AMERICA AND CHINA

Audio-book Review
By Chet Yarbrough

(Blog:awalkingdelight)
Website: chetyarbrough.blog

Red Flags

By: George Magnus

Narrated by : Derek Perkins

George Magnus (Author, UBS Economist, International Banker, Globalist.)

As a former UBS economist and Associate at the China Centre at Oxford University, Magnus studied economic progress in China. He has acted as an adviser to asset management companies that dealt directly with China.

George Magnus develops a cogent argument that illustrates differences between American and Chinese economic strengths and weaknesses.

Magnus develops his analysis by recalling the history of China. He recounts a country ruled by authoritarian Emperors, a nationalist dictator (Chiang Kai-shek) and communist revolutionaries (Mao and Deng Xiaoping). He then offers an analysis of the revisionist leader, President Xi Jinping.

After Mao’s death Deng Xiaoping chose to expand; some would say re-envision, Mao’s version of communism.

Deng continued centralized party control but recognized the value of private enterprise in meeting GNP goals. Deng’s theory of communism is exemplified by his comment that “It doesn’t matter if a cat is black or white; as long as it catches mice, its a good cat.”

Deng still believed in a controlled or “planned economy” but opened the door to private enterprise. The results speak for themselves.

However, Magnus notes that Xi is returning to a more ideological form of communism. The cat has to be more of one color. Xi re-emphasizes party’ planned control of the economy. Magnus suggests this is a red flag portending economic trouble.

Magnus explains the growing importance of State Owned Enterprises (aka SOE’s) is raising China’s debt. Magnus argues Xi’s focused attention on increasing GNP is a red flag because of its negative economic impact on a burgeoning middle class. The middle class is earning less even though GNP continues to rise.

Magnus explains China’s middle class is not proportionately benefited by an increasing GNP.

This disproportionality exists in the United States as well as most post-industrial nations. The gap between rich and poor in America is well documented in Piketty’s book about “Capital in the Twenty First Century”.

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. 

However, America is acknowledged by the world as a capitalist country that encourages and multiplies innovation. Even Putin, in a “60 Minutes” interview, applauded America’s innovation. Putin expressed a wish for the same level of innovation in his own country. Controlled economies limit innovation to a few controllers. Capitalist economies expand innovation based on a multitudinous and diverse citizenry.

Here is a major difference between America’s and China’s economies. Innovation is a fundamental value of capitalism, noted by Adam Smith in the “The Wealth of Nations (published in the 18th century).

Magnus implies another distinction between America and China.

Magnus notes that a misstep by a President in China has a wider affect on the local economy than a misstep by an American President.

Magnus notes China can more quickly respond to an economic crises. America is more deliberative. The chance of being correct or wrong when taking action is quickly implemented in China. Quickness is both a danger and a benefit. It is a danger when the decision is wrong; a benefit when it is right. (One would be hard-put to suggest China did not respond more correctly and quickly to the Covid19 pandemic than the United States.)

Magnus relates an example of the value of China’s economic strength in its avoidance of much of the 2008 financial crises.

At the same time, Magnus notes the red flag of too much control by a top down manager can be catastrophic. The Chinese famine during and after the cultural revolution illustrates the danger of being wrong in a top-down management system.

Xi’s emphasis on party ideology and a controlled economy has the potential for another disastrous cultural revolution.

A singular focus on one leader is a red flag for China as is evidenced by Mao’s initial economic improvements in China that deteriorated with the advance of the “Gang of Four” during the cultural revolution.

America’s system of decision making, though slower, has made it the wealthiest country in the world. America managed to implement an economic policy that revived the economy in the face of a near financial collapse in 2008.

Judgement is premature today, but America’s response to Covid19 has been both right and wrong; in part because of poor leadership from the top, but also because of a failure of America’s checks and balances to mitigate the pandemic’s effects.

Magnus combines China’s history with its demographic and political changes. In building his argument, Magnus explains China carries an economic risk if it fails to adjust economic goal setting for more domestic goals.

President Xi’s Road and Belt Plan: Magnus suggests President Xi is focusing too much attention on GNP growth with R.B.P. It comes at the expense of living standards for a rising middle class. The inference is that political unrest in China will increase.

Magnus sees population ageing as another red flag.

Fewer Chinese children are being born to bare the burden of a disproportionally aging demographic. This is true in many nations; particularly nations that unduly restrict or over-regulate immigration.

Though Magnus’s book is published before Chinese demonstrations in Hong Kong, his prescient understanding of Chinese culture reveals a number of serious stresses.

Cultural suppression and “re-education” camps in Xinjiang damage China’s national and international reputation. There are an estimated eleven million Uighurs living in the middle of China.

Magnus illustrates this unrest comes from a conflict between communist ideology, and cultural difference. The unrest is amplified by Deng’s opening of a door to private enterprise.

America is obviously not immune to political unrest but, unlike China, a supreme leader’s power is offset by a constitutional government of checks and balances.

Magnus notes the history of China as one of strong leaders unburdened by institutional checks and balances. President Xi’s move to increase his control of China is a contrast to an electoral process in the United States that restricts Presidents to two four year terms, or one four year term if the public is dissatisfied.

And finally, Magnus points to Trump’s foolish dismissal of a trade treaty with China.

On the one hand, it is necessary for America to fight unfair trade practices. On the other hand, a broad trade war with a giant consuming and manufacturing country is a meat cleaver approach to what should be a surgeon’s scalpel.

Magnus suggests abandoning the Chinese trade agreement because of a trade imbalance is a red herring. Trade imbalances are a natural consequence of competition.

If one company can build something faster and cheaper, the money saved by a consuming country can be used to innovate.

