Document Number 9 and the China Dream

China 4: Kevin Rudd on "Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era".

If the subhead to this post reads a little Orwellian, it should. It is the formal title of Xi Jinping's magnum opus- his leadership philosophy all about gaslighting the Chinese people and the world that ... capitalism is socialism, dictatorship is democracy, and brother Xi should lead China forever. Kevin Rudd has very impressively followed his prime ministership of Australia with graduate career studying China and Xi Jinping. This book is evidently part of his thesis work. So it is not really a popular book, but rather a more turgid close reading of all the "banner terms" of modern Chinese communism- the slogans that seem to drive Chinese politics. These slogans are deeply meaningful, but not easily parsed. It takes some expertise to know what is going on, as would be true in the US for a slogan like "Make America Great Again".

Let us dig into Xi's slogan a little. "Xi Jinping Thought" is unusual, in that only three modern leaders have had their names tied to a banner term. There have been "Theory of Three Represents", the "Great Leap Forward", even the "Two Whatevers", and many others, but only "Mao Zedong Thought" and "Deng Xioping Theory" were named for the individual leaders. And clearly, Xi has outdone them all in the length of his banner phrase! "Socialism with Chinese Characteristics" harkens back to Mao's split from the Soviets, when Chinese communism was proclaimed to be something a bit different, more peasant-based, and one might say a little emperor-based as well. This through-line in PRC political philosophy was naturally strengthened when the Soviet Union imploded, and the PRC forged its own path, discarding Marxism in favor of capitalism, which is essentially what socialism with Chinese characteristics now amounts to, economically speaking. Politically however, Leninism reigns supreme.

Lastly, "a New Era" is a highly significant statement by Xi about the phases of socialism. Deng Xiaoping posited that China would have to go through a long phase of a "Primary phase of socialism", by which he meant capitalism, which would make China rich. Once China was rich, the party could think about how to divide the pie. But it was clear that socialism, as practiced either in China or in Russia, was never going to get them to a sufficiently prosperous state to gain any of the blessings of modernity, (or to a state of power vs its international adversaries), upon which Marx had after all based his ideal state. Deng noted that this primary phase might take generations- even hundreds of years. The idea was usefully vague. But Xi has cut the time line rather drastically, stating that China has already entered a new era (phase), that his plan is for China to be a moderately prosperous country by 2035, and a country by 2050 that is "a great modern socialist country that is prosperous, strong, democratic, culturally advanced, harmonious, and beautiful". This all means that "Opening and Reform" which had led to the pell-mell (and increasingly technocratic) capitalism of the Deng and post-Deng period can be dialed back, and that the preferences of the state / party (aka Xi Jinping), including some action against inequality, can be put on the agenda again. 

So, just because it sounds Orwellian doesn't mean that there is nothing behind it. As for its content, Xi Jinping thought is a wide-ranging stew of platitudes, sharp policy reversals, and everything in between. But the central theme is putting the party (CCP) back in charge of everything again. Xi has instituted an unprecedented rolling, perpetual purge of the party from top to bottom to enforce discipline, prosecute corruption, and empower his allies. Xi recognizes that everything flows from ideology. If the ideology has become rotten, as it did in the Soviet Union, and has threatened to do in China during the wild-west capitalism of the last few decades, then faith declines, discipline declines, and the system becomes vulnerable to collapse. Thus Xi has focused on issuing a confident and sweeping ideology of how things should be run, with himself in charge of the party, the party in control of the state and country. This ideology incidentally does a great deal to rehabilitate Mao, mention Marx as often as humanly possible, and claim that it is socialism that the CCP is building in China. 

You may have noticed that the word "democracy" entered into the statement above of the "Chinese dream". While the dream is mainly about power- personally, domestically, and internationally- it is also about quality of life. (Indeed, Xi goes so far as to accuse the West of "spiritual impoverishment".) Just as the word "Republic" figures into the name of the PRC, the word democracy figures (sparingly) into this national ideology. But it is not any kind of democracy we would recognize. It is the spirit of the people as expressed in the party- a "whole-process people's democracy". In fact, Xi has quashed all nascent practices of voting and internal democracy which had been sprouting within the party over the last few decades, to go with his bulldozing of collegial decision making at the top and term limits. (However, there is a significant history of protests in modern Chinese history, up to the current time, that can happen when the political strain is sufficiently great.)

All this became especially explicit in Document number 9. Kevin Rudd draws on many writings and speeches by Xi, but this document is particularly telling, as it was leaked from an internal set of deliberations early in Xi's reign (2012). It describes the ideology not so much in the glowing terms given publicly, but in far more existential terms as critical to prevent the rot and eventual fall of the party. Discipline over everything, as well as a fighting spirit to take the battle to the enemy, which is ... Western values. Out of this arose the "Wolf Warrior" phase of Chinese diplomacy, which was a sort of Trumpy, and rather counterproductive, reset of everything the Chinese diplomatic corps had known for decades, under Deng's "Hide and Bide" policy. They would turn the tables, by the usual magic of authoritarian projection, and claim themselves as the victim of bullying by the West, for their reasonable, scientific, and ancient cultural values.

As an aside, Deng's policy made, and still makes, eminent sense. Why? Because the US had shaped an extremely benevolent environment in Asia since World War 2. Shipping routes were free and open, trade was free and open. Japan was pacified. Asian tigers one by one took advantage of this environment to climb to prosperity. The US tried, in its ham-fisted way, to fight the bullies, whether they descended from North Korea, or from North Vietnam (governments that remain extraordinarily durable and repressive). The US was happy to educate millions of Chinese students and send them back with all the modern skills they could use to build China, capitalist or otherwise. The US was less happy, but still willing, to de-industrialize if that meant getting goods from China that were cheap. The only request in return was that China abide with the peaceful regime, particularly regarding Taiwan. And there was the natural hope that Western values would indeed spread and infiltrate into modern China along with capitalism, to bring China into the Asian system of alliances and friendly trade relationships.

Obviously, that did not happen. Xi Jinping is now furiously back-peddling on the whole deal, preaching "struggle" against Western values and a China Dream that has China not only solve its internal problems, but solve those of the next international order, by quashing human rights, elections, inefficiency, privacy, and all other encumbrances on the Chinese way of governance (helpfully summarized as the Seven Don't Mentions). Most ironically, China has twisted its own resurgence under capitalism as a peculiar justification of Marxism, Leninism, and Chinese culture. Kevin Rudd paints a stark picture of the sweeping nature and evolution of Xi Jinping Thought. Under the Orwellian rubric of "win-win" diplomatic relations and a "Community of Common Destiny", China is bullying its neighbors around the South China sea, bullying the UN, and other countries around the world such as in Africa. One senses a new mission, even an exceptionalism reminiscent of American exceptionalism, but quite a bit darker. As Kevin Rudd puts it: "... now the party's wider definition and vision of social justice was available to the world at large, delivered though the alternative international system that China was now building. For Xi, this will be China's 'city on a hill'".

