ECONOMICS – Page 5 – REVIEWS AND VIEWS OF LIFE

POLITICAL CHAOS

Tariffs to restrict foreign production is shooting citizens in the foot by artificially increasing the cost of living.

Books of Interest
Website: chetyarbrough.blog

Edge of Chaos: Why Democracy Is Failing to Deliver Economic Growth – and How to Fix It

By: Dambisa Moyo

Narrated By: Pamala Tyson

Dambisa Moyo (Zambian-born economist and author with a BS and MBA from Harvard, former World Bank consultant to Europe, Central Asia and Africa.)

“Edge of Chaos” is a revelatory and intelligent analysis of economic rewards and risks of democracies and dictatorships. Fundamentally, Moyo argues failures of government economies are related to societal instability and short-term government economic policies that are disproportionately influenced by monied interests and kleptocratic political leaders. Rich corporations and kleptocratic leaders distort economic opportunity, create chaos while producing and exacerbating economic inequality. She argues America is at the edge of chaos because of a flawed democratic election system that is biased toward short-term rather than long term economic policy.

Moyo identifies the Gini index of income inequality to show that there is little difference between the rich and poor in China and the United States despite their government leaders’ differences.

China is a dictatorship while America is a form of democracy. They are nearly the same on the Gini index scale of citizen inequality while South Africa, Zambia and Brazil are at the bottom. Slovenia, the Czech Republic, Slovakia, Belarus and most of the Scandinavian countries show the lowest differences in citizen’ economic inequality. Mayo argues the difference has little to do with their forms of government except in relation to their government policies. In her opinion, China and the United States could improve their citizen’s Gini index position if their government policies would focus on income equality.

Both China and America have relative stability but with different forms of government.

Unquestionably, freedom is the sine non quo (indispensable ingredient) of America, but it is income inequality that causes the chaos Moyo alludes to in her book. That chaos is not overtly apparent in China because of dictatorship but one who has traveled to China feels there is a similar level of discontent, if not chaos, among its citizens over economic inequality.

Moyo’s solution for reducing America’s growing chaos seems difficult but not impossible to implement.

Dambisa Moyo’s solution revolves around the following 8 recommendations.

Make voting compulsory to increase voter participation more representative of the people.
Make election to the House of Representatives a six-year term like the Senate to encourage longer term economic goals but limit the number of terms one can be in office. (Eliminate career politicians.)
Increase the pay of politicians to what successful private sector leaders receive.
Establish policy making agencies that can focus on long-term policies without being threatened by near term election cycles.
Invest in the education of future leaders of the political system.
Encourage public officials to focus on economic diversification with an educated understanding of technological change in the world.
The wealth of the nation should be focused on reduction of economic inequality.
Strategies to manage natural resources should be developed to focus on sustainability.

Fair trade is where America is on the wrong side of history according to the author.

Adam Smith believed in fair trade.

Adam Smith argued for removing trade barriers like tariffs and quotas because of limited natural resources. He explains resources are more efficiently allocated, product production is increased, and economic growth is improved with free trade. As inferred by Moyo, American chaos is partly a result of ignoring Adam Smith’s prescient understanding of economics.

America democracy has journeyed a long way since 1776.

America’s fundamental success came from its emphasis on freedom within rules-of-law organized around the “checks and balances” of three distinct branches of government, i.e., the executive, congressional, and judicial branches. This is the strength of American Democracy that has offered stability. The inference made in “Edge of Chaos” is that America’s stability is at risk if it does not adapt to technological change wrought by A.I. and global interconnectivity.

Service is a growth industry in America.

Technology is changing the nature of American productivity from material products to service. With the help of A.I., America can begin to address many of the service needs of its citizens. From aid to the homeless, to education for service to others, to drug treatment of the addicted, to improved health care for all, the prosperity and income of Americans can be more equitably shared.

Global interconnectivity requires greater acceptance of fair trade as originally described by Adam Smith.

Today’s alleged protection of worker employment by using tariffs to restrict foreign production is shooting citizens in the foot by artificially increasing the cost of living. Re-education for service to the public by using A.I. to make citizens more human-centered offers an alternative to 21st century American chaos.

These are intelligent observations by a very young and well-educated author.

A.I.s’ CROSSROAD

The greatest threat of A.I. is that the ubiquity of information will turn people and countries against each other.

Books of Interest
Website: chetyarbrough.blog

Feeding the Machine (The Hidden Human Labor Powering A.I.)

By: Mark Graham, Callum Cant, James Muldoon

Narrated By: Orlando Wells

Graham, Cant, and Muldoon have backgrounds that offer an educated opinion about the impact of artificial intelligence on the world labor market. Graham is a Professor of Internet Geography affiliated with the University of Oxford’s School of Geography and the Environment. Cant is a researcher and labor rights advocate for workers in the gig economy. Muldoon is an Associate Professor in Mangement and Head of Digital Research at a think tank on modern technologies.

“Feeding the Machine” reminds one of the Industrial Revolution in its early stages.

The fear of loss of jobs because of machine replacement led to the Luddite movement that destroyed machines manufacturing products. The quality of machine-produced product may not have met craftsman standards, but production cost was so much less, the public preferred the lower-cost product. As the industrial revolution grew, the quality of production improved, and many craftsmen lost their jobs. Many of these craftsmen had to find new jobs. Some became users of machines to produce product. The transition was undoubtedly difficult because it required changes in the way people work. Rather than working for themselves, they had to work for manufacturers that produced products with machines. Craftsman had to work regular hours for a wage rather than sell product based on their exclusive labor. Karl Marx in “Das Kapital” explained that capitalism devalued worker’s contribution to society because they were not compensated fairly for their work based on profits earned by company’ owners.

Workers began to unionize to increase their political power and influence on managers of companies owned by entrepreneurs.

The results of unionization have been to begin equalizing wages and company profits. That equalization is a battle between corporate profit needed to stay in business, reasonable return to company owners, and livable wages for workers. When any of these three are out of balance, companies either go bankrupt, or find an acceptable balance that serves the needs of all.

Information is energy in today’s A.I. world., just as steam was in the industrial revolution.

