China’s Great Wall of Debt (Shadow Banks, Ghost Cities, Massive Loans, and the End of the Chinese Miracle.)
By: Dinny McMahon
Narrated by: Jaimie Jackson
Dinny McMahon (Author, former reporter for the Wall Street Journal, Dow Jones Newswires, and former fellow of the Woodrow Wilson International Center for Scholars.)
Dinny McMahon lived in China for ten years before writing “China’s Great Wall of Debt”. He is neither the first nor undoubtedly the last chronicler of modern China’s future.
Wealth is a function of the have and have-nots in China. This is a familiar refrain to many who believe it equally describes America’s economy.
McMahon explains how the last twenty years of economic growth in China is a function of real-estate monetization that has reached a mortgage nadir, teetering on the edge of collapse. McMahon notes the difference between America’s real estate booms and busts and China’s is that it has taken America two hundred years to reach its present prosperity while China has done it in less than 3o years. He implies that time difference has benefited America by giving it more tools than China for dealing with economic inequality.
China has a singular party with one leader who has few checks and balances, with a singularly authoritarian governmental organization.
When leadership changes in America, political and economic policies are only incrementally adjusted. In leadership change in China, political and economic policies may be dramatically altered or even abandoned. That truth is evident in China’s transition from Chiang Kai-shek to Mao to Deng Xiaoping, to Xi Jinping.
McMahon’s fundamental point is China’s rapid economic growth is founded on a financial structure dependent on real estate financed by the state and a poorly governed semi-private banking system that artificially inflates China’s assets.
McMahon notes there was pent-up demand for private real estate ownership when all land was owned by the government. That pent-up demand is the source of China’s rapid economic growth. However, in the current market, McMahon suggests real value in that real estate is diminished by a public that is not wealthy enough to afford it. A kind of Ponzi scheme is growing with consumers that are buying land without real collateral but with a ghost banking system that is condoned, if not supported, by the state.
McMahon is not alone in suggesting China may be headed for trouble. Whether shadow banks, ghost cities, and massive loans will be the end of the Chinese Miracle seems less important than what a Chinese economic collapse would mean to the rest of the world.
David Rock (Author, business consultant, received a doctorate in the Neuroscience of Leadership from Middlesex University in the UK)
“Your Brain at Work” was originally released 2009 and revised in 2020. This review is based on the 2009 edition. David Rock is a business-management consultant and co-founder of an institute called NeuroLeadership Institute. Rock brings together neuroscientists and leadership experts to reveal works of the human brain that improve business management skills.
What Rock suggests is that human neurological activity is at the heart of effective business management. The expressed objective of Rock’s recommendations is to produce more effective and efficient businesses. His method for explaining this process is a case study of a husband and wife who represent two kinds of managers. One is a self-employed, and cybernetic systems designer. The other is a mid-level manager, recently promoted to manage a business division.
The first manager is a solely-owned business entrepreneur. The second is a division manager within a larger business. The first is a line manager. The second is a staff manager.
Rock shows there are crossovers in their management skills but their goals are different. Though Rock does not mention it, the first person’s job is zero-sum with profit as a measure of success. The second manager is within a larger organization where effectiveness and efficiency, rather than profit, are measures of success. Both are intent on being good managers but profits are of incidental importance to a staff manager. Both managers desire positive results. Rock suggests both can train their minds to use similar management methods to achieve their different business objectives.
Rock argues that both managers must better understand how their minds work to mitigate bad business decisions.
There are an estimated 100 million cortical columns in the neo-cortex that transmit information to different parts of the brain through neurons in each column.
The example Rock gives for the entrepreneur is in the sales pitch and planning for automating billing and sales for 200 stores. The entrepreneur is given an opportunity to bid a job that requires cybernetic and management skill. The entrepreneur has done similar jobs but none quite as large as this one.
When the request for bid is received, the entrepreneur underestimates the complexity of the proposal. The entrepreneur rushes to prepare a proposal after procrastinating for 4 days with only 30 minutes left to complete a proposal before meeting with the buyers. In the rush, the entrepreneur runs into printer problems, typos, and miscellaneous minor problems that conflict with mindfulness required to complete and present the proposal.
Rock goes into the mechanics of thought to explain how stressors distort self-awareness and make one lose sight of reasoned performance.
The entrepreneur is nearly late for the meeting which is another stressor that affects the sales presentation. When the customer asks if a deadline can be met, the entrepreneur hesitates because of the stressors accompanying lack of mindful preparation. The entrepreneur’s thoughts are momentarily derailed because of an inability to recall a former memory, a similar client experience that had a tight deadline that the entrepreneur met.
The entrepreneur’s thoughts and actions did not come from quiet self-understanding but from fear of losing a sale. Rock introduces the idea of a mind’s “director” that tells one to relax and remember relevant experiences that give confidence to sellers and measured acceptance by buyers. Rock emphasizes the importance of mind preparation before arriving at an important meeting. He goes on to explain how to train one’s mind to be calm to thoughtfully review what is laying dormant in one’s recollections. A good manager should practice mindfulness.
A similar story is created for the newly promoted staff manager. Many people in this newly formed division were fellow workers of this newly promoted manager.
The promoted manager has ideas based on personal knowledge of some of the employees about who should get particular jobs to make the new project a success. With little self-reflection, the promoted manager assigns a job to one of the employees without preparing everyone for their new roles.
Rock suggests first meetings should be designed to allow people to reacquaint themselves with each other in a new management arrangement. He suggests letting the flow of reacquaintance influence job assignment for productivity of the team.
Though the promoted manager may have made a good decision based on previous experience with someone who is now a subordinate, the decision creates unnecessary conflict between aspirational division employees.
Rock argues that the mind’s “director” can be trained to interrupt bad decisions through contemplation of prior experience, and a period of mindfulness can lead a team of people to become more comfortable with their roles in the company’s management change.
