2008 was just yesterday but today’s attack on government regulation is destined to create America’s next crises.
Audio-book Review
By
Chet Yarbrough
(Blog:awalkingdelight)
Website: chetyarbrough.blog
The Big Short & No One Would Listen
By Michael Lewis By Harry Markopolos
Narrated by Jesse Boggs Narrated by Scott Brick & Others
There are lessons to be learned from Lewis’s and Markopolos’s books that are forgotten in the pending impeachment trial of President Trump.
Both Adam Smith (the father of economics) and Thomas Hobbes (author of “The Leviathan”) argued self-interest is a universal human characteristic.
Self-interest led Trump to enlist the Justice Department to overthrow the election of President Biden. If that is not insurrection, one wonders what justifies any impeachment action.
Smith argued that capitalism takes the essence of human nature’s self-interest to advance civilization. He noted-the advance of capitalism is not a smooth upward curve but an improving trend. Smith was not saying that bad things do not happen in a capitalist society but they bend toward the good of society.
Hobbes would take issue with both of Smith’s assertions. Self-interest would not advance civilization unless it was regulated. Hobbes insisted on government control through “rule of law” to mitigate non-virtuous self-interest.
Hobbes feared unbridled self-interest in any form of government. Hobbes viewed human nature as brutish and unfair unless ruled by a Socratic philosopher king or, in a democracy, by tightly regulated and enforced “rule of law”.
The forensic reports of Michael Lewis and Harry Markopolos show what happens when efforts to regulate human nature are abandoned. One concludes from their books that Thomas Hobbes’ “Leviathan” wrecks havoc on society when “rule of law” is either not present, or unenforced.
Inept management by Fannie Mae, and Freddie Mac offered mortgage insurance for grossly over-leveraged mortgages. Companies like AIG removed investor risk by insuring banks against bad investments.
All of these foolish actions coalesced to bankrupt companies and families around the world. Individual lies, bungles, and missteps in the real estate industry created the worst recession since the 1929 stock market crash.
While this real estate debacle was developing, Bernie Madoff built a 50 to 70 billion dollar empire by making fools of the U.S. Government, European royalty, world wide charities, and working families. Madoff lied, cheated and stole billions of dollars from wealthy investors, charities, and mom and pop businesses with offers of bogus investment returns based on buying from Peter to pay Paul. He paid dividends to earlier investors by taking money from newer investors.
As long as people believed in Madoff, or deluded themselves, his wheel of fortune continued to roll. As the real estate market collapsed, old investor money was recalled and new money became unavailable. Madoff’s failure was inevitable.
Michael Lewis identifies seers that recognized “Quants” were packaging doomed mortgages into re-salable financial instruments called derivatives. These astute observers of the market, knew mortgage backed securities were at risk.
How could these things happen in a 21st century, democratically elected and governed society? Hobbes would say “how could these things not happen”?
Madoff’s investment lies were exposed by Harry Markopolos in a “red flag” report to the Security Exchange Commission in the year 2000; way before the 2008 economic catastrophe.
The title of the book “No One Would Listen” tells the story. This book is an indictment of democratic government in free society. Markopolos’s story exposes an inept and failed SEC, an agency created by government to protect investors–when, in fact, it protected corporate interests.
The irony is that Madoff did not get caught by the SEC. He confessed in 2009 because his Ponzi scheme fell apart. along with the collapse of the real estate industry.
Lying is part of being a human being. That is a fundamental reason for government to have “rule of law”. It protects people from the abhorrent self-interest of the few from the many.
President Trump is impeached by the House of Representatives. It is the moral responsibility of the Senate to have a trial.
Hiding behind a loose interpretation of the rules of the Constitution is a disservice to the people. Guilt or innocence should be proven by the facts; not the parties of interest.
Regulation is not a perfect solution for control of bad actors in a free society. However, no regulation is worse.
Audio-book Review
By Chet Yarbrough
(Blog:awalkingdelight)
Website: chetyarbrough.blog
Capitalism Without Capital
Written by: Jonathan Haskel, Stian Westlake
Narrated by: Derek Perkins
JONATHAN HASKEL (AUTHOR, BUSINESS SCHOOL PROFESSOR IMPERIAL COLLEGE LONDON)
STIAN WESTLAKE (AUTHOR, ENGLISH BUSINESS CONSULTANT)
In addressing 21st century technology, Haskel and Westlake argue that the tradition of hard asset value is diminished. In today’s technological economy, the authors suggest investment in intangibles is as important as investment in buildings and machinery.
Haskel and Westlake acknowledge intangibles have always been an important part of economic growth. They note worker training programs, specialized employee’ experience, and patented designs have always had value; but auditors rarely (if at all) quantified those intangibles as anything other than expense. Little of a company’s investment in training, employee experience, and patents is assigned as an asset by analysts who use pre-twenty-first century accounting rules.
Most intangibles have historically been classified as uncapitalized expenses. In part, because quantification of intangibles is difficult to measure. Before the tech-revolution, investments in training, patents, and experience were looked at as costs of doing business. They were most often expensed (with some exception for patents).
When companies are sold, value of goods (machinery, buildings, inventory), and historical price/earnings ratios are the principal determinants of value. Haskel and Westlake note that patents are unreliable values because competitors reverse engineer product that, with newly created changes, are arguably new “unpatented” products; e.g. cell phones, computer chips, software programs, etc.
Haskel and Westlake note that patents are unreliable values because competitors reverse engineer product that, with newly created changes, are arguably new “unpatented” products; e.g. cell phones, computer chips, software programs, etc.
With growth of companies like Amazon, Microsoft, Apple, Google, Uber, Facebook, et al–standard accounting practice needs more than hard assets to determine value. Though it is difficult to patent intangibles, Haskel and Westlake suggest new accounting methods are, and should be, created for today’s and tomorrow’s industries. The idea of new accounting methods leads to “Capitalism Without Capital”.
With growth of companies like Amazon, Microsoft, Apple, Google, Uber, Facebook, et al–standard accounting practice needs more than hard assets to determine value.
Haskel and Westlake suggest information replaces capital as the fuel for economic growth.
Haskel and Westlake suggest information replaces capital as the fuel for economic growth. They extend their argument by advising investors, lenders, and governments to increase their capital commitment to intangibles. This seems ironic in view of a remaining need for traditional capital investment to energize 21st century economic growth. However, the authors are arguing capital is a smaller part of overall economic growth; albeit a critically important part. What they are suggesting is that investment should be recognized as an asset; not just an expense. Investors and lenders should look beyond bricks and mortar as a measure of security for capital investment. Some would argue that companies like Tesla should be able to carry a higher debt load because its value is greater than the sum of its hard assets.
Further, Haskel and Westlake emphasize Governments continued subsidization and investment in research and development in those areas where near term return is problematic. The example the authors give is DARPA in its early invention as a precursor of the internet, but there are many more examples; e.g. nuclear power, computer hardware, weather prediction, space exploration, etc.
Historically, intangible value has always been with us but recognized as an expense. Haskel and Westlake suggest intangibles need to be partially and judiciously accounted for as assets. When recognized as assets, intangible values open the door to wider private and public finance.
Kotkin’s first volume about Stalin’s rise to power offers lessons to modern American and Chinese governments. China seems on one path; America another.
STEPHEN KOTKIN (AMERICAN AUTHOR, HISTORIAN, ACADEMIC)
Stephen Kotkin offers a remarkable and comprehensive view of Russia’s 1917 Revolution in “Stalin, Volume I”. Kotkin succinctly describes how power in the hands of one may advance a nation’s wealth, but at a cost that exceeds its benefit.
Kotkin’s first volume about Stalin’s rise to power offers lessons to modern American and Chinese governments. China seems on one path; America another.
The formation of “checks and balances” sustains America’s economic growth, even in the face of leadership change. In contrast, a “rule of one” has moved China’s economic wealth to new heights, but “rule of one” threatens its future success; particularly if it follows Stalin’s, and now Putin’s mistaken path.
In historical context, Kotkin profiles the three most important characters of the Russian revolution; e.g. Vladimir Lenin, Joseph Stalin, and Leon Trotsky. Kotkin documents the personalities and circumstances of the pre-U.S.S.R.’ economy; i.e. an economy based on the disparity between wealth and poverty, federalization and centralization, political idealism and pragmatism.
MAO ZEDONG (1893-1976, FOUNDING FATHER OF PEOPLE’S REPUBLIC OF CHINA.)
