ECONOMICS – Page 10 – REVIEWS AND VIEWS OF LIFE

A CLASSIC’S TRUTH

Audio-book Review
By Chet Yarbrough

(Blog:awalkingdelight)
Website: chetyarbrough.blog

The Road to Serfdom

By Friedrich A. Hayek

Narrated by William Hughes

Hayek wrote “The Road to Serfdom” during WWII. His observation was that Nazi Germany and its rise to power had a direct relationship with the growth of socialism, a belief that central planning and control are keys to national prosperity.

Hayek suggests that America and Great Britain suffer a similar strain of belief. He argues that central planning and control leads to totalitarianism. “The Road to Serfdom” is a prescient vision of the dangers of socialism.

The dilemma of government is in drawing the line between central planning and public service. It is particularly complicated by what the intent of Article 1, Section 8 of the Constitution meant when it said a part of the purpose of government is to “promote the general welfare”

It seems common that authors of popular, sometimes classic, books are often interpreted by people who have not read them. Authors like Harriet Beecher Stowe, Richard Wright, Ayn Rand, Vladimir Nabokov, and Friedrich Hayek are frequently commented on but content often becomes a surprise to actual readers.

Friedrich Hayek’s book is frequently lauded by American conservatives and vilified by American liberals.

In truth, Hayek is a seer for both ignorant American’ conservatives and liberals; i.e. Hayek is neither a spokesman for modern American conservatism or liberalism but a strong proponent of classic liberalism.

To be clear, today’s conservatism and liberalism are not defined in the same way Hayek defines them in his 1944 publication. Liberalism in 1944 meant belief in freedom of choice and endorsement of laissez-faire economic principles. 1944 conservatism meant a rejection of the principles of equality with an aristocratic, “rank has privileges”, ideology.

Contrary to Hayek’s conservatism, modern conservatives and liberals endorse subsidization of private enterprise. Subsidization comes from tariffs, tax incentives, and other preferential treatment for private business and industry.

Principles of equality and laissez-fair economic principles are less doctrinaire in the 21^st century because American political parties blur the difference. Modern liberals are closely associated with government regulation and intervention but not necessarily laissez-faire principles.

Modern conservatives are opposed to government in most forms of regulation and intervention, but only in principle; not in practice. Modern conservatives, as well as liberals, endorse subsidization of private enterprise. Subsidization comes from tariffs, tax incentives, and other preferential treatment for private business and industry.

Contrary to a wide perception that John Maynard Keynes (a liberal economist in today’s parlance) denigrated “The Road to Serfdom”; Keynes, in fact, praised it. John Maynard Keynes believed in government intervention when a state’s economy is in crisis.

According to Thomas Hazlett in the July 1992 issue of “Reason Magazine”, Keynes wrote “In my opinion it (Road to Serfdom) is a grand book…Morally and philosophically I find myself in agreement with virtually the whole of it; and not only in agreement with it, but in deeply moved agreement”.

Though Keynes praised “The Road to Serfdom”, he did not think Hayek’s economic’ liberalism practical; i.e. Keynes infers that Hayek could not practically draw a line between a safety net for the poor, uninsured-sick, and unemployed (which Hayek endorsed) while denying government intervention in a competitive, laissez-faire economy.

When businesses have an unfair advantage that denies competition, Hayek suggests government regulation is required.

Where modern conservatives get “The Road to Serfdom” wrong is where Hayek writes that government has an important role in a nation’s economy that goes beyond a simplistic notion of laissez-faire.

Where modern liberals misunderstand “The Road to Serfdom” is where Hayek explains that freedom of choice is essential within the bounds of safe pursuit of economic success. When human safety issues from uncontrolled industrial pollution threatens the safety of society (which most modern scientific opinion calls global warming) Hayek writes government intervention is necessary.

After listening to “The Road to Serfdom”, one cannot help but believe that Hayek would be as appalled by “private” industry’s greed in the 21^st century.

Hayek wrote that big business is not bad in itself but big business that fails to compete on a level playing field because of government subsidy, through tax concession and special treatment, should be regulated by government to ensure fair play.

In the face of overwhelming evidence to the contrary, Trump denies the reality of global warming.

One is compelled to agree with Hayek when he observes that government programs interfere with free choice when government officials create social programs they think are good for someone else. Hayek is not saying that government should not care for the poor, work-disabled, or technologically unemployed. He writes: “Where, as in the case of sickness and accident, neither the desire to avoid such calamities nor the efforts to overcome their consequences are as a rule weakened by the provision of assistance – where, in short, we deal with genuinely insurable risks – the case for the state’s helping to organize a comprehensive system of social insurance is very strong.”

Hayek goes on to suggest that technological change that causes unemployment warrants government assistance. The danger Hayek tries to make clear is that government interferes with free choice when social programs try to create false equalities.

BREAD LINES IN NEW YORK 1933–Hayek is not saying that government should not care for the poor, work-disabled, or technologically unemployed.

Hayek writes: “Where, as in the case of sickness and accident, neither the desire to avoid such calamities nor the efforts to overcome their consequences are as a rule weakened by the provision of assistance – where, in short, we deal with genuinely insurable risks – the case for the state’s helping to organize a comprehensive system of social insurance is very strong.”

Hayek is acknowledging a role for government. The role is to regulate private enterprise in those areas where freedom of choice or equal opportunity is infringed upon.

HEALTH INSURANCE — If insurance is not available to all in a land of prosperity, then government has a role in creating a program that will offer insurance to all.

