War is Politics by Other Means

What happened in the American war in Vietnam?

I am watching the lengthy PBS series on Vietnam, which facilitates a great deal of sober reflection. This dates me, but I recall (barely) the nightly body counts on TV, and the arguments with family about what was going on, both abroad and in the US in reaction to the war. I was too young to be particularly anti-war or pro-war, but I was very perplexed. The US was the greatest nation ever, had nuclear bombs and aircraft carriers, and had sent people to the moon. What power did this tiny country so far away have that we did not have?

The salve of time helps to clarify that we had lost this war long before it ended. Because, in the Clausewitzian dictum, war is politics by other means. The North Vietnamese had something that we didn't, which was an unassailable political position and ideology. They were in effective charge of much of the South, especially rural areas, for most of the war. The North Vietnamese had the double political distinction of military victory against the French, and of effective land reform against the landlords. In comparison, the South Vietnamese government was a bumbling, corrupt holdover from the French, which spent its time alienating the majority religion of the country, Buddhism, and keeping the landlords in power over the peasants of the countryside. Who was going to win this battle for hearts and minds?

Yes, North Vietnam was run by communists, and is still. But their propaganda and policies were effective to the mass of the population, in selling themselves as nationalists first and foremost- victors over the Japanese, the French, and later on the Americans too. Who would mess with that kind of record? Unfortunately, to put it in LBJ terms, we got into a pissing match with the North Vietnamese. No one wanted to "lose" South Vietnam, or let communism snatch one more country, or be the first president to lose a war. So it was our pride vs the North Vietnamese pride. Sadly, this did not translate into political support or governing competence in South Vietnam. Its government crumbled in our hands, and no amount of napalm was going to fix that.

We should at this point (that is to say, roughly 1963) have reframed the whole effort in Vietnam as one strictly in support of the South Vietnamese government. The US military is never going to win hearts and minds in foreign countries, not unless, as in World War 2, we have utterly destroyed those countries first and brought all their civilians to their knees in thankfullness for ridding them of their demented fascist government. Not conditions that come around very often, thankfully. The more time we spend somewhere, (say, Afghanistan, or Iraq), the worse it gets. The fact that the US had previously propped up the French position in Vietnam didn't help either. So all we can realistically do is support the native government (and even that may bring taints of colonialism and racism, rendering that support rather poisonous). And in this case, the government of South Vietnam was a mess, and should have been left to die on its own. That is what the politics dictated at the time, and the PBS series makes it clear that this was apparent to those who knew what was going on. They showed a great passage by an ex-soldier from the North, to the effect that, were it not for the US, the North would have taken Saigon by 1966.

It is instructive to compare our effort in Korea. North Korea tried to set up a Viet Cong-style insurgency in the South as well, but it was crushed by our client there, Syngman Rhee. North Korea tried to drape itself in the banner of anti-Japanese militancy, but that didn't play particularly, since the overwhelming US role in defeating Japan was so clear. South Korea instituted effective land reform in 1948 as well, which was key to dampening enthusiasm for communism. One might wonder why communism excites enthusiasm at all, but to landless peasants whose rent is half their crop, and who suffer countless other humiliations, it is a pretty easy sell, at least before the collectivization drive begins(!) So the political position of South Korea, destitute as it was, was far better than that of South Vietnam vs their respective northern antagonists. One might also add ancient cultural patterns, whereby modern Vietnam was created over the preceeding millenium by the gradual southward military expansion of the North Vietnamese, after they had successfully defended themselves against the Mongol and Chinese empires. 

Ho Chi Minh city, present day. Is this communism?

So, communism. Vietnam suffered terribly upon reunification due to a decade of doctrinaire communism, as if the aftermath of our brutal war hadn't been bad enough. After the wonderous dispensation of market-Leninism (!), begun in 1986, it is now a moderately prosperous but still one-party state with a miserable human rights record. Vietnam is reaping rewards from the US-China trade tensions as it becomes a top destination for low cost manufacturing. The US is its top export market. Its citizens have 1.4 cell phone subscriptions per capita, and its Gini coefficient is now similar to that of the US. Buddhism remains the leading religion, which, while confined to a state-run Sangha and political impotence, is relatively free otherwise. 

The US was right to be against communism. States like North Korea, Cuba, China and Vietnam show that communism, even after all the reforms and backtracking on Marxist theory, is antithetical to fundamental human freedoms, due to its Leninist / Stalinist greed for single party political control, which implies vast intrusion into all aspects of civic, social, and personal life. Russia is backsliding into that mindset, and we are right to stand once again with a friend in need, this time Ukraine, against its onslaught. But the new war just goes to show the critical importance of having a friend able to stand on its own feet, politically. Our military help would be pointless if Ukraine were a rotten state, with Russian insurgents and sympathizers, say, running 70% of the rural communities, and the central government pursuing vendettas against the Orthodox church instead of shoring up its support on all fronts.

Integral to the politics of warfare are economic factors like land reform and inequality. It was the corruption and steadfast lack of recognition of the peasant's plight that destroyed South Vietnam. The Viet Cong would not have been able to mount an insurgency were the peasants not desperate and open to well-honed propaganda based on economic equality / opportunity. Ruthless terrorism played a role, as it did for the Taliban. But the basic position of hopelessness versus an uncaring state and economic system was fatal. We are facing similar issues ourselves, as people in rural areas feel left behind and neglected, despite being the beneficiaries of such various and generous handouts from the state that would make welfare recipients blush. No matter- the US has become incredibly unequal and economically/socially stagnent, which is a recipe for populism and revolt, of which we recently had a taste. As inequality rises in China and Vietnam, will they face class-based revolt, driven by some new ideology of equality, fraternity, and liberty?

• Krugman on inequality.
• Photos of Vietnam.
• A green transition.
• A plague of bad plates.

Building the Middle Class

Why are poor people in the US enslaved to tyrannical, immiserating institutions?

Santa Claus brought an interesting gift this Christmas, Barbara Ehrenreich's "Nickle and Dimed". This is a memoir of her experiment as a low wage worker. Ehrenreich is a well-educated scientist, feminist, journalist, and successful writer, so this was a dive from very comfortable upper middle class circumstances into the depths both of the low-end housing market and the minimum wage economy. While she brings a great deal of humor to the story, it is fundamentally appalling, an affront to basic decency. Our treatment of the poor should be a civil rights issue.

The first question is why we have a minimum wage at all. What is the lowest wage that natural economic conditions would bear, and what economic and social principles bear on this bottom economic rung? In ancient times, slavery was common, which meant a wage of zero. This was replicated in the ante-bellum American South- minimum wage of zero. So as far as natural capitalism is concerned, there is no minimum wage needed and people can rather easily be coerced by various social and violent means to work for the barest subsistence. The minimum wage is entirely a political and social concept, designed to express a society's ideas of minimal economic, civic, and social decency. Maybe that is why, as with so many other things, the US reached a high point in its real minimum wage in the late 1960's, 66% higher than what it is now.

Real minimum wage in the US, vs nominal.

The whole economy of low wage work is very unusual. One would think that supply and demand would operate here, and that difficult work would be rewarded by higher pay. But it is precisely the most difficult work- the most grinding, alienating, dispiriting work that is paid least. There is certainly an education effect on pay, but the social structure of low end work is mostly one of power relations, where desperate people are faced with endlessly greedy employers, who know that the less they pay, the more desperate their workers will be to get even that little amount. It is remarkable what we have allowed this sector to do in the name of "free" capitalism- the drug tests, the uniforms, the life-destroying scheduling chaos, the wage theft, the self-serving corporate propaganda, the surveillance.

