ordered to organize field trips to the site so the county could report 5,000 visitors within two months.

The involuntary visitors had to take several buses to get to a village 20 miles from the county seat. From there, they hired motorcycles to carry them another nine miles down dirt roads, the newspaper Guangzhou Daily reported.

The Guizhou Commercial News reported that some government offices were left unattended while state employees served as tourists.

The $10,000 suit

2009-10-30T06:06:52Z

Here’s a lovely suit of clothes that can be had for, oh, about $10,000. It’s the result of a project conceived by Drexel University instructor Kelly Cobb to make a man’s suit entirely from materials produced within 100 miles of her home. According to an article by Paul Adams in Wired magazine, the suit was produced by a team of 20 artisans, requiring a total of 500 man-hours.

Let’s see, that’s 500 hours of skilled or semi-skilled labor by artisans whose time is probably worth something on the order of $20 an hour. For about $10,000 I can have one made for you.

But if you take up my offer, don’t get too smug about buying local. According to the same article in Wired, Cobb estimates that 8 percent of the materials came from outside the prescribed 100 mile radius. Now here’s the money quote: “If we worked on it for a year and a half”, says Cobb, “I think we could have eliminated that 8 percent”.

So—20 artisans, at—oh, let’s be way conservative—$10,000 each per year, for a year and a half—if you’re really a purist, your suit will run you about $300,000.

Or you could go down to Wal-Mart, grab something a little snazzier for well under a hundred bucks, and reflect on the benefits of global trade.

(A tip of the hat to Mike Rizzo.)

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Despite claims, data continue to show small impact of stimulus

2009-10-24T05:50:00Z

Debate about the impact of the $787 billion stimulus continued this week. “Thanks largely to the Recovery Act,” Larry Summers argued, “we have walked a substantial distance back from the economic abyss and are on the path toward economic recovery.” Yet the latest data from the Department of Commerce continue to show that only an insubstantial part of this distance was due to the stimulus. The table shows the latest Department of Commerce estimates of the contributions of consumption, investment, net exports, and government spending to the improvement in GDP growth from the first to second quarter. Growth improved by 5.7 percent (from -6.4 percent to -0.7 percent). Private investment was by far the major source. Government spending contributed 1.9 percentage points, but more than half of that was defense spending which was not part of the stimulus. The table is an update of information reported in my Wall Street Journal article of last month with John Cogan and Volker Wieland. This one-page brief provides more details and also shows that direct spending from the stimulus contributed only 0.3 percent of 5.7 percent. We will learn more when the Department of Commerce releases data from the third quarter next week, but so far their data are very clear that the stimulus is having a negligible impact.

Looking for a Farmers' Market?

2009-10-21T17:38:16Z

We've blogged before about sites like Swivel and ManyEyes, data-mashup sites which allow users to upload datasets, create tables, share them with other users, and compare them to other datasets on the sites. This week a new open data project, Factual, was launched by Google alum Gil Elbaz.

The SuperFreakonomics Global-Warming Fact Quiz

2009-10-28T14:03:53Z

By the time you finish this blog post, you will understand why we differ from our critics in our conclusions.

DOR publishes report comparing Washington's state and local tax ranking

2009-10-22T18:00:01Z

The Department of Revenue (DOR) today published an updated comparison of state and local tax rankings. According to DOR's press release:

Washington ranks 26th highest nationally in state and local taxes as a percentage of personal income, and 32nd highest in property taxes, according to newly released federal data covering Fiscal Year 2007.

Washingtonians paid $109.25 in state and local taxes per $1,000 of personal income, compared to a national average of $113.32. Of that, $29.25 went to property taxes, compared to a national average of $34.04.

Washington ranked 15th in state and local taxes per capita at $4,269, $35 more than the national average of $4,234. Washington ranked 27th per capita in property taxes at $1,143, $129 less than the national average of $1,272.

The FY 2007 figures do not reflect the current downturn in the economy, which largely won’t show up until the Fiscal Year 2009 information is available for all states.

The Department’s annual report, Comparative State/Local Taxes, is based on data published by the Census Bureau and Bureau of Economic Analysis. The full report is available here.

Here are a couple of tables of note from the report:

Will There Be Snow in Moscow This Winter?

2009-10-26T13:41:44Z

Not if the mayor of Moscow Yury Luzhkov has his way. According to Simon Shuster at TIME magazine, For just a few million dollars, the mayor's office will hire the Russian Air Force to spray a fine chemical mist over the clouds before they reach the capital, forcing them to dump their snow outside the city. Authorities say this will be a boon for Moscow, which is typically covered with a blanket of snow from November to March.

Global Warming in SuperFreakonomics: The Anatomy of a Smear

2009-10-21T11:46:02Z

Our critics accuse us of manipulation and cherry-picking and misrepresenting a variety of arguments about climate change and energy production. If everything they said was actually true, it would indeed be a damning indictment. But it's not.

Why Email No Longer Rules... (Jessica E. Vascellaro/Wall Street Journal)

2009-10-12T13:20:04Z

Jessica E. Vascellaro / Wall Street Journal:
Why Email No Longer Rules... And what that means for the way we communicate — Services like Twitter, Facebook and Google Wave create a constant stream of interaction among users—for better or worse. — Email has had a good run as king of communications. But its reign is over.

