ECONOMICS – Page 11 – REVIEWS AND VIEWS OF LIFE

POWER OF IDEAS

Audio-book Review
By Chet Yarbrough

(Blog:awalkingdelight)
Website: chetyarbrough.blog

Written by: Scott L. Montgomery, Daniel Chirot

Narration by: Stephen McLaughlin

SCOTT L. MONGOMERY (AUTHOR, AMERICAN GEOLOGIST, AFFILIATE FACULTY MEMBER UNIVERSITY OF WASHINGTON)

DANIEL CHIROT (AUTHOR, PROFESSOR OF RUSSIAN AND EURASIAN STUDIES @ UNIVERSITY OF WASHINGTON.)

“The Shape of the New” is about the power of ideas. Scott L. Montgomery (a geologist and professor) and Daniel Chirot (a winner of a Guggenheim Fellowship for Social Sciences) write about three ideas rarely argued in polite conversation; e.g. economics, politics, and religion.

Montgomery and Chirot capsulize the importance of their subject by paraphrasing Victor Hugo’s line in “Les Miserable”. “One can defeat an army but not an idea”. (The actual quote is: “An invasion of armies can be resisted, but not an idea whose time has come.)

The essence of the author’s augment is that Smith’s, Marx’s, and Darwin’s ideas are seminal beliefs that define the modern world.

Among others, Montgomery and Chirot profile the ideas of Adam Smith, Karl Marx, Charles Darwin, Alexander Hamilton, Thomas Jefferson, Jerry Falwell, and Sayyid Qutb. Each represents ideas that are part of modern world socioeconomic and religious thought. Smith’s, Marx’s, and Darwin’s ideas largely standalone, but Hamilton, Jefferson, Falwell and Qutb rest on the shoulders of others.

Adam Smith (1723-1790, Scottish economist)

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

Marx’s dialectic suggests capitalism is just a phase in an economic cycle that will evolve into communism.

CHARLES DARWIN (1809-1882) FOUNDER OF THE THEORY OF THE ORIGIN OF SPECIES.

Hamilton grasps the importance of centralized control of money and national debt to support mercantilism, and free enterprise. Jefferson tempers Hamilton’s nationalist control with arguments for states’ rights that reflect on concerns raised by Smith, and then Marx, about unregulated economic power.

JERRY FALWELL (1933-2007, AMERICAN EVANGELICAL SOUTHER BAPTIST PASTOR, FOUNDER OF THE MORAL MAJORITY)

Jerry Falwell begins the evangelical Moral Majority that decries homosexuality and abortion, and posits belief in salvation only through faith in a Christian God.

SAYYID QUTB (1906-1966, EGYPTIAN AUTHOR,EDUCATOR,ISLAMIC THEORIST,POET,AND LEADING MEMBER OF THE MUSLIM BROTHEHOOD)

SAYYID QUTB (1906-1966, EGYPTIAN AUTHOR,EDUCATOR,ISLAMIC THEORIST,POET,AND LEADING MEMBER OF THE MUSLIM BROTHERHOOD) Qutb (pronounced “kootube), like Falwell and Christianity, believes only in his faith, a Mohammedan God.

Smith’s, Marx’s, and Darwin’s ideas play out in religions and nation-states that deeply influence the modern world.

Hamilton, Jefferson, Falwell, Qutb, Lenin, Stalin, Hitler, Mao, and other leaders adopt, adapt, and distort Smith’s, Marx’s, and Darwin’s ideas; figuratively leading humanity to heaven and hell.

What Montgomery and Chirot do is return to original texts of Smith, Marx, and Darwin to show how their ideas penetrate Hamilton’s, Jefferson’s, Falwell’s, and Qutb’s thoughts and actions. As Smith’s ideas are more widely disseminated and read, America’s economic policy changes. The world’s economy evolves.