Is it a population issue, that there is always an excess of low-wage workers? I think it is really the other way around, that there is a highly flexible supply of low-wage work, thanks to the petty-tyrannical spirit of "entrepreneurs". No one needs the eighth fast food restaurant, the fifteenth nail salon, or the third maid cleaning service. We use and abuse low wage labor because it is there, not because these are essential jobs. If a shortage of low-wage workers really starts to crimp an important industry, it has recourse to far more effective avenues of redress, such as importing workers from abroad, outsourcing the work, or if all else fails, automating it. What people are paid is largely a social construct in the minds of us, the society of employers who couldn't imagine paying decently for the work / servitude of others. To show an exception that illustrates the rule, nurses during the pandemic did in some cases, if they were willing to travel and negotiate, make out like bandits. But nurses who stayed put, played by the rules, and truly cared for those around them, were routinely abused, forced into extra work and bad conditions by employers who did not care about them and had .. no choices. In exceptional cases where true need exists, supply and demand can move the needle. But social power plays a very large role.

Some states have raised their minimum wage, such as California, to $15. This is a more realistic wage, though the state has astronomic housing and other costs as well. Has our economy collapsed here? No. It has had zero discernable effect on the provision of local services, and the low wage economy sails on at a new, and presumably more humane, level. When I first envisioned this essay, I thought that a much more substantial increase in the minimum wage would be the proper answer. But then I found that $15 per hour provides an annual income that is almost at the US level of median income, 34k annually for an individual. The average income in the US is only 53k. So there is not a lot of wiggle room there. We are a nation of the poorly paid, on average living practically hand-to-mouth. On the household level, things may look better if one has the luck to have two or more solid incomes.

My own individual incomes analysis, drawn from reported Social Security data.

Any any rate, a livable wage is not much different from the median wage, and even that is too low in many economically hot areas where real estate is unbearably expensive. This is, incidentally, another large dimension of US poverty, that the stand-pat, NIMBY, no-growth zoning practices of what is now a majority of the country have sentenced the poor and the young to an even lower standard of living than what the income statistics would indicate, as they fork over their precious earnings to the older, richer, and socially settled landlords among us.

So what is the answer? I would advocate for a mix of deep policy change. First is a minimum wage that is livable, which means $15 nationwide, indexed for inflation, and higher as needed in more high-cost states. It should be a basic contract with the citizenry and workers of all types that working should pay decently, and not send you to a food pantry. All those jobs and businesses that can not survive without poorly paid workers... we don't need them. Second would be a government employer of last resort system that would offer a job to anyone who wants one. This would be paid at the minimum wage, and put people to work doing projects of public significance- cleaning up roadways, building schools, offering medical care, checkups, crossing guards, etc. We can, as a society and as civil governments, do a better job employing the poor in a useful way than can the much-vaunted entrepreneurs. Instead of endless strip malls of bottom-feeding commerce, let local governments sweep up available labor for cleaning the environment, instead of fouling it. Welfare should be, instead of a demeaning odyssey through DMV- like bureaucracies, a straight payment to anyone not employed, at half the minimum wage.

Third, we need more public services. Transit should be totally free. Medical care should be completely free. Education should be free. And incidentally, secondary education should be all public, with private schools up to 12th grade banned. When we wonder why our country and politics have become so polarized, a big reason is the physical and spiritual separation between the rich and poor. While the speaker in the video linked below advocates for free housing as well, that would be perhaps a bridge too far, though housing needs to be addressed urgently by forcing governments to zone for their actual population and taking homelessness as a policy-directing index of the need to zone and build more housing.

Fourth, the rich need to be taxed more. The corrosion of  our social system is not only evident at the bottom where misery and quasi-slavery is the rule, but at the top, where the rich contribute less and less to positive social values. The recent Twitter drama showed in an almost mythical way the incredible narcisism and callous ethics that pervade the upper echelons (... if the last administration hadn't shown this already). The profusion of philanthropies are mere performative narcissism and white-washing, while the real damage is being done by the flood of money that flows from the rich into anti-democratic and anti-government projects across the land.

And what is all this social division accomplishing? It is not having any positive eugenic effect, if one takes that view of things. Reproduction is not noticeably affected, despite the richness at the top or the abject poverty at the bottom. It is not having positive social effects, as the rich wall themselves off with increasingly hermetic locations and technologies. They thought, apparently, that cryptocurrencies would be the next step of unshackling the Galtian entrepreneurs of the world from the oppression of national governments. Sadly, that did not work out very well. The rich can not be rich without a society to sponge off. The very idea of saving money presupposes an ongoing social and economic system from which that money can be redeemed by a future self. Making that future society (not to mention the future environment) healthy and cohesive should be our most fervent goal.

• How about universal basic services, like housing and transit?
• But not in this congress.
• Bernie is still on the case.
• Meanwhile, how does a soak-the-poor tax system sound?
• Mint that coin!
• Economic regression.

Magellan, the Movie

The story of Magellan's voyage is positively cinematic.

It has now been five hundred years since the first circumnavigation of the world, by Ferdinand Magellan. This feat doesn't generally get as much fame as Columbus's discovery of the Caribbean, even though Columbus didn't know what he was doing, and kept not understanding what he had done long after he returned. By the time, thirty years later, that some more of the new world had been explored, and the Portuguese had also entered the Indian ocean around the bottom of Africa, the overall geography of the earth had not advanced a great deal, still being based on Ptolemy's significantly (about 30%) too-small estimate. But the lure remained- how to get to the all-important spice islands in a more convenient way. 

And it was a very commercial lure. Magellan had little scientific interest in all this, per se. He was a mariner through and through, and had done extensive research with his colleagues, mapmakers, and astronomers. But most of all he was desperate to make some money after a wide-ranging, but not very well-paid, career with the official Portuguese fleet. He had visited India and what is now Malaysia, and had heard from a friend who had finally found the spice islands, and had decided to stay there. So when Magellan went to the King of Portugal to propose his westward voyage around the tip of South America, it was a strictly commercial venture, hopefully easier and shorter than the trip around Africa and through the Indian ocean. But the king was uninterested, as the Portuguese already were using the eastern route, and didn't seem much point in trying another, unknown one. Columbus had already tried that gambit and had not gotten much for it. Not much in the way of spices, at any rate.

So Magellan stormed off in a huff, renounced his allegiance to the Portuguese crown, and made his proposal to the Spanish king instead. Now that logic made more sense. The Spanish and Portuguese had come up with a colonial demacation line, the treaty of Tordesillas, that split the Atlantic, which is what gave Brazil to the Portuguese. But this line in imaginary fashion extended around the globe to the other side, and depending how big that globe was, might award the spice islands (the southern islands of the Indonesian archapelago) to Spain, not Portugal. Devising a route from the other side might get Spain there faster, and also avoid unpleasant conflict with sea lanes that were now busy with Portuguese shipping. So the expedition was approved and launched in 1519.