Hayek’s only caveat is that the insurance be offered as an affordable, free enterprise, and individual choice, not as an entitlement.

Hayek opposes government programs that interfere with free competition among similar businesses.

The weakness of Hayek’s argument is in idealization of humanity; i.e. human nature is that leaders in government and the private sector will drive for advantage. In the case of one country, that advantage may theoretically be mitigated by impartial government regulation but, in a world of sovereign nations, power is inherently limited.

If China wants to subsidize steel exports, American options are limited to creating import tariffs that further distort market competition. This is the mistaken route that President Trump has taken. Further, Hayek’s idealization presumes that politicians cannot be bribed, human beings are not prejudiced, populations have an equal opportunity to succeed, and humanity is inhumanly perfect when left in a state of grace.

Hayek correctly points out the importance of money as a measure of success in a free society. However, in today’s America, “Moneyocracy” has become an American form of government. “Moneyocracy” is the aristocracy of the 21^st century that elects public officials, denies equality of opportunity—for education, economic mobility, and employment.

The gap between the rich and poor is widening by degrees that may bankrupt America because of an enlarging safety net for the old, the sick, the unemployed, and the unemployable.

The field of competition for free enterprise is becoming more unequal. Hayek observes that government intervention slips into socialism when free enterprise is artificially manipulated. The fear is that America will begin looking for their Hitler to manage a sick economy.

Conservatives that rant against government regulation based on Hayek’s “Road to Serfdom” are as incorrect as liberals that argue Hayek wrote against social government programs for the poor, disabled, and unemployed.

THE DISMAL SCIENCE

Audio-book Review
By Chet Yarbrough

(Blog:awalkingdelight)
Website: chetyarbrough.blog

Capital in the Twenty-First Century

By: Thomas Piketty

Narrated by L. J. Ganser

THOMAS PIKETTY (AUTHOR, FRENCH ECONOMIST)

What follows Thomas Piketty’s erudite introduction to Capital in the Twenty-First Century is a detailed history of capital formation and income inequality that nearly puts one in a coma.

In truth, Piketty’s peregrination is essential for credibility but only for the sake of economists that wish to challenge Piketty’s conclusions. To a non-economist, less traveling between economic histories would have offered more clarity and less boredom. I suspect, even this brief synopsis will make many eyes glaze over. That is unfortunate, because Piketty’s book is important.

Thomas Piketty’s hypothesis in Capital in the Twenty-First Century is that the wealth and income gap between economic classes is widening in modern, post-industrial nations.

He reaches back in history to note that at one time ninety percent of the wealth of nations was held by less than 1% of the population. This high water mark lessened with industrialization and the growth of a middle class. A major break in wealth and income disequilibrium came with the Great Depression, and World War I and II’s conflagrations. However, 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.

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Piketty’s book could not have been written until the modern age. Analysis of economic data requires mathematical modeling on a scale only achievable with computers. He offers an interesting introduction to Capital in the Twenty-First Century. However, Piketty’s dense and lengthy forward requires listener’ concentration; and for some of us, a re-winding and re-hearing.

BREAD LINES IN NEW YORK 1933, The working middle and lower classes use income to live; not to invest. If they had jobs, they continue to receive income equal to or better than what they had before. The consequence of Depression and World Wars reduces income disparity between the super-rich and the middle class because capital investment income is lost by the wealthy; not the middle class and poor.

The dramatic collapse of the stock market, war’s destruction, and world debt obligations hit high income earners harder than the middle class. Piketty explains–the superrich lose wealth accumulation from capital investment when the Depression and two World Wars disrupt the economy. The working middle and lower classes use income to live; not to invest. If they had jobs, they continue to receive income equal to or better than what they had before. The consequence of Depression and World Wars reduces income disparity between the super-rich and the middle class because capital investment income is lost by the wealthy; not the middle class and poor.

Recovery from world economic Depression and two World Wars requires many years of positive economic growth. After 1983, Piketty argues that capital investment income began to widely outstrip labor income. Thus begins a return of the widening gap between the super-rich and everyone else.

As the economy recovers from Depression and War, capital investment’ income increases and wealth, once again, begets wealth. Until the 1980s, increases in income from capital investment fluctuated but productivity and higher wages helped workers incomes keep pace with the wealthy. It was still possible for the upper middle class to cross class barriers and become capital investors as well as workers. Pre-1980 economic growth mitigated a widening gap between social/economic’ classes.

LABOR VS. CAPITAL INVESTMENT: The wealthy have income from both labor and capital (passive investment); while the middle class and poor have income solely from labor. Income for the middle class and poor does not increase fast enough to allow capital investment; compounding the income gap between the rich and everyone else.

Piketty argues that political influences and economic power begin to coalesce after the 1980s; creating steadily disproportionate increases in income for capital versus labor. Tax shelters and inherited wealth, based on coalescing politics and economics, disproportionately raises income for the wealthy versus the middle class and everyone else. The rich get richer, a middle class becomes smaller, and low-income populations become bigger. Piketty explains that income from labor does not rise as fast as income from capital investment.

Piketty reports that the wealthy make more money from capital investment than they do from their labor.

At the same time, the middle class and poor have little or no capital investment income. Investment income widens the gap between economic classes because labor wages do not provide enough discretionary income for capital investment. The wealthy have enough discretionary income to increase capital investment while the middle class has less discretionary income because of the cost of living.

Piketty reaches into history to remind listeners of Ricardo, Marx, Kuznets and other famous economists. He notes that an economic theory offered after WWII suggests that “a rising tide lifts all boats”. (The Kennedy administration made the “…rising tide…” quote famous.)