One needn't deny the great accomplishments of China, in adopting capitalism to pull itself out of poverty, in establishing a technocracy that can build a remarkable high speed rail system and run it on time. And in keeping its government stable and attentive to its people's needs amidst great change internally and abroad. But the idea that Chinese governance by the CCP is a model for the future of the entire world does give one pause. Its foreign policy has not made it many friends. Its only true partners on the world stage are Russia and North Korea. For all its rhetorical dedication to non-interference in the internal affairs of other countries, and to their territorial integrity, it has allied itself not with Ukraine, which is being invaded, but with Russia, which is invading. (Of course, the fact that Donald Trump, contrary to the wishes of the US population and its Congress, has allied himself with Russia as well- and has not been impeached over it- doesn't speak very highly of our own values at the moment.) China's model is not attractive to people across the world, though it is very attractive to authoritarians of all stripes, who wish to rule their people without their consent and in perpetuity. China's trade practices are also costing it influence, as it progresses up the value chain and floods the world with products that other countries want to retain viable industries in, such as auto production.

There is a long history of influence-shaping in CCP practice, some of which is straight propaganda, but part of which goes by "United Front Work", going back to the very founding of the party. It involves infiltrating other organizations and gaining power in them, co-opting friendly segments of enemy organizations and countries, such as in Taiwan, and generally presenting as anodyne a face as possible in order to gain acquiescence before revealing one's true intentions. Previously, the scope was narrow, targeting groups such as the Kuomintang, the leaders of Tibet and Xinjiang. But now, the targets are the UN, other international organizations, countries of the global South, and a blizzard of "friendly" initiatives, including Belt and Road, and the Global Security,  Global Development, and Global Civilization (!) initiatives. It is nothing if not audacious. But as noted above, the effort is not gaining much purchase, since it is fundamentally unattractive, at least on a popular level. And Xi Jinping's wolf warrior approach hasn't helped either. Internally, Xi's Leninist retrenchment is degrading China's economic prospects and trading cultural vibrance for rigid discipline and adherence to "the mass line". Abroad, the dividends of Xi's rule have clearly been conflict rather than harmony, and propaganda only goes so far in a world that still (as yet) values truth, empathy, and harmony. 

I will close with a summary by Kevin Rudd: "By contrast, Xi Jinping saw this potential political future for China and did not like what he saw. He understood what his predecessors were seeking to do by leaving the democratic door open for the next generation and decided instead to slam it tightly shut. Xi, as an intelligent man, also understood the costs of doing so. But he saw these social economic, and international reputational costs as well worth paying to preserve the power of the CCP for the long term. ... For him, the cost-benefit analysis of preserving China's Marxist-Leninist nationalist model was self-evident." "In Xi's belief system, the absolute power of a Leninist party remains axiomatic to the survival, strength, and success of both the party and the nation."

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At the Birth of Chinese Communism

China 2: Review of the autobiography of Chang Kuo-t'ao

Before the Chinese Communism was overtaken by Mao, and then the cult of Mao, it was an idealistic glimmer, and stepchild to the world-wide revolution fostered by Soviet Russia. It was founded by students disgusted with the weakness of Qing China and inspired, as were so many others, by the supposedly progressive, modernizing, and anti-imperialistic movement communism was taken to be at this time. Chang Kuo-t'ao (now translated as Zhang Guotao) was generally second-in-command of the Chinese Communist party from its founding through the first united front with the Kuomintang, until differences with Mao forced him out. Ultimately he settled in Canada, and wrote what I have to say is a scintillating memoir of those early days, rich in detail and well-written. He even translated it into English largely himself. He was clearly a formidable intellect, having risen to prominence originally as one of the main student leaders of the May 4th movement. It is astonishing, really, that this significant book is out of print.

He takes it as given that the progressive causes we all hold dear- labor rights, national sovereignty for countries such as China (against colonial powers and interlopers like Japan and Britain), economic fairness, and democracy (in a manner of speaking) would be served by communism. He strives through these pages to take leadership of labor unions and labor associations, and thereby build the political capital that will lead to the worker revolution. To bind together all the oppressed workers of China- the railway workers, factory workers, the foundry workers, into the Marx-prescribed conscious worker class that takes over the state and bring the next dispensation.

But early on, he travels to Russia right after its civil war, to attend a "Toilers of the East" conference of the Comintern, (surely an inspiration for Newspeak), and it is a decidedly jarring experience. The conditions are unbelievably primitive, the people are suffering, and the hand of the state is not so benevolent. Later, during the days of the NEP, conditions improve, and Chang can look on Russia with a bit more admiration. But here, now, it is a mess. He also meets Lenin during this trip, remarking immediately on his intelligence and approachability, in contrast to most of the others he is seeing. Unfortunately, the Comintern officials sent by Russia to baby-sit the Chinese Communist Party (CCP) are a series of abrasive or scheming characters, often out more for the interests of Russia than those of China or even the CCP. But since the Comintern was providing much of their funding, it got to have a lot of say as well. 

Mao Zedong also attended the inaugural conference of the CCP, but Chang characterizes him as a country bumpkin, and this first volume of his memoir hardly mentions Mao further at all. That comes in volume 2, which this review does not cover. The major issues of the time were- how to grow the organization in the teeth of almost universal opposition by the conservative and economic elites, leading frequently to police attacks and imprisonment? This warlord epoch had a silver lining, however in its diversity- the rulers in Beijing tended to be more conservative, but those in Shanghai and Guandong were more sympathetic and lenient. The second issue was whether and how to align with the Kuomintang- the main nationalist party under Sun Yat Sen, who had been staging revolts against the Qing for decades, and was the first president (however briefly) of the Republic of China.

Chang does not say a great deal about the growth issue, except to say that he led the party's efforts to organize worker's unions and bind them into larger national associations. This led to exponential growth over the middle 1920's, where each successive year's conference would have ten-fold more participants. He has a great deal more to say about relations with the Kuomintang- the so-called united front. From Sun Yat Sen's perspective, the more the merrier. The communists were, while he was alive, a minor, activist, and intellectual element in his coalition. Critically, it was also a politically visionary and progressive element. While the Kuomintang had largely lost its political reason for existence with the fall of the Qing, and was becoming a party of everyone against Japan, the communists had a much more activist and forward-thinking political program. A program that was specifically strong enough to enforce dominance over their military efforts. No communist general ever became a rogue warlord.

On the other hand, for the communists, alliance with the Kuomintang was existential. The Russian advisors constantly urged them to formally become Kuomintang members. To mix in, and eventually become so strong as to take over the whole organization. But Chang was always opposed and reluctant. Serving two masters was no way to keep the purity of the communist faith. And one could easily foresee that the stronger the communists became, the more friction would enter into the relationship, and the more resistance would come from conservative elements of the Kuomintang, of which there were many. That is certainly how it turned out. The communists were purged twice over- once in the 1927, and again after the two parties allied during World War 2 to drive out the Japanese.

What struck me most about this whole story was the importance of a strong political program. The warlord periods and actors in Chinese history are characterized by elite competition in the baldest terms. Warlord A is based in one region and has a local base of the armies and elites of his region. warlord B has the same elsewhere. Whoever is the cannier general, or more scheming maneuverer among various corruptible officials and generals, wins the prize and claims the mandate of heaven. But suppose that one of these generals has a truly popular political program of systematically freeing the peasants of their age-old chains. That would be an entirely different proposition, and brings a whole new level of political power to bear, both internally and externally.

