Tuesday, December 29, 2015

Thundering Proclamations!

A supposed advantage of a political party is that it allows groups to speak with one voice. Presumably what they say has more authority than simply coming from the mouths of individuals. The phenomena exists across the spectrum: the New York Times has an editorial board, that issues editorials, supposedly fact-checked and sanitized, presumed to represent the intelligent opinion of the establishment. Not even Paul Krugman or Tom Friedman can pontificate with the authority of the Editors.

Political campaigns use the same trick. Candidates speak about "our campaign," and "our strategy." Often they'll invite voters to "please join us." It's the modern version of the royal We.

Donald Trump, too egotistical to refer to "we" or "us," nevertheless magnifies authority by talking about himself in the third person.
Donald J. Trump is calling for a total and complete shutdown of Muslims entering the United States until our country's representatives can figure out what is going on.
Trotskyist organizations are masters at this manner of speaking. They have a raft of authoritative-sounding groups. On my Beat is an otherwise unread journal entitled International Viewpoint. "International Viewpoint is published under the responsibility of the Bureau of the Fourth International."  Who knows what the Bureau of the Fourth International is, but it certainly does sound weighty.

Traditionally, Trotskyist grouplets have used the language of Lenin's Comintern: titles like secratariat and political committee. Jack Barnes goes by the title National Secretary of the Socialist Workers Party. "Secretary" has such an anodyne ring to it--hardly befitting a long tradition of mass murderers.

Coincidentally or otherwise, this sort of language is used by the United Nations. And perhaps, if you squint, you'll find it spoken at the European Union.

On my Beat, however, the champion of thundering proclamations is Solidarity. As of today the top three articles on their website are written by the editors of Against the Current, the Solidarity Steering Committee, and an International Statement on Iraq and Syria. The latter is signed by a list of about 30 individuals and organizations from around the world, some of which may have more than a dozen members. (For whatever reason they weren't able to win the concurrence of the Bureau of the Fourth International.)

The International Statement reads like it was written by a committee. It is completely incoherent. As is typical, this proclamation concludes with a list of exhortations. The first one reads "Oppose draconian policies; defend the democratic rights of everyone." Well, that just clarifies everything, doesn't it?

The confusion starts at the top. The opening paragraph reads
We fight dictatorships, imperialist aggression, and Daesh. We reject the politics of “national security,” racism, and austerity. It’s time to mobilise!
The dictatorship is the Assad regime. "Imperialist aggression" is sponsored by Iran, Turkey, Saudi Arabia, and Qatar, not to mention Russia, the USA, and European countries. Daesh is, of course, ISIS. In other words, they are against everybody!

Their solution? "Solidarity with democratic and progressive anti-imperialist forces throughout the Arab region." They never specify who those forces are, though presumably they don't include the Free Syrian Army or al-Nusra. One supposes there might be three or four people in Syria who will qualify for such "solidarity." Personally, I'd advise them to get together and form a central committee.

The editors of Against the Current also opine on Syria in a piece entitled Global Lessons of a Catastrophe. There is only one global lesson: it's all our fault. We Americans have disproportionately contributed to global warming, spent too much money on the military, have enabled ISIS, the Assad regime, Turkey, etc., and we invaded Iraq. The people of Syria are absolutely innocent of everything, like children, and bear no responsibility at all for all the death and destruction.

If only we just ceased to exist the world would be a much better place. One way to eliminate us is to let hundreds of thousands of Syrian refugees in to the USA (at taxpayers expense). "No Border No Nation, Freedom of Movement for All" reads a banner in an accompanying photograph. One could add "No Civilization" to that list.

The third piece, by the Solidarity Steering Committee is headlined Facing the Enemy Within. It's about Donald Trump, of course.
An enemy ideology is tunneling within U.S. society, intending to take over and establish its state and social supremacy. Most of the time it moves mainly undercover, but will seize any opportune moment to leap from the shadows and proclaim its aims openly. It is deeply hostile to democratic values, religious (and irreligious) freedom, women’s rights, and racial equality. It’s not something new in our country, but it’s capable of shifting forms and appearances as circumstances permit.

The enemy is bigotry and white supremacy.
I am no great fan of Donald Trump, but I do not believe for a minute that he represents a white supremacist movement. He does defend a way of life, and that way of life deserves to be defended. My disagreement with him is less in his goals but more in the way he proposes to accomplish them. But the Steering Committee is completely off the rails; their proposal is that "white people" should just commit suicide.

We live in a Constitutional Republic. It depends for its success on shared assumptions about what government is supposed to do, and on what the rights and obligations of citizens are. It is based on the European Enlightenment of the 17th and 18th Centuries, which in turn derives from a Judeo-Christian-Classical world view. Our Republic depends also on the English language as the universal language of government and public life.

As such, the American way is not a universal solution for all of humankind. While we can easily accommodate modest numbers of Muslims and Hindus and Buddhists, etc., those who come to live in this country have to learn to be Americans. That is, they have to learn English and learn the basics of civic life in these United States.

The American civilization is worth preserving. It cannot survive if there are no borders. The thundering proclamations from the likes of Solidarity need to be rejected.

Further Reading:

Saturday, December 19, 2015

Politics & Evolution

In which I claim that Dr. Ben Carson and Mr. Louis Proyect hold similar beliefs.

My Trotskyist friends claim to accept the theory of evolution while also denying it. In this they are typical of the Left. And also of the Right.

Louis Proyect is a good example. I reviewed his extensive criticism of Napoleon Chagnon in a post entitled Marxism & Evopsych, which includes a critique of the Marxist view on evolution. I won't repeat that here except to say that contrary to their claim, Marxists deny the theory of evolution, at least as it applies to human beings.

Since writing that review I have read and reviewed two books on the subject: one by Jonathan Haidt (The Righteous Mind), and the other by Nicholas Wade (A Troublesome Inheritance). These render my Marxism & Evopsych remarks somewhat incomplete, and I confess probably lend some credence to Mr. Proyect's complaints against modern Darwinism.

The latter book is particularly troublesome, as the name implies. It argues that ethnic differences are indeed more than skin deep, and also include variations in personality. In particular, the circle of trust appears to be under significant genetic control. People who have lived in urban areas for many generations, for example, will tend to be more trusting of strangers than folks who've spent the last millennium out in the bush. 

Other people (not Mr. Wade) argue that things like IQ is significantly heritable, and that ethnic groups differ in average IQ, often by a significant margin. Indeed, a recent book by Garett Jones (The Hive Mind) argues that the wealth of nations depends crucially on the average IQ of its population. (He speculates that it may depend more strongly on the IQ of the top 5%, though that's unproven.)

Such ideas have a long and disreputable heritage, as Mr. Proyect will be quick to point out. This chart is easily found by searching for "iq by nation". 