Rock goes on to explain the importance of social connection and how status needs to become a constant presence in a manager’s mind when steering a team toward a corporate goal.
The author uses the stories of two managers showing how failure to recognize the role of social contact and status can threaten success.
Much of what Rock explains is summarized by the ancient phrase “know thy measure” (more colloquially known as “know thyself”). Regardless of one’s status in a company or in life, a better understanding of oneself is at the core of human success and failure. Rock’s point is that successful managers develop their inner “director” with mindfulness (“Your Brain at Work”) as a guide to what the author argues is a predetermined future.
Dangerous Ideas (A Brief History of Censorship in the West, from the Ancients to Fake News
By: Eric Berkowitz
Narrated by: Tim Campbell
Eric Berkowitz (Author, human rights lawyer and journalist
Eric Berkowitz recounts the history of free speech and censorship. His history infers censorship is a misdirected waste of time. Berkowitz argues freedom of speech is unstoppable. Even in the most repressive governments in history, citizens have exercised freedom of speech.
Berkowitz recounts many who chose to exercise free speech that were exiled, tortured, dismembered, maimed, or murdered. However, these free speech martyrs insist on having their say. That seems Trump’s justification for suing Facebook and Twitter.
Pundits suggest Trump has no chance of winning his suit against Facebook and Twitter–Berkowitz’s presumed response would be “who cares?”
The fundamental point made many times in Berkowitz’s history is that censorship does not work because there is always someone who is willing pay any price to say what they think must be said. Berkowitz offers many historical examples of why free speech is a confusing and difficult problem.
Free speech can spread both truth and lie.
One of Berkowitz’s answers to the conundrum of free speech is that more freedom allows each listener to choose what they wish to believe. Problems arise when freedom of speech offers lies as truth and misleads the public.
White supremacism lies and Covid19 falsehoods have historically destroyed lives.
In every country of the world, free speech is unstoppable because it is controlled by the few, not the many.
Listening to Berkowitz’s history vivifies a trip to China in 2019. A guide, presumably at some risk to himself, took our small group into a private room to remind us of China’s response to the idea of free speech in Tiananmen Square .
Our guide reminded us of one protester who moved in front of a Chinese tank whenever it tried to change directions. The guide explained the “tank man” (who was never identified by name) was arrested, and never heard from again.
At the direction of President Deng Xiaoping, 300,000 troops were mobilized to stop a demonstration by Chinese students. China’s soldiers fired on college students and friends who were demonstrating their belief in free speech. An unknown number of Chinese citizens (some say hundreds, others say thousands) were murdered at the direction of government leaders. Our 2o19 Chinese guide was exercising his right of free speech by reminding us of what happened on June 4th, 1989.
Government is the first seat of control for free speech. However, that first seat is diminished by singular economic interests, political interests groups, and fringe propagandists.
The rise of newspapers, radio, and television focused and expanded the principle of free speech. Economic interests influence these early platforms but with a more limited threat and benefit to society.
Facebook, Twitter, YouTube, and the blogosphere have widened the principle of free speech and significantly increased potential public threat and benefit.
In the age of newspapers, radio, and television, government controls were explicitly legislated but in the internet age control is hidden in platform algorithms. Government may still have the first seat of control, but media moguls have usurped legislated government censorship.
Berkowitz offers no answers. He only reveals the complexity of freedom of speech. He suggests freedom of speech is an essential ingredient of a just society. However, at the heart of free speech is economic interest. Free speech is secretly used to distort truth and sometimes incite violence.
Whether it is a newspaper reporter told to revise an article that criticizes corporate advertisers or a discloser of government secrets there is societal threat. Even more pernicious is the Amazon, Facebook, or Twitter executive who orders a coder to increase customer clicks for corporations that pay more for advertising. And then there are the media trolls who distort the truth, lie, or incite violence to increase click count with no regard to consequence.
Freedom of speech is “…a riddle wrapped in an enigma” (a Winston Churchill quote about Stalinist Russia). Freedom of speech is a two-edged sword, a tool for truth building leaders and liars. Truth building offers peace; lies offer Russian Ukrainian wars.
Merchants of Truth (The Business of News and the Fight for Facts)
By: Jill Abramson
Narrated by January LaVoy
Jill Abramson (American author and journalist, first female executive editor of the NYT serving from 2011-2014.)
Jill Abramson describes a “near death” experience for print media in “Merchants of Truth”. She begins with the rise of BuzzFeed and Vice, with a newspaper reporter’s view of YouTube, and a vignette about Jackass. Then, she zeroes in on the “New York Times” and “Washington Post” and how their news coverage has changed. Abramson explores the principles of the new “Merchants of Truth”.
It is disappointing to see “click bate” from Apple, Amazon, YouTube, and Facebook competing with news about local, and worldwide events that mean something.
To some, Abramson’s brief history of BuzzFeed and Vice is a cringe worthy exploration of how vapid we are and how easily we are distracted by titillating, often idiotic, and sometimes false facts. However, Abramson shows that BuzzFeed and Vice make a contribution to news gathering that appeals to a wide audience, particularly a younger audience.
The criticism Abramson launches against BuzzFeed, and particularly Vice, is that both slip into Gonzo (exaggerated and fictionalized) reporting. The public is titillated but not accurately informed.
BuzzFeed and Vice are becoming bigger players in the media news business. The key to their success is public attention but advertising revenue is its vehicle for growth. Pleasing advertisers encroaches on the objectivity of news.
BuzzFeed and Vice have reduced the barrier between advertising and news. That barrier breach is exhibited by Abramson’s story of The New York Times apology to China, and the Washington Post’s turn to the metrics of popular news coverage.
Abramson pulls no punches in her judgement of The New York Times’ bow to economic necessity in kowtowing to China when a reporter’s story is critical of Chinese suppression. She recounts Arthur Ochs Sulzberger’s letter apologizing to President Xi for a reporter’s story about Chinese government repression. Abramson implies the apology is for potential loss of revenue.