Comparison with the Americal Revolution is instructive. The Americans had a relatively coherent political program- freedom from the English yoke, and a dedication to doing self-goverment even better than the English, with enlightened institutions and enunciated, limited, powers. The political dominance over their military instruments was absolute. George Washington spent the whole war complaining and wheedling the Continental Congress for more of everything, but he never entertained the thought of taking over the revolution, like a prefigured Napoleon or Chiang Kai-shek. 

Conversely, the example of "our side" in Vietnam. The Southern government offered a political program of corruption, landlord-ism, anti-Buddhism, and alliance with the imperialist foreigners. That was not a winning formula!

So far, so good. But what was the nature of the communist political program? This was in the end, another imperialist import from the West, a particularly poisoned chalice. Chang writes frequently of organizing and taking control of other organizations such as unions and union federations, as though it was the most natural thing in the world. Democracy is confined, at best, to the communist central committee, which votes on various important topics. But cultivation of true democracy, mild governance, and respect for the base of their party? There isn't much of that at all. Far more attention is devoted to the propaganda department, as the modern way to generate political support. The "dictatorship of the proletariat" is never defined, never expanded into model of governance, but left as a slogan, to be wielded by the most ruthless among the communist leadership to mean alot of dictatorship and not much proletariat. 

Chang describes his own regrets as follows:

"And I, so enthusiastic then about the Communist ideal and one of the founders of the movement, who for eighteen years was to labor as a coolie in its service under terrible difficulties, could never have believed that I would have no choice but to leave this CCP after it had been poisoned by Stalin and Mao Tse-tung. 

How could there have been such fantastic developments? Readers will find the answer in the narrative that follows. Generally speaking, when a small number of people launch an armed insurrection, a revolution of force that leads to the establishment of this or that brand of revolutionary state power and practices dictatorial rule, they must eventually abandon their idealistic principles and righteous beliefs of their early period and replace them with concepts of power, treachery and plotting, terror and cruelty, etc. The Communist movement is inseparably linked with the proletarian dictatorship; and so the Communist system of dictatorship must produce such despots as Stalin and Mao Tse-tung. Saying that they poisoned the CCP is tantamount to saying that the ugly realities of dictatorship have buried the beautiful future perspective of communism. The major inherent lesson is that the CCP has suffered from the incurable disease of dictatorship."

Both the Soviet Union and China, as communist dictatorships, also ended up wielding an imperialist sword over their near-abroad, imposing immense suffering on subject peoples and ethnic groups. A deep irony for movements that were fundamentally anti-imperialist in their origins and rhetoric. Chang was clearly caught up in the intellectual currents and enthusiasms of his day, which to us seem almost inexplicable, and do not compare well with better eras of the enlightenment.

An Alternative Vision of China, Past and Future

An appreciation of Chen Jiongming.

China has had a tumultuous and sad history over the last couple of centuries. There was humiliation at the hands of colonial powers, then partial occupation by Japan, followed by Communist revolution, civil war, famine, cultural revolution, and finally its re-adoption of capitalism and rise to immense commercial power, under an autocratic political system. One ray of hope was the first republic, founded in 1912 as the Qing dynasty was overthrown. This was inspired by and initially run by Sun Yat Sen, though he soon bowed out in favor of the warlord Yuan Shikai. Sadly, this republic was just a brief phase in a larger warlord period where competing armies all over China tried to out-maneuver the others. Ultimately, Sun Yat Sen's "nationalist" movement came back to power after his death in 1926 under the leadership of Chiang Kai-shek, who turned out to be little more than another warlord after jettisoning the major principle of democracy from the "Nationalist" platform. 

Well, one leader during this time who paid a bit more attention to the political foundations of China's future was Chen Jiongming. He was part of the great student movement of progressive ideas in the early 1900's, exemplified by the May Fourth movement, the massive student-led revulsion at the sell-outs of China's interests by the Versailles treaty ending World War 1. He was elected to the Guangdong provincial assembly in 1909, and after one abortive attempt at revolution in service to the coming republic, was elected commander of and army based in Hong Kong and aimed to taking over Guangdong province. This he finally did successfully in late 1911. He eventually became the local governor, where he led a brilliant administration devoted to restoring the peace, building the economy, and putting progressive ideals into practice, such as women's political rights. 

After several reverses, particularly after Yuan Shikai clarified his intention to become emperor, Chen was put at the head of another army, which gained control over southern Fujian, next door to Guangdong, in 1918. The next four years would see him take over Guangdong again, and again put in place an efficient and progressive administration. Chen's main principle during this time was federalism, the idea that it would be best to nurture democracy and modernization in single provinces or small areas like Guangdong, rather than devoting all efforts, (as Sun Yat Sen was doing), to take over all of China. The warlord competition was one that seemed to corrupt its participants. When winning is the only goal, other principles get sacrificed, if there were any there to begin with. Few of the warlords had strong political ideals or any kind of progressive basis at all, other than winning. Already Yuan Shikai had shown himself to be afflicted by that virus, and Chiang Kai-shek would take the Nationalists more or less down the same road, after they had indeed conquered all of China and then faced the Japanese and Communists in succession.

Chen Jiongming

Chen was clearly going in a different direction, hoping that successful government and modernization in one area could lead more peacefully and gradually to the similar liberation of other areas. Rather than sacrificing all for power, he wanted to put good government first and stay on the military defensive while tending to an area that is perhaps the premier commercial area of China, which would later lead the way to the PRC's curious blend of capitalism and communism, and whose delta hosts Hong Kong, Macau, and Guangzhou (aka Canton). 

The problem in China, in this and other epochs, is that there are few natural barriers that, in the parlance of biology, foster speciation in geographic isolation. It is too easy to invade other areas, and very difficult to differentiate, grow, and succeed before one's riches are plundered by someone else. The zero-sum logic of warlordism is rampant, and all the people can do is to wait for one of them to win, and hope the winner can be turned to more or less benevolent directions. Chiang Kai-shek and the Nationalists were far from benevolent or competent when their turn came, and their system collapsed in the face of a true peasant revolution (finally, an understandable and broadly appealing political basis, however fleeting) led by Mao Zedong. But that regime turned out to be far, far from benevolent in its turn, and only much later turned its attention to making life better for the Chinese, who are now trapped in an economically growing autocracy, whose leaders are petrified that the people will someday turn on them and recover their natural rights.

It is interesting to note that the Tiananmen square incident happened just as Taiwan was, after a long authoritarian phase of its own, establishing truly functional democratic institutions. Deng Xiaoping, however, crushed the protesters and nascent liberalization in the PRC. Two paths were diverging. Each avoided chaos, but which was the better one?

Perhaps Sun Yat Sen was right to dismiss federalism as a pipe dream in China, given the long history and the political situation at the time. Perhaps it was either eat or be eaten, on this vast and bloody stage. But it is fascinating to consider that an alternate road was in the offing- one that promised far less bloodshed, far less suffering, and a far more civilized outcome.

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Origins of The Trumpocene: Something in the Air?

I have a theory about our predicament.