It's been reposted by such worthies as Stormfront (I won't honor them with a link) and FreeRepublic. Nevertheless, the data in this chart seem mostly reproducible and correct, as Mr. Jones discusses in detail. (The causes of the phenomenon are a matter of considerable controversy.)

So actually I don't blame Mr. Proyect for denying evolution's application to human beings. It paints a grim picture of our species. Our prognosis is not good. Mr. Proyect aspires to a better world, and in doing so he is forced to deny science.

Another politico who sides with Mr. Proyect is the presidential candidate, Dr. Ben Carson. Dr. Carson is a retired neurosurgeon, serving as the Director of Pediatric Neurosurgery at Johns Hopkins for nearly 30 years. As such he must know something about evolution, and it is unlikely that he rejects it altogether. Even though he says "I don't believe in evolution... I simply don't have enough faith to believe that something as complex as our ability to rationalize, think, and plan, and have a moral sense of what's right and wrong, just appeared." [All Carson quotes from Wikipedia.]

In October 2015, Carson stated that he does accept the idea of natural selection, but there is only evidence for microevolution (changes in allele frequencies that occur over time within a species), which he believes was the result of "a wise creator who gave his creatures the ability to adapt to their environment so that he wouldn't have to start over every 50 years", whereas "there's never been one species that's turned into another species, that can be proved." 
But then, with respect to using fetal tissue for research, he said "to not use the tissue that is in a tissue bank, regardless of where it comes from, would be foolish. Why would anybody not do that?"

So like Mr. Proyect, Dr. Carson is inconsistent on evolution. When it comes to his professional life he has at least implicitly accepted it. But in his religious and political world he adamantly rejects it. In this he is like most people--they reject evolution on Sunday when they go to church, but rely on it on Monday when they visit the doctor. Surely this ability to compartmentalize is an evolved, human trait.

It's very difficult to be consistent on evolution. Maybe some devoutly religious people qualify--like those Christian Scientists who reject any and all medical care, or perhaps some of the faculty at Bob Jones University. But such folks are few and far between.

Then there are people who raise evolution to the status of religion: I'd put Stormfront or FreeRepublic in that category. They consider the above IQ chart to be divinely inspired. Leave aside, for the moment, that they don't know what they're talking about.

Also consistent on evolution is Boko Haram. I don't mean in an intellectual sense--I doubt the Bokos know anything about science. But in the way they live their lives they obey evolution's core principles:
  1. The ultimate measure of evolutionary success can be measured by the fertility rate of one's children and grandchildren.
  2. Evolution cares not a whit for the happiness of the individual organism.
So consider the 250+ schoolgirls from Chibok kidnapped by Boko, and then sold off as wives and concubines.
  1. The lifetime fertility of these girls is likely to be very high--at least for those who survive. Four or five children apiece, subsequently yielding 20+ grandchildren is a reasonable guess. Further, the reproductive success of the kidnappers is virtually assured--how many of the girls are already pregnant?
  2. Yet prospects for happiness for the girls is dire. Or, as an evolutionist might put it, who cares.
Compare the Bokos' fertility with that of aging ex-Trotskyists. I don't believe Mr. Proyect has any offspring (or at least none mentioned on his blog). I have two, but not yet any grandchildren. How many unrelated ex-Trotskyists would you have to put in a room before they could cumulatively match the reproductive success of one Boko platoon leader?

There is no doubt, at least compared to Trotskyists, that the Bokos have a better understanding of evolution.

And yet any member of civilized society--among whom I'd count myself and both Dr. Carson and Mr. Proyect--will object. While we might state it differently, our creed maintains We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness.

Of course evolution denies all of this: the Truths are not only not self-evident, they're not even true. We weren't endowed by any creator, and we don't have any unalienable rights. And for Happiness? Just ask the organisms from Chibok about that!

So I sympathize with Misters Proyect & Carson. Their selective denial of evolution is a mark of civilization, not scientific ignorance (though in the case of Mr. Proyect it is that, too). Despite my own passionate defense of the science of evolution, I have no use for those who raise it to moral principle. Accordingly I would never vote for any ultra-rationalist candidate--not Richard Dawkins or Daniel Dennett or Christopher Hitchens. Nor would I vote for Barack Obama.

Still, I think Dr. Carson gets the better of any debate. He has three children, and one presumes also some grandchildren. Religious people are more able to successfully reproduce, despite denying evolution, than us more secular sorts. This is civilized religion's great advantage: it potentially answers the question of our age: how can we successfully reproduce in an environment that contains birth control and still remain civilized?

I would never vote for Dr. Carson for biology teacher of the year. For other reasons I probably won't vote for him as president. But on the issue of evolution he's probably closest to getting it right.

Evolution is a science. That's all it is. It tells you something about the human species, but it cannot be the moral lodestar or a religious foundation. As Katherine Hepburn famously said, “Nature, Mr. Allnut, is what we are put in this world to rise above.”

Further Reading:

Sunday, November 29, 2015

Book Review: 'Trotsky'

Paul Le Blanc's Trotsky is primarily an account of Leon Trotsky's last dozen years in exile.

Mr. Le Blanc describes Trotsky's passion in religious terms.
With a grand philosophical sweep that comprehends reality as an evolving and dynamic interplay of matter and energy, Marxism projects reality as a vibrant totality in which amazing qualitites of humanity (creative labor, community, the quest for freedom) have generated technological advances, economic surpluses and consequent inequalities that - in turn - generate struggles against oppression.
Trotsky engaged in those struggles beginning as a teenager and never wavered from the faith. Socialism was, for him, the preordained solution to all of humanity's problems, rather like the Second Coming.

So the fulfillment of Trotsky's socialist dream came in October, 1917, when at the last minute he allied himself with Lenin's Bolshevik party. A famed orator, he delivered his initial speech to his new comrades, rousing them to paroxysms of revolutionary fervor and closing with this peroration:
Let this vote of yours be your vow - with all your strength and at any sacrifice to support the Soviet that has taken on itself the glorious burden of bringing to a conclusion the victory of the revolution and of giving land, bread and peace!
Of course it was a complete lie. The peasants never got any land. Instead they were wiped out. As for bread, the Russian living standard declined from Day One of the revolution and never, ever caught up to that of the capitalist West.