Arthur Ochs Sulzberger Jr. (Publisher of The New York Times.)
The implication is advertising revenue influences NYT’s and Washington Post’s reporting in the same way as clicks on Apple, Amazon, Facebook, YouTube, BuzzFeed and Vice. The concern is in the bending and blending of news to attract wider audiences for advertisers who have little concern about the accuracy of news that impacts society.
On the other hand, Abramson suggests Sulzberger as a publisher of “All the News Fit to Print” may have been more concerned about losing a foreign outpost for the paper’s news reporters. One suspects, it is both concern about loss of a news site and bending to the demands of a political and revenue producing hegemon. There has always been a tacit concern about advertising revenue and news reporting in the media. One might recall “60 Minutes” initial rejection of an expose on smoking. They eventually aired the episode, but fear of loss from a major advertiser was in play.
Vice reporting of a trip to North Korea with Rodman (the former Bull’s basketball player) is one of several examples of click bate reporting. It offers titillation but hides the brutality of a murderous government regime.
As a fossil (oldster), one might read the New York Times, Wall Street Journal, a local paper, the Economist, and Foreign Affairs. The reason for variety is perspective. Each covers most aspects of news (culture, business, local and international).
Abramson explains reputable media outlets have checks and balances. They try to insure objectivity and accuracy in their reporting. The checks and balances sometimes fail as they did with the NYT’s Jason Blair. However, BuzzFeed, Vice, YouTube, Facebook, and other newcomers are just beginning to establish checks and balances.
Jayson Blair (Former journalist with The New York Times, fired for fabrication and plagiarism.).
New media argues all societal beliefs should have equal expression. That is a distortion of America’s freedom of speech. Americans have regulated freedom, just as they have regulated free speech. Freedom Of Speech is to DoNoHarmToOthers.
Another failure Abramson notes is the paucity of critical reporting by the New York Times and Washington Post of WMD in Iraq. Checks and balances did not work in either paper because of investigative failure.
All news media fight for facts. However, for many reasons, the facts chosen create spin.
With the addition of BuzzFeed, Vice, and YouTube the inherent bias of chosen facts is accelerated and amplified by emotion. Abramson implies spin is not the intent of reputable media like the New York Times and the Washington Post. One might disagree because all facts are not included in every report that is posted. All news reporting has some level of distortion.
Every merchant might report facts, but a listener/reader comes away with subtly, and sometimes, widely different understandings of the same story. It is not that facts are necessarily untrue, but choice of facts and the addition of emotion infects the story.
Additionally, there is inbred bias in the mind of listeners and readers of the news. Those listed as liberals, conservatives, or libertarians bring their personal beliefs into everything they read, hear, and say.
The difference between traditional news sources, and BuzzFeed or Vice, is elicited emotion. There is less fight for facts with BuzzFeed and Vice. Their fight is for attention whether the facts are correct or not.
Abramson shows how BuzzFeed and Vice, and similar “news” gatherers are willing to manufacture facts to get attention. BuzzFeed measures public expression and interest. BuzzFeed tailors’ articles to magnify whatever is popular. BuzzFeed’s and Vice’s objective is to get the reader to click their feed. It has less to do with a fight for facts than what Big Data tells these new “Merchants of Truth” is the public’s interest.
Videos, like Jackass that play on YouTube, fit into the titillation genre. However, as a merchant of truth, YouTube’s platform generates often useful information. Its platform offers do-it-yourself help, from people who demonstrate how they did it themselves.
YouTube also offers educational programming on current events, history, and science. As a “Merchant of Truth”, it is not fighting for facts. It, like BuzzFeed and Vice, is looking for clicks to increase advertising revenue.
BuzzFeed and Vice fight for attention, not facts. They make money for clicks whether facts are right or wrong. Advertisers are interested because attention drives sales.
Like BuzzFeed, it resists control of content to increase popularity under the cloak of freedom of speech. Both BuzzFeed and Facebook are struggling to keep hate out of their content without acting as Big Brother monitors of vitriol. Neither are focused on a fight for facts or truthful news. Both seek user clicks to give interest to vendors that will pay to advertise.
Facebook is a ubiquitous forum meant to connect society. In actuality, it appears Facebook is a forum that often reinforces and magnifies difference in society.
The New York Times, Wall Street Journal, Washington Post, The Economist, and Foreign Affairs have video and online feeds. Most offer those feeds to subscribers. Some, like Foreign Affairs want an additional fee for the online service. The degree of adoption of emotion by traditional media varies, but it creeps into all “Merchants of Truth”. All media serves what big data shows the public wants.
Abramson shows that national TV and newspaper coverage of the news have adopted some of the characteristics of BuzzFeed, Vice, and YouTube to improve their income, and economic viability.
Somewhat more ominously, Abramson explains how traditional media is adopting measurement metrics that tell publishers how many clicks or engagements reporters get from their writing. If news reports do not achieve a certain level of interest, the reporter’s continued employment and/or compensation becomes a topic for discussion. News is in danger of being measured by popularity, not substance.
Getting back to Abramson’s personal experience at The New York Times, she acknowledges not having much management experience when she became the Executive Editor of the paper. She notes former employers never offered management graduate courses for her to broaden her education. Undoubtedly, she was an excellent employee that got things done.
Abramson devotes a part of her book to air grievances about an “old boys club” in the news business. Other writers, as well as Abramson, have reported a double standard for women in the media industry. Women are viewed differently when they exhibit the same aggressiveness that men show as managers.
Abramson acknowledges she does not listen as carefully as she should when confronted with opposition. That is a characteristic of both men and women who have come up through the ranks of an organization. They are superstars. They get things done and are promoted to become managers.
In well managed companies, mentor-ships or management development programs are offered rising stars. They offer employees an opportunity to see the difference between doing things yourself to having things done through others, a skill set that can be taught.