How did we get here? With a madman as president, a cabinet of incompetants and sycophants, a supine legislature barely able to keep the lights on, and a dominant block of voters that see nothing wrong with it? This president has, for no discernable reason, decided to wage a trade war against basically the entire world, with special emphasis on our closest friend, Canada. This president launched an idiotic war against Iran that has destroyed our military and diplomatic status, and isn't doing much for our economy either. This president has launched vendettas against anyone with brains, such as colleges, medical researchers, military, diplomatic and intelligence professionals. And this president has made past corruption scandals look like penny ante with shameless shakedowns, pump-and-dumps, and quid-pro-quos reaching into the billions.

It's not good, and stands at the end of a political tradition with far higher accomplishments. We used to expect complete sentences, coherent thoughts, and reasoned policies. All that is now out the window. The civil war era and the revolutionary era were both characterized by excellent, sometimes great writing, lengthy and reasoned debates, and careful argument. Just think of the Federalist papers, the Lincoln-Douglas debates, and other works of Abraham Lincoln. Even into the end of the 20th century, we accomplished great things, and had elevated goals, such as fostering a world-leading research enterprise, and addressing poverty. 

Today, politics revolves around zingers and memes, and we can hardly hold things together while our madman in chief burns down one institution after another. But therein lies a clue- what is in the air? What is making us crazy? As we pass the September 11 anniversary, we recall, inter alia, the devastating effects of pollution around ground zero. Among its many health effects are cognitive impairment and dementia. There is a large literature on the cognitive impairments caused by particulate pollution, particularly in the young. That is a clue.

Long ago, someone had the bright idea to add lead to gasoline. Lead was already known as a neurological poison, but cars were king, and already exquisitely dangerous, so it hardly seemed significant to add an entirely different kind of risk to the fuel mix. Lead was never added to diesel fuel, as diesel is supposed to auto-combust from engine compression. But gasoline is supposed to, instead, be ignited by the spark plug, not compression. An "octane" rating was even devised to make higher-lead gasoline more attractive at the pump. 

Leaded gasoline proceeded to pollute our landscapes, increasingly as car use rose during the 20th century. Urban areas were particularly hard-hit, though agricultural areas can also be highly polluted. There is a well-supported theory connecting this pollution with rises in crime in the US, and later declines as lead was removed from gasoline and gradually the environment. The phaseout of lead was gradual, so if we take its peak in the mid-70's to 80's, then the generation exposed to the most lead in childhood would have been at prime criminal age in the mid-90's. That is one reason why crime has been dropping since that time. But prime criminal age is only one stage of life. Our political system is run by older adults, and the prime voting age is more like fifties and sixties. Thus a peak of criminality in the mid 90's due to the cognitive ravages of lead would correspond to a peak of political influence right about now. 

This is not to say that our president is suffering from lead poisoning. He has other, and far more serious issues with psychopathy and Hitler/Putin worship. (Though he is remarkably touchy about not being very bright.) But the political generation that elected him and forms his base- our political generation- may well be afflicted, explaining to some degree why our political environment is so degraded right now. We are not entirely up to scratch. 

But it isn't just about lead. Particulate pollution is pervasive, from all sorts of fossil fuel burning. We used to think nothing of cooking with natural gas, but it is a major source of indoor pollution. Coal burning spewed vast amounts of mercury, another neurotoxin, among many other pollutants. The bottom line is that the clean energy transition can not come soon enough, if not for our planet, then for our political sanity. 

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• Truly bottom of the barrel.
• The Supreme Court may be afflicted as well.
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Institutions of Truth

Society is built up around institutions, which come in several varieties.

We gather together to do more than we can possibly so alone, into families, tribes, and nations. As human capabilities increased through time, and our populations increased, ever-more diverse and specialized groups assembled to deal with the incredibly complex opportunities at the technological and social frontier. Putting astronauts on the moon required a vast organization with all sorts of skills, but especially technical skills. Such an institution runs on truth. Managers need to get truthful statements from the financial bean counters, the astronauts need to have confidence in the testing and engineering operations, the engineers need to count on the vendors and technicians for quality products and work. 

As a scientist, I often think of my own community as the epitome of truth-seeking and moral righteousness. But all human communities are truthful in their own way, though rarely so explicitly and doggedly. The legal system, for example, is predicated on a search for truth. Granted, it uses an adversarial system that relies on each side bending the truth to its interests, which is an ethic and practice that can easily get out of hand. Even politics is a sort of truth-finding system, not in its speechifying and rhetoric, but in gauging the feelings of an electorate- how it views its problems and who it thinks might solve them, assuming that voting is truly secret and civically engaged. It has been fascinating to see the lies of our current president, so meaningful to his base, functioning as permission to be their worst selves- racist, greedy, incontinent, misogynist, hateful, ignorant.

The news media is an explicitly truth-seeking and publishing enterprise, but can be compromised, both by its market incentives and by political pressures and interests. Markets and business are likewise truth-seeking, not in that they always tell the truth, but that they are predicated on finding a ground truth of what makes money- what is the most efficient and useful thing to be done at this moment. And connected with this is advertising, apparently one of the best ways to make money, and the financial foundation of the news media. Advertising is a curious phenomenon. Its practitioners are paid to tell lies, but only little lies, that skirt the boundaries of fraud. Their art is more typically to insinuate their lies rather than state them outright. That pretty women will flock to the owner of this watch or that car, or that betting at this casino will make you both handsome and rich. 

The arts dispense with explicit truths entirely, and tell human truths though imagined stories. The mark of great art is that it cuts to the heart of the human condition using all its artifice and archetypes. The Matrix is a great example of a wildly creative and frankly insane story that poses the central moral dilemma- can we take the truth, and can we- do we even want to- overcome pleasant illusions to get there?

At the bottom of it all is religion, which offers spiritual purpose and community, founded on pure fantasy. It used to be, in pagan times, that religions were not taken so literally and seriously. Each cult coexisted with the others, and none claimed to be more than an art of the archetypes whereby people could get in touch with a sense of binding social and philosophical purpose. A civic pleasure and ceremonial. But then came Christianity, child of the collision between Judaism and Egyptian and Greek philosophies. Christianity claimed a true historical story, even though it was fabricated more or less out of whole cloth. It claimed absolute truth, certain life after death, and salvation for something... apparently, the human condition was not good enough and had to be redeemed, by blood and death. It certainly was dramatic, but truth? Only on some campy (and masochistic) emotional level.

This institution has had incredibly pervasive effects on our view of truth, and it has taken hundreds of years to extricate ourselves from its presumptions and bizarre claims. Even now there is a rump movement of biblical literalists who are wreaking evil on our politics and society. All in the name of a hot mess of fabrications and primitive morals. We need to take a closer look at the role that truth plays in our day-to-day lives and society, in our moral lives and imaginations. 

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From Icebox to Hothouse, and Back Again

Better modeling, by including the biosphere, retrodicts more of Earth's dynamic climate history.

Climate change, while ignored by the current administration, is not ignoring us. The Earth is warming well past where it has been for millions of years. But before that? While the planet has generally had stable climates, they have varied substantially through time, and have gone through occasional catastrophes. There was a little ice age, in the middle of the last millennium, thought to have been caused in part by the depopulation of the Americas due to European diseases. The ensuing regrowth of forests covering the Americas drew down CO2 from the atmosphere and cooled the climate. But more to the point, there have been far more severe episodes, both of heat (the end-Permian extinction event) and cold (the Sturtian glaciation of the Precambrian). All of these arise from CO2 levels, as CO2 is the master controller of heat in the atmosphere, thanks to the greenhouse effect. (As it is on Venus as well.) 