In the 1940s, Kuznets argues that the income gap between rich and poor would eventually reach a level of stasis. His basis for that argument is statistical evidence showing a reduced gap between the rich and the general population after the Second World War. However, Piketty argues that stasis for an income gap is dependent on economic growth. Piketty explains that the economic shocks of Depression and World Wars are an anomaly that distorts Kuznets’ theory of eventual economic stasis.

Economic growth has not historically kept up with capital investment growth. Piketty argues that parity is not necessary but economic growth has been under 1% while capital investment growth averages over 5%.

This gap inures to the benefit of the wealthy; not to the middle class or poor. Over time, the gap guarantees increasing income to the wealthy and dwindling income to the middle class; a middle class slipping into poverty. A concentrated wealth bias and an increasing gap between the rich and everyone else is reinforced by inheritance.

Piketty infers that labor-income’ increases have not been big enough for middle class’ capital investment since the 1980s. Piketty argues that the depression and two world wars were the primary reasons for relative stasis of the income gap between 1939 and early 1980s. From 1980s onward, the income gap only widens.

Piketty explains–because the rate of economic growth in post industrial nations has not been big enough; and because income tax structure disproportionately benefits capital investment, the gap between the wealthy and the middle class is widening.

Piketty re-states the cause as increasing capital income for the wealthy and decreasing labor income for the middle class and poor. In the U.S., the income gap is magnified by the rise of CEO’ super salaries that exceed 400:1 in relation to average worker’s pay; this is also true in Europe with a 25:1 ratio.

The climax of Piketty’s argument is that without economic growth nearer the rate of capital investment, national’ economies will return to historic highs where 90% of the world’s wealth is held by less than 1% of the population.

In the fourth and final section of Piketty’s book, he offers a theoretical cure for today’s trend toward income inequality.

PIKETTY’S SOLUTION:

One, create a progressive tax on capital investment income.

Two, provide public financing for education and health services that levels the playing field for all economic classes.

Three, protect pension rights of the working class.

Four, increase the retirement age based on changes in life expectancy.

Five, revise the income tax code to make it genuinely progressive.

Six, regulate capitalism by legislating democratic and financial transparency.

Seven, reduce immigration restrictions to allow needed workers to fill open job opportunities.

Eight, reduce public debt through capital taxation, austerity, and managed inflation.

Piketty’s fundamental point is that the gap between the rich and everyone else must be understood in the context of real economic growth. As long as capital income disproportionately exceeds growth of labor income, the income gap between classes will continue to increase. That income gap militates against real economic growth because it reinforces expansion of either a welfare state or chaos.

Human nature is an unruly beast, it desires freedom but neither desires dependence on a welfare state nor seeks social isolation from chaos. Piketty does not have incontestable answers but he has credibly framed the problem of income inequality.

DECRIMINALIZATION

Audio-book Review
By Chet Yarbrough

(Blog:awalkingdelight)
Website: chetyarbrough.blog

Flowers in the Blood: The Story of Opium

By: Jeff Goldberg, Dean Latimer, William Burroughs (Introduction

Narrated by Stephen McLaughlin

JEFF GOLDBERG (AMERICAN JOURNALIST, STAFF WRITER FOR THE ATLANTIC) — JEFF GOLDBERG (AMERICAN JOURNALIST, STAFF WRITER FOR THE ATLANTIC, & POLITICAL PUNDIT)

Published in 1981, “Flowers in the Blood” argues for decriminalization of opiates. The idea remains controversial in 2018, and 2022. Written by Jeff Goldberg and Dean Latimer, a listener feels misdirected by historical information.

DEAN LATIMER (WRITER FOR THE EVO, AKA EAST VILLAGE OTHER-WENT ON TO EDIT HIGH TIMES)

The feeling of misdirection is reinforced by a languid, seemingly opiated, performance of the narrator, Stephen McLaughlin. It is not that one is seduced by Goldberg and Latimer’s writing, but a listener feels cornered in a room of opium eaters. Goldberg and Latimer reveal how opium is extracted from a flower to offer a tranquil escape from life’s stresses, with a tantalizing peek at world clarity. Opiate extraction seems simple; the consequence of use, not.

OPIUM POPPY — Goldberg and Latimer reveal how opium is extracted from a flower to offer a tranquil escape from life’s stresses, with a tantalizing peek at world clarity. Opiate extraction seems simple; the consequence of use, not.

brave new world — Goldberg and Latimer argue that opiates enhance natural neurotransmitters, like endorphins, to reduce stress and depression caused by living life. This argument reminds one of a “Brave New World” where every stress in life is characterized as negative.

Goldberg and Latimer argue that opiates enhance natural neurotransmitters, like endorphins, to reduce stress and depression caused by living life. This argument reminds one of a “Brave New World” where every stress in life is characterized as negative.

Goldberg and Latimer note that refinement of opium into morphine and heroin increases its addictive power. They extol the pleasure of opiates while cataloging its history of addiction. Goldberg and Latimer reflect on opium’s effect in altering cerebral states of being. Their argument seems counter intuitive.

They note its use by artists ranging from Charles Dickens to Elizabeth Barrett Browning. They infer opiates enhance artist’s abilities. They realistically identify opiates’ medical benefit, while exposing its potential for addiction. Goldberg and Latimer suggest opiates enhance artistic sensibility, and temper sociopathic homicidal acts. They begin an argument for legalizing opiates.

OPIATE LEGALIZATION — Goldberg and Latimer extol the pleasure of opiates while cataloging its history of addiction. Their argument is counter intuitive. They begin a defense for legalizing opiates.