Women and men rise in organizations to become managers by getting things done. Abramson notes that aggressiveness is judged differently in women. Women are called pushy while men are called forceful and effective.
Becoming a manager is a difficult transition because it involves ceding control that is the hallmark of an employee’s success as a doer of things. A manager needs to trust others to do the things that need to be done. One suspects it is more difficult for women to develop trust in others because of generations of unequal treatment. Whether a man or woman, when an employee becomes valuable as a person who gets things done, it is difficult to give up one’s control to others.
Being a manager requires trust in employees that may not do their jobs exactly the way a new manager (a former “doer of things”) believes they should be done. This is where skill-set adjustment is needed.
If an employee fails at a task, a new manager needs to help the employee overcome the failure. If the employee continues to fail, he/she will eventually be fired. If the employee succeeds, he/she goes on to the next task. Abramson’s dismissal may have been as much a function of unequal treatment as inadequate training. Her analytic and reporting skill is proven by her history and her analysis of media news in “Merchants of Truth”.
In a fight for facts, what a consumer can take from Abramson’s analysis is how important it is to read and listen to more than one “Merchant of Truth”. Finding truth is what Americans of conscience seek.
Freedom of speech cannot be an excuse for unvetted news.
Much of what Abramson’s personal experience is at The New York Times is reinforced by her analysis of the evolution of the Washington Post. This century has not been kind to traditional news media. It is in a state of transition. Some of us hope it evolves, and is not relegated to the trash bin of history.
The media for this generation is changing. What one hopes is that the best of each is eventually adopted. Every news source must be measured against truth. Determining truth is made up of true facts that no singular news outlet is capable of compiling.
“All the news that is fit to print” is an apt logo for the New York Times but it is misleading. History is continually revised because new facts are discovered, and the perspective of society changes. Americans need to be diligent in seeking the truth. The truth does not lie in one source.
Peter Drucker (1919-2005, Austrian-born American management consultant)
Peter F. Drucker is a storied business management consultant (famously known as a consultant for General Motors in the 1940 s) who taught business administration and sociology at Claremont Graduate University in California. He died at the age of 95 in 2005.
Drucker’s management insight reverses the power structure of profit and non-profit enterprises; i.e. management down changes to management up with organization leaders determining direction but employees (knowledge workers) controlling productivity and effectiveness.
“Management Challenges for the 21st Century”, written in 1999, capsulizes Drucker’s view of the world and his management beliefs. He notes that for the first time in recorded history post-industrial nations are demographically becoming older rather than younger.
American, Chinese, Russian, Japanese, Indian, and most European countries’ birth rates are lower than their death rates. There are more people nearing retirement than entering the work force (excepting countries with higher immigration rates that offset low birth rates).
This demographic change profoundly affects the future of modern economies. Drucker argues that retirement age will grow from age 65 to 75. Drucker observes that revenue from consumers’ discretionary spending rather than revenue from gross sales is the hall mark of growth industries.
Drucker explains private corporations need to treat employees like non-profits. They need to treat employees like volunteers by respecting employee abilities and placing them where they can be most productive.
The rise of the knowledge worker and the fall of manual labor changes the way managers manage.
Successful organizations will increasingly value employees as investments (as assets) as they recognize the real cost of employee turnover.
Good managers will continue to be leaders but employee jobs will be based on defined objectives (rather than job descriptions) that can be met by employee placement in jobs that require their specific skills and/or strengths.
Successful organizations will invest in employees by putting them in positions that capitalize on what they are good at or can be trained to be good at. With job placement that utilizes employee’ strengths, successful managers will stay out of the way by enabling rather than directing employee performance.
The manager’s role becomes one of defining organizational objectives, measuring productivity, and changing organization structure based on empowered employee roles.
Education is a critical component of Drucker’s philosophy of management but his approach contradicts the present direction of educational reform that focuses on teacher accountability for educating students in the fundamentals of reading, writing, and arithmetic.
Drucker promotes a Montessori like approach to education. Drucker believes in structuring education based on student interest rather than a set curriculum.
Peter Drucker is an insightful sociologist and guru of American free enterprise. Managers who choose to follow his recommendations increase their odds for success in life, let alone organization management.
Enrico Moretti (American author, econonomist, and Professor of Economics at the University of CA.)
Enrico Moretti suggests jobs in America have a new geography. As a professor of economics, Moretti notes how technology reshuffles the nature and location of jobs around the world. Great manufacturing cities like Detroit, Pittsburgh, and Chicago are losing jobs in the 21st century. More jobs are moving to places like Seattle, Portland, Silicon Valley, and Austin. Tech employment is creating more jobs away from historic manufacturing hubs.
Manufacturing job losses 1997 to 2012 as a percentage of working age populations.
Manufacturing jobs are declining in American cities. That decline is memorialized in a New York Times magazine; distributed in the May 5, 2019 Sunday paper. The human cost to Lordstown, Ohio, when G.M. closes its Cruze automobile manufacturing plant, is heartbreaking.
In the early years of tech, companies like Apple, Microsoft, and Google chose business locations based on where they wanted to live; not where labor existed.
Moretti suggests new job creators choose city locations based on factors other than manufacturing labor. Moretti suggests University locations have some effect, but decisions made by early entrepreneurs seem serendipitous; more than reasoned. Their initial start-ups may be in any community because their ideas are new. Their technologies are unproven. Their new employees are generally young, inquisitive, college educated, and innovative. If these new job creators attract investor interest, they grow their companies through culturally shared purpose.
Not only is there the multiplier effect of unrelated domesticate services, there are new technology companies that choose the same communities. The culture grows to what Moretti suggests is enough density to attract the best and brightest in the world. Incomes rise for all businesses in that community. Even though these communities become more expensive to live in, they continue to attract tech companies because of the savvy technological depth of the area.
