NEWSPAPERS

Audio-book Review
By Chet Yarbrough

(Blog:awalkingdelight)
Website: chetyarbrough.blog

Written by Sarah Ellison

Narrated by Judith Brackley

(SARAH ELLISON-AUTHOR, REPORTER FOR “THE WASHINGTON POST”)

The word “War” in Sarah Ellison’s book title exaggerates the reality of change at the “Wall Street Journal”. Exaggeration aside, Sarah Ellison succinctly reports big changes in the newspaper.   Ellison writes a very straight forward and interesting account of the takeover of the “Wall Street Journal” by Rupert Murdoch and News Corporation.

(RUPERT MURDOCH, MEDIA MOGUL)

Ellison’s presentation does not have the depth and breadth of Halberstam’s “The Powers That Be” but it does provide insight to changes that are happening in the newspaper industry.

Murdoch is characterized by some as a devil but Ellison’s picture is not horned or tailed.  The “Wall Street Journal”, like every mass circulation newspaper in the nation, is in the same life boat. 

The internet and their communication speed have ripped holes in the “Chicago Tribune”, “Philadelphia Enquirer”, and “Los Angeles Times”.   Even the “Washington Post” and “New York Times” are taking on water

Murdoch is not painted as a white knight but Ellison’s reporting suggests rescuer is a more apt description than devil. The same might be said of Jeff Bezos’ acquisition of the “Washington Post”. Also, though the “New York Times” has not changed hands, it has suffered through years of weakened financial viability.

JEFF BEZOS (CEO AND PRINCIPAL OWNER OF AMAZON)

Nationally read newspapers are threatened by the instantaneous reporting of the internet.

The “Wall Street Journal” and other daily papers are leaner today because they are following market demand for shorter stories, but the “…Journal” and other national market papers have not abandoned investigative journalism.  Newspaper reporters plumb the inner workings of world crises. They reveal government malfeasance, and investigate corporate corruption. They remind the public that “freedom of the press” is fundamental to democracy. The depth of newspaper coverage is deeper and more comprehensive than rumor driven internet accounts.

The internet has democratized the news; i.e., individuals seek their own depth.  Some suggest newspapers like “USA Today”, have taken a step too far by reducing print to twitter feeds about the news. Their reporter and news feed cutbacks have caused a loss in value (stock price decline) that has encouraged a hostile takeover by MNG (an offer recently rejected by “…Today” ownership). The complication for print media is monetizing web based reporting without decimating print coverage. Those newspapers that cannot meld one to the other seem destined to fail.

ARTHUR OCHS SULZBERGER JR. (PUBLISHER OF THE NEW YORK TIMES)

Murdoch and Sulzberger media conglomerates have specialization and editorial biases that serve their consumer cohorts.  Subscribers have the option of reading their papers on the internet when traveling away from home. Income from internet add sales supplement print advertising. Those publications that refine the utility of their websites are a boon to both newspaper publishers and consumers.

Those newspapers that focus on substantive truth, website improvement, and delimited editorial bias will serve themselves as well as the public.  Internet integration of print with internet reporting will sustain national newspapers’ future.  

Media longevity is a matter of change; i.e. newspapers did not disappear with the advent of radio and radio did not disappear with the advent of television; they adapted, they changed.

Newspaper readers who stand and wait will also be served.  Murdoch over paid for the “Wall Street Journal”; maybe for the wrong reasons, but with the right results.  Ellison implies the “…Journal” is serving its customers better now than before Murdoch’s takeover. The “New York Times” return to profitability suggests the same. The jury remains out on “USA Today”, Chicago Tribune, Los Angeles Times”, “Washington Post”, “Philadelphia Enquirer” and other nationally recognized papers. Change is universal, survival is ephemeral.

FORGOTTEN TOO SOON

2008 was just yesterday but today’s attack on government regulation is destined to create America’s next crises.

Audio-book Review

By Chet Yarbrough

(Blog:awalkingdelight)

Website: chetyarbrough.blog

The Big Short                                                         &           No One Would Listen

By Michael Lewis                                                               By Harry Markopolos

Narrated by Jesse Boggs                            Narrated by Scott Brick & Others

There are lessons to be learned from Lewis’s and Markopolos’s books that are forgotten in the pending impeachment trial of President Trump.

Both Adam Smith (the father of economics) and Thomas Hobbes (author of “The Leviathan”) argued self-interest is a universal human characteristic.

Self-interest led Trump to enlist the Justice Department to overthrow the election of President Biden. If that is not insurrection, one wonders what justifies any impeachment action.

Smith argued that capitalism takes the essence of human nature’s self-interest to advance civilization.  He noted-the advance of capitalism is not a smooth upward curve but an improving trend.  Smith was not saying that bad things do not happen in a capitalist society but they bend toward the good of society.

Hobbes would take issue with both of Smith’s assertions. Self-interest would not advance civilization unless it was regulated. Hobbes insisted on government control through “rule of law” to mitigate non-virtuous self-interest.

Hobbes feared unbridled self-interest in any form of government. Hobbes viewed human nature as brutish and unfair unless ruled by a Socratic philosopher king or, in a democracy, by tightly regulated and enforced “rule of law”.

The forensic reports of Michael Lewis and Harry Markopolos show what happens when efforts to regulate human nature are abandoned.  One concludes from their books that Thomas Hobbes’ “Leviathan” wrecks havoc on society when “rule of law” is either not present, or unenforced.

Inept management by Fannie Mae, and Freddie Mac offered mortgage insurance for grossly over-leveraged mortgages.  Companies like AIG removed investor risk by insuring banks against bad investments. 

All of these foolish actions coalesced to bankrupt companies and families around the world.  Individual lies, bungles, and missteps in the real estate industry created the worst recession since the 1929 stock market crash. 

While this real estate debacle was developing, Bernie Madoff built a 50 to 70 billion dollar empire by making fools of the U.S. Government, European royalty, world wide charities, and working families.  Madoff lied, cheated and stole billions of dollars from wealthy investors, charities, and mom and pop businesses with offers of bogus investment returns based on buying from Peter to pay Paul.  He paid dividends to earlier investors by taking money from newer investors.

As long as people believed in Madoff, or deluded themselves, his wheel of fortune continued to roll. As the real estate market collapsed, old investor money was recalled and new money became unavailable.  Madoff’s failure was inevitable.

Michael Lewis identifies seers that recognized “Quants” were packaging doomed mortgages into re-salable financial instruments called derivatives. These astute observers of the market, knew mortgage backed securities were at risk.

How could these things happen in a 21st century, democratically elected and governed society?   Hobbes would say “how could these things not happen”?


Madoff’s investment lies were exposed by Harry Markopolos in a “red flag” report to the Security Exchange Commission in the year 2000; way before the 2008 economic catastrophe.

The title of the book “No One Would Listen” tells the story.  This book is an indictment of democratic government in free society.  Markopolos’s story exposes an inept and failed SEC, an agency created by government to protect investors–when, in fact, it protected corporate interests. 

The irony is that Madoff did not get caught by the SEC. He confessed in 2009 because his Ponzi scheme fell apart. along with the collapse of the real estate industry.   

Lying is part of being a human being. That is a fundamental reason for government to have “rule of law”. It protects people from the abhorrent self-interest of the few from the many.

President Trump is impeached by the House of Representatives. It is the moral responsibility of the Senate to have a trial.

Hiding behind a loose interpretation of the rules of the Constitution is a disservice to the people. Guilt or innocence should be proven by the facts; not the parties of interest.

Regulation is not a perfect solution for control of bad actors in a free society.  However, no regulation is worse. 