For example, the end-Permian extinction is thought to have been caused by unusual volcanism in what is now Siberia. Over a mere 100,000 years, this poured an estimated 26,000 petagrams of CO2 into the atmosphere, causing its concentration to shoot up to about 2500 ppm (parts per million) and temperatures to shoot up as well, killing off 90% of all species. What we are doing now is much faster, though admittedly in early days. We are pouring roughly 11 petagrams of CO2 into the atmosphere yearly, which has raised CO2 concentrations from a preindustrial 280 ppm to 427 ppm today. It would take us another one to two thousand years to cause a 90% extinction event!

A bedrock of our climate thermostat is the silicate cycle. Since the vast majority of carbon on earth is locked up in rocks, (carbonates of silicon, magnesium, and calcium), not in the biosphere, it is rocks that have a dominant effect. Volcanoes belch out CO2 in huge amounts. That CO2 slowly eats away at rocks that are exposed, re-forming carbonate compounds that are weathered off and back into the ocean. Where these compounds (with those built by shelled animals of all kinds) are gradually deposited on the sea floor and subducted back into the Earth's crust. Some of those carbonates are reduced at depth and brought forth again by volcanic activity. The more CO2 there is in the atmosphere, and the warmer it is, the more weathering happens and thus the faster CO2 levels are brought back down. That is the elegant thermostat that has kept Earth at mostly mild temperatures through its long history. 

However, this is a slow thermostat, taking hundreds of thousands of years to equilibrate. Unusual events, like an asteroid impact, prodigious volcanism, or the advent of human ingenuity, can make a mess of things way faster than the silicate cycle can deal with in its slow, grinding way. Many subtler influences can also come into play, like cycles in the tilt of the Earth towards the Sun, or continental arrangements that lead to particular patterns of ocean circulation, can create variations such as ice ages. A recent paper brought out peculiar influences from the biosphere that can also affect, and even destabilize, the thermostat on longer time horizons

The oceans are responsible for roughly half of photosynthetic productivity, and they are also where the carbonate minerals get buried. So how they react to changes in the atmosphere are very influential in the whole cycle. These authors ran half-million-year simulations of climate perturbations while including not only the silicate cycle, but also reactions by the biosphere and especially the phosphorous cycle, which has a strong influence on biological productivity. It turns out that when the atmosphere has lower levels of oxygen than we do today, (as was the case during the Precambrian epoch), high CO2 levels cause long-term rises in biosphere productivity and also in phosphate recycling out of the ocean floor. The extra phosphate increases biological productivity even more, and thus causes CO2 drawdown to persist past where the silicate cycle would level out for the long term. The result can be a rebounding ice age after a hot phase. 

Model results over 500,000 years, showing rebound from an injection of high CO2 at year 10,000. A shows concentrations of CO2 over time, B shows O2 concentration, and C shows sea ice, which goes to zero at first, the rebounds sharply, especially under the blue condition of 0.6 times current oxygen concentration in the atmosphere. It shows how exquisitely sensitive the climate is to CO2.

These models make some sense of the Precambrian climate cycles, which had a few dramatic swings that went through so-called snowball Earth phases where the entire surface of the planet seems to have iced over. The silicate cycle naturally came to the rescue eventually, spewing enough CO2 from volcanoes to overcome the snow / albedo effects of all the ice and cause a rebound hot phase. Between the rising oxygen levels and the extreme climatic swings, the stage was somehow set for the rise of animal life, leading the so-called Cambrian explosion, though there was a fair amount of simpler precursor animal live in the Precambrian.dd

https://www.science.org/doi/10.1126/science.adh7730

A schematic of the proposed cycle, with CO2 coming in from vulcanism (red) and being disposed of by various means, first and foremost the silicate cycle (blue). OC = organic carbon, P = phosphorous/phosphate, OCpetro = organic carbon weathered out of sediments, coal, limestone, and other geologic formations. Thus, the brown color shows this paper's additions to the classical silicate cycle.

While it is just a modeling paper, models are what we think and do in science. It is nice to have laboratory confirmation for areas of science (like molecular biology) that permit it, but historical sciences, especially those pertaining to whole planets as systems, have to be more forensic and speculative. This new model is a refinement on the basic silicate cycle, and thus seems a strong improvement on what has heretofore been a science of more or less back-of-the-envelope estimation. And judging from this new model, the authors propose that the next ice age is not being put off indefinitely by our profligate emissions, but rather that organic burial feedbacks will bring it closer (than 400k years away) with additional overcooling thereafter!

• Medicine is toast. "MIRA outperformed physicians in diagnostic accuracy and made guideline-concordant, medication-safe and appropriate admission decisions."
• A death sentence for US science.
• Revaluing trash.
• Apparently, fungi in the ocean are a thing.

Vindman on Russia and Ukraine

Not enough appeasement, or not enough deterrence?

I have been watching the Harry Potter series of films, a decade or two after first reading the books. Aside from being extremely entertaining, they show Rowling to have been weirdly prescient about the moral dilemmas only developing as she was writing, and now flourishing in grotesque fashion. How large sectors of supposedly civilized populations can be attracted to blatant racism. How cruelty, destruction, and contemptuous corruption can likewise become an attractive political brand. How corrupt powers corrupt the truth first, and then replace merit with lickspittle devotion among their followers, with predictable consequences. What seemed comically phantasmagoric has now turned into our day-to-day reality, with phones taking the place of wands.

It is not only relevant to US political scene, but also internationally, in the turn taken by Russia from a struggling post-Soviet democracy or at least quasi-democracy, back to an imperial emperorship under Vladimir Putin. After sending clouds of misinformation into the West, he started attacking Georgia and Ukraine with dementors, trying, without success so far, to squeeze the soul out of his "little brother". 

Alexander Vindman has something to say about the matter, in his new book, "The Folly of Realism". Vindman came to fame through his testimony against Voldemort, -er, Trump- during the first impeachment hearing, which revolved around corrupt conditioning of aid to Ukraine to get false political testimony against his foes. Vindman was on the NSC, and had participated extensively in Defense department and White House policy development around the changing conditions in Ukraine and Russia. His book recounts the long historical road that led to the current Ukraine war, and the many missteps by the US that are now part of that history.

The question is about US policy around the catastrophe in Ukraine- what was the US role in it? What should our policy have been, and what should it be now? The "realism" in Vindman's title refers to the foreign policy school that foreswears idealism. It says that we should ignore any sympathetic feelings about democracy or independence for Ukraine and recognize that Ukraine was always going to be in Russia's sphere of influence and not get tangled up in its defense. Under this reading, our policy mistake was to lure Ukraine towards the West with empty promises of joining NATO and the EU, while our paramount interest was actually in maintaining a stable relationship with Russia so that no one starts World War 3. 