What Moretti notes is that if new tech ideas have legs, innovators locate in the same area. Like germs on a petri dish, they multiply to create a new culture.
Moretti acknowledges foreign manufacturers pay their laborers less but, more ominously, he notes foreign countries are doing a better job of educating workers to more fully embrace technology. That embrace begins in grade school and advances through higher education. China’s, Vietnam’s, India’s, Taiwan’s, and South Korea’s emphasis is on science and mathematics. In the U.S., Moretti cites numerous studies showing the quality of American education, particularly in science and mathematics, is declining.
Moretti notes manufacturing decline is partly based on automation, but more fundamentally on a deteriorating American education system.
Science Curriculum Ranking in the world.
The irony of Moretti’s observation is that many graduates
of American universities are foreign students that are compelled to leave
America when they finish their degrees.
They are unable to remain in America because of America’s restrictive
immigration policies. Adding to government
immigration policy limit is America’s failing education system; not only at a
graduate level, but at the preparatory level of America’s grade and high school
As an economist, Moretti explains the multiplier
effect of companies that choose to operate in the U.S. and world where labor is
best educated; particularly in the field of technology. Additionally, Moretti suggests foreign governments
are proportionately outspending the U.S. in science research and development. America is falling behind and risks its
future as a multi-cultural center and economic power in the world.
Historically, most Americans are immigrants. Moretti is certainly right in arguing America’s education system must improve, but that improvement needs children of parents who are intent on making their lives better.
What is missed by Moretti is that immigration is important to America; not only for the technological elite, but for first-generation immigrants. From that pool of humanity, America became the most successful industrial nation in the world. That prominent position is threatened by America’s current leadership.
Alec Ross (Author, American technology policy expert)
Alec Ross’s book about future industries is founded on
world travel and observation. Ross is an
historian by education. His wide-ranging view of sociological change is from personal
experience with technology and the information-age.
Ross observes social change around the world as a senior adviser to then Secretary of State, Hillary Clinton. His dizzying travels explain how mobile phones connect the world and change economic, political, and social opportunity for both third world, and highly industrialized countries.
Ross’s fundamental argument is that “…Industries of the Future” will be based on information technology. The forefront of that technology rests on software (coding) and human evolution (genetics).
Despite nationalism and the horrendous consequence of Covid19 on the world, Trump-like government leaders who focus on nationalist independence and existing manufacturing jobs are job destroyers; not creators.
New jobs will not come from expanded labor-intensive manufacturing but from the accumulation and use of data. Ross suggests coding and genetics will determine jobs of the future.
Ross infers creators of code are tomorrow’s laborers. Today, learning how to code is a valuable skill that insures employment through and beyond the 21st century.
Though there is hyperbole in Ross’s suggestion that today’s coders make a high wage of $100,000+ a year, they do make an entry level living wage with vertical mobility. As the market matures, coder’s income will undoubtedly keep pace with expanding economies.
Ross shows how coding opens the door to automating the manufacturing world. Human labor to make things will change to coding labor that ultimately leads to machines building machines.
Artificial Intelligence is common today and will be ubiquitous tomorrow.
The automobile industry is increasingly relying on machine assembly of automobiles. The manufacturing process still requires human supervision, but physical labor will be increasingly code driven.
Numerous examples are noted by Ross. Driving a car is simpler because of A. I. Using GPS maps shorten travel time, gauge traffic congestion, and locate lost devices. The obvious effect of information technology is reduction in physical labor with employee job change, reeducation camps, and new employment. This is a tough reality for today’s laborers; particularly those who work hard every day. The rise of A. I. contradicts the industrial age’s moral belief that character is enhanced by hard labor.
The laborer says, “I am not going to lose my job to a machine”. From a production line laborer or steel worker of a certain age, it is a message once said by Luddites in the nineteenth century. In the industrial age Luddites began dismantling machinery that cost their jobs.
Job upheaval is frightening. However, Ross suggests the information-age offers the greatest opportunity for the world since the industrial revolution. President Trump’s populist effort to turn back time creates false hope for many hard working Americans.
Employees in dying professions should be helped by private industry and the government to retrain and embrace inevitable market changes. America needs a Rooseveltian and internationalist response to Covid 19 and the advance of technology.
What Ross shows is that industrialized nations that choose not react positively; to be proactive to the information age are destined to decline. Ross shows how third world countries in Africa see opportunities that were never seen before because of technology.
With a mobile phone, African men and women have become entrepreneurs because they can communicate with wider circles of influence and support. Their phones become banks for loans and payments; and more importantly, for investment in themselves.
Ross explains another opportunity presented by the information age in farming. As has been known for centuries, farm productivity is improved by appropriate management and use of natural resources and man-made fertilizers. That customization increases the world’s food supply in ways that could only be approximated in the industrial age. Coded farm machines replace day laborer planting, cultivation, and harvesting,
With the advent of automated farm management systems, soil preparation, planting, and harvesting operations can be more precisely customized.
The second fundamental argument in Ross’s book regards genetics. Understanding of genetic science and our ability to manipulate genetic markers is a wild-west opportunity.
In theory, genetic modification can be a threat to the ecology of the earth, a monumental environmental catastrophe.
To Ross, genetic modification is a boon for agricultural and human productivity that will lead the world out of environmental and human crises.
Giant steps have been and are being made in genetic modification of agricultural products. Ross notes reports of crop productivity increases due to disease resistance coming from genetically modified seeds. Ross argues that GMO opponents are wrong in suggesting “natural” agricultural products are any safer than genetically modified food products.
Ross sites reports of GMO foods that show they are equally or more nutritionally beneficial to humankind than non-GMO foods.
Many would agree with Ross’s assessment of the success of GMO production. However, modification of the human genome opens a much higher level of concern.