With free enterprise, one beats the competition by changing product or streamlining production to reduce costs. This is a harsh reality for workers in particular industries but as Schopenhauer suggests it is a matter of creative destruction.

America became the richest country in the world because of its ability to change, to innovate, to adjust to the demands of the market. The Trump administration looks to the past rather than the future.

Magnus strongly suggests China is at risk of economic failure if it chooses not to reduce its focus on GNP as a measure of success. Magnus argues more attention must be paid to domesticate needs and consumption. The Road and Belt initiative has potential for Chinese growth but it should not be emphasized at the expense of domestic need.

Magnus implies China’s ecological environment is on a knife’s edge. One side chooses growth at any cost. The other side moderates growth based on cleaning the environment for future generations.

Having traveled to China, one can see polluted rivers, and congested cityscapes in the midst of beautiful boulevards, spectacular monuments, and businesses filled with local and foreign visitors.

China and the world must recognize the importance of the health and welfare of its citizens. Magnus suggests China is at a crossroad. They can continue to grow GNP at the expense of its citizens or re-direct their economy to address the needs of a rising middle class. It does not mean they have to adopt a different form of government but they need to revise their goals.

One may conclude from Magnus’s book, there will always remain the potential for economic calamity with top down management. Magnus reflects on the history of China and infers it is unlikely to change. China’s growth and prosperity depends on a continuation of philosopher kings which have not sustained any country in the modern age. The next king may not be as far sighted or wise as the current king.

Top down management may have worked in ancient times, but world interconnectedness and interdependence require cooperation and competition for independent countries to grow and prosper.

EVOLUTION OF POWER

Audio-book Review
By Chet Yarbrough

(Blog:awalkingdelight)
Website: chetyarbrough.blog

The Age of Surveillance Capitalism

By: Shoshana Zuboff

Narrated by Nicol Zanazrella

Shoshana Zuboff (American author, former Harvard Professor of Business Administration).

Shoshana Zuboff analyzes the evolution of power wielded and enabled by Google, Amazon, Microsoft and other media giant’s that invade personal privacy. 

Her scholarly examination concludes “…Surveillance Capitalism” will lead to Orwell’s “1984” or B.F. Skinner’s “Beyond Freedom and Dignity”.

Orwell notes in “1984” that invasion of privacy is a way of conditioning human beings to believe in “truths” manufactured by whoever leads.  In contrast, B.F. Skinner’s “Beyond Freedom and Dignity” argues behavioral observation and reward is a tool for making people live morally “good” and peaceful lives. 

The words “truths” and “good” are in quotes because they are determined by what Zuboff calls “the big other”.  “The big other” is a knowledge leviathan that knows everything about everyone. 

In Orwell’s world, humans will be managed by a totalitarian government. The government monitors all private and public actions of its citizens. These governments have a set of propagandized “truths” that demand and compel obedience. Orwell’s world relies on knowledge of every detail of its citizen’s life. When a citizen’s actions do not conform to government rules, they are psychologically bombarded, and re-programmed to believe.

In Skinner’s world, individual citizens will act as they think they want, as though they have free will. However, operant conditioners (“the big other”) will reward citizens for fulfilling desires of respective employers, vendors, and governments which are holders of private information. These operant conditioners will use personal and private data to offer rewards for “good” behavior.  (Zuboff calls these holders of private information “the big other”.)  

Orwell and Skinner offer views of a future where privacy no longer exists.  Orwell’s view is obviously dystopian.  Skinner’s view is utopian, hiding in the skin of dystopia.  Zuboff explains how either future is conceivable in “The Age of Surveillance Capitalism”.  Her conclusion finds both futures reprehensible and possibly inevitable.

“The Age of Surveillance Capitalism” exposes America and the world to the greatest economic and social change since the industrial revolution.  In “The Age of Surveillance Capitalism” every human action is catalogued, distributed, and utilized by entities interested in influencing human’ thought and action. 

“The big other” is enabled by media giants to seduce the public into buying technical products that are connected to the world wide web.  Products, like Nest, Google Search, Amazon, Facebook, Microsoft Word, Microsoft Excel, Quick Books, etc. record everything humans do and see, with extraordinary insight into what they think.  That data base becomes a tool for modifying behavior without conscious knowledge of its users. 

In Skinner’s view, freedom and dignity are a fiction.  To Skinner, only behavior is currency for future peace and prosperity. That behavior can be conditioned by “the big other” in Skinner’s world.

In one sense, Skinner’s recognition of positive reinforcement’s value to society is exemplified by moguls like Henry Ford.  Ford’s recognition of the value of raising wages for his workers (an operant conditioning reward) increases production and lowers product price.

Zuboff systematically builds her argument with the history of industrialization and the dramatic change it brought to society.    Ford grew his fortune by positive reinforcement of worker’s higher wages and the public’s consumption of a lower cost product that revolutionized travel. 

The credibility and threat of Zuboff’s argument is reinforced by George Bush’s accelerated invasion of privacy after 9/11, and Barack Obama’s use of technology from Google’s Eric Schmidt (Google’s CEO, at the time) in his run for election. 

One might also argue the rise of Donald Trump is a harbinger of the threat of “…Surveillance Capitalism”.  Evidence suggests Trump’s election campaign drew on Russian surveillance of Hillary Clinton and political research from Cambridge Analytica to win election. 

Cambridge Analytica provided detailed information on voters who agreed with the anti-science convictions of Donald Trump. They voted, and Trump won the election.

(As noted in Wikipedia.org–Analytica is a visual software package developed by Lumina Decision Systems for creating, analyzing and communicating quantitative decision models.)