Goldberg and Latimer argue that there are three options. One, continue jailing narcotic purveyors and users. Two, legalize opiates and let the free market determine use. Three, decriminalize opiates and offer treatment to those who become addicted.

Their argument is for number three; they suggest number one (the American standard) is ineffective, and number two would be a disaster in the making. Goldberg and Latimer argue that America should legalize and regulate opiates and treat those who become addicted.

DRUG TREATMENT AND COUNCILING — America regulates alcohol and tobacco, both proven addictions. Alcohol and tobacco are regulated by the market, with education on their harmful effects and government taxation to increase prices that affects consumption. Goldberg and Latimer argue that America should legalize and regulate opiates and treat those who become addicted.

America regulates alcohol and tobacco, both proven addictions. Alcohol and tobacco are regulated by the market, with education on their harmful effects and government taxation to increase prices that affects consumption. These regulations have had some success, but people still have the right to drink and smoke to excess.

The option of opiate legalization is troubling because it infers substituting inner-direction of human beings for other-direction by government. It increases the potential of a “Brave New World” where human choice is no longer individual but collective.

DRUG USERS — Goldberg and Latimer point out that punishing the addicted with prison is a mistake. Those who succumb to addiction need help; not punishment.

Goldberg and Latimer point out that punishing the addicted with prison is a mistake. Those who succumb to addiction need help; not punishment. One can readily accept that argument but opiate regulation by the government is a step too far. This may be a distinction without a difference but Alcohol and cigarettes are still a private sector choice with government intervention (principally tax increases and education) based on political input.

PHILIP SEYMOUR HOFFMAN (1967-2014) — The loss of Seymour Hoffman in February 2014 was a tragic loss. Hoffman dies at the age of 46, John Belushi at 33, Kurt Cobain at 27, Billie Holiday at 44, River Phoenix at 23; all from opiate overdoses. If opiates were legalized, would these artists have been saved—who knows?

The loss of Seymour Hoffman in February 2014 comes to mind. Hoffman dies at the age of 46, John Belushi at 33, Kurt Cobain at 27, Billie Holiday at 44, River Phoenix at 23; all from opiate overdoses. If opiates were legalized, would these artists have been saved—who knows? They chose addiction to escape the insecurity and stress of life. Their choice is their choice. Insecurity and stress are facts in every human’s life. America’s failure is related to treatment, not government control of human choice.

WAR ON DRUGS — With treatment programs, the government will make the objective of addicting users a waste of manufacturer’s and seller’s time. It may not eliminate illegal drug activity but it will make it less financially viable.

America needs to continue their fight against illegal opiate manufacturers and sellers. Threat of punishment is not the key but reduction in profitability will drive illegal manufactures out of the market. With treatment programs, the government will make the objective of addicting users a waste of manufacturer’s and seller’s time. It may not eliminate illegal drug activity but it will make it less financially viable. Addiction treatment programs and substance abuse’ education are legitimate roles for state governments. Opiates should be subject to the same laws that presently govern drug research and development.

Unfortunately, “Flowers in the Blood” fails to nuance legalization of opiates. It leans more toward influencing uneducated poor, educated middle class, and idle rich to experiment with addictive drugs. Goldman and Latimer are on the right track with regulation and treatment of addiction, but their book encourages drug experimentation in a culture that needs no encouragement. Stress is a part of life and being drugged into obliviousness diminishes humanity.

POLITICS AND ECONOMICS

Audio-book Review
By Chet Yarbrough

(Blog:awalkingdelight)
Website: chetyarbrough.blog

The Wealth of Nations

By Adam Smith

Narrated by Gildart Jackson

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

“The Wealth of Nations” is often referred to but rarely read or listened to in the 21^st century. Thirty Six hours of an audio book is punishing. However, one is surprised by Adam Smith’s prescient understanding of the value of freedom and his appreciation of the American and British conflict over American’ colonization.

“The Wealth of Nations” is not only about economics. It is about politics as an essential ingredient of economics.

Britain was among the mercantile leaders of the world when his book was published in 1776, the year of American Independence.

Dutch dominance had receded; Spain and France were vying for monarchical rule of Western Europe while Napoleon was soon to dominate the east and west European continent. British imperialism was on the rise. Britain became the dominant moral and economic power of the 19^th century.

Adam Smith’s publication defined and codified economics while recognizing the economic limitation of imperialist expansion. Long before Britain’s ascension to the moral and economic leader of the world, Smith noted the error of denying self-determination to distant colonies.

Contrary to President Trump’s “America First”, Smith believed that whatever is produced at the cheapest price and best quality for the consumer is the guiding principle of “The Wealth of Nations”.

Smith argued that business regulation should begin with the best interest of the consumer at the forefront of legislation.

In general, Smith argues that trade monopolies are bad and competition is good. Governments that restrict trade hurt the consumer; therefore, tariffs on foreign goods should be abolished. To Smith, anything that restricts free trade is bad.

Former Secretary of the Treasury, Jacob Lew agrees with the father of economics–eliminating tariffs imposed on goods…would help ease inflation (Nov 3o, 2021 CNBC article). Concern over job loss in America if trade tariffs are eliminated is absurd when looked at through the eyes of an economy transitioning from industrialization to technology.

Freedom was a big deal to Adam Smith. The essence of Smith’s view of economics is that the consumer should be the beginning and end point of all economic decisions and actions. In some respect, this narrow interpretation of “The Wealth of Nations” suffers from the same nearsightedness of a more contemporary author, Ayn Rand.