Falwell and Qutb reflect on unleashed sectarian beliefs consequent to Darwin’s idea of evolution. If there is no God, then what in life is not permitted? Qutb disapproves of Gamal Abdel Nasser’s westernization of Egypt because it violates the Quran and Muslim Arab identity.

Gamal Abdel Nasser 1918-1970 (Egyptian politician, 2nd President of Egypt 1954-1970).

Montgomery and Chirot note that much of the religious right is reactionary. The religious right challenges the socioeconomic belief of Smith’s sectarian vision of the invisible hand. To a Christian, the invisible hand can only be God’s hand. Marx and Darwin’s science only has relevance if it fits God’s plan.

To Qutb, the true path for humankind is through the word of the Koran. The authors question the good works of the evangelical movement when it infringes on human freedom and ignores scientific evidence. On the other hand, the authors note that religion plays an important role in the history of morality. Many question the direction of evangelicals but religions continue to shape morality in good and bad ways.

China’s rapid advance may not be exactly what Marx predicts but it is a kind of capitalist evolution that incorporates some of the tenants of communist centralized control.

Just as Deng’s and Xi’s interpretation of Marxism distorts communism, Keynes’ and Hayek’s belief in free enterprise distorts Smith’s economics.

Darwin’s view of evolution is morphing into arguments for genetic manipulation to create more perfect human beings. One questions whether this is a step toward Nazism or nirvana.

As Victor Hugo notes, “An invasion of armies can be resisted, but not an idea whose time has come.” Montgomery and Chirot have written an informative and interesting history of “..Big Ideas and How They Made the Modern World”.

In the end, “The Shape of the New” is a tribute to the importance of a liberal education. One may be a genius, but without a liberal education genius is often so narrowly focused, it leads to societal destruction.

GOD IS NOT THERE

Audio-book Review
By Chet Yarbrough

(Blog:awalkingdelight)
Website: chetyarbrough.blog

Go Tell It on the Mountain

Written by: James Baldwin

Narrated by: Adam Lazarre-White

JAMES BALDWIN (1924-1987 AMERICAN NOVELIST & SOCIAL CRITIC) — JAMES BALDWIN (1924-1987 AMERICAN NOVELIST, SOCIAL CRITIC)

Go Tell It on the Mountain because God is not there. Go Tell It on the Mountain because no one listens. Go Tell It on the Mountain because no one cares. James Baldwin rages against culture that makes one, what one is not. Baldwin wins fame from a book that defines the chains of discrimination. He explains why and how culture is a curse. Baldwin tells a story that explains why being different denies equal opportunity.

Go Tell It on the Mountain is partly auto biographical. It tells of the author’s remembrance of his childhood and formative years. In broad perspective, Go Tell It on the Mountain shows how Americans are born as equals but deprived of potential by culture. Though published in 1953, the truth of Baldwin’s observations about culture is institutionalized in America.

Baldwin writes a story about three economic opportunities for early 20^th century black Americans. They are announced by Baldwin as robber, pimp, or preacher. Today, some believe blacks are still not suited for more.

STEREOTYPING — Only when human beings are treated as equal will stereotypes disappear.

Baldwin’s story is about two fathers of the same boy. One is the natural father; the other is a stepfather. The birth father is characterized as naturally smart. He moves from the rural south to the urban north with a woman he does not marry. The father is arrested for being at a store when two black men rob it. Because the father is in the wrong place at the wrong time, he is sent to jail for trial. The father is accused but not convicted. He is so shaken by the experience; he slits his wrists and dies. What would this father have become if he had not been arrested and jailed? The innate skill of a human being may be a combination of genetics and environment but if one’s color says you can only be a robber, a pimp, a preacher, a sports star, or an entertainer; being smart is not enough. Only when human beings are treated as equal will stereotypes disappear.

BLACK PREACHER — The irony of a stepfather/ preacher’s abuse is that he is biblically as sinful as most human beings. (In retrospect, knowing that Baldwin is gay, one surmises how abusive a religious stepfather might be.)