And peace? Trotsky himself became the Secretary of War leading the Red Army to eventual victory, but at enormous cost. Gone was the heroic language. Instead he used threats typical of a psychopath.
I give warning that if any unit retreats without orders, the first to be shot down will be the commissar [Communist political director] of the unit, and next the [military] commander.
Perhaps because he lacked political support Trotsky pursued the war with utmost brutality, as Mr. Le Blanc describes.
In the name of defending the Revolution, a terrible violence was justified, which included the brutal repression of the peasants who were simply defending their crops from confiscation, and of the angry sailors and workers who revolted at the Kronstadt naval base outside Petrograd, traditionally a centre of pro-Bolshevik strength.
 Lenin, no fan of political violence, was taken aback.
...Trotsky particularly, as the supreme commander of the Red Army, developed a style that even Lenin - quite capable of pitiless authoritarian rhetoric - concluded was excessively 'administrative'.
"Administrative" is an odd euphemism for mass murder. But Trotsky ran with it. Subsequently his primary accusation against the Stalinist regime was that they were "bureaucratic", as if the slaughter of 40 million people could be justified if only there'd been less paperwork involved.

However unintentionally, Mr. Le Blanc depicts his subject as a womanizing psychopath. (You'll have to read between the lines to deduce the womanizing, but I'll stand by the claim.) Only when he was cast into exile, beginning in 1928, did he adopt the persona of the cuddly pig from George Orwell's Animal Farm.

While in exile Trotsky worked on three major projects. The first was his magisterial trilogy, The History of the Russian Revolution, which will be read for many generations to come. (I read the one-volume edition back when I was in college, 40 years ago.) The man was a literary genius.

The second project was an analysis of the Stalinist "degeneration" of the Soviet Union. Loathe to call the 1917 Revolution a failure, Trotsky insisted to the end that something fundamental had changed. However deformed and "bureaucratized", in the USSR workers owned the means of production, representing a major leap forward for humanity. I believe the Socialist Workers Party still subscribes to this theory, even today.

The reasons Trotsky gives for the degeneration of the USSR make no sense, and it's hard to take them seriously. Mr. Le Blanc describes them succinctly.
'When there is enough goods in a store, the purchasers can come whenever they want to. When there is little goods, the purchasers are compelled to stand in line,' Trotsky explained. This led to the next link. 'When the lines are very long, it is necessary to appoint a policeman to keep order.' This simple example, he argued, 'is the starting point of the power of the Soviet bureaucracy. It "knows" who is to get something and who has to wait.'
Unlike in backward Russia, Trotsky maintained, in Germany, England, and America there are no shortages and therefore no policeman is necessary. That's why "bureaucracy" uniquely took hold in Russia.

But this makes not even simple-minded economic sense. There is no country on earth--not even the United States--where there are no shortages. There aren't enough Mercedes Benz to go around. Even the most casual acquaintance with Adam Smith reveals how market prices clear when supply meets demand. The "bureaucracy" arises because central planners stick themselves between suppliers and consumers, destroying the market and creating huge inefficiencies and distortions. It has nothing to do with the relative poverty of Russia.

Trotsky obviously knew nothing about economics. There is no evidence that he had even heard of his great contemporary, John Maynard Keynes. He completely misunderstood the Great Depression and the causes of World War II, leading (as Mr. Le Blanc points out) to totally wrong predictions about the postwar era.

Trotsky's third project was the establishment of the Fourth International. The First International was founded by Marx & Engels; the Second International, known for social democracy, was led by the great German socialist, Karl Kautsky. Lenin established the revolutionary Third International. The Trotskyist, Fourth International arose in response to Stalin.

The project has been an abysmal failure. At no time and in no place has Trotskyism succeeded as a viable political movement. In consequence the International has splintered. Indeed, we could number the various iterations like they do software versions: International numbers, 4.1, 4.2, 4.2.1, 4.2.1a, etc. It's a farce.

So Trotsky kept the dream alive, surrounded by his groupies (disproportionately female) in his hideout in Mexico. But it takes a psychopath to know one, and Stalin couldn't sleep at night knowing that his charismatic, intelligent, ruthless rival was still alive. Live by the sword; die by the ice-pick.

I think Leon Trotsky failed at his life's ambition. He only got to spend a few years as a mass murderer--his true calling. His efforts to denigrate his rival come across as self-serving and incredible. The Fourth International is a joke. Only his History will survive as an enduring legacy.

But even that will pale. Trotsky thought that the Russian Revolution was the turning point in World history, rather like the birth of Christ. And for a few years it seemed that way. But now, a quarter Century after the demise of the USSR, the event looks more like a bad dream. Russia has been ruined by 1917: its culture, literature, population, and economy irreparably destroyed. If people recall 1917 today it will be as what not to do.

Goodbye Trotsky.

Mr. Le Blanc's book is well-written, nicely edited, and appropriately priced. The designers of the Kindle edition deserve especial praise (even though a few of the pictures are missing). If despite my advice you're still interested in Leon Trotsky, then this book is highly recommended.

Further Reading:

Sunday, November 15, 2015

The Demise of the Democratic Party

The demise of the Democratic Party? The claim is ambitious and I claim no certainty. Of course the Republican Party then has to change, too.

The symptoms of such a change are apparent. Political correctness--proudly inaugurated by we Trotskyists back in the early 70s--entered the American mainstream by the 1980s. But recently it has descended into parody, as illustrated by Mizzou and Yale, and also by the "rape culture" witch-hunt. Further, the environmental movement has gone off the rails, advocating ever more extreme policies that, if enacted, will impoverish billions of people. These are not positions of a thriving political movement.

Our argument starts with Arnold Kling's book describing the three axes of politics, which I reviewed and summarized here. Briefly, he claims that political discourse is organized around three poles: Progressives see the world as a tension between oppressor and oppressed; Conservatives defend civilization against barbarism, while Libertarians support freedom over coercion. In the current political alignment, Progressives are all Democrats, while Conservatives and Libertarians are uncomfortably joined in the Republican Party.

But it need not always be that way. To see why, note that Mr. Kling's label Progressive is misleading. Progressives look forward to a better world. They are building a future where there is no inequality, racism has been conquered, poverty is but a memory, and electric power comes from magical unicorns that leave no environmental footprint. Only the 1%, or perhaps the people with white male privilege, or the big corporations stand between us and a more humane world.

But there is another way to reach the same conclusion. Instead of a utopian future, what we really need to do is recover some golden age past. Do you remember those days when a guy with a high school education could get a good job at the factory? When there were uplifting shows on TV like Leave it to Beaver, or Father Knows Best. When the biggest decision in life was the choice between Ford and Chevy. Those were the days, my friend, and but for the 1%,  or the big corporations, or disruptive technology, or free trade with foreigners, we could go back to those halcyon days when we all lived happily ever after.

Believers in that last dream are commonly called conservatives (though they differ somewhat from Mr. Kling's description of Conservative), but the only real difference between them and Progressives is which direction they're looking. Progressives look forward to the future, while conservatives look back at the past. But at the end of the day they're both looking at the same thing, and regard the same people as enemies. Especially if you ditch the political correctness meme (which is happening in real time right before our eyes), then progressive and conservative close cousins under the skin.