On the other hand would be a more values-based, idealistic approach. Under this reading, our promises were not wrong, only our unwillingness to back them up. It is patently obvious that neither Russia nor anyone else is going to use nuclear weapons in these kinds of conflicts- that would be self-defeating when the aim is to gain territory and population (or even to defend one's own population, when pitted against other nuclear powers). In all honesty, having nuclear weapons is more of a prestige thing at this point than a real factor of military strategy, let alone tactics. But to give Putin his due, he used them with consummate skill, rattling the nuclear saber at critical times to cow the West and particularly the US from intervening in Ukraine, much to our shame.

Idealism posits that our interests are inextricably linked to our values. There are no durable and dependable international relationships without shared values, and we should be extremely grateful that, at least up to the current administration, the liberal West has had a solid core of shared values that undergird our entire collective security structure. Thinking that we can pursue "interests" that conflict with those values is chimerical and tends, as we are seeing in the current administration, to sell out and destroy exactly what is most valuable to us on the international stage. 

But perhaps even worse than the philosophical differences within the US policy establishment that led to the schizophrenic and catastrophic approach to Ukraine was the inattentive way we sleepwalked into it. Emblematic of this is Obama's "reset" with Russia. Even after Putin had declared that the loss of the Soviet empire was the most catastrophic event in the last century, even after Russia attacked and set up a simmering conflict with Georgia for trending democratic, even after Russia had spent years pumping offensive and destabilizing propaganda into its enemies in the West, Obama was anxious to get Russia off his plate and initiated the reset. This was a policy of turning a blind eye to all the geopolitical trends that clearly showed that Russia was not going to be a democratic partner to the West, but was, on the contrary, heading rapidly in the opposite direction, despite the window dressing of Dmitri Medvedev. More specifically, it failed to recognize that Ukraine was in mortal peril from these trends. The prior president Bush had declared that his ultimate goal was to bring Ukraine into NATO. But no plan was offered, no timeline or support was given, even while Russia's apoplexy over the prospect was, to those who were paying attention, growing by the year. 

Current status of NATO. Whatever the rhetoric, the new eastern European members of NATO are members in order to defend themselves against Russia. The whole point of NATO is to unite Europe defensively against Russia. Naturally, Russia takes this as an insult, but the history is self-explanatory, as is the same historical reasoning in case of Ukraine. As long as Russia takes no responsibility for its many past crimes, and its current lies, offensive behavior, and ongoing crimes, there can be no question of reversing this fundamental relationship.

The reset ignored all this and assumed, as we all did, that a new war in Europe was inconceivable- whatever complaints Russia had would be raised in some appropriate forum. During this time, Russia was carefully playing its cards for Ukraine, using Paul Manafort to dress up its proxy, Viktor Yanukovych, electing him president, and getting him to cancel progress towards joining the EU. Unfortunately, in 2014, the Ukrainian people wised up to the direction all this was going, and ousted Yanukovych in a popular uprising, sending him fleeing to Russia. Immediately thereafter, Russia extracted its pound of flesh, invading and taking over Crimea, and for good measure starting a war in Eastern Ukraine, to be kept on the simmer. 

All this should have been foreseen by US policy makers. But instead, they had their reset, with a few temporary benefits weighing against the disastrous direction portended by Russia's actual policies and intentions. If the US model for Ukraine was the same as for Belarus, we should have been honest about that and not promised any future relationship or alliance such as NATO. We should have clarified that Ukraine was in Russia's sphere, and tough luck.. they would have to deal with the neighbor that nature had dealt them. On the other hand, if we truly valued the independence of Ukraine and its civilized aspirations, in light of its being in its own right a very large country, both in area and in population, then we would have put more effort into deterring Russia rather than appeasing it. 

Ukraine was not ready for NATO membership- that much was understood. We can see by the example of Hungary how dangerous it is to have backsliding, regressive and frankly traitorous countries within the alliance. Ukraine's democracy was by no means ready for full membership. In light of that, the US should have offered a direct security relationship, as the Georgia war played out, to put teeth behind our desire for Ukraine to remain independent and work out its own relationship with democracy and with Europe. The point was not to influence the government or people of Ukraine, but simply to deter Russian meddling. For by this time, the truth was visible- that Russia wanted to rebuild its empire / sphere of influence, whether its neighbors wanted to be assimilated or not. The race was on, between the gathering strength and determination of Russia to recover "its" former possessions, and its neighbors' growing sovereignty and ties to Europe. 

One might ask.. how is this model different from Vietnam? Wouldn't this have tied us to a corrupt government that would have been fatally impaired, politically speaking, by taking assistance from the US? Wouldn't Ukraine have come to rely on our security crutch, while thumbing its nose at Russia and miring itself ever deeper in corruption and dysfunction? I think the differences are significant. Firstly, the Ukraine war had not happened yet. We would be deterring, not trying to repel, an attack. Secondly, the ultimate prize of European integration remained as a more significant goal, quite beyond any bilateral relationship with the US. It is clear that the people of Ukraine were quite strongly motivated in that direction, and part of that was gaining a functioning liberal political system.

As a Ukrainian by birth, Vindman was and is appalled by the path to war, some of it paved by the US. He is casting about for historical counterfactuals and alternative paths, and, given the dysfunctions of our own political system, those are hard to come by. Perhaps preventing the first election of Donald Trump would have been significantly more productive than any policy adjustments farther back in time.  But I have to agree that our split-the-difference approach to Ukraine, which was initiated in the Bush administration, was fundamentally in error, and was a temporizing solution (which the Obama administration fatally continued) to a problem that turned out to be far more urgent than was anticipated. Though it should have been anticipated.

• Are we second-rate yet?
• There's something about postmodernism... 
• War is now IT.

What is the Matter With the Labor Market?

Labor's share of the economy has rarely been lower- what is going on?

We will start with a graph of share of income, to labor, vs capital. Note that labor here includes all the highly paid executives- all those fat salaries. The share has been going down for decades, while the profit and capital share has been going up. The seventies were the high-water mark, when unions reached their apogee, and after which the Reagan revolution put business and management back in the driver's seat. 

Labor's share of national income is at an all-time low.

The neoclassical theory of labor is that businesses will hire as many employees out of a perfectly liquid labor market until the last hire is exactly as productive as her labor cost. Every worker would be hired into their most productive possible job, with the commensurate pay. Over the economy as whole, this mechanism would mean that everyone who can be productive will be employed, and that every company produces as much as it can sell. And also that wages grossly equal the productive capacity of the workers, as judged by what buyers are willing to part with. 

In a very rough sense, there is logic to this model, which at least has the virtue of generally equating what is being spent by buyers with what companies are making as revenue and paying out for their inputs, including labor. But there are a lot of problems when you get into the details, making the whole topic of labor market operation and wage-setting far more complicated, and far less fair, than capitalists and their favorite economists envision. It is a bit like the market for medical care, which has grievous flaws. One wouldn't want to go to a Stalinist system of state job assignment and wage-setting, but that doesn't mean the market mechanisms are operating fairly and efficiently.