Rand argues that competition, without government interference, is essential to progress. Both authors ignore weaknesses inherent in human nature that demand some level of government regulation.

On the other hand, government regulation is subject to the same human frailties as business. Laws of “unintended consequence” play out in both political and business decisions. The consumer is an employee as well as an employer.

The economic consequences of wages that do not meet the basic needs of family survival because of foreign competition, technology, industrial obsolescence, etc. have real consequence to employers as well as employees. Bankruptcies occur, unemployment rises, the rich become less rich and the poor starve. Just as Smith’s reviled monopolies, free markets have consequences.

Smith is right. Rand is right. But, both are idealistic rather than realistic because of the nature of humankind. They both infer everything works out in the long run when humankind is left alone.

JOHN MAYNARD KEYNES (1883-1946)

John Maynard Keynes noted, we are all dead in the long run. (In fairness, Smith does acknowledge limited circumstances in which government regulation is justified.)

What is fascinating about Smith’s work is its historical context. He infers that American colonies have reason for discontent because of British taxation without representation. He also suggests Britain’s imperialist decisions and actions should be tempered by a cost benefit analysis of what British subjects receive in respect to costs of managing economies thousands of miles away.

Smith effectively introduced rationality to economics. Capitalism became a marriage between politics and economics.

One can argue that Britain followed Smith’s advice about imperialism through the 18^th and 19^th centuries to become the most powerful nation in the world. But Britain’s grasp of the cost of imperialism began to slip in the 20^th century and a decline in economic strength began. The cost of imperialist policy exceeded the benefit; not to mention, the inherent immorality and unfairness of cultural subjugation.

Visiting “The Wealth of Nations” is a worthwhile journey into history. Is there a 21^st century Adam Smith in America’s future or is he/she pottering around Asia, Europe, the Middle East or Africa and not yet recognized?

RISE AND FALL

Audio-book Review
By Chet Yarbrough

(Blog:awalkingdelight)
Website: chetyarbrough.blog

Asabiyyah: What Ibn Khaldun, the Islamic Father of Social Science, Can Teach Us About the World Today

Written by: Ed West

Narrated by: P. J. Ochlan

ED WEST (ENGLISH AUTHOR, JOURNALIST, BLOGGER)

IBN KHALDUN (STATUARY SYMBOL OF ISLAMIC HISTORIAN BORN 1332, DIED 1406 AT 73 YEARS OF AGE.)

Ed West offers a brief introduction to the life of an ancient historian. His name is Ibn Khaldun. Khaldun describes the first known evolutionary theory of human origin. West also notes this 14^th century scholar creates the first known socio/political theory of the rise and fall of civilizations.

Khaldun explains life’s origin as a aggregation of chemicals and minerals that create organic life and, in turn, evolve into different species.

West notes that Khaldun suggests humankind evolved from monkeys. This is four centuries before Darwin’s “Origin of Species”.

Ibn Khaldun is considered by some to be the first person to write foundational theories for modern sociology, economics, and demography. West notes that Khaldun explains how nations are formed, maintained, and destroyed by sociological, economic, and demographic forces.

Khaldun offers counsel to the great conqueror, Amir Timur (aka Tammerlane), who plans to resurrect the 13^th century Mongol empire built by Genghis Khan.

TIMUR AKA TAMMERLANE IS COUNCELED BY IBN KHALDUN (1336-1405–(Timur is said to have caused the death of over 17 million people in the effort.)

West suggests that Khaldun explains how Timur and other rulers, from the Roman empire to Genghis Kahn to Timur successfully conquered great areas of the known world. His explanation is “Asabiyyah” (aas-sah-bee-ah), a theory that all successful conquerors establish a social environment that creates solidarity among a group of people sharing understanding, purpose, and achievement.

West explains that Khaldun expands “Asabiyyah” to a theory of civilization’s rise and fall. Humans proliferate based on family affiliations. Religion widens family relationships to create tribes. Tribes become a congregation of different families with common beliefs. Tribes come into conflict and eventual settlements that grow into larger groups based on evolved common beliefs.

At each step of widening common interest, a leader rises from the ranks. With an accretion of social ties, villages, towns, and cities are formed with a leader at its head. As the ties that bind continue to expand, nation-states are formed.

Ibn Khaldun’s explanation is “Asabiyyah”, a theory that all successful conquerors establish a social environment that creates solidarity among a group of people through shared understanding, purpose, and achievement.

West shows that Khaldun goes on to explain how civilizations decline. First, Khaldun notes that sons and daughters of great leaders rarely exceed their parent’s leadership success. Khaldun posits the current social and scientific belief of “reversion to a mean”.

Each subsequent offspring of a great leader comes closer to the average of a civilization’s population. Leadership diminishes in succeeding generations.

Second, Khaldun suggests diminished common beliefs lessen a civilization’s cohesion. Religious differences rise, economic circumstances change, social groups fracture, family ties reassert themselves as ties that are more important than community. The example that Khaldun gives is Rome’s decline as a world power. West suggests the same may be said of the United Kingdom’s decline.

Has the American Dream become a lie few believe in? Are elected officials withdrawing to their families at the expense of nation-state’ leadership?

West’s “Asabiyyah” makes one think of America. Does today’s political conflict reflect diminishment of commonly held nation-state belief? Is the increasing gap between rich and poor destroying the social fabric of America? Is the divisiveness of former President Trump a reflection of a nation in decline?