As one listens to “Feeding the Machine” which claims A.I. produces poor quality energy is like early steam engines that provided inadequate energy. Who can say that A.I. “energy” will not improve just as steam engines improved? One becomes skeptical about the authenticity of the authors’ opinion. It seems too soon to believe A.I. power will not improve human life, just as steam engine power improved product quality and lowered consumer prices.

The authors make valid points about the impact of A.I. on workers.

Workers are often paid a pittance for repetitive work that is mind numbing because of the need to monitor digital information for its accuracy and quality. Is that significantly different than the repetitive motions needed by workers on a production line for manufactured goods? Henry Ford changed the way cars are produced by creating assembly line work that gave repetitive jobs to workers. Is that repetitive work much different than digital inspection by workers of A.I. production?

The many examples the authors give of remote workers’ wages for digital accuracy in Africa and other poverty-stricken areas of the world is heart rending. These new laborers are paid small wages that assure continued poverty. Economic inequality is a crime against humanity. Improving education seems the only sure way of defeating economic inequality. Education is a long road to travel but there seems no solution for economic insecurity without it.

Having traveled to Africa, seeing firsthand a dedicated teacher in a class of school children, one feels there is hope that the world’s economic insecurity will end.

Ford was a conservative right-wing businessperson by any measure. He supported Hitler because he was an authoritarian that resurrected a faltering German economy. However, Ford recognized workers were consumers and despite low wages for automobile workers of his time, he chose to raise wages. Ford recognized workers were also consumers. That remains true today. It seems reasonable to presume, unlivable wages will rise for digital workers around the world for the same reason the conservative Ford raised his worker’s wages.

This is not to say, what the author’s write is wrong about workers in Africa that are exhausted from repetitive work at an A.I. company but that the world is at a crossroad similar to the industrial revolution.

The world will change based on the weight of people’s discontent. The greatest threat of A.I. is that information ubiquity will turn people and countries against each other. The result may be a nuclear holocaust that changes the world and societies in a way that is impossible to predict.

The war in Ukraine.

The authors go on to explains how A.I. dehumanizes society. Creating a world-wide’ assembly line for product production allows companies to reduce their production costs by hiring workers around the world who are eager to have an income to improve their lives. The consequences to companies in the host country are improved profits. The consequence to host countries’ workers are layoffs and loss of income. A country of wealth has tools to mitigate worker layoffs, poorer countries do not. Laid off workers have better chances of finding new jobs in wealthy countries. This is not to minimize the consequence but to suggest the world is benefited more than harmed by A.I.

A point made by the authors that played out in the actor strike in America is that actors should be compensated for any work generated by A.I. images or voices of actors.

A.I. that generates false images should be penalized for misrepresenting real people without their consent. Another caution suggested by the authors is that A.I. can recreate art that is equivalent to todays and past literary and visual artists. That seems somewhat hyperbolic but if it is true, society has the tools to penalize those who choose to use A.I. to deceive the public. A.I. is only a tool of society. It is a source of energy that can destroy but also improve the lives of humanity. The authors note only minds are truly creative. A.I. is a recreator of the past, not the future. The use of A.I. by humans improves creative potential.

IN THE LAST CHAPTERS OF “FEEDING THE MACHINE”, THE AUTHORS SOUND AN ALARM BY NOTING THE CONTROL EXCERCISED BY INTERNET MOGULS WHO DIRECT THEIR EMPLOYEES TO CODE ALGORITHMS TO MEET THE NEEDS OF THEIR COMPANIES. THIS IS A SMILAR POWER EXERCISED BY ROBBER BARONS OF THE LATE 19TH CENTURY. DEMOCRACRATIC CAPITALISM COPED WITH ROBBER BARON’S HEGEMONIC POWER THROUGH GOVERNMENT HEARINGS AND OVERSIGHT. ELECTED OFFICIALS SEEM WILLING TO COPE WITH MEDIA BARONS OF THIS CENTURY IN THE SAME WAY. PUBLIC HEARINGS AND GOVERNMENT OVERSIGHT OF MEDIA MOGULS ARE BEING CONDUCTED TODAY.

PRECISION

The human factor is at the heart of perfection with precision as the qualifying characteristic of craftsmanship or technology.

Books of Interest
Website: chetyarbrough.blog

“The Perfectionists” How Precision Engineers Created the Modern World

By: Simon Winchester

Narrated by: Simon Winchester

Simon Winchester (British-American author, journalist, historian.)

Simon Winchester has a remarkable ability to simplify, detail, and vivify history’s complexity. Winchester is not new to this listener. His erudition, writing, and narration are a pleasure to read or hear. His story of the origin of the first Oxford English Dictionary, is a fascinating recollection of Dr. William Minor who shot and killed a stranger on a London street. Dr. Minor was imprisoned in an asylum for his aberrant behavior but became an important source of information for James Murray, the leading lexicographer of the “Oxford English Dictionary”.

“The Perfectionists” is about the advance of the world economy from the perspective of entrepreneurs driven to succeed. Their success, in Winchester’s opinion, is based on understanding and capitalizing on the value of precision.

James Watt (1736-1773) perfected Thomas Newcomen’s 1712 steam engine

Though one may go back to the first century to find the first steam engine, it is the invention of James Watt, and the improvements of Matthew Boulton, and Sir Charles Algernon Parsons in the 18th and later 19th centuries that perfected steam engine utility and power. Watt created the steam engine, Boulton helped Watt perfect the steam engine for industrial use, and Parsons expanded its utility by creating steam turbines to power the propellers of steamboats. Each played a role in making steam engines more efficient with precise design and milling refinements that provided more power and wider utility.

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

With the advent of the industrial revolution, Winchester explains how speed and quality of production were geometrically improved by focusing on precision. He offers several industry examples, including weapon manufacture, automobile production, camera refinement, telescope resolution, airplane manufacture, watch making, and CPU design which now leads to the A.I. revolution.

**Winchester notes the beginning of the industrial revolution starts with the perfection of energy production machines that power the manufacture of standardized parts for finished products.**

Winchester tells the story of the French that insisted on standardizing parts for gun manufacture to increase the speed with which repairs could be made for damaged weapons. Winchester recounts the war of 1812 when Great Britain bloodied the nose of America by routing the capitol’s volunteer defense because of a lack of useable guns. He tells the story of an American rifleman with a broken trigger on his rifle who chooses to run from a British onslaught because trigger replacement would take two weeks for customization to fit his gun.