It is a fascinating story, and gets more and more interesting as it goes on, with exotic locations, spectacular discoveries, first contact with far-flung natives, mutiny, hangings, and maroonings. It is very well-told by Tim Joyner, in his definitive and meticulous 1992 book. One aspect that did not come up, however, was that Magellan and colleagues could have come up with a much more accurate estimate of the circumference of the globe by their thorough knowledge of latitude. Longitude- that was difficult to calculate, though his voyage made amazing advances in this respect as well. But if they were imaginative enough to consider that the globe was round in all directions, then the circumference around the poles, which was well within their ability to calculate with precision, would have told them that Ptolemy was way off, and that scurvy was going to be their lot in traversing the Pacific ocean (which Magellan named, incidentally).

A top-secret 1502 map of the known world, from Portugal. The coast of Africa is well-detailed, while farther areas are quite a bit murkier. Crucially, nothing is known of the southern extent of South America.

The last ship, of the five that embarked on the expedition, limped back into San Lucar, near Seville, Spain, three years later, bedraggled and desperately bailing out their bilge. But it brought back a treasure of cloves, as well as a treasure of information. The expedition had poisoned relations with numerious natives, not to mention the Portuguese, who quickly overtook and imprisoned the small contingent left at Ternate, one of the spice islands. In fact, Magellan himself died in a reckless attack on a thousand natives in what is now the Philippines. 

So the mini-series version would have to be told by someone else. And that should be Antonio Pigafetta, the self-appointed anthropologist of the expedition. A worldly fellow from Lombardy who had been employed at the Vatican, he was part of its ambassadorial delegation to Spain when he heard about Magellan's plans. He appears to have jumped at the chance for adventure, and kept detailed dairies of the events of the voyage, to which all subsequent authors are hugely indebted. He even kept a day log which he was surprised to see finally came up a day short- precisely the day that one loses when following the setting sun around the world. He seems to have been quite a character, who had high respect for Magellan, and whose adventurousness also saved him from scurvy, which tended to afflict the more squeamish eaters, who were put off by eating rats and whatever else came to hand. 

So there you have it, perhaps a twelve part miniseries spanning the globe, rich with drama, suffering, scenery, deceit, greed, blind ambition, valor, and victory, telling of one of the great adventures of mankind.

• What are we doing in Africa? And what is China doing there?
• Jared Huffman represents me.

Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era

China girds for defense against infiltration by Western ideas. And Wang Huning leads the way.

The current Chinese Communist Party congress prompts us to take stock of where we are in our relations with China and where China is going. The major theme is of course conservativism. Xi Jinping remains at the helm, and may stay there for several cycles to come. The party remains uniquely in control, using all elements of new and old technologies to "guide" Chinese culture and maintain power. And increasingly is trying to shape the international environment to abet its internal controls and maybe spread its system abroad.

It is worth recounting the fourteen points of Xi Jinping thought in detail, as stated on the Wiki page:

• Ensuring Communist Party of China leadership over all forms of work in China.
• The Communist Party of China should take a people-centric approach for the public interest.
• The continuation of "comprehensive deepening of reforms".
• Adopting new science-based ideas for "innovative, coordinated, green, open and shared development".
• Following "socialism with Chinese characteristics" with "people as the masters of the country".
• Governing China with the Rule of Law.
• "Practice socialist core values", including Marxism-Leninism and socialism with Chinese characteristics.
• "Improving people's livelihood and well-being is the primary goal of development".
• Coexist well with nature with "energy conservation and environmental protection" policies and "contribute to global ecological safety".
• Strengthen the national security of China.
• The Communist Party of China should have "absolute leadership over" China's People's Liberation Army.
• Promoting the one country, two systems system for Hong Kong and Macau with a future of "complete national reunification" and to follow the One-China principle and 1992 Consensus for Taiwan.
• Establish a common destiny between the Chinese people and other peoples around the world with a "peaceful international environment".
• Improve party discipline in the Communist Party of China.

The casual reader will note that Communist party dominance and retention of control is the subject of roughly four or five of these points, depending on interpretation. One can sense that control is absolutely the central obsession and fear of party. And no wonder- there are plenty of structural and historical reasons.

China has had a tumultuous history from earliest recorded times, cycling between centralization and dissolution and civil war. The golden periods were always ones of stability, while the worst were times of anarchy, banditry, decline. Then there were the colonial humiliations, from the opium wars to Japanese occupation. Whether one adds in the disastrous legacy of Marxism- which also came from the West- into the mix, is a matter of taste. As noted above, the current CCP still gives lip service to Marxism-Leninism (though pointedly not to Maoism!).

In the more current era, the West promotes free trade, human rights, and democracy as a way to contest the power and ideology of the CCP. Each have their ulterior aspects, certainly in relation to China. Human rights and democracy are obviously direct attacks on the very core values of the CCP. Free trade might seem like a no-brainer and objectively desirable. But in reality, it cements the advantages of highly developed countries, since less developed countries can never gain an advantage in high technology if their only advantage is low labor cost and poor education & other infrastructure. Therefore, China has had to protect itself from the onslaught of the West, economically, politically, and socially.

This is the basic theme of the CCP ideology, driven particularly by Wang Huning, a social scientist. academic, and now politbureau member and close advisor of Xi Jinping. Huning has been a close advisor to the last three leaders of China, and evidently a major architect of their signature mottos, "The Three Represents", "The Chinese Dream", and now "Xi Jinping thought ...". He is a close student of the US, and appears generally to be the "vision guy" for the Chinese leadership. (Maybe even the brains behind the operation, if one wants to be hyperbolic.) While Huning in his earliest writings advocated for the democratic development of China, in line with general development of a modern, mature state, and with models such as Japan, that has all been deferred and subsumed under the more immediate needs of the party. His public writing ceased after he joined the central government. 

The biggest and most traumatic historical shock guiding the CCP today was undoubtedly the collapse of the Soviet Union. (As it guides Putin as well.) Before everyone's eyes, the siren song of the West, of capitalism, and of "freedom" (particularly the freedom to be nationalist) captured the populace, and destroyed the Soviet state from within, resulting in a gangster Russia that has only painfully re-established its strength and order, turning back into an authoritarian (and nationalist) state and a colleague of China on the anti-Western world stage. 

The Chinese Communist Party avoided all that through its merciless grip on power. It never let its eye stray from the ball, or softened it heart towards its dissidents and malcontents. It patiently experimented with a mixed capitalist / one party rule system, which has turned out (so far) to be highly successful. It availed itself of all available technology and capitalist methods from the West to develop its economy at a pell-mell rate, learning especially from its fellow-tigers, Singapore, Taiwan, Japan, Hong Kong, and South Korea. However, it continues to (rightly) fear the siren songs of freedom, democracy, etc. as core threats. It conveniently uses psychological projection to blame the West for all these attractive ideas, which in truth are not exclusively Western at all, but are dreams that Chinese people have as well. (See Hong Kong, see Singapore, see Taiwan) So the ideology and the propaganda follows the age-old script of justifying a bloated, intrusive, and often very cruel state by casting the blame for dissent on outsiders.

That's a big TV screen.

The CCP has also been highly effective in many areas. It obviously keeps tabs on everyone with not just surveillance, but with social surveys and party members at the grass roots, and even allows limited local protests, so that it has a feeling for what the people want, despite a lack of formal democracy. It has engineered a miracle of infrastructure, trains, and housing. Indeed, there is an overhang of construction that it is slowly winding down, in the current real estate crunch. It has protected its population comprehensively from Covid, surely saving millions of lives, even as it imposes stark, and likely not sustainable, costs. It has recognized the dangers of bitcoin and shut down the cryptocurrencies in comprehensive fashion- something we might learn from. And it is leading the way in solar manufacturing and installation, even while its use of coal remains catastrophic. It continually identifies and fights corruption in its own ranks, recognizing that a one-party state is an invitation to rot and sclerosis.