One would have thought that the internet, enabling rapid and nation-wide job posting and hunting, would have fundamentally changed the job market, in favor of workers. But the graph above disagrees- things have gotten worse instead of better. One thing that internet job boards do not mention is pay. That remains a closely held secret, never discussed with workers or with prospects, until the moment when they have already been reeled in and gone through numerous interviews, and the low-ball is offered. There are many other structural asymmetries and power dynamics. Productivity is extremely hard to gauge, and ends up being whatever one's manager gets into her or his head. The whole job-finding process is extremely averse, full of humiliation, uncertainty, and pain, enforcing inertia in current employees, and thus power for employers. 

For example, a paper from a few years back shows that, when women enter a profession and change its composition, the pay across that profession goes down. The scholarly language is restrained, but the lesson is obvious. Pay is set by intuition and power relations, not by an analysis of productivity, or the magical workings of a fair labor market. The 80's started the greed-is-good movement in American business, as executives were empowered to take pieces of the business for themselves. Before, managers were employees, often well paid. Now, their pay became increasingly an expression of power rather than productivity- how much they could extract from the business as rent. Naturally, the more money from the business (whether via salary, stock, or other benefits) went into executive's pockets, the less was left over for workers. Similarly, the whole theory of business underwent a change as well, from an organization with multiple stakeholders and purposes, including civic ones, to a singular focus on profit and rewarding investors. Labor ceased to be involved as a stakeholder, but was demoted to an input, to be paid as little as possible. 

One additional influence is the idea of the sufficient wage. Most people are most keenly interested in having income sufficient to live on, in some style considered in their social sphere to be decent. When wages across society fall below this level, revolutions occur. But do wages ever rise above it? Employers are sensitive to these dynamics, and as part of their wage setting know what workers will put up with, regardless of productivity, fairness, revenue, etc. This is particularly relevant with the addition of women to the workforce. What used to be regarded as a decent wage, in that it supported a family, now only has to support half a family, since most families have two earners. The perverse effect of women entering the workforce is thus, on this admittedly vague social theory, not only to subject them to outright socially based discrimination, but to lower the general level of wages, insofar as employers can get away with that without generating an insurrection. 

The value of the federal minimum wage over time.

Now we are at a dramatic point, where a soaring stock market rides on ever-higher profits taken by US businesses, while a vibe-cession and plunging consumer sentiment show that most Americans are struggling, unhappy, and underpaid. Billionaires are sprouting like mushrooms, each of whose dollars is taken from the hands of labor. So what is fair, and what do workers deserve? We need to take a whole-society view here, rather than confining ourselves to what pure capitalism sees as an ideal. Much of income inequality comes from a minimum wage that simply has not kept up, not even with inflation, let alone with worker productivity. A recent book outlines much of the evidence, but it is well known that raising minimum wages is hugely positive, increasing economic activity and helping low-power workers get a fairer deal out of the system, at very little cost to job creation or profits. The authors suggest (very modestly, one must say) generally keeping minimum wages at sixty percent of the median wage, which is currently 64,000 per year, thus would work out to about $18.50 per hour. Lower pay than that generally reflects power dynamics of oppression, and feeds into bad working conditions and the maintenance of low-value industries.

At the upper end, a new social contract needs to be drawn up to re-orient the corporation to a more socially positive role. Competition, which is the most important discipline on businesses, needs to be fostered. Taxation needs to be raised and made fairer, removing escape hatches, offshore shelters, conduits, etc. Capital needs to be taxed at least equivalently with labor, not less, as is shamefully done now. The chances of any of this taking place in the corrupt environment of the current administration and congress is nil, obviously, but if they won't do it, then the workers they are so blatantly betraying have the votes to forge a new path.

Notice that these are not technical issues, but social ones. The growth of inequality and loss of labor's wage share is a story of lost social cohesion, self-serving ideologies, and political corruption. Hopefully we do not need a crisis on the scale of World War 2 or the Civil War to recover some degree of care for each other, but the current environment would need a dramatic reversal to even begin going in that direction.

• More on the debt.
• How can this staggering loss be sold?
• When labor gets out of hand.
• When companies become tax cheats. We all should have a Carribean subsidiary!

Dalio on Debt

Review of Ray Dalio's "How Countries Go Broke". 

It is difficult to focus on important policy issues, as the national media is led around by the president's revolving fixations like a cat by a laser pointer. But focus we must, if we are not going to decline faster than we already are due to incompetent and corrupt leadership. One looming area is the federal budget. As a card-carrying acolyte of MMT economics, it is hard to say this, but there are limits to federal borrowing. 

A recent book by super-investor Ray Dalio lays out a set of patterns, which he calls the big cycle, that tracks government solvency over roughly eighty year cycles, which typically start out tight and solvent, using relatively hard money, and end up overextended and in crises that are resolved by some mix of inflation, depreciation, and restructuring / reneging on debts. It is a perpetual and international set of cycles. As an investor, he is not much of a writer or economist, so the book is repetitive, poorly written, and markedly incurious about the origins of the patterns he finds. But still, it makes some significant points. 

First is that the cycle happens for all monetary systems, whether fiat and borrowing domestically, or hard currency and borrowing in foreign currencies. But the consequences are far more severe for the latter than the former. Having your own currency, as MMT economists well know, is a blessing when you want to borrow and manage a domestic economy. Second is that even with a fiat currency, the limits are different, but there still are limits to government borrowing, which we are gradually running into. 

Trajectory of US government debt.

Trajectory of interest compared to other US government spending.

At the beginning of a big cycle, the foregoing crisis has scared everyone into hard currencies, like gold, or some properly revalued local currency backed by a solvent government. Probity is everything. Later on in the cycle, the money is softened up due to increased borrowing and laxer standards. Eventually, there are private debt crises, where the central bank is obliged to take on a large part of the private debt and expand its balance sheet. Eventually, the central bank no longer bothers to unwind its balance sheet after such crises, and holds on to both private debts and government debt that it monetizes. And at the far end of the cycle, the debt service paid by the government threatens to become so onerous that a crisis develops- investors flee, interest rates go up, inflation goes up, and the debts, fiat though they are, become unsustainable. There is "restructuring".

This is a big cycle because it is superimposed on the regular business cycle that takes much shorter time- something like five to ten years. And it concerns the government's management of the money, not the private sector's vacillating enthusiasm about business conditions. Turkey is currently in the far end of such a cycle, plunged into high inflation and struggling to find a way to put itself back on a sound basis after massive mismanagement. And obviously the US is somewhere late in the same continuum. The issue is not the size of the federal debt, or its relation to GDP, but the amount we have to pay in interest from the annual budget. That is heading towards one trillion dollars, and if interest rates remain where they are, (given the inflationary pressures from the current administration's bad policies such as tariffs, oil shortages, and tax cuts), there is danger of a growing spiral of higher revenues going to interest, and less money available for government functions, increased monetization by the central bank, and ultimately, loss of faith in the currency. 

A fascinating case is that of Japan, which both Dalio and MMT economists focus on for its unique approach to monetary policy. Since its debt bubble in the 90's, Japan has shifted lots of private debt and public debt to the central bank's balance sheet, which stands at about three times GDP- far beyond what other countries would deem acceptable. This can be sustained because the bank of Japan has kept interest rates very low- in the zero to one percent range. Thus the cost of all this debt is manageable, and will remain so unless and until interest rates go up. But this also means that the bank can not use interest rates to manage the economy and foreign exchange. In consequence, Japan's currency has weakened enormously on the international currency markets, making imports (such as of oil, significantly) much more expensive, while improving the competitive position of Japanese export manufacturers. Additionally, Japanese banks and businesses have been reluctant to unwind bad debts, which leads to the stagnation and lack of overheating that the low interest rates would otherwise foster. Everyone kicks the can down the road, waiting for either a crisis, or a resolution, neither of which seem in the offing. 