American guns were custom made which meant that when one was damaged it would take weeks for repair.

Honoré LeBlanc, a French gunsmith during the reigns of Louis XV and XVI, created the idea of interchangeable gun parts in the 18th century. Though it came to the attention of Thomas Jefferson, it did not catch hold in America until after the war of 1812. There was an effort by America to standardize parts in the early 1800s but Eli Whitney (the inventor of the cotton gin), hoodwinked the American government into a contract for standard gun parts that never materialized.

**Winchester explains Eli Whitney flimflammed the American government to get a contract for standardized gun parts but never produced the product for which the government contracted.**

Winchester notes Whitney knew nothing about guns and hired a crew of customizing gunsmiths who manufactured unique weapons that could not be repaired with standardized parts. Because the parts were manufactured by individual craftsman, the guns produced were not interchangeable. They did not have precisely manufactured parts that would allow interchangeability. Whitney gave a demonstration to the government with only one gun that he assembled in front of Jefferson and a government committee. He did not demonstrate any repair with standard parts. Jefferson fell for the false presentation and initially lauded Whitney. This demonstration was in 1801 which explains why a soldier might have fled because of a broken trigger in the War of 1812.

Henry Royce (1863-1933)

Winchester explains standardizing and precision making of gun parts were an essential step in the industrialization of America. Standardization and precision-made interchangeable parts became the touchstone of success in the automobile industry in the 20th century. Winchester tells the story of Rolls Royce and Ford Motor companies to make his point. Both Royce and Ford recognized the importance of precisely made standard automobile parts to garner their success in the automobile business. Though their route to success is precise manufacture of automobile parts, the wealth they created for themselves was quite different.

Henry Ford (1863-1947)

Ford became one of the richest people in the world while Royce became wealthy but not among the richest in the world. Royce chose to pursue perfection of every part of the automobile which limited his unit production and increased manufacturing cost. Though Ford perfected standardized mechanical parts, they were precisely designed only for functionality. Ford added the dimension of standardized labor to the manufacturing process. By creating an assembly line of laborers with precise replaceable mechanical parts, Ford could produce more automobiles than Royce in a shorter period of time.

The point Winchester makes is perfection of standardization (production of precisely tooled engine parts) is a cornerstone of successful industrialization. Royce expanded the concept to every part of an automobile while Ford focused on replaceable mechanical parts of the automobile.

Winchester tells a story of ball bearing manufacturing during Henry Ford’s reign when some automobiles were failing. The bearing manufacturer proved it was not their bearings with tests that showed the bearings were perfectly within precise measurement requirements. What Ford realizes is that the ball bearings were milled exactly the same and met the precise dimensions required. The problem was found to be the assembly line and human assembly mistakes. One thinks of the loss of precision in Boeing aircraft today and wonders what that means for Boeing’s future if it is not immediately corrected.

Winchester contextualizes the story of the ball bearings in recalling the history of a near catastrophic plane crash when a Rolls-Royce jet engine fails on a Qantas Airlines Airbus A380 in 2010.

Jet engines are precisely manufactured marvels of aviation. However, a tiny flaw in one oil pipe within the engine nearly caused the loss of over 400 passengers. Winchester explains Jet engines are dependent on superheated gas exchange that, if not properly cooled, will damage the engine. Every engine has a series of drilled holes that allow ambient air to cool the engine during flight. The holes are drilled in precise locations throughout the engine louvers and oil pipes to keep the engine from overheating. One of the oil pipes holes is in the wrong location which caused the engine to overheat after many flights. The failure of human oversight of the automated process and final checks by the manufacturer are the underlying cause of the near catastrophe.

More examples of the importance of precision are wonderfully offered by Winchester in “The Perfectionists”. His examination of the tech industry is as prescient as his analysis of the automotive industry and airline industry. He covers Moore’s law and how technology is advancing at an accelerating pace while inferring humanity may be at a turning point. That turning point is the crossroad between human and machine decisions about the future.

The human factor is at the heart of perfection with precision as the qualifying characteristic of craftsmanship or technology.

Winchester infers craftsmanship does not mean precision is to be sacrificed. He recalls the emphasis on precision in Japanese culture where many craftsmen assembled and repaired Seiko watches to revitalize the brand in the late 20th century. Precision is not a lost art whether work is done by machine or a craftsman, but the human factor remains a critical component of both processes. The point to this listener is that precision is only a part of what has advanced the welfare of society.

WHAT’S TO BE DONE

America cannot pass essential legislation that fairly addresses the burden and potential benefit of immigration.

Books of Interest
Website: chetyarbrough.blog

“A Map of Future Ruins” (On Borders and Belonging)

By: Lauren Markham

Narrated by: Gilli Messer

Lauren Markham (Author, reporter on issues about migration and human rights.)

Immigration is a hot subject around the world.

Lauren Markham writes a somewhat disjointed book about immigration to a Greek island between Turkey and Greece.

Lauren Markham offers a report of a fire in a Lesbos refugee camp in the small town of Moria on September 9, 2010. There were no deaths from the fire but the conditions of the encampment and the government’s response to the crises tell of unfair and inadequate treatment of refugees–reminiscent of other countries dealings with unwanted immigrants.

The camp was designed to hold 3,000 people but grew to nearly 13,000. Seventy percent of the migrants were from Afghanistan. A fire of unknown origin destroyed the immigrant’s shelter that gave notice to the world of the inadequate care offered refugees fleeing crime, poverty, and displacement in their home countries.

Turkey and Greece have a storied history of conflict that is reminiscent of the Afghanis flight from Afghanistan. Turkey’s most revered leader, Mustafa Kemal Ataturk, ordered Greeks to leave Turkey in a mass exodus during his reign. Ethnic and religious differences between the Ottoman Empire and Greece came to a boil in 1923. Those differences are reminiscent of the escape of Afghanis from the restrictive life of the Taliban in Afghanistan. Afghanis chose a route from Afghanistan through Iran to Turkey to the Greek Island of Lesbos to escape the Taliban.