The second father of the same boy, a stepfather, also gravitates from the rural south to the north but he is older and knows success as a preacher. He is not characterized as particularly smart but he believes in God and talks the talk of a good man who will rescue an unwed mother and her child from a life of despair. However, the stepfather is a martinet. He severely punishes his wife and children for what he considers sin or disrespect. The irony of the preacher’s abuse is that he is biblically as sinful as most human beings. (In retrospect, knowing that Baldwin is gay, one surmises how abusive a religious stepfather might be.)

What makes Baldwin’s book important is its reflection on a part of American culture that denies equal opportunity for all. A smart man kills himself because he is black and has experienced the hate and inequality of discrimination. A preacher beats his wife and sons because he believes he has a right, given by God, to assay sin and punish those who violate his limited understanding.

Being smart or being religious is not enough; particularly if you are a minority or a woman because cultures stultify individuality and restrict opportunity. Individuality and opportunity are hindered by poor education and biases that are eternally engendered (institutionalized) by discrimination. Blacks have shown they are more than criminals, preachers, sports stars, and entertainers. And women have shown they are more than child bearers and housewives but America continues to struggle with equal opportunity for all. Baldwin exemplifies America’s struggle in Go Tell It on the Mountain.

NARCONOMICS

Audio-book Review
By Chet Yarbrough

(Blog:awalkingdelight)
Website: chetyarbrough.blog

Narconomics: How to Run a Drug Cartel

Written by: Tom Wainwright

Narration by: Brian Hutchison

TOM WAINWRIGHT (BRITISH AUTHOR, EDITOR OF THE ECONOMIST)

“Narconomics” is about the business of illegal drugs.

Joaquin Guzman (aka El Chapo, captured 2.22.2014 and recaptured 1.8.16).

Tom Wainwright notes drug cartels are modern businesses. They benefit rich owners while liberally rewarding middle class managers with money, power, and prestige. The difference is–middle managers brutally terrorize employees, kill their customers, and murder innocent bystanders.

Drug Cartel murders Mormon Family living in Mexico in 2019.

Picture from the New York Post, Nov. 6, 2019.

These business conglomerates systematically brutalize the public. The manufacture and sale of illegal drugs is a growth industry, diversifying its practices and products while becoming global enterprises. An irony of Wainwright’s story is the ugliness and economic success of drug cartel businesses are abetted by bribe-taking government leaders.

President Enrique Peña Nieto (Former President of Mexico– accused of bribery from the Oil Industry and Sinaloa Drug Cartel.)

The substance of Wainwright’s book is that cartels are run with many of the fundamental principles (aside from overt terror and murder) that make international companies richly successful.

DRUG CARTELS (ONE OF SEVERAL MONOPOLIES IN THE WORLD)

Though policies like the war on drugs and alcohol prohibition were meant to save people from themselves, Wainwright suggests they failed.

When desire for money, power, or prestige is unmet, humans compensate with drug use; or other escapist behaviors.

Wainwright argues that understanding drug cartel business practices will show how their industry profits can be disrupted.

Wainwright suggests changing the focus from a war on drug producers and sellers to a policy for treating, educating, and rehabilitating users.

Wainwright shows how drug cartels capitalize on fundamental human drives and weaknesses. He goes on to suggest how drug cartels can be destroyed.

Rather than spending billions to militarize national police forces, Wainwright suggests those dollars be spent to treat, rehabilitate, and educate accused and/or incarcerated users.

An encouraging article in the WSJ (12/15/21) notes that Mexico and U.S. drug interdiction agencies are working on a framework to combat drug cartels “… likely to focus more on drug addiction”. In destroying the drug cartel’s consumer base, they lose profit. Without profit there is no money, no power, and no prestige. There is only a failed business model.