But the fundamental conundrum remains- how to justify and strengthen a one-party state in the midst of the rising well-being, education and sophistication of its own population. The other tigers, including even Singapore, all began with strongly authoritarian systems that each evolved, in parallel with their economic development, into more or less free democracies today. While one can sympathize with the CCP's desire to avoid the chaos of the Soviet Union's demise, the now more cogent and relevant models of political evolution in the local region are far more positive stories, which the CCP seems to pointedly, and lamentably, ignore. 

Indeed, China appears to be heading in a different direction, a bit more like that of North Korea. Their wolf warrior diplomacy is given to vitriolic statements and bullying, now showcased over Taiwan. Their internal propaganda is increasingly nationalistic and strident, following the Xi Jinping thought's guidelines of shaping the cultural values of China to be more cohesive and disciplined. (Covid hasn't helped, either.) It is increasingly intolerant of diversity, as shown against minority ethnic groups, which are being wiped out in systematic terms. For example, the government offers generous subsidies to minority members who marry Han ethnic partners, and drives the same policy by locking up large numbers of Uyghur men for re-education. China's ideological leaders are groping for CCP-friendly "values" that can effectively block what they view as foreign viruses, but which are, in point of fact, endogenous and natural to the human condition.

Under Xi and Wang Hunting, the party is still searching for those elusive "socialist core values" that are uniquely Chinese, not Western, not from the backward (and somewhat feudal) countryside, and supportive of the Communist party. But all they have come up with are greed/capitalism, nationalism, an obsession with stability, and a new personality cult. 

While I can not foretell the future, this does not seem like a good way to go. In foreign policy, one can measure success by how friendly the neighboring countries are- in this case to China, and to the US. There are areas of the world where very peaceful relations exist, such as across the EU, and between the US and its neighbors. That does not seem to be the case in the South China Sea. The constant drumbeat of threats and bullying by China, against Taiwan in particular, but others as well, various territorial disputes, and a enormous military building spree have put everyone very much on edge, and not on friendly terms. This is a fundamental problem for China, and for the rest of us if they bull their way into a world war.

Domestically, it is quite possible for the repressive system to continue indefinitely, given its continuing determination and often very intelligent management, always on guard against the heresies of freedom and goodwill. But that would be giving up an important future path. The Chinese culture would have greater growth prospects, and greater beneficial consequences at home and abroad, if it opened up and tolerated greater pluralism. Its economic dynamism is up till now built on foreign technology, and its ability to innovate and operate truly in the vanguard of world development depends on some significant degree of political and social dynamism as well, not on Big-Brotherism. 

So I see a future where inevitably, the CCP will have to experiment with grass-roots democracy in order to resolve its fundamental value and motivation conflicts as growth slows and China becomes a wealthier country. These will be frought and dangerous experiments. But in time, there is a chance that they will lead to the same kinds of opening that other Asian countries have experienced so successfully, with the gradual development of another party, and a more humane and less paranoid culture. Conversely, insistence on repression tends to spiral into a need for additional repression, with corresponding chances for a dramatic crackup that might produce another one of the grand cycles of Chinese history.

• Another review, focusing on Xi Jinping.
• On the dangers of private schools.
• Critique of the Nobel prize in economics.
• Religion and the nuttery.

Some Theological Aspects of Modern Economics

Economics remains in a difficult intersection between science and humanities, with distinctly political and ideological conflicts.

We seem to be in a passion play about inflation right now. It is skyrocketing, or zooming, etc. It is a huge crisis. But, since it is measured year-over-year, maybe it is just a simple bounce from the depths of the pandemic when demand and prices, especially for gasoline, were negligible, and some businesses shut down. Now demand is back, but some sectors of the economy are having a hard time meeting demand, especially for workers, so prices are going up, by modest amounts. Some stories say that "inflation is never temporary". Others say the structural dislocations will pass and things will get back to normal. One can tell the ideology quite clearly from the story line. Conservatives have double motives to paint it a crisis, to disparage the current president (tax cuts had nothing whatsoever to do with this!), to support the preservation of capital and capitalists, and to generally box in policy makers from spending money on truly momentous objectives, like addressing climate change.

Why is this such a drama? Why isn't economics more of a science? In real sciences, you do not see competing schools of thought, such as the Chicago and the Keynesian schools of economics, the New Keynsians and the Modern Monetary Theorists, which last for decades and never seem to resolve their warfare. Maybe that is because real sciences don't study anything important. But more likely, real sciences have methods to efficiently describe and resolve their differences- with reference to reality- that economists do not seem to have. For in the macroeconomics realm, there is not a lot of experimentation that one can do. It is a field more like history, from which scholars and observers tend to draw the lessons they want to draw, not the ones that would serve them best. Or theology, whose subject is wholly illusory, such that its practitioners are not really in the business of studying anything observable at all, (or even discernible!), but in social management- how to build ideologies and propagandize with effective rhetoric, how to build churches, how to sermonize, whom to target in their weaker moments, what and whom to value, which social hierarchy to support, and how to do so.

Economics is far from illusory, and plenty of economists do the truly scientific work of describing the economy as it is, giving us the grist of statistics from which the theorists can spin their opinions. It is at the policy and macro level where things get theological, where moral and ideological commitments outweigh technocratic sense. For economics at the policy level is fundamentally Darwinian- how one wants to split the pie depends on who you think is worthy- morally and operationally. Economics is not intrisically democratic- far from. There are some who are worth more to the system, depending on one's standpoint. The Ricardians (with the Chicago school carrying on its supply-side banner) deemed production and producers the only important parts of the mechanism. Demand would take care of itself as long as producers were given maximum latitude to conduct business and trade as they wished. As the ideological cycle turned, entrepreneurs were once again the vanguard and watchword in the eighties and nineties. 

When it comes to inflation, similarly vast ideological forces are at work. The progressive Kenyesian policy environment of the 1960's was eroded, then eviscerated by Milton Friedman's and the Chicago school's general neo-Ricardian attacks during the 1970's, in our period of stagflation. It was genuinely destructive to experience inflation at relatively high levels, and the solution ended up being deep recessions ultimately authored by Jimmy Carter via his appointment of Paul Volker. The power of workers to bid for higher pay and inflation-protected pay was destroyed by de-unionization, outsourcing and off-shoring. Those forces largely remain today, suggesting that the current inflation blip will be transitory. 

Inflation is measured in consumer prices, so it largely reflects low-end wages that are spent most readily, rather than the stock market or other places where the rich invest. As long as wages are kept down, then inflation will be kept down as well. The big question is how the economy splits the pie- between wages at the low and middle levels, versus returns on capital / wealth and executive pay. This balance has been heavily out of kilter over the last few decades. This may have been great for keeping inflation down, but has obviously had highly corrosive effects on much else, from the opioid epidemic, to our great dependence on China for goods and supply chains, and our political breakdowns. So economics is not just about the economy, but about a great deal more- who we value and what vision we have for the future.