INVESTMENT VALUE

Audio-book Review
By Chet Yarbrough
(Blog:awalkingdelight)
Website: chetyarbrough.blog

Capitalism Without Capital

CAPITLALISM WITHOUT CAPITAL

Written by: Jonathan Haskel, Stian Westlake

Narrated by: Derek Perkins

JONATHAN HASKEL (AUTHOR, BUSINESS SCHOOL PROFESSOR IMPERIAL COLLEGE LONDON)
JONATHAN HASKEL (AUTHOR, BUSINESS SCHOOL PROFESSOR IMPERIAL COLLEGE LONDON)

STIAN WESTLAKE (AUTHOR, ENGLISH BUSINESS CONSULTANT)
STIAN WESTLAKE (AUTHOR, ENGLISH BUSINESS CONSULTANT)

In addressing 21st century technology, Haskel and Westlake argue that the tradition of hard asset value is diminished. In today’s technological economy, the authors suggest investment in intangibles is as important as investment in buildings and machinery.

Haskel and Westlake acknowledge intangibles have always been an important part of economic growth. They note worker training programs, specialized employee’ experience, and patented designs have always had value; but auditors rarely (if at all) quantified those intangibles as anything other than expense. Little of a company’s investment in training, employee experience, and patents is assigned as an asset by analysts who use pre-twenty-first century accounting rules.

Most intangibles have historically been classified as uncapitalized expenses. In part, because quantification of intangibles is difficult to measure. Before the tech-revolution, investments in training, patents, and experience were looked at as costs of doing business. They were most often expensed (with some exception for patents).

When companies are sold, value of goods (machinery, buildings, inventory), and historical price/earnings ratios are the principal determinants of value. Haskel and Westlake note that patents are unreliable values because competitors reverse engineer product that, with newly created changes, are arguably new “unpatented” products; e.g. cell phones, computer chips, software programs, etc.

COMPUTERS AND MOBILE PHONES
Haskel and Westlake note that patents are unreliable values because competitors reverse engineer product that, with newly created changes, are arguably new “unpatented” products; e.g. cell phones, computer chips, software programs, etc.

With growth of companies like Amazon, Microsoft, Apple, Google, Uber, Facebook, et al–standard accounting practice needs more than hard assets to determine value. Though it is difficult to patent intangibles, Haskel and Westlake suggest new accounting methods are, and should be, created for today’s and tomorrow’s industries. The idea of new accounting methods leads to “Capitalism Without Capital”.

INTERNET LOGO
With growth of companies like Amazon, Microsoft, Apple, Google, Uber, Facebook, et al–standard accounting practice needs more than hard assets to determine value.

information thief
Haskel and Westlake suggest information replaces capital as the fuel for economic growth.

Haskel and Westlake suggest information replaces capital as the fuel for economic growth. They extend their argument by advising investors, lenders, and governments to increase their capital commitment to intangibles. This seems ironic in view of a remaining need for traditional capital investment to energize 21st century economic growth. However, the authors are arguing capital is a smaller part of overall economic growth; albeit a critically important part. What they are suggesting is that investment should be recognized as an asset; not just an expense. Investors and lenders should look beyond bricks and mortar as a measure of security for capital investment. Some would argue that companies like Tesla should be able to carry a higher debt load because its value is greater than the sum of its hard assets.

GOVERNMENT VS. PRIVATE RESEARCHFurther, Haskel and Westlake emphasize Governments continued subsidization and investment in research and development in those areas where near term return is problematic. The example the authors give is DARPA in its early invention as a precursor of the internet, but there are many more examples; e.g. nuclear power, computer hardware, weather prediction, space exploration, etc.

Historically, intangible value has always been with us but recognized as an expense. Haskel and Westlake suggest intangibles need to be partially and judiciously accounted for as assets. When recognized as assets, intangible values open the door to wider private and public finance.

PARADOX OF POWER

Kotkin’s first volume about Stalin’s rise to power offers lessons to modern American and Chinese governments.  China seems on one path; America another. 

Audio-book Review
By Chet Yarbrough

(Blog:awalkingdelight)
Website: chetyarbrough.blog

Stalin, Volume I: Paradoxes of Power, 1878-1928STALIN VOLUME 1

Written by: Stephen Kotkin

Narration by:  Paul Hecht

STEPHEN KOTKIN (AMERICAN AUTHOR, HISTORIAN, ACADEMIC)

STEPHEN KOTKIN (AMERICAN AUTHOR, HISTORIAN, ACADEMIC)

Stephen Kotkin offers a remarkable and comprehensive view of Russia’s 1917 Revolution in “Stalin, Volume I”.  Kotkin succinctly describes how power in the hands of one may advance a nation’s wealth, but at a cost that exceeds its benefit.

Kotkin’s first volume about Stalin’s rise to power offers lessons to modern American and Chinese governments.  China seems on one path; America another. 

The formation of “checks and balances” sustains America’s economic growth, even in the face of leadership change.  In contrast, a “rule of one” has moved China’s economic wealth to new heights, but “rule of one” threatens its future success; particularly if it follows Stalin’s, and now Putin’s mistaken path.

SIZE OF CHINA IN COMPARISON TO AMERICA
FORMER U.S.S.R.

In historical context, Kotkin profiles the three most important characters of the Russian revolution; e.g. Vladimir Lenin, Joseph Stalin, and Leon Trotsky.  Kotkin documents the personalities and circumstances of the pre-U.S.S.R.’ economy; i.e. an economy based on the disparity between wealth and poverty, federalization and centralization, political idealism and pragmatism.

MAO ZEDONG (1893-1976, FOUNDING FATHER OF PEOPLE’S REPUBLIC OF CHINA.)

MAO ZEDONG (1893-1976, FOUNDING FATHER OF PEOPLE'S REPUBLIC OF CHINA)

Three leaders in the Chinese revolution were Mao Zedong , Zhou Enlai, and Deng Xiaoping.  Zhou Enlai is the moderate of the three in trying to preserve traditional Chinese customs.  Mao is by some measures an idealist who attempts to expand the theory of communism.  His idealism creates a bureaucracy that nearly derails China’s economy.  “The Gang of Four” radicalized Mao’s idealism into a more Stalinist view of communism.  “The Gang of Four”s radicalization of Chinese communism is eventually reversed with the leadership of Deng Xiaoping, but not until after the Tiananmen Square massacre.

DENG XIAOPING (CHINA'S CHAIRMAN OF THE CENTRAL ADVISORY COMMISSION 1982-1987)

DENG XIAOPING (CHINA’S CHAIRMAN OF THE CENTRAL ADVISORY COMMISSION 1982-1987)

After Tiananmen Square, Deng recognizes the power of public dissent.  Rather than increasing suppression, Deng opens the Chinese economy to a degree of self-determination.  Deng does not abandon communist ideology.  However, he recognizes the importance of economic growth and how less doctrinal communist policy would unleash the power of people as demonstrated at Tienanmen Square.

Deng dies in 1987 and the government of China is reshuffled.  Deng’s eventual successor, President Xi, emphasizes the idealism of communism that threatens return to a Stalinist-like terror in China; i.e. a terror enhanced by technological invasion of privacy, and “big brother” control.

XI JINPING (GENERAL SECRETARY OF THE COMMUNIST PARTY OF CHINA AND PRESIDENT OF THE PEOPLE’S REPUBLIC OF CHINA)

XI JINPING (GENERAL SECRETARY OF THE COMMUNIST PARTY OF CHINA AND PRESIDENT OF THE PEOPLE'S REPUBLIC OF CHINA)

President Xi returns to Mao’s authoritarian belief in enforced collectivism with the idea of expanding China’s new-found wealth through government subsidization of industry.  Xi renews emphasis on rule by the Communist party, headed by himself.

GAP BETWEEN RICH & POOR

The growing disparity between rich and poor in both China and America is widely seen in the internet, and with increased international travel.  China’s rapid rise in economic wealth is unevenly spread, just as it is in the United States.  The difference is in how that economic disparity is addressed.

In America, private dissent is an inherent part of its history which lauds individualism, self-determination, and freedom (within the boundary of “rule of law”).  But, these characteristics denigrate American citizens who are unable or unwilling to reap the rewards of  individualism, self-determination, and freedom.  These are the Americans sleeping on America’s streets and living in their cars. 