Zuboff argues the principle of positive reinforcement takes a giant leap forward with the technology of “Capitalist Surveillance.  Henry Ford’s personal insight is replaced by “the big other”.  Potentially, every capitalist or government entity now has access to the details of everyone’s lives. 

In a capitalist country, there is no singular controller but a multitude of public and private entities that manipulate human life like Skinner’s pigeons in a cage. 

In a communist or fascist country personal surveillance easily slips into Orwell’s “1984”.  Zuboff offers the example of the social categorization of Chinese residents by President Xi’s government. Assigning a number to a Chinese citizen capsulizes their support or opposition to communism. That number influences every aspect of that citizen’s success or failure in China.

Zuboff warns that tools for predicting future behavior are in the hands of “the big other”.    Zuboff speaks from her personal experience with Skinner. Skinner was one of Zuboff’s professors during her college days.  She infers today’s surveillance economies bend toward totalitarianism borne by behavioral reinforcement.

A fundamental question is: Do we have free will?  Or as Skinner and Alex Pentland suggest are we just vessels for behavioral modification?

The other side of “Surveillance Capitalism” is the benefit offered to the general public by data compilation.  There is a leveling of cost for consumer items because of pricing and consumer criticism gathered and distributed to the general public when buying a product or service.  There is a value in being able to arrive at a destination on time without worrying about getting lost in the country or city.  There is the ability to control utility use, and guard one’s house by using tech products like Google’s Nest.  There is the potential of producing more product at cheaper price because of “Surveillance Capitalism”. The idea is similar to the way Ford grew his automobile company by rewarding employee behavior and producing lower priced product.

The question remains—what price are humans willing to pay for convenience? 

The industrial revolution just as the technological revolution changed society.  It seems fair to say the American standard of living has increased as a result of industrialization.  Is there reason to believe the same may be true with a technological revolution that makes life easier but less private? 

Zuboff questions the trade off but so did the Luddites when they destroyed machines that replaced craftsman.  One cannot take Zuboff’s scholarly study lightly, but the genies of the tech revolution are out of the bottle. 

If there is a such thing as free will, there seems no harm or foul.  However, manipulating human behavior belies Google’s founder’s unofficial slogan of “Don’t be evil”.  (Interestingly, in April or May of 2018, Google abandoned the slogan.)

FINANCIAL CRISES

Audio-book Review
By Chet Yarbrough

(Blog:awalkingdelight)
Website: chetyarbrough.blog

Crashes and Crises: Lessons froma History of Financial Disasters

By: Professor Connel Fullenkamp

Great Courses Lecture Series

Connel Fullenkamp (Professor of Economics at Duke University)

Professor Fullenkamp makes one thing clear in “Crashes and Crises”. Financial disasters are an inevitable consequence of all nation-state’ economies, regardless of their form of government. Fullenkamp reaches back to the 1600s to explain how, and why financial disasters are inevitable.

In part, it is because of the nature of humankind.  Fullenkamp notes human error and criminality are facts of life. What the public must do is educate itself.  History is a teacher that tells the public there have always been hucksters that say they can make you rich with little or no risk.  From Charles Ponzi, to Ivar Kreuger, to Bernie Madoff, there have been “get rich schemes” that victimized the public.

From swindlers, to gamblers, to financial model builders, to inept leaders, Fullenkamp recounts American, French, Zimbabwean, Indian, Japanese, Taiwanese, Mexican, Dutch, and German financial disasters.  Fullenkamp’s argument is that crashes and crises are a normal part of financial activity. What he explains is that financial crashes and crises are unavoidable, but he suggests they can be mitigated.

Fullenkamp explains how and why technology increases the potential consequence of human error and criminality in financial crises.

Fullenkamp notes the danger of derivative models. They are packaged investments that can be so complicated that only the creators know how they work.

Major investors, like Warren Buffet called derivatives “financial weapons of mass destruction”. 

Fullenkamp notes that investment models are often complex. The personal motives of financial model creators, and the lucrative incomes for investment analysts and sellers can make derivatives dangerous. However, Fullenkamp is not against derivative investments. Fullenkamp’s advice is that if you do not understand a derivative investment, and its potential risk cannot be explained, the investor should walk away.

The 2008 world financial crisis is an example of a derivative model that nearly collapsed the American economy. 

The derivative model was based on real estate mortgages that were bundled and analyzed to be worth more than their value; particularly, if individual mortgagees went into default. 

Because of imprudent lender qualification of mortgagees by companies like Countrywide, more and more bundled mortgage-backed securities became over valued. Many of these mortgages were sold to FannieMae.

When several mortgages in an investment bundle went into default in 2007, investment bundles crashed. FannieMae held many of the mortgages because they were fobbed off by mortgage lenders as soon as home mortgages were closed.

Because of FannieMae’s relationship with the federal government, the U.S. treasury was at risk when mortgagees defaulted.

The federal government was compelled to buy FannieMae’s defaulted mortgages which exacerbated the 2007-08 financial crises.

The derivative’s crash caused financial institutions, investment houses, and individual investors to either fail, or sell their derivatives at a discount. That caused an international economic crisis.  It became an international crises because bundled mortgages had been purchased by world-wide investors and institutions, many of which were also invested in the American economy.

The sellers of these mortgage derivatives failed to clearly understand what they were selling or, more greedily, took advantage of their marketability. Fullenkamp implies it is as much the buyer’s as the seller’s fault by making bad investment decisions.

Fullenkamp reaches into history to show many other financial crises and crashes.  He covers economic bubbles in tulips, international trade shares, mining stock investment schemes, the economic panic of 1907, the effect of hyperinflation in Germany and Zimbabwe, the 1929 crash, and more recent events like the dotcom bubble, and rogue trader debacles.  Many of the bubbles Fullenkamp identifies are a result of investor’s “irrational exuberance”, a phrase used by the former Chair of the Federal Reserve (Alan Greenspan) in the 1990s.