Keynes in his magnum opus had some wry comments on this phenomenon, in 1936:

"The completeness of the Ricardian victory is something of a curiosity and a mystery. It must have been due to a complex of suitabilities in the doctrine to the environment into which it was projected. That it reached conclusions quite different from what the ordinary uninstructed person would expect, added, I suppose, to its intellectual prestige. That its teaching, translated into practice, was austere and often unpalatable, lent it virtue. That it was adapted to carry a vast and consistent logical superstructure, gave it beauty. That it could explain much social injustice and apparent cruelty as an inevitable incident to the scheme of progress, and the attempt to change such things as likely on the whole to do more harm than good, commanded it to authority. That it afforded a measure of justification to the free activities of the individual capitalist attracted to it the support of the dominant social force behind authority."- John Maynard Keynes, The General Theory of Employment, Interest, and Money

• Resisting the lies is harder than you think.
• Sustainability is the big issue, and our politics are too small to address it.
• Democracy is hanging by a thread.
• And each side seems to think it is saving democracy, apparently. Though only one side does so undemocratically.
• Of course.. Republicans dedicated to state destruction will support crypto.

Eugenics is All the Rage

Animal breeders have no qualms directing intensive systems of artificial selection.

Eugenics is defined with reference to humans, as any consideration or implementation of artificial selection. There is little doubt that it would be effective, but there is some disagreement about what an "improvement" would represent. We are not cattle to be bred to specification, but organisms with dignity and freedom- specifically freedom from meddling by others in our reproduction. Wild animals have this freedom as well, by default. But domestic animals- that is a different story. For all our "humane" societies and pampering of some, our treatment of others is distinctly undignified. And that includes their breeding. 

Across the domestic animals, from racing horses and show dogs to dairy cows and chickens, breeding these days is carried on at unprecedented intensity, with the most advanced scientific and statistical techniques. For farm animals, this has led to inbreeding and alarming malformations, such as chickens that can't walk, and cows with chronic udder infections. For dogs, the creation of fundamentally malformed breeds also leads to chronic suffering, (short snouts, short legs), as does lack of care in breeding for temperamental health.

These animals have serious problems, of a genetic nature.

Animal breeding has progressed through three major stages. First is the traditional approach, using hunches and personal judgements- using the best animals, and perhaps cross-breeding with animals from other farms to retain diversity, if any directed breeding is done at all. With a relaxed approach, this led to generally good results, establishing the great dog breeds and other livestock, where hardiness and health were always prominent values. But in pigeon, cat, dog, and other casual breeding since Victorian times, amateur breeding like this can also go rather astray. 

In modern livestock breeding, this was superseded by the use of Estimated Breeding Value, or EBV, which is a systematized way to account for the genetic, rather than phenotypic trait quality in animals, by accounting for their relatives, as far as they have been measured, and also by accounting for uncertainties around heritability and systematic and environmental effects on the trait of interest. This concept puts breeding on a far more scientific basis, with quantification of traits, and of pedigrees. One result is that the breeding value can be estimated for animals who do not even have the trait, such as male dairy cattle. Another has been that animal breeding has been even more relentlessly driven to meet commercial and consumer objectives, even ones that shift over time as tastes change.

Naturally, the EBV method has now been supplemented by DNA-based evaluations in more recent times. The ability to "see" into the genome by sequencing some or all of it, thereby establishing a landmark map based on variants distributed throughout, allows the traits (if linked to such landmarks) to be tracked in all individuals, regardless of phenotype, and even in individual gametes and fetuses. This dramatically reduces the lottery that otherwise is genetics. However, its value is significantly bounded by the fact that most interesting and desirable traits are usually not genetically simple (like, say, eye color), but are complex, influenced in very small amounts by many different loci / genes. 

This is a frontier for animal rights and humane policy development, that animals not only should be treated well, but bred well. In livestock breeding, European countries have some relatively aspirational standards and laws, the US lacks even that. The "standards" used by such organizations are the American Kennel Club are worse than nothing, as they drive breeding for looks alone, and welcome the most obscure and unhealthy breeds, regardless of grave malformations, temperamental disasters, and inbreeding. While health of the animal needs to be paramount, other issues such as the ability of animals to live without special care and infrastructure, and genetic diversity, also need to be addressed, if we are going to be serious stewards of animals in our care.

• Our inert politics.
• The sleaze never let up.

Cooking With Solar

Who knew cooking with energy from the sun would be so difficult?

Cooking with rays from the sun- what could be more delightful, or more efficient? The same rays that warm the skin can heat food as well- one merely needs to concentrate the heat a few fold. Well, doing so is remarkably difficult to do in practical terms. Not only do you need to concentrate the sun's heat, but then you have to preserve the heat you collect, without blocking out the light with all that insulation. This can be quite a trick. Thermostatic control? You must be joking- none of the currently sold or proffered DIY projects incorporate such an extravangance. The current state of play is a slightly demented world of youtube videos, fly-by-night companies, and charitable efforts pointed at developing regions. But rest assured, it can be done.

Naturally, the most significant drawback is that the sun doesn't shine all the time, confining solar cooking to mid-day times, and sunny conditions. Several kinds of cookers have been developed, each with individual drawbacks and features. 

• Parabolic stove
• Vacuum tube oven
• Closed box oven
• Open panel oven

First off, the parabolic solution puts the premium on power. While the other cookers are akin to ovens, this one is more like a range / stove. It gets extremely hot and cooks in a hurry. The concentrated light from the sun needs, however, to be constantly tracked and aimed at the pan on the burner. Yet it is an invisible flame, presenting some difficulty. It can burn a finger or blind you in an instant. One company developed a reasonably practical design, complete with glowing video. But then it promptly shut down and disappeared, I assume due to the daunting legal liability implied in selling such an appliance. These cookers remain very much a DIY, and at your own risk, proposition.

A parabolic cooker- adjust often, and use with care!

Second are vacuum tube ovens, which are basically thermos bottles with sun-facing inputs. These have outstanding insulation, so they capture the radiation coming in very effectively, storing it as heat. They can be used in cloudy conditions and maybe in non-mid-day conditions. The downside is that the thermos structure limits capacity for food, and also hides it from view. These also come in water-heating versions, filling a core camping and emergency need.

A vacuum tube style of oven. This one has quite high capacity. The central thermos provides extremely effective insulation, collecting every bit of the insolation.

Third are closed-box ovens, which are perhaps the most widely used form of solar cooking. Given enough insulation and a well-sealed glass top, you can make a reasonably practical oven out of cardboard boxes, wood, or metal, which get up to 350 degrees °F. This is a slow kind of cooker, perhaps more like a crockpot than an oven, taking quite a bit of time to heat up. They are not so sensitive to light direction, so can be left out for lazy afternoon and will still work. This is an amazingly active area of DIY activity, with endless variations. One of the most impressive I have seen is a sleek, low oven build of glass and wood, meant to stay outside full time.

 A commercially made box oven, with glass top and room for one or two pots.

A DIY version of a box oven, with clean lines and very high capacity.

Lastly, a more portable version of a solar oven is an open panel oven, where a set of foldable or collapsable reflective panels surround the pot, without much other structure. These are maximally simple, and aimed at camping and other portable needs. But they need something extra to hold in the heat around the pot, which may be a plastic oven bag, or a pair of glass bowls that go around the black pot inside. When properly protected, set up, and with large enough collectors, these can get to 300 degrees and work well cooking stews, rice, etc. These enjoy a wide variety of DIY efforts and styles as well, and one of the best is offered by a maker in Southern California.

A panel cooker being used on the go. Note the glass bowl holding the central pot.