Markham shows the initial response of the Greeks was to aid the Afghanis in their flight but as the number of refugees grew, the burden became too great. The conditions of the encampment deteriorated, and the anger of the Greek government escalated. A fire of unknown origin began in the camp. Six Afghanis, two of which were minors under 18 years of age, were arrested and found guilty of setting the fire. Markham shows the evidence for conviction had nothing to do with truth but was manufactured by the Greek Court to find a verdict of guilt.

“Dallas, Texas, United States – May 1, 2010 a large group of demonstrators carry banners and wave flags during a pro-immigration march on May Day.”

The inference from Markam’s report is that America’s border state conflicts will, and undoubtedly have, resulted in unjust treatment of emigrants. The irony is that America needs emigrants to meet the needs of its economic future. America seems to be doing as poor a job of addressing immigration as the story of the Afghanis in Moria. America cannot pass essential legislation that fairly addresses the burden and potential benefit of immigration.

THE MARSHALL PLAN

NATO is not an American Marshall Plan but a bulwark for nation-state self-determination.

Books of Interest
Website: chetyarbrough.blog

“The Marshall Plan” (Dawn of the Cold War)

By: Benn Steil

Narrated by: Arthur Morey

Benn Steil (Author, American economist, senior fellow and director of international economics at the Council on Foreign Relations.)

Along with an excellent history of America’s “…Marshall Plan”, there is an underlying message about two fundamental forms of government, i.e., one is democratic, and the other is authoritarian. By democratic, the point is not to suggest an idyllic understanding of American Democracy or Russian Authoritarianism. America and Russia have experienced government leadership that has been both authoritarian and democratic in the last 248 years.

One can justifiably argue America’s authoritarianism was experienced during the four years of the Trump administration (2017-2021).

In contrast Russia’s democratic experience was with Mikhail Gorbachev between 1985 and 1991. Before and after Gorbachev, democratic experience in Russia has been limited and largely authoritarian. What history of “The Marshall Plan” shows is the superior value of American democracy’s checks and balances that limit the power of authoritarian leadership by preserving deliberations of the many as opposed to the one. Trump is not the first U.S. President that was an authoritarian.

George Catlett Marshall Jr. (1880-1959, American army officer and statesman, became Secretary of State and Secretary of Defense during the Truman administration.)

History of “The Marshall Plan” shows the resilience of democratic versus authoritarian governance. Steil shows “The Marshall Plan” is created in a boiling cauldron of disagreement among branches of the American government. The conflicts between American political parties and departments of government hammered out a plan that improved the economies of both America and Europe after the war. America became the economic hegemon of the world as Russia’s economy collapsed in the early 60s.

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

One might argue the success of China came as a result of the more inclusive economic decision-making policies of Deng Xiaoping after Mao Zedong’s death. With Deng’s opening the economy to market-oriented reforms in 1978, worker efficiency and productivity created an economic boom in China. China’s danger today is the autocratic rule of Xi Jinping. His one-man rule nearly collapsed the economy during Covid 19. America certainly suffered from Covid, but Trump’s authoritarian character was mitigated by political resistance to unilateral Presidential decision-making.

Steil explains how Molotov delayed negotiations on “The Marshall Plan” with a clear understanding that only one person, Joseph Stalin, made decisions in Russia.

Steil notes “The Marshall Plan” is singularly disparaged and reviled by the Russian government. That disparagement is directed by one person, Joseph Stalin. There is no one to oppose the autocratic rule of Stalin’s leadership. Stalin’s opposition was either sent to the Gulag or murdered. A more balanced power structure in Russia could have taken advantage of “The Marshall Plan” but by singular fiat of one person (Stalin) implementation was impeded after WWII. The errors inherent in communism and authoritarian rule are being recreated by Putin in the 21st century.

What Steil shows is that many elected officials in America fought the principles of “The Marshall Plan”. However, the constant back and forth of government policy arguments in Congress aided European recovery after the war in a way that stabilized Europe and monumentally improved the economic growth of America.

Autocracies can certainly improve their economic growth at a pace that is superior to governments ruled by democratic ideals. However, autocracies have a much greater risk of following the wrong path because of their singular focus on one person’s decisions.

With an autocrat’s decision-making process, economic growth is either stultified or accelerated by one person’s decision. The give and take of democracies offer the benefit of different policy maker’s perspectives that may slow policy decisions but ultimately improve the odds of forward economic growth.

**This argument is somewhat disingenuous in the sense that American natural resources were** still to be tapped in the 20th century.

However, it is more than the availability of natural resources that made America economically successful. It is the give and take of a democratic process that protects America from the giant missteps that can come from autocratic rule. America has had some good to great rulers, but it has also had some ignorant, bigoted autocrats that offered minimal support for the ideals of freedom and equality. Checks and balances are the strength of American democracy. Presidents can make a difference, but they cannot destroy America’s future.

Ben Steil’s history of “The Marshall Plan” is not limited to an explanation of how important and difficult it is for America to pass important and consequential legislation.

The last chapters of Steil’s history of the Marshall Plan explains why Russia, China, and North Korea resent American encroachment on their spheres of influence. From the era of Stalin, Mao, and Kim Jong II, there has been a growing concern over the expansion of America’s sphere of influence. Steil explains how the Marshall Plan has morphed into a deepening concern about NATO expansion in Europe. As noted in an earlier, the Marshall Plan is created to aid recovery of countries that were impacted by WWII’s destruction. In reality it aided America to become the hegemon of the world. Because of the economic stimulus that revived the countries damaged by WWII, America created new markets for their industrial growth and international trade.

NATO is viewed as another vehicle for America’s economic growth and ideological threat to Putin, Xi, and Kim Jong Un’s control of their countries.

NATO is viewed as another invidious way for America to expand their influence and power. That seems an unfair evaluation of NATO. NATO is a military defense plan saying one country within NATO that is attacked by another country is an attack on all NATO countries. Every nation that has managed to become an independent country should be able to pursue there own interests.

The iron curtain is rusting but its characteristic strength remains a barrier to international cooperation.

The rusting of the iron curtain comes from the tears of societies ruled by authoritarians. The authoritarians are leaders who believe their way of life is threatened. NATO is viewed as a trojan horse at the front gates of non-aligned countries.

