we asked richard gill why.s demand curves and the union-determined supply curve in the newspaper industry. for a prosperous paper, its situation before the settlements would appear like this. its demand curve is strongly affected by the printers' productivity. the supply curve is really the union-determined wage. we have equilibrium at this wage with this number of printers. now two things happen. unions demanded higher wages. so the supply curve of labor shifted up here. but also the times introduced more highly automated typesetting machinery. this greatly raised the productivity of printers. since the demand curve for labor reflects printers' productivity, the new demand curve might look like this. here's the final situation. the times is basically ok. wages are higher. employment is lower. but the productivity increase made possible by automation leaves the firm profitable. when it came to relatively unprofitable papers like the herald tribune, however, the situation was quite different. they were fairly cl

we asked analyst richard gill.ge profits in a capitalistic system, according to economist joseph schumpeter, derive from one source-- innovation. they're the superabundant rewards given to those who are clever enough, daring enough, enterprising enough, to come up with something new. the apple computer story is a letter-perfect example of what schumpeter was talking about. a few points about this process-- first, innovation decisions are quite different from the expected rate of return calculations we discussed earlier. how can you calculate a rate of return when you're doing something new? it's doubtful the interest rate plays any major role here. second, the entrepreneurs weren't risking big money. they sold a van and a calculator. their risks were far more subtle, a sense of failure, perhaps, reputations, schumpeter might have said. third, the huge profits did not last that long. ibm and all their brotherhood quickly swooped down into the personal computer market. entrepreneurial profits are often huge, but also

we asked analyst richard gill what economists think of the job corps and the war on poverty. main lesson we can learn is that reducing hardcore poverty, even in the so-called "affluent society," is extremely difficult. in principle, the theory behind the job corps concept is far more attractive than that of simple transfer payments. here, peter -- or rather, uncle sam -- trains paul to enable him to find a productive place in society. unfortunately, by any measure, this is an expensive procedure. the training is expensive, trainees often drop out, and even when they finish the program, they may find it difficult to find jobs, particularly if general unemployment is high. this is really the "leaking bucket" problem. we fill a bucket with water, peter's tax dollars, to provide funds for paul's training. but the bucket has all sorts of leaks in it. how much water actually reaches its destination? how many of the tax dollars spent on the job corps or other such programs actually produce results? in the 1960s, in the spirit of the great new war on poverty, many people were willing

with the help of our economic analyst richard gill, we'll find out on this edition of "economics usa.m david schoumacher. we like to think of our economy as one that runs on competition. for instance, we can choose the brand ofasoline weuy. if one station sets its prices too high, thene can simply go across thet if one station for a lower price.o high, if enough drivers pass the high-price station by, sooner or later it goes out of business. of course, if in order to attract business a station sets its prices too low and can't cover costs, sooner or later it'll go out of business, too. but what happens to prices if one company, or one person, controls all the gas stations? that was what the country faced in 1890. the company was standard oil -- the man was john d. rockefeller. this was the infant oil industry john d. rockefeller saw after the civil war. drilling equipment was hand- and foot-operated in those days and available cheap. anybodcould join the o rh, and anybody did. with thousands of small-scale prospectors, drillers, and finers competg, the supply of oil was plentiful. pri

we asked economic analyst richard gill. one principle economists don't thk too highly of is what we might call the principle of perfection. it's a natural approach. we have these harmful external effects, let's get rid of them no matter what the cost. the 1973 plan for los angeles was a little like this. smog is harmful to your health. let's get rid of it, virtually outlaw driving for six months of the year. there are countless examples of this approach. nuclear generating plants involve certain hazards. let's ban them completely. alcohol leads to driving fatalities. let's bring back prohibition. the trouble with this approach is not only that it usually doesn't work -- the los angeles plan had to be modified -- but that it's bad economics. in our society, clean air has become a product. it brings us certain benefits, but it also has certain costs of production. and what economists want to do is to measure these benefits against these costs, taking, of course, all external effects into account. these look like ordinary supp

we asked economic analyst richard gill if that holds for the rest of the economy.case of the american automobile dustry, especially in recent years, is competition between a relatively small number of firms. we don't have a monopoly, which means a single firm in control of the industry. we don't have pure competition, which means thousands of firms selling identical products. we have a few firms in control, what economists call an oligopoly. now, in general, oligopolistic firms like to avoid price competition. people can get hurt that way. and this automobile story brings out two ways firms can avoid price competition -- one, by fiddling around in various ways with the special features and gadgetry associated with their product, what economists call "product differentiation." and two, by advertising and trying to convince consumers that their special version of this product is necessary for their survival, or at least for eir personal or social success. now, this kind of competition raises all sorts of problems for the economic analyst. when you have product differ

mussels must spend a part of their life cycle attached to the gills of juvenile salmon, after three months they detach, and drop to the riverbed. richard bond is the manager of the centre. >> we're just looking at these gills just to see what pearl numbers of glocodia are like so it gives us an idea of how many we are going to be stocking back to the river. >> o.k so what am i looking at? >> so you can see the gill archers there from the fish. >> oh yeah! >> you can have up to 2000 on each of the fish, a very high number, so it just helps us to monitor the numbers of glocodia there, helps us to improve our techniques for the future, for future generations of peral mussels really. >> so these babies are the host for all other fresh water pearls? >> that's right later on in the summer these eggs would have hatched and there will be fish about maybe 3 - 4 cm in length. >> you've got some of them then? >> yes we do we've got some of those from last year in the tanks behind me there. >> there's about 4000 salmon in this tank at the moment, we're actually gonna take them to the river later today and release them to the river, and back to the