There are moral and ethical questions raised by science and religion with experimentation on the human genome. On the one hand, it raises the possibility of erasing the diseases of humankind. On the other, there is the fictional account of the “Island of Dr. Moreau”. Both concerns are expressed in the controversy surrounding the 2018 human gene editing in Hong Kong by Dr. He Jiankui, a Chinese researcher.
Dr. He Jiankui (Claims to have conducted the first human genome-editing of a human embryo)
Ross approaches “The Industries of the Future” from a
more historical than scientific perspective.
His book sees great opportunity in information technology, but proof is
largely unborn history. The
technological revolution is not like the industrial revolution because it goes
beyond Newton’s laws and only touches Einstein’s. Ross seems more likely right than wrong but only
the future will tell, and only history will prove it.
Jerry Z. Muller (Author, professor of history at the Catholic University of America)
Muller offers an interesting and insightful defense of capitalism. Jerry Muller’s “Thinking about Capitalism” is
an historical account of economic theory.
Muller explores three economic systems: 1) market, 2) command, and 3) mixed. In his journey through the history of economic systems, market (aka capitalism) shines brightest.
Muller notes that capitalism is pummeled by many anecdotes of history. Muller does not deny the excesses of market economies, but Muller suggests capitalism’s benefits far exceed its detriments.
There is nothing new in Joe Manchin’s self-interest in coal investment or representation of a state dependent on the coal industry. The question is whether he is representing his personal interest in wealth and re-election or the common good of the nation.
Adam Smith (1723-1790, Scottish economist)
Muller argues capitalism’s storied failures distort its multifaceted values. In the “Wealth of Nations”, a seminal work on capitalism, Adam Smith clearly explains the value of a capitalist (market) economic system based on self-interest. Muller notes Smith’s term “self-interest” is often misinterpreted by the public as greed.
Smith’s definition of self-interest is founded on virtue, i.e., behavior based on high moral values. However, Self-interest comes in many forms.
One person’s self-interest may be altruistic in helping others to feel better about themselves. Another person’s self-interest may be to increase personal wealth to improve their family’s standard of living. And, self-interest may be associated with greed. The fundamental point is that everyone’s self-interest is a motivation that is ungoverned by an outside force. Self-interest is a part of human nature.
In a broader sense, there is some truth in the economic cliché of “a rising tide lifts all boats”. It reflects Adam Smith’s belief in the “invisible hand” that guides one’s life in a market driven economy. Every individual strives for their own self-interest which offers charity to some, employment to others, and individuated incentive to all.
Thomas Hobbes (1588-1679)
Thomas Hobbes notes that human nature is both good and bad. He tempers Smith’s argument for capitalism by suggesting government is necessary to mitigate self-interest that is harmful to the public.
Smith and Thomas Hobbes (author of “The Leviathan) believe self-interest is a universal human characteristic. Smith addresses self-interest as an enlightened Socratic understanding of virtue. Hobbes is less doctrinaire and implies Socratic virtue is not common in the general population.
Smith argues that capitalism takes the essence of human nature’s natural self-interest to advance civilization. This advance is not a smooth upward curve but an improving trend. Bad things do happen in a capitalist society. Hobbes might agree with Smith but only in the context of “rule of law” that mitigates non-virtuous self-interest.
Edmund Burke (1729-1797, Irish statesman)
Muller does not ignore critics of Adam Smith’s “Wealth of Nations”. Edmund Burke is a noted critic who argues that too many social conventions are sacrificed by disparate self-interests. He argues that the French revolution is a potential consequence of an economy driven by self-interest.
The social structure of France is decimated in the 1789 revolution. History shows “the terror” of the French revolution murdered innocents. On the other hand, it reformed an economy that left many behind. Prior to 1789, only the rich owned land, never went hungry, and inherited wealth. In the 18th century, France’s poor are mired in poverty, often hungry, with little chance for advancement.
Justus Möser (1720-1794, German social theorist)
Muller also cites criticism from Justus Möser , a contemporary of Burke, who believed the rise of capitalism (mercantilism) destroys craftsmanship in local economies. With trade from other parts of the country and world, Möser argues insular communities are harmed by prices of similar products replacing local artisan’s goods.
Möser argues mercantilism destroys the fabric of local communities; foments insecurity and social unrest. Muller, in part, agrees with Möser’s argument. However, Muller notes Möser’s argument is right and wrong.
With less money being spent for one thing, more money is available to buy or invest in other things. What Möser ignores is mercantilism’s benefit to consumers and the local economy. Consumers who buy a product for less money have more money to spend or invest in the local economy.
An amendment to criticism of Möser is that the consumers must have enough money to buy product being produced, whether in America or somewhere else.
Much of Möser’s argument is the same concern raised by those who support today’s trade war. Trump ignorantly pursues a trade war that weakens Adam Smith’s view of capitalist competition. America needs to adapt to a world economy that is increasingly intertwined.
Möser is right in suggesting free trade creates insecurity in local markets. It also demands adjustments in labor that harm local artisans, but Muller argues there is a net gain in public good and general welfare with free trade.
Max Weber (1864-1920, German sociologist, philosopher, and political economist)
Muller goes on to explain how a confluence of religion and capitalism benefits society with Max Weber’s melding of Protestant Ethic with the Spirit of Capitalism. Weber makes the idea of living aesthetically and putting aside savings as a prudent way of living life in an uncertain environment. Creating wealth became a religious calling to some.
Joseph Schumpeter (1883-1950, Austrian political economist)
Muller reviews Joseph Schumpeter’s contribution to the theory of capitalism. As a 20th century Harvard Business School professor, Schumpeter lectures on the value of “the invisible hand”. Schumpeter advances the idea of “creative destruction” as a characteristic of capitalism.
Schumpeter outlines the value of entrepreneurs who pursue new ideas, new products, and innovation that replaces dying industries. He trumpets the growth of capitalism as an engine that perpetuates societal benefit. Some argue that today’s American governance discourages new ideas by dwelling on manufacturing at the expense of technological innovation and change.