The current exemplar of the conservative movement is Donald Trump. And lo and behold he's a long-time Democrat, a former close ally of that progressive, Hillary Clinton. So it is not written in stone that conservatives will always be allied with Libertarians. Quite the contrary, one sees a split in the Republican Party, with Trump, Cruz, and Carson on one side, and Paul, Bush, and Rubio on the other.

So I foresee a Janus-faced political party combining backward-looking conservatives on one side with forward-looking progressives on the other. There is tension between them, to be sure, but they both share the same enemies. Let's call them the Traditionalists. Traditionalists oppose free trade, are skeptical of immigration, support unions, support subsidies to important American firms such as GM and the Post Office, don't like Silicon Valley, and tend to be nativist. In addition to the above list, their ranks include Pat Buchanan (arguably the founder of the movement), Hillary Clinton, Bernie Sanders, Rick Santorum, Mike Huckabee, Matt Drudge, and Rush Limbaugh. Their constituency will be Blacks, Appalachians, and working-class whites. The coin of their realm will be a deep-seated grievance against the 1%, globalization, disruptive technology, and the New Normal.

Opposing the Traditionalists will be a Party I'll dub the Liberals, so named because they'll count among their members classical liberals such as Arnold Kling and me. But not just us. Other members will include Larry Summers, Paul Krugman, Bill McKibben, Bryan Caplan, and John Kerry. The Liberals will believe in free trade and open borders, along with the rule of law. They'll welcome new technology. Unlike the Traditionalists, they'll see the modern era as the best of times. Maybe it will get better in the future, but only if we stay the course.

Liberals will also be a coalition. While all of us will subscribe to capitalism and globalization, the Party will contain both Keynesians and Hayekians. Against the Traditionalists those differences are modest. Likewise, people who worry about global problems (e.g., Bill McKibben) will sign up as Liberals. The Liberals' constituency will include Silicon Valley, the professional class, new immigrants (e.g., most Hispanics and Asians), young people, and people who enjoy travel and interesting restaurants.

So lets consider specifically the fate of two subgroups: academics and Trotskyists.

Academics will split, though not evenly. The top of the profession--e.g., Larry Summers and Paul Krugman--will be Liberals. That's because they're winners in the winner-take-all competition, and they benefit directly from global marketplace for their ideas. I expect the famous people at the Ivies to be Liberals pretty much regardless of their current political affiliations. The internecine fight within the Liberal Party will be intense, but again, compared to the Traditionalists all differences will pale.

Most Academics--e.g., my colleagues at the local state college--will become Traditionalists. Their top priorities will be to preserve funding, tenure, and the prestige that comes from the title professor. All of these are at risk in the New Normal, threatened by both technology and globalization. 

Those faculty who staffed the barricades at Mizzou are part of the Traditionalist brigade, though they don't realize it yet. Everybody at the barricades--the faculty, the Black students, the white students--have a vested interest in the survival of the university as an institution. They will need allies in its defense. Their natural allies are other people in the same predicament, i.e., people whose jobs are being automated or globalized, and whose salaries are declining. To win those allies my faculty colleagues are going to have to abandon political correctness. I think you will see that happen very quickly now.

My Trotskyist friends are in worse shape. Note that socialism will not be on the agenda for either Party. Some Trotskyist talking points will still have traction, e.g., the higher minimum wage, a growth of the union movement, and a dig at the 1%. But the blanket condemnation of individual property and freedom will be a non-starter. Further, most of the Trotskyist movement has aligned itself with radical environmentalism, which will put them at odds with most Traditionalists.

I think Trotskyism will fade into irrelevance. (Actually, I've thought that for a long time.)

A possible exception is the Socialist Workers Party (SWP). The masthead of the The Militant proclaims it's "published in interests of working people." Working people have to have jobs, and so the SWP has wisely distanced itself from the job-killing Greenies. Likewise, they're taking more "conservative" stands regarding Jihadism, Israel, and national defense. They are gradually turning themselves into a Traditionalist grouping. They might survive as such (though they won't be recognizably Trotskyist anymore).

Traditionalist Parties have long existed in Europe, including the National Front in France, UKIP in Britain, and Alternativ fuer Deutschland in Germany. Perhaps Syriza could now be put under that umbrella. In all cases they are becoming simultaneously less socialist and less fascist, and thereby more palatable to a mainstream audience.

So Donald Trump, rather than being an outlier, is a foretaste of politics in the New Normal.

Further Reading:

Thursday, November 12, 2015

Trotsky's Common Sense Diet

The conceit is that Americans have unhealthy diets. I don't think that's is true--we eat better food than anybody ever has in the history of humanity. We can eat poorly if we so choose, but for the most part the modern American diet is perfectly fine. The main problem is we eat too much.

The typical adult male needs about 2000 Calories per day, split between carbohydrates, fats, and proteins. While the precise proportion of those nutrients is probably not that important, it is essential that you get a sufficient quantity of each. For that reason I am not a fan of the extremist low-fat or low-carb diets. Common sense should rule.

Carbs (aka, sugars) are something of a special case. Unlike fats and proteins, these need to be metabolized right away. The body cannot easily store carbs for future use. Eating too many carbs at one time pegs out the system. And especially as one gets older this can lead to diabetes (something I have recently become familiar with).

So while carbs are a necessary nutrient, we should consume them in complex, slowly-digestible forms. Refined sugars should be avoided, and high-fructose corn syrup should not be eaten at all. If possible, one should eat whole grains--healthier mainly because it takes the body longer to digest them.

In addition to the nutrients, there are selected chemicals that the body needs in order to function properly. Your body can't make those so they have to come in your food. They include things like retinol, niacinamide, pyridoxine, cyanocobalamin, and ascorbic acid. Collectively they are known as vitamins, and the common names for the ones I've listed are A, B3, B6, B12, and C. These are all small molecules that can be readily manufactured in a chemistry lab. You can consume them in a pill.
The structure of some vitamins
       (taken from http://www.daviddarling.info/encyclopedia/V/vitamin.html)

Here are some common myths about the American diet:
  • People who worry a lot about their diet are healthier.
Many religions, e.g., Judaism, have dietary laws. I do not believe these confer any health benefits. Indeed, my anecdotal impression is that orthodox Jews are disproportionately obese and unhealthy. Whether that's because of kosher or despite kosher I don't know, but obviously kosher isn't helping any.

Even worse off are the vegans. The vegan students I've encountered have pasty, unhealthy complexions, seem to be frequently sick, and look terrible. This is not a good diet, certainly lacking in fats and proteins, and probably missing some vitamins as well.