Is nationalism dead, or are we crossing a threshold where the principals of nation-state need to be expanded to include a wider community? Is the next step reflected by the E.U. or some similar congregation of nation-states?

According to West, Khaldun believes nationalism is critically important for a civilization to remain strong. In the time of Khaldun, there was no vehicle for common beliefs except a leader’s influence over conquered nations.

Today, there is an internet. It seems the human family may once again be expanded. Nation-states may not be prepared for “space-ship-earth” but there may be an interim step.

That interim step was tried during the cold war with the U.S.S.R. It failed. The E.U. is facing challenges today.

Trump’s America is regressing from comity to disparity with emphasis on making itself great again. A leading question today is whether civilizations are competing to be in decline or ascendance?

Of course, leadership is key to any future. Right now, there seem few leaders that can make civilizations grow beyond their borders. Khaldun seems as relevant today as he was in the 4^th and early 5^th centuries.

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 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 21^st century China.

“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.

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.

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.

BEIJING CHINA HIGH RISES (TYPICAL IN MAJOR CHINESE CITIES 2018)
INDUSTRIAL POLLUTION ON A BAD DAY IN BEJING,, CHINA

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.

BITCOIN

Audio-book Review
By Chet Yarbrough

(Blog:awalkingdelight)
Website: chetyarbrough.blog

Digital Gold, Bitcoin and the Inside Story of the Misfits and Millionaires Trying to Reinvent Money

Written by: Nathaniel Popper

Narrated by: Robert Fass

NATHANIEL POPPER (AUTHOR, NYT'S REPORTER) — NATHANIEL POPPER (AUTHOR, NYT’S REPORTER)

Nathaniel Popper writes a book on the history of bitcoin. His history is a “Just the facts Mam” presentation. One will draw their own conclusion about the good and bad qualities of crypto currency.

Just like the dollar, pound, renminbe (yuan), franc, and euro, bitcoin is used for legal and illegal transactions. There are a host of criminals who have gamed currencies. Pepper recounts examples of bitcoin that show it is not exempt from currency manipulation.

BERNARD MADOFF (AGE 74) SERVING 150 YEAR PRISON SENTENCE

However, the manipulation takes the form of coding modification, or criminal hacking, rather than overt Bernie Madoff-like’ deceit. Wealth has been accumulated and lost in every medium of exchange since the beginning of barter between buyers and sellers. Popper shows that the fundamental difference between conventional currencies and bitcoin is how value is determined; who decides on what the value should be, and the transparency of change.

Popper explains bitcoin’s value is a consensus of its owners and users. Bitcoin value rises or falls based on most of its holder’s and merchant’s willingness to sell goods in exchange for bitcoin’ value. In contrast, conventional currencies are based on government fiat and national economic stability.

BITCOIN SYMBOL — Popper explains bitcoin’s value is a consensus of its owners and users. Bitcoin value rises or falls based on most of its holder’s and merchant’s willingness to sell goods in exchange for bitcoin’ value.

CHECKS AND BALANCES — All currencies offer exchange of goods based on willing seller and buyer discretion. However, conventional money does not rely on majority determination of value. Value of conventional currency is an inchoate combination of government decision, and the economic condition of respective nations. http://news.webshots.com/photo/2005825900056011884kLVAuD

All currencies offer exchange of goods based on willing seller and buyer discretion. However, conventional money does not rely on majority determination of value. Value of conventional currency is an inchoate combination of government decision, and the economic condition of respective nations. When aberrant government actions or economic crises occur willing buyers disappear, and currency value falls. However, bitcoin is not dependent on government regulation or the state of one economy. Bitcoin relies on its buyers and sellers and is independent of singular government decisions or any singular national economies.

INFLATION — When aberrant government actions or economic crises (like hyper-inflation) occur willing buyers disappear, and currency value falls. However, bitcoin is not dependent on government regulation or the state of one economy. Bitcoin relies on its buyers and sellers and is independent of singular government decisions or any singular national economies.

What Popper clearly explains is that troubled economic countries can see dramatic conventional currency movements that destroy wealth because of government decisions. However, he equally notes many examples of large devaluations in bitcoin. The difference is that devaluation of bitcoin is based on owners and users who are not tied to any single nation-state economy or government regulation. Bitcoin value is based on the opinion of its owners and users.

One might conclude bitcoin is more egalitarian than conventional currency because it is based on the will of the majority of owners and users. That may be true but the idea of depending on bitcoin’s open system modification of cryptographic code is a threat to the will of the majority.

Only code technologists understand the ramification of code changes in bitcoin. Most users can only vote in ignorance and hope. One may argue that is also true when electing a government; however, the difference is transparency. Bad governments can be judged by the public and eventually defeated. Cryptocurrency is, as its title implies, concealed. It is both secret and incomprehensible to most owners and users. Most bitcoin users can only vote in ignorance and hope that coders are acting in a majorities best interest.

No form of currency guarantees value. Every form of currency has its ups and downs. The difference is in who makes the decision about value. If you live in a highly inflationary country, bitcoin offers some level of stability. If you live in a wealthy and relatively stable country, bitcoin seems less attractive.

The future of bitcoin or other cryptocurrencies seems more utilitarian in a future where nationalism disappears and there is acceptance of a world economy based on equality of opportunity. We seem far from such a Utopian world.

A BRADBURY CLASSIC

Audio-book Review
By Chet Yarbrough

(Blog:awalkingdelight)
Website: chetyarbrough.blog

The Illustrated Man
By Ray Bradbury

Narrated by Paul Michael Garcia

Flights of imagination sparkle and spin in this updated 1950s Ray Bradbury classic. This compendium of Bradbury’ tales is titled “The Illustrated Man”.