Muller examines the other two economic systems, i.e., 2) command, and 3) mixed systems. Muller implies they fail to meet the historical successes of market capitalism. A command economic system is autocratic with primary economic decisions made by one ruling agency—like Mao’s communist party, Hitler’s Third Reich, and Stalin’s Great Turn.
Short term economic benefit of a command system economy hugely disrupts society. Economic improvement is evident in the short term, but momentum is lost as the gap between haves and have-nots grows.
In a command economy, the cult of personality takes over and image becomes more important than substance; i.e. who you know becomes more important than productivity.
Muller implies mixed economic systems are a work in progress. They are represented by leaders like President Xi in China, and President Putin in Russia.
Xi and Putin retain the concept of communist control of the economy but combine command economics with “Smithian” capitalist ideals.
China’s mixed economic policy began with Deng Xiaoping, but Xi expands its reach.
Both China and Russia have shown economic improvement in the late 20th and early 21st century. Xi’s “Road and Belt” plan is part of a command economy, but it relies on the capitalist market principle of influencing trade between nation-states. China’s long-term success remains to be seen. Whether it will be a more effective form of economic improvement than Adam Smith’s market-based formula is left to history.
Russia, like Xi, uses capitalist influence to grow its economy. Russia, in contrast to China, uses its natural resources (oil distribution), rather than a “Road and Belt” policy to expand its influence.
Fundamentally, Muller infers no modern economic system is better than capitalism. One draws that inference by Muller’s cogent explanation of the value of capitalist self-interest. Because Adam Smith’s concept of self-interest is an inborn characteristic of human nature, it will prevail over any economic system that requires command control.
America has been a successful capitalist country in great part because of checks and balances that mitigate command control qualities of mixed economies. Hobbes assessment of human nature demands some level of command control, even in a capitalist economy.
One might argue that America’s avoidance of near economic collapse in 2008 is evidence of the importance of a mixed economic theory. (Interestingly, a December 18, 2018 “…Economist” article, published under the Schumpeter byline, notes that China’s communist party control of businesses during Trump’s trade war have fared better than private businesses.)
American history shows lower taxes encourage higher production and job creation. What is missed by tax reduction is that it exacerbates income inequality. Tax reduction incentivizes corporate leaders to devalue worker wages to increase profitability. Human self-interest leads to higher income for corporate owners and executives. The consequence magnifies the wealth gap between have and have-nots.
It seems time today to read Thomas Paine’s “Rights of Man”. Though his primary purpose is to refute Edmund Burke’s condemnation of the 1789 French revolution, his observations on British Aristocracy are the essence of today’s American “moneyocracy”.
Though President Trump is not the originator of American “moneyocracy”, he is its quintessential representative.
In spite of domestic mass murders by demented Americans, Trump and many of his followers insist on giving voice to the NRA’s belief in an American right to buy automatic weapons designed only to kill people.
Uvaldi, Texas elementary school shootings 5.24.22
It takes money to run a campaign for public office. Trump, like most politicians, panders to lobbyist’ and business’ interests that distort the American electoral process.
The appeal of Trump has to do with American’s desire to be left alone. Whether a misogynist, a gun toting individualist, a federal tax cheat, or an independent morally upright American, many believe that is their right. Trump exemplifies the right to be left alone.
Beginning with congress’s approval of tax reform, America’s ballooning deficit is a direct consequence of a mistaken belief that “a rising tide lifts all boats”. Contrary to the tired refrain “jobs, jobs, jobs” to make “America Great Again”, the current administration is setting the table for the world’s next economic crises.
The “Occupy Wall Street” demonstrations are an amorphous scream of disgust by an educated population that resents American “moneyocracy’s” control of the economy, elected representatives, the election system, and the “Rights of Man”. “Moneyocracy” is an inheritable line of an American aristocracy.
Instead of 18th century Aristocratic control of British government, 21st century America substitutes the wealth of individuals and corporations (classified as individuals) to control American Democracy. This is not a partisan issue in America.
Every President, Republican or Democratic, has sided with corporate interests in this era of corporate largess. The world is in a state of economic upheaval that is fueled by technology. That economic upheaval is not adequately addressed by corporate America. The government continues to subsidize yesterday’s economy at the expense of middle and lower income citizens.
Management executives that are employees of corporate America take salaries 50 times or more than salaries of their average employee.
The new controller of our economy, the primary interest group of elected representatives, and the master of the American election system is corporate America.
Wealth is the new hereditary right of succession. Corporate America is the thief and ruler of inherent “Rights of Man”.
Once individual compensation reaches beyond rationality, money becomes fuel to maintain America’s “Moneyocracy”, the new hereditary right of succession.
The controller of our economy and political representation is corporate America.
The primary interest group of elected representatives, the master of the American election system, and ultimately, the thief and ruler of inherent “Rights of Man” are corporations and the super-rich. Of course, the rich have always been in control of American government. However, now the rich are not just singular individuals. They are corporations classified as individuals.
The Supreme Court in “Citizens United v Federal Election Commission” in 2010 rules that corporations are persons with the right to support candidates for office with as much money as they want to influence government policy.
The Supreme Court’s unwise decision based on freedom of speech identifies corporations as persons. With that nose in Democracy’s tent, corporations could offer millions of dollars to election campaigns. What human being cannot be influenced by such largess? Excessive executive compensation perpetuates “moneyocracy”, but corporate influence is the cause of the loss of the “Rights of Man”.
Tax change is a smoke screen that obscures the real danger of American decline in the 21st century. It is too blunt an instrument to bludgeon the rich. It smacks of false patriarchy and jingoist rhetoric.
American history shows that Americans believe that hard work is the source of success but being American does not guarantee a free ride. Equal opportunity is where America fails.