One decries Putin’s slaughter of Ukrainians in an unjust war. Life of innocents have no value to today’s Russian leadership that believes their power and way of life is threatened.

The real-politic of authoritarian’s desire for stability and power outweigh the value of human life. The same is seen in the plight of Palestinians who are not part of the October 7th’ terrorists’ killings and kidnappings but are in the way of Israel’s retaliation against Hamas.

In my amateur opinion, China, Russia, North Korean, or other authoritarian governments have a right to rule their countries as they wish. Their citizens are the key to every leader’s longevity. NATO is an effort to offer freedom of choice to established independent countries but if the citizens of a country support their leaders, there is little NATO, or any alliance can do, except to support the sovereignty of all nations.

NATO is not an American Marshall Plan but a bulwark for nation-state self-determination.

Steil argues George Kennan is right in suggesting NATO expansion would be “the most fateful error of American policy in the entire post-Cold War era”. Kennan believed it would inflame nationalist beliefs and reinvigorate the Cold War. And so, it has–as evidenced by Russia’s invasion of Ukraine, China’s expressed intention and action toward Taiwan, and North Korea’s armaments support of Russia.

UNIONIZATION

Nolan clearly illustrates how important political power is in balancing corporate owner/managers’ disproportionate incomes and privileges with labor.

Books of Interest
Website: chetyarbrough.blog

“The Hammer” (Power, Inequality, and the Struggle for the Soul of Labor)

By: Hamilton Nolan

Narrated by: Franklin Pierson

Hamilton Nolan (Author and free-lance Journalist)

“The Hammer” is a paean to unionization. Unions lost much of their political power in the early 1970s. Political power of labor was diminished by State governments, poor labor union management, and a diminishing number of labor union members. Nolan’s argument is workers have to reestablish political power to change their unfair and inequitable relationship with business.

The widening gap between rich and poor is traced to the era of President Reagan when the first deep cuts in corporate taxes occur.

Reagan fought unionization by firing air traffic controllers that sought better wages. Reagan’s supporters believed government social programs were out of control and their cost diminished the power of free enterprise. Much of the American public either agreed or were apathetic. However, as the gap between rich and poor accelerated, Americans began to complain about inequality. With extraordinary income increases for business owners and CEOs, and repressed wages for workers, the need for unionized political power became self-evident. Nolan introduces his book about unionization with a brief biography of Sara Nelson.

Sara Nelson (AFA president of the Association of Flight Attendants.)

Nolan writes about Sara Nelson who became a union member when she worked for United Airlines as a stewardess. Nelson was born and lived in Corvallis, Oregon. She applies for a job with United Airlines in St. Louis. She gets the job but her first paycheck is late. She couldn’t pay her rent. A check is given to her by a union employee to tide her over until her first check is delivered. From that day forward, according to Nolan, Nelson became a supporter of unions. Eventually Nelson becomes the president of the Association of Flight Attendants (AFA).

Liz Shuler (President of the AFL-CIO since 8/5/21.)

Ironically, the first woman President of the AFL-CIO is also from Oregon. Liz Shuler received a bachelor’s degree in journalism from U of O in Eugene, Oregon. She became a union activist after college and worked to organize clerical workers at Portland General Electric. She is elected as the President of the AFL-CIO in 2021 after serving as the first woman Secretary-Treasurer of the organization.

Nolan’s book addresses State conflicts with unionizers and family-income for low-income workers. The first states he addresses are South Carolina and California. Nolan notes South Carolina has become a haven for businesses wishing to avoid unions. South Carolina’ State laws discourage unionization which appeals to businesses wishing to relocate. Nolan notes South Carolina attracts businesses looking to improve profits by reducing labor costs. The consequence of business’s lower labor cost is to reduce South Carolina workers’ standard of living. South Carolina’s workers are among the lowest (19th out of 50 States) paid workers in the U.S. Nolan implies South Carolina’s income inequality is a consequence of the State’s policy of discouraging unionization.

California has the fourth largest income inequality in the U.S.

Nolan notes the cascading negative of unfair compensation for domestic labor. Though California now allows childcare servers to be unionized, their unionization efforts are discouraged by government regulation, as well as the fragmentation of its poorly compensated workers. The consequence of State government regulation keeps wages low and discourages entrepreneurs from starting childcare’ businesses. A compounding negative is created when users of childcare’ service, women in particular, are unable to work in regular work-day jobs. Workers are compelled to stay home to take care of their children, reducing family income and further impoverishing low-income childcare’ workers. It becomes a vicious cycle, hurting entrepreneurs trying to start a childcare service, employees wishing to increase family income, and employers needing more workers.

Nolan expands his argument by noting how service industries in Las Vegas, the State of Florida, New Orleans, and Mississippi are benefited by unionization.

Vacation and gambling meccas like Las Vegas, Florida, New Orleans and Mississippi need service industry employees. These vacation and gambling meccas depend on service quality for visiting tourists. Lack of representation for service employees diminishes employee’ standards of living which indirectly damages the reputation of the entertainment and vacation industry.

In Las Vegas, where Nolan lived for twenty years, the service industry is protected by the Culinary Union.

Nolan notes how strong the Culinary Union has become in Las Vegas and disparages casino owners like the Fertitta’s who have fought unionization. Numerous examples are given to show how union actions have improved the lives of Casino workers, many of which are immigrants from other countries.

Nolan’s argument for the value of unionization is compelling but his encomium for the union movement ignores America’s immigration crises.

The vast need for immigration reform is not being forcefully addressed by unions. Compensation inequity is a noble fight carried out by unionization, but it needs to broaden its role in immigration. Unions need to use their power and influence to change immigration policies to equitably treat a labor force that is sorely needed in America. Unions need to help educate and house legal immigrants, so they do not become a part of America’s growing homelessness. Additionally, unions could use their recruiting expertise to get Americans off the street by providing job training services and gainful employment.

**Public perception of unions could be monumentally improved with a program to recruit and indoctrinate the homeless with training for jobs in the 21st century.**

There is so much that unions could do to far exceed the minimalist goal noted in Liz Shuler’s plan to add a million union members over the next 10 years. Nolan pitches for Sara Nelson as a more dynamic leader for the union movement. Maybe Nelson would be better than Shuler, but growth, value, and public perception of union members could be monumentally improved with a program to recruit and indoctrinate the homeless with training and jobs for the 21st century.