ROD SERLING (1924-1975, SCREENWRITER, TV PRODUCER, NARRATOR)

Bradbury spins stories; reminding one of late night re-runs of Rod Serling’s “Twilight Zone”. Every episode sparkles with stars and planets, habitable by man but riddled with fear, death, and destruction. Bradbury grasps human nature and turns it against itself by writing stories that illustrate man’s selfishness, insecurity, wantonness, and aggression.

Tattoos come alive on rippling skin to act out a series of plays about mankind’s future. Everyone fears the illustrated man because his tattoos expose the worst in man. Belief that nuclear cataclysm will end life on earth blooms like a mushroom cloud. Traveling to other planets changes mankind’s environment but man’s nature remains the same.

THE ILLUSTRATED MAN (PLAYED BY ROD STEIGER) — THE ILLUSTRATED MAN (PLAYED BY ROD STEIGER IN A 1969 MOVIE) Tattoos come alive on rippling skin to act out a series of plays about mankind’s future.

AYN RAND (1905-1982) — AYN RAND (1905-1982, AUTHOR WHO FIRMLY BELIEVED IN THE VIRTUE OF SELF-INTEREST) Unregulated self-interest is a dangled reward stolen by one to keep it from the many; in the end the reward is destroyed by the selfishness of each against the other.)

These are not happy stories but they are great flights of imagination. Bradbury tells a story of human exile and deprivation that exacerbates selfishness when personal reward is dangled in front of exiled and deprived human beings. The dangled reward is stolen by one to keep it from the many; in the end the reward is destroyed by the selfishness of each against the other.

Insecurity is a devouring beast in the story of a planet blessed by an appearance of a Visitor (presumably Jesus) just before a rocket ship lands on the planet that has been visited. The captain disbelieves it has happened and is driven to track down this Visitor rather than settle in the insecure surroundings of a unblessed world. The captain is left to wander the universe, never to arrive in time to actually see the Visitor.

INFIDELITY — Wantonness is illustrated by Bradbury’s story of an unhappily married man.

Wantonness is illustrated by the husband that is unhappily married. He duplicates himself. His duplicate takes his place beside his wife so he can buy a ticket to Rio to exercise his fantasy. The duplicate is so perfect it becomes as human as the husband. The duplicate places the wanton husband in a box to die, and buys a ticket to Rio for his wife to accompany it in its fantasy.

Human kind is aggressive. Humans conquer and destroy civilizations. One world of the future prepares for a second visit from mankind by becoming the image of a City. This image devours the men of the second visit and assumes their bodies; i.e. the City image is transformed into the bodies of the humans from this second visit. The City image plans to return to earth to destroy those who had destroyed them.

NUCLEAR DETONATION ABOVE TEST TARGET 1986 — Human kind is aggressive. When human’s conquer or destroy others, others rise to destroy those who had destroyed them. An endless circle of life where agression eats itself.

Bradbury is a master story-teller. Paul Michael Garcia’s narration is a tribute to Bradbury’s skill.

INDICTMENT

Audio-book Review
By Chet Yarbrough

(Blog:awalkingdelight)
Website: chetyarbrough.blog

Tears We Cannot Stop-A Sermon to White America

Written by: Michael Eric Dyson

Narrated by: Michael Eric Dyson

MICHAEL ERIC DYSON (AUTHOR, BAPTIST MINISTER, PROFESSOR OF SOCIOLOGY AT GEORGETOWN UNIVERSITY)

Michael Eric Dyson is a graduate of Princeton who teaches at Georgetown University. “Tears We Cannot Stop” is an indictment of white America. The indictment accuses white Americans of serious crimes stemming from today’s bigotry, neglect, permanent injury, and murder of black Americans.

Examples of police violence against black Americans, a history of ethnic isolation, forced conformity and denied equal opportunity strongly support Dyson’s accusation.

Each accusation and the evidence gathered by Dyson confront the conscience of every white American. What he writes rings of truth. The more Dyson explains, the greater is white America’s guilt. It is a message missed by white Americans because they do not live the life of black Americans. White privilege is taken for granted in America because money, power, and prestige are held by mostly white American males.

RODNEY KING (APPEARANCE 3 DAYS AFTER BEATING 3.6.92–KING DIES IN JUNE 2012 @ 47 YEARS OF AGE)

The institutionalization of racism makes black Americans afraid. Out of that fear comes distrust, anger, apathy, and isolation. Black mothers and fathers fear for their children whenever they leave home. Regardless of education, fame, or fortune, Dyson notes an honest and law-abiding black American is subject to a different set of social rules. From birth, black Americans are told by their parents not to disagree with police for fear of being beaten, arrested or shot.

Truth does not matter in a black person’s response to accusation. Most black Americans live with fear; most white Americans do not. When stopped by the police, a black American thinks–what can I do; where can I go; what can I say; who can I trust other than myself and my race? When unjustly accused, black Americans have limited recourse. Those limits are tinged with frustration, and/or anger. No wonder some feel disrespected and alone in America.

RUDY GIULIANI (FORMER MAYOR OF NEW YORK CITY)

RUDY GUILIANY (FORMER MAYOR OF NEW YORK CITY) Dyson attacks pundits who suggest black Americans are their own worst enemy. The white pundit’s argument is they kill each other. The argument ignores two monumental facts. One, the toll that poverty and unemployment play in poor communities; and the truth that whites murder whites nearly as often as blacks kill blacks.