Education, anti-discrimination legislation, and equality of opportunity have to be strengthened. Corporate America needs to step up. Corporations need to quit wasting money influencing legislators and invest in human rights.
Corporations need to subsidize education by re-training their employees to meet changes wrought by technology.
Corporations must insist on equal treatment of employees, by gender and/or ethnicity. The government needs to re-enforce equal opportunity for all.
America needs to return to the ideals of equal opportunity by allowing entrepreneurs to create wealth through human productivity. Money is not an end but it has become an end that has no end; i.e. high salaries perpetuate themselves through an Aristocratic “moneyocracy”. If one says they make a $1,000,000 a year they are saying they are better then someone who makes $10,000 or $100,000 a year. Salaried compensation is perceived as human value.
Denying salaries that exceed 50 times average employee compensation is not denying the creation of wealth. Entrepreneurs that create productive companies that grow to multi-billion dollar enterprises have opportunity to become billionaires; not from salaries, but from building human productivity that creates wealth.
“Occupy Wall Street” is an unlikely precursor of another American Revolution; however, it may be a symptom of an American cancer that debilitates productive life without killing the patient. “Occupying Wall Street” is not a hippie “sit in” but a plea for reform of American “moneycracy” just as Thomas Paine’s “Rights of Man” was a plea for reform of Aristocratic inheritance.
ADDENDUM: Does the “right to be left alone” extend to pandemics? The question is raised when it comes to a pandemic that has killed over 783,000 people in the United States as of November 15, 2021. (Statistics provided by “worldometer”, a reference website that provides real-time statistics. Considered the best free reference website by the American Library Association.)
Martin Jacques has written an interesting book about China’s rise as a world economic power. His overview of the geo-political and Realpolitik relationships of the east and west are interesting; particularly in light of the Trump administration.
“When China Rules the World” has interesting details that inform but do not convince one that China will rule the world. The provocative title drives the bus but it does not reach its destination.
World control is a myth that causes wars and destroys the best and brightest, as well as the mean and maniacal.
What is happening in China is remarkable. China’s transition from Maoist communism to capitalist communism is a caterpillar turning into a butterfly; i.e. China has grown wings but it still lives in a world constrained by its environment.
Though President Xi is re-instituting some Maoist mistakes, China’s world wide investment in infrastructure is based on capitalist beliefs. Xi has an internationalist focus, just like that which made America great; at least, until Trump’s Presidency.
Chairman Mao’s cultural revolution and belief in enlarging collectivist ideology nearly destroys China’s path to prosperity
Xi is attempting to open new markets by financing infrastructure improvements in African, Middle Eastern, and Asian countries. He is creating customers for Chinese product.
Undoubtedly, Xi is also trying to seduce other nations into belief in Xi’s form of Communism. This is not unlike America’s intent to democratize the world.
Jacques argues that a 90% Han Chinese cultural domination of 1/5th of the world’s population will change the nature of the 21st century. In a limited sense, that is undoubtedly true. However, regardless of the type of government rule, human nature is the same.
Money, power, and prestige, are the primary motivations of humankind. Whether one is Han Chinese, Tibetan, Uighur, Indian, Hispanic, Black, or any singular ethnic group, all humans seek control of money, power, and prestige. These innate drives are the speedometer, brakes, and steering wheels of nation-state’ leaders and followers.
There are dominant factions in every culture that are not necessarily the majority of a culture’s population. Jacques’ early comments suggest China’s 5000 year history reflects a cultural conformity greater than any other country in history while later he acknowledges that the predominant Han population is highly diverse in its beliefs.
Cultural conformity is not the relevant issue; i.e., dominant cultures, whether a majority or minority of an indigenous population, are the game changers of a nation’s history.
Jacques argues that China’s cultural history of familial respect and veneration will have profound affects on the future of world economies. Jacques has a valid point. However, the history of modernization suggests that the fabric of extended filial obligation will be ripped apart in China just as it has in every industrializing nation.
China, just as all modernizing nation-states, will see deterioration of familial bonds.
Human nature is immutable. As an agrarian culture moves to the city and parents are compelled to work for wages, family structure and filial commitment deteriorates.
Of course, capitalism is not the same in China as it is in the western hemisphere. As Jacques reports, major capitalist businesses are state owned in China. They compete in the world market but government support mitigates much of the free enterprise ideal of capitalist economies. However, no nation-state operates as a free enterprise capitalist country; i.e. government has always played a role in capitalist nations. Government subsidy of industrialization is a matter of degree.
It may be that China will change the way industrialized countries compete but global economic domination is no longer possible in a tech savvy world that recognizes knowledge is power and natural resources are limited.
All the world knows how each culture in the world lives. With that knowledge, countries will gravitate to systems of government that serve its dominant culture best. Best is defined as what is most important to the dominant culture in the context of either money, power, or prestige.
Long term, China is facing a tougher road to modernize because of population, environmental degradation, and dwindling natural resources, but their short term prospects look better than most other nations.
As Jacques points out, China’s savings rate is over 20%, with a GDP growth rate 3 times that of America. The cost of dwindling natural resources is more affordable to China than most other modernizing countries. However, all economies are closely tied to each other and a major failure in America or Europe will have great consequence for the world economy which will significantly affect China’s short term advantage.
With a failure of a western countries economy, China’s drive toward modernization will be in danger. That danger is demonstrated today by America’s creation of a trade war with China.
Some argue this burgeoning trade war is hurting the Chinese economy more than the American economy. That may be true in the short term, but the efficacy of trade wars are questionable in the long term; particularly in our internet connected world.
Jacques’ book is worth its purchase price and a consumer’s time because he exposes some of the cultural biases of China that are not widely known. His suggestion that discrimination is as prevalent in China as it is in the United States is reprehensible, and disgustingly familiar. Globalization is real. Human nature is immutable. All mankind travels on the same space ship; i.e. our blue ball. At the very least, China is proving that our environment is fragile and natural resources are finite.