But more interesting than the economic drama is the larger cultural cycle which Dalio alludes to as well. For this is not just an economic big cycle, but something deeper. For the US, Dalio starts with the civil war, but I think it is much more instructive to include the cycle before, which started with the Revolutionary War. These wars, plus World War 2, mark the three big cycles that the US has been through. Each started with war, and with currency disruption. The Continental Congress issued reams of Continental currency that had, by the end of the war, become worthless. So, one big objective of the ensuing constitutional order was to put the newly minted dollar on a sound footing, as also the finances of the federal government. This led to decades of growth, prosperity, and (the war of 1812, and various Native American extermination campaigns aside) peace. The middle of this period also saw a progressive cultural flowering, with the transcendentalists, various experimental communes like Brook Farm, and the Great Awakening. All this stability allowed people to envision a better society. However, what happened instead was increased division and conflict, leading to the Civil War. 

Here again, paper money was issued and resulted in significant inflation, as the accumulated hatred tore the country apart. But in its wake, prosperity again reigned, with rapid technological advancement, peace, and, eventually, and progressive movements for women's suffrage, temperance, anti-corruption and anti-monopoly, and the Settlement movement. All this was reset in the Depression and ensuing world war, which then began a new cycle of conflict avoidance enshrined by the US role in the UN, NATO, and a very sedate and conventional media environment. As peace and stability took hold, a new progressive movement rose- the hippies, the anti-war, civil rights, and feminist movements. Did these foster peace and togetherness? Not exactly. One can sense that the culture was eager for truth, for not sugar-coating things anymore, for honesty and, indeed, for conflict. Humor shows became more cutting, movies more biting, tinged with horror and apocalypse. And here we are, in a country where the two parties can't stand each other and are headed towards something that smells distinctly martial.

All this conflict has smothered discussions of actual policy, which anyway has gone to the dogs in the new administration. For example, a high level of federal borrowing is more defensible if it builds US productive capacity, through investments in future-oriented technology and education. But the current adminstration is spending billions to cancel renewable energy contracts that had already been entered into. This is money not just down the drain, but subtracted from future productive capacity. 

Is Dalio sanguine about our prospects? Not particularly. But nor does he view them as terribly dire. In the first place, the gulf between sovereign, fiat-issuing countries and others comes out starkly in his many graphs and analyses. The latter get into much more difficult straits when they borrow too much of someone else's money. Secondly, rather modest adjustments now, to federal spending, to taxation, and to interest rate policy, can change the trajectory we are on, from spiraling to sustainable. I would focus particularly on the tax side, which has so egregiously been attacked by the current administration, in its contempt for making the rich pay anything. Dalio mentions, however, that the most consequential lever is that of interest rates, which, as Japan shows, can, if low enough, make eye-watering debts quite easy to carry. But given a system where we want to retain the interest rate as a lever of macro-economic policy, (and capitalist motivation), it would be best to approach rates not by fiat, as Japan has done, but by good policy on the other fronts, which will naturally lead to lower interest rates, if properly handled. 

• Are we headed into the China century?
• A pathetic spectacle of weakness and decline.

Peak Carbon?

Are we at peak oil, perhaps even peak burning? Thanks to Donald Trump, renewables are looking better than ever.

It turns out that using the oil weapon opens people's eyes to the alternatives. The Saudis have recognized for a long time that stability in oil pricing and supply was the way to keep the world addicted. But in the current wars, Russia has used the natural gas weapon, and Iran has used the oil weapon. Now the addicts realize what a thin needle it is that brings them the fossil fix. After two months of closure on the Strait of Hormuz, the economic responses around the world have been surprisingly muted. While Paul Krugman rang the alarm of $200/barrel oil, prices have stabilized around $110 or so. It turns out that demand is more elastic than anticipated, at least it has been while supplies are still in transit. However, as physical shortages begin to hit, prices may rise again.

As a matter of strategy, the US administration is clearly flailing, unwilling to recognize a loss, and callous about the worldwide harms being imposed by its fruitless dithering. Is a blockade of Iran going to break its government? That is highly unlikely. They have been through much worse, such as during their war with Iraq. Trump's attacks and insults have rallied the population, entirely contrary to the administration's intention, but entirely foreseeably. Iran's sensitivity to economic pain is much lower than ours. And, as the administration was already doing on an ongoing basis prior to its war, it continues to make enemies of the US around the world, more so with each passing day that shipping in the Persian Gulf is stalled.

Paul Krugman bemoaned the "demand destruction" that continued shortages and high prices would cause, which may lead to economic slowdowns, perhaps recession. However I welcome it. It represents conservation of this precious resource, and, one might say, more realistic pricing that brings in, at least to a small degree, the widespread harms of fossil fuels. When one adds volatility and geostrategic dependencies, on top of the gross environmental harms, and what is now an economic disadvantage of fossil fuels when compared with renewable energy, the solution is clear, if not easy. The transition to renewable energy is going to accelerate.

Trend of world-wide carbon emissions.

Currently, the world is at the cusp of still-rising carbon emissions. This means that, even after all the climate conferences, and the reports, the activism, and the technological development, humanity as a whole is still burning more fossil carbon every year than the year before, and thus increasing the CO2 concentration in the atmosphere ever faster, and driving the climate crisis to ever-accelerating harms and disasters. Is it possible that this strategic-economic crisis, brought on by the blundering of a demented US administration- one that has done all in its power to deny climate change and scuttle the energy transition- will finally turn the tide? Could we be at peak carbon? And if so, will the downslope of emissions be faster than the upslope, in this slow-motion catastrophe? One can see that the US is already past peak carbon, and the state of California stands at 75% of the peak carbon emissions, which happened back in 2004. The upslope has been driven by highly uneven, and gradual, technological development and increased population. The downslope will be driven by the much more globally integrated rise of renewable technologies, so it has a chance of happening at a faster pace, despite the challenges of transitioning difficult economic sectors like trucking and aviation.

With the economic tailwinds of cheaper energy storage technologies, coupled with other advances in geothermal, solar, and wind power collection, the transition is inevitable. But public policy can make it faster or slower. The Biden administration worked towards the future, while the current administration works against it. Outside the US, China is enabling both its own transition and those of all other countries by leading extremely efficient solar and storage manufacturing. Those economics are going to eliminate new coal plant construction, and eventually use of all fossil fuels. China now sells more EV than fossil-based automobiles. While it has a prodigious fleet of coal-burning power plants, and is still building new ones, the overall level of coal power generation has leveled off, as it closes plants close to reduce pollution in sensitive urban areas.

While ironies abound, the important part of the story is that the biosphere is baking and needs help as fast as possible. If that help comes through the narcissism of small-minded tyrants, so be it. 

• Caesar, King, tomato, tomahto.
• Coding is toast.
• Renewable energy has beaten methane in the US electricity generation.
• Krugman chimes in.