Three leaders in the Chinese revolution were Mao Zedong , Zhou Enlai, and Deng Xiaoping. Zhou Enlai is the moderate of the three in trying to preserve traditional Chinese customs. Mao is by some measures an idealist who attempts to expand the theory of communism. His idealism creates a bureaucracy that nearly derails China’s economy. “The Gang of Four” radicalized Mao’s idealism into a more Stalinist view of communism. “The Gang of Four”s radicalization of Chinese communism is eventually reversed with the leadership of Deng Xiaoping, but not until after the Tiananmen Square massacre.
DENG XIAOPING (CHINA’S CHAIRMAN OF THE CENTRAL ADVISORY COMMISSION 1982-1987)
After Tiananmen Square, Deng recognizes the power of public dissent. Rather than increasing suppression, Deng opens the Chinese economy to a degree of self-determination. Deng does not abandon communist ideology. However, he recognizes the importance of economic growth and how less doctrinal communist policy would unleash the power of people as demonstrated at Tienanmen Square.
Deng dies in 1987 and the government of China is reshuffled. Deng’s eventual successor, President Xi, emphasizes the idealism of communism that threatens return to a Stalinist-like terror in China; i.e. a terror enhanced by technological invasion of privacy, and “big brother” control.
XI JINPING (GENERAL SECRETARY OF THE COMMUNIST PARTY OF CHINA AND PRESIDENT OF THE PEOPLE’S REPUBLIC OF CHINA)
President Xi returns to Mao’s authoritarian belief in enforced collectivism with the idea of expanding China’s new-found wealth through government subsidization of industry. Xi renews emphasis on rule by the Communist party, headed by himself.
The growing disparity between rich and poor in both China and America is widely seen in the internet, and with increased international travel. China’s rapid rise in economic wealth is unevenly spread, just as it is in the United States. The difference is in how that economic disparity is addressed.
In America, private dissent is an inherent part of its history which lauds individualism, self-determination, and freedom (within the boundary of “rule of law”). But, these characteristics denigrate American citizens who are unable or unwilling to reap the rewards of individualism, self-determination, and freedom. These are the Americans sleeping on America’s streets and living in their cars.
America’s system of governance allows a rift between the rich and poor because it is based on a system of “checks and balances”. America’s system demands debate, and more broadly considered human consequence, before government action is taken.
LIVING ON THE STREET IN AMERICA
In China, the homeless are compelled to work at jobs created by the government. China’s system of governance is driven from the top, with limited debate, and more singularly determined public consequence. Government action is autocratically determined.
BEIJING-In China, dissent is discouraged and freedom is highly restricted, but homelessness is addressed with housing for the poor at subsidized prices.
In ancient China, singular autocratic rule offered a mixed blessing. Some of the world’s wealthiest and most cultured governments were created in China. These ancient dynasties successfully expanded their economies to make China a world leader in science and industry. At the same time, with few checks and balances, the history of China’s “rule of one” resulted in periodic social and economic collapse.
In some ways, China’s ancient civilization’s rise and fall is reminiscent of the rise and fall of the U.S.S.R. after 1917. Kotkin describes the turmoil surrounding Russia in 1917. The beginning of WWI and Germany’s invasion exaggerate the paradox of power in Russia. Modern European, Asian, North American, Middle Eastern, and African countries are experiencing some of the same economic, and political disruption.
On the one hand, the peasant is a proud Russian; on the other hand, he is a slave of the landed gentry; indentured to preserve the wealth of others at the cost of his/her life.
In 1917, the Czar and wealthy aristocracy depend on a population of the poor to defend the government. Russian peasants are faced with defending a government system that recognizes them as serfs, agricultural laborers indentured to wealthy landowners. (A similar system existed in China prior to 1949.)
In 1949, Mao recognizes the same inequity and judiciously separates landlords from their vast estates and re-distributes it to tenant farmers who worked for them. Ownership restructuring improved agricultural production until Mao tried to make small collectives into large collectives with Communist party oversight. Formation of a Chinese Communist Party bureaucracy distorted actual production and de-motivated farmers that did the real work of farming. The result of production over-estimation caused a nation-wide famine.
KARL MARX (BORN TRIER, GERMANY 1818-DIED LONDON, ENGLAND 1883)
Kotkin notes Russian social and economic inequity is a breeding ground for a Leninist/Marxist revolution. Marx’s dialectic view of the wealth of nations suggests that governments will change based on the growing recognition of the value of labor; i.e. beginning with agrarian feudalism, growing through industrialized capitalism, and socialism; reaching to a state of equilibrium in communism (a needs-based and communal sharing of wealth). Marx suggests all nations will go through this dialectic process.
Lenin bastardizes Marx’s dialectic idealization. Lenin believes the process can be accelerated through revolution and centralized control of the means of production. This idea is adopted by Mao Zedong in China in 1949 with early success. However, Mao expands the collectivist policy with “The Great Leap Forward” in 1958. Mao’s broader collectivist policy collapses the Chinese economy in 1962. Thousands of Chinese die from starvation as communist overseers exaggerate food production quotas.
Collectivist expansion is an oversimplification of Kotkin’s explanation of Vladimir Lenin’s form of communism but it shows the risk of “rule of one” governance. Even Lenin is conflicted about how Russia will grow into a communist society.
Lenin recognizes the social and economic distance that Russian peasants must travel to gain an appreciation of a new form of government.
Much of the Russian population, like the Chinese in 1949, were illiterate and living at a subsistence level; bounded by a non-mechanized agrarian economy. Lenin vacillates between growth through education and growth through autocratic command. Kotkin suggests that Lenin gravitates toward centralized command because of the need to consolidate power within the revolution.
What Lenin needed in 1917 were followers that could get things done. Before being felled by brain disease and stroke, Lenin relies on the abilities of men like Joseph Stalin. Mao relies on his revolutionary Red Guard. Kotkin argues that Stalin became close to Lenin as a result of his organizational skill and his penchant for getting things done without regard to societal norms. For Mao, close associates like Deng Xiaoping, were his enforcers. Stalin becomes the most powerful enforcer in Lenin’s revolution. Deng eventually becomes the leader of Communist China.
Though Stalin wields great enforcement powers, Kotkin infers Trotsky is the intellectual successor to Lenin. Stalin and Trotsky are shown to be at odds on the fundamental direction of the Bolshevik party, the successor party of Russian communism. However, the exigency of getting things done, as opposed to understanding the goals of creating a Leninist/Marxist government, were paramount goals for consolidating power after the revolution. Kotkin explains how Stalin became a defender of Leninist doctrine while Trotsky became an antagonist and eventual apostate because of Stalin’s manipulation of events.
MAO AND STALIN IN 1949
China waits and observes Stalin’s method for rapid industrialization of Russia. Kotkin explains that Stalin gains an intimate understanding of Lenin’s doctrines while Trotsky chooses to compete with Lenin’s philosophical positions. The threat of factionalism accompanies Trotsky’s doctrinal departures.
The irony of the differences between Stalin and Trotsky are crystallized by Kotkin. Stalin’s intelligence is underestimated by both Lenin and Trotsky. Stalin carefully catalogs and memorizes Lenin’s communist beliefs. In contrast, Trotsky chooses his own communist doctrinal path based, in part, on Lenin’s writing. Here, another similarity is drawn with the near religious following of Mao’s Red Book with aphorisms about governing oneself and China.
Kotkin suggests Lenin views Trotsky as a more likely successor than Stalin as leader of the country. Lenin appreciates Stalin’s organizational ability but views Stalin’s temperament as too volatile for long-term government control. In 1922, Lenin is said to have dictated a “testament” saying that Stalin should be removed from his position as General Secretary. Lenin’s “testament” critiqued the ruling triumvirate of the party (Stalin, Zinoviev, and Kamenev) and others like Bukharin, Trotsky and Pyatakov but the pointed suggestion of removal for Stalin is subverted.
After Lenin dies, the triumvirate chooses to ignore Lenin’s “testament” for Stalin’s removal. After all, Stalin is a doer; i.e. he gets things done. Just as Stalin suppresses opposition to his interpretation of Lenin, China suppresses opposition to the Communist Party’s doctrines. Doctrinal differences are successfully suppressed in China until the the failure of “The Great Leap Forward” in the 1950’s. The consequence of “The Great Leap Forward”s failure is the cultural revolution in the 1960’s.