Likewise, the Atkins diet is low-carb extremist. I tried it at one point and found it completely unworkable. Reducing carbs is fine, but an ideological crusade to eliminate them is nuts.
  •  Some essential ingredient is missing from your diet.
Just take the magic pill--so the story goes--and you'll be much healthier. That's what they tell you in the nutrition shops or on late-night TV. Not true. As long as you get your vitamins you're fine. There is no magic ingredient missing from the food you eat.

As I've already said, our biggest problem is that we eat too much. It is simply not true that despite all that food we're all on the verge of malnutrition because we lack some essential nutraceutical. It's nonsense. I never visit those "nutrition" shops.
  • Fast food is unhealthy food.
A Big Mac has about 550 Calories. If you ate three of them a day you'd get all the carbs, fats, and proteins you need, along with 1650 Cal. If the remaining Calories were consumed as fresh fruits and vegetables you'd have a perfectly balanced diet. Nobody on the Big Mac diet will die of malnutrition.

Of course that diet is boring. So people augment it with fries, a soft drink, and an apple pie. Then you've got too many Calories and way too many carbs. But there is nothing intrinsically wrong with fast food. All it is is good food served quickly.

  • Pesticides and food additives are bad for you.
Pesticides are clearly non-toxic to humans. Were it otherwise we'd have long since been killed off--they've been used ubiquitously for decades if not centuries. To the contrary, pesticides make food better by keeping insects out of it. I live right next to an apple orchard, and if the farmer didn't use pesticides the apples wouldn't be near as good.

I used to buy bread that didn't contain preservatives. Of course it goes stale and moldy within a few days. I always ended up throwing half the loaf away. There is no measurable damage to human health from preservatives. Indeed, there is enormous cost savings because much less food has to be discarded.

Likewise, food additives add taste and texture to food. The alternative is a lot more sugar or a lot more fat. Food shouldn't just be healthy, but also tasty and attractive. Food additives allow that to happen cheaply and with no significant ill effects.
  • "Health food" is healthy.
My daughter buys something called "almond milk" in lieu of the real thing--she thinks it's healthier. But it's just sugar water with a little almond extract and a few vitamins mixed in. It's overpriced, carb-loaded crap. Much better to buy real milk, which comes not only with vitamins and proteins, but necessary fatty acids. (My wife is lactose-intolerant, so that is not an option for her.)

Likewise, I see no advantage to so-called "organic" food. It confers no health benefits that I can see. But the Madison Avenue guys have y'all bamboozled into buying the stuff at inflated prices. I never touch it.

So that's Trotsky's common sense diet. Eat recognizable foods. Don't worry about additives or pesticides. Avoid excess carbohydrates. Control your calorie intake. As Aristotle said, all things in moderation. Enjoy your food. Don't let the Greenies, the ad men, the fanatics, or the scolds get to you.

Bon Appetit!

Thursday, October 15, 2015

Sam King Defends Lenin's Imperialism

Sam King (no relation to my pseudonym) throws the word "monopoly" around like it actually meant something.

Mr. King is the author of a long, interesting article entitled Lenin's Theory of Imperialism: A Defense of its Relevance in the 21st Century (h/t Socialist Action). It suffers from the flaw common to most Marxist theory: it's principally concerned with a rabbinical exegesis on some ancient text. In this case the text is Lenin's Imperialism: The Highest Stage of Capitalism, published in 1900. His major claim is summarized in the final paragraph.
Far from having become antiquated, the framework provided by Lenin’s Imperialism: the Highest Stage of Capitalism is still able to cast light on even the most modern developments in world political economy – as I have tried to show in relation to China. If this article provokes even a handful of serious people to go back and study or re-study Lenin’s thesis, then it has done its job.
I think this is nutty--a study of modern economics starting from a political polemic written more than a century ago by somebody inexpert in the discipline is not worthwhile. But before Mr. King can analyze the modern economy, he has to dispense with some modern-day Marxists who have apparently lost their way. Specifically, he takes on the deceased Chris Harmon, late of the International Socialist Tendency (IST).

For example, he attributes the following to Mr. Harmon (footnotes deleted for clarity).
Harman argued, “Most of the Third World, including nearly all of Africa and much of Latin America outside Brazil and Mexico, is of diminishing economic importance for the dynamic of the system as a whole. Profits and interest payments from such regions are the lettering on the icing on the cake for world capital, not even a slice of the cake itself”, while “the major sources of surplus value in the world are in the advanced countries”. Lenin is evoked in support of this position.
Mr. Harmon's opinion seems right to me--a proper description of the modern world. Mr. King almost admits as much, but no matter.
Whatever the truth of Harman’s position on the unimportance of exploitation of the poor countries for imperialism, it cannot be said to have anything in common with Lenin.
In other words, reality sucks. Facts that don't conform to Lenin's theory, however creatively interpreted, must be studiously ignored. And so Mr. King spends the rest of the article strenuously pounding square pegs into round holes, trying to fit the modern world into Lenin's theory.

Like Biblical exegesis, the Marxist sort also has moral consequences. Mr. King does not fail to point out the long reach of class collaboration (emphasis mine).
Leaving aside that Harman is arguing here not what Lenin said, but what his “phraseology” seemed to suggest, it is easy to find categorical refutation. Lenin called it a “petty bourgeois reformist point of view” to believe it “possible, under capitalism to separate” out “‘productively’ invested capital (industrial and commercial undertakings) and ‘speculatively’ invested capital (in Stock Exchange and financial operations)”.
Lenin's theory of imperialism revolves around two concepts: monopoly and unequal exchange. The latter depends on the uniquely Marxist understanding of value. There is the market price of labor, aka the wage, which is easily measured on the market. Then there is the value of labor, which is some kind of spiritual quantity that depends on what a worker's time is actually "worth." The difference between the value and the price represents unequal exchange, i.e., the degree of exploitation of the proletariat. Since labor's value cannot be measured, these numbers are just made up and estimated. This is why Marxist polemics never contain any actual data.

Mr. King gives numerous examples of where, in his opinion, value and wage substantially diverge. Consider, for example,
...your computer. One study gives a breakdown of revenues for iPods sold in the US for $300. US-based retailers got $75. Apple secured $80. Chinese workers and bosses got $2.61 between them. How would it be possible to imagine the workers who did most of the work are exploited, not by the capitalists who get most of the profits, but only by some middlemen and subcontractors?
Of course the factory workers did not do most of the work (as Mr. King admits later in the article). The vast majority of the effort was done by designers, engineers, entrepreneurs, salesmen, and brand managers in the United States, Taiwan, and Israel. Chinese factory workers probably contributed about 1% of the value. So this is no example of unequal exchange.