Whomever the leaders of unionization may be in the future, Nolan clearly illustrates how important political power is in balancing corporate owner/managers’ disproportionate incomes and privileges with labor.

TIKTOK ENERGY

America and every nation must believe in themselves until, like all changes in society, the proof of an energy’s value becomes self-evident

Books of Interest
Website: chetyarbrough.blog

“Energy” (A Human History)

By: Richard Rhodes

Narrated by: Jacques Roy

Richard Rhodes (American journalist, historian, and author.)

Richard Rhodes explains the many forms of “Energy” that have changed the course of history. The one constant is human ingenuity. The source of energy evolves over centuries of civilization. The source of energy has changed from human hands to fuel burning machines to atomic fission to fusion to information. The back and forth of human thought and action have used sources of energy to remake the world. Rhodes’ history shows progress is not always forward. Change is often resisted until results outweigh failures.

Having just gone through the first chapters of Rhode’s excellent history of energy, this review was prematurely completed because of the TikTok controversy noted in the news.

It is important to complete Rhodes’ history to have some understanding of why information is the energy of modern times. Citizens of the world are facing many of the same obstacles Rhodes wrote about in his book. That energy is information may seem incongruous to some but, Rhodes’ history about wood, coal, oil, electricity, nuclear power, and the current state of renewables is like the energy crises of information today. Rhodes does not consider what some argue is tomorrow’s energy source. Tomorrow’s energy source is information. The many trials, the fits and starts, of the energy sources Rhodes explains are the same trials facing today’s world with information as the most current iteration of “Energy”.

Energy is fuel for doing work. Its early forms are those noted in Rhodes’ history. Earlier forms of energy are still relevant, but their utility is being challenged by the immense growth of information and how information drives the future.

There are lessons to be learned about the challenges of information as energy from the experiences noted in Rhodes’ history. This is a bumpy time that shares the trials and tribulations of wood, coal, oil, electricity, nuclear power, and renewable energy of the past. Each energy source has improved the lives of its users but not without trial and error. The world is in the midst of a transition from the industrial age just as the industrial age transitioned from the agricultural age. The world is entering the information age.

The energy change today is information, most recently multiplied by artificial intelligence.

The paranoia of today is that foreign governments will use information to disrupt the progress of nations that have their own forms of government. The controversy of TikTok is a case in point. On the one hand TikTok is being used by small entrepreneurs in America to conduct their businesses. On the other, TikTok’ popularity is spreading the equivalent of porn to the public, distorting the perception and education of children. There is the added threat of influencing the public to overthrow governments. The question is would TikTok be any less a threat if it were owned and restricted to one country or another? Facebook offers the same potential as TikTok. Facebook, Google, and Amazon are energy sources for distorting truth and influencing the public in the same way as TikTok. Domestic ownership does not cure the negative potential of information distortion or abhorrent political influence.

Is TikTok going to change democratic capitalism or is it going to change Chinese communism? One suspects, it will change both. The information highway cannot be blocked. Information energy, like water, will find its own way through cracks in its environment.

The fundamental point made in the last two chapters of Rhode’s excellent history is that the world, and America, need to increase the number of nuclear energy plants based on the need to curb environmental pollution. His argument is based on learning from the nuclear accidents that have occurred, and designing nuclear power plants to mitigate the consequence of failure. He notes no energy source in the world has succeeded without learning from producer’s mistakes. Our mistakes at Chernobyl, 3-Mile Island, and Fukushima are correctable. Environmental degradation is the crises of the 21st century that threatens human existence.

America and every nation must believe in themselves until, like all changes in society, the proof of an energy’s value becomes self-evident.

CAPITALIST’ LESSONS

Capitalism is not a partisan issue but a social imperative for both Republicans and Democrats to work together to benefit all Americans.

Books of Interest
Website: chetyarbrough.blog

“Capitalism in America” (A History)

By: Alan Greenspan, Adrian Wooldridge

Narrated by: Ray Porter

As one would expect, “Capitalism in America” begins with the British economist, Adam Smith, who defined capitalism in 1776 with “An inquiry into the Nature and Causes of the Wealth of Nations”.

Alan Greenspan (on the left) is an American economist who was chairman of the Federal Reserve from 1987-2006. Adrin Wooldridge (on the right) is a British economist and journalist who wrote for “The Economist”. Wooldridge has a doctorate in philosophy and has co-written several books with Richard Micklethwait, the editor-and-chief of Bloomberg News. One might argue Greenspan has a conservative bias but Wooldridge’s experience as a British journalist gives one a sense of balance in this informative and well-written history of American capitalism.

Smith’s concept of capitalism advocated leaving economic decisions to market forces, tempered by individual economic decision makers. What Greenspan and Wooldridge infer is that decision-makers’ discretion and interference are what roils capitalism’s history.

“Capitalism in America” reveals tumultuous times for the American economy but with positive forward momentum. The public in all countries have experienced hard times from market forces. Some countries, like Israel, India, and the U.K. have experimented with socialism as an alternative to capitalism. Communist countries like Russia and China flirt with capitalism and one may argue–benefited from its market results. The author’s history shows capitalism as the primary reason for America’s economic growth and success. However, that’s getting ahead of their story.

The authors begin at beginning with the story of Jefferson’s desire to emphasize agriculture as the primary driver of economic growth in America. In contrast, Alexander Hamilton believes the industrial revolution demands a broader view of economic policy. The key to tapping into the industrial revolution required capital which Hamilton clearly recognizes. Hamilton recommends the creation of a national bank. Hamilton is inspired by Great Britain’s Bank of England. It offered private capital and paper credit to businesses and entrepreneurs.

Hamilton, as Secretary of the Treasury, presented a “Report on a National Bank” to President Washinton and the House of representatives in 1790. This report notes that Congress, with its authority to collect taxes, could fund the bank and lend money to the government to pay foreign creditors, public services, and private businesses to grow the economy. Jefferson opposed the idea, but Hamilton’s broad interpretation of the Constitution allowed his idea of a national bank to be created. In 1791 the First Bank of the United States is established in Philadelphia and remained chartered for 20 years. This became a giant step for America’s economic growth.