America’s system of governance allows a rift between the rich and poor because it is based on a system of “checks and balances”.  America’s system demands debate, and more broadly considered human consequence, before government action is taken.

LIVING ON THE STREET IN AMERICA

HOMELESS

In China, the homeless are compelled to work at jobs created by the government.  China’s system of governance is driven from the top, with limited debate, and more singularly determined public consequence.  Government action is autocratically determined.

BEIJING CHINA HIGH RISES (TYPICAL IN MAJOR CHINESE CITIES 2018)

BEIJING-In China, dissent is discouraged and freedom is highly restricted, but homelessness is addressed with housing for the poor at subsidized prices. 

In ancient China, singular autocratic rule offered a mixed blessing.  Some of the world’s wealthiest and most cultured governments were created in China.  These ancient dynasties successfully expanded their economies to make China a world leader in science and industry.  At the same time, with few checks and balances, the history of China’s “rule of one” resulted in periodic social and economic collapse.

In some ways, China’s ancient civilization’s rise and fall is reminiscent of the rise and fall of the U.S.S.R. after 1917.  Kotkin describes the turmoil surrounding Russia in 1917.  The beginning of WWI and Germany’s invasion exaggerate the paradox of power in Russia.  Modern European, Asian, North American, Middle Eastern, and African countries are experiencing some of the same economic, and political disruption.

On the one hand, the peasant is a proud Russian; on the other hand, he is a slave of the landed gentry; indentured to preserve the wealth of others at the cost of his/her life.

RUSSIAN SERFS AND PEASANTS

In 1917, the Czar and wealthy aristocracy depend on a population of the poor to defend the government.  Russian peasants are faced with defending a government system that recognizes them as serfs, agricultural laborers indentured to wealthy landowners.  (A similar system existed in China prior to 1949.) 

In 1949, Mao recognizes the same inequity and judiciously separates landlords from their vast estates and re-distributes it to tenant farmers who worked for them.  Ownership restructuring improved agricultural production until Mao tried to make small collectives into large collectives with Communist party oversight.  Formation of a Chinese Communist Party bureaucracy distorted actual production and de-motivated farmers that did the real work of farming.  The result of production over-estimation caused a nation-wide famine.

KARL MARX (BORN TRIER, GERMANY 1818-DIED LONDON, ENGLAND 1883)

KARL MARX (BORN TRIER, GERMANY 1818-DIED LONDON, ENGLAND 1883)

Kotkin notes Russian social and economic inequity is a breeding ground for a Leninist/Marxist revolution.  Marx’s dialectic view of the wealth of nations suggests that governments will change based on the growing recognition of the value of labor; i.e. beginning with agrarian feudalism, growing through industrialized capitalism, and socialism; reaching to a state of equilibrium in communism (a needs-based and communal sharing of wealth).  Marx suggests all nations will go through this dialectic process.

Lenin bastardizes Marx’s dialectic idealization.  Lenin believes the process can be accelerated through revolution and centralized control of the means of production.  This idea is adopted by Mao Zedong in China in 1949 with early success.  However, Mao expands the collectivist policy with “The Great Leap Forward” in 1958.  Mao’s broader collectivist policy collapses the Chinese economy in 1962.  Thousands of Chinese die from starvation as communist overseers exaggerate food production quotas.

Collectivist expansion is an oversimplification of Kotkin’s explanation of Vladimir Lenin’s form of communism but it shows the risk of “rule of one” governance.  Even Lenin is conflicted about how Russia will grow into a communist society.

VLADIMIR LENIN (1870-1924, LEADER OF THE 1917 RUSSIAN REVOLUTION)

Lenin recognizes the social and economic distance that Russian peasants must travel to gain an appreciation of a new form of government.

Much of the Russian population, like the Chinese in 1949, were illiterate and living at a subsistence level; bounded by a non-mechanized agrarian economy.  Lenin vacillates between growth through education and growth through autocratic command.  Kotkin suggests that Lenin gravitates toward centralized command because of the need to consolidate power within the revolution.

What Lenin needed in 1917 were followers that could get things done.  Before being felled by brain disease and stroke, Lenin relies on the abilities of men like Joseph Stalin.  Mao relies on his revolutionary Red Guard.  Kotkin argues that Stalin became close to Lenin as a result of his organizational skill and his penchant for getting things done without regard to societal norms.  For Mao, close associates like Deng Xiaoping, were his enforcers.  Stalin becomes the most powerful enforcer in Lenin’s revolution.  Deng eventually becomes the leader of Communist China.

Though Stalin wields great enforcement powers, Kotkin infers Trotsky is the intellectual successor to Lenin.   Stalin and Trotsky are shown to be at odds on the fundamental direction of the Bolshevik party, the successor party of Russian communism.  However, the exigency of getting things done, as opposed to understanding the goals of creating a Leninist/Marxist government, were paramount goals for consolidating power after the revolution.  Kotkin explains how Stalin became a defender of Leninist doctrine while Trotsky became an antagonist and eventual apostate because of Stalin’s manipulation of events.

MAO AND STALIN IN 1949

MAO AND STALIN IN 1949

China waits and observes Stalin’s method for rapid industrialization of Russia.  Kotkin explains that Stalin gains an intimate understanding of Lenin’s doctrines while Trotsky chooses to compete with Lenin’s philosophical positions.  The threat of factionalism accompanies Trotsky’s doctrinal departures.

The irony of the differences between Stalin and Trotsky are crystallized by Kotkin.  Stalin’s intelligence is underestimated by both Lenin and Trotsky.  Stalin carefully catalogs and memorizes Lenin’s communist beliefs.  In contrast, Trotsky chooses his own communist doctrinal path based, in part, on Lenin’s writing.  Here, another similarity is drawn with the near religious following of Mao’s Red Book with aphorisms about governing oneself and China.

Kotkin suggests Lenin views Trotsky as a more likely successor than Stalin as leader of the country.  Lenin appreciates Stalin’s organizational ability but views Stalin’s temperament as too volatile for long-term government control.  In 1922, Lenin is said to have dictated a “testament” saying that Stalin should be removed from his position as General Secretary.  Lenin’s “testament” critiqued the ruling triumvirate of the party (Stalin, Zinoviev, and Kamenev) and others like Bukharin, Trotsky and Pyatakov but the pointed suggestion of removal for Stalin is subverted.

After Lenin dies, the triumvirate chooses to ignore Lenin’s “testament” for Stalin’s removal.  After all, Stalin is a doer; i.e. he gets things done.  Just as Stalin suppresses opposition to his interpretation of Lenin, China suppresses opposition to the Communist Party’s doctrines.  Doctrinal differences are successfully suppressed in China until the the failure of “The Great Leap Forward” in the 1950’s.  The consequence of “The Great Leap Forward”s failure is the cultural revolution in the 1960’s.

AMERICA'S GDP
CHINA'S GDP

In America’s history the economy slugs along with setbacks and successes.  Though 1929 sees the collapse of the American economy, it recovers with government intervention, the advent of WWII, and the push and pull of a decision-making process designed by the framers of the Constitution.  That push and pull is from leadership that is influenced by the checks and balances of three branches of government.  That same process saves the American economy in 2008.  The power and economy of America has grown to become the strongest in the world.

Kotkin’s research suggests young Stalin is something different from what is portrayed in earlier histories.  Stalin grows close to Lenin because he is the acting arm of Lenin’s centralized command.  Lenin relies on Stalin to get things done.  He is Lenin’s executor.  At the same time, Lenin turns to Trotsky as an economic adviser to ensure a more comprehensive understanding of what needs to be done to stabilize the revolution.  Trotsky believes in the importance of centralized control of the economy.

Both Lenin and Stalin believed in communism but the first acts on a vision of the future; the second acts on the “now”. 

DENG XIAOPING AND PRESIDENT XI

China’s Deng and Xi seem to reverse Lenin’s and Stalin’s reasoning.  Rather than Deng being like Lenin, he acts on China in the “now”. 