Wainwright goes on to suggest that drug use be decriminalized and regulated by the government. This is no panacea but history shows that the war on drugs is a failure. The heart of success for drug cartels is its adoption of business practices that generate profit. The reality of the fundamentals of well-run business organizations is that they do not disappear. Remove the source of profit and businesses either fail or are compelled to change.

Wainwright explains that the business of illegal drugs is a global enterprise.

A global level of government cooperation is needed for effective elimination of drug cartels. No single nation can eradicate cartels because of globalization. One nation’s success in the drug war only compels cartels to move to neighboring countries. The solution lies in treating, rehabilitating, and educating drug users. Only with decriminalization, user medical treatment, and public education will the source of profit for drug cartels be cut off.

Wainwright offers a compelling argument for attacking drug cartels by removing the source of their profits. The source of profits is the consuming public; not the illegal drug manufacturers and distributors.

The fact that drug cartels are run like businesses reveals an infrastructure that allows diversification. Once profits are reduced for drug manufacture and distribution, cartels will change to survive.

Wainwright notes that drug cartels have already diversified; i.e. they are human traffickers, and extortion consortiums. Government agencies and the general public are equally repulsed by human trafficking, murder, and extortion. Governments and the general public are more likely to cooperate in eradicating that type of criminal activity; less so with drug addiction.

The glimmer of hope is that cartel diversification does not pander to the desire for escape from reality offered by drugs.

There is no simple or cheap alternative to “the war on drugs” but there is a history that shows in its current form, war does not work. The drug war is no joke, neither is it a solution.

Illegal drug manufacturers and distributors are just the cost of doing business; not the source of profit. Cure the public of its need for drugs, decriminalize drug use, or at least treat the addicted, and drug cartels have no motive to be in the business.

A MODERN MACHIAVELLI

Audio-book Review
By Chet Yarbrough

(Blog:awalkingdelight)
Website: chetyarbrough.com

Human Action (A Treatise on Economics)

Written by: Ludwig von Mises

Narrated by: Jeff Riggenbach

LUDWIG von MISES (1881-1973, THEORETICAL ECONOMIST OF THE AUSTRIAN SCHOOLD, INFLUENCED HAYEK AND FRIEDMAN)

America is on the threshold of the largest tax change since Ronald Reagan’s presidency. If past is prologue, trickle down economics will not work, the deficit will rise, and the poorest will be victimized. The genesis of the delusion of trickle down economics comes from interpretations of a modern Machiavelli.

Ludwig von Mises is a twentieth century Machiavelli. This near 48-hour audio book details a theory of economics that will offend modern liberals, expose weakness of libertarians, and vilify the new American President’s nationalist policies. The venality of treating government as a business is a mistake of monumental proportion.

Approaching von Mises as a devil incarnate is unfair. His beliefs are pilloried by today’s liberals as loudly as aristocrats and rulers vilified Machiavelli in the 16^th century. Like Machiavelli, von Mises looks at the world as it is; not as it ought to be. His observations cut at modern liberal, as well as anarchic, views of highly regarded liberals like Ralph Nader, Martin Luther King, Norm Chomsky, and alleged conservatives-like President Trump.

In von Mises book, Roosevelt’s New Deal is vilified. Additionally, von Mises vociferously disagrees with the liberal John Maynard Keynes’s

economic interventionist creed. Ironically, Donald Trump may be the most interventionist President since FDR with a scatter brained economic plan that von Mises would equally vilify.

Von Mises observations have historical credibility. What they do not have is social conscience. In fact, he suggests social conscience is a fiction perpetrated by populists to distort the value of capitalist economies. Like Machiavelli, von Mises observes the nature of human beings, and recognizes their inherent irrationality and moral weakness. Von Mises illustrates numerous examples of human irrationality; beginning with market consumption, and ending with entrepreneurial ambition. Donald Trump exemplifies von Mises argument that humans are irrational, greedy, power-hungry, and vain. For President Trump to believe taxing imports by 20% makes Mexico pay for a useless five-billion-dollar wall is absurd. The American consumer will pay for that wall in increased cost of Mexican produce and manufactured goods.