Dyson attacks pundits who suggest black Americans are their own worst enemy. Some white pundit’s argue blacks kill each other more than whites kill blacks. The argument ignores two monumental facts. One, the toll that poverty and unemployment play in poor communities; and two, the truth that whites murder whites nearly as often as blacks kill blacks.

Dyson notes that victimization is a community problem; not a black or white issue; i.e. if you live in a black community, blacks murder blacks; if you live in a white community, whites murder whites.

Blacks victimize blacks because alternative ways of taking care of their families are limited by socio/economic isolation. Blacks become invisible to white America.

The real difference between black and white victimization is whites have more opportunity in America. White, mostly male, Americans write the history of America and create the rules for “democratic” governance.

Dyson encourages white Americans to become more involved with black Americans. The social disconnect between races promotes ignorance of common goals and aspirations. Who does not want to live in peace, provide for themselves and their families, raise their children to be better off than themselves? Part of the difficulty is that there is little trust between black and white Americans as is noted in the following social experiment.

Leaders in America, consciously or subconsciously, treat non-white Americans as “others”. When humans treat someone as an “other”, they become less human. Minorities and other nation’s populations become “gooks”, “spics”, “towel heads”, “niggers”; i.e. something identified as less than human. This human categorization institutionalizes discrimination. It leads to this American dilemma and to world wars.

Leaders of America, who are mostly white males, ignore the plight of black Americans. One wonders how many white Americans thank their God for not being born black. That is Dyson’s reason for concluding black Americans shed “Tears We Cannot Stop”.

MADOFF’S PERPETRATORS

Audio-book Review
By Chet Yarbrough

(Blog:awalkingdelight)
Website: chetyarbrough.blog

Ponzi Supernova—Madoff Speaks

Recorded by: Audible Original

Produced by: Steve Fishman

STEVE FISHMAN (NEW YORK MAGAZINE REPORTER)

In “Ponzi Supernova”, Audible offers recorded interviews with Bernie Madoff and other perpetrators of the largest Ponzi scheme in history. Steve Fishman conducts several telephone interviews with Madoff while he serves a life sentence for fraud. Steve Fishman gets the telephone interviews after wheedling his way into Madoff’s confidence through a fellow prisoner. To round out Fishman’s story, he captures telephone conversations with several other crooks, investigators, and victims of Madoff’s crime.

BERNARD MADOFF (AGE 74) SERVING 150 YEAR PRISON SENTENCE (Madoff died in prison on 4/14/21 at the age of 82).

Fishman shows how a sixty billion-dollar Ponzi scheme is created and how it escapes detection for over twenty years. Supplemented by audio books like “The Big Short”, and “No One Would Listen”, Fisher amplifies Madoff’s unconscionable crime with recordings of victims who lost their life savings. Fisher explores the perfidy of banks and investment companies that mindfully ignored Madoff’s impossible investment returns; all the while, being financially benefited from Madoff’s lies.

“Ponzi Supernova” reveals how Madoff created an empire of greed. Madoff comes off as an average intellect with a big ego, meager technological skill, and zero empathy. He hid behind the shadow of prestige.

Madoff refuses to take responsibility for his crimes and exhibits no remorse for the grief and death of others effected by his crimes. As a person, Madoff reminds one of a sociopath

Madoff manages to appeal to the greed of human beings and blames others for their greed. He manufactures investment data that hides the truth of his investment skill and his organizations’ portfolio. He takes investor’s money and uses new investor’s money to pay earlier investor’s returns. Few real trades support Madoff’s extraordinary portfolio performance.

“Ponzi Supernova” implies most of the investment firms; investment firms that knew of Madoff’s firm should have and could have exposed his lies. However, they were paid a fee for their service. Rather than investigate Madoff’s investment methodology, most investment firms gathered fees and left investors to fend for themselves.

Fisher notes how one analyst is sidelined by his investment company because he asked too many questions. The questions would have exposed Madoff’s scheme. Fisher also interviews an independent analyst that tells a client not to invest in Madoff’s company because she saw too many red flags. For instance, Madoff would not provide examples of his past investments to show how he made such remarkably steady returns; even in a falling market. Madoff’s standard refrain was “trust me”.

Like stories in “The Big Short” and “No One Would Listen”, Fisher’s recordings show institutional incompetence by government regulators, and greed from the private sector.

The SEC interviews Madoff on numerous occasions. Often the SEC representative is young and inexperienced. When reports are requested, Madoff’s back-office team manufactures whatever information is requested. The reports have no basis in truth. The reports are manufactured to satisfy whatever question is asked. If the SEC had called to confirm whether the trades had really been made, they would have exposed Madoff for fraud. Rather than check specific trade transactions, the SEC settled for a simple report that said Madoff had a trade account.

Nearly eleven billion dollars of the sixty billion-dollar Ponzi scheme is recovered. However, the recovery is largely limited to American investors by what are called “claw backs”. The “claw back” is from investors who had taken their money out before Madoff’s collapse in 2008. Other countries had no “claw back” provisions which meant many non-Americans lost everything.

Madoff and a few of his employees went to jail, but many escaped with fines and admonishment. “Ponzi Supernova” clearly implies both the government and private sector were guilty for losses by many small investors. These investors relied on government regulation and private sector financial advice.

If there is a lesson in this story, it is that every person should closely monitor their own investments. Most, if not all, human beings are seduced by money, power, and/or prestige. It is every investor’s responsibility to know how their investment adviser is benefited by your investments in their recommendations. Better to make your own investment mistakes, rather than rely on others who have a financial interest in your trading decisions.

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