Several future Presidents opposed an American national bank. Of course, Jefferson was one because of his belief in an agrarian future for America. Jefferson’s friend and future President, Madison (the 4th President of the U.S.) opposed the idea of a national bank, and Andrew Jackson (the 7th President of the U.S.) used his power as President to oppose the “Second Bank of the United States” in 1833.

The authors note the successful industrialists of the 19th century capitalized on Hamiltonian creation of an American banking system. They became known as the robber barons of America. Rockefeller, Vanderbilt, Carnegie, and J.P. Morgan used capital to produce oil, expand rail transportation, make steel, and provide bank capital to grow the economy.

And then, WWI drew America into events that roil the course of its economic history.

An American economic boom occurs in the first two years of the war with America choosing neutrality. Exports surged from $2.4 billion to $6.2 billion in 1917. Everything from cotton, to wheat, to automobiles, to food, to machines were exported during those years. After joining the war, 3 million Americans were mobilized. When the war was over, the world and the American economy faltered. Recession (1918-1921) hit the world after the war, though America showed it had become a major world power.

As America recovered from WWI, their prowess as a producer of goods and services led to the roaring 20s and a runaway stock market that eventually crashed at the beginning of the Great Depression (1929-1939).

The authors note President Roosevelt is a great salesman who provides relief to many Americans with government employment programs during the depression. However, the authors note Roosevelt’s inept management delays America’s recovery by instituting price controls that distort market forces. Overt price control is a recurring mistake of national economies. The authors are not saying that price control is a singular cause of America’s continuing economic crisis, but it makes market recovery more difficult and longer to achieve.

The authors explain reparations for WWI’s winners helped set the table for WWII.

Germany’s inability to pay reparations, the growth of Antisemitism, and German inflation led to the rise of Hitler. Though not addressed by the authors, Japan felt threatened by American, Chinese, and Russian influence in Asia that led to Pearl Harbor and America’s entry into WWII.

The point is made that America’s depression before the war is not cured by Roosevelt’s economic intervention. The advent of war mobilized American industry.

The authors suggest market interference delayed recovery from the Great Depression. On the other hand, Roosevelt gave hope to the country with his speeches and employment programs. Citizens underlying faith in America’s ability to overcome hardship, and their response to Pearl Harbor reinvigorated the economy. Industries were retooled to meet the demands of war.

The authors argue mistakes in America’s capitalist history have been made by both Democratic and Republican Presidents who interfered with naturally occurring market forces. From Roosevelt to Nixon to Reagan to Obama to Trump, Presidents who institute price controls and/or tariffs interfere with free trade. America’s capitalist economy suffers from those actions. This is not to argue all legislation and federal action on the economy constitutes capitalist interference. Fundamental human rights that ensure freedom to vote, speak one’s mind, practice one’s own religion, work in industries one chooses, while seeking peaceful resolution of differences, are interferences that sustain capitalism.

Freedom to compete is the hallmark of capitalism.

When natural market forces are interfered with by business leaders and public legislators, capitalism suffers. An inference one may draw from the authors is that legislated programs that aid Americans who are unable or unwilling to participate in the capitalist economy are an interference with capitalism. That raises legislated issues of emigration, social security, health insurance, education, defense, transportation, veteran’s benefits, housing, environmental protection, occupational safety, and other public benefit programs. This is where there is continuing disagreement among Americans. These are not party issues because both Republican and Democratic leaders have both positive and negative arguments for and against these policies.

There is the law of unintended consequences that plague government policies. Some argue Reagan reinvigorated the American capitalist economy by reducing taxes, cutting government programs, reducing government employment, and busting union strikes. He did those things and government debt skyrocketed to a level greater than ever in the history of America. The gap between rich and poor was set on a path that beggared the poor and enriched business managers without comparable enrichment of labor. Like Roosevelt, Reagan sold ideas that had unintended consequences that were not in the long-term interest of Americans.

How can one measure the success of capitalism versus other economic systems? The author’s history of capitalism offers no answer but reveals what has benefitted and damaged American society since 1776. They illustrate failure of capitalism is in the hands of American leaders. Capitalism’s improvement is not a partisan issue but a social imperative for both Republicans and Democrats to work together to benefit all Americans.

CAPITALISM’S DEATH?

Democratic capitalism is the most likely form of government to assuage our worry and find a rational solution for our right to privacy.

Books of Interest
Website: chetyarbrough.blog

“TECHNO-FEUDALISM” (What Killed Capitalism)

By: Yanis Varoufakis

Narrated by: Yanis Varoufakis

Yanis Varoufakis (Author, Greek economist and politician, Minister of Finance of Greece for 7 months in 2015, launched Diem25, the “Democracy in Europe Movement 2025” in February 2016.)

Yanis Varoufakis’s “Techno-Feudalism” argues the advance of technology is killing capitalism. Varoufakis’s argument is that democratic capitalism is either dying or dead. He suggests a survival plan in the last chapter of his book. This misguided book reminds one of Mark Twain’s response to news of his illness, i.e., “The reports of my death are greatly exaggerated”.

Varoufakis argues the advance of technology and its intrusion into private lives of citizens will destroy freedom of the individual and result in a government ruled by authoritarian, undemocratic, feudal oligarchs.

Varoufakis infers technology is the cause of the rise of new robber barons that have struck it rich in the internet era. He largely disparages the great wealth accumulation by the founders of Amazon, Google, Microsoft, Apple, and other tech leaders in the 21st century. His argument is based on belief that these new robber barons became rich without the hard work of laborers like those during the industrial revolution. The error in his argument is that labor is adjusting from work with one’s hands to work with one’s mind.

Freedom is the keystone of democracy.

Freedom and democracy have been limited and abused over the centuries but have ultimately led to the wealthiest countries in the world. When freedom is overregulated by democratic leadership, economic progress is diminished. Democracy has historically mitigated mistakes of overregulation with human nature’s desire for freedom. There is no reason to believe human nature will change.

