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Worth the read. The quote from Dr. Alchian, as he relates the story of his 1954 paper, is priceless: "We knew they were developing this H-bomb, but we wanted t
by cs702 5y ago
Worth the read. The quote from Dr. Alchian, as he relates the story of his 1954 paper, is priceless:
"We knew they were developing this H-bomb, but we wanted to know, what's in it? What's the fissile material? Well there's thorium, thallium, beryllium, and something else, and we asked Herman Kahn and he said, ‘Can't tell you’… I said, ‘I'll find out’, so I went down to the RAND library and had them get for me the US Government's Dept. of Commerce Yearbook which has items on every industry by product, so I went through and looked up thorium, who makes it, looked up beryllium, who makes it, looked them all up, took me about 10 minutes to do it, and got them. There were about five companies, five of these things, and then I called Dean Witter… they had the names of the companies also making these things, ‘Look up for me the price of these companies…’ and here were these four or five stocks going like this, and then about, I think it was September, this was now around October, one of them started to go like that, from $2 to around $10, the rest were going like this, so I thought ‘Well, that's interesting’… I wrote it up and distributed it around the social science group the next day. I got a phone call from the head of RAND calling me in, nice guy, knew him well, he said ‘Armen, we've got to suppress this’… I said ‘Yes, sir’, and I took it and put it away, and that was the first event study. Anyway, it made my reputation among a lot of the engineers at RAND."
- sandworm101 5y agoThis is from the early days of modern operational security. This would be far more difficult today. If only the bomb makers had talked to the ketchup people at Heinz. Rumor has it that Heinz regularly purchases extra ingredients, disposing of the extra bits on site, so that nobody can infer their secret recipes by counting what goes into the factory. Given the security budget for protecting nukes, it should have been simple to double-order both lithium and thorium.
- mcguire 5y agoAre you saying modern defense contractors artificially depress their stock prices in the name of opsec?
- trhway 5y agono. what he seems to be saying is that modern defense contractors waste a lot in order to hide their true activity/product.
- sandworm101 5y agoNo. If your magic superweapon needs a small amount of red fairy dust and there is only one person making the red dust, it is a good idea to also buy some blue dust to conceal which type is the necessary ingredient. Nobody depresses any stock price, rather you give some false business to another source too.
- mannykannot 5y agoThis certainly looks like good practice to me, but it could be undone by insider trading, which could ignore the blue dust supply chain. The article flirts with the possibility of there having been insider trading here, but does not seem to come to any definite conclusions. Given the weaker reporting rules of those days, it may be impossible to say.
- dkarl 5y agoCold War business idea, half a century too late: manufacture a cheap, unremarkable substance and sell it at an extremely high price to the U.S. government, to confuse Soviet intelligence. Shroud the production in secrecy and compartmentalize knowledge of the manufacturing process, so that everybody involved in production thinks that in a different section of the plant something secret is being done to create an end product that is special and useful in some way, but in reality you're creating exactly the cheap, boring stuff you say you are. The government could drive truckloads of it into nuclear weapons production facilities, shuffle it around from one warehouse to another, and eventually relabel it as waste.
- whall6 5y agoPutting a target on your back for some lucre
- 5y ago