Capitalists can capitalize on unequal exchange only if they have a monopoly. Otherwise (as Mr. King does not mention) the benefits go entirely to the consumer. Mr. King describes two kinds of monopolies. The first is held by multi-national corporations, of which Nike and Apple are two examples. And these do have a monopoly of sorts. While sneakers are a commodity product (i.e., no monopoly), branded Nike sneakers are a monopoly of Nike. Indeed, as any sophomore microeconomics student learns, brands create "artificial" monopolies--Crest toothpaste, McDonald's hamburgers, Nike sneakers, etc.
Where do Nike’s profits come from? Nike does not produce anything; it outsources all its production. Are Nike’s profits then produced by Tiger Woods, Shane Warne and its small group of advertising, design, sales and financial staff in their offices in the US? The Marxist answer is “no”: production workers create the value realised as profits.
Actually, yes, Tiger Woods, et al., contributed significant value to the brand. As did the designers, stylists, and advertisers in the US. It is simply not true that production workers created all the value. Only a small bit of it.

The other monopoly is "financial capital." Despite spending seven years as a card-carrying Commie, and an additional thirty as a student of economics, I still have no idea what that term means. It's a boogeyman, like neoliberalism. So I can't do Mr. King's argument justice, but he seems to claim that "financial capital" is increasingly monopolized. Really? Today we have not just banks, but commercial and investment banks, hedge funds, venture capital, mutual funds, pension funds, exchange-traded funds, shadow-banking systems, all kinds of derivatives, along with many financial instruments I've never even heard of.

I don't understand the half of it. And neither does Mr. King. For that matter, neither does anybody else. The whole thing is so complicated and so interlocked that nobody has a clue what will happen when something goes wrong. But one thing is certain: it is definitely not a monopoly! So on that Lenin is just wrong.

One more claim by Mr. King is worth examining.
Indonesian textile workers receive wages around one-thirtieth of the Australian minimum wage. They must work a full work day to earn what an Australian worker gets in the first minutes of a shift.
A similar discrepancy occurs on the US-Mexican border. Workers can increase their wages by a factor of 10 just by moving from Juarez to El Paso. Why? It is not, as Mr. King rightly states, because American textile technology is so superior. Indeed, he remarks that such low-tech manufacture is comparably productive around the world. And it's not that Americans are more skillful--the Mexican gets the pay raise on his first day in the USA.

Instead it has to do with good institutions. I count the following advantages of El Paso over Juarez.

  • Low crime. Crime adds a significant cost, and the crime difference between El Paso and Juarez is significant.
  • Secure property rights. Factory owners in El Paso have secure title to the land going back several centuries. There is no doubt who owns it. The government is (generally) not able to simply expropriate it. Nobody will invest very much if property rights are not secure.
  • Rule of law. American courts and the American legal system have a long tradition in both common law and constitutional law. They will get it right most of the time. That's not true in Mexico: the common law tradition does not exist, and the constitution is not awarded the same authority. Legal outcomes are much less predictable.
  • Economic freedom. Entrepreneurs in the USA are free to fail. Nobody goes to jail for going bankrupt (unlike, e.g., China). Conversely, American businesses can keep the proceeds of their efforts, even if in a narrow sense it's unfair. The biggest correlate for a country's standard of living is the measure of economic freedom.
Lenin understood none of this, though in 1900 perhaps we can't blame him. Sam King, on the other hand, really should know better.

Further Reading:

Tuesday, October 13, 2015

Book Review: Popper's Bitcoin Book

Nathaniel Popper is the author of Digital Gold, an account of the short history of bitcoin. Bitcoin is a digital currency invented by "Satoshi Nakamoto," and released to the world in 2009.

The book is advertised as a business book, and no doubt some legitimate fortunes have been made and lost. A few of the characters are, indeed, entrepreneurs in the spirit of Sam Walton, Steve Jobs, or Aubrey McClendon. The name Wences Casares, the Patagonian founder of Xapo, comes to mind, though (apart from Satoshi himself) no bitcoiners rise to the rank of genius that one associates with those other giants of industry.

But two other less creditable strands are prominent, especially in the early years. First is a kind of crackpot libertarianism--a cross between Ron Paul and Occupy Wall Street. It's a paranoid world view that posits some grand conspiracy theory between the government, big business, and the Federal Reserve, among others. These are people for whom the dollar bill is an infringement on liberty, and the main object of activism is to protect one's privacy from the prying eye of government. Roger Ver, a longtime champion of bitcoin, who served time for illegally selling explosives and has renounced his US citizenship, is representative.

The second strand is outright criminality. The biggest use for bitcoin, even today, is buying and selling illegal drugs. The founder of the trade was a poor fellow named Ross Ulbricht, aka Dread Pirate Roberts. Along with belonging to the kooky Libertarian club, he also grew mushrooms in his basement and wanted to sell them. Apart from hawking them on a street corner, a bitcoin-enabled internet storefront looked to be a golden opportunity. And so Silk Road was born--the internet marketplace run along the principles of Amazon.com, but that used bitcoin as a cheap, relatively anonymous way to transfer money.

For this Mr. Ulbricht is now serving a life sentence without parole, a punishment which many (perhaps including me) think is excessive.

Other people got caught up in Silk Road, including an early bitcoin entrepreneur named Charlie Shrem. A born salesman and a natural champion for the new technology, he ran the first currency exchange facilitating bitcoin purchases. While great at raising capital, he wasn't a particularly good manager and had no interest at all in regulations surrounding financial transactions. So, despite likely having no criminal intent, he is now spending two years in the federal pen--a sentence that is surely unduly harsh.

And then there is Mark Karpeles, the French dude who bought Tokyo-based Mt. Gox, building it into the premier trading platform for bitcoin. Unfortunately his bookkeeping was not up to the challenge, and in 2014 Mr. Karpeles revealed that somehow the company had "lost" 750,000 bitcoins, worth as much as $500 million. That story is complicated (I don't think it is completely told in Mr. Popper's book), and some of the money has been recovered. Nevertheless, Mr. Karpeles is now charged with embezzlement.

Despite this, surprisingly bitcoin is still around. There are four reasons for its continued existence. First, successors to Silk Road have proliferated, and the technology remains today the best way to buy and sell contraband. This remains the biggest use for the currency and guarantees a market. Second, honest, non-ideological entrepreneurs have entered the market, of which Wences Casares is a preeminent example. He is looking for legitimate markets, and indeed, bitcoin is now popular in places where banks are unreliable, e.g., Mr. Casares' native Argentina.

Third, the dreaded establishment has latched on to bitcoin. Every major bank now has a research program on the technology. The blockchain (bitcoin) algorithm can be used to trade any number of things cheaply, e.g., stocks, bonds, and real estate. Blythe Masters, the lady wunderkind working for JP Morgan, actively disowns bitcoin currency, but is using the blockchain to trade derivatives. (Ms. Masters does not appear in Mr. Popper's book, but she is the first woman to play a significant role in any of the business books I have read.)