Next, Fullenkamp goes into some detail about the danger of shadow banking.  Lending without government oversight becomes more tempting during an economic crises.  Shadow banking is unregulated lending that theoretically is not subject to government oversight or regulation. Without checks and balances in a market driven world, unregulated lending hides or distorts GNP growth. 

Fullenkamp ends his lectures with a warning about China’s shadow banking.  He moderates his warning by suggesting China is not near a crisis, at least at the time of these lectures. 

To some listeners, his warning gains some urgency based on China’s declining economy during the Covid19 crises. Of course, Fullenkamp implies shadow banking is a risk to all nation-states in 2020.

Fullenkamp acknowledges the importance of government regulation of financial activity.  He notes changes in American law after crises have occurred.  He notes a primary example in the secrecy of stock listings that was eliminated by disclosure requirements of the federal government. 

Some argue government actions, after the 2008 economic crisis, saved the American economy.  

What might have happened without the leadership of George Bush, Barrack Obama, Ben Bernanke, and their Treasury Secretaries, Henry Paulson, and Timothy Geithner?

With the economic impact of Covid19, one doubts President Trump, Secretary of the Treasury Mnuchin, and his administration are up to the task of dealing with 2020’s burgeoning financial crises. With the added dimension of social unrest from George Floyd’s murder and Trump’s obnoxious law and order comments, it is difficult to be optimistic.

EGYPTS REVOLUTION

Audio-book Review
By Chet Yarbrough

(Blog:awalkingdelight)
Website: chetyarbrough.blog

The Buried-An Archaeology of the Egyptian Revolution

By: Peter Hessler

Narrated by Peter Hessler

Peter Hessler (American Author, and journalist.)

Peter Hessler chooses to move from China to Egypt just before the 2011 Egyptian revolution.  He, his wife, and twin newborns live in Egypt for five years.

Hessler worked for The New Yorker as a staff writer from 2000 to 2007 and became the magazine’s correspondent for China from 2011 to 2016. 

Hessler looks at Egypt through the eyes of an American who lived in both China and Egypt as a reporter.  His perspective melds Chinese and American acculturation with interesting incite to Egypt’s history, language, and politics.

Egypt is a fascinating country for anyone who has visited or read about its ancient civilizations.  With brief comments about Egypt’s historic monuments and museums, Hessler touches the culture of modern Egypt. 

Hessler notes the extraordinary ability of Egyptians to hold two opposing thoughts and adjust behavior to accommodate both beliefs.  On the one hand, there is a sense of “let it be” when minor or major events occur in the lives of modern Egyptians.  On the other, there is a history of autocratic Egyptian rulers who insist on strict control of society.   In view of the many non-Egyptian’ governments after the Pharohs, it comes as no surprise that Egyptians are adaptive.

Sadat, Mubarak, & Nasser were military dictators before the election of Morsi who is deposed in the revolution by today’s military leader, Abdel Fattah el-Sisi.

Hessler comments on the ability of Egyptians to learn languages at varying ages of maturity.  Language skill is the lingua franca of the ability to adapt. 

From ancient times of the Assyrians, Persians, and Greeks; to more modern times of the Ottomans and British–Egypt remains Egyptian despite their adaptability.

Hessler offers an understanding of Egypt through the eyes of its citizens.  He recounts the tumultuous relationship of an entrepreneurial garbage collector and his wife.  The garbage collector is illiterate.  His wife can read and write.

The garbage collector is in his 30s when he marries his 18-year-old wife.  Their marriage leads to three and then four children.  The garbage collector is exiled from his children with the threat of divorce initiated by his conservative wife.  His wife follows Egyptian culture in covering her face but rejects some of the discriminatory aspects of a patriarchal society.

Hessler’s garbage collector is a great source of information about Egyptian culture because of the details he knows of other lives based on what Egypt’s citizens throw away.  The collector is scrupulously honest about the garbage he collects.  When he finds something in the trash that has value he returns to his customer.  It is a matter of pride; stoked by belief in a cosmic or religious wheel in his mind that tells him what is right.  However, the wheel seems to stop when it comes to relationship with his wife and children.  This leads to what Hessler suggests is a fundamental flaw in modern Egypt; i.e. women’s inequality. 

Because the collector’s wife knows how to read and write, she files an appeal to the court to strip her husband of his house and property.  She files for divorce but recants after finding the consequence of such action would make her and her children destitute.

Surprisingly, their tumultuous relationship becomes less combative as their life together matures. Their personal trials seem a paradigm of Egypt’s “let it be” and autocratic culture.

Hessler reports on the ponderous, corrupt justice system that both aids and thwarts the intentions of married couples seeking help.

Women are discriminated against based on their sex in Egypt. 

Women are raised to believe their role in life is to have and raise children, and take care of their husbands and families.  Girls are not afforded the same educational opportunities as men.  Women are expected to sacrifice their entrepreneurial right to a job when they are married.  Hessler notes female children are routinely genitally mutilated. This is a tradition based on a belief that sexual pleasure and desire are a threat to society. Hessler compares the torture of genital mutilation to the Chinese tradition of binding women’s feet.

Hessler compares Chinese with Egyptian culture to expose the consequence of sex discrimination.  The potential of women’s contribution to the economy in Egypt is eviscerated by its culture of discrimination.

In an adults most productive years, Egyptian housewives cannot work for pay outside of the home.  If a woman has a good job, she is expected to relinquish it when she is married.  In contrast, Chinese women are full participants in the economy.