Xi seems more like Lenin and looks at China’s future based on the ideals of communism. However, from an American perspective, all autocrats common failing is belief in “rule of one”.

Glasnost and perestroika fail to overcome that belief.

Kotkin puts an end to any speculation about Lenin being poisoned by Stalin.  Kotkin argues that Lenin died of natural causes, strokes from a brain disease.  What Kotkin reveals is the internecine war that is waged between Stalin and Trotsky while Lenin is dying.  The strokes steadily debilitate Lenin and suspicious written pronouncements are made that may or may not have originated with Lenin.  Lenin’s secretary is his wife.  Some evidence suggests a missive from Lenin saying Stalin should not be his successor, noting Trotsky as a better choice.  Kotkin suggests such a missive is unlikely.  Lenin seems to have had his doubts about both men.

Succession in modern China seems less filled with intrigue than communist Russia but the opaqueness of China’s politics makes the rise of Xi a mystery to most political pundits.  What seems clear is that China’s rise and fall has always been in the hands of the “…one”.

PRESIDENT XI’S ONE BELT, ONE ROAD PLAN FOR CHINA’S FUTURE

CHINA'S BELT AND ROAD PLAN

History will be the arbiter for President Xi’s success or failure with a road and belt plan for China’s economic future.  The same may be said for President Trump’s focus on the virtue of selfishness for America’s economic future. The fundamental difference between America and China is Xi has no “checks and balances”; American Presidents have the Supreme Court, Congress, and a 4-year-election-cycle to assuage arbitrary government action.

AYN RAND (1905-1982)

AYN RAND (1905-1982, AUTHOR WHO FIRMLY BELIEVED IN THE VIRTUE OF SELF-INTEREST AND UNREGULATED CAPITALISM.)

In Russia, Trotsky is characterized as an intellectual while Stalin is a pragmatist.  In China, Deng is characterized as a pragmatist while Xi seems a doctrinal theorist.

In history, Trotsky is highly opinionated and arrogant.  Stalin is street smart and highly Machiavellian.  Trotsky thinks right and wrong while Stalin thinks in terms of what works.  In China, Deng is Stalin and Xi is Trotsky.  In America, Trump is Stalin and his opposition is Trotsky-like do-nothings.

Trump lost the election in 2020 because–from an American perspective, all autocrats common failing is belief in “rule of one”.

Stalin is reputed to be temperamental while Trotsky is aloof.  Though Trotsky insists on centralized control, Stalin argues for federalization.  Stalin paradoxically argues for federalization because he knows Russian satellite countries want independence, but he will act in the short-term for centralization to get things done.  And of course, Stalin clearly adopts centralized economic planning for the U.S.S.R.; i.e., another of Kotkin’s paradoxes of power.

Ironically, though Putin is now showing himself to be as ruthless as Stalin, he is unable to exercise the same level of dictatorial control. Unrest is not quelled in the face of the Russian people’s assessment of Putin’s justification for the Ukrainian war.

There is much more in Kotkin’s powerful first volume about Stalin and the Russian revolution.  Germany’s role in the revolution is a case in point.  The writing is crisp and informative.  The narration is excellent.  After listening to “…Volume I”, one looks forward to Kokin’s next which is published this year.

The past is present in Kotkin’s excellent biography of Joseph Stalin.

COMMUNISM

Audio-book Review

By Chet Yarbrough

(Blog:awalkingdelight)

Website: chetyarbrough.blog

Karl Marx: A Nineteenth-Century Life

karl marx

By Jonathan Sperber

Narrated by Kevin Stillwell

JONATHAN SPERBER (PROFESSOR AND AUTHOR)

JONATHAN SPERBER (PROFESSOR AND AUTHOR)

Having just returned from China (more about the trip in a future blog), it seems apropos to revisit Jonathan Sperber’s biography of Karl Marx.  In many respects, China’s resurgence as a major economic power suggests Marx may have outlined an economic system with some strengths, but communism and China’s form of communism have catastrophic weaknesses.

Johnathan Sperber has gathered an impressive amount of data in his history of Karl Marx’s life.  Sadly, his presentation is not equal to his collection.  Unlike biographies done by Robert Caro (who wrote “The Power Broker” about Robert Moses, the land planner of New York, and former President, Lyndon Johnson) or William Manchester (a Winston Churchill Biographer), Sperber fails to bring his subject to life.

KARL MARX (BORN TRIER, GERMANY 1818-DIED LONDON, ENGLAND 1883)

KARL MARX (BORN TRIER, GERMANY 1818-DIED LONDON, ENGLAND 1883)

Marx is considered by some to be one of the three most influential economists that ever lived (Adam Smith and John Maynard Keynes being the other two.)   That high praise is not forcefully presented in Sperber’s biography.  Sperber offers facts but leaves coherence to the reader.

Marx means something to the 21st century.  Some might argue America is reaching a point in the history of capitalism that is foretold by Marx’s theory of socialist economics.  As Sperber notes, Marx believed capitalism was a step in the economic evolution of the world, leading to a governmental revolution.  Marx believed capitalism would reach a nadir of conflict between haves and have-nots because of social inequity inherent in capitalist economies.

As Sperber notes, Marx lived through and wrote about social conflict created by feudalism and capitalism in the mid-nineteenth century.  Marx is raised in Prussia, ruled by a Czar in a feudal economic system. He witnesses growing discontent of feudalistic working-class Russia.

'Remember, an economic boom is usually followed by an economic kaboom,'

Marx created a theory of economic evolution showing feudalism, capitalism, socialism, and communism as progressive improvements in the lives of all people.

feudalism

Feudalism grew out of the rule of Kings and Czars with a small aristocracy receiving privileges of wealth and property with the bulk of human civilization indentured to the privileged class.

As the indentured, under-privileged population grew, discontent led to revolution.

Aristocracy Government

In 1776, America broke with English aristocracy to form a “checks and balances” democracy; in 1789, the French population broke with absolute monarchy to form a populist democracy; in 1848, German states rebelled against the aristocratic Prussian confederation of thirty-nine states ruled by an aristocracy and chose various forms of government to establish their own nationalist identities.

DENG XIAOPING (CHINA'S CHAIRMAN OF THE CENTRAL ADVISORY COMMISSION 1982-1987)

DENG XIAOPING (CHINA’S CHAIRMAN OF THE CENTRAL ADVISORY COMMISSION 1982-1987,) In 1980 Deng Xioping, though maybe not in a revolutionary sense, changed the direction of communism in China.

Each Chinese change in governance led to more liberal, slightly more democratic, and capitalist economies.

China did not abandoned communism but insisted on a more pragmatic way of governing.  Deng’s famous quote,  “It doesn’t matter whether a cat is black or white, as long as it catches mice. …. “,  crystallizes China’s insistence on a communist form of government.

XI JINPING (GENERAL SECRETARY OF THE COMMUNIST PARTY OF CHINA AND PRESIDENT OF THE PEOPLE'S REPUBLIC OF CHINA)

XI JINPING (GENERAL SECRETARY OF THE COMMUNIST PARTY OF CHINA AND PRESIDENT OF THE PEOPLE’S REPUBLIC OF CHINA)

The current President of China, Xi Jinping, reinforces Communism in China by imposing party rule over China’s semi-autonomous provinces; e.g. Tibet and Hong Kong.

Hong Kong is presently in the throes of resistance to China’s encroachment on their semi-autonomous existence. Hong Kongers’ discontent could be seen in traveling to Hong Kong months before today’s demonstrations.

As nations prospered during the industrial revolution, more mercantile economies formed.  Aristocracy became broadly defined by wealth rather than inheritance.  Parliaments and congresses were created to represent wider population interests.

However, Sperber explains Marx believed that the greatest part of nation-state citizens remained in poor economic condition; even when based on mercantilism.  Marx, looked at the economic condition of the world, and noted that transition from feudalism to mercantilism only marginally improved living conditions for the majority of state citizens and, in fact, actually worsened the condition of the young and impoverished who worked long hours for little pay.  To Marx, capitalism just exacerbates the mercantile economic condition of the poor.