Those are the current types, each with its pluses and minuses. Once one considers solar cooking, it is natural to want to deploy it to those who really need it- the rural and poor around the world, who have lots of sun, and not many other resources. The scourge of traditional cooking fuels in these areas is particularly alarming, usually being wood, coal, or dung, which lead to deforestation, climate change, land depletion, and copious pollution, both indoor and outdoor. Thus solar cooking becomes another sort of colonial dream foisted on the less fortunate, who have not set up proper infrastructure to pillage the earth and pollute the atmosphere. But the various impracticalities of solar cooking, including inconvenient timing, outdoor location, low capacity, slow speed, unusual, non-local, and fragile materials, have doomed such efforts to marginal effectiveness. Maybe some further leap in the technology, like incorporating a heat storage mechanism (rocks?) might solve some of these problems. It is amazing, really, how convenient the stored /reduced forms of carbon (in biomass and fossil fuels) are for our needs, and how hard they are to replace.

• Shades of WW2: All Russia wants is a little elbow room.
• The gravitational wave observatories are running, and recording the death spirals of black holes.
• The next presidential election could start a civil war.
• Carbon tax, now.
• Good sleep, good life.

What Would be an Effective Carbon Tax?

Carbon taxes could be effective if they are high enough. None are high enough now.

Look around, and you are struck by the myriad ways we use and waste fossil fuels. Live pigs are shipped by the airplane load from the US to China. Wildfires caused by global warming are fought with tanker airplanes. Plastic shopping bags by the trillion are churned out for single use followed by permanent entombment. Back-country hikers rely on helicopter rescues to get them out of jams. And of course we burn them with abandon for transport, heat, and electricity. Fossil fuels are far too cheap- from merely an efficient use perspective, quite apart from their disastrous role in climate heating, other forms of pollution, and overall sustainability.

The last decade has seen astonishing progress in renewable energy technologies, bringing them to par price with fossil fuels or even cheaper. But this price relationship is misleading, since it only reflects the low-hanging fruit of adding sporadic power to a grid that runs largely on fossil fuels with highly flexible dispatch characteristics. Making progress to a fully renewable and stable grid, and extending this to transportation, industrial processes, and chemicals will take vastly more work, including technologies not yet in hand.

We have such a long way to go to decarbonize.

The most  effective way to do this is to price the vice: price CO2 emissions. A uniform price will reach all the uses of fossil fuels, (I would add biomass as well, which generate CO2 emissions just the same), and harness the same capitalist motivation that has spent decades thoughtlessly expanding their destructive use. Government regulation can do a great deal, and is gradually driving coal to oblivion. But it will not be enough to drive the more complete transition that is needed, especially at the speed required. Climate heating is already rampant and highly destructive. 2040 is a mere 18 years away- nothing in infrastructure terms, and not much more in transport vehicle lifetimes. Natural gas remains the fuel of choice across the electric grid, residential, and industrial applications. Within twenty years, it needs to be demoted to minor status.

So what would be an effective carbon tax? One can take the baseline to be the carbon cap and trade system instituted by California, which ends up as an auction price for carbon emission credits. This is a very light tax with lots of exceptions, which has had a commensurately light effect. The price currently stands at ~$23 per ton of CO2 emitted. This is equivalent to about 22 cents per gallon of gasoline. This is not going to change many people's behavior, obviously. At ten percent or less of the retail price, this scale of tax is not going to drive a transition to electric vehicles. Overall in California, this tax brings in roughly a billion to two billion dollars per year, and is thought to be having a beneficial effect, but only as a fractional part of a much broader portfolio of regulations and policies.

In Sweden, the carbon tax is over $130 per ton. This is more significant, on the order of a dollar per gallon of gasoline. Again, there are so many exceptions, especially for heavy industry, that it touches only forty percent of emissions. Overall, it has caused only an eleven percent reduction in transport carbon emissions. Europeans pay much higher prices for motor fuels to start with, for many reasons beyond the carbon tax, so the relative effect of even such a larger tax is small. Europeans already use gasoline at a rate roughly one fifth that of the US, so are already very thrifty. We can expect in the US to have much greater elasticity to higher fuel prices, assuming a bit of political maturity instead of whining about our god-given right to cheap gasoline. 

At the same time, unless alternative fuels, forms of transport, or social behaviors appear, especially in the truck and other heavy vehicle segments, this kind of tax would still have limited effect and serious economic costs. So the modeler and prognosticator has to wonder where the response to carbon taxes will come from. The pandemic showed that we can telecommute very effectively, thereby saving prodigious amounts of fuel. Tesla has shown the way in electric vehicles- a segment that had previously been brutally decimated by GM in various bait-and-switch schemes. Hybrid technology is edging into in larger cars and transit. It will take a big price signal to switch these markets in a dramatic way. Even doubling the price of gasoline, which in the US would take a carbon tax on the order of $400 or more per ton of CO2 emitted, would only bring our fuel prices to those of Europe, which still drives, has traffic jams, and emits vast amounts of CO2 from the transport sector. Such a tax would bring in about $400 billion per year in the US, easily within the normal taxation and economic capacity of a $20 trillion economy.

Yet now there are replacement technologies, so a carbon tax will, in classic economic fashion, create change, not just disgruntlement and economic pain. It will also bring forth more replacements, while working at every margin to drive conservation. Do we need continued technology investment? Absolutely. Do we need more public policy and infrastructure investments, such as reducing give-aways to the fossil fuel industries, charging them for their many immediate as well as long-term harms, and reconfiguring electrical grids and natural gas grids? Yes. A carbon tax is an accellerant to save the biosphere from incalculable harm. Its revenue can be administered right back to citizens or into the government accounts, displacing other taxes. So its net economic effects could be minimal, even while its effects on economic reconfiguration and conservation would be strong. 

• All laws must be enforced, or what good are they?
• No wonder the internet has gone to the dogs.

Nature and the Corporation

Douglass North on the role of institutions in our society, part 1. "Understanding the process of economic change"

Institutions, in the thinking of this book and its general field of institutional economics, are the rules of the game of life, while people and their organizations are the players. The practice of going to workplaces and being forced to work there for eight hours, and then going home.. that is an institution of modern societies, based partly on unwritten traditions, and partly on explicit rules written in laws, regulations, organizational guidelines, etc.  The fabric of our lives, and particularly the efficiency and success of our economies, depend on the details and quality of institutions, which set the parameters and incentives throughout the system, which the actors then grapple with, trying to either to satisfy them in competition against other actors, or to evade them, or to alter them through legal, polical, or social means. 

For example, North cites other writers who have concluded that one of the fundamental defects of the Muslim world, as it fell behind the Northern Europeans in economic and cultural terms through the Middle Ages, was the complete lack of the cultural institution of the corporation. Muslim commercial law centers around partnerships, typically very small partnerships between an investor and a merchant, which form anew for each trade mission. But until modern times and reforms inspired by the West, there was no legal form for corporations, which are so fundamental to the Western economic model, providing durable legally and financially independent homes for entrepreneurial teamwork and innovation. Corporations obviously tap into natural human tribalism, offering the familiar setting of small group cohesion and competition, and helpfully cross-cutting against other cultural organizations and power centers such as actual clans, tribes, nations, and religious groupings.

This is a very powerful view of how culture and economics interact. Are corporations all good? Obviously not. They are given rules by the culture at large, though traditional practices and by legal structures when those unwritten rules prove insufficient. Child labor, fraud, tax evasion, family-destroying work schedules... the ways corporations have to make money in socially destructive ways, and thus the ways in which they need to be regulated, are endless. And it is our collective view of these harms and our capacity through social and legal structures / sanctions to address them that manifest in the strength and quality of our institutions.