 

Parenthetically, Hessler notes Egyptian homosexuals are persecuted for their sexual preference.  The irony of that homosexual persecution is in Egypt’s patriarchal culture that discourages social contact between the sexes.  Putting aside genetic predisposition, without social contact with women, male relationships become the only acceptable form of intimate relations.

Egypt’s demonstration against a crackdown on LGBT’ rights.

Hessler’s book is interesting because of his firsthand knowledge of the revolution that removes Morsi from the Egyptian Presidency.  In many conversations with Egyptian residents, Hessler notes the weakness of the Brotherhood in Egypt; both in number and in qualification for political leadership. 

Hessler contrasts the military with the Muslim religion of the Brotherhood.  The military has a long history in modern Egypt.  The tradition of strong leaders has an even longer history.  The Brotherhood is characterized by strong leaders who only press religion; without understanding the nature of society that desires order, safety, and economic opportunity. Order, safety, and economic opportunity are a “good despot’s” alleged intent.

Mohammed Morsi (Fifth President of Egypt for 1 year until removed from office by General Abdel Fattah el-Sisi. Morsi dies of a heart attack in 2019.)

Hessler shows the Brotherhood as an association of religious believers that have little organizational skill.  They are not educated to lead.  They are educated to worship.  That educational limitation exhibits itself in Morsi’s weak government.  Egypt flounders economically with the election of Morsi.  One can argue it is still floundering under el-Sisi but Hessler shows the military is more prepared to lead based on the tenants of worldly desire rather than religious worship.

Egyptian Brotherhood Rally

(In a population of 80,000,000, there are an estimated 600,000 dues paying members of the Brotherhood; of which 100,000 are considered militant.)

Hessler explains there are many conspiracy theories surrounding the Brotherhood’s influence in Egypt. Their small numbers and inept management skill seem unlikely to create a successful uprising in Egypt. The Brotherhood’s revolutionary impact seems symbolic more than real. However, one realizes Russian Bolsheviks were a small minority in 1917.

Abdel Fattah el-Sisi (Current President of Egypt)

Hessler notes that el-Sisi’s popularity is diminished by missteps in funding infrastructure improvements at the expense of more direct economic need.  He cites the expansion of the Suez Canal as an example of a prudent long-term aid to the economy but a neglect of medical services, justice reform, and housing needs for today’s general population.

There is also the issue of repression by el-Sisi.  Hessler recalls the incident of a tortured, and then killed, foreign student that criticizes the current government.  The author notes that el-Sisi’s defenders suggest the murder was an accident caused by young and inexperienced supporters of el-Sisi. 

In recalling my personal trip to Egypt in 2019, the Brotherhood is a big concern of the government. Tourism is a big industry for Egypt. That industry nearly dies with the election of Morsi. Some Egyptians feel something is getting done with el-Sisi; while no economic progress happened with Morsi.

Hessler offers a glimpse of the hardship Egypt faces in the 21st century.  His observations are at a local level of Egyptian society; not at the obscure level of a thirty-day tourist.  Time will tell if el-Sisi is the answer to Egypt’s failing economy. 

Sisi is acknowledged by Hessler as a good communicator.  Sisi is truly an Egyptian focusing on his perception of what Egypt needs now; not the religious salvation of the eternal.  The biggest criticism of Egypt’s leadership in Hessler’s book is the unequal treatment of women.  There seems no action taken by el-Sisi to address that reality. One wonders if the economy is likely to grow quickly enough to avoid another revolution without gender discrimination reform.

GARDEN OF EDEN

Yarbrough (Blog:awalkingdelight)
Website: chetyarbrough.blog

New Zealand in 2019

Written by: Chet Yarbrough

Having the wonderful experience of visiting New Zealand as an America tourist was like visiting a biblical Eden. However, no country is without political controversy.

On the one hand, New Zealand has the ambition of being an ecological Eden with no natural predators and a perfectly balanced environment.

Is that realistic? How can nature be nature without predation? From times untold, wild animals have eaten each other.

And then, there are humans. Humans are by nature predators. Environmental degradation is accelerated by economic prosperity.

American media gives positive marks to the current Prime Minister of New Zealand, Jacinda Adern. In part because of her immediate response to the Christ Church mass shooting but also because of her environmental effort to reduce greenhouse gases and pollution.

Adern is also lauded for her response to the Covid19 crises.

New Zealand is blessed with renewable energy sources from geothermal-power, hydro-power, and a burgeoning wind and solar power industry. Not that this is something only the Prime Minister has done in her short term, but it illustrates the environmental sensitivity of the country.

Prime Minister Adern is not universally applauded by fellow New Zealanders. Contrary to Adern’s press coverage in the U.S., many New Zealand farmers seem quite upset with Adern. We had the happy opportunity to spend a day and night with a farming family in New Zealand.

The farming family we spent time with explains there is a conflict between New Zealand’ farmers and the current administration. Over 45 percent of New Zealand is farm land. It is distributed among farmers that have an average size farm of over 350 acres. An important distinction between our countries is that American corporations may use farms as a tax shelter while New Zealanders use farm land to produce more product. There are few if any corporate farms in New Zealand. New Zealand farms are owned by real farmers.

However, farming is a major polluter of land in America; as well as New Zealand.

Over 50% of methane and nitrous oxide in the world comes from farm animals. Adern puts the burden of correction on private farms. Over 50% of methane and nitrous oxide in the world comes from farm animals. Cattle, sheep, goats, deer, alpaca, llamas, goats, and chickens are common farm animals raised on New Zealand farms. Land, water, and air quality issues being raised by the current administration are a big concern of the farming community.