CHINA MOVING 250 MILLION PEOPLE INTO CITIES ACCORDING TO THE NEW YORK TIMES

CHINA IS MOVING 250 MILLION PEOPLE INTO CITIES ACCORDING TO THE NEW YORK TIMES (Housing is un-affordable for a large percentage of new city dwellers.  The government of China subsidizes housing for many Chinese that come from rural areas.)

In 2018, it seems China may be reaching a capitalist tipping point where low wages do not cover the cost of living.  Though many Chinese have moved from rural areas, wages remain low in comparison to the cost of living.  Housing and health coverage is un-affordable for a large percentage of new city dwellers.  The government of China subsidizes housing for many Chinese that come from rural areas to mitigate the plight of the poor.

ADAM SMITH (1723-1790, AUTHOR OF -THE WEALTH OF NATIONS)

ADAM SMITH (1723-1790, AUTHOR OF -THE WEALTH OF NATIONS) Marx developed the labor theory of value to suggest that classical economic theory suggested by Adam Smith leaves too many people in the gutter.

Marx felt Smith did not properly quantify the value of labor.  Marx argued that capital was created to benefit owners at an unfair expense to labor.

Marx believed capitalist aristocracy continued to victimize the working class, trading one form of indenture for another.  Marx suggested democracy was an evolution for economies that widened the benefited population but still left most workers underpaid, undernourished, and disadvantaged.

Sperber clearly points out that Marx did not believe that communal ownership of property redressed the inequities of state’ economies; i.e. Marx argued that inequity is caused by capital creation that only benefited ownership and undervalued labor that created capital.

China’s current experience seems to show Marx may have been right to believe communal ownership has little to do with state’ economics because communal ownership remains a dominant factor in China’s extraordinary economic resurgence.  Property is not owned by individuals in China.  Land is either owned by a collective or by the State.

BEIJING CHINA HIGH RISES (TYPICAL IN MAJOR CHINESE CITIES 2018)

Though land cannot be owned by Chinese citizens, distribution of capital has been widely increased through rising prices of high-rise condominiums. Many high-rise condominiums are owned by individual Chinese.  Some citizens inherited or bought condominiums at such low prices–appreciation made them rich.

CHINA MAP

The fly in the ointment of their newfound wealth is the price of sale must be agreed upon by the government which creates an artificial bubble that may burst into hyper-inflation, with the potential for a nation-wide economic collapse. 

China moves to address a potential economic collapse in an inventive and creative way. What China is doing--is trying to widen their market for goods with an economic growth plan called "Belt and Road".  China invests billions of dollars in other countries infrastructure.  China is betting that these improvements will create consumers for Chinese manufactured products.  A side benefit is that these infrastructure improvements offer employment to Chinese citizens and businesses.  (As can be read in news magazines like the Economist and papers like the Wall Street Journal and New York Times, some nations resent China's investments in their countries for various nationalist and economic reasons.)
China is also investing in the world's natural resources to expand their manufacturing capability.  The question is whether these long-term investments will pay off in time to stabilize China's construction market. The construction market is where individual Chinese citizens carry their wealth. Condominium prices will reach a limit.  In 2018, a 300 square foot condominium sells for over $500,000 in China's larger mainland cities.  That is nearing $2,000 per square foot (and Chinese buyers do not own the land).  In the United States, most housing is less than $200 per square foot; including the land.   Continued wealth distribution in China depends on the success of the "Belt and Road" program.

Marx supported worker unionization’s effort to equalize benefit through a more equitable distribution of capital.  He was deeply involved in the “International Workingmen’s Association” (aka First International).  Herein lays the evolution of capitalism to socialism and Marx’s belief (and maybe Xi’s belief) in the fairness of economic communism.  Modern China seems to be addressing the idea of a more equitable distribution of capital on paper, but the paper is based on what appears to be an unsustainable real estate market.

INCOME GAP

Piketty argues that the income gap widens once again, after World War II.  He estimates 60% of 2010’s wealth is held by less than 1% of the population; with a lean toward the historical 90% threshold. Moneyed interests have become the new aristocracy, as repressive and privileged as the Kings and Czars of the mid-19th century.

One can disagree with Marxian theory but the widening gap between haves and have-nots (the 1% and 99%,) is a real-world concern in the 21st century.

Marx’s solution for economic inequity is flawed but the condition he describes in the evolution of economies seems prescient. To most Americans, Marx’s communism is not the answer. 

RAZOR'S EDGE

When CEOs of companies are making over 200 times average laborers’ income, there is a glaring problem in the current condition of capitalist economies. Instead of income differences, it is housing value in China.  China is on a razor’s edge that may as easily cut their throat as shave their face.

This is a disappointing book because it garners too little interest in the power and influence of Marx’s economic theories.  However, it offers insight to what Marx may have had right (the importance of distribution of wealth) and what he had wrong (communal productivity).  China is using a different vehicle than America for distribution of wealth but the principle of wealth-distribution addresses what ails all forms of government.

PARODY OF LIFE

Audio-book Review
By Chet Yarbrough

(Blog:awalkingdelight)
Website: chetyarbrough.blog

Babbitt

Babbitt

Written by: Sinclair Lewis

Narration by:  Grover Gardner

SINCLAIR LEWIS (1885-1951 AMERICAN NOVELIST-FIRST TO RECEIVE THE NOBEL PRIZE IN LITERATURE)
SINCLAIR LEWIS (1885-1951 AMERICAN NOVELIST-FIRST TO RECEIVE THE NOBEL PRIZE IN LITERATURE)

Sinclair Lewis’s “Babbitt” is categorized as a satire, a parody of life in the early roaring twenties, but its story seems no exaggeration of a life in the 20th or 21st century.  Published in 1922, it is considered a classic.  It is said to have influenced Lewis’s award of the Nobel Prize for literature in 1930.  (Lewis is the first American to receive the Nobel Prize in Literature.)  Lewis is highly praised for describing American culture.  “Babbitt” is the eighth of thirteen novels Lewis published by 1930.  Lewis creates a body of work that intimately exposes strengths and weaknesses of American democracy and capitalism.

Reader/listeners are introduced to George F. Babbitt, a man in his forties.  Babbitt is a realtor.  He is successful financially; bored, and relatively happy in his married-with-children’ life.  His best friend, Paul, is equally bored, less financially successful, but deeply unhappy in his marriage.  Paul is harried by a wife that men categorize as shrewish.  Babbitt’s best friend chooses to cheat on his wife.  When Babbitt finds Paul in a clandestine meeting at a Chicago restaurant, he waits for him at a hotel to try to understand what is happening.

VIOLENCE AGAINST WOMEN
DOMESTIC ABUSE VICTIM (Lewis writes a satiric vignette where women are rarely viewed as equal to men, and expected to forgive men for violent treatment.)

In a male-bonding moment Babbitt forgives Paul and agrees that his friend’s wife is a shrew.  Babbitt offers to mislead the betrayed wife by lying about her husband’s out-of-town business trip.  Later, the spurned wife argues with Paul.  Paul responds by shooting her in the shoulder.  Babbitt sticks by his friend; even when he is convicted and sentenced to prison for three years.

After a year of his friend’s incarceration, Babbitt tries to get the spurned wife to forgive her husband and petition the parole board to release Paul early.  She neither forgives nor forgets.  She chastises Babbitt for his deluded belief that her husband deserves any leniency.  This seems a satirical vignette where women are rarely viewed as equal to men, and expected to forgive men for violent treatment.

INFIDELITY
Babbitt, Lewis’ anti-hero, deludes himself with the idea that another sexual relationship in his life is his right, and that it will not hurt anyone.

In his mid-forties Babbitt is becoming more restless.  He rationalizes infidelity and discounts the value of his wife and family.  He chooses to cheat on his wife because he feels his wife does not understand him.  Babbitt deludes himself with the idea that another sexual relationship in his life is his right, and that it will not hurt anyone. One may presume this is another satirical vignette.  On the other hand, how many men and women rationalize their way to extra marital affairs today?