And here is where one looks back in horror at what has happened to our institutional structures over the last few decades. Donald Trump was merely the apotheosis of lawlessness and institutional destruction that has been the program of the Right for decades. It was enunciated most charmingly by Ronald Reagan, (earning him high grades from historians), but he was only repeating the thoughts of intellectuals like Friedrich Hayek and Milton Friedman who made such persuasive cases for the "freedom" part of free enterprise. I recall especially the spellbinding nature of Friedman's narratives, which contrasted the sclerosis of communist economies with the vibrancy of free markets. Friedman was a hedgehog, advocating one big idea and bulldozing through any nuance or complication. And I regard him as the most influential cultural figure responsible for the general inequality and institutional weakness we find ourselves facing today.

A typical nostrum from Milton Friedman. As though "freedom" was self-explanatory and absolute. Rich people take it to mean something quite different from how others take it, and therein lies the destructive magic of this ideology. 

For he was spinning fairy tales, quite simply. The free market was always good, the government was always bad in his telling. Ham fisted regulation and intrusive economic policy were only one target of attack. Money and inflation was another, and one of the most damaging wedges of this argument. The government is necessarily in charge of the money, by printing it and managing its value through the interest rate, banking regulation, and other mechanisms. But the private sector and general economic conditions are obviously enormous factors as well, creating a complex system of feedbacks and unanticipated events. But Friedman gleefully pinned all the blame for inflation on the government, pronounced a false simplicity in his monetarist program, and used it to further bludgeon the state to get out of the regulatory business. If the government couldn't even get something as simple as the money supply right, how could it possibly have the intellectual wherewithal to regulate the internet, or corporate mergers and concentration, or industrial policy vs other countries? This was the kind of thinking that led to people buying gold, and eventually to the thought that we should get back on the gold standard, one of the greatest lunacies of right-wing politics. (Which Friedman would never have subscribed to, incidentally.)

This intellectual and rhetorical attack, so richly supported and cheered by business interests and the rich, led to the following decades of revolt by the Right against all forms of regulation and enfetterment by the government, to the point now that Republicans speak blithely of defunding the IRS, as if defunding the government and enabling vast tax avoidance consitutes the most natural and virtuous motivation that anyone could imagine. And the gross over-simplifications that Friedman engaged in, his rhetorical excesses, are reflected in more general anti-intellectual trends like the denialism and warfare waged by the right against climate change, among many other topics of urgent and common interest. He, Nobel Prize winner that he was, disastrously debased our intellectual debates on politics and economics. His narrative framing (and that of the whole Chicago school) shaped a generation and more, misleading us into false certainties and terrible policies.

Now, our institutions are in tatters, given that half of our political system is in open warfare against the very idea of productive regulation of economic affairs and a positive role for the state in managing elementary unfairnesses and corruptions that are mounting across our political and economic systems. No wonder that on the world stage, our system is no longer in the vanguard, but is faced with a fundamental challenge coming from states (principally China) whose political systems remain in the driver's seat in managing social institutions, including economic institutions of all kinds, even while harnessing markets in extremely successful ways. 

The question is not whether the government is good or bad, or whether corporations are good or bad. Both institutions have critical and positive roles to play in our prosperity. Both are tools, not ends in themselves. Both need rules to operate effectively- government to be refreshed (via elections, education, research, and new talent) by ever-expanding public perspectives on how society can be improved, and business by an active set of institutions and rules set down by the government to channel all that greed to productive directions instead of the socially destructive directions it inevitably takes when rules are absent. (See Haiti, post-war Iraq, and Afghanistan for examples.) Indeed, it is not going out on a limb to state that business people who spend their time railing against regulations, legal strictures and other institutions designed to make economic markets fair, socially responsible, and productive are not really interested in business at all, but in plunder.

"Because there is a widespread prejudice among many neo-classical economists that simply an absence of government intervention is a sufficient condition for good economic performance in a particular market, it is important to stress that the performance characteristics of any market are a function of the set of constraints imposed by institutions (formal rules- including those by government- informal norms, and the enforcement characteristics) that determine the incentive structure in that market. As noted in the discussion of institutional change in chapter 5, if the incentives reward piracy then that will be the outcome. Any economist who doubts the importance of this observation has only to examine the characteristics of various factor and product markets in Russia in the 1990s to be convinced that it is the incentive structure derived from the institutional framework that is decisive. The rash of entrepreneurial malfeasance in large U.S. corporations in 2001-2 has reflected the evolution of the institutional framework that has altered relative prices to provide incentives for such anti-social behavior."  p.77

 

• Notes on China's economic trajectory. Institutions will be the main determinant.
• Vaccines? Schmaxines!
• Democrats- and the planet- have a problem in coal country.
• What is it with Republicans and basic health & decency?

Aisha and Ali

Women's rights and the crackup of Islam.

I am reading the highly interesting book "The Heirs of the Prophet Muhammad", by Barnaby Rogerson. It takes a docu-drama and highly hagiographical approach, yet works in a lot of facts as well. It covers one of the most dynamic and transformative periods in world history, when the newly founded religion, Islam, swept out of Medina to defeat and convert its old enemies in Mecca, then progressively the rest of the Arabian peninsula, into the Byzantine stronghold across Syria and the Near East, the Persian empire, and lastly The Byzantine rump state of Egypt and points west. Let no one mistake Islam for a religion of peace. 

Muhammad left no succession plan, and wise heads got together in turn to appoint the first three successors to lead the community, Abu Bakr, Omar, and Uthman. These were each, in their own way, strong and very effective leaders, just the fortune that Islam needed to press its jihad against each of the neighboring empires. Riches started to flow into Medina, and by Uthman's reign, religious restrictions were eased, wealth spread, slaves and concubines proliferated, and an enormous baby boom occurred in the desert. But Uthman had planted the seeds of destruction, by appointing only his relatives to run the provinces- the Umayyads.

Uthman's reign reeked of nepotism, and he ended up assassinated in a revolt by disgruntled provincials, who took up the standard of Ali. Ali was one of Muhammad's earliest and closest converts, a son in law, war hero, and in personal and thelogical terms, an obvious choice as successor (or Caliph). Ali was acclaimed as Caliph right after the assassination, thus gaining the immediate enmity of all the Umayyads. And there were other problems, which had clearly led the earlier meetings of the companions of the prophet to choose other successors. First, Ali was not an effective leader. A true believer, yes, but starry-eyed, unrealistic, and unskilled in the tribal politics that underlay the new empire and faith. 

Aisha, on her camel, directing the battle against Ali, near  Basra. Turkish depiction, 16th century.

Second, Aisha loathed him. Betrothed to Muhammad at age 6, married at 9, Aisha was his favorite wife, of a stable that grew eventually to 12. Aisha remains a sort of Mary figure in Islam, and was granted a higher pension than any other figure after Muhammad's death, in recognition of her special position. She had once gotten into hot water after being left behind by a caravan, and was brought back to camp by a handsome soldier the next day. Tongues wagged, and eventually the gossip got so bad that Muhammad conjured a revelation from god absolving Aisha of any blame, and bringing heavy punishments on her accusers. What was Ali's role in all this? He had casually advised Muhammad that wives were cheap, and he should just divorce the inconvenient Aisha and be done with it. 