In one sense, Varoufakis’s argument is correct. There is a greater risk of loss of freedom with the advance of technology, i.e., particularly with the rise of artificial intelligence. The evidence of that risk is seen in China and North Korea’s surveillance capabilities today.

Authoritarian leadership has always been a risk to society.

As inferred by Varoufakis, authoritarian risk is greater in the 21st century because of surveillance technology and the predictive power of artificial intelligence. Surveillance does not change the nature of humankind. Democratic government only becomes more important. The juggernaut of technology will not be stopped, and our lives will be more intimately understood by strangers than ever before. That truth only means democracy, freedom of choice, and equal opportunity are made more consciously recognized as important.

The fact that the 21st century has new robber barons, business leaders with great wealth and power, is nothing new.

All forms of government have winners and losers. What democracy does is level the playing field. It is a raucous governing system that leaves some out of success, but it beats any known alternative for broader human opportunity. Democracy will always be a work in progress. America needs better health care for all citizens. America needs improvement in equal rights and opportunity for all citizens. No Americans should be homeless or hungry. Few countries, if any, have adequate health care, equal rights, and opportunities for all its citizens. Most realize, America must do better.

The resurgence of labor unions in America is a good sign for American peace and prosperity.

Varoufakis suggests democracy can be saved by bringing it down to an individual level within companies that generate wealth for the country. In one sense, he is right but his idea of giving one vote to every employee in determining wages, and the direction of a company are a step too far. Labor is a critical part of yesterday’s, today’s, and tomorrow’s economic prosperity. Owners and managers of companies need to include union representation in their corporate decisions. Neither labor nor management have all the answers, but all have money, commitment, and labor in the game. Each should have their say. That is a part of Democracy’s success in the world.

The intimate knowledge of personal behavior is a valid concern in the modern world. In the hands of authoritarians, the risks of surveillance technology are multiplied. In democracy, risks are not eliminated but can be judiciously regulated. Democracy has the best chance of determining how a surveillance economy needs to be handled. Democracy will continue to make mistakes, but historically, its successes outweigh its failures.

Citizens should worry about what others know about their personal lives, but the advance of technology will not be stopped. Democratic capitalism is the most likely form of government to assuage our worry and find a rational solution for our right to privacy. Varoufakis’s “Techno-Feudalism” is more wrong than right, but he makes one think about our future.

RICH AND POOR

Contrary to Leonhardt’s optimism, whether the American power structure continues to shift toward a more equitable treatment of the poor remains to be seen.

Blog: awalkingdelight

Books of Interest
Website: chetyarbrough.blog

“Ours Was the Shining Future”

By: David Leonhardt

Narrated by: Dan John Miller

David Leonhardt (Author, journalist and columnist, writes “The Morning” newsletter for the “New York Times”, received a BS from Yale in applied mathematics in 1994.)

David Leonhardt writes an encomium to Democratic Capitalism in “Ours Was the Shining Future”. Some of what Leonhardt writes will make conservative Americans gag while liberals will tend to praise his view of American history. The hot button issues of 21st century America are immigration and the rising gap between rich and poor.

Leonhardt’s selected historical facts argue that immigration has a cost to America that is mitigated by its contribution to the economy by second and later generation immigrants. He resurrects John F. Kennedy’s oft quoted phase about America as “A Nation of Immigrants”. Leonhardt argues the rising gap between rich and poor accelerated with the election of Ronald Reagan and subsequent tax and spend decisions made by later government administrations.

The difficulty one may have with Leonhardt’s reporting is that historical facts do not speak for themselves.

It is the power of Leonhardt’s persuasion rather than the facts of history (and one’s own prejudices) that make a credible argument for

(1) the benefit of unionization in America,

(2) the benefit of intervention by the Franklin Roosevelt administration during the depression,

(3) the aggressive tax reduction for high income earners with government overspending (beginning with Ronald Reagan) that negatively affected the American economy and disproportionately increased the gap between the rich and poor, and

(4) the monumental economic benefits from second generation immigrants like Sundar Pichai (CEO of Google), Indra Nooyi (former CEO of PepsiCo), Elaine Chao (the U.S. Secretary of Transportation under Trump), and Lin-Manuel Miranda (the creator of the Broadway musicals “Hamilton” and “In the Heights”), and others.

Leonhardt recounts the history of the union movement in America that evolved into a political power that improved the income and lives of the working poor.

He touches on the corruption of the union movement but on balance suggests more good than bad came from its representation of labor. Leonhardt argues the decline of unionization and tax policy changes in the late 20th century increased the gap between rich and poor.

Leonhardt argues immigration needs reform and infers it should begin with acceptance of an estimated 340,000 children (dreamers) born in the U.S. to unauthorized immigrants.

He suggests new immigration should be limited to immediate relatives of legal immigrants that presently live in the U.S. He reiterates the value of second-generation immigrants while acknowledging the burden borne by the economy with first generation immigrants. New immigrants generally have a language deficiency, greater education needs, and a willingness to work at jobs for lower pay than non-immigrant workers who also need jobs.

Leonhardt suggests the gap between rich and poor is a function of an unequal distribution of political power.

Leonhard believes improvement is coming from a resurgent union movement and an evolving recognition by both conservatives and liberals of the consequence of inequitable tax treatment that favors the rich.

There is some evidence to support Leonhardt’s belief in a power shift with the recent union actions in automobile, teacher. and nursing services strikes that increased their income. Minimum wages have risen in 22 states that have affected an estimated 10 million workers. The highest are in California ($16), Massachusetts ($15.75), and Washington ($15.50).

However, one is inclined to be skeptical about income gap reduction with Trump’s Presidency that further reduced taxes on the rich and Biden’s reluctance to act on tax inequality.

Leonhardt receives a Pulitzer Prize for Commentary, the Gerald Loeb Award for excellence in reporting on business, finance, and the economy, a New York Time Book Review Editors’ Choice award, and The Atlantic’s Ten Best Books of the Year for the most notable and influential book of the year. These are nice academic rewards but whether Leonhardt’s arguments are anything more than a finger in a dike, near a breaking point, is yet to be revealed.

Contrary to Leonhardt’s optimism, whether the American power structure continues to shift toward a more equitable treatment of the poor remains to be seen. The continued popularity of Trump among conservatives is disheartening and suggests otherwise.

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