New Zealand farmland regulation is creating a furor among some farmers that are being told to change their practices to reduce pollution. The cost of these changes are to be borne solely by the farmer according to the farm family we visited.

Real farmers in both America and New Zealand have a reputation for being independent. That independence is distorted by corporate ownership in America but not in New Zealand. The New Zealand farming community is made of farmers who work the land. One gets the impression they will not re-elect Ms. Adern unless she changes direction.

The irony of what we were hearing is that farmers like all people are concerned about the environment. The problem is in the cost of adjusting farming practices to accommodate environmental concern.

From an outsider’s perspective, the solution seems simple. Farmers in New Zealand are not constrained by corporate farming practices like America. New Zealanders do not farm to shelter income but to produce product. It would seem reasonable for the government to assist New Zealand’ farmers financially to adjust to less environmentally damaging practices. The perception we had from the family we spent the night with was that the current government wants all of that cost to be borne by the farmers.

When the word subsidization is mentioned, both husband and wife of the New Zealand farm family seem to wince. Without knowing the history of farming subsidization in New Zealand, one wonders what happened in its history.

As long as real farmers are producing groceries there seems every reason for tax dollars to be used to help farmers mitigate pollution. Farmers are as concerned about the environment as environmentalists. Where would the world be without food production and real farmers?

Visiting other countries is a guilty pleasure. It is an expensive undertaking that many cannot afford. We loved our time in New Zealand. One sees there is no perfect country. Every country has its discontents; America, not withstanding.

BULLY OF THE WORLD

Audio-book Review
By Chet Yarbrough

(Blog:awalkingdelight)
Website: chetyarbrough.blog

The Accidental Superpower

By: Peter Zeihan

Narrated by Peter Zeihan

Peter Zeihan (Author, American geopolitical strategist)

“The Accidental Superpower” is a wild ride.  Peter Zeihan is a geopolitical strategist and futurist who argues that geography is destiny.  His prognosis for America is perversely positive.

Zeihan suggests America is in the “cat bird” seat for this and the next (yet to be born) generation.  The “cat bird” seat implies a superior position of survival in a world headed toward crises.

“The Accidental Superpower” is a cautionary tale that suggests the tail will wag the dog. 

If America’s current actions and future intent is to abandon Bretton Woods’ history, then Zeihan implies wars will continue, famine and pestilence proliferate, millions will die, and self-interest will be humanities’ only interest.  In the era of Trump, Zeihan shows the reach and potential of bullies in the world. 

Zeihan builds a credible and terrifying argument.  The Bretton Woods Agreement was created in 1944.  Its purpose was to set up a system of rules to ensure economic stability around the world.  Zeihan notes that America has steadily abandoned the principle of Bretton Woods since 1973 when the U.S. suspended the gold standard for the American dollar. 

It is not to suggest that the gold standard should be re-instituted but that the American dollar became the new standard for world economies.  In part, because the basis for economic wealth became the American dollar.

The American dollar gives the United States an outsize influence in the world. That influence is reinforced by an unparalleled military/industrial complex.

The resources of America became a primary standard for economic stability in the world.  Zeihan argues the legitimacy of Bretton Woods is replaced by the geographic existence of the United States.  America is bordered by two oceans, blessed with an internal river transport system, natural energy resources (including Shale oil which makes the U.S. oil independent), a replenishing labor force (supplemented by immigration), and economic growth. Therein, Zeihan explains America is capable of ignoring the rest of the world.  

This is a disturbing view of realpolitik.  It opens the door to an America dreamed of by ignorant nationalist like the current President of the United States. Zeihan infers the United States can be the bully of the world because of its military superiority, wealth, and geographic isolation. 

Empathy is an essential characteristic missing from a nationalist credo that believes it is “my way or the highway”. With a belief system based on “self-interest”, and the mantra of philosophers like Ayn Rand, the world seems destined to destroy itself. 

Zeihan supports his future predictions with a logic borne from geographic facts, history, and philosophical belief.  Zeihan’s perception of the world’s future creates fear and trembling in any who choose to believe it.

A few of Zeihan’s predictions are:

  1. China will not grow to be a superpower and will follow the path of Japan with an aging population that cannot maintain its economic growth.  The diverse nature of its population is hidden by the false belief that the Han people are of one mind.  Internal dissension will rise.  China is subject to river flooding and hemmed in by mountains and narrow waterways.
  2. Russia will covet the land of other nations because of an economy that rests on dwindling natural resources, a harsh environment, and lack of international trading ports.  The Tatar and Chechen populations will continue to plague consolidation of power in Russia.
  3. South African nations will suffer from starvation because of its lack of arable land.  Angola is one of the few African nations that may escape that fate because of its fertile land and young population.
  4. The European Union will fail because of nationalism, a lack of a viable common currency, and its failure to consolidate political power.
  5. Great Britain will become more dependent on the U.S. for trade and survival.
  6. Turkey will strengthen its influence and control over the Middle East through military strength and a young and growing population.
  7. Uzbekistan will become a more powerful independent nation because of its relatively young population and abundant clean energy (largely from hydroelectricity).
  8. Australia and New Zealand will prosper because of its vibrant agricultural economies, and ocean-bound isolation.
  9. Saudi Arabia will fail as an economic powerhouse because of its dependence on foreign labor for all industrial development. Saudi citizens are minor participants in the labor market, and unprepared to compete in an industrialized world.
  10. Iran is demographically young but burdened by an arid climate.  Its religious intolerance will be an impediment to economic growth.
  11. Spain, Portugal, and Italy are vulnerable to outside influence, inflation, high unemployment, and growing economic weakness.
  12. Germany may once again rise as a belligerent state because of its need to expand to continue its economic growth.  Its driven and well educated population reinforces industrial and technological growth.
  13. Canada will become a failed nation because of its aging demographics and diverse population.  Failure will only be abated by its relationship with the U.S.  Zeihan suggests Alberta should consider becoming part of the U.S. because of its one industry dependence (oil).
  14. The relationship between Mexico and the U.S. will improve because of proximity and mutual trade benefits.  The drug war will continue and perversely improve the Mexican economy. Drug war areas will be isolated to narrow parts of the country.
  15. Climate change is real, but its impact will be mitigated in the U.S. with hardening infrastructure in coastal cities that will mitigate or abate flooding.  Most of Florida will disappear under water.  Many island archipelagos will also disappear.
  16. Pakistan’s diverse population will continue to disrupt political control of the country.  Its conflict with India will continue despite diminishing financial support from the U.S.
  17. India’s economy will suffer from environmental degradation.