And finally, even the evil government is beginning to take notice. Much to the Libertarians' dismay, the gnomes at the Fed and the IRS have realized that bitcoin is not like cash. The latter is truly anonymous and can be used to evade taxes, among other things. Bitcoin is precisely not anonymous, but merely pseudonymous. Indeed, all transactions are a public record, just waiting for the police to figure out who hides behind the pseudonyms. That's how Mr. Ulbricht got caught.

So now some paranoid people are suggesting that the Fed wants to eliminate cash altogether and replace it with bitcoin or some similar system.

So what do Trotskyists think about bitcoin? I have absolutely no clue. My guess is that few of the papers on my Beat would know the difference between a blockchain and a cement block. If you're stuck in a 19th Century timewarp, then new technology becomes a mystery.

As for me, I'm cautiously optimistic about bitcoin. I took Mr. Casares' advice, which I paraphrase from memory here:  
Buy four bitcoins, which today costs about $1000. There's a good chance that you'll lose all your money--that the price of bitcoin will fall to zero. But there's also a chance that bitcoin will eventually be worth $1 million.
Paypal has about 200 million users in the world, and everybody acknowledges that Paypal is a success. But you need a credit card to use it, and only one billion of the world's population has a credit card. Bitcoin, on the other hand, only requires having a cell phone. Six billion people have a cell phone. So bitcoin has a much larger potential market than Paypal.
Today bitcoin has 13 million users. When it has 200 million (like Paypal) it will be a success. 
I bought the bitcoin lottery ticket. The most I can lose is a grand. But I might also become rich.

Further Reading:

Sunday, October 4, 2015

Trotskyists on Economics

Here is a roundup of recent Trotskyist opinion on economics, broadly interpreted.

Consider first Socialist Action's article headlined Scientists Say: End Fossil Fuel Use Now. I guess that means I won't be able to heat my house this winter. And I should probably forget about going to work on Monday, as that entails driving a car. Oh, and I'm not allowed to use a thorium reactor, either.

So maybe I shouldn't take author Christine Frank so literally? Perhaps she'd be willing to give me thirty days to wean myself off of hydrocarbons? Maybe even a year, though who knows, all of Antarctica might melt before then.

As it turns out, Ms. Frank's solution ignores her imaginary deadline.
The only way to stop further environmental devastation by a greedy capitalist class that refuses to give up its fossil-fuel-based economy is to nationalize the entire energy industry and put it under democratic workers’ control. At the same time, we must ensure a just transition with retraining, union wages, and full benefits for all workers making the shift from the production of dirty fuels to clean, renewable energy.
Even if you could accomplish all of this before the End Of The World, it's not clear to me that democratically empowered workers are going to vote for collective suicide, e.g., freezing to death in the winter. But then Ms. Frank never had much of a brain for practicalities.

Socialist Action is obviously not serious about convincing anybody who doesn't already agree with them. Their website is principally dedicated to the psychological amusement of their own comrades.

Equally ridiculous is the article by Socialist Action's Marty Goodman entitled Syriza Wins, Greek Workers Lose, about Alexis Tsipras' reelection as Greek prime minister following his abrupt turnabout on the memorandum. The correct path for Greek workers, according to Mr. Goodman, is to support the Trotskyists in the ANTARSYA coalition--you know, the ones that got 0.85% of the vote. (Mr. Goodman hilariously mentions that this is an improvement over last time!)

The Left breakaway from Syriza that supported Grexit did much better, getting somewhat less than the 3% necessary to enter parliament. Such a smashing success, per Mr. Goodman, is attributable to their supposedly bourgeois insistence on continued capitalist rule.

The fact is that the overwhelming majority of Greeks want to stay in the Euro. And no wonder, as the alternative is instant poverty. When Tsipras' negotiation failed to produce the expected free unicorns, Greek voters--sadly but predictably--settled for the only remaining option. Mr. Goodman's thesis that the election was somehow unrepresentative is delusional.

I try to take my Trotskyist friends seriously, but these Socialist Action articles are just stupid--there's no other word for it.

The folks over at Solidarity hold the same opinion as Ms. Frank, but they are better informed and more honest about what it entails. Reprinting a piece from the Bureau of the Fourth International (whatever that is), they lay out the unvarnished truth.
To save the climate: 1) 4/5ths of known reserves of fossil fuels must remain underground; 2) the energy system based on these fossil sources (and on nuclear power) must be destroyed as quickly as possible, without compensation; 3) production which is harmful, unnecessary, or based on planned obsolescence must be abandoned, in order to reduce the consumption of energy and other resources; 4) the despotic and unequal productivist/consumerist system must be replaced by a renewable system, one that is efficient, decentralized, social and democratic.
This requires nothing less than the disemployment and mass impoverishment of the majority of the world's population. Of course if that's what's necessary to Save the Planet, then certainly we should all go along--even democratically elected workers must agree.

The Militant's masthead includes the slogan "published in the interests of working people." Socialist Action and Solidarity will both claim similar sentiments. But their relentless insistence on mass poverty will never win the support from anybody who actually has to work for a living.

More serious is an article in Solidarity by Kevin Lin, entitled Chinese Strikes in Manufacturing: From Offensive to Defensive? Mr. Lin obviously knows something, and that right there makes the piece worth reading. He describes strikes at manufacturing companies in China, including at a footwear factory and a clothing & leather company. Some were successful and others not so much.

His thesis (and I simplify it here) is that in the previous decade strikes have been for higher wages and better working conditions--demands that Mr. Lin terms "offensive." More recently, however, unrest has been caused by company closures, severance packages, and demands for workers to relocate. These are "defensive" because while they protect workers, they don't improve standards of living.

Mr. Lin claims that because of the weakness in the Chinese economy, defensive struggles will now prevail. I think he's right.

The Militant also reports on labor unrest, this time in the US. As usual, they're the best reporters on my Beat. Alyson Kennedy files from East Chicago about the contract negotiations between the United Steelworkers and ArcelorMittal. After describing the weakness in the global steel market, she writes,
“We are in for a long fight,” Darrell Reed, a member of Local 1010’s grievance committee, told the Militant. “I’m not optimistic that the latest negotiations will get us something we can live with. Both active and retired members have to stand together. Health care is a major issue, especially for retirees. For some of them the company’s offer means not having enough money for food after paying for health care.”
Mr. Reed has it right. Margins in the steel industry are razor-thin, and companies have no ability to raise prices. Further, even as the workforce shrinks, the number of retirees continues to grow. And contrary to Marxist opinion, benefits for retirees do not come from the capitalists' margins, but instead are paid out of the salaries of the employees. That's why it's going to be so hard to keep active and retired members on the same page--they're both competing for the same pot of money.