Lewis, through his characters, infers there is a struggle for fair, if not equal treatment, in women.  In “Babbitt”, Lewis never gives women a role as superiors or equals that have intellectual interests in government, society, or culture.  Rather, Babbitt suggests women often feign interest in a man’s thoughts for the desire of companionship, attention, and affection.

GENDER INEQUALITYBabbitt implies women rarely seek intellectual stimulation or sexual gratification.  Men are shown to classify women as shrewish because they are pushing husbands to be more expressive and attentive. There are many ways of interpreting Lewis’s intent but this is not an exaggerated satire, it is a truth of many men’s view of women.

WOMEN AND THE LADDER TO SUCCESS
An underlying theme in “Babbitt” is the inequality of American capitalism.  Women and most minorities are less equal because they are either not in the work force, or in the work force at a lower wage.

An underlying theme in “Babbitt” is the inequality of American capitalism.  Women and most minorities are less equal because they are either not in the work force, or in the work force at a lower wage.  The union movement is struggling for recognition in the 1920s because of low wages being paid by business owners.  Lewis suggests Babbitt begins to modify his opinion about the labor movement as he becomes entangled in the lives of less successful Americans like Paul and his spurned lover.

Wealthy capitalist see the answer to the union movement is electing a business President that cracks down on unions.  Capitalists who have money and power classify the union movement as anarchic, communist, or socialist.  (This sounds familiar today.)  Babbitt suspects there is something wrong when he sees some union supporters are from the educated class.  What makes Lewis’s observations fascinating is that they are written when America is in the midst of the roaring twenties; before the 1929 Wall Street’ crash. In the early 1920s, capitalism seems to be a tide raising all boats when in fact it is a torpedo being readied for launch.

Trump Cartoon About Unions
Wealthy capitalist see the answer to the union movement is electing a business President that cracks down on unions.

Babbitt experiences peer pressure that causes him to recant any perceived support of union sympathizers and eventually returns to the fold of do-nothing conservatism.  He recants his libertine ways and returns to hearth and home. But Lewis offers a twist by having Babbitt’s son shock the family by rebelling against standards of upper middle class life.  He decides to marry without the blessings of his family or his church.  George F. Babbitt is the only family member who whole heartedly supports his son’s unconventional act.

Babbitt writes in the midst of a burgeoning American industrial revolution.  It seems what happened in the 1920s is similar to what is happening today.  The industrial revolution is now the technology revolution; women are still undervalued, many Americans want a business President elected, and unions are being busted.  Today’s young men and women are still breaking social conventions.  The stage seems set.  One hopes 2018 is not America’s roaring twenties; pending another economic crash.

 

TSAR PUTIN?

Audio-book Review
By Chet Yarbrough

(Blog:awalkingdelight)
Website: chetyarbrough.blog

The New Tsar: The Rise and Reign of Vladimir Putin

Written by: Steven Lee Myers

Narration by:  Rene Ruiz

STEVEN LEE MYERS (DIPLOMATIC CORRESPONDENT, WASHINGTON BUREAU, THE NEW YORK TIMES)

Steven Lee Myers, NYT’s reporter and author.

Steven Lee Myers has written a highly polished and informative biography but fails to convince one that Putin is a Tsar.  Putin is more Richard Nixon than Catherine the Great.   Putin, like Nixon, is smart and thin-skinned.  Putin, like Nixon, makes personnel decisions based on loyalty, and views the world in real-politic terms.

Myers shows Putin comes from a family of Russian patriots with a grandfather and father that fought in Russian armies in different generations.  Each lived during the Stalinist years of Gulags and terror but none rebelled against the power of Russia’s leadership.

Myers explains how Putin becomes interested in the KGB at the age of 16 and grooms himself for a life in the secret service.  Putin’s KGB-influenced’ career-path is to become an attorney.  He learns German and is assigned to East Germany in his first years as a KGB agent.

Myers explains how Putin’s steely disposition grows in East Germany, and later St Petersburg, Russia. Putin keeps a low profile but exhibits bravery, independence, and initiative when his country’s leaders are overwhelmed by the fall of the Berlin Wall and the Iron Curtain.

ANATOLY SOBCHAK AND VLADIMIR PUTIN (ST. PETERSBURG, RUSSIA)

Putin becomes the “go-to” guy for the Mayor of Leningrad (aka St. Petersburg).  Putin’s relationship to the Mayor of Leningrad, Anatoly A. Sobchak, is founded on loyalty. 

Sobchak is initially recognized as a representative of new Russia but the power of his position is diminished by the ineptitude of his administration.  In spite of Sobchak’s mistakes, Myers shows that Putin stands by him.  Loyalty is a characteristic of Putin that is expected of all who work with him.  Eventually Sobchak is electorally defeated and Putin is left out of a job.  

Putin’s relationship with the mayor of Leningrad reminds one of his support for Lukashenco, the President of Belarus, who illegally diverted a commercial airline to capture a government political dissident (Roman Protasevich). 

Roman Protasevich (Belarusian journalist and political dissident.)

Alexander Lukashenko (President of Belarus)

In a televised June 4th, 2021 confession by Protasevich, Lukashenco embarrasses himself and his country with coerced praise by the Belarus President. This reminds one of Stalin’s show trials.

Russia is unlikely to return to hegemonic control of adjacent countries. Ethnic nationalism and desire for greater freedom are unquenchable thirsts.  Ukraine, Georgia, and even Belarus, seem unlikely to rejoin Russia in a new Socialist Republic.

FORMER U.S.S.R.

Russia is equally unlikely to be ruled by a Tsar again because its population is better educated; aware of the value of qualified freedom, insured by relative social stability, and security.

Russia will remain a major international power and influence in the world.  Nuclear capability and cybernetics (particularly as a weapon of political and economic disruption) guarantees Russia’s position in world affairs.

Forcing Ukraine or Georgia to return to the Russian block or quelling Chechen resistance is beyond the military strength of Russia’s Putin or his successors.  Reassembly of a form of the U. S. S. R. is only conceivable based on political accommodation based on economic influence or volitional federation.  Neighboring countries can only be seduced; i.e. either by economics, or cybernetic influence.  A majority vote of neighboring countries; not military dominion, will be the “modus vivendi” for Russian expansion.

But what about the Crimea.  It is a part of the Ukraine.

An argument can be made that territory of the Crimea is not an exception.  Millions of dollars were spent by Russia to modernize Crimea for the Olympics.  Undoubtedly, a great deal of time was spent influencing Crimea’s population (which is ethnically 65% Russian).  It is conceivable that a majority of the Crimea residents voted to become part of Russia.

Of course, this sets aside the truth of Crimea’s territorial and nationalist connection with Ukraine.  One might argue this is analogous to Hitler’s invasion of Czechoslovakia.  Hitler used the excuse that ethnic Germans were being abused in the Sudetenland.  In this view, Putin is no Tsar; i.e. he is more Stalinist accolade.

(To make Crimea the equivalent of the Sudetenland one might ask oneself if the majority in the Sudetenland were ethnic Germans, and was there a vote by Sudetenland residents.)

Crimea

Undoubtedly, a great deal of time was spent influencing Crimea’s population. 65% of the Crimea’s population is ethnically Russian.  It is not inconceivable that a majority of Crimea residents voted to become part of Russia

Myers cogently reveals the strengths and weaknesses of modern Russian rule.  In a limited sense (limited by Myers’ independent research and fact checking), Myers’ corroborates the experience noted in William Browder’s book, “Red Notice”.  Putin is certainly capable of undermining the influence or action of any person who chooses to challenge his authoritarianism.

WILLIAM FELIX BROWDER (AKA BILL BROWDER-CEP AND CO-FOUNDER OF HERMITAGE CAPTIAL MANAGEMENT, NOTED CRITIC OF PUTIN)

American-born British financier and political activist.