In conclusion, Zeihan suggests America will remain a superpower with outsize influence on the success or failure of other nations. 

A caveat might be America may become the bully of the world; at least until a nuclear war or accident decimates the environment. 

There is good reason to have fear and trembling for this world’s future if “self-interest” is the only criteria for well-being.

American Capitalism

Audio-book Review
By Chet Yarbrough

(Blog:awalkingdelight)
Website: chetyarbrough.blog

Americana, A 400-Year History of American Capitalism


By Bhu Srinvasan

Narrated by Scott Brick, Bhu Srinvasan

Bhu Srinivasan (Author, American citizen born in India, Emigrated at age 8 to the United States with his mother.)

“Americana” is homage to the muscular success of capitalism in the United States.  It appears it takes someone born outside America to unapologetic-ally endorse the gift of capitalism to the world. It seems Bhu Srinvasan lives the American dream in the 21st century. 

Srinvasan “leans in” by arguing libertarian-ism’s strengths outweigh its weaknesses.  “Americana” speeds through the history of great men (because women’s contribution is largely ignored) who settle America in the 17th century.  With the help of English entrepreneurs willing to risk investment in the voyage of the Mayflower, the egg of American capitalism is hatched. 

Mayflower Replica

(The Original Mayflower Sailed September 6,1620 and landed on Cape Cod 66 days later, which was 500 miles north of its intended destination in Virginia.)

The investors expect a return on their investment.  They finance the expedition based on an expectation of success from a settlement in Virginia.  The first years of the Pilgrims’ progress is nearly a bust.  The author explains the initial investment is nearly lost but recovered by an agreement among the settlers to buy out their Mayflower investors.  The buyout is a success because the settlers find a ready market for American goods in England; particularly beaver furs which were provided to settlers by native inhabitants.

With growth of the fur trade, new settlers come to America.

The beaver fur business is expanded with new settlers who learn how the Indians ply their trade.  Competition grows and undoubtedly many tribes are shut out of the trade.

This, as in many more stories told by Srinvasan, reminds one of the boon and bane of capitalism.  That is not Srinvasan’s intent, but the effect of competition from acquired knowledge, new technology, and entrepreneurship is repeated many times.  There are winners and losers in the growth of capitalism. What is one life worth?

There is an “end justifies means” theme in Srinvasan’s view of America. This is an attitude reflected by President Trump’s suggestion on March 24, 2020 to re-open America in April.  The reality of quality-of-life improvements in America makes Srinvasan’s, and some would say Trump’s view, a worthy subject of contemplation.  America is the most economically successful nation in the modern world.

Srinvasan glosses over issues of slavery, racism, and corporatism. Trump’s suggestion that America should be reopened for business in April of 2020 is a judgement that suggests ends justify means. The spread and human impact of the coronavirus is unknown.

Many of the harsh realities of a transactional economic system bare down on America with exposure to the coronavirus. Do ends justify the means? 

Carnegie, Vanderbilt, Ford, Rockefeller, Morgan, Edison, Westinghouse, Watson, Gates, and Jobs are a few examples given for the success of American Capitalism. 

What is missed is the “blood in the water” from changes wrought by these men of steel, automobiles, energy, finance, communications, transportation, and technology.  With each advance in American ingenuity, there is a general rise in America’s standard of living.  Indeed, Bhu Srinvasan himself is a tribute to the success one can have in 21st century America. But, Srinvasan tells only one side of the story.

Homelessness in America is a disgrace.  Rat infested ghettos in large American cities perpetuate poverty and crime.  A deteriorating education system is gamed by the wealthy who neglect what can be done to help the poorly educated. 

Corporations have a duty to educate people displaced by technology.  Government needs to move beyond the transactional value of health care to provide basic health services to all Americans.  Environmental degradation needs to be abated before the world’s 6th extinction. 

To ignore the price paid by a growing underclass in America, is side-stepped by Srivasan’s “…History of American Capitalism”. 

America capitalism can do better.  We are no longer a struggling economy like that which existed in the days of the Pilgrims and later so-called robber barons.

Srinvasan is an excellent primer on capitalism but that is history; not a prediction of a future where homelessness, a deteriorating environment, a failing education system, inadequate health care, and racial injustice are ignored.

AMERICAN TAXATION

Audio-book Review
By Chet Yarbrough

(Blog:awalkingdelight)
Website: chetyarbrough.blog

A Fine Mess (A Global Quest for A Simpler, Fairer, and More Efficient Tax System

By: T. R. Reid

Narrated by T. R. Reid

T. R. Reid is a reporter for the “Washington Post”.  He is not an economist.  However, he suggests there are more equitable ways of taxing the American public than presently used by the government.

Reid’s travels around the world investigating other countries tax systems are the basis for his theory for cleaning up America’s “…Fine Mess”. Sadly, Reid has a futile unrealistic attitude that the British characterized as pissing in the wind.