Now, when Ali needed help in his new role as Caliph, Aisha remembered, and whipped up a couple of Muhammad's companions into opposition, and led them personally across the desert to Basra, and into battle with Ali, the battle of the camel, which camel was Aisha's command post. Aisha lost, was personally wounded, and went into a life of retirement in Medina under Ali's protection, helping compile hidiths, providing recollections of the old days, and running a school for women. But the war against Ali went on from this fateful spark, and he gradually lost support to the wilier Umayyads. Thus, Aisha stands as a pivotal figure in Islam and world history, responsible in part for the disastrous Sunni-Shia split, but also a clear standard bearer for women's rights within the world of Islam, an aspect that has clearly been in occultation for some time, especially in what are ironically regarded as the more fundamentalist precincts of the faith.

• Strength and terrorism.
• Lies are a feature, not a bug, of sociopathy.
• We have not been serious about contact tracing in the US.
• Darwin- on target again.
• As if shipping weren't bad enough.

Where Does Surplus Value / Profit Come From in Capitalism?

Marxists say it is stolen from the worker. Capitalists say it comes from risk-taking and managerial work. Who is really doing the work?

One of the pillars of Marxism is that capitalists steal labor from workers. All profits come from excess labor done by workers by the sweat of their brow, which capitalists, through various nafarious means, appropriate for themselves. The workday, for instance, is an artificial construct. What if all the necessary work could be done in three hours? Well, the labor agreement means that the employer has the right to eight. Therefore, employers extract as much value as possible from that time regardless was really needed to fulfill the actual job- value that ends up as profit in the pockets of owners, who do no work at all.

On the opposite side, Chicago school economists hold to a theory of marginal value, where every factor in production is fairly paid for its individual contribution, through the magic of the various markets- commodity, labor, financial, etc.- that they come from. Each of these markets is assumed to be efficient, thus rendering each input to production fairly bid for its contribution, and leading also to a dynamic re-ordering of production systems when conditions change, such as when some inputs become scarce (and their price goes up), or new technologies expand the availability of other inputs, like, say, computation power.

It should be obvious that each of these theories is a fairy tale, (a panglossian one in the neoclassical case), heavily motivated by ideology, while carrying grains of truth. Labor markets are not efficient at all, and businesses work night and day to keep them that way. At the same time, businesses capture profits from countless other streams than the exploited labor of their workers. And in fact, the whole purpose of business is to exploit miss-priced market opportunities- otherwise profit could not exist.

A recent pair of posts on Bill Mitchell's blog delved into the Cambridge controversy- an economist's spat of the early 1960's which was formative in left-wing economics. Many tangential issues came up, such as whether economic growth is more demand-limited or supply limited. But it also dealt with issues of the value of capital, the source of profits, and the accuracy of marginal value theory. To summarize rather brutally, left-wing economists from Cambridge, England argued that business profits were not market-based, but based on social and power relations, cultural tradition, and many other factors besides the markets. Economists from Cambridge, Massachusetts (MIT) argued a classical theory that profits were based in marginal theory on all the market ingredients, and particularly could be approximated by the current interest rate, representing the default alternative to business investment- that is, the marginal value of capital.

The result of the controversy was that the British school successfully pointed out some flaws in the American analysis, which the Americans admitted, to the effect that the general profit rate does not always follow capital intensity, and nor does the individual firm's investment schedule necessarily follow the logic of interest rate-driven margins either. From this molehill, the left made a triumphant mountain, while the mainstream regarded it as a minor hiccup from their ever-more baroque modeling of perfect markets and ideal economies.

Joan Robinson, principal proponent of the Cambridge England end of the Cambridge controversies.

All that said, it is worth being more specific about where profit comes from, and here I confess to going off the reservation of economic convention. While stealing extra labor is surely one of the time-honored methods of making a profit, it is far from the only way. Indeed, businesses can be seen as miners, always on the hunt for those special gems in the environment that cost less than they should, or can be sold for more than they cost. And the opportunities of this sort are endless in variety and scale. 

• difference between supply and demand
• difference between efficient producers and inefficient
• difference between using family members and paying workers from the labor market
• difference between dumping toxic waste and disposing it properly
• difference between hiring an amoral accountant and a lawful one
• difference between buying lower grade inputs for manufacturing
• difference between lying to customers, or not
• difference between running marketing campaigns, or not
• difference between paying taxes, or not paying taxes
• difference between suing competitors successfully, or not
• difference between buying competitors or competing with them
• difference between doing research to find new technologies, or not spending that money, or stealing that technology
• difference between lobbying the government successfully to make protective laws, or not

The scope for finding  money and making profit goes far, far beyond the conventional notion of arbitrage between capital goods and interest rates. Labor is also only part of the picture. Being a typically large part of most company's costs, its treatment and mistreatment is, however, an endlessly fruitful area for losses and gains, not to mention wider social tension. Money and profit can be found under any number of rocks, which is where the mantra of a "business model" comes from. Everyone and every business has some angle by which they make a living.

Are these gems of profit fairly priced in their factor markets? Don't be ridiculous. A coal company only makes money because coal is free. The earth makes no contracts, and nor does the air for the pollution sent up by the power plant that burns the coal. Turning free things, like enslaved or cowed labor, or personal data, or natural resources, or computer power, or shady accounting, or corrupt laws, into money, is the essence of "business models". Finding a way around markets, by collusion, by substitution, by doing without, by corruption, even by clever new technologies, are a business person's top priorities. So not only are markets, when they are used, hardly "fair" in any financial or social sense, but they do not begin to address all the sources of business profit or return to capital.

We can grant that most of this work of finding profitable gems is done by the capitalist or her managerial minions, thus should be accounted to the returns of capital, not to wages stolen from workers. Only in the classical mass industrial enterprise where the raw material costs are negligible and labor is the overwhelming factor would these converge into the same thing as envisioned by Marx. (Though the modern fast food industry, and gig "economy" come to mind as well.) Some of these gems can be valued financially, and can be regarded as capital, obtained via savings and investment and even competitively priced in a marginal accounting. But many cost nothing, and characterize the pursuit of business as more than a dry exercise in accountancy or economics, but rather as a cultural mode, descended from a long tradition of opportunistic ownership / exploitation / employment of others, of technological innovation, trade, and plunder.

Not to put a fine point on it, business is about greed, and in its natural state reverts to rapine and pillage. The Vikings were consummate businessmen, converting earnings into capital- long-boats and other weapons-, which were the backbone of their centuries of pillage all over coastal Northern Europe. Today, we can see a similar process in Afghanistan. The Taliban leverages ruthless terror into power., plundering as it goes along. They can then tell everyone how to live, collect the taxes, and run their many businesses, corrupt or not. 

Whether their state is "business-friendly", their example points to the intertwined nature of state systems and business systems of exploitation. States set the rules, in the ideal case driving business from brutal mafia and gang activities, which are generally socially destructive, if not entirely zero-sum, towards level and transparent playing fields that are at least somewhat constructive, pulling their profits from the mute vaults of nature and its resources instead of from social oppression. But all this depends on the wisdom and foresight of the state. Many "business model" gems mentioned above involve skirting the law, or engaging in activities the law has not even (or yet) contemplated, to make a buck. There is a constant arms race going on, between the "innovation" of private greed, and the capacity of the state to conceptualize, measure, and legislate against new areas of long-term harm. When the business class and Republicans bleat about taxes and "freedom", they (and their pet economists) are explicitly taking one side of this conflict, the side of irresponsible regression to unregulated, irresponsible, and destructive styles of "business". 

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