In spite of Putin’s great power, Myers shows there are chinks in his invincibility.  Putin’s sly manipulation for re-election after Medvedev’s only term as President fails to quell the desire for freedom of Russian citizens.  Just as Watergate exposed the hubris of Nixon, Putin will suffer from the sin of being a flawed human being.  Putin, like Nixon, is a great patriot of his country but neither exhibit the inner moral compass that make good leaders great leaders.  This is a reminder of the 45th American President who focused on the business of America; not its role as a beacon for freedom and equality of opportunity.

An odd article in the NYTs (4/6/22) notes America is perplexed by what Putin owns in order to punish him with confiscation or restriction of assets. Putin is a true believer in communism. His position and property are owned by the State. In one sense that makes Putin vulnerable because his money, power, and prestige is dependent on his government’ position. In another, his position insulates him from international economic sanction.

Trump-Putin summit in Helsinki

U.S. President Donald Trump and Russian President Vladimir Putin shake hands as they hold a joint news conference after their meeting in Helsinki, Finland, July 16, 2018. REUTERS/Leonhard Foeger

Myers creates a convincing portrait of a man who is subject to the sins of most who rise to power.  Putin believes he has become a god among men.  He rationalizes his greed by thinking the fate of Russia’s re-ascendance lies in his hands.  Even in the days of Stalinist governance, relationship to the leader was the sine ne quo of wealth and power.  Putin carries on that tradition.  Putin’s friends and associates from the KGB and his tenure in St. Petersburg are critical components of Putin’s control of the economy and government.

Putin is no Tsar but he could have been if education had not advanced society and freedom of expression  had not entered the internet age.

TODAY’S LUDDITES

Audio-book Review
By Chet Yarbrough

(Blog:awalkingdelight)
Website: chetyarbrough.blog

The Glass Cage-Automation and Us

By: Nicholas Carr

Narrated by: Jeff Cummings

NICHOLAS G. CARR (AMERICAN WRITER-FORMER EDITOR OF HARVARD BUISNESS REVIEW)

NICHOLAS G. CARR (AMERICAN WRITER-FORMER EDITOR OF HARVARD BUSINESS REVIEW)

The Glass Cage, written by Harvard alumnus Nicholas Carr, ironically places him in the shoes of an uneducated English textile artisan of the 19th century, known as a Luddite.

Luddites protested against the industrial revolution because machines were replacing jobs formerly done by laborers.  Just as the Luddites fomented arguments against mechanization, Carr argues automation creates unemployment and diminishes craftsmanship.

WORKMEN TAKE OUT THEIR ANGER ON MACHINES DURING THE INDUSTRIAL REVOLUTION. (Just as the Luddites fomented arguments against mechanization, Carr argues automation creates unemployment and diminishes craftsmanship.)

Workmen take out their anger on the machines

Carr carries the Luddite argument a step further by inferring a mind’s full potential may only be achieved through a conjunction of mental and physical labor.  Carr posits the loss of physical ability to make and do things diminishes civilization by making humans too dependent on automation.

There is no question that employment was lost in the industrial revolution; just as it is in the automation age, but jobs have been and will continue to be created as the world adjusts to this new stage of productivity.

INDUSTRIAL REVOLUTION

Unquestionably, the advent of automation is traumatic but elimination of repetitive industrial labor by automation is as much a benefit to civilization as the industrial revolution was to low wage workers spinning textile.

The Covid19 pandemic of 2020 will accelerate world’ transition to automation. Though this book is written earlier than the pandemic’s economic consequence, corporations are reevaluating the necessity for office buildings to conduct their business. More and more employees will work from home.

Employment adjustment is traumatic.  The trauma of this age is that work with one’s hands is being replaced by work with one’s brain.  The education of the world needs to catch up with socio-economic change; just as labor did in the 20th century.  To suggest humans do not learn when they cannot fly a plane, build a house, or construct an automobile with their own hands is a specious argument. 

Houses and cars have not been built by one person since humans lived in caves and iron horses replaced carriage horses.  Houses and cars were built by teams of people who worked with their hands but only on specific tasks.  Those teams of people were managed by knowledge workers.

ASSEMBLY LINE WORK

Service and education for society are the keys to the transition from industrialization to automation.

QUANTS

Automation of tasks reduces the mind numbing, low pay work of laborers.  Automation turns manual labor into the development and education of people who design hardware and software to execute tasks that result in more safely flown planes, new houses, new cars, new refrigerators, so on and so on.

Carr suggests that airplane pilots should be given more control over automated planes they fly despite the facts he quotes that clearly show plane crashes kill fewer people today than ever in history.  They are bigger, faster, and more complicated to fly.  The argument that pilots need to learn how to fly a jumbo jet when automation fails is like telling a farmer to pull out his scythe to harvest the wheat because the thresher quit working.

Carr’s argument is that pilots have forgotten how to fly because automation replaced their skill set.  To state the obvious, planes are not what they were 100 or even 10 years ago.

WRIGHT UNPOWERED AIRCRAFT

One might argue that Boeing’s 737 Max mistakes are evidence that Carr is correct in suggesting planes have become too complicated, but it ignores the reality of mistakes have always being made by humans. Humans are preternaturally motivated by self-interest.

Boeing’s leaders made mistakes in not fully analyzing and disclosing risks of 737 changes, and in not adequately training airline pilots on the safety features of the plane.

Carr raises a morality argument for not saving life when an automated machine makes a decision rather than a human being.  One can suggest an example of how an automated machine is more likely to make the right decision than a human.

For example, presume a driver-less car is programmed to save its occupant when an injured bicyclist is laying in the street around a blind curve. A fast moving automated car with a family inside, with mountain cliffs on both sides of the road, will drive over the bicyclist without conscience.  The bicyclist is dead but the car passengers are alive.   If the car is driven by a person, both the cyclist and the family are likely dead. 

THINKING SLOW
Carr’s argument is that humans need to make their own intuitive decisions.  As pointed out by Daniel Kahneman in “Thinking Fast and Slow”, the primary “think fast” mode in humans is intuition, which is often wrong.

Without doubt, many automation errors (e.g., the 737 Max) have been and will be made in the future, but to suggest automation is not good for society is as false as the Luddites arguments about industrialization.

This period of the world’s adjustment is horrendously disruptive.  It is personal to every parent or person that cannot feed, clothe, and house their family or themselves because they have no job.

Decrying the advance of automation is not the answer.  Making the right political decisions about how to help people make job transitions is what will advance civilization.

OTHER gods

Audio-book Review
By Chet Yarbrough

(Blog:awalkingdelight)
Website: chetyarbrough.blog

The Attention Merchantsthe attention merchants

By Tim Wu

Narrated by Marc Cashman

TIM WU (AUTHOR, PROFESSOR OF LAW AT COLUMBIA )
TIM WU (AUTHOR, PROFESSOR OF LAW AT COLUMBIA )

Not since “The Powers That Be” (published in 1979) has there been a better history of the media industry.  Tim Wu is heir to David Halberstam.  First there were newspapers, then radio, then television, and now the world-wide web.  Wu offers a modern vision of media’s impact on society in “The Attention Merchants”.

Gone are many of the famed “…Attention Merchants” like Bill Bernbach, Neil French, and David Ogilvy.   They were the early influencers; i.e. the copy writers, and agents that created consumer advertising for Sulzberger, Chandler, Hutchins, Paley, and Luce.  They worked for founders of some of the most influential newspaper, radio, television and magazine outlets of the 19th and 20th centuries. They were the “gods” of a newly formed consumer society. Consumers read, watched, and listened to pitches for everything from votes to vitamins to the latest model Cadillac.  Wu shows pitches remain the same, but methods have changed.

DAVID HALBERSTAM'S SEMINAL WORK ON THE MEDIA INDUSTRY (PUBLISHED 1979)
DAVID HALBERSTAM’S SEMINAL WORK ON THE MEDIA INDUSTRY (PUBLISHED 1979)  Gone are many of the famed “…Attention Merchants” like Bill Bernbach, Neil French, and David Ogilvy.  They were the “gods” of a newly formed consumer society. Consumers read, watched, and listened to pitches for everything from votes to vitamins to the latest model Cadillac.