Reid suggests a tax overhaul is due in America.  The last major revision was over 30 years ago.  He argues a mess has been created by incremental tax changes that have greatly exacerbated the wealth gap in America.  Reid illustrates the many ways in which the American tax system is a mess.  An often-quoted factoid is “Warren Buffet is taxed at a lower rate than his secretary”.

There are many economists that would agree with Mr. Reid.  The most famous is the French economist Thomas Piketty who wrote “Capital in the Twenty-First Century”. 

Reid argues the U.S. has the highest corporate tax rate in the world but the lowest corporate taxes collected.  Having the high rate and collecting it are two different things. 

Reid notes corporations like Caterpillar, Apple, Microsoft and others spent millions of dollars to set up legal tax shelters that reduce corporate tax to single digits; to as low as zero for some. 

Reid goes on to explain how billions of dollars are kept in corporate accounts outside of America to avoid taxation, and how that money is not repatriated to the U.S. because of current tax law. 

(Ironically, during Trump’s administration, corporate rate was reduced from 35% to 21%; and continues to be a significantly uncollected tax.) 

DEFINITION BBLR

Reid persuasively argues that a tax overhaul should be made based on the principle of BBLR, a “Broad Based Low Rate” tax.  The purpose of a tax overhaul would be to eliminate loopholes, broaden and reduce tax rates while equalizing citizen’ tax burden.  Schemes for creating tax shelters would be eliminated.   

As is widely known, millions of dollars are spent by American citizens and corporations to file tax returns.

Preparing and paying taxes is laborious and confusing task for many Americans.  Even basic tax return filings are difficult for many American citizens to complete.  How many do not file because of that difficulty?  Some buy software to file taxes.  Add to software purchases and there is only growing tax-preparation costs to file for others. Those costs are borne by individual tax payers. The expense of our inefficient, and inequitable tax system multiplies geometrically when you add corporation efforts to avoid taxes.

America’s taxing inequity is glaring.  Millions of dollars are spent to avoid taxation through creation of tax shelters.  The formation of these shelters costs millions in lawyer, tax consultant, and auditing fees but save billions of dollars for corporations and the super-wealthy who legally (sometimes illegally) reduce taxable income.

“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.

Reid’s point is that America’s “…Fine Mess” can be made simpler, fairer, and more efficient by creating a completely new tax system.  He suggests the corporate tax might be eliminated and replaced by a flat rate with no loopholes.

Reid argues for a “Value Added Tax”.  A VAT would be a combination of local taxes and federal taxes on all consumable goods. 

After collection, this tax would be distributed between States, and cities, as well as the Federal Government.  The purpose of these taxes would be for maintenance of local services (like education, public safety, public works, and administration), and Federally mandated services (like national defense, health, education, and public welfare).

Reid’s argument is that VAT’ enforcement would require less supervision by the government because a VAT applies at each stage of the production of goods.  Each stage of production is rebated for taxes paid by the handler that adds value. The VAT is a combination of taxes at each stage of production which is reported to the government for reimbursement.  The reimbursements must add up to the final tax charged to the consumer.  If the numbers are not the same, the IRS will be able to tell which manufacturer failed to pay their tax.

A simple computer program would be able to monitor the collection of the tax because it must balance to all reimbursements of added value.  In theory, a VAT eliminates much of the need for a massive Internal Revenue Service which Reid suggests is unable to adequately monitor the present taxation system.  Reid notes that it is impossible for the IRS to closely monitor today’s taxing system because of the complicated nature of its Congressionally legislated structure.   

Another BBLR tax recommended by Reid is a financial transaction tax that would be low but capitalize on every financial transaction in the United States. 

This transaction tax would be less than a penny per dollar but capable of raising billions of dollars based on the many financial transactions that occur in the U.S. 

Reid offers the example of Hedge Funds that specialize in massive trades for short periods of time.  These Hedge Fund trades move the stock market by fractions that reap millions for traders.  With a tax on financial transactions revenue would be created for Federal Government programs that serve the health, education, and welfare of the nation.

What concerns a listener about Reid’s argument for a Value Added Tax is its potential for continued inequity.  The poor may have to pay the same price for food, energy, and shelter as the rich.  Reid does not adequately address that concern except to suggest a system would be established to offset that inequity.

Another concern, inadequately addressed by Reid, is the impact on Hedge Fund traders business if they lose the advantage of small changes in quick trades. Will Hedge Fund transactions disappear?

Political will is another issue not adequately addressed by Reid.  What majority of congress men and women will stand up to the many lobbyists who support them in their election?   Will most Republicans and Democrats co-opt or fight special interests that object to a massive change in the American tax system? 

Finally, how would America deal with the lost jobs for tax lawyers, tax preparers, software developers, and corporations that benefit from tax preparation and tax avoidance schemes?

One may agree with Reid’s assessment of America’s tax system.  It is a “A Fine Mess”.  The question is–Do our elected representatives have the political will to clean it up; or at least make it fairer? 

Incremental change of the tax code only makes it less intelligible. In Reid’s opinion, it is all or nothing.  Reid implies “go big” or “go home” because nothing will change if the entire tax code is not replaced.

JOB CREATION

Audio-book Review
By Chet Yarbrough

(Blog:awalkingdelight)
Website: chetyarbrough.blog

The New Geography of Jobs

By Enrico Moretti

Narrated by Sean Pratt

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 curriculums.

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.

JOBS TODAY AND TOMORROW

Audio-book Review
By Chet Yarbrough

(Blog:awalkingdelight)
Website: chetyarbrough.blog

The Industries of the Future

By Alec Ross

Narrated by Alec Ross

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.

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.