Von Mises criticizes famous economists like David Ricardo for introducing politics into economics. Von Mises argues that the drive for money, power, and prestige are inherent in an entrepreneurial capitalist system. Von Mises argues that government officials who profess social conscience distort free enterprise by picking winners and losers. When politicians pass legislation that aids one entrepreneur over another, it distorts the driving force of capitalist economies. He equally vilifies government leaders who impose tariffs on international trade. Von Mises explains that the fallacy of government leaders who pass favoring legislation is that the real mover of the economy is the consumer; not the producer.

FRENCH REVOLUTION — Von Mises believes labor has a choice. They can work for low wages or remain idle. The fallacy of that argument is the inherent unfairness of not having enough income to live creates revolutionary discontent.

The logical extension of von Mises’ theory is that any government planning or action that affects an entrepreneur’s willingness to take a risk to produce product, or service a customer’s perceived needs, is bad for society. To von Mises, efforts to organize labor is an interference with capitalist entrepreneurs because labor is not taking a risk. Von Mises argues that labor costs will find its own level by being an automated tool of the entrepreneur; subject to hunger and deprivation if they choose not to participate. Von Mises point is that the entrepreneur will pay what he/she must to have labor available, but no more than what the end-product consumer is willing to pay. Von Mises believes labor has a choice. They can work for low wages or remain idle. The fallacy of that argument is the inherent unfairness of not having enough income to live creates revolutionary discontent.

Unions offer a vehicle for leveling the power between businesses and labor. To not allow unionization is tantamount to favoring businesses that are no longer competitive but are today recognized as an economic equivalent of individuals. Not to give unions a place “at the table” is morally, ethically, and economically unfair; particularly in industries that are no longer entrepreneurial.

Another von Mises’ observational theory is that government policy should have no role in subsidizing new inventions, new drugs, the ecology of the world, or the elimination of slavery because such policies interfere with pure capitalism. This reinforces absurdist arguments of libertarians.

NATIONAL INSTITUTE OF HEALTH (RESEARCH INSTITUTE FINANCED BY THE GOVERNMENT.)

American creativity has historically been benefited by government subsidization of technological advances. (President Putin noted in a 60 Minutes’ interview that creativity is his most admired quality in the American economy.) The speed of improvements in health, education, and welfare historically increased with government subsidization of drug research, public education, and the energy industry.

The fallacy of von Mises’ theory lies in the framework of theorists. It ignores human existence by hiding behind the unquantifiable nature of society. One may argue that America’s Civil War had nothing to do with the elimination of slavery. (Von Mises suggests that slavery was abolished because it became too expensive; not because it was morally and ethically reprehensible.) One may argue that Roosevelt’s New Deal was a failure. One may argue that the Marshall Plan after WWII rewarded failed nations. One may argue that George Bush’s and Barrack Obama’s decisions to bail out the American economy interfered with pure capitalism. History suggests von Mises is wrong. Government intervention can be good as well as bad. (Bush unilaterally agreed to lend $17.4 billion of taxpayers’ money to General Motors and Chrysler, of which $13.4 billion was to be extended immediately.)

Von Mises lived into the 1970 s. How could he ignore the moral and ethical iniquity of slavery, the value of the Marshall Plan, government subsidization of the American banking system, financial incentives for the energy industry, and the billions spent to advance technological inventions? Those are good examples of government intervention. On the other hand, building a wall between Mexico and the U.S. and levying a 20% import tax is a bad government intervention.

American capitalism works because of the checks and balances written in the Constitution. Von Mises theory is based on valid observations but social conscience, whether statistically measurable or not, must be a part of decisions that affect the lives of millions. Mistakes will be made, and have been made, but economic statistics cannot be substituted for pragmatism.

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