Today’s social, political, and economic consumers are recorded, manipulated, spindled, and controlled by “other gods”.  Modern “…Attention Merchants” are internet entrepreneurs like Amazon’s Jeff Bezos, Google’s Larry Page & Sergey Brin, Microsoft’s Bill Gates & today’s CEO Satya Nadella, Apple’s (now deceased) CEO, Steve Jobs & today’s CEO Tim Cook, Facebook’s Mark Zuckerberg, and Netflix’s Reed Hastings. Television, newspapers, radio, and magazines still capture our attention but not like past “…Attention Merchants”.  Old media are still with us, but computer screens and mobile phones have joined the mix.  Wu shows how the public’s decisions have become less volitional, more manipulated, and addictive as www. sites came into being and technology matured.

INTERNET LOGO
Old media is still with us, but computer screens and mobile phones have joined the mix.  Wu shows how the public’s decisions have become less volitional, more manipulated, and addictive when www. came into being and technology matured.

MARLBORO MAN
Neither smoking or “free” access to information is without harm or cost.  The Marlborough man is dead, and “free” internet information is not free.

Wu recounts how advertising became a critical part of early media’s power, influence, and profit.  Just as advertisers promoted false benefits of smoking in the 20th, internet advertisers promote false benefits of free access to information and entertainment in the 21st century.  Neither smoking or “free” access to information is without harm or cost.  The Marlborough man is dead, and “free” internet information is not free.  “Fake news” has always been in the “…Attention Merchant’s” tool box but Wu shows that a new dimension is created with the rise of “free” information technology.

The internet not only informs the public, i.e., it distracts society, distorts facts, and reveals intimate details of personal lives. Internet users become products, rather than just consumers. Information gathered on consumers is provided to government and sold to private enterprise.

More ominous than media distortion by capitalist manipulators is government-controlled media that distorts truth to justify the Ukraine war.
ukraine bombing

Personal information is used by governments, and private sector businesses to achieve their own purposes.  Power and control become centered on organizations rather than individuals.  Data mining is a new industry. Decisions are less determined by personal being and private belief.  Today, decisions are shaped by a society “under the influence” of government, and private sector’s “…Attention Merchants”.

data mining
Personal information is used by governments, and private sector businesses to achieve their own purposes.  Power and control become centered on organizations rather than individuals.  Data mining is a new industry.

facebook
In this Facebook age, there are few secrets about what one likes and what one is willing to pay for product.

Wu notes how today’s “…Attention Merchants” are different.  Advertisers have always tried to influence individuals.  Advertisers have always told lies or distorted truth to get buyers to buy and believe.  Wu explains the difference.  Now personal information is acquired with confused consent by users of the internet. In this Facebook age, there are few secrets about what one likes and what one is willing to pay for product.

Customers are no longer just consumers.  Wu notes customers have become products.  Customers are sold to the highest bidder without customer awareness or compensation.  Today’s “…Attention Merchants” argue that sales pitches are customized to what the customer wants.  Businesses rationalize access as the customer’s compensation.  Government rationalizes access as a way of staying in touch and understanding the public.  Wu implies both arguments are willful misrepresentations.

consumer's mind
Consumers have less control over their decisions because “…Attention Merchants” use intimate personal information to seduce conscious and unconscious motivation.

There is a cost to voters and consumers because personal information is being sold without pay for product that enriches “…Attention Merchants”, private enterprise, and government.  The product delivered is the personal information that reveals who we are, what we think, what we desire, and what we are willing to pay.  Consumers have less control over their decisions because “…Attention Merchants” use intimate personal information to seduce conscious and unconscious motivation.

The sinister aspect of Wu’s explanation is that “…Attention Merchants” now have tools that exaggerate the impact of “fake news”.  By knowing intimate beliefs of consumers, “…Attention Merchants” are able to create algorithms that funnel “fake news” that feeds what consumer’s may either accurately or inaccurately believe.  Prejudices and discrimination are reinforced.  The worst characteristics of political populism are reinforced.  “The Attention Merchants” expand control of individual thought so that the course of democratic elections, government policies, or business successes can be unduly influenced by false or misleading information.

wikipedia
The positive aspect of the internet is shown by sites created without advertising input; e.g. Wikipedia and some blogosphere creations abjure advertising as a source of compensation.

Wu notes there are glimmers of hope with a growing recognition of the impact of the internet. The internet broadens human understanding of the world. The positive aspect of the internet is shown by sites created without advertising input; e.g. Wikipedia and some blogosphere creations abjure advertising as a source of compensation.

Exposure of blind spots in acquisition of personal data are currently being exposed in congressional hearings with Facebook CEO, Mark Zuckerberg.  At the same time, Russian interference in American elections is being more seriously investigated.

As Marie Currie is to have said— “Nothing in life is to be feared.  It is only to be understood.  Now is the time to understand more, so that we may fear less.”  Of course, one might remember, she died from the radiation she received from her discoveries.  (Ironically, Marie Currie’s death was found not to be from radiation exposure.  In autopsy, her body radiation levels were within normal range.)

COST OF CHANGE

Audio-book Review
By Chet Yarbrough

(Blog:awalkingdelight)
Website: chetyarbrough.blog

Factory Girls

By Leslie T. Chang

Narrated by Susan Ericksen

LESLIE CHANG (AUTHOR)

Leslie Chang is perfectly suited for this journey into the heart of China’s economic transformation. 

Ms. Chang works for the “Wall Street Journal”.  She has family generational experience of imperial and communist China from the 1920s to the present; she speaks Mandarin Chinese, and grew up in the United States.  Chang brings intimate perspective to the dynamics of economic and social change in 21st century China.

CHINESE FACTORY WORKERS

“Factory Girls” gives the world a glimpse of the tremendous cultural change occurring in today’s China.

Sixteen year old girls are leaving rural China to seek their future in the City.  With little formal education, they are fuel for the engines of China’s rapid industrial growth.  Chang follows several of these amazing young women back and forth from their rural beginnings to their immersion in the difficult life of factory work.

CHINA'S FARMING INDUSTRY

At home on one acre farms there is nothing for young women to do but eat, sleep, and be treated as a burden and betrothal obligation.

CHINESE WORKER IN THE CEMENT INDUSTRY

Anomie, culture, tremendous ambition, boredom, and opportunity lure these young women into an unknown world of commerce.  Chang notes there is little Chinese law to protect children from the abuses of industrialization.

The city beckons because it offers more than the limited opportunity of baring male children. China’s cultural history emphasizes male value and female inferiority to fuel the ambition of young women anxious to prove themselves.

The drive for money, power, and prestige are as clearly evident in women as in men.  Those drives have been unleashed by China’s industrial transformation. 

The consequence to factory girls is good and bad; i.e. a consequence of living any life.  But, for the factory girls, Chang seems to infer the cost of change is less than the cost of staying on the farm.

SIZE OF CHINA IN COMPARISON TO AMERICA

China is not America.  Though about the size of America, China has a population of 1.31 billion; America 325 million.

Chang’s book is frightening to American parents who have the luxury of endorsing extended childhood through college for those who have a high school education.

Imagine a sixteen year old daughter taking a train to a city where she knows no one; has no financial support, and is expected to make her own living.

It is hard to imagine an American daughter that has no opportunity except as a barer of male children.  What is a young Chinese girl to do if her life options are limited? What is any human to do if their options are unfairly limited?  The poor in America know, but that is another book.

“Factory Girls” is an impressive report of the massive cultural change occurring in China.  It is an astounding affirmation of the “will to power” explained by Friedrich Nietzsche. It is the drive of the superman (or woman) to perfect and transcend the self through the possession and exercise of creative power.

One cannot help but admire the factory girls of China; i.e. as difficult as the reality of their lives seems to be.