Actually, it's all of a piece--the unrest in China, the dispute in the steel industry, and even the demand for $15/hour. For higher wages for Walmart employees means that savings have to come from elsewhere--either by hiring fewer workers in America, or by pinching suppliers. But the suppliers are Chinese workers, who end up footing the bill. That's why their strikes are increasingly defensive, and also increasingly unwinnable.

The only winners are American consumers, who will get cheaper prices. All the workers--whether in the US or China--are really on strike against the consumer. And it's a battle the unions will never win.

The Militant, at least, does not always demand Instant Poverty Now.

Further Reading:

Saturday, September 26, 2015

People Who Won't Be President

I won't become president in January, 2017. And neither will any of you, my readers.

We're in good company, joining this list of distinguished others who will also never be president: Ben Carson, Hillary Clinton, Ted Cruz, Carly Fiorina, Rand Paul, Bernie Sanders, Jill Stein, and Donald Trump. Let's consider them in alphabetical order.

Ben Carson is a very nice man. I like him, and I'd enjoy having him as a house guest. He's gotten himself in trouble recently by suggesting that he'd never vote for a Muslim. Actually, I agree with him on that. The statement is analogous to what many on the Left say when they object to voting for a Mormon or a Catholic. Such preferences are the right of every voter, including Ben Carson. Note Mr. Carson did not say that Muslims are prohibited from being president.

But Mr. Carson is clearly out of his league. He has no experience relevant to being president, and it shows in the debates. He has maxed out on his poll numbers. He'll fade in the stretch.

Hillary Clinton is a crook. She can't tell the truth, neither about Benghazi nor her e-mail server. Worse, she's got Richard Nixon's trait of looking like a liar even when she is truthful.

If she wins the nomination she will lose the general election by a landslide. But I predict she will drop out of the race before the Democratic Convention. I think her candidacy is increasingly untenable.

Ted Cruz is a crank. I have suggested that he represents the stupid wing of the Republican Party. I don't agree with his position on immigration. His foreign policy suggestions are not serious. He takes the most radical possible position, winning the enthusiastic support of the most extreme Republican base. But he'll never win over the majority of Republicans, much less the general electorate. He's unelectable outside of Texas. (And after this campaign he may not even win re-election there, either.)

Carly Fiorina is a naif. She reminds me of Sarah Palin--an attractive candidate on the surface, but completely unprepared for the attack ads. Like Ms. Palin, Ms. Fiorina has no clue what's coming at her. It will start with her Republican opponents if, by some fluke, she actually wins a primary. And if she survives that the Democrat smear machine will take her apart limb from limb. Like Ms. Palin, there won't be a stitch left on her reputation when they're done.

But she won't get that far. Though it's great having her on the debate stage.

Rand Paul is an ideologue. He has tried very hard to leave his father behind and become a more mainstream, electable Republican. But he can't do it. He just doesn't believe in any credible foreign policy, often sounding to the Left of President Obama. He is very smart and articulate--great fun to listen to. I agree with 90% of what he says, but the remaining 10% is a deal-breaker. Judging from the polls, my Republican comrades agree with me.

Bernie Sanders is a clown. He's the Democrat analog to Ted Cruz--a charlatan appealing to the Progressive faithful. His promises are so outlandish that there is no way he could keep them if he tried. For example, he thinks we'll get richer if we restrict trade: in his world Americans won't be allowed to buy products from Canada, China, Mexico, or Central America. That's bad for American consumers, no doubt. Of course then we won't be able to sell products to those countries, either. That's bad for American workers.

People earn money by selling stuff to other people. How can you earn money when it becomes illegal to buy and sell?

Jill Stein is a fool. I don't understand why she is running. Her program is mostly indistinguishable from Mr. Sanders, except that she is completely oblivious to even the most obvious economics. Indeed, her demand to equalize incomes in America reduces to Poverty now for everybody--even the 1%.

For example: "Create millions of jobs by transitioning to 100% clean renewable energy by 2030, and investing in public transit, sustainable agriculture, and conservation."

Note to Jill & Bernie: it is easy to create jobs. You can just hire folks to dig holes in the ground and then fill them in again. That's what they did during the New Deal. That's what they've been doing in China. But jobs like that don't make anybody any richer. Them's prison jobs.

Why invest in public transit when nobody wants to ride public transit? Most of the trains and buses in this country move around empty. But Jill wants us to dig more holes.

Some of my Trotskyist friends support her over Mr. Sanders solely because she doesn't have a (D) after her name. This is like their support for the Syriza opposition that just got 3% of the vote in Greece. That's what they call a "realistic" path to socialism.

Donald Trump is a fraud. So he's gonna kick out 11 million illegal aliens in two years, and then let most of them back in via an "expedited" process. Why? How? Who is paying for all that?

The man's a great entertainer and skilled TV personality. But he's already wearing thin. By the time real Republicans have to cast real votes, he won't get 10% of them, if that many.

Mr. Trump, far from being a Republican, represents the stupid wing of the Democrat party. We're being trolled, and eventually we'll wise up and push him aside.

The viable Republican candidates are Marco Rubio, Jeb Bush and Chris Christie. The only viable "candidate" for the Democrats is Joe Biden, if he wants to run.

I think it's going to be a Republican year.

Further Reading:

Thursday, September 17, 2015

Refugees in Hungary

Louis Proyect writes a complex (perhaps even incoherent) post comparing 1956 Hungary with Syria today. I won't presume to summarize it here, but one theme is a polemic against the stupid Left (my term). These are Leftists who support Assad today, or who supported the Soviet invasion of Hungary in 1956. I call them stupid (perhaps violating my rules for this blog) because they let Barack Obama do all their thinking for them--whatever the US government supports they must oppose, and vice versa, regardless of any other considerations.

Mr. Proyect's opinion (which I share) is that the rebels in 1956 were on the side of angels, and that the murderous Assad regime is a major cause of the refugee crisis emanating from Syria. Where he and I disagree is on the responsibility of European nations to accept large or even unlimited numbers of these refugees. Specifically, he condemns Hungary's Prime Minister Viktor Orban for coddling fascists and mistreating Syrians.

Mr. Proyect puts the rap sheet this way:
But it is Hungary that takes the cake apparently. 
  • It put a razor-wire fence on the border with Serbia to keep refugees out. 
  • It put up billboards (in Hungarian no less) warning anybody who made it through the razor-wire fence that “If you come to Hungary, don’t take the jobs of Hungarians!” 
  • A TV news photographer kicked and tripped refugees running away from the police. The station she worked for was connected to the far-right Jobbik party that lines up with the “axis of resistance” on Syria, opposing “the systematic attempts of the West to find a casus belli for an armed intervention against the Assad government.” 
  • At an internment camp for refugees in Hungary, cops threw bags of food to them as if they were hungry animals. 
Since the refugees are