A Flawed Study on Abortion and Crime? (int'l edition)

It is surprising to read that academic heavyweights such as Harvard professor Robert J. Barro and his fellow professors from Stanford and the University of Chicago refer to, or even take responsibility for, a study that is of no academic value (''Does abortion lower the crime rate?'' Economic Viewpoint, Sept. 27).

It would make more sense to state that crime correlates with unemployment rather than with abortion. Due to the economic boom the U.S. has been enjoying for the past couple of years, young people find alternative (legal) ways to make money, since society holds many job opportunities for them.

In countries like Germany, abortion rises along with crime. In Russia, where abortion has been legal since World War II, crime is massively on the rise due to a lack of jobs and a corrupt police force. So the study may be right only for the U.S. and only for the 1990s compared with the 1970s. One could argue just as well that abortion figures correlate with daily TV consumption or computer literacy in Portugal.

Barro mentions that improvements in crime statistics are due mainly to a decreasing number of property crimes. Property crime may well be prevalent among the poor, but why does he not mention changes in crime categories such as fraud and embezzlement, which are predominantly committed by rich, well-educated members of society?

Christian Grosse Erdmann
Frankfurt

Europe Need Not Discard Its Safety Nets (int'l edition)

Your choice of success stories in ''Europe's big chance'' (European Business, Sept. 27) should have cautioned against a U.S.-style route for European business policy. Nokia is a high-tech leader in one of the most lavish welfare states. Mannesmann diversified instead of returning free cash flow to shareholders. France, with its dirigisme undimmed, has an unrivaled recent job-creation record.

But as you were fair enough to acknowledge, euro-zone labor productivity has outgrown that of the U.S. for much of the past two decades and even moved above it on some measures. This should counsel against the naive equation of deregulation with market flexibility, and flexibility with efficiency.

Europe's unemployment is high because its productivity kept rising when growth slowed. But it can afford to support those who lose jobs while they recuperate, retrain, or keep the artistic world alive. Systems intent on squeezing everyone back into work then have to supplement low pay through taxes (while still decrying others' industrial subsidies) or less-than-reliable charity.

To see the false economies of cutting ''costs'' that include human and social capital investment, you only need to look at Britain. On New Economy criteria, it should be way ahead of EU partners in productivity, innovation, and living standards. But that accolade still goes to Germany, which on the same criteria should be a de-industrialized backwater by now.

The whole New Economy thesis ignores the unique context of the U.S., which makes its recent success impossible to replicate. Few countries can borrow abroad in their own currency and so go on living above their means without deflating and defaulting. Even fewer can expect to consume scarce global resources (and emit the corresponding pollution) so disproportionately to their population. Why the ''world's most competitive economy'' must import so much more than it exports is as much a mystery as why the world's richest economy cannot save. Luckily for the U.S., the more restrained (and now debt-constrained) East Asian countries continue providing the cheap imports that now underpin low American inflation and high living standards--and to export capital so that Americans can go on buying them.

A successful euro zone could erode U.S. reserve-currency and seigniorage privileges, slowing an economy whose shrunken welfare and market-based social-insurance arrangements seem ill-equipped to cope with downturn. In advocating a U.S.-style solution to Europe's ''problems,'' perhaps your hidden agenda is to stop the growth tables turning in this way.

Alan Shipman
London

How the Rest of Japan's Banks Could Bulk Up (int'l edition)

''Japan's banks'' (Asian Cover Story, Sept. 6) says: ''The creation of the first trillion-dollar bank might just signal that Japan's long financial nightmare is finally drawing to a close.'' This improvement would indicate that the world financial market is expanding and will give more benefits to a lot of people. The following are some examples of how Japan's banks should be improved:


1. Interest rates are too low. Most of the banks show similar levels of interest rates.


2. When the banks obtain benefits, they should restore some of the benefits to society. For example, they should absorb the interest rate on a loan because we have covered their inferior credit with our taxes.


3. They should open their information to the public clearly.


4. CPAs should disclose their financial status to the public and point out their problems to protect investors. CPAs should receive a penalty for falling short of this duty.


5. They should consider different aspects (interest-rate level for customers, etc.) that are important for themselves and investors.

Kouichi Kimura
Hamamatsu City, Japan