In America’s history the economy slugs along with setbacks and successes. Though 1929 sees the collapse of the American economy, it recovers with government intervention, the advent of WWII, and the push and pull of a decision-making process designed by the framers of the Constitution. That push and pull is from leadership that is influenced by the checks and balances of three branches of government. That same process saves the American economy in 2008. The power and economy of America has grown to become the strongest in the world.
Kotkin’s research suggests young Stalin is something different from what is portrayed in earlier histories. Stalin grows close to Lenin because he is the acting arm of Lenin’s centralized command. Lenin relies on Stalin to get things done. He is Lenin’s executor. At the same time, Lenin turns to Trotsky as an economic adviser to ensure a more comprehensive understanding of what needs to be done to stabilize the revolution. Trotsky believes in the importance of centralized control of the economy.
Both Lenin and Stalin believed in communism but the first acts on a vision of the future; the second acts on the “now”.
China’s Deng and Xi seem to reverse Lenin’s and Stalin’s reasoning. Rather than Deng being like Lenin, he acts on China in the “now”.
Xi seems more like Lenin and looks at China’s future based on the ideals of communism. However, from an American perspective, all autocrats common failing is belief in “rule of one”. The rising dictatorship of Putin is doomed to fail but there is no guarantee that his replacement will either be soon or less repressive.
Glasnost and perestroika fail to overcome that belief.
Kotkin puts an end to any speculation about Lenin being poisoned by Stalin. Kotkin argues that Lenin died of natural causes, strokes from a brain disease. What Kotkin reveals is the internecine war that is waged between Stalin and Trotsky while Lenin is dying. The strokes steadily debilitate Lenin and suspicious written pronouncements are made that may or may not have originated with Lenin. Lenin’s secretary is his wife. Some evidence suggests a missive from Lenin saying Stalin should not be his successor, noting Trotsky as a better choice. Kotkin suggests such a missive is unlikely. Lenin seems to have had his doubts about both men.
Succession in modern China seems less filled with intrigue than communist Russia but the opaqueness of China’s politics makes the rise of Xi a mystery to most political pundits. What seems clear is that China’s rise and fall has always been in the hands of the “…one”.
PRESIDENT XI’S ONE BELT, ONE ROAD PLAN FOR CHINA’S FUTURE
History will be the arbiter for President Xi’s success or failure with a road and belt plan for China’s economic future. The same may be said for President Trump’s focus on the virtue of selfishness for America’s economic future. The fundamental difference between America and China is Xi has no “checks and balances”; American Presidents have the Supreme Court, Congress, and a 4-year-election-cycle to assuage arbitrary government action.
AYN RAND (1905-1982, AUTHOR WHO FIRMLY BELIEVED IN THE VIRTUE OF SELF-INTEREST AND UNREGULATED CAPITALISM.)
In Russia, Trotsky is characterized as an intellectual while Stalin is a pragmatist. In China, Deng is characterized as a pragmatist while Xi seems a doctrinal theorist.
In history, Trotsky is highly opinionated and arrogant. Stalin is street smart and highly Machiavellian. Trotsky thinks right and wrong while Stalin thinks in terms of what works. In China, Deng is Stalin and Xi is Trotsky. In America, Trump is Stalin and his opposition is Trotsky-like do-nothings.
Trump lost the election in 2020 because–from an American perspective, all autocrats common failing is belief in “rule of one”.
Stalin is reputed to be temperamental while Trotsky is aloof. Though Trotsky insists on centralized control, Stalin argues for federalization. Stalin paradoxically argues for federalization because he knows Russian satellite countries want independence, but he will act in the short-term for centralization to get things done. And of course, Stalin clearly adopts centralized economic planning for the U.S.S.R.; i.e., another of Kotkin’s paradoxes of power.
Ironically, though Putin is now showing himself to be as ruthless as Stalin, he is unable to exercise the same level of dictatorial control. Unrest is not quelled in the face of the Russian people’s assessment of Putin’s justification for the Ukrainian war.
There is much more in Kotkin’s powerful first volume about Stalin and the Russian revolution. Germany’s role in the revolution is a case in point. The writing is crisp and informative. The narration is excellent. After listening to “…Volume I”, one looks forward to Kokin’s next which is published this year.
The past is present in Kotkin’s excellent biography of Joseph Stalin.
This is a disturbing book because it brings a wolf to the door. The wolf may blow your house down whether it is made of brick or straw.
Herman Cain (Previous Presidential candidate, Tea Party Activist who believes in returning to a gold standard for the American dollar. Most recently, President Trump tried, unsuccessfully, to have Cain appointed to the Federal Reserve Board.)
President Trump’s harangue about the independence of the Federal Reserve is old news. Packing the Federal Reserve has been done before. The selection of Herman Cain reflects on an Executive branch that lives in the past.
James Rickards infers the sky is falling because we are in a war that cannot be won without returning the American dollar to a gold standard. The argument is that returning to a gold standard will create a level playing field for currency that will stabilize the economy and break down barriers to free trade; i.e. not free trade exactly but regulated trade. Somehow, currency backed up by gold will be more stable than the full faith and credit of a government—really?
What is roiling the market today is a trade war; not currency manipulation.
Gold was over $1600 per ounce when Rickards was published. It ranged between $1529 and $1800 per ounce since this was published. Without a fixed standard, Rickards argues national economic security is at risk. Rickards argues that America has fought two currency wars in its history and is now in the middle of its third war, using weapons that cannot defend America in a currency war.
America is part of a world market; not a singular self-sufficient economic island.
Trade wars between nations is twentieth century thinking. World interconnection through travel, media, and education demand constructive cooperation between nation-state economies. It is economic improvement of all nations that makes each nation stronger. As national economies improve, free trade flourishes. It is a waste of human life to engage in restrictive trade policies or artificial standards of value like gold.
BEN BERNANKE (CHAIRMAN OF THE FEDERAL RESERVE 2006-2014)
Rickards believes Bernanke, in 2012-13, misreads a primary cause of the depression. Rickards believes Bernanke is steering the U.S.’ economy into a ditch. He argues that “quantitative easing” is a road to hyper-inflation and economic calamity because it artificially stimulates the economy with newly printed money that has no intrinsic value.
Rickards goes on to suggest the Euro crises are examples of currency instability and the unpredictability of many battles being fought in the currency wars. His assessment is that political interests of China and Germany are the only glue that keeps countries like Greece from economic collapse.
Rickards is an attorney and an economist. That makes him capable of structuring an argument about the economy with more credibility than a bumbling blogger. However, to this bumbler, Rickards’ arguments are specious.
First, other economists disagree with Rickard’s considered argument about the gold standard, Ben Bernanke for one. Second, what evidence is there that one country’s decision to return to a gold standard will reduce economic conflict among nations? Finally, history shows Rickards to be wrong in terms of America being steered into a ditch. One can reasonably argue that Bernanke’s, Geithner’s, and Paulson’s actions kept America out of a ditch.
In contrast, it appears President Trump may be steering the American economy into an economic ditch.
Countries are run by different government philosophies, different national interests, and rely on different economic resources—how will creating a gold standard for currency in one country or all countries reduce conflicting self-interests? The currency war will not be changed with a return to the gold standard, i.e., currency wars will continue and evolve based on whatever standard is used for currency to determine value.
The gold standard is not a magic bean that can be exchanged for a milk cow. There is no bean stock to golden egg land.
Geo-political thinking and self-interest do not change because of a gold pegged American dollar. Currency conflicts will not disappear, i.e., they will re-set to commodity wars, or maybe bitcoin wars. America is as capable as any post-industrial nation to compete on that basis.
Rickards observes the trillion-dollar American Treasury bill hoard held by China and sees the sword of Damocles raised to slice America’s neck. Why would Jack want to kill the goose that lays the golden eggs? America is “Mr. and Mrs. Consumer” on steroids.
AMERICA’S BULLY
Currency wars are real, but America has fought them before with results that have made it the bully of the world. Maybe America needs to learn how to be a little humbler rather than gamble on a currency play or trade war that has as much chance of causing as curing world economic collapse.
Consumption is threatening humanity. Human resource should be deployed to improve living standards of all people, but economies that strictly focus on consumption are killing the golden goose.
Work on the environment is truly an improvement that “lifts all boats”. Better waste management, clean water, clean air, and education are investments with infinite returns. Wars of any kind between nations is twentieth century thinking.
Three thousand years of history are compressed into a twenty-one day tour of China. Aside from dramatic images of China’s economic growth, one of the most interesting political observations made by our tour guide is the 70% rule of leadership.
In a self-limited group of 15 American tourists, Overseas Adventure Travel produces a personalized tour of Zhonggou; a.k.a. the “Middle Kingdom”–so named because China grew from a number of small provinces into a singular nation; i.e. a nation the size of the continental United States. Like all maps drawn by a nationalist country, China became the center of the world (a self-identified “Middle Kingdom”).
Our professional guide introduced himself as “Jason” (on the left). “Jason” is born and raised in China. He is educated and trained as a natural-medicine pharmacist like his mother. However, he chooses to abandon that career to see the world. He applies for a position with O.A.T., and after extensive interviews, training, and testing he becomes an independent, licensed tour guide.
Being a guide is no easy task. When guiding 15 people, and seeing sites only read about in literature and the news, things get complicated.
In many ways, tourists are like ostriches. Ostriches are known to bury their heads in the sand when scared. As tourists, we often do the same, not out of fear, but in astonishment.
China’s great wall, giant cities, panda parks, public monuments, landscaped byways, and city parks overwhelm the senses. O.A.T. guides are charged with gathering, and managing 15 tourists while directing and telling a cultural history of the country in which they live.
This is a panda reserve in Chengdu, China. As with many indigenous species around the world, the panda is endangered and restricted to sanctuaries where they can reproduce without fear of poachers who covet their fur.
The immense surroundings of an awakening political, and economic giant arrives in a rush of cityscapes, bullet trains, and water ways.
China is a country of 1.3 billion in a land the size of America with 327 million. Population density difference is immense. (In China there are 134 people per square kilometer vs. 30 in the U.S.) Instead of big cities of 8,000,000 citizens in the U.S., China’s big cities have 20,000,000.
While explaining China’s complicated history, “Jason” juggles arrangements for traveling cross-country. He assigns rooms at hotels, arranges meals, schedules meetings, and offers lectures prepared by local historians and residents. At the same time, “Jason” prepares 15 people to board trains, boats, and planes for the next city.
PARTY BOAT
ROOM ACCOMMODATION FOR OVERNIGHT TRIP
BEIJING AIRPORT
BULLET TRAIN
A constant refrain from our guide is “don’t forget your passport”. Sometimes, a passport is forgotten at the hotel; other times personal luggage exceeds air-travel weight limits. “Jason” smiles, calms fears, and explains how problems can be overcome. He says he has a “cousin”. He doesn’t, but somehow problems are solved and the group moves on.
China is a closely watched country. The government requires surrender of your passport at hotels, and often insists on presentation of passports at particular sites like Tienanmen Square.
Two areas we visited (Tibet and Hong Kong) are called autonomous (actually they are, at best, semi-independent) provinces in China. These “autonomous” regions have a different set of rules but the influence of main-land China is obvious in conversations with local residents.
Since our trip to China, Tibet and Hong Kong’s semi-independent status is being challenged by Xi’s desire for conformity. To Xi, the future of China is dependent on control by the communist party. Any ethnic, economic, or political independence from the party is suppressed.
A famous Tibetan monastery (Depung Monastery), originally designed to house Dali Llamas in life and death–is converted to a government building during the cultural revolution. It falls into disrepair but is renovated by President Xi as a museum. The current Dali Llama (forbidden to return to China) is unlikely to be entombed, like former Dali Llamas, in this monastery.
Tibet requires a passport, a special visa, and security checks. All interior China flights have security stations to x-ray baggage and inspect passports when you board. Wi-fi is generally available at hotels but an unsettling feeling comes with use of wi-fi because of a feeling everything you do is monitored.
Some hotels have only Chinese stations and those that have CNN or BBC seem to limit coverage of any news that is critical of China
Additionally, it seems certain information is not available on the internet. These anomalies do not change one’s interest in China but “Big Brother” seems ever present.
Of course, the same is true in America but “Big Brother” is more likely a private company like Facebook, Apple, or Google.
Government surveillance is restricted by “rule of law” in America. America retains “checks and balances” that mitigate autocratic decisions by singular leaders.
“Jason” notes–in his experience, people all over the world are the same. People love; people hate; people believe and disbelieve, but cares and feelings of individuals are the same.
However, there seems a distinct philosophical difference in views of freedom. Freedom seems more feared in China than America. National coverage of Tibetan, Uighur, and Hong Kong independence suggests great concern over ideological differences between ethnic groups, provinces, and the government; particularly differences that encourage public demonstration against government policy.
As “Jason” unfolds Chinese history, one thinks about how important powerful, and singular leaders have been in governing China. Three cultural constants in Chinese history seem to be:
great care for familial relationship,
pursuit of higher education, and
autocratic rule.
MAO ZEDONG (1893-1976, FOUNDING FATHER OF PEOPLE’S REPUBLIC OF CHINA)
DENG XIAOPING (CHINA’S CHAIRMAN OF THE CENTRAL ADVISORY COMMISSION 1982-1987)
Through generations, China relies on strong leaders who are able to unite disparate interests of provinces, religions, and ethnic groups.
From the great dynasties of ancient history to the eras of Mao, Deng, and now Xi, our guide suggests many Chinese believe “…great leaders must achieve 70% of what is right for the Chinese people” to advance the country. Those leaders that do not achieve that level of public good, are failures.
In other words, Mao and Deng may have made mistakes, but they were at least 70% right. President Xi seems in the process of proving himself. Ancient China’s lead in the world of science and economic growth suggest some truth in a 70% rule–after all, no one is always right.
CHIANG KAI-SHEK (CHAIRMAN OF THE NATIONAL GOVERNMENT OF CHINA 1943-1948) Leader of China during WWII was labeled as corrupt by communist forces in China.
China, like all surviving nations in history, have fallen and risen. In the 1940’s and into the 50’s, Mao overcame, what is considered by some, a corrupt government with a revolution that advanced the economic and political strength of China. Mao eliminated feudal farming that enriched the few at the expense of the many.
In the 1950’s China rapidly improved farming production of the country. On assuming power, Mao’s goal is to eliminate landed gentry who fail to make their farms produce what they were capable of producing. Redistribution of land became a primary goal of the communist revolution.
Mao’s means were to split the land among the peasants and allow them to own their own land. Individual small land owners formed collectives to improve farming productivity. In the 50’s that plan worked magnificently. China advanced rapidly in the early years of Mao’s reign.
However, with the initial success of small farm-collectives, Mao made the mistake of increasing the size of the collective with communist overseers. Mao’s intent is to advance productivity more quickly. The overseers undermine productivity with an economic program titled the “Great Leap Forward”.
Communist bureaucrats begin saying production is steadily increasing when it is not. Individual farmers no longer control productivity.
Farmers lose their passion to improve productivity as they become smaller cogs in a bigger machine. The bigger machine is layered with bureaucrats that want to look good on paper, but as overseers they overstate the productivity of the collective.
The communist party overestimates its ability. The “Great Leap Forward” replaces farmer’s with Communist bureaucrats. In the late stages of Mao’s “Great Leap Forward”, millions of Chinese die because of bureaucratic lies about farm production. Presumably, this falls into the 30% failure of Mao’s leadership.
Nearing the end of Mao’s life, he may have recognized his error but a cabal, called the Gang of Four (which included his wife), seized control of the government and continued the failed policy of communist control of agriculture. Mao, or this Gang of Four, started the cultural revolution (1966-1976); causing the death of millions. With the question of Mao’s intent, and the usurpation of power by the Gang of Four, the mistakes of the cultural revolution seem less attributed to Mao than the “Gang of Four”.
After removal of the “Gang of Four”, Deng Xiaoping, a pragmatic leader during Mao’s reign, opened the door to a form of capitalism. The door is nearly shut with the Tienanmen Square slaughter. At Deng’s order, a massive protest in Tienanmen Square, is to be ended by “any means necessary”. An unknown number of Chinese men, women, and children are murdered by the military.
Some suggest that Tienanmen Square is a turning point in the history of China. Deng did not apologize for the Tienanmen decision, but he overcame his mistake by arguing that “It doesn’t matter whether a cat is black or white, as long as it catches mice. …. “ Deng seems to have listened to some of what the Tienanmen protesters were saying. Undoubtedly, many protesters were attempting to make communism better; not to destroy what works for the masses. but to focus on what enriches their lives.
The principle of the collective in China remains. Land is largely owned by the State. However, a version of a free market is created which allows private sale of vertical construction (particularly space within buildings) in China’s cities. (This is somewhat misleading because the sales price in a private transaction requires approval by the government, but the government does allow profit to the individual on the sale.)
Small farms are still owned by some Chinese, but the trend is for continued collectivization. Additionally, the growth of cities changes the desirability of farming. Older Chinese may stay on the farm but their children migrate to the city. When aged farmers die, the land is retained by the family but often as tenant farms; unless the government makes an offer they cannot refuse. The tenant farms still operate as a part of a collective. Produce is determined by individual farmers but brokers sell farm product to retail stores for purchase by the public.
A construction boom began with Deng’s pragmatic solution that seemingly combines communist oversight with capitalist ambition. Chinese entrepreneurs work hard, become wealthy, and live a better life. Small farms are steadily re-acquired in China through a process of payment to farmers in the following way:
families are offered (collectively owned) small-parcel farms equal in size to their parent’s land. They become absentee landlords that receive rent in the form of farming profits,
various incentives are offered by the government to families for their move; sometimes, a pension or medical insurance policy, and
the government offers a condominium or house in a different location.
In using this method of acquisition, the government is able to build new condominiums, shopping centers, and infrastructure projects–like the “Three Gorges Dam” that controls flooding. Infrastructure work is ubiquitous in China.
Roads, bridges, and rails are being built to influence and connect Chinese provinces. The most recent monumental evidence of this practice is a high-speed train connection over a bridge between the mainland and the “autonomous” province of Hong Kong.
The process of government acquisition of privately owned farmland is complicated. A team of Chinese bureaucrats measures the house in which a farmer lives, the size of the land the family owns, the product they produce, and the livestock they have. The government determines the price that will be paid. The land owner must accept the decision. In return the farmer may be offered an equally sized piece of land in a collective that is farmed by others; personal incentives like a pension or medical insurance, and a condominium or home in which to live.
BARGE NEAR THREE GORGES DAM
SHIP’S WAITING TO ENTER LOCK AT THREE GORGES DAM
LOCK AT THREE GORGES DAM
State acquisition of land allows massive infrastructure projects to be built. These projects offer jobs to Chinese farmers and their children who are migrating to the city. In some cases, the small farm is retained while the farmer’s children go to the city for a job. With payment from a city job, some call on their farmer parents to help them with a down payment on a condominium in the city. The price of condominiums rises. They rent the condo they have, and make a down payment on a second condo. With each transaction, they become wealthier; i.e. at least, wealthier on paper.
Construction activity is endemic in every city visited. A striking observation is that many of the condominiums seem unoccupied. The question becomes whether construction is too far ahead of real economic growth.
However, retail businesses appear to be booming in China’s cities. Shopping centers are full of residents, and travelers. Restaurants of every kind compete with each other in high-rise shopping malls. Our local guide in Hong Kong notes that the original street markets are disappearing because of conventional retail construction.
Another striking difference between big American and Chinese cities is that you see few homeless citizens in China. In China, government subsidizes housing for the poor. It is not luxurious. It is small and crowded. The dilemma of government is in drawing the line between central planning and public service. It appears to keep the poor from being homeless.
There seems an underlying fear of the effect of the tariff war (started by President Trump) on the local economy. An example of the consequence of the tariff war is a new 90% tax on purchase of a new Tesla in Hong Kong. There was no tax when Tesla first entered the market. Before the tax, Musk’s cars were widely purchased in Hong Kong. One doubts that continues with a 90% tariff.
Another great surprise is that air pollution in Beijing, when we were there, seems no worse than it is in America. However, we were there during the African conference which may explain why the air seemed relatively clear. China successfully cleared the air by limiting polluters during the Beijing Olympics.
Environmental degradation is a concern in China. Over 60% of their energy comes from coal. The largest Hydroelectric dam in the world, the Three Gorges Dam, only produces 2% of China’s energy needs. Three Gorges is considered a dam for flood control more than energy. Interestingly, the Yangtze river shows a lot more debris and garbage below the dam than above it. Generally, water ways seem polluted with debris like plastic and other human debris. In an effort to abate pollution around Hong Kong, sampan life is discouraged. Much fewer sampan are licensed in modern Hong Kong.
Tap water is considered undrinkable throughout China; which means nearly all water for daily consumption is bottled. Hong Kong is vitally dependent on the mainland for water. There are 21 treatment works in Hong Kong but treatment changes the taste of the water so much that Hong Kong residents drink bottled water.
As noted in a previous blog, President Xi, the current leader of China, is determined to reassert the dominance of the Communist Party in China. Strong centralized rule has been a hallmark of rapid economic and political advance in China’s history.
PRESIDENT XI’S CENTRALIZED RULE CONTINUES TO BE CHALLENGED BY HONG KONG DEMONSTRATORS–NEW YORK TIME’S ARTICLE 6.14.19.
Time will tell if President Xi is a 70% or 30% leader. Xi’s decision to initiate a China’s “Road and Belt” program for the world may be a harbinger of great success or abject failure. The worry may be whether Xi is like an early Mao, and pragmatic Deng, or a singular version of “The Gang of Four”.
Having just returned from China (more about the trip in a future blog), it seems apropos to revisit Jonathan Sperber’s biography of Karl Marx. In many respects, China’s resurgence as a major economic power suggests Marx may have outlined an economic system with some strengths, but communism and China’s form of communism have catastrophic weaknesses.
Johnathan Sperber has gathered an impressive amount of data in his history of Karl Marx’s life. Sadly, his presentation is not equal to his collection. Unlike biographies done by Robert Caro (who wrote “The Power Broker” about Robert Moses, the land planner of New York, and former President, Lyndon Johnson) or William Manchester (a Winston Churchill Biographer), Sperber fails to bring his subject to life.
KARL MARX (BORN TRIER, GERMANY 1818-DIED LONDON, ENGLAND 1883)
Marx is considered by some to be one of the three most influential economists that ever lived (Adam Smith and John Maynard Keynes being the other two.) That high praise is not forcefully presented in Sperber’s biography. Sperber offers facts but leaves coherence to the reader.
Marx means something to the 21st century. Some might argue America is reaching a point in the history of capitalism that is foretold by Marx’s theory of socialist economics. As Sperber notes, Marx believed capitalism was a step in the economic evolution of the world, leading to a governmental revolution. Marx believed capitalism would reach a nadir of conflict between haves and have-nots because of social inequity inherent in capitalist economies.
As Sperber notes, Marx lived through and wrote about social conflict created by feudalism and capitalism in the mid-nineteenth century. Marx is raised in Prussia, ruled by a Czar in a feudal economic system. He witnesses growing discontent of feudalistic working-class Russia.
Marx created a theory of economic evolution showing feudalism, capitalism, socialism, and communism as progressive improvements in the lives of all people.
Feudalism grew out of the rule of Kings and Czars with a small aristocracy receiving privileges of wealth and property with the bulk of human civilization indentured to the privileged class.
As the indentured, under-privileged population grew, discontent led to revolution.
In 1776, America broke with English aristocracy to form a “checks and balances” democracy; in 1789, the French population broke with absolute monarchy to form a populist democracy; in 1848, German states rebelled against the aristocratic Prussian confederation of thirty-nine states ruled by an aristocracy and chose various forms of government to establish their own nationalist identities.
DENG XIAOPING (CHINA’S CHAIRMAN OF THE CENTRAL ADVISORY COMMISSION 1982-1987,) In 1980 Deng Xioping, though maybe not in a revolutionary sense, changed the direction of communism in China.
Each Chinese change in governance led to more liberal, slightly more democratic, and capitalist economies.
Hong Kong is presently in the throes of resistance to China’s encroachment on their semi-autonomous existence. Hong Kongers’ discontent could be seen in traveling to Hong Kong months before today’s demonstrations.
As nations prospered during the industrial revolution, more mercantile economies formed. Aristocracy became broadly defined by wealth rather than inheritance. Parliaments and congresses were created to represent wider population interests.
However, Sperber explains Marx believed that the greatest part of nation-state citizens remained in poor economic condition; even when based on mercantilism. Marx, looked at the economic condition of the world, and noted that transition from feudalism to mercantilism only marginally improved living conditions for the majority of state citizens and, in fact, actually worsened the condition of the young and impoverished who worked long hours for little pay. To Marx, capitalism just exacerbates the mercantile economic condition of the poor.
CHINA IS MOVING 250 MILLION PEOPLE INTO CITIES ACCORDING TO THE NEW YORK TIMES (Housing is un-affordable for a large percentage of new city dwellers. The government of China subsidizes housing for many Chinese that come from rural areas.)
In 2018, it seems China may be reaching a capitalist tipping point where low wages do not cover the cost of living. Though many Chinese have moved from rural areas, wages remain low in comparison to the cost of living. Housing and health coverage is un-affordable for a large percentage of new city dwellers. The government of China subsidizes housing for many Chinese that come from rural areas to mitigate the plight of the poor.
ADAM SMITH (1723-1790, AUTHOR OF -THE WEALTH OF NATIONS) Marx developed the labor theory of value to suggest that classical economic theory suggested by Adam Smith leaves too many people in the gutter.
Marx felt Smith did not properly quantify the value of labor. Marx argued that capital was created to benefit owners at an unfair expense to labor.
Marx believed capitalist aristocracy continued to victimize the working class, trading one form of indenture for another. Marx suggested democracy was an evolution for economies that widened the benefited population but still left most workers underpaid, undernourished, and disadvantaged.
Sperber clearly points out that Marx did not believe that communal ownership of property redressed the inequities of state’ economies; i.e. Marx argued that inequity is caused by capital creation that only benefited ownership and undervalued labor that created capital.
China’s current experience seems to show Marx may have been right to believe communal ownership has little to do with state’ economics because communal ownership remains a dominant factor in China’s extraordinary economic resurgence. Property is not owned by individuals in China. Land is either owned by a collective or by the State.
Though land cannot be owned by Chinese citizens, distribution of capital has been widely increased through rising prices of high-rise condominiums. Many high-rise condominiums are owned by individual Chinese. Some citizens inherited or bought condominiums at such low prices–appreciation made them rich.
The fly in the ointment of their newfound wealth is the price of sale must be agreed upon by the government which creates an artificial bubble that may burst into hyper-inflation, with the potential for a nation-wide economic collapse.
China moves to address a potential economic collapse in an inventive and creative way. What China is doing--is trying to widen their market for goods with an economic growth plan called "Belt and Road". China invests billions of dollars in other countries infrastructure. China is betting that these improvements will create consumers for Chinese manufactured products. A side benefit is that these infrastructure improvements offer employment to Chinese citizens and businesses. (As can be read in news magazines like the Economist and papers like the Wall Street Journal and New York Times, some nations resent China's investments in their countries for various nationalist and economic reasons.)
China is also investing in the world's natural resources to expand their manufacturing capability. The question is whether these long-term investments will pay off in time to stabilize China's construction market. The construction market is where individual Chinese citizens carry their wealth. Condominium prices will reach a limit. In 2018, a 300 square foot condominium sells for over $500,000 in China's larger mainland cities. That is nearing $2,000 per square foot (and Chinese buyers do not own the land). In the United States, most housing is less than $200 per square foot; including the land. Continued wealth distribution in China depends on the success of the "Belt and Road" program.
Marx supported worker unionization’s effort to equalize benefit through a more equitable distribution of capital. He was deeply involved in the “International Workingmen’s Association” (aka First International). Herein lays the evolution of capitalism to socialism and Marx’s belief (and maybe Xi’s belief) in the fairness of economic communism. Modern China seems to be addressing the idea of a more equitable distribution of capital on paper, but the paper is based on what appears to be an unsustainable real estate market.
Piketty argues that the income gap widens once again, after World War II. He estimates 60% of 2010’s wealth is held by less than 1% of the population; with a lean toward the historical 90% threshold. Moneyed interests have become the new aristocracy, as repressive and privileged as the Kings and Czars of the mid-19th century.
One can disagree with Marxian theory but the widening gap between haves and have-nots (the 1% and 99%,) is a real-world concern in the 21st century.
Marx’s solution for economic inequity is flawed but the condition he describes in the evolution of economies seems prescient. To most Americans, Marx’s communism is not the answer.
When CEOs of companies are making over 200 times average laborers’ income, there is a glaring problem in the current condition of capitalist economies. Instead of income differences, it is housing value in China. China is on a razor’s edge that may as easily cut their throat as shave their face.
This is a disappointing book because it garners too little interest in the power and influence of Marx’s economic theories. However, it offers insight to what Marx may have had right (the importance of distribution of wealth) and what he had wrong (communal productivity). China is using a different vehicle than America for distribution of wealth but the principle of wealth-distribution addresses what ails all forms of government.
UPTON SINCLAIR, JR. (1878-1968, WINNER OF THE PULITZER PRIZE FOR FICTION)
It seems appropriate to revisit Sinclair’s book in light of the current administration in Washington D.C.
In the era of Trump, it is not meat packing but the coal industry that needs help. Trump’s pandering to the American coal miner offers air without oxygen to an industry that is dying.
Private industry and the American government need to step in and offer a way out for coal industry’ laborers. The Trump administration undervalues American labor by presuming laborers can only be cogs in a machine rather than complete human beings.
Instead of insisting on continuing an industry destined to fail, private industry and government should be offering living-wage transition, and education for new jobs; i.e. jobs that look to a future rather than a past.
Sinclair exposes the dark side of poverty and immigration in the United States. It reminds one of Charles Dickens’ stories of child labor in London but does not offer much warmth or balance. Sinclair’s story offers no respite from utter degradation. There is no respite for the reader to believe there is any redemption for being poor in Chicago in the early 1900s.
“The Jungle” is a grim tale written by Upton Sinclair about the meat-packing industry in early 20th century America.
Lessons of “The Jungle” are reminders of the limits of unregulated capitalism, industry’ greed, and government neglect. Sinclair attacks the meat-packing industry of the 1900’s.
Descriptions are given of spoiled meat ground into sausages; loaded with chemicals for appearance and smell, with too much production to be adequately inspected by too few inspectors. Employees lose limbs and lives in accidents; with corporate lawyers preparing to swindle the uneducated with unfair financial settlements. Wages are too low to offer enough money for shelter and food; let alone any savings, to break the cycle of poverty. Promotion is limited to those who are willing to compromise their morality by feeding a corrupt system that thrives on human exploitation.
Herbert Hoover is the 31st President of the U. S. when the meat packing industry is at its worst. Like Herbert Hoover, Trump seems to think the strong survive and the poor deserve their fate.
To some, this is the same as today’s stories of the coal industry.
Don Blankenship (Former CEO of the 6th largest coal company in the U.S., Massey Energy)
Convicted on a misdemeanor charge of conspiring to willfully violate mine safety and health standards in 2015. Sentenced to 1 year in prison and fined $250,000.
Images of poverty and what it leads to are still seen in American cities; i.e. people living on the street, begging for a dollar to eat; some drinking the dollar away at a local tavern because it blunts the pain of being poor and offers a haven from a cold winter day. Young people, some children, turning tricks to survive; selling their body because low paying jobs of high volume/low price conglomerates do not pay enough for rent and food.
Hearing of the meat industry–its lax government oversight, greedy corporate owners, and corrupt politicians deeply offends American ideals. Grinding poverty changes a family of ambitious immigrants into cogs in a meat butchering machine that breaks spirits and turns good people into bums and latent criminals.
In Dickens novels, there are some remnants of human joy; even in impoverished London. In Sinclair, the only glimmer of light is small-scale concern for fellow human beings. The early days of the union movement offer some hope. However, even Sinclair’s positive sentiments are corrupted by politics. Sinclair idealizes socialism and touches on early communism.
America still offers the best known vehicle for freedom in a regulated democracy.
Since 1789, America’s relationship to immigrants has been a work in progress.
The United States has a growing need for younger workers; not to the extent of countries like Japan, but after 2020 it is increasingly important.
America needs more youth to re-balance its economic growth.
The influx of immigrants generated much of America’s success in the industrial age. Immigrants offer the same opportunity for America in the tech age.
To some immigrants, the avenue out of poverty is crime and immorality, but that has always been true in America’s history. That is why American democracy is founded on rule-of-law. Human nature does not change.
The life cycle for an honest immigrant is grim; arriving poor; staying poor, and dying. American Presidents who only focus on the business of business fail to understand or care about the trials of the poor, the newly arrived immigrant, or the social condition of impoverished communities.
Every country in the world benefits and suffers from the nature of man and the effects of urbanization; none offer Eden. America remains a land of opportunity, but to close our doors to those who want to improve their lives with freedom and honest work is an unconscionable mistake. Demographics are destiny. America’s and many post-industrial economy’s populations need help.
Modern America is not quite so dark but inequality of opportunity still plagues capitalism with wealth, greed, and political corruption hiding the dire condition of the poor.
As long as the poor remain hidden; the rich and middle class will avert their eyes, mutter “get a job”, and think the poor get what they deserve.
America is Constitutionally responsible for the welfare of its citizens.
Those who think the business of government is only business are incorrect. Business is a tool to use in forming a more perfect union; governing with justice, supporting domestic tranquility, providing for a common defense, and promoting the general welfare.
SINCLAIR LEWIS (1885-1951 AMERICAN NOVELIST-FIRST TO RECEIVE THE NOBEL PRIZE IN LITERATURE)
Sinclair Lewis’s “Babbitt” is categorized as a satire, a parody of life in the early roaring twenties, but its story seems no exaggeration of a life in the 20th or 21st century. Published in 1922, it is considered a classic. It is said to have influenced Lewis’s award of the Nobel Prize for literature in 1930. (Lewis is the first American to receive the Nobel Prize in Literature.) Lewis is highly praised for describing American culture. “Babbitt” is the eighth of thirteen novels Lewis published by 1930. Lewis creates a body of work that intimately exposes strengths and weaknesses of American democracy and capitalism.
Reader/listeners are introduced to George F. Babbitt, a man in his forties. Babbitt is a realtor. He is successful financially; bored, and relatively happy in his married-with-children’ life. His best friend, Paul, is equally bored, less financially successful, but deeply unhappy in his marriage. Paul is harried by a wife that men categorize as shrewish. Babbitt’s best friend chooses to cheat on his wife. When Babbitt finds Paul in a clandestine meeting at a Chicago restaurant, he waits for him at a hotel to try to understand what is happening.
DOMESTIC ABUSE VICTIM (Lewis writes a satiric vignette where women are rarely viewed as equal to men, and expected to forgive men for violent treatment.)
In a male-bonding moment Babbitt forgives Paul and agrees that his friend’s wife is a shrew. Babbitt offers to mislead the betrayed wife by lying about her husband’s out-of-town business trip. Later, the spurned wife argues with Paul. Paul responds by shooting her in the shoulder. Babbitt sticks by his friend; even when he is convicted and sentenced to prison for three years.
After a year of his friend’s incarceration, Babbitt tries to get the spurned wife to forgive her husband and petition the parole board to release Paul early. She neither forgives nor forgets. She chastises Babbitt for his deluded belief that her husband deserves any leniency. This seems a satirical vignette where women are rarely viewed as equal to men, and expected to forgive men for violent treatment.
Babbitt, Lewis’ anti-hero, deludes himself with the idea that another sexual relationship in his life is his right, and that it will not hurt anyone.
In his mid-forties Babbitt is becoming more restless. He rationalizes infidelity and discounts the value of his wife and family. He chooses to cheat on his wife because he feels his wife does not understand him. Babbitt deludes himself with the idea that another sexual relationship in his life is his right, and that it will not hurt anyone. One may presume this is another satirical vignette. On the other hand, how many men and women rationalize their way to extra marital affairs today?
Lewis, through his characters, infers there is a struggle for fair, if not equal treatment, in women. In “Babbitt”, Lewis never gives women a role as superiors or equals that have intellectual interests in government, society, or culture. Rather, Babbitt suggests women often feign interest in a man’s thoughts for the desire of companionship, attention, and affection.
Babbitt implies women rarely seek intellectual stimulation or sexual gratification. Men are shown to classify women as shrewish because they are pushing husbands to be more expressive and attentive. There are many ways of interpreting Lewis’s intent but this is not an exaggerated satire, it is a truth of many men’s view of women.
An underlying theme in “Babbitt” is the inequality of American capitalism. Women and most minorities are less equal because they are either not in the work force, or in the work force at a lower wage.
An underlying theme in “Babbitt” is the inequality of American capitalism. Women and most minorities are less equal because they are either not in the work force, or in the work force at a lower wage. The union movement is struggling for recognition in the 1920s because of low wages being paid by business owners. Lewis suggests Babbitt begins to modify his opinion about the labor movement as he becomes entangled in the lives of less successful Americans like Paul and his spurned lover.
Wealthy capitalist see the answer to the union movement is electing a business President that cracks down on unions. Capitalists who have money and power classify the union movement as anarchic, communist, or socialist. (This sounds familiar today.) Babbitt suspects there is something wrong when he sees some union supporters are from the educated class. What makes Lewis’s observations fascinating is that they are written when America is in the midst of the roaring twenties; before the 1929 Wall Street’ crash. In the early 1920s, capitalism seems to be a tide raising all boats when in fact it is a torpedo being readied for launch.
Wealthy capitalist see the answer to the union movement is electing a business President that cracks down on unions.
Babbitt experiences peer pressure that causes him to recant any perceived support of union sympathizers and eventually returns to the fold of do-nothing conservatism. He recants his libertine ways and returns to hearth and home. But Lewis offers a twist by having Babbitt’s son shock the family by rebelling against standards of upper middle class life. He decides to marry without the blessings of his family or his church. George F. Babbitt is the only family member who whole heartedly supports his son’s unconventional act.
Babbitt writes in the midst of a burgeoning American industrial revolution. It seems what happened in the 1920s is similar to what is happening today. The industrial revolution is now the technology revolution; women are still undervalued, many Americans want a business President elected, and unions are being busted. Today’s young men and women are still breaking social conventions. The stage seems set. One hopes 2018 is not America’s roaring twenties; pending another economic crash.
Broken families, broken hearts, but most of all, broken trust are described in Jill Leovy’s book, “Ghettoside”.
Leovy’s “true story”, somewhat surprisingly, deals mostly with the relationship between Black communities and local law enforcement in an area known as South Central Los Angeles. The surprise in the story is that the 2000 census shows 87.2% of the population of South Central Los Angeles is Latino–only 10.1% is Black; the remainder white, Asian, or other.
SOUTH CENTRAL LOS ANGELES (51 SQUARE MILES, 25 NEIGHBORHOODS)
The 2000 census shows of 49,728 people live on 2.55 square miles of land, made up of nine communities. One presumes Leovy chooses the relationship between Blacks and the police because it fits the particular facts of her story.
Food distribution as a result of Covid19 and unemployment.
It seems fair to suggest broken families, hearts, and trust are equally true for Latin South Central Los Angeles families because poverty and gang violence are common denominators of its residents.
Though Leovy’s story is not about poverty, “Ghettoside” (a coined word for ethnic groups killing themselves) is partly related to poorly regulated capitalism; just as genocide is partly related to totalitarianism. The poor in American cities have few legal means of escape.
“Ghettoside” appears most obviously in modern cities because of population concentration. The poor have few available living-wage jobs. The poor congregate in run down inner-city neighborhoods because that is all they can afford.
Decent education is a cost without immediate benefit; i.e. robbery, extortion, prostitution, and other illegal activities provide gainful employment, put food on the table, and pay the rent. On-job-training is provided by street gang activities.
Violence provides “street-cred” and gang affiliation provides power. Money, power, and prestige, the hallmarks of capitalism, are as coveted by the poor as the middle class and rich.
GANGS IN SOUTH CENTRAL LOS ANGELES (A son rejects the gang culture but, like all teenagers, craves his own identity. He ignores gang-culture rules of living in South Central. Standing on a corner, with a hat that is the wrong color, he is shot in the head by another teenager that presumes gang affiliation.)
This story about South Central is primarily told from the perspective of the police department. Leovy tells the “true story” of a black South Central Los Angeles’ cop who works and lives in a South Central L.A.’ community. He is an exception to the rule of most South Central policemen because he lives in the neighborhood he polices. He is an excellent homicide detective, who works hard to solve crimes in a city he loves. He raises a family that exemplifies the American dream. He comes from a lower middle class family, marries a Costa Rican wife while in the marines, and returns to South Central to become a cop. They raise three children; two younger children went to college while the oldest struggled in school. With extra effort, the oldest finishes high school. He is not interested in college but is a conscientious, hardworking young man; much like his father. The oldest son rejects the gang culture but, like all teenagers, craves his own identity. He ignores gang-culture rules of living in South Central. Standing on a corner, with a hat that is the wrong color, he is shot in the head by another teenager that presumes gang affiliation.
LAPD IN SOUTH CENTRAL LOS ANGELES (Leovy explores police department reaction to inner-city homicide to reveal how good cops are overwhelmed by a culture that victimizes itself.)
Leovy explores police department reaction to inner-city homicide to reveal how good cops are overwhelmed by a culture that victimizes itself. As the story unfolds, the police officers’ oldest son dies. The investigation is turned over to a different department that initially fails to solve the crime; not because of lack of effort but because of a bureaucratic way of conducting the investigation. The officer in charge is a meticulous detective but the record of his investigation shows he repeatedly knocks on doors of possible witnesses without actually making contact. The effort is duly noted in the “murder book” but no new evidence is found. A new officer is assigned to the case that is equally organized but pursues witnesses until he finds them. A record of attempted contacts is not acceptable to this detective.
Leovy provides detail of the new officer’s interrogation of a suspect that rivals the skill of the investigator of Raskolnikov in Dostoyevsky’s classic fictional story of “Crime and Punishment”.
The interrogation description is a pleasure to listen to and a high commendation by Leovy for the investigating detective. The case is solved but one is left with the feeling that justice is not done. A young man, a teenager, is dead. The killer is also a teenager. When asked why he murdered the police officer’s son, he said he shot him with his eyes closed; he only did it because the officer’s son looked like he belonged to a rival gang, and, after all, he is Black, so who cares?
Leovy systematically reveals how difficult it is for a good police officer to keep up with the murder rate in South Central L.A. Everything from budget cuts, to bureaucratic “cover your ass” investigation, to a culture that feeds on itself, makes a good policeman’s job un-doable.
Leovy explains how Black families believe they do not matter to the police because murders do not get solved.
Police officers are faced with mistrust that makes solving murders less important than bureaucratic record keeping that shows they are working
“Ghettoside” is a picture of hell; i.e. a picture of broken families, broken hearts, and broken trust.
When trust between citizens and police is broken, witnesses will not cooperate because they fear reprisal from the accused.
Ineffective police bureaucracy is compounded by officers that are not part of the community for which they are responsible. The irony of that observation is made obvious in Leovy’s story of a good officer who lives in the community and has a son murdered for being part of the community.
Being a cop in South Central L.A. looks like the hell described in Sartre’s play, “No Exit”. It is a play where three dead characters are locked in a room with no exit. In Leovy’s story, there are the police, the citizens, and the perpetrators. Sartre is saying “hell is other people” because each is perpetually viewed by the other as the worst part of themselves.
Audio-book Review By Chet Yarbrough (Blog:awalkingdelight) Website: chetyarbrough.blog
A Primate’s Memoir: A Neuroscientist’s Unconventional Life Among the Baboons
Written by: Robert M. Sapolsky
Narration by: Mike Chamberlain
ROBERT SAPOLSKY (AMERICAN NEURO-ENDOCRINOLGIST, PROFESSOR OF BIOLOGY, NEUROSCIENCE, AND NEUROSURGERY AT STANFORD UNIVERSITY)
Robert Sapolsky’s “A Primates Memoir” is a masochist’s guide to Africa. (Our 2017 trip to Africa was luxurious in comparison.) Sapolsky’s trip is what you would expect from a biological anthropologist who sojourns to Africa in the early 80s. Sapolsky lives in a tent while studying baboons.
Our stay in Africa is luxurious in comparison to Sapolsky’s in the 1980s.
At the age of 12, Sapolsky appears to know what he wants from life. In his middle-school years, he begins studying Swahili, the primary language of Southeast Africa.
Sapolsky’s career is aimed at understanding Southeast Africa. Sapolsky’s 1984 PhD. thesis is titled “The Neuro-endocrinology of Stress and Aging”. Presumably, his trip to Africa became the basis for his academic thesis. Sapolsky’s experience in Africa is recounted in “A Primate’s Memoir”.
Animal preserve in Southeast Africa
While studying Baboons, Sapolsky is exposed to the worst of African society. His memoir of those years touches on the aftermath of Africa’s colonization, Africa’s ubiquitous diseases, its governments’ instability, and its abundant and frequently poached wildlife.
SOUTHEAST AFRICA
Robert Mugabe (Former President of Zimbabwe)
JACOB ZUMA (FORMER PRESIDENT OF SOUTH AFRICA)
Though some of what Sapolsky writes has changed, today’s news shows characters like Robert Mugabe, and Jacob Zuma, who are accused of victimizing the poor to enrich themselves.
Some African, and other nation-state leaders around the world, are corrupt. Many Southeastern African bureaucrats, foreign business moguls, indigenous apartheid promoters, and wildlife exploiters still walk, drive, and bump down streets and dirt trails of this spectacular continent.
Self-interest often conflicts with general economic growth and stability. Today’s Southeast Africa is great for tourism (one of the three biggest industries) but the poor remain poor, the rich richer, and the middle class nearly non-existent.
Today’s Southeast Africa is great for tourism (one of the three biggest industries) but the poor remain poor, the rich richer, and the middle class nearly non-existent.
Sapolsky returns to Africa after marrying. He squires his science and marriage partner to revisit a baboon troop he was studying in the 1980s. At the same time, he touches on the cultural norms of a society that seems little changed from his early years in Africa.
Sapolsky recounts the melding of a tragi-comic story of an African who is mauled by a Hyena. In telling the story, he reveals the stoic acceptance of life as it is. However, each time the story of the mauling is told by different people, it changes. The change comes from a blend of truth and fiction that conforms to the tellers’ view of themselves. The essence of the story is that an African man sleeping in a tent is mauled by a Hyena looking for food.
Re-telling of an African story changes with each narration–The change comes from a blend of truth and fiction that conforms to the tellers’ view of themselves..
When the story is told by Masai warriors hired by a company to protect its employees, the victim is saved when the Hyena is speared by the Masai warrior’s courage. When the story is told by the victim, it is a company cook who bashes the Hyena that runs away. When the story is told by a newspaper reporter, the Masai warriors were drunk and not doing their job; the cook bashed the Hyena, and the victim survived. When the story is told by the cook, the victim’s yell brings the cook to the tent; the cook grabs a rock, bashes the Hyena, and the Hyena flees. Finally, when the story is told by the company employer, the victim is not an employee, the Mesai warriors did spear the Hyena, and the employer had no responsibility for the victim.
A cultural interpretation is inferred by these many versions of the same story. Some humans indulge in alcohol to escape reality. Most humans wish to protect an idealized version of their existence. News coverage is sometimes a mix of truth and fiction to make stories more interesting than accurate.
Life is happenstance with each human dealing with its consequence as an end or beginning that either defines, or extends their understanding of life. Truth is in the eye of the beholder. Some people are willing to risk their lives for others. Private companies focus on maximizing profit and minimizing responsibility. Life is not an either/or proposition despite Kierkegaard’s philosophy. Humans are good and bad; no one is totally one or the other–not even America’s morally corrupt and ethically challenged leader.
Sapolsky shows that baboon families, like all families, are born, mature, and die within a framework of psychological and physical challenges imbued by culture. All lives face challenge but culture can ameliorate or magnify the intensity and consequence of the challenge.
The overlay of Sapolsky’s memoir is the research and reported evolution of a baboon family in Southeast Africa. He shows that baboon families, like all families, are born, mature, and die within a framework of psychological and physical challenges imbued by culture. All lives face challenge but culture can ameliorate or magnify the intensity and consequence of the challenge.
Sapolsky gives the example of Kenyan “crazy” people who are hospitalized, treated, and fed to deal with their life circumstance. In America, it seems “crazy” people are left to the street. The inference is that Kenyan “crazy” people live a less stressful life than American “crazy” people. This is a positive view of Kenyan culture but there are ample negative views in Sapolsky’s memoir. Rampant poverty, malnutrition, and abysmal medical treatment are Sapolsky’s recollected examples.
Sapolsky’s memoir shows he clearly lives an unconventional life, but it seems a life of purpose. What more is there?
Further, Haskel and Westlake emphasize Governments continued subsidization and investment in research and development in those areas where near term return is problematic. The example the authors give is DARPA in its early invention as a precursor of the internet, but there are many more examples; e.g. nuclear power, computer hardware, weather prediction, space exploration, etc.
Babbitt implies women rarely seek intellectual stimulation or sexual gratification. Men are shown to classify women as shrewish because they are pushing husbands to be more expressive and attentive. There are many ways of interpreting Lewis’s intent but this is not an exaggerated satire, it is a truth of many men’s view of women.
REVIEWS AND VIEWS OF LIFE 