The false god of coffee

2009-10-19T23:44:56Z

This year I decided to stop drinking coffee, my only source of caffeine. Anyone who knows me will recognize this as a radical step. I've been drinking coffee since age 10, and I'd developed quite an obsession for the perfect cup.

In the past, I've experimented with quitting a few times by simply going cold turkey. Each time, the physical withdrawal, basically headaches, was over within 10 days, but after a month or two I would become convinced that coffee was good for my concentration and start drinking it again.

My reason to quit this time was the growing suspicion that coffee was causing mood swings and crashes that are bad for my overall sense of well-being. For this experiment I decided to stop very gradually. I thought that if I allowed the psychological withdrawal to occur gradually alongside the physiological, I would be able to observe my 'coffee-desire' without acting on it, and learn the skill I would need to avoid relapsing in future.

I made the same amount of coffee each day, using a vac-pot. Although I didn't measure caffeine content, I did control many factors including grind, age of beans, water temperature and water/coffee contact time. From this controlled pot of coffee, I used measuring cups to discard an additional 20ml per week. I used notebook software to keep some records of my progress and I started with a 3 cup pot in mid-April '09. Towards the end of July I wrote "I am increasingly wanting to abandon this project altogether", but I continued and on 8th August I was down to a half shot glass per day, and decided I was done.

Over the past few days (starting around 12th Oct), I noticed myself increasingly thinking "I am having trouble concentrating and coffee might help". These thoughts came to a crescendo on Wednesday. This time, I was armed with data.

As part of a separate experiment, I have been keeping track of the amount of time I spend working on projects. I work in 25 minute intervals which I time with a coffee timer, and I mark an X in a paper journal for each interval that I successfully complete. If I get distracted, I don't mark the X, and if I can't concentrate, I abandon it and don't mark an X rather than sitting out the timer. I've been doing this since the end of June, so I tabulated the data and created a graph* of my hours of concentration per day, and overlaid a bar showing when I drank my last coffee.

Causality is a complex issue. Obviously this is an n=1 experiment and I am intentionally doing other things that may well be improving my concentration, but one thing is very clear; the amount of time I spend concentrating has not deteriorated since I quit coffee, so I can easily reject the hypothesis "I need coffee to help me concentrate."

I see this as a success for self-quantification. Whether or not it provides a general insight into the effects of caffeine, it validates the utility of self-tracking for making individualized personal decisions.

I will be doing more experiments.

*At the QS MeetUp someone correctly pointed out that I had an error in the labeling of my x-axis on the chart I showed there. This meant that I'd placed the "quitting bar" in the wrong place - near to september 4th, happily this doesn't affect the conclusion, and the graph shown here is the corrected version.

Oliver Williamson and the pin factory

2009-10-12T14:14:31Z

In Adam Smith there is the pin factory and the market and from that beginning we trace the long literature in economics focused on the twin questions, What price to set? How much to produce? Following Coase, Williamson asks different questions, Why a pin factory? Why are the 18 steps to make a pin performed by a single firm rather than two or more? Why are there many firms instead of one large firm? Why does the pin factory not vertically integrate upwards to buy the steel factory and downwards to buy the retail hardware shop?

Williamson's answer rest on the notions of bounded rationality, contract incompleteness, asset specificity and opportunism. Start at the end, asset specificity and opportunism. When a deal has been sealed the parties typically move from having many potential partners to being locked in. That's bad because it raises the possibility of opportunism--one party can exploit the other. But it's also good because when the lock-in is credible each party may be more willing to invest in assets which are extra-productive but specific to the relationship.

Marriage, for example, takes away some possibilities but it adds others. With marriage, for example, comes a greater willingness to invest in children (n.b. asset specificity, the child is of extra value but only to the specific parties involved in the marriage) but that very benefit also means that one of the parties has the leverage to be opportunistic. Knowing all of this when they enter the contract the parties bargain ex-ante, they exchange promises and make investments (the ring), they establish rules for ex-post bargaining or decide on the background rules to apply in that eventually (pre-nup, no fault divorce, covenant marriage). The rules are never perfect and the contacts are always incomplete.

Transaction cost economics is all about applying these ideas in different settings to figure out the best governance structures (marriage, vertical integration etc.) in different circumstances. How does one deal with expensive investments (such as highly individual dies or plant construction) that are specific to a given trade and put the investor at risk yet which increase productivity? Williamson analyzes how firms come to rely on long term contracts or vertical integration or other seemingly non-competitive solutions to enhance market productivity. Early generations of antitrust enforcers often saw these as monopolistic dealings, but scholars such as Williamson helped us understand how these are essential to the workings of the invisible hand.

Williamson's paper, The Economics of Governance (working version) published in the May 2005 AER is an excellent recent summary of his views in the area. Williamson's work is notable for inspiring a large body of empirical and theoretical work in modern industrial organization and having influence in law, political science, and management. His work has been widely cited, and by some counts he was the most widely cited economist in the world.

I especially thank John Nye who contributed to this post.