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Post US Standard of Living
Created by John Eipper on 06/26/17 4:31 AM

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US Standard of Living (Tor Guimaraes, USA, 06/26/17 4:31 am)

It is always a pleasure to engage Ric Mauricio's in discussion, because he is intellectually honest and has some challenging questions. Ric wrote on June 24th: "[While] the American standard of living may have eroded over the last couple of decades, I often wonder why Silicon Valley seems to not exhibit such an erosion... We are still prospering. How is this? Is it because we fight back with resolution to succeed? Is it because failure is not a setback, but a move forward? Is it because we foster diversity here in the Bay Area? Because we embrace the creativity of our LBGT community, the logical acumen of our south Asian immigrants, and the entrepreneurial spirit of our Jewish, Chinese and European immigrants?"

Yes Ric, everything is relative. Jokingly I could say that focusing on Silicon Valley is tantamount to cheating. Nevertheless, I agree my America is still (and probably always will be) a great country. No doubts about that, but it used to have the greatest standard of living by far when I arrived here, and it hurts me to see it obviously losing ground against itself and the world for whatever reason. We do have some centers of entrepreneurship second to none, but we lost primacy in many areas of science and technology, and that does not bode well for our kids' future. We are still the best at translating science to technology to new business enterprises, but the American work force has not been participating in the commercialization of the new products to the extent that I wish, because they can not work as cheaply as some foreign labor which is getting smarter and better educated. You mentioned the great Chinese market, but they are our rival and potential enemy. I am an American and Chinese prosperity alone does nothing for us unless we have a positive trade balance.

Another very important question: "Can we then look at the micro economics of [Silicon Valley] and replicate it across the US? "

Theoretically yes, and practically we are doing reasonably well. We have hundreds of small centers for technological innovation, entrepreneurship development, small business incubators. Most centers I am familiar with are relatively weak on scientific research (bad news strategically), but are doing good work otherwise. If I were the dictator I would declare a moratorium on taxes for any new business hiring more than 1 employee for at least two years, or something like that. On the other hand, let's get real. If the whole America were turned into a huge Silicon Valley, who would pay all the taxes to keep up the nation's infrastructure and our expensive military?

Last, Ric showed his commendable positive attitude: "To me, increased traffic means increased jobs and increased prosperity. Why are these people complaining? Is it because they all try to do the same thing at the same time (driving)? Why not adjust your schedule? I do. ... When people complain that they can't prosper in the Bay Area, I ask them what they're doing about it."

Indeed, commercial transportation is the favorite way to measure business economic activity, probably sales (higher GDP) and greater business profits. But do not make the wrong assumption that increased business activity will directly translate into new and higher paying jobs. In my last trip to China, some of my associates were all doing well and driving fancy cars. They were also sounding like American workers complaining about income stagnation while their corporations were raking in huge profits.

Finally, a confession: I noticed that when I was a younger man I never complained about anything, instead just went out and made things right, one way or another, and ran over anything and anyone in my way (not implying others do that). Now that I became a grandfather, I feel sorry for other less fortunate people and complain too much. Thanks for making me realize this, Ric. Cheers!

JE comments:  It's no secret that WAISers are largely a mature demographic, so this question is important:  Do you complain more or less now than during your youth?  I complain less--though I still complain.  Have I mellowed with age, or am I just more resigned to the world's injustices?

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  • Are Trade Deficits Bad? (Cameron Sawyer, Russia 06/27/17 3:20 PM)
    Tor Guimaraes wrote on June 26th: "I am an American, and Chinese prosperity alone does nothing for us unless we have a positive trade balance."

    Why do we need a positive trade balance? A positive trade balance necessitates a negative investment balance--the two must balance. In fact, there is much reason to believe that trade balances may sometimes actually be more the consequence of investment balances, than the other way around.

    Take Russia, for example, which has huge trade surpluses with the rest of the world. Is that a good thing? Actually, Russia's trade surpluses are a very bad sign--they show the huge deficit of foreign investment which (together with low productivity, but the two are related) is Russia's biggest economic problem.

    The US has the opposite situation--voracious demand for US shares and bonds, the sale of which supports the incoming flows of goods and services. This is a much better situation than Russia's, because this incoming flow of investment not only supports consumption, it makes capital cheap, which makes productivity growth (and maintenance of a high level of productivity) possible. Productivity growth in the US is less than it should be, because of other factors like the world's highest rate of corporate taxation (which severely discourages investment), but the absolute level of productivity in the US is still among the highest in the world, surpassing that of most other highly developed countries.

    The flow of inexpensive goods from China has been a godsend to the US economy, allowing the US to abandon low-value economic activity and continue moving up the ladder of economic development. Of course, economic progress is a painful process for those whose professions are eliminated--as it always has been since the Industrial Revolution. Following the gradual destruction of highly paid blue collar work, we are now seeing the destruction of highly paid, low-level white collar work. The position of the middle class is further harmed by astronomical health care costs and high taxation, taxation which is far higher than it seems because Americans get so little for their tax dollars, in comparison to people in other developed countries (supposedly high tax Scandinavia is actually not so high at all when you consider the services you get for free for your taxes, and corporate taxes and other disincentives to investment and entrepreneurship are much lower than in the US). But for every job which is destroyed, another is created, and opportunities for entrepreneurship, especially those driven by technology, continue to flourish despite the gross disincentives created by US policies. As of May 2017, unemployment in the US stood at a historical low level of 4.3%, which is in labor shortage territory.

    So why in the world would the US want a trade surplus with China? Actually, the US investment surplus with China is under pressure now as labor costs and profits increase in China, as China rapidly develops itself. Technology increasingly trivializes the manufacturing process, decentralizing it, relentlessly reducing the value added in the manufacturing process. But this is also good--it means the US needs China less and less. The low-value economic activity which the US has relied on for China, will soon be done by machines--instead of one big factory in Szechuan cranking out widgets designed in Chicago, there will soon be small automated plants cranking them out on the spot in every metropolitan area. Pretty soon after that, there will machines in every home cranking out much of the "stuff" we need for daily life --cf Neal Stephenson's prophetic The Diamond Age. Look at 3D printing to see where manufacturing is going.

    We need to forget about trade deficits and concentrate on removing the barriers to economic progress, and particularly, entrepreneurship, starting with increasing the educational level of the population, followed perhaps with reforming corporate taxation--the only good idea, it seems, our clown of a president has ever come up with.

    JE comments:  A cogent and reassuring analysis from Cameron Sawyer, who reminds us that trade balances are not a zero-sum game.  Debt, however, must be serviced.  At what point does a trade deficit (investment surplus?) become a threat to a nation's well-being?

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    • US Trade Deficit (John Heelan, -UK 06/28/17 4:02 AM)
      JE asked on 28 June: "At what point does a trade deficit (investment surplus?) become a threat to a nation's well-being?"

      As John said previously, debt must be serviced with interest payments. The danger is when the owners of trade deficits start to protect their future interests by buying bonds and gilts in the debtor nation. It is a bit like a credit card company loaning the card holder more money so that he/she can pay the interest. This is a recipe for long-term financial disaster whether public or private.

      "Foreign governments hold about 46% of all US debt held by the public, more than $4.5 trillion. According to the Treasury, the largest foreign holder of US debt is China, which owns more than $1.24 trillion in bills, notes, and bonds or about 30% of the over $4 trillion in Treasury bills, notes, and bonds held by foreign countries."

      "Outside the US, China is the largest foreign holder of the debt, with $1.25 trillion. It is followed closely by Japan, which holds $1.13 trillion"


      JE comments:  The CNN piece above says that Trump had "implied" he could negotiate down the US debt to 85 cents on the dollar.  Huh? 

      The article is from May 10th.  This nugget of Trumpism must have quickly been forgotten.  Otherwise the markets would be reeling by now--not to mention the millions of ordinary citizens holding US savings bonds.

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      • on Risky Assets (Jordi Molins, -Spain 06/29/17 4:27 AM)
        In the last decade, the performance of risky assets has strictly correlated with central bank purchases, even on the relatively short term, with an approximate lag of 12 months.

        Central banks are expected to slow down the pace of their security purchases during the next few years. Risky assets will probably suffer out of that. Remember that investors have massively switched from active asset managers into passive vehicles (mostly ETFs). Active portfolio managers used to keep a sizable amount of cash, while ETFs do not. This is one of the reasons why markets are so "expensive" now.

        It seems likely that central banks (being a centrally managed organization supposed to "know better" than the market) will not know how to exit from QE (by some calculations, the ECB monetary policy stance is equivalent to keeping interest rates at -5.5%), and on the short term at least, risky assets will suffer. FANG asset pricing is crazy, and it clearly resembles other episodes in history (nifty fifty, railroad investments in 1870s, IT stocks in 2000 ...).

        Efficient market theory states it is not possible to know how financial markets will evolve over time. I believe markets will suffer, for several reasons outlined in this message, but ultimately due to expensive valuations.

        JE comments:  Show me your FANGs:  Facebook, Amazon, Netflix, Google (Alphabet).  I had to look that one up.

        Jordi Molins sees a bubble in today's "expensive" securities.  Not long ago, Time magazine published an article on how US Price-Earnings ratios are significantly higher than in the rest of the world--meaning, US stocks are overpriced in comparison to securities in other countries.  Can Jordi comment?

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        • International Securities and "Transparency" (David Duggan, USA 06/30/17 5:12 AM)

          When commenting on Jordi Molins's post of June 29th, John E mentioned that US Price-Earnings ratios are presently far higher than those of international securities.  Only if you believe the earnings stream from US companies is equally perilous as compared with that of companies headquartered abroad. My belief and experience (having invested in international funds for nearly 25 years) is that US companies' earnings streams are more predictable and less subject to manipulation than those of foreign stocks. Put another way, it's transparency.

          JE comments:  It would be instructive to see a ranking of book-cooking by nation.  Such a list would also have to keep in mind each nation's standards for defining income, profits, write-offs, and the like.  I would assume that some nations are more "transparent" than the US.  Perhaps Ric Mauricio can comment?

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          • International Securities and "Transparency"; from Ric Mauricio (John Eipper, USA 07/02/17 4:49 AM)
            Ric Mauricio writes:

            John E (see David Duggan, 30 June) asked about international transparency on financials.

            Internationally, GAAP (Generally Accepted Accounting Principles) is applied to all accounting. Having said that, there are countries where GAAP is interpreted in many different ways. I don't know if this is due to culture or what. The US GAAP practices are the best in the world. Again, having said that, there are accountants (think Arthur Andersen and company) who will stretch the interpretation beyond the spirit of the rules. The same is true in Europe, which I rate very close to the US in sticking close to GAAP. Hong Kong, Singapore and Australia also stick very close to GAAP. But what about South Korea, probably the closest in standard of living to the US as can be? South Korea is comparable to HK, Singapore and Australia, but information flows slower to us.

            Then there is the big one: The People's Republic of China. They actually are very close to the US in applying GAAP. However, there are times where I think that some Arthur Andersen ex-accountants may have expatriated to that part of the world. Now not all Arthur Andersen ex-accountants were complicit in the bad behavior, but I am referring to those that were. By the way, Alibaba (BABA), the giant Chinese company, is based in the Caymans. Uh, gee, transparency? Good luck with that.

            The other big one is India. Now here I have a problem. I am not sure they understand what GAAP is. Really. They drive me absolutely nuts. The problem is that they push on you this arrogant "you don't know what you are talking about" when you try to explain the accounting principle to them. And to think that the Intuit QuickBooks help desk is in India. That is really frustrating.

            The Middle East seems to follow GAAP. Here's a question to WAISers. What country is the biggest shareholder of Deutsche Bank?  No, not Germany.

            But there is always the caveat. Just because a company complies with GAAP doesn't mean the numbers are right. This is why P/E ratios do not come into my valuation studies when I am considering an investment. Earnings can and are manipulated. Due to taxes, it is better to understate your earnings. And with the US corporate tax higher than other countries, it is really imperative that US accountants understate earnings, which drives P/E ratios higher (thus the higher P/E ratio for US stocks). I zero in on free cash flow, which is not amenable to manipulation. In fact, REITs (Real Estate Investment Trusts), which exhibit a very high P/E ratio which skews the entire index, are best analyzed with their AFFOs (Adjusted Free Flow from Operations).

            JE comments:  I never thought about that, but of course:  US companies are always incentivized to minimize their (official) profits.

            As for the Deutsche Bank question--Ric did "telegraph" a Middle East answer.  I'll guess Qatar...?

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            • Who Wields the "Invisible Hand"? (John Heelan, -UK 07/04/17 5:43 AM)
              Ric Mauricio asked on 2 July: "What country is the biggest shareholder of Deutsche Bank?"

              Interesting question! The answer might be related to capitalism's "Invisible Hand" that Adam Smith defined in his 18th-century magisterial Wealth of Nations as "the unintended social benefits of individual self-interested actions. The phrase was employed by Smith with respect to income distribution (1759) and production (1776)."  A more parochial question for us Europeans might be "Who wields the 'Invisible hand' in European politics?" Some might answer Goldman Sachs, with its heavy investment in placing alumni in Europe's corridors of political power.  Seven of these alumni have been called "Masters of the Eurozone," investing in loss-making countries such as Greece and Italy as well as having a presence in the Fed, IMF and World Bank.

              (See http://www.independent.co.uk/news/business/analysis-and-features/what-price-the-new-democracy-goldman-sachs-conquers-europe-6264091.html and http://www.expertinvestoreurope.com/news/1025589/italy-land-opportunity-goldman-sachs )

              Perhaps Americans should also be aware of Goldman Sachs' apparent infiltration of the White House


              Some might suspect that just as AIPAC and Saudi Arabia are the "invisible hands" behind US Middle East policy, Goldman Sachs might well fulfill a similar role in domestic policy.

              JE comments:  Isn't the Invisible Hand supposed to be...invisible?  In any case, the Golden Revolving Door between GS and government is no secret.  Can anyone in WAISworld take us inside GS?  What exactly is the "special sauce" that makes its people so irresistible as political appointees?

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              • "Invisible Hand"; from Ric Mauricio (John Eipper, USA 07/05/17 5:11 AM)

                Ric Mauricio writes:

                The Invisible Hand?  (See John Heelan, July 4th.) Is this the beginning of a discussion of conspiracy theories, Bilderberg and the Masons?

                JE asked, "Isn't the Invisible Hand supposed to be...invisible?" Indeed, it is invisible. Goldman Sachs is but a visible face of this "invisible hand." It is the strategy of "hiding in plain sight." So if one were to look at the power shareholders of GS, one can see where the power is. And believe me, it is an intertwined network of power brokers of the world, extremely challenging to decipher, even for this forensic analyst. One can say that we only see the tip of the iceberg. We see what they allow us to see. But the "invisible hand" is merely following the Golden Rule: He who has the gold, makes the rules.

                So who is the "invisible hand" that controls the bank that exerts great influence on the European Central Bank? JE got close. Very close. It is not Qatar, but Saudi Arabia, through a shell company in the Cayman Islands, controlled by a royal prince.

                Happy 4th.

                JE comments:  Does the Invisible Hand have a puppetmaster, in a conspiracy-theory fashion?  We probably need a refresher course on Smith's concept, but wasn't his Hand beyond the control of individual human actions?

                And a happy (belated) July 4th to you, Ric!

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              • When the Invisible Hand is Visible (John Heelan, -UK 07/05/17 11:48 AM)
                John E asked me on July 4th: "Isn't the Invisible Hand supposed to be...invisible?"

                Only until arrogance makes the Hand visible. One would hardly call capitalist "invisible hands" of Trump, his cronies and supporters "invisible" as the Orange One becomes more arrogant on domestic and world stages.

                JE comments:  There's no shortage of arrogance in Washington these days, but has Trump had any real effect on the economy?  What, beyond the Trump Bump that flattened out in March, has changed as a result of Trump policies?  Not even for-profit prisons have shown much life of late.

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    • US Trade Deficit with China (Tor Guimaraes, USA 06/29/17 4:39 AM)
      Cameron Sawyer (June 27th) made some excellent points about the possible problems with a strong positive trade balance. However, what I had in mind about China specifically was:

      First our corporations without government supervision made China the manufacturing center of the world by shipping our jobs there and sharing our capital and manufacturing technology. In return we got lots of cheap, low-quality products, and considerable disrespect for the environment. That has been a massive economic and military strategic advantage for them, a major rival and potential enemy. Also as pointed out we owe them a lot of money and the interest alone in the long run can become crippling financially.

      I would have much preferred that we protected out technology better and had kept jobs in the USA to help maintain our old standard of living by selling the world our products. Let us be creditor to the Chinese or at least not such huge debtors.

      The bottom line seems to be the global corporations and the Chinese companies are making great profits, the standard of living for most of the Chinese people got considerably better, and the American people got screwed.

      JE comments:  Improving China's standard of living can only be a good thing--correct?  Or let's consider it this way:  can anything be "gained" by keeping the Chinese impoverished?  For starters, they're now buying a lot of Buicks.

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      • Economic Impact of Manufacturing (Cameron Sawyer, Russia 06/29/17 3:42 PM)

        Does Tor Guimaraes (29 June) really think that anything good for the American people could have come from our selling cheap consumer goods to the rest of the world? This is not a high value-added activity and does not create high-paid jobs. The Chinese did an enormous favor to our economy by taking these activities off our hands and allowing us to concentrate on high value-added work--so moving up the ladder of economic development. The American people did not "get screwed"--at least, not by this.

        The era of highly paid, low-skilled work, remembered with such nostalgia by Trump supporters and many on the Left, is gone forever. Those jobs were the product of a unique combination of factors which we are not likely to ever see again:

        1.  Huge profits produced by oligopolic capital in the manufacturing sector, when manufacturing was a far more capital-intensive activity than it is today, which meant that the few large corporations who were able to put together the huge amount of capital needed to carry out large-scale manufacturing faced little competition and were able to command high prices and extract large profits.

        2.  Machines had not yet done away with the need for large labor forces.

        3.  Various factors, including non-market factors (including unions) led to sharing of these large profits with the work force.

        With the advent of flexible manufacturing processes, CAD/CAM, mass-produced machines, and especially, plastics, and also with dramatically more efficient marketing and distribution of goods because of information technology, which broke the power of the oligopical large retail chains, manufacturing itself is becoming an increasingly trivial part of the economy--a commodity operation performed on raw materials, when the real value is created, and the real profits are earned, in the process of inventing products, designing them, and marketing them (activities which mostly still take place in the US--Apple products are a perfect example.). My prediction is that manufacturing will in fact move back to the US, and pretty soon, as the process of manufacturing becomes ever more commoditized and more decentralized. No need to do it in China and ship the goods half way around the world, if you can do it in a small plant in every major city, with no workers, and run by a few engineers. This is coming! Look at 3D printing for hints.

        The other side of that story, however, is that manufacturing will cease entirely to be a center of significant value creation, and moving manufacturing back to the US will have no effect on our economy. The actual production of goods out of components and/or raw materials will be no more significant economically than packaging, or shipping. Manufacturing as a sector is altogether well on the way to joining agriculture as an insignificantly small part of any modern economy. It wasn't all that long ago that some people insisted that the decline of agriculture is the end of the world--that agriculture is the only "real" economic activity. Sounds just like what Trumpites say about manufacturing--and it is nonsense.

        The present difficulties of the American people have nothing to do with China.

        JE comments:  Might the US anxiety related to China's rise as a manufacturing juggernaut have to do with the lessons taught by the wars of the last two centuries?  Which nation wins?  The one that produces more stuff--look at the North in the Civil War, and the US/USSR in WWII.  "Value-added services," innovation, and marketing savvy without production muscle don't cut it.  You need boots, Spam, and trucks.

        Let us hope Norman Angell's Great Illusion thesis has finally come to pass--that nations will no longer go to war due to their economic interdependence.  Angell couldn't have been more wrong in 1909.

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        • Norman Angell's "The Great Illusion"; from Gary Moore (John Eipper, USA 07/01/17 3:34 AM)

          Gary Moore writes:

          JE, commenting on Cameron Sawyer June 30, brought up Norman Angell's
          The Great Illusion, 1909--surely one of the landmarks in irony, because Angell
          was saying that war had become outmoded.

          The illusion was there, all right,
          but it was his. Whether Angell in 1909 or Frances Fukuyama in 1992 (The End
          of History
          , another laughable landmark) the prophets on war always seem to
          be wrong, though who knows? Maybe the world can outgrow it. One prophet,
          in another vein, was incredibly right: Arnold Toynbee in the 1940s predicting
          "etherality"--that the technological leaps of the future would become less and
          less clunky and material, and more and more small and conceptual--which sounds
          like what Cameron Sawyer is talking about, in his note about manufacturing
          receding in economic clout in somewhat the way that agriculture once did.

          Bottom line: it's a new world every day, and coming very fast--so lots of room for
          prophets saying just about anything.

          JE comments:  The pacifying effect of Mutually Assured Destruction, with its uncannily accurate acronym (MAD), came into being in the 19th century.  Gatling said as much when he patented his rotary gun in 1862.  Nobel was of the same view when he gave us dynamite.  It took the atomic bomb, however, to make the major powers think twice about going to war--so far.

          So why can't the world "outgrow" war?

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          • Norman Angell's "Great Illusion" (Robert Whealey, USA 07/03/17 8:41 AM)
            Thanks for putting Norman Angell on the Forum. When I taught in 1968- 1974 a course on War and Peace, I had my Honor Students read the Norman Angell essay, The Great Illusion. Most students were repelled by World War I, World War II, the continuing wars in Indochina and in the Middle East. They came to the course as somewhat cynical. Many TV pundits have used Angell to prove that he failed to predict World War I and sneered at The Great Illusion.

            I always used the essay to repudiate Social Darwinism and the "survival of the fittest," as well as the stupidity of imperialism. They overlooked that Norman Angell was a great believer in Progress, Rationality and Liberalism. He showed how the British could have avoided World War I.

            But greedy capitalists, military men looking for glory, and hack politicians looking to the next election with little or no history plunged Europe into the Great "catastrophe," 1914-1924. The Western world still has not yet recovered from World War I, Fascism, and Stalinism, although there seemed to have been a short-term revival of Western Europe with NATO and the European Union.

            For the last 10 years in my retirement, I have long thought about Norman Angell, but in my senility, I could not recall his name. Thanks to Gary Moore, I am now downloading this essay in my reply to my flash drive.

            JE comments:  Sir Norman Angell was awarded the Nobel Peace Prize, reportedly the only recipient so recognized "for writing a book."  Angell's prize came in 1933--long after the illusion of his Great Illusion became obvious.  Was it wishful thinking from the Selection Committee?  Sir Norman died at 94 in 1967, so he lived through WWII as well.

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            • Norman Angell Was (Sort of) Right; from Gary Moore (John Eipper, USA 07/06/17 9:27 AM)

              Gary Moore writes:

              My thanks to Robert Whealey (July 3) for moderating my comment about
              Norman Angell.

              His 1909 book, The Great Illusion, has indeed become an icon
              among wrong predictions of the End Of War (as JE initially pointed out), but I
              remember the shock when I looked into the book, expecting to find a march
              of folly, but soon thinking, Whoa, this guy has some good points. Apparently
              the Nobel committee thought so, too--in spite of World War I.

              Gary Moore

              JE comments:  Let's add Angell to that exclusive group of scholars who formed an incorrect thesis, despite an oftentimes correct analysis.  I'd place Marx in this category--and more recently, Francis Fukuyama. 

              Who else belongs on the list of the "usefully wrong"?

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              • The "Usefully Wrong": Daniel Bell's "End of Ideology" (Francisco Ramirez, USA 07/07/17 4:43 AM)
                John E asked for help in assembling a list of writers who provided useful analyses despite reaching the wrong conclusions. I would add Daniel Bell, The End of Ideology (1960).

                I like his The Cultural Contradictions of Capitalism, in which he describes himself as a socialist as regards the economy, a liberal with respect to the polity, and a conservative when it comes to culture. The latter is evident when he analyzes the shift from an emphasis on character to personality.

                JE comments: Bell argued (in 1960!) that the era of big or total ideologies was over, and would be replaced by newer, "parochial" ideologies and piecemeal technological advances.  The Cold War raged on for another generation, but perhaps Bell had it right that extreme "isms" are now passé everywhere, with the exception of Islamism.

                One lesson we learn from Bell (and later, Fukuyama):  don't proclaim the "end" of anything.

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                • The "Usefully Wrong": Schumacher's "Small is Beautiful" (John Heelan, -UK 07/08/17 4:02 AM)

                  To our list one might add Schumacher's 1973 Small is Beautiful, not that it was "usefully wrong" but that the world had (has?) not developed enough to realise that it could be right. One might also add the Club of Rome's 1972 Limits to Growth and the Hudson Institute's The Year 2000 (Kahn & Weiner) that missed the Oil Crisis that changed the world one year later. As one reviewer of Schumacher's book pointed out in 1993, "Thirty years on, the 'modern world' described by Schumacher has been radically transformed. The impact of globalisation and wholesale economic liberalisation makes his vision of self-sufficient local economies look both utopian and anachronistic." The promises were eagerly seized on by the zeitgeist of the 1960s, but the impact of globalisation and rampant capitalism (aka Trumpism) indeed does make his vision of "self-sufficient local economies look both utopian and anachronistic."


                  Are political ideologies the new religions? They have all the usual hallmarks: sacred books that few will challenge, widespread centres for reinforcing worship rituals (thanks to social media), wannabe Popes (like Trump and Putin), investing in ways to control their flocks of acolytes, excommunication (aka bankruptcy and Chapter 11). Are these neo-religions "usefully wrong " or just "dangerously wrong" in the long-term?

                  JE comments:  John Heelan originally gave 1963 as the date of Small is Beautiful, but online sources (including Wikipedia) say 1973.  I made the edit, but this clashes with the 1993 essay cited above, which begins with "thirty years on."

                  Universal famine was on many radar screens at that time; see also Paddock's (1967) Famine 1975!  I bought a copy at a library used book sale many years ago, but never read it.  

                  Political ideologies are religions, yet this is less obvious than in the Old Days--few still take seriously the "isms" of the Marxist, fascist, Maoist, etc., varieties.  We're left with secular, humanistic liberalism, a religion we cannot see.  Perhaps this was Bell's point.

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                  • More "Usefully Wrong"; from Gary Moore (John Eipper, USA 07/09/17 12:38 PM)

                    Gary Moore writes:

                    Usefully wrong? Galileo on the obvious preposterousness of the idea
                    that the moon could exert some sort of magical influence to cause the tides.
                    And of course there was Columbus.

                    Wegener, less remembered, was derided for his preposterous idea that entire
                    continents might run on little rollers, since of course continents can't drift.

                    Still, Columbus has to be the example that sheer intellectual audacity can roar through
                    to the discovery, independent of the supposedly indispensable premises.

                    JE comments:  Columbus, who never gave up on his Indies thesis, should be the hands-down winner of the "usefully wrong" contest.  Great response, Gary.  But wasn't Wegener actually right?

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                    • Alfred Wegener and Continental Drift; from Gary Moore (John Eipper, USA 07/10/17 4:19 AM)

                      Gary Moore writes:

                      John E asked a question after my mention of "usefully wrong" Alfred Wegener
                      in the early twentieth century and the disdain he met from established
                      geologists when he said the continents were, incredibly, drifting.

                      JE asked, "but wasn't Wegener actually right?" (And not "usefully
                      wrong.") Answer: the reason Wegener fits the outer edges of this
                      useful category is that he had the important, overall answer right, but with
                      the technology of his times he couldn't see the mechanism, and propounded
                      a mechanism for wandering continents that, in fact, turned out not to be
                      the real one. In the tumult he did ponder the possibility of the real one at
                      one point (sea-floor spreading), but his hidebound critics could seize on his
                      speculation about other mechanisms to say that he was just a speculative

                      A poignant position. He could hardly be advised in retrospect not to
                      have speculated about how it worked, but the speculation took him a step too far.

                      JE comments:  Wegener perished in 1930 on a scientific expedition to Greenland, making him one of the last of the intrepid German scientist-adventurers in the Humboldt mold.  Little is left to discover on our planet, so people of the Wegener ilk now have to make to with "extreme" sports and stunts like sailing solo around the world--with no GPS.

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                      • Continental Drift, Wimbledon, Tour de France (David Duggan, USA 07/10/17 10:27 AM)
                        It is a gloomy day in Chicago, and my mood matches the weather. Not simply because I fear further continental drift leading to more earthquakes (the largest earthquake on this continent occurred 300 miles southwest of here in 1811 on the New Madrid, Missouri fault line--in the bootheel region of that territory--7.9 on the Richter scale, sorry San Francisco, you get only 7.8--church bells inexplicably were ringing in Boston), nor because of corruption in Ukraine (Chicago boasts one of the more vibrant Ukrainian communities about 3 miles southwest of where I live, sporting cathedrals from both the Ukrainian Orthodox and the Ukrainian Catholic traditions). But because the World Champion Chicago Cubs are floundering two games below .500 in an inept division which they should be dominating. As they approach the All-Star break, the Cubs have exactly one token player, last year's National League MVP Kris Bryant, hitting an anemic .269 this year with 18 home runs. This is the first time since the All-Star game was inaugurated in 1933--where else but in Chicago--that the defending world champions have been relegated to the token player allowed each team. Yesterday, Bryant booted a 1st inning ground ball with runners on 1st and 2d, leading to a grand slam off World Series hero Jon Lester and a 10-run 1st inning, the worst in Lester's career and he didn't even finish the inning. Last year Bryant hit .292 with 39 taters, so maybe there's hope. The White Sox meanwhile, in perpetual re-building mode since their 2005 World Series victory, were no-hit until the 9th inning yesterday and are contemplating a move to Oak Lawn after the All-Star break, lest their mediocrity further besmirch Chicago's tops-in-the-country murder totals.

                        Normally, I'd be excited at this time of year as we approach what I consider the most exciting week in the annual sports calendar: the 2d week of both Wimbledon and the Tour de France. But Wimbledon has been notably quiet this year, with Serena awaiting the birth of her 1st child, and the 37-year old Venus moving through the bracket into the 4th round; if she wins she'll face French Open champion Jelena Ostapenko in the quarters. Venus started her pro career before Ostapenko was born in 1997. Two-time champion Petra Kvitova, the victim of a stabbing incident 7 months ago in her Czech home, was ousted early, by unseeded American Madison Brengle no less. Now only Venus and Coco Vandeweghe hold up the American hopes, matching the number from that great bastion of tennis lore, Croatia. Since 2003, no American not surnamed Williams has reached the finals of a Grand Slam tournament. Canada, meanwhile has had two.

                        On the men's side, few upsets and less drama. Defending champion Andy Murray is cruising, while ageless wonder and # 3 seed Roger Federer hasn't dropped a set. He meets his Bulgarian doppelganger Grigor Dmitrov in the 4th round today. Federer's Swiss countryman and French Open finalist Stan Wawrinka was bounced in the first round, no surprise as he refuses to shorten the wind-up on his ground strokes to accommodate the faster pace on the lawn. The buzz, however, has been about 3-time champion Boris Becker's bankruptcy (caused in no small measure by an improvident restaurant broom-closet tryst with a Russian model who garnered his seed from the used condom and impregnated herself--some say this was payback from the Russian mob into whom Boris was indebted for gambling excesses: the ensuing divorce from former German-American fashion model Barbara Feltus cost 15 million euros) and the practice of some early round retirements by players in no shape to withstand a best-of-five sets match on tennis' most hallowed grounds (channeling my inner Bud Collins).

                        But the Tour de France has been the most disappointing for this cycling aficionado. In the 4th stage last week challenger Peter Sagan elbowed sprinter Mark Cavendish into the side concrete guard barrier in the final chase for the stage win. Cavendish was out after a devastating crash; Sagan docked 30 seconds (he should have been disqualified). Then yesterday, during a treacherous final descent in the Alps stage from Nantua to Chambery with 3 "hors de categories" climbs, top challenger for Team BMC Richie Porte lost control of the rear wheel of his bike at 40+mph, went off the wet pavement, launched himself into Daniel Martin, and wound up being taken by ambulance in a back brace. Bike frames and components were flying all over the place. Martin was able to get a new bike and finished the stage; defending champion Chris Froome is still in the lead, and is expected to win his 4th Tour, exceeding Greg Lemond's 3, but behind the 5 won by Miguel Indurain, Bernard Hinault, Eddie Merckx, and Jacques Anquetil. Indurain was likely juicing toward the end of his career and we all know about Lance Armstrong's 7 TdF victories being stripped from him. Crashes, they say, are part of the sport, but when you lose top racers you have to think whether it's a sport or a spectacle (like NASCAR). Earlier this year, 2011 Giro d'Italia winner Michele Scarponi was killed in a training accident before the Giro.

                        It's still gloomy, but perhaps this is because yesterday I violated my self-imposed injunction against going to Chicago's odious street fairs. Nearby Roscoe Village was hosting its annual burger fest, and I didn't feel like cooking so I plunked down $12 for a cheeseburger and fries, refusing to pay $6 for a plastic cup of former locally craft-brewed Lagunitas suds (it's been bought out by Heineken), and skipping the requested $10 "contribution" to an organization which has refused to join my Lake View Citizens' Council (I'm a board member). The angst is killing me, and today is a rest day on the Tour de France and I don't have cable to watch Wimbledon.

                        JE comments:  Cheer up, David.  Your excellent sports writing always puts your fellow WAISers in a better mood!  We have rain and gloom predicted all week in Michigan, too.  But the weekend is only five days away...

                        A phonetics phun phact:  New Madrid is stressed on the "Mad."  Ditto with New Berlin in neighboring Illinois, stressed on the Ber.

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                • The "Usefully Wrong": Daniel Bell, Rampant Capitalism (Tor Guimaraes, USA 07/08/17 4:31 AM)
                  John Eipper wrote: "Daniel Bell argued (in 1960!) that the era of big or total ideologies was over, and would be replaced by newer, 'parochial' ideologies and piecemeal technological advances. The Cold War raged on for another generation, but perhaps Bell had it right that extreme 'isms' are now passé everywhere, with the exception of Islamism."

                  It might be interesting to note that the ideology of capitalism has become more difficult to defend but in reality it is rampant throughout the world. It has suffocated Communism to death and limited Socialism to small pockets and specific programs. Rampant Capitalism has also crippled or totally corrupted democracy and free markets.

                  Besides unbridled Capitalism which is growing exceedingly well worldwide, I wonder if Mr. Bell forgot about personal ideologies which also are doing extremely well worldwide--egoism, narcissism, self-indulgence, nationalism, religious fanaticism, etc.

                  Last, regarding "piecemeal technologies" I wonder what Mr. Bell had in mind? He obviously was not thinking of the Internet, mobile computing, social computing, etc.

                  JE comments:  The counterargument is that capitalism, rampant or not, is not an ideology.  It's a natural state that just is.  Other "isms" are imposed, hence artificial.  Shall we scrutinize this assumption?

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                  • Hegemony Again: Gramsci (John Heelan, -UK 07/09/17 4:23 AM)
                    Gramsci argued, "every relationship of 'hegemony' is necessarily an educational relationship," (Gramsci, 1971: 350).

                    In other words, hegemony involves the learning (socialization) of individuals through the use of institutions. Through this socialization, a consensus is obtained and maintained where the beliefs of the existing dominant structure and groups (in this case, capitalists) are in control. It is worrying in a world faced with the threat of capitalist globalization, that educationalists believe "The counterargument is that capitalism, rampant or not, is not an ideology. It's a natural state that just is." One might think that is part of the message of ideological PR police saying, "Move along: nothing to see here!"

                    JE comments: I didn't say I endorsed this counterargument.  Tor Guimaraes (next) has also questioned my response.

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                  • Is Capitalism a "Natural State"? (Tor Guimaraes, USA 07/09/17 4:37 AM)
                    John Eipper commented on my last post with "The counterargument is that capitalism, rampant or not, is not an ideology. It's a natural state that just is. Other 'isms' are imposed, hence artificial. Shall we scrutinize this assumption?" (8 July)

                    I think this assumption is completely wrong. When the settlers forced upon the native American population the concept of private property so central to capitalism, it was not natural; it was a shock. The rampant capitalism that we have today is based on the ideology beneficial to us capitalists. We believe in private savings, wealth accumulation, investment in new enterprises, and in making profits. If our nation's laws and regulation permit us to buy out the competition, sell products to people without the common sense to buy them for whatever reason, the consumer should be blamed. If it is more profitable to move my manufacturing facilities to a foreign rival country where production is cheaper for whatever reason, so be it. There is an ideology that guides us into doing such things. It is our choice as a nation, but it does not have to be.

                    Even though it is human nature to acquire and accumulate wealth, so is sharing one's wealth with other people. Using the accumulated wealth as an investment to gain further wealth creates capitalism. The problems and benefits from having the capital accumulate in the hands of the central government (Communism) or in private hands can be debatable.

                    As grandma says, the proof is in the pudding, the results. From our unbridled capitalism of the last decades we have some scary results which will translate into an increasingly difficult social economic national situation:

                    While corporations (a critical vehicle for capitalism) are doing quite well, a major problem today is the financial weakness of those nearing retirement. Some 42% of those age 55 to 64 said they lacked six months' worth of savings, and 47% said they were living paycheck to paycheck. How these people are going to retire at 70 and then live for a few decades is a mystery (Survata survey for www.gobankingrates.com). Today, only 32% of retirees have any pension at all, and that number is trending steeply downwards as employer pensions continue to vanish (Wendy Connick, The Motley Fool).

                    While the net worth for a few lucky people have increased dramatically (many new millionaires and billionaires), the average net worth of the 50's household group topped $200,000 in 2007, then plummeted to $140,000 in 2008--26% are expect to work until at least 70.  Average credit card debt for the group is $9,096.  The group represents almost half of vacation travels and 80% of luxury travel.  The age 55+ household group accounts for nearly half of all spending on home renovations.  One in five say they are assisting an older parent; 62% are doing the same for a grown child (AARP).

                    We capitalists love to reduce competition to make more profit through mergers and acquisitions. Since 1997, the number of publicly traded stocks has declined from 7,355 to 3,600 today. In 1997 there were 6,500 small and microcap stocks vs. only 3,100 today. Reasons for the decline include: regulatory red tape, venture capital funding, rise of private equity funding, whose payouts take shares off the market (Center for Research in Security).

                    JE comments:  Anthropologists speak of "hoarding" vs "sharing" societies.  The former is the cornerstone of a capitalist economy.  Moreover, the hoarders inevitably defeat the sharers, who are left with a romantic moral victory but little else.  Hobbes over Rousseau?

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                    • Hoarding vs Sharing Cultures (Tor Guimaraes, USA 07/10/17 3:51 AM)
                      John Eipper stated on July 9th: "Anthropologists speak of 'hoarding' vs 'sharing' societies. The former is the cornerstone of a capitalist economy. Moreover, the hoarders inevitably defeat the sharers, who are left with a romantic moral victory but little else. Hobbes over Rousseau?"

                      Hoarding is not a word complimentary enough to describe the extremely constructive cycle of savings, investment in the discovery of new knowledge, new technology, entrepreneurship, and economic development, which leads to more of the same. Thus despite its potential for self-destruction, the ideology of capitalism has been extremely constructive and has produced incredible results.

                      As I preach without a pulpit from my book God for Atheists and Scientists, a nation which fully embraces this virtuous cycle will in a few decades become most powerful. The sharing part is important also but should be secondary; so as the most successful group members become abnormally wealthy and powerful, some of their wealth should be shared with their employees, managers, and society. Without such sharing of their enormous individual wealth and power, the latter can eventually become a problem for the individual and the group. The "hoarder" will start investing to undermine the democratic processes of the nation, control the legislative process, eliminate competition and free markets, overpower the rest of the group/nation into servitude and second-class citizenship, and in many cases engage in aggression and manipulation of the weaker (sharers or otherwise) nations.

                      JE comments:  Tor Guimaraes puts in a vote for hoarding cultures, although he prefers to call it "savings."  Absolutely.  Likewise, politicians never speak of "spending" on a program they like; it's "investing."

                      Hoarding has entered the public consciousness through reality TV, which show people sleeping in their cars because their houses are piled to the ceiling with junk.  At what point does virtuous saving turn into obsessive hoarding?  What other languages have a direct translation of "to hoard"?  Spanish makes do with "acumular," but this is a neutral word with no pathological undertones.

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                      • Hoarding and Sharing (Henry Levin, USA 07/10/17 9:31 AM)

                        Virtually all economists agree that for a society to prosper, it must have the ability to move above subsistence. For a rising standard of living it is necessary to have capital accumulation. But, both capitalism and state socialism have both accumulation consequences and distributional ones as well as for freedom of choice and despoiling the environment. If the average level of capital per-capita rises, but is accumulated mostly by the rich, the economic status of the poor may still be at subsistence levels or close to it. This is also true when the capital is accumulated by the state and the political classes that govern the state.

                        When forms of social and economic organization are discussed, we must differentiate their aggregate impact on capital accumulation and income and the distributional consequences. And one can add to this the sustainability of resources and despoilation of the air and water as part of the discussion. But this requires raising the level of discussion beyond slogans and anthropologists' definitions. It also entails issues of governance and freedoms and their consequences. If there is interest in constructing scorecards, there are far more dimensions than the present WAIS conversations.

                        JE comments:  Exploring the nuances is exactly what WAIS tries to do.  Granted. it sometimes takes several postings to get there.  Henry Levin makes a convincing case that the "hoarding/sharing" distinction is a gross oversimplification. 

                        Remember "sun people" vs "ice people"?  https://en.wikipedia.org/wiki/Leonard_Jeffries  Ice people must accumulate food and fuel to survive.  Sun people cannot keep food from spoiling, so they give away the surplus in the hope that next time, the generosity will be repaid.  It's another profound oversimplification, but interesting food (!) for thought.

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                        • Is Capitalism a "Natural State"? From Ric Mauricio (John Eipper, USA 07/10/17 5:00 PM)

                          Ric Mauricio writes:

                          John Eipper commented on 8 July with "the counterargument is that capitalism, rampant or not, is not an ideology. It's a natural state that just is. Other 'isms' are imposed, hence artificial. Shall we scrutinize this assumption?"

                          I happen to be of the opinion that capitalism, in its purest form, is a natural state. On the other side, communism, with its forced allegiance by a government, is "unnatural."

                          Capitalism is man's natural need to innovate, be creative, and to be productive. Barter, or the exchange of goods between people, further evolved into the use of coinage. If I invent a product or a process, it is natural that I would want to be compensated for my blood, sweat and tears (and risk-taking). Trade is good. It benefits many. It raises our standard of living.

                          One can compare basic capitalism to another natural state: spirituality or the seeking of a greater ideology on why we exist. Siddhartha, Lao Tzu, and Jesus (sorry, have not studied other religions enough to add more names to this group) all espoused this spirituality in their teachings.

                          Now the reason I made this comparison is to show how a natural state can be hijacked to produce a more unnatural state. How so? Well, in the case of the teachings of Siddhartha, Lao Tzu, and Jesus, they were hijacked by Confucius and the Apostle Paul to produce religions. And religionists further destroy the natural state by imposing unnatural legality that lose the heart of the original teachings (yes, Jesus pissed off the Pharisees by pointing this out). It is interesting that there are those who attempt to codify Zen or Buddhism by writing books on it. And they never quite get it because Zen cannot be codified. Enlightenment (Christians don't seem to understand that the concept of the Holy Spirit as enlightenment) cannot be codified. It is a natural "is."  And Buddha is not a big fat guy. Buddha is enlightenment. Christians don't seem to get the concept of Jesus' teachings as the path to enlightenment.

                          In the case of capitalism, the natural is turned into the unnatural through the hoarding of wealth, thus losing the pureness of the original concept. Our world celebrates this hoarding with its edification of those who are wealthy.

                          Now here's a question: since communism or even socialism is the forcing of people into sharing, does that mean that sharing is "unnatural"? I believe that there is a natural need to share, but one can lose the natural spirit of sharing when forced through the commercialization of sharing.

                          JE comments:  Even before the barter economy can evolve, you need the concept of private property.  To see that sharing is natural as well, look no further than the primary unit of "communism":  the family.  From each according to her ability, to each according to her needs.

                          Non-human animals share, but do they barter?  I cannot think of any examples.

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                          • Is Capitalism a "Natural State"? Animal Barter (Luciano Dondero, Italy 07/11/17 10:36 AM)
                            Interesting post from Ric Mauricio (11 July).

                            It seems to me, however, that "capitalism" is too much of a loaded term to be used to describe a natural situation. To begin with, it is associated in everybody's mind with the echoes of the Cold War (Communism vs. Capitalism) and thus it is understood as meaning the US basically. For a number of reasons, no country currently in existence could have escaped from many bad elements resulting from that conflict.

                            Regarding JE's query about barter and non-human animals, off the top of my head I can give a few examples.

                            Various species of ants farm various kinds of insects, exchanging the "military protection" of their nests for food. In many species of spiders, the tiny male offer a bundle containing a juicy insect ready for consumption to the much larger female, obtaining sex in exchange for that--and also getting a good chance of coming out of the "love bed" alive.

                            JE comments:  Does the male spider offer a meal so that he doesn't become a meal?  All this begs the question:  is extortion a form of barter?  I suppose it is.

                            Great to hear from you, Luciano.

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                            • Capitalism and Communism in the Bible (John Heelan, -UK 07/12/17 5:04 AM)
                              Interesting comments from Luciano Dondero (11 July). Re the Communism vs Capitalism trope, is it not interesting that one can find Biblical quotations and parables supporting both ideologies? Or does that tell us something about the malleability of religions to the hegemony in which they sit?

                              JE comments: Perhaps the most capitalist episode in the Bible is the Parable of the Talents (Matthew), which endorses both inequality and an aggressive investment strategy.  The hapless servant left with one talent is reprimanded for "burying" it to keep it safe.  His portfolio was the equivalent of a low-interest CD.  Curse you, wicked servant.

                              On the flip side, Liberation Theology often cites the "communist" society of Jesus and the Disciples, who disdained private property.

                              Yes, the Bible can support any ideology.

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                            • Origins of Capitalism: Genoa, or Jericho? (Eugenio Battaglia, Italy 07/12/17 6:09 AM)
                              Following the thought-provoking post of Luciano Dondero (11 July), I must second him in questioning the use of the word "capitalism" to indicate a natural situation. How can we call "natural" the present capitalist system that has been (is) loathed by billions of people?

                              By the way, some believe that modern capitalism was born in 1407 with the founding of the "Officium Comperarum et Bancorum Sancti Georgi," the future Bank of St. George of Genoa, but what about the Medici of Florence, who nearly went bankrupt in 1478 because of the default of the British King Edward IV and the Lancasters? A curiosity from the 1930s: someone in Italy started talking about asking for a refund of the capital given to the Crown, together with interest.

                              Returning to the topic of feelings, I have the feeling that what John E and many other WAIS colleagues have referred to as capitalism is the evolution of what started, even much earlier than the Bank of St George, but immediately when humans started settling in the first town (for example Jericho 8000 BCE) with the first storage of grain. Modern capitalism, on the other hand, is only an awful degeneration of that.

                              Personally I always considered "real-world" communism and capitalism as the two opposite sides of the same degenerate state.

                              JE comments:  Most would agree that capital-C Capitalism began in the Middle Ages in Italy, with the advent of double-entry bookkeeping (Genoa, Florence) and the brokerage houses of Venice.  The first more or less modern stock exchange appeared in Antwerp in the 1500s.  Then and now, it's all about pooling wealth and spreading out risk.

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                              • Origins of Capitalism; on Human Adaptability (Luciano Dondero, Italy 07/13/17 3:39 PM)
                                I think that Eugenio Battaglia (12 July) may have a point when he queries whether the origins of "capitalism"--or whatever we want to call what appears to be a "natural" way of making deals among humans involving private property, agriculture, money and city walls--goes as far back as Jericho (see https://en.wikipedia.org/wiki/Jericho ).

                                I would like to make a more general observation with respect to this discussion: we should keep in mind that not everything which is natural is also good or positive or desirable.

                                Among human behaviors which are widespread across many societies and many ages one can find rape, theft, murder, corruption, nepotism and cannibalism. By the way, many animals share these proclivities.  And of course we suffer from diseases like smallpox, heart failure, arthrosis and cancer, which are also definitely natural occurrences.

                                Not to mention earthquakes, volcano eruptions and big rocks falling from the sky and generating mass extinction-level events, like the one that wiped out the dinosaurs, which by the way produced conditions favorable for the emergence of our very own species some 60 million years later.

                                It might be useful to consider a few things about Homo Sapiens.

                                What distinguishes us from other species on the planet is our extreme ability to adapt our behavior to suit the environment around us.

                                We are the only species that inhabits almost every nook and cranny of planet Earth. (Ants and other insects are also fairly widespread, but there are many different genera and species of them while there is just one species of humans.)

                                Because a crucial component of any environment are animals that want to eat us (predators), animals that we want to eat (prey), and especially other individuals like ourselves (peers), we humans have developed an uncanny capacity for large-scale cooperation, while maintaining our individuality and striving to fulfill our own desires and aims.

                                This means, for instance, that any attempt to "organise" a society according to high-falutin' principles that go against the grain of human nature is doomed to failure: any utopia with collectivist traits implodes from within (eg. communism in the USSR and China), or simply fades away (eg. the kibbutz movement in Israel).

                                But humans have also been able to build societies where some of the least palatable components of human behavior are regarded as crimes, are legislated and fought against, and are more or less diminishing.

                                Furthermore, even though we are highly individualist beings, we humans manage to accomplish feats of cooperation that rivals those of ants' super-organisms.

                                And our human conglomerates are not made up of clones or of closely related individuals: we succeed in associating complete strangers to undertake hard and dangerous activities, witness what occurs in any emergency situation.

                                While this is certainly mediated by our culture, and by a societal ethos that encourages solidarity and taking care of others, there is a clear evidence that this is also in part innate, ie. it is in our genes.

                                A book that sheds a fair amount of light on this is The Better Angels of Our Nature: Why Violence Has Declined by evolutionary psychologist Steven Pinker (2011); very controversial as it posits that violence has been diminishing over the centuries, not in absolute figures, of course, but percentage-wise.

                                JE comments:  Luciano Dondero points out a paradox:  "natural" is not necessarily good, certainly when it comes to human behavior, yet "unnatural" social experiments don't work, either.

                                Francisco Ramírez argues against the "natural/unnatural" distinction when discussion economic organization.  Read on...

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                              • Genesis of Capitalism: Luciano Pellicani (Francisco Ramirez, USA 07/14/17 3:36 AM)
                                This is a paper I find especially interesting and the first one I assign in my course on World, Societal, and Educational Change:

                                Luciano Pellicani. "On the Genesis of Capitalism." Telos 74, 1987-1988: 43-64.

                                The terms natural and unnatural are not useful in this discussion, since we are talking about a historical mode of production and the degree to which its logic permeates human society. This is not natural as in the object of study in the natural sciences. But it is not necessarily unnatural in the sense of perversion or contrary to human nature. Humans are very flexible and can clearly co-exist with all sorts of economic, political, and social structures that are not only the products of human activity but which shape and give meaning to human activity.

                                JE comments:  Pellicani's essay doesn't seem to be anywhere on the 'Net; nor could I locate it through Adrian's JStor subscription.  Pellicani also has a book titled The Genesis of Capitalism and the Origins of Modernity.  Haven't read it, but I cribbed the following:  Pellicani rejects the two major global/totalizing theories of the rise of capitalism, Marx's theory of accumulation and Weber's Protestant work ethic.  In their place, Pellicani sees capitalism's rise as a combination of societal, historical, and structural factors.  I wonder if his inquiry also includes geography (accessibility to trade) and the environment (high food-yielding plants and animals), two crucial influences on a society's development.

                                Did I get that right, Francisco?

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                                • Capitalism: an Unspecified Beast (Luciano Dondero, Italy 07/16/17 4:29 AM)
                                  I'm afraid Luciano Pellicani's essay (Francisco Ramírez, 14 July) shows exactly why there is a problem when talking of "capitalism" as if it were some kind of "natural" process (or period) in the history of mankind.

                                  According to the Telos website, the abstract of "On the Genesis of Capitalism" goes as follows:

                                  "Any consideration of the genesis of capitalism must start from Marx for two reasons: what Marx himself wrote on the subject; and the many accounts developed to explain the formation of modern market society either as alternatives to or elaborations of Marx's theory. Marx sees universal history as a succession of modes of production leading to the final goal: the conciliation of humanity with itself and with nature. The economy therefore explains the economy and everything else, since 'religion, family, state, morality, science, art, etc., are simply particular modes of production and fall under its general law'; as such, they 'have no history, no development.'"

                                  In other words from a Marxist standpoint, talking of "capitalism" is meaningful only if you place it into the set of so-called "modes of production," that runs as follows:

                                  1. Primitive communism; 2. Ancient mode of production; 3. Feudalism; 4. Capitalism (divided into Early capitalism and Late capitalism; 5. Socialism (as the lower-stage of communism); 6. Communism

                                  (The Asiatic mode of production is supposed to be a variant between no.2 and no.3, and is localised). See https://en.wikipedia.org/wiki/Mode_of_production .

                                  This all seems very neat and nice, including a golden age in the past and a teleological projection.  Now, of course one can always take up any writing from any period of time, Marx included of course, but then they should be subjected to a critical analysis, in light of further development in our understanding of our own history and course of societal action.

                                  And that's why it's not very helpful, and certainly not very scientific, to adopt Marxism as a guide, i.e., something which has been put to the test of history, with an historical experiment running throughout the best part of last century, from which it has come out as a colossal failure--either by a collapse of its own society and the subsequent "return to capitalism" (USSR) or else, it has maintained most of the forms of communism while in practice also reverting to capitalism (China).

                                  I know that some have written that capitalism won the battle against communism, while in more sober terms one can simply say that communism ran out of steam; meanwhile "capitalism" remains a rather unspecified beast, meaning very different things to different people. Not to mention that it's being implemented in so many different ways that it's hard to use a single name to define it.

                                  Nazi Germany, FDR's USA, Militaristic Japan in the period leading up to WWII: were they all "capitalist" regimes? What about Saudi Arabia, Iran, today's Western democracies, Russia and China: Are they all also "capitalist"?

                                  JE comments:  Is it fruitful, or does it even make sense, to use Marx's notion of capitalism in an analysis of capitalism?  Luciano (Dondero) raises an excellent question in this critique of a fellow Luciano (Pellicani).  What does it mean to assume a default definition of capitalism--as in, any modern mode of production that is not socialism or communism?  I do not know, but remember that this WAIS discussion began with Marx as one of history's "usefully wrong" thinkers.

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                                  • Pellicani's Take on Capitalism (Francisco Ramirez, USA 07/17/17 3:09 PM)
                                    The key to Pellicani's argument is that the medieval market cities were able to inject elements of rationality and dynamism into a stagnant feudal world only after they gained complete political autonomy. He parts with Marx because he does not think that it simply a matter of contradiction in the feudalist mode giving rise to a capitalist mode. He parts with Weber because he notes that early Calvinism was not all supportive of the acquisition spirit. But he thinks both Marx and Weber in comparing Europe with Asia open the door the what he sees as their hidden hypothesis: the rise of politically autonomous cities in the former but not the latter. A number of other scholars have made similar arguments emphasizing the political and not just the economic or the cultural.

                                    For purposes of my course it gives me a chance to say to students that you can think of the world as a capitalist economy, an inter-state system, and a global culture (my own work emphasizes transnational standards, norms, etc.). If you think WAIS, we owe to capitalism the technology that makes possible a virtual world of communication, one can locate participants in their national-states and assume some local expertise in matters local, but also some shared understandings of what constitutes civil and scholarly discourse. More often than not people disagree without being disagreeable or indulging in ad hominem attacks.

                                    JE comments:  One might conclude that Pellicani holds the model of the Italian city-states, such as Genoa and Venice, as the ideal breeding grounds for capitalism.  Yet these cities became eclipsed by northern and western Europe.  Does Pellicani address this shift?

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                                    • Italy's City-States and the Rise of Capitalism (Eugenio Battaglia, Italy 07/18/17 7:16 AM)
                                      Commenting on the very interesting post of Francesco Ramirez, 17 July, our esteemed moderator refers to the Italian city states, such as Genoa and Venice, as the ideal breeding grounds for capitalism.

                                      I believe he is (as usual) correct. Let us have a quick look at these city-states.

                                      After the barbaric invasions the Repubbliche Marinare (really at that time repubblica was the equivalent of state) of Amalfi, Pisa, Genoa, Venice and Ragusa came into prosperity.

                                      Amalfi was probably the first to have some power beginning in AD 839, and is famous for its sea codex "Tavole Amalfitane" (Tabula de Amalpha--Capitula et Ordinationes Curae Maritimae) which came out in the 11th century and was widely used in all the Mediterranean until the 16th century.

                                      This republic was the first to disappear, being defeated by Pisa, then conquered by the Normans and finally destroyed by an earthquake in 1348. It is now a small tourist town.

                                      Pisa came to power around AD 1000. It was initially allied with Genoa to expel the Saracens from the Tyrrenian Sea. But the alliance ended and Pisa was defeated by Genoa in the sea battle of the Meloria in 1284. Pisa's decline ensued, until 1406 when it became a subject of Florence.

                                      Ragusa (now Dubrovnik) was founded in AD 614 by the inhabitants of Epidaurum after it was destroyed by the Avars. Ragusa developed only as an advanced town on the sea with a great fleet. At a certain point it had the largest fleet of big ships, and free commerce but no colonies. This was different from Genoa and Venice, which had colonies on the Black Sea and in the Central and Easter Mediterranean, including Constantinople.

                                      Ragusa is famous for having abolished slavery in 1416 and officially shifting from Latin to Italian in 1472. From 1205 to 1358 it was under the influence of Venice. In 1492 it gave refuge to the Sephardic Jews expelled from Spain.

                                      From 1526 Ragusa maintained its independence but had to pay a tribute to the Ottoman Empire, for such reason the Pope excused it from participating in the victorious sea battle of Lepanto (1571).  But it did participate in the Invincible Armada.

                                      Ragusa, Genoa (AD 958) and Venice (AD 697) survived until the Napoleonic period. Ragusa was occupied by the Austro-Hungarian Empire which placed it within Croatia. Venice too ended under the Austro-Hungarian Empire while Genoa became part of the Savoy kingdom.

                                      The Italian towns, which were ideal breeding grounds for capitalism, became eclipsed by northern and western Europe. Florence mostly due to the British default on its loans and for the startling stupidity of the Italians, who called in foreign powers to be involved in internal Italian disputes--for example, France's Charles VIII in 1494 and the deleterious meddling of the Papacy.

                                      In specific reference to Genoa, Florence and Venice, we may even say that they were killed by their famous sons Cristoforo Colombo, Amerigo Vespucci, Giovanni da Verrazzano, Giovanni Caboto, etc., who with their enterprises moved the center of commerce and banks from the Mediterranean to the Atlantic at the same time that the Ottoman Empire starting 1453 closed the routes to the East.

                                      I should add that Genoa is famous for its "Liber Gazarie" of 1316, a conditio sine qua non for commerce by ships and early capitalism, while Venice had it codex "Capitolare Nauticum." The extant copy is from 1256 but was already in force from two centuries earlier

                                      Other smaller Italian Repubbliche Marinare were Ancona, Gaeta and Noli.

                                      A curiosity: when the Venetian fleet was defeated by Genoa in front of Curzola in 1298, among the Venetian prisoners was Marco Polo, who in a Genoese jail dictated "Il Milione" to Rustichello da Pisa.

                                      JE comments: I teach this stuff, but I never phrased it in exactly these terms: the passing of commercial hegemony from the Mediterranean to the Atlantic was the work of Italian mariners.

                                      Think of how history would have played out if the Italian city-states had not fought among themselves. Curiously, this endless internecine squabbling was antithetical to the conducting of business, which was, or should have been, the business of the Maritime Republics.

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                                  • Genesis of Capitalism (Timothy Brown, USA 07/18/17 4:29 AM)
                                    If the genesis of capitalism dates back only to Marx, what was it before it existed? (See Luciano Dondero, 16 July.)

                                    Personally, I find that trying to count how many angels can dance on the head of a pin a foolish waste of time, because the pin and the angels are both invisible to the human eye and mind--hidden, even from the speakers, behind smokescreens of discourse.

                                    My own view is that there are only two visible difference between capitalism and Marxism. Under capitalism the capitalists are richest while the "masses" usually do OK and can at least voice their opinions without fear of the consequences, whereas under the Marxoid version of "socialism," the softer more politically palatable word behind which Marxists hide what they really think, it's the Marxists who get rich and the "masses" get the leftovers.

                                    My source of support for this thesis is, first, the several decades during which I did more or less daily politico-economic analyses of countries governed under one or the other systems: Ho Chi Minh's Vietnam and Mao's China (5 years) and Castro's Cuba and Ortega's Nicaragua (12) on the Marxoid side and 14 on the capitalist side--France (5), the Netherlands (4), the EU, OECD, IBRD (5), eight years of post-Foreign Service doctoral research and analysis and another 15 or so as an observer trying my best to understand just what the hell I'd been doing during all those years.

                                    My conclusion in a nutshell: In every instance the words of the political and economic discourse, across the entire spectrum from far left to far right, were just smoke screens behind which political activists were hiding. often even from themselves, their true objectives--power and wealth--not just from those they sought to rule but more often than not, hiding them from themselves and their own consciences behind smoke screens of code-words.

                                    JE comments:  In capitalism, Man exploits Man.  In communism, it's the other way around.  (Who can track down the genesis of that quote?  I believe it's an old Soviet anekdot.)

                                    What is the etymology of capitalism?  Most sources say it was a coinage of the French Revolution, where capitaliste was a label of derision for the wealthy.  Other sources claim an earlier origin, in the 17th century.  Marx no doubt is responsible for the wider acceptance of the term, as juxtaposed against socialism/communism.

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                                    • Trump Bailed Out by Deutsche Bank? From Ric Mauricio (John Eipper, USA 07/21/17 5:21 AM)

                                      Ric Mauricio writes:

                                      I really like Timothy Brown's quote of July 18th: "I find that trying to count how many angels can dance on the head of a pin a foolish waste of time, because the pin and the angels are both invisible to the human eye and mind--hidden, even from the speakers, behind smokescreens of discourse."

                                      That is a keeper.

                                      I think I can see the head of the pin, but, of course, not the angels. In fact, has anyone seen an angel lately? Yes, there are people who approach angelic status, but are they angels? One time, in a discussion, I mentioned that in my afterlife, that I wanted angel wings. Of course, me being me, there is an impossibility of earning that status, but I figured if the Almighty can do anything, s/he could bestow upon me angel wings and I can come back to earth and help people. Would be pretty cool. I mean, c'mon, I would be really bored just lounging around heaven (provided I end up there) and doing nothing.

                                      But enough about angels. Let's talk about the latest news in relation to capitalism. Trump's business dealings. Seems that the only bank who was willing to lend Mr. Trump the money to save his holdings was none other than the Deutsche Bank. Now the news is that because Deutsche Bank was complicit in laundering Russian funds (they paid huge penalties), that perhaps there is a Russian connection with Trump.

                                      Aha, I had asked in a previous post what country the largest shareholder of Deutsche Bank. JE guessed Qatar, which was close. It is Saudi Arabia through an entity in the Cayman Islands. So you see, there is misdirection and they are looking for the wrong connection. Perhaps there is a possible Saudi connection with the President, which is why they gave him that medal. Which is why, even though most of the 9/11 terrorists were from Saudi Arabia (and funded through a Saudi ... bin Laden), there is no travel ban from that country.

                                      JE comments:  There's a stench wafting from Trump's Deutsche Bank connection, but (as always) it stops short of a smoking gun.  Trump's "I am a businessman" smokescreen gives him an immunity in the US imaginary.  Remember what the business of America is?  Business.  (Calvin Coolidge)

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                                    • Marx and the Genesis of Capitalism; on Historical Periods (Luciano Dondero, Italy 07/30/17 8:49 AM)
                                      Timothy Brown (18 July) raised a very pertinent question: "If the genesis of capitalism dates back only to Marx, what was it before it existed?"

                                      Unfortunately, while the question is straightforward enough, trying to formulate a coherent answer is not so easy.

                                      As far as I can tell, Marx's role has been that of shaping (altering, distorting, whatever) the meaning and understanding of certain concepts and words to the point where they can no longer be used, except following his own line of reasoning.  "Capitalism" being a case in point. And I very much doubt that this makes Marx someone who was "usefully wrong," as it has been raised in this discussion.

                                      Is it possible to define broad periods of human history using synthetic descriptions and lumping together different times and different places under specific rubrics?

                                      Marx and Engels did it, following in the footsteps of their mentor Hegel. So did many others before them. There is the classical division into a Golden Age, Silver Age, Bronze Age, Heroic Age and Iron Age, which goes back to Hesiod. There is Saint Paul's theological division of history into three ages: the first before the age of Moses (under nature); the second under Mosaic law (under law); the third in the age of Christ (under grace). Then there is another, and much used to this day, thrichotomy: "ancient, medieval, modern."  This classification, as Bernard Lewis pointed out, "is European; it was invented by Europeans in Europe to classify the different phases of European history; and like so many other things from Europe, it was either adopted by or imposed upon the rest of the world, whether appropriate or not."

                                      Any of these periodization may be convenient for a quick survey of mankind's motion through the ages, or for any other purpose. However, these are all in some way ideologically based schemes, and typically they are not: (A) scientifically correct, (B) helpful in achieving a better understanding of the thing under examination, (C) useful to foresee and/or influence the future course of our existence, as societies and as a species.

                                      A more scientific approach is required in order to study the historical process in the course of human development. It must start far earlier than recorded history, using information from fossilized human remains; from geological and biological metamorphoses; and from traces of material production, artificial habitats, social organization, and culture. Some of these can help to outline a timeline of human evolution (https://en.wikipedia.org/wiki/Timeline_of_human_evolution ).

                                      Among modern attempts at periodization based on scientific research (and not on ideology, like those of the post-modernist crowd) there is the "cultural evolution" model (http://www.hollowtop.com/spt_html/Cultural_Evolution.htm ) which gives us Bands, Tribes, Chiefdoms, Divine Kingdoms, Agricultural States, Industrial States.

                                      Another variant focuses on the economic aspects: hunting-gathering, agriculture (farming and animal-husbandry), barbarism, civilization.  Of course, civilization is a very broad term, covering several millennia, and that would lead us back to more splitting and defining.

                                      What's the purpose of all this?

                                      Let me underline Timothy Brown's conclusion, which I find relevant here: "In every instance the words of the political and economic discourse, across the entire spectrum from far left to far right, were just smoke screens behind which political activists were hiding, often even from themselves, their true objectives--power and wealth--not just from those they sought to rule but more often than not, hiding them from themselves and their own consciences behind smoke screens of code-words."

                                      What we are dealing with here, the main subjects who are involved in trying to shape their own destinies and society as well, are in actual fact human beings, who have a wide range of possible alternatives to their disposal, but within very severe and concrete constraints. And no matter how we call them (or they themselves do), they have a lot more in common between themselves than things that set them apart. There are indeed "cultural universals" (see https://en.wikipedia.org/wiki/Cultural_universal )

                                      Now, we tend to attribute a lot more importance to the choices we make than these really have in shaping the world around us: how many have tried (and failed) in dictating rules for economics, for politics, for morality, and so on and so forth?

                                      Yet surely the choice that men (and women) make are not irrelevant or meaningless or indifferent ones.

                                      If we break down the basic defining criteria in a number of democratic societies in the "West" (broadly defined, because India, Japan and Australia/NZ are geographically "Eastern" in a conventional sense), we will definitely find that they share some of those criteria with other contemporary (and past) societies, while these criteria may be loathed/rejected by countries whose population also numbers in the billions.

                                      Is it possible and appropriate to elevate some of these criteria above all others?

                                      Let's consider, for instance, that some of those criteria that we may now regard as "given," are in actual fact acquisitions of recent decades: notably legal equality for women and men, and for non-whites and whites. This even in Western Europe and the USA.

                                      Is it possible to determine which freedoms are the fundamental ones?

                                      And what should happen whenever different freedoms, or their implementation by different individuals or ethnic group, enter into conflict? Who regulates those? And how? Which criteria are "just"? Which ones are "lesser evilist"? And which ones are "plain wrong"? And how do they fit in the "natural" spectrum? And in the historical evolution of human society?

                                      It seems to me that an attempt needs to be made to try to provide answers that would lead to a more precise and complete understanding of what is meant by a "natural" state of things in contemporary society, whatever label we may want to use: capitalism, free society, the West, democracy in the 21st century, and so on.

                                      PS: In the end, I did not answer Tim's question.

                                      JE comments:  Luciano Dondero raises a lot of interesting questions.  First, how useful are the so-called "cultural universals"?  Click on the Wikipedia link above, and you'll see items like language, kinship terms, colors, and sexual jealousy.  Yes, but different cultures each attribute their meanings to all of these.  Take death rituals.  We all die, but...?

                                      Likewise with historical periodization.  The more we delve into the "pre-modern," "ancient," "post-modern," and the like, the more we see that there isn't much there, there.

                                      WAISer thoughts?

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                                      • Terrorism, Ideology, and Identity Politics: a 2002 Talk (Timothy Brown, USA 08/03/17 6:54 AM)
                                        I very much appreciate Luciano Dondero's thoughtful comments (although I hope he's not related to Mrs. Dondero, my high school algebra teacher, who gave me a D).

                                        Luciano's comments carry me back to my opening comments during Opening Plenary Session II at the 2002 World Media Center meeting in Washington. Feel free not to read it since, in essence, my comments were directed at the challenge posed by the conflict between popularly believed public narratives and what that in fact we've actually been facing for decades. This has been very different from what we--or at least most of us--have been misled by the dominant popular dialogue to believe.

                                        Since it may well be the longest quote ever posted by WAIS, if our esteemed coordinator chooses to include all of it, I'll forgive you for not reading it.

                                        An Eye on Consequences: The Military and Security Threat

                                        Thank you, Robert. I think I will begin by telling war stories instead of what I was thinking about discussing. Actually, there is a considerable continuity between being in the Marine Corps and being in the diplomatic corps, since they are the two premier instruments of US foreign policy. But in any case, what I would like each of you to do for a moment is to pretend you are a member of a tribe, because you are and don't know it. You are members of the media clan, of the globalization tribe, and we are here because our tribe is under attack by, among others, members of the anti-globalization tribe right across the river from us who are trying even as we speak to close down one of our capital cities. And I use that image deliberately because we are those who have benefited from globalization, all of us, myself among you. We may not think we have benefited as much as we should have. But we have all benefited while many others haven't, and that is one of the sources of the tensions we need to keep in mind when we talk about what we are doing here.

                                        Once, sitting in a coffee shop of a very, very nice hotel in a Central American capital, I was talking to someone I'd come to know quite well after leaving the diplomatic service who had been the commander of a communist revolutionary army. I had been interviewing him, and had asked him, "How did you pay for your war?", an important question because such enterprises are much more expensive than the public thinks they are. He told me that a revolutionary effort is a very expensive proposition: "So we knew that we had to have a war chest even before we started our war, which ended up costing about $100 million a year for 14 or 15 years." As to how they paid for it, he explained, "We started out trying to rob banks but found out there were two problems with this. One, there wasn't enough money in the banks and two, they had guards who shot back, which wasn't what we had in mind." (I might add at this point that I have never met anyone quite as capitalist as some former communist revolutionaries.) So he said they decided to use a technique known as "revolutionary recuperations." For those of you who are familiar with the Mafia, this is a form of extortion, or protection racket. He said that this worked pretty well. For example: "Since we had sympathizers who were workers in factories we were able to threaten factory owners. Give us 10 percent of what you earn: You really don't want sugar in the gas tanks of your trucks." But that still didn't produce enough money.

                                        Finally, he explained, since they were looking for ways to obtain money on their own and didn't want to go into the debt of the Russians or the Cubans early in the revolution, they decided to try some kidnappings. I asked him how well this worked for them. (As an aside, it needs to be understood that when talking with veterans of such movements it is important not to be judgmental.) He then explained that, as they were trying to decide how to get a kidnapping campaign started, they soon realized, after thinking about the idea for a while, that if you're going to kidnap someone there's no use kidnapping just anybody. It has to be someone who has money, or who has money in the family, in their company, or whatever. And that was not all. You also have to know their movements, their character, and something about their family. In other words, organizing a kidnapping involves a very major intelligence undertaking, especially for a small group.

                                        Then I asked: "So what did you do?" He replied: "Well, I started out looking for someone and then made a recommendation. The others in the group looked at me and said, but that's your best friend. Well, yes, but I know the family well, I know they have money, I've had dinner at their house quite a few times and know they will probably pay up. So we kidnapped him and sent a ransom note to the family. But to my surprise the family didn't respond. Suddenly the question became: What do we do now? We have him and he knows who we are." Up to that point the whole thing had seemed almost a lark. But that very quickly changed. "Now, we had to convince them. But how? Another note, nothing; another note, nothing. Finally, we decided we had no choice. So we cut off one of his fingers, put it in an envelope and sent it to his mother. But still they didn't pay. Finally, out of desperation, we sat him in a chair and turned a video camera on him (actually a movie camera in those days) and began torturing him." They filmed what they were doing, complete with sound, and sent the film to his mother. At this point the family paid, but all they could do was deliver their victim's body to the family. They had not realized just how easy it is to kill a human being. In terms of money collected to pay for their revolution, that was their first big coup and became their main initial source of income. During their entire campaign of kidnapping, my friend estimated that they managed to collect about $187 million in 1960s dollars in ransom. I went on to ask him how he had felt about the incident and how he had justified it. I was not as emotional with him as I am with you now because my purpose was not to condemn but to understand his thinking at that time. He said: "Now I wish we hadn't done it. But you have to understand. In a war like ours, the end justifies the means and there is no such thing as an innocent civilian." In other words, and I won't say who I am echoing, "those who are not with us are against us."

                                        That is what we are up against, and I think that most of the people here have been much too optimistic about how easy this [the war on terrorism] is going to be. In the 16th century we had wars of conquest and plunder, and then we moved in the 17th, 18th, and 19th centuries into wars of conquest and colonization, and to maintaining control of colonies in order to exploit them. Many of you here today are from places that were subjugated by empires during that period and now live with the consequences of that era.

                                        During the 20th century, which we luckily just escaped without being incinerated-I love the Spanish term for this, carbonizado, or turned to carbon-by nuclear weapons, there were three drives behind violence. One was ideology, the second was theology, and the third was identity, the latter mostly in terms of ethnicity and nationalism. During that century, an estimated 350 million persons died in politically motivated violence, a number equal to the entire population of modern Western Europe. The 20th century also saw the remaking of the world's map, particularly after the fall of the colonial empires, with identity the main drive behind the changes that took place. Identity was also one of the two major disabling anomalies that led to the collapse of the Soviet Union-failure to handle the nationalities issue well. It was a problem they never did really come to grips with.

                                        And if we're not very careful, the 21st century will prove to be much, much bloodier than the 20th. The reason I'm prepared to say this is that we have now peeled away the 20th century's top layer of ideological confrontations, which was, in all honesty, the thinnest of the three to begin with, not the thickest. We even managed to peel away, to a certain extent, the second layer of theological drives behind some of that century's armed violence, and I know that this claim runs contrary to a lot of what's been said here. But what's happened is that theology has come to be folded into identity, so that religion has become a source of self and identity that is increasingly wrapped up inside a core group identity. That's one of the main reasons why I think this century is exceptionally dangerous, because conflicts driven by identity are the deepest and most dangerous of all.

                                        The second reason I'm prepared to say this century may well be bloodier than the last one is because of the availability of weapons of mass destruction in smaller and smaller packages with greater and greater potential to cause damage. As horrible as it is, nuclear war is not the most dangerous kind of weapon of mass destruction we face. Nor are chemical weapons. The most dangerous ones we face are biological weapons, and they have not even been mentioned here yet today. They can kill far more people far faster and can go quickly across national borders, all things the other forms of weapons cannot do. We may be able to vaccinate the American population against smallpox, but how do we keep smallpox from getting into Mexico? Or crossing the Atlantic? Or crossing the Pacific? So, even if we ourselves are safe, what happens to everybody else? Because once it's loose, it's like the gates of hell have been opened, as someone recently said.

                                        What is this identity I'm talking about? We all have a variety of identities. But I would suggest that we each have a core identity as members of a group that we do not fully recognize until we think about it a bit. There are certain elements you can look for when you're looking for a core group identity. These make up what I consider to be a sort of a model for analysis. This model doesn't give specific answers to any specific questions, but it can be broadly applied when thinking about identity issues. First, your core group identity has a defined territory. This is usually geographic, although it can be theological or ideological, as we saw during the Cold War and now are seeing in the Islamic world, or in the Catholic world for that matter. There will be a common language, usually a mother tongue, or at least a common language of discourse, a shared way of talking to one another. As an example, the most powerful tribe in the world today is the international business community and they talk the same language, which nobody else can understand as well as they can. You will also find a shared history, a shared culture, usually a shared religion, and a shared belief in a value system. And, above all, you will find a shared sense of "us versus them." Identity is a little bit like pornography. It may be hard to define precisely, but you know it when you see it. Those who share an identity can readily tell the difference between "us" and "them" and, when conflicts arise, they almost invariably think not just in terms of "Us and Them" but in terms of "Us versus Them."

                                        How does such an identity develop? And here I part company with much of the more accepted science. I think John Locke was wrong. We are not born tabula rasa, that is to say as blank slates on which life then writes. Instead we inherit much of our behavior from our ancestors. What does the number 32,768 mean to any of you, other than the fact that it's probably bigger than your annual salary? That's the number of your grandparents who were alive in 1702, about 300 years ago, and you are the product of genes of that many people just in the last three centuries, and what you are is a result of what they were. Then, once you're born into a family we all have mothers who become the main sources of our beliefs and values, our language, and most of our initial fund of basic knowledge. True, the father is also involved and does some of this as well, if he's around, and so do our siblings. But Mother comes first and, by the time you are eight or nine years old and ready to venture into the larger world beyond, your basic individual identity has already been formed. Collectively, this process also creates a group identity. It is only at this point that secondary communicators such as the media get their shot. And by then it's too late. All you of the media can do is do what the schools, or playmates, or workmates can also do, and that is to work on this already formed identity and attempt to sway it a bit one way or another. But in the long run you cannot permanently change it.

                                        I liken the identity process to computers. Genetically we come into the world as little IBMs or Apples, and then our family makes us little Word Perfects or whatever, (Word Imperfect in my case.) It's not until after this has been done that you can download any serious software. Has anybody ever tried to load Mac software onto an IBM and seen just how spectacular the crash can be? So you can only pass along to individuals and groups with formed identities programs, or "software," that is compatible with the already existing identity systems of their culture. And if you don't respect this basic rule, you're guaranteed sooner or later to have it blow up in your face, as it did in the face of the Soviet revolution.

                                        I almost subtitled this presentation, and pardon the vulgarity but I'm a former Marine sergeant: "When you're up to your ass in alligators, it's hard to remember that your mission is to drain the swamp." We have been talking about the alligators of terrorism today a lot more than about the swamp. But it is the swamp that spawns them, and when it comes to identity conflicts, I would argue that the higher the perceived threat to any element of an identity, and most especially if it is the identity itself that members of the group believe is being threatened, the more violent the potential reaction. It is when people feel threatened that they are most likely to respond violently, either to agitation by someone who knows how to exploit the reactions elicited by such a threat or because they themselves come to believe that either they must act or they will lose an important part of their identity. If a perceived challenge, or threat, is purely at the societal level, it's easier to handle than if it's at some deeper level. And identity is the deepest level of all. So if we are now in the middle of a clash of civilizations, in Huntington's words, we are in about as deeply as we can be. And I think that much of what we're talking about here is an identity clash between Islam-or certainly at least fundamentalist Islam-and the Western world and, frankly, especially its fundamentalist Christians, although the latter are much less prone to violence.

                                        As to the organization of armed political groups to engage in violence and terrorism, let's imagine for the moment that we're launching a political process that may, in fact, eventually lead to the use of terror tactics. Initially, we probably have no intention of using such tactics. Our first step will probably be to organize a political movement with a political objective and try to attain those objectives without violence. If this fails, we may then begin to use organized civil violence-demonstrations, strikes, and so forth-to gain our goals. Then, if this also fails and we feel twice frustrated in our efforts to achieve our objectives, we may begin to use organized, armed violence. It is at this point in a political process that a revolutionary or guerrilla force comes into being. And normally, it is not until we become convinced that even this will not gain for us our political objectives that we will resort to terrorism. In other words, terrorism is usually a tactic of last, not first, resort.

                                        Put another way, terrorism is an extreme political act taken for a political reason, not an act independent of politics. And, contrary to the conventional wisdom, it is neither the act of just a few persons nor is it cheap. As I tell my students, the first thing you find out when you choose to engage in armed political violence, especially in terrorism, is that you need money, lots of money. If you think oil runs the Western economies, I can guarantee you that it is money, and lots of it, that fuels terrorist and other violent organizations. For the revolutionary movement of my friend, the $187 million war chest they built up was just seed capital. Over its lifetime, his revolutionary movement actually cost at least $600 million to run, and probably more than twice that amount. And even at that it was cheaper than a number of other revolutions that were going on in neighboring countries at the same time.

                                        Another thing you quickly discover is that secrecy and security are absolutely vital. You must protect your secrets, just as it's your enemy's job to find out yours while protecting his own. I suspect that Bill Gertz will get into this and perhaps explain just how complicated this can be. You also find out you need safe havens, because nobody can stay in the field for 365 days a year under physical threat of destruction at any moment. The stress is just too great. You just have to get out once in a while and get some rest, some training, and recover from whatever parasites or wounds you might have. And I would argue in this regard that one of the real intents, if not a publicly stated one, of going after Iraq is to make of that country and its regime an object lesson: Henceforth anyone or any country that harbors terrorists risks being destroyed, or having its regime destroyed.

                                        You will also find that to succeed you need sympathizers and active supporters and lots of them. The management model I use to describe the organization of an armed political group that uses terrorism as a tactic is that of a pyramid with levels I will run through quickly, except for one. The most important level is that of the soil on which it rests. In the case of any violent movement that uses terror tactics this means, at the very least, a layer of indifferent, unengaged, or intimidated general public. Public apathy is one of the best allies of people who are prepared to use violence. Then, at the bottom of the pyramid itself lies a group of political sympathizers who become the foundation on which the rest of the pyramid of terror will be built. Usually they are just sympathetic and little more. But it is from this group that the next level of the pyramid, a system of organized active supporters, is drawn and molded into a yet higher layer of this pyramid, a system of clandestine support cells, as has been discussed here by other participants before me.

                                        Neither a guerrilla force nor a guerrilla force that uses terror can survive and be effective without a large, organized, and active corps of unarmed but guilty civilians to support it. These civilians are indispensable to its success. They are the ones who collect the money; provide food, clothing, housing, and weapons; and help it with training, logistics, and intelligence activities. They also do most of the proselytizing and recruiting, provide the armed elements with early warning, run escape and evasion routes, in short do all the things that are essential to the survival and operations of any armed violent force. I have managed to get access to the internal documents of two guerrilla forces and found this laid out clearly. These documents clearly show that a system of clandestine support cells is not an accident of nature but the fruit of a very carefully thought-out organizational effort. While there are, of course, important variations from group to group, in every case I studied these cells were carefully compartmentalized from one another for reasons of security. It is on this layer of clandestine support system of compartmentalized cells that the structures above depend entirely.

                                        Just above the clandestine support cells lies what is probably the most vulnerable layer in the organizational pyramid. In Latin America, those who are active at this level are called the correos. Elsewhere they may be called the liaisons or the runners. Regardless, they serve as the grease between the organized armed activists in the next layer above them and the essential support systems that sustain them from below. It is their role to insulate the cells below from the armed activists above by serving as the primary link between the cells of activists who are providing the support and those carrying guns. So, it is usually only above this layer of correos that you will find armed combatants. And if a movement decides to use terrorism as a tactic- and many don't because terrorism is a double-edged sword-those who engage in it will normally be drawn from the ranks of these combatants.

                                        Just how many people may be involved in such a movement, or one of these pyramids of terror? I cannot speak from evidence as to al-Qaeda, or the Red Brigades, or other such groups. But, in terms of the three organized armed groups whose central archives I have been able to look at, for every soldier in the field they had about 20 to 30 active supporters in clandestine support cells, and for every active member of such a cell they had 15 to 20 sympathizers keeping their secrets, providing them with the essentials without which they could not have engaged effectively in violence, and making sure they had a sympathetic base population within which they could hide. This is, then, the nature and size of the seas in which, as Mao Zedong labeled them, guerrillas and revolutionaries swim.

                                        So do the math. If there are 10,000 active al-Qaeda combatants, they probably have 200,000 to 250,000 supporters in clandestine cells and as many as 2 to 5 million sympathizers who help support them. These are not small organizations, and we are fooling ourselves if we try to pretend that they are. Let me go even further. As it is currently being fought, I believe we are going after the wrong target. In the longer run, killing or capturing terrorists one at a time is about as effective as pulling the tails off salamanders-the swamp of political activism that spawned them will just produce another one and, in any case, the terrorists themselves are merely a fraction of all those who are prepared to use violence and engage in extremist tactics. So, as long as the movement that produces them remains active and dedicated to its political objectives, it will simply produce more.

                                        Therefore, in my view the most important target in the war on terrorism is not the terrorists themselves. The main mission must be to convince or neutralize their base of active sympathizers to stop supporting them. So there are several more important targets. The primary targets must be a terrorist organization's active support base of clandestine cells, its correos, or guides or liaison agents, and its non-terrorist combatants, because they are the ones who produce and support the terrorists. I will not try to go into detail here on how one can go about doing this. Obviously in 20 minutes that cannot be done. But there are historical cases where this has been accomplished and success has led to the ending of a particular armed, violent political movement that used terror tactics. So it is far from impossible.

                                        But what I can and will argue here in the few moments I have left is that, unless we keep our eyes on the larger ball we have about as much chance of winning the war on terrorism as we do of winning the war on drugs. And that's a war we have already lost, as far as I can tell. So, our longer-term mission must be to drain the swamps from which the terrorist alligators emerge. True, in the short run we have no choice but to hold back the alligators. But if that's all we do, in the long run we are bound to fail.

                                        JE comments:  I read every word, and am struck by how current (prescient) Tim Brown was in 2002.  Gosh, that's 15 years ago.  That conflicts based on ideology have been completely replaced by "identity" clashes is now an indisputable fact.  What role does ideology play in the current US-Russia relationship, or the US-China relationship for that matter?  I can think of none.  Further, Tim correctly predicted that the gulf between the "haves" and the "have-nots" of globalization would drive societies apart.  Just see what happened in 2016 in the UK and the US.

                                        One of the two high schools in Royal Oak was named Dondero--perhaps George A. Dondero was another relative of Luciano?  Some years back the two schools were consolidated into one, with the uninspired name of Royal Oak HS.

                                        Two of Dondero's most famous alums:  radical activist (and former Mr Jane Fonda) Tom Hayden, and Eagles frontman Glenn Frey.  Both died last year (2016).


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                                  • Economy of Nazi Germany (Eugenio Battaglia, Italy 07/20/17 4:56 AM)
                                    In his excellent and provocative post of July 16th, Luciano Dondero asked: "Nazi Germany, FDR's USA, militaristic Japan--were they all 'capitalist' regimes?"

                                    I am not versed enough in economics to participate in a learned discussion here; however I have some observations:

                                    Nazi Germany was not a capitalist regime, but rather an example of national (not Marxist) socialism (we may add the Fascist Socializzazione) which.may economically triumph even against considerable obstacles.

                                    Hitler came to power in 1933, finding more than 6 million, over 30%, of the German work force unemployed, but in 1937 he opened the doors to immigration because there were no more available German workers.

                                    Some Italians, attracted by the favorable working conditions, high wages and social benefits, went to Germany. When Mussolini visited Germany and was presented with huge Nazi parades, the Italians joined the parade with their black shirts for a special homage to Il Duce. Apparently the Nazi high brass was not very enthusiastic.

                                    Among the volunteer immigrants was a neighour living in the apartment just below mine. He went to Germany very proudly with his black shirt, but after the end of the war he returned and claimed that he was a victim of deportation. He was one of many who made this claim.

                                    Hitler created a National Central Bank instead of the usual Central Bank owned by other private banks. This Bank did not exchange marks for gold but in exchange for work. Furthermore the commercial exchange was not priced in gold (pounds or dollars) through the various usurious banks, but through direct exchange of products, therefore there was no debt and no deficit.

                                    The controversial (well anyone that is not, a priori, claiming to be a follower of the new Western religion on the devil Hitler is controversial or unreliable; of course I am a believer) Henry Makow wrote, "This was the main reason why Hitler should have been stopped." The British economist Henry C.K. Liu wrote: "Through a policy of independent sovereign monetary policy and a program of public works which granted full occupation the Third Reich transformed a bankrupt Germany into the strongest economy in Europe, in only four years prior to starting the expenses of armament."

                                    Another controversial historian, Mark Weber, in his Historia y Cultura del III Reich...


                                    ...has written an interesting and very detailed review on the subject.

                                    The conditions of the German workers and of the average citizen following the example of Fascist Italy were extremely good, with high wages and considerable fringe benefits for families, children, having great open museums, concerts, sponsored vacations, even cruises on special workers' vessels, medical assistance for all, etc.

                                    David Lloyd George, after visiting Germany in 1936, wrote a long article of praise, closing it with the following: "Yes, Heil Hitler, I myself say that, because for truth he is a great man."

                                    The late historian John Toland rightly wrote: "If Hitler had died in 1937, without any doubt he would be considered one of the greatest men of German history."

                                    JE comments: If only Hitler had died in 1937.  Then we'd have had the chance to test Toland's hypothesis.  As for Mark Weber, he certainly is controversial:  Weber is (or was) an outspoken Holocaust denier, although paradoxically, he later would "deny" Holocaust denial, which made him a pariah even among fellow deniers.  (This per Wikipedia.)

                                    I always understood that Hitler just put Germany's unemployed in the army. This is an oversimplification, but some years back WAIS addressed the topic of the so-called Nazi economic recovery. It's complicated, and more nuanced studies suggest that the Nazi economy was not as healthy as apologists claim. One scholar goes so far as to argue that Germans were gradually starving under Hitler (pre-1939), and were materially worse off than during the desperate 1920s and early '30s. Cameron Sawyer's discussion from 2010 gives a good overview:


                                    Toland's Hitler biography was not without critics.  See this review:


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                                    • If Hitler Had Died in 1937... (Carmen Negrin, -France 07/20/17 2:11 PM)
                                      In response to Eugenio Battaglia (20 July), it would have been even better if Hitler had died in 1936 before invading Spain with Mussolini! My family would still be in Spain, all the intelligentsia that benefited Mexico and other Latin American countries would have also stayed and helped their own country develop.

                                      Maybe Eugenio can tell us about this new law being discussed in Italy about forbidding and reprimanding any praise to Mussolini including on Internet.

                                      JE comments: I'm especially interested in Eugenio's response to the second paragraph. WAIS has repeatedly published Mussolini praise from Eugenio. As editor, might I someday face prosecution in Italy? Note the disclaimer appended to every WAIS post:

                                      The views expressed in this posting are of the author only and may not necessarily reflect the official viewpoint of the WAIS organization.

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                                      • Anti-Mussolini Laws in Italy (Eugenio Battaglia, Italy 07/22/17 8:46 AM)
                                        Commenting on Carmen Negrín's post of July 20th, our esteemed moderator asked me: As editor, might I someday face prosecution in Italy for having published Eugenio Battaglia's praises of Mussolini?

                                        I would say "NO," and that the disclaimer should be enough defense.

                                        After all I am not praising Mussolini per se in my posts.  I am relating actual facts.

                                        For instance, it is a fact if I write about the earthquake of 23 July 1930 in Irpinia, magnitude 6.7 with 1404 deaths.  The reconstruction went very well, including a savings of 500,000 lire from the original budget with the delivery of the new houses on 28 October 1930, 3746 brand new and 5190 repaired.  Contrast this with the earthquake in central Italy on 23 August 2016. Little rebuilding has been done until the present. Just yesterday the Mayor of Amatrice was on television asking at least for the removal of rubble from the streets. In citing the above there are no exclamations of Viva il Duce, maybe only a denunciation of the present government's incompetence. Admittedly, the locations of new housing in Amatrice have been identified and a provisional building for four restaurants should be ready within days, although the mayor is still working out of a container. The inhabitants, unfortunately, are still scattered around without rebuilt housing.

                                        The first statute against Fascism is in Italy's unconditional surrender of 1943. It was then confirmed by the article 17 of the Peace Treaty (Diktat).  The previous article 16 prohibits acting against those who from 10 June 1940 until 8 September 1943 showed "liking" (treason) favorable to the Allies.

                                        The Italian Constitution of 1948 has a "transitional disposition" Article 12, against Fascism.  Two other laws followed: Scelba 1952 and Mancino 1993.

                                        The present uproar about Mussolini started at a beach in Venice, extremely popular and well run, which had some photos of Mussolini on display. Furthermore, the Left is presently in political trouble and when the Reds are in these conditions their only hope to distract the public is a good revival of antifascism, even if Mussolini died 72 years ago and with him Fascism came to an end.

                                        The most ridiculous proposals are appearing, such as destroying buildings built during Fascism, checking all emails or jailing a guy who places democracy in jeopardy by lighting up a cigarette with Mussolini-themed lighter.

                                        By the way, up to now the "saluto romano" was not considered a crime if made in a cemetery during the commemoration of a fallen person, even if he was a fascist, but it may be considered a crime if done in other circumstances.

                                        To conclude, I do not believe that there will be enough time to pass the new law in the two Parliamentary chambers prior to next spring's elections. Nor does it look like the numbers are in favour

                                        That is all for now from Italy--lay, democratic and antifascist born from the resistance and formed by the constitution.

                                        JE comments:  Have there been any convictions under the existing anti-Mussolini laws, say in the last 25 years?

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                                        • Prosecutions of Mussolini Apologists in Italy (Eugenio Battaglia, Italy 07/23/17 5:12 AM)
                                          Regarding prosecutions in Italy for pro-Mussolini or Fascist views, there have been several cases of convictions and the dissolution of some small political groups.

                                          In Milan in 2015, 16 members of Casa Pound honoring Sergio Ramelli and Enrico Pedenovi (both young MSI members killed by the Reds in the 1970s) and Carlo Borsani (a gold medal recipient blinded in a war injury and killed by the partisans in 1945) were sentenced to one month in jail and a 250-euro fine in favor of ANPI (Associazione Nazionali Partigiani Italiani--communists) for giving the "saluto Romano" and other "fascist" gestures.

                                          The mayor and his aldermen of the town of Affile are presently facing prosecution with a possible sentence of two years' imprisonment for having allowed the construction of a "mausoleum" (large tomb) dedicated to Marechal Graziani.

                                          In Bolzano in 2010, the local leader of Casa Pound (the best-known group, inspired by the social doctrine of the great poet Ezra Pound) attended a hockey match wearing a shirt with a photo of Mussolini. For that he was sentenced to two months in jail.

                                          Note: generally, for sentences of three years or less, nobody in Italy really goes to jail. Rather, incarceration is substituted by some alternative punishment.

                                          Anyway do not worry.  The Italian government ensures that Italy remains a good colony of the Empire, ready to supply cannon fodder for its various wars and to support any self-defeating sanction. But overall it is extremely ready to fight Fascism even it is a Saluto romano or a photo of Mussolini hidden in a closet.

                                          JE comments:  These prosecutions seem to be of a symbolic nature, which begs the question:  doesn't all this attention actually motivate the Mussolini apologists?

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                                          • What is Meant by "Reds"? (Carmen Negrin, -France 07/23/17 3:13 PM)
                                            I wonder what Eugenio Battaglia (July 23rd) refers to when he says "the Reds." I don't know of any party of that name.

                                            JE comments: I believe Eugenio meant the Red Brigades (Brigate Rosse), who were at war with the neo-fascist MSI (among others) in the 1970s.  Carmen Negrín's question does raise a question in my mind:  have any leftist political groups self-identified as "Reds" since the demise of Italy's Brigate?

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                                            • Who are the Reds? (Roy Domenico, USA 07/24/17 10:17 AM)
                                              Regarding the question of "who were the reds," I think that Carmen Negrín (23 July) was pulling our legs a bit.

                                              The Reds are communists--I would think that's obvious. The two neo-Fascists mentioned by Eugenio Battaglia may have been killed by the Red Brigades; but the Red Brigades positioned themselves against the Italian Communist Party (PCI) which, they felt, had betrayed the cause by dealing with the Christian Democrats.

                                              Look at the flag of the Soviet Union. Look at China's flag today. Its message is that "the East is Red."

                                              JE comments:  Flag below.  In the generation since the fall of the USSR, "red" has lost its original bogeyman meaning, at least in the US.  The Red States are now as red-blooded as, well, red meat.  When my classes start in a month, I will quiz my students:  what does the expression "Better dead than red" mean to you?  I'll be sure to report back.

                                              I've also heard (again) from both Carmen Negrín and Eugenio Battaglia.  Stand by.

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                                              • Reds and Red States (Timothy Brown, USA 07/25/17 6:21 AM)
                                                I beg to quibble with Roy Domenico (July 24th).

                                                Unlike all the rest of the world, in today's United States the color of the right-of-center Republican Party conservatives is flaming red, while, again, unlike the rest of the world, the color of the left-of-center Democratic party is delightfully blue.

                                                My professor of Political Psychology (my primary PhD) would have labeled this a major propaganda coup by the left. But, then, before she left Moscow State University where she'd taught during the Cold War, she'd been unusually well versed on how one subtly manipulates public opinion.

                                                In short--sorry Roy--in the United States it's no longer obvious that "The Reds are communists."

                                                Here it's the far-left faction of the Democrats who are cheerfully Blue.

                                                JE comments: I tried to make this same point when commenting on Roy's post. 

                                                Some years ago we attached a date on the "Red State/Blue State" division. The original culprits were the TV networks, who needed a way to mark the states on the electoral map. In the early days of color TV, the Democrats were predictably red. Was it the "liberal media" that staged the coup of turning them blue?

                                                According to this 2012 Smithsonian article, the color shift happened in very recent times:  the Election-without-End of 2000.


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                                                • Reds, Red States, and Blue States (Roy Domenico, USA 07/26/17 4:27 AM)
                                                  I just finished sending my last post--which was something of a question--and I read Timothy Brown's response (July 24 and 25).

                                                  I'm not sure if we disagree on that much. I get Tim's point that the Republicans are red now and I expect he's right with the under thirty (or forty?) crowd who never experienced the "old" notion that the reds are communists (at least old in America's case--identification of with the far left is still the norm for most of the world). But this still bugs me and says something about the declining place of history and heritage. My concept of red drew from more than a century-old self-identity. The far left (mainly communists) were red and proud of it--and this heritage can still be seen in the flags we've mentioned. The current American connection between red and Republican is apparently based on some media decision--either by a political operative or someone simply ignorant of the tradition (or maybe both).

                                                  Deep down inside, I've never been comfortable with the idea of painting the US Republican Party red and the Democrats blue. JE triggered this in me with his statement that it happened in the 2000 election. I don't doubt that--but why? Somebody somewhere--I expect some functionary at a TV network--made some bizarre decision to use red as the conservative color. Was there ever an explanation?

                                                  JE comments: Could the decision have been purely esthetic? The South votes Republican, and blue, like the sky, looks better when it's on the top. Also, the Coasts are Democratic, and can be blue like the oceans.

                                                  It's just a theory.  Perhaps a lame one.  I was reading House Beautiful last night.

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                                                  • "Red Century": New York Times (Luciano Dondero, Italy 07/28/17 2:11 AM)
                                                    I surely bow to our American colleagues when they describe how "red" is now getting a new spin in US politics.

                                                    However, I think this series in the New York Times might be helpful to keep a sense of historical/world balance:


                                                    JE comments:  An excellent recommendation, Luciano, for this centennial year of the Russian Revolution(s).  There are several articles in the series I'm looking forward to reading, beginning with the discussions of whether Lenin was a German agent (and funded no less by German condoms--most intriguing).

                                                    Imagine an alternate universe in which the USSR still exists.  This would be one helluva year of centennial pageantry.

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                                                  • Reds and Red States (Robert Whealey, USA 07/28/17 5:14 AM)
                                                    I agree that Republican-leaning states should be called by their true name, and not by the color Red. The traditional Democratic states should be called by their traditional leanings, not Blue.

                                                    The United States, Great Britain, the French Republic from 1789 and the brief Provisional Government in February 1917 in Russia, used the red, white and blue. If you turn the Russian flag upside down, it would become the Dutch Tricolor.

                                                    An all-red flag was used briefly during the French Revolution by Danton. The red flag was born again in the 1905 Russian Revolution and with Lenin in November 1917.

                                                    Red became a symbol of contempt in the United States from 1917 to 1991. That red flag became a symbol for dogmatic, ideological propaganda against Communism. TV once again would like to sow confusion in the United States, with voters 18 and below, who have never read a single history book. The intelligence agencies would rather hire English majors than History majors in federal government. Historians and philosophers, who are looking for the truth, ask too many embarrassing questions, in my opinion.

                                                    JE comments:  Don't the intelligence agencies prefer technocrats, STEM types?  In any case, English majors are trained to think critically, just like philosophers and historians.

                                                    In this discussion we've done justice to the politics of red.  Shall we lighten things up a bit?  How about the "Pinkos"?

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                                                    • Reds and Rojos, Republicans and Republicanos (Enrique Torner, USA 07/29/17 8:56 AM)
                                                      The names and colors of the US political parties are extremely confusing, especially to Spaniards. I always have had a very difficult time trying to explain to my family in Spain that American Republicans are the complete opposite of Spanish "republicanos," also called "rojos" (reds). So, when, after the 2016 American election, Spaniards saw the electoral map, many of them thought that the "communist" party had won by a lot, because they saw so much red on the map! The added complication is the American electoral system, which is incomprehensible from the point of view of the common Spanish citizen.

                                                      Reversely, when I teach the Spanish Civil War in my university classes, my American students tend to identify "republicanos" with Republicans, and think that they are conservative! I believe French and Italians have the same problem, right? What other countries have it?

                                                      JE comments:  Same in my classes.  US students have a very hard time with the basic premise of the SCW, because the Republicanos were on the left side of the spectrum.  Even more confusing for them is the notion that the rebellious side was on the right.  Aren't "revolutions" always the handiwork of the Commies?

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                                                    • Russian Flag and Dutch Flag (Rodolfo Neirotti, USA 07/30/17 7:31 AM)

                                                      Robert Whealey wrote on July 28th: "If you turn the Russian flag upside down, it would become the Dutch Tricolor."

                                                      Please see both flags below, showing that this is not the case.

                                                      JE comments:  Absolutely true, but several accounts of the origin of the (Tsarist) Russian standard in 1696 establish a connection to the Netherlands.  Peter the Great was an admirer of Dutch shipbuilding prowess, and apparently the Russian flag was inspired by Dutch ships calling on the port of Arkhangelsk.  See below:


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                                              • Singing "The Red Flag" (John Heelan, -UK 07/25/17 6:44 AM)
                                                One also remembers the lyrics of "The Red Flag" (1889):

                                                The people's flag is deepest red,

                                                It shrouded oft our martyred dead,

                                                And ere their limbs grew stiff and cold,

                                                Their hearts' blood dyed its ev'ry fold.

                                                Then raise the scarlet standard high.

                                                Within its shade we'll live and die,

                                                Though cowards flinch and traitors sneer,

                                                We'll keep the red flag flying here.

                                                Look 'round, the Frenchman loves its blaze,

                                                The sturdy German chants its praise,

                                                In Moscow's vaults its hymns are sung

                                                Chicago swells the surging throng.

                                                Then raise the scarlet standard high.

                                                Within its shade we'll live and die,

                                                Though cowards flinch and traitors sneer,

                                                We'll keep the red flag flying here.

                                                It waved above our infant might,

                                                When all ahead seemed dark as night;

                                                It witnessed many a deed and vow,

                                                We must not change its colour now.

                                                Then raise the scarlet standard high.

                                                Within its shade we'll live and die,

                                                Though cowards flinch and traitors sneer,

                                                We'll keep the red flag flying here.

                                                It well recalls the triumphs past,

                                                It gives the hope of peace at last;

                                                The banner bright, the symbol plain,

                                                Of human right and human gain.

                                                Then raise the scarlet standard high.

                                                Within its shade we'll live and die,

                                                Though cowards flinch and traitors sneer,

                                                We'll keep the red flag flying here.

                                                It suits today the weak and base,

                                                Whose minds are fixed on pelf and place

                                                To cringe before the rich man's frown,

                                                And haul the sacred emblem down.

                                                Then raise the scarlet standard high.

                                                Within its shade we'll live and die,

                                                Though cowards flinch and traitors sneer,

                                                We'll keep the red flag flying here.

                                                With heads uncovered swear we all

                                                To bear it onward till we fall;

                                                Come dungeons dark or gallows grim,

                                                This song shall be our parting hymn.

                                                Then raise the scarlet standard high.

                                                Within its shade we'll live and die,

                                                Though cowards flinch and traitors sneer,

                                                We'll keep the red flag flying here.

                                                It's always amusing to watch the last act of the Labour Conference each year when the Party leaders all link arms on the conference stage to sing the "Red Flag."  It's a pity that some cannot remember the words and are clearly just moving their mouth!  The other interesting thing is that the "Red Flag" is sung to the tune of a German Christmas hymn, "O Tannenbaum! Oh Tannenbaum."

                                                However I prefer the rude parody that states:

                                                The working class can kiss my arse

                                                I got the foreman's job at last.

                                                You can tell old Joe I'm off the dole

                                                He can stick his Red Flag up his 'ole!

                                                JE comments:  "We must not change its color now."  As we saw earlier today, in 2000, American political pundits did just that.

                                                Here's a vocabulary quiz:  How many of you know what "pelf" is?  I had to look it up.

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                                            • Who Are (Were) the Reds? (Carmen Negrin, -France 07/24/17 10:38 AM)
                                              To answer John E, "Red" is the term used by the Francoists to anyone who wasn't Francoist, not a very precise terminology. That's why I was wondering what Eugenio Battaglia meant.

                                              JE comments: Rojo, bolchevique, judío, masón:  the Francoists didn't sweat the semantic nuances.  As Eugenio Battaglia (next) will explain, he was using "red" in the all-inclusive red-bashing sense.  A question for Eugenio:  were Jew, Mason, Bolshevik, etc., also used as "othering" epithets in Mussolini's Italy?

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                                            • The Reds Then and Now (Eugenio Battaglia, Italy 07/24/17 10:48 AM)
                                              In response to Carmen Negrín (23 July), I was referring to the Red Brigades, but not only them. Carmen with the Spanish Civil War should know who the "Reds" are.

                                              JE comments: Surprisingly, Carmen and Eugenio are in agreement here...

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                                              • Le Pen, and a Conversation in a Taxi (Carmen Negrin, -France 07/25/17 10:02 AM)
                                                With his reference to the "Reds," I understood who Eugenio Battaglia would be referring to in Spain, but I wasn't totally sure who he was referring to in Italy. But yes, it is true that I was pulling his leg!

                                                In any case, of course this terminology, which puts everyone in the same bucket, is very practical for certain purposes, but not very precise or correct. I would consider myself (outside the US) as pink, but I guess these many colors take too much time to explain, especially in a nationalistic environment.

                                                By the way, and this should make Eugenio happy, I took a taxi today and mentioned the fact that if Le Pen had won the elections I would have left France.  He asked me why. My answer, almost apolitical (except in the US), was:  "Because I am a democrat."

                                                So he started giving me a history lesson about how all the wars had been initiated by democrats, WWI, WWII, all the 19th-century ones. I thought it was quite interesting to hear how history can be reinterpreted according to one's ideals, in this case Le Pen's and how these ideas have spread again and become banalized, and finally, how memory needs to be constantly refreshed.

                                                Sorry to say but he didn't get a tip!

                                                JE comments:  France must be like Latin America, inasmuch as you can always count on a spirited political discussion from taxistas.  But Carmen:  was your taxi driver talking about "small-d" democrats, or the capital-D party in the United States?  If the former, blaming them for the World Wars is folly.  It is true that the US had a Democratic president when it entered most of its wars:  WWI, WWII, Korea, and Vietnam.

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                                    • Economy of Nazi Germany (Tor Guimaraes, USA 07/20/17 2:24 PM)

                                      Eugenio Battaglia (20 July) stated, "Nazi Germany was not a capitalist regime, but rather an example of national (not Marxist) socialism." 

                                      Nazi Germany was a hybrid system, a one-party socialist dictatorship with some major private capitalist entities (companies).

                                      No one can deny that compared to the situation after WWI, the Nazis after the early ideological cleansing which was pretty ugly, took much better care of German working class. In my opinion, once the shooting for WWII started, German social economics started to deteriorate and measurement of productivity became exceedingly difficult due to military conscription (more untrained women to the production lines) and widespread slave labor. Also, stolen raw materials must have been helpful, but war activity took a heavy toll.

                                      One of the most impressive performances from Nazi Germany, and to a lesser extent Tojo's Japan, were some of the advanced weapons systems developed under fire: jet fighter, new tanks, V1 and V2 rockets, new submarines. If the jet, the V2 and the new submarines had been more fully deployed, we might all be speaking German today despite Hitler's strategic stupidity invading Poland and starting WWII prematurely, Barbarossa, declaring war on the US, etc.

                                      Further, thank God Hitler's megalomania wasted huge amounts of German energy and raw materials (labor, cement, steel, etc.) in the Channel Islands, the Siegfried Line, the huge battleships, etc.

                                      JE comments:  I'm still curious about Nazi Germany's central bank.  How exactly did its currency work?  Was the Reichsmark ever a convertible currency?

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                                    • Eric Kurlander, "Hitler's Monsters" (John Heelan, -UK 07/21/17 4:18 AM)

                                      In response to Eugenio Battaglia (20 July), by coincidence I am currently reading Hitler's Monsters by Eric Kurlander (Yale UP, 2017), which claims to be "The definitive history of the supernatural in Nazi Germany, exploring the occult ideas, esoteric sciences and pagan religions touted by the Third Reich in service of power."

                                      From the base ideas of Madame Blavatsky's Theosophy, Kurlander traces step-by-step how the ideas of what he terms "the supernatural imaginary" of the occult, supported by Hess, Hitler, Himmler, Goebbels, Rohm and others, became the basis of the "religion" fundamental to National Socialism that was aimed at the destruction of European Judaism and reached its pinnacle in the Wannsee Conference.

                                      JE comments:  Helena Blavatsky's theosophy been cited as one of the underpinnings of modern anti-Semitism.  I presume this is one of the central arguments of Kurlander's book.  Professor Hilton was familiar with Blavatsky's writings, but did not go into detail:


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                                    • Lloyd George's Visit to Hitler, 1936 (Robert Whealey, USA 07/21/17 4:43 AM)
                                      I would like to see an endnote for the 1936 visit, when David Lloyd George said "Heil Hitler."  (See Eugenio Battaglia, 20 July.)  I read David Lloyd George's report to the FO. He did praise Hitler in a somewhat humorous way. But I don't recall any slogan such as Heil Hitler.

                                      JE comments:  Google "Lloyd George praises Hitler" and you get a minefield of apologist websites.  It's hard to separate the wheat from the chaff (more precisely, manure).  Did LG ever say "Heil Hitler" in earnest?  We do know he came back from the 1936 encounter glowing with Fuhrer enthusiasm.  In an essay he called Hitler "Germany's George Washington."

                                      Remember the British Tommies' classic ditty, "Lloyd George Knew my Father, Father knew Lloyd George," sung to the tune of "Onward Christian Soldiers"?  Some say it referred to LG's reputation as a womanizer.

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                                      • Was Lloyd George an Appeaser in 1936? (Robert Whealey, USA 07/23/17 4:53 AM)
                                        Lloyd George in 1936 indeed was an appeaser, certainly different than he had been in 1916 to 1922.

                                        The purpose of LG's 1936 trip was to tell Hitler that Great Britain was not going to return former German colonies to the Third Reich.

                                        JE comments:  I hope Robert Whealey will follow up on this.  Did Hitler ever ask for Great Britain to return its colonies--presumably, the ones in Africa it lost after WWI?  I don't recall ever reading about this, even in A. J. P. Taylor's arguably revisionist The Origins of the Second World War.

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                      • Hoarding vs Sharing, Continued (Cameron Sawyer, Russia 07/11/17 5:14 AM)
                        In my opinion, this is a very good comment from Tor Guimaraes (10 July).

                        I think it is a gross, and potentially misleading simplification, to refer to all saving and investment as "hoarding." It is the essence of human economy, much more than the division of labor, to create wealth which can be saved over for winter, then another season, or invested to multiply and allow prosperity which does not have to be produced every day. Only this makes it possible for humans to extend the effect of their labor (and other economic activity) to future periods, and thus to provide for themselves even when they are sick or too old to work.

                        I agree with Tor that this is primary economic activity; sharing comes after. Saving and investment is characteristic of more advanced economies where economic actors think and plan further than just for today. It is an activity which is essential to economic progress, and which brings a multitude of benefits to everyone, and not just to the savers and investors, so should not be taxed or otherwise discouraged into unattractiveness, lest economic progress be stopped altogether--lest there be nothing to share.

                        JE comments: Let's call it "savings vs sharing," as "hoarding" is such a loaded term. And yes, you cannot share at all until you accumulate stuff above a subsistence level.

                        I'm still waiting for responses on "hoarding" in different languages. Specifically, what other languages have a single word for the pathological accumulation of things? I would think "hoarding" enters the public consciousness especially in times of war, when it is often codified as a crime.

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        • US-China Economics, Revisited (Tor Guimaraes, USA 07/04/17 4:25 PM)
          Once again Cameron Sawyer (June 30th) makes some truthful points which are impossible to deny. Commenting on his post, John Eipper also gave some excellent counterpoints. I agree with Cameron that China should not be blamed for America's problems. We are ultimately responsible as a nation for our social, political, economic decay.

          John Eipper commented on my last post with "Improving China's standard of living can only be a good thing--correct? Or let's consider it this way: can anything be 'gained' by keeping the Chinese impoverished? For starters, they're now buying a lot of Buicks."

          Clearly, improving Chinese standard of living would be a great thing for the Chinese. We Americans should concentrate on improving our nation's standard of living which has been going to the dogs for a few decades.

          Also, clearly it would be counterproductive to make our objective keeping the Chinese people impoverished. I am sure they would not appreciate that and it would clearly distract us from accomplishing what should be our primary objective: improving our standard of living.

          John sees a silver lining in the Chinese people's newly acquired wealth because they are buying "Buicks." That does not help our nation's standard of living. As I wrote earlier, the global corporations and the Chinese companies are making great profits, and the standard of living for most of the Chinese people got considerably better, but from the American people's perspective all we get are cheaper goods of lower quality (even poisonous) with reduced or no manufacturers responsibility, indecent labor practices and environment pollution, etc.

          To me the potentially most devastating problem is that we have given our major rival and potential enemy a massive long-term economic and military strategic benefit. That is the utmost insanity for any country perpetually worried about national security. On top of everything, as part of the package we owe them a lot of money and seem to have no discipline to pay it back (the interest alone can become financially crippling in the long run). This situation is no laughing matter.

          JE comments:  Not impressed by Buicks?  Another US "export" to China we haven't addressed in this discussion is education--precisely, the 300,000 Chinese studying in the US, and spending great deals of money to do so.  That many of the best and brightest end up staying here is only icing on the cake.

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          • "Alienation 101": Chinese Students in US Universities (Rodolfo Neirotti, USA 07/06/17 4:10 AM)
            John E wrote on July 4th: "Another US 'export' to China we haven't addressed in this discussion is education--precisely, the 300,000 Chinese studying in the US, and spending great deals of money to do so. That many of the best and brightest end up staying here is only icing on the cake."

            Concerning the Chinese studying in the US as another US "export," I strongly recommend the article "Alienation 101" by Brook Lamer published in the April-May 2017 The Economist 1843 supplement. It is a good analysis of the situation, with a description of the frustrations and interactions of the students with the locals.

            JE comments: Here's the link to the article, which focuses on the ambivalent experience of Chinese students at the U of Iowa. Iowa has heavily recruited Chinese students as a means to increase its all-important revenues.  (Xi Jinping lived with a host family in Muscatine, Iowa in the 1980s, cementing the "special relationship" of the state with the PRC.)

            Lamer highlights the "missed opportunities" of bringing Chinese to the US.  At Iowa, a ghetto culture has emerged among the 2000+ Chinese population, who spend their days cruising in luxury vehicles and keeping to themselves.  

            Is the economic panacea of Chinese students in the US largely an example of mutual exploitation?  Read on:


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  • Ric Mauricio on the US Standard of Living, FAANG (John Eipper, USA 06/30/17 4:33 AM)

    Ric Mauricio writes:

    Tor Guimaraes (26 June) asked the question: "If the whole America were turned into a huge Silicon Valley, who would pay all the taxes to keep up the nation's infrastructure and our expensive military?"

    Well, wouldn't we be paying more taxes if everyone was making more money? I know the tax coffers in Silicon Valley have been filling up, although there are some cities, like San Francisco, who like to adjust their budgets at more than their forecasted revenue. I noticed my church (yes, I still go to church although I seem to disagree with them more than I agree) always sets their budget greater than forecasted "giving," then asking for more. Tsk, tsk. Seems the way of government entities and non-profits.

    By the way, the statistics just came out from the FBI on the safest cities in California (I am sure they came out with the national stats as well) and my city, Foster City, came out as the #6 safest city in California. And if you look closer, it came out as the #1 city in Northern California. When I was considering which city to move to in my move from the Sacramento area (I originally moved there from San Francisco), I made a grid and ranked cities and picked my city. Ah, like picking a stock. Ha ha.

    Now JE made the statement: "It's no secret that WAISers are largely a mature demographic, so this question is important: Do you complain more or less now than during your youth? I complain less--though I still complain. Have I mellowed with age, or am I just more resigned to the world's injustices?"

    Ah, I always tell people, do not call me a mature adult. Mature is boring. Thank goodness, I've retained my youthful wonderment of the universe and the world; always fascinated by the thinking of those, like those who are part of WAIS, who are not afraid to think beyond the box. I laugh at the world. The reason people find Chip Gaines of Fixer Upper endearing is because of his boyish impishness. And you gotta love his wife, Jo, for putting up with it. I find it funny that those who complain that illegal immigrants are taking our jobs wouldn't even consider doing those jobs. "Laugh, and the world laughs with you; Weep, and you weep alone."  By the way, I like Dali. I also like Escher. And aren't Elvis, the Beatles, the Stones, Motown, Hendrix, Coltrane and Davis, part of the 20th Century?

    Tor, sorry to disagree with you on the China subject, but the reason that jobs are shipped overseas is to produce products at a much more reasonable price than we can possibly produce them. I really doubt that Apple can sell iPhones and iPads for thousands of dollars if produced here. And many jobs here were not lost to overseas but to robotics. In The Graduate, it was plastics. Today it is robotics. Even Chinese workers are being displaced by robotics.

    By the way, FANG really is FAANG, with Facebook, Amazon, Apple, Netflix, and Google, though technically one can say it is FAAAN, if Google is included as Alphabet. And finally, Cameron Sawyer did an excellent treatise on how the world turns economically. Yes, the world seems to be one big soap opera.

    JE comments:  FANG/FAANGs are in; so is STEM.  BRICS (Brazil, Russia, Indian, China, South Africa) are out.  Can a historical era be judged by the acronyms it keeps?  What happened to the EU's PIIGS?

    The WAIS Effect strikes again:  at the (extended) family dinner table last night, we were talking about the lovable, mediagenic Gaines family.  They embody the very best of the can-do-it spirit that built America.  Now we don't build; we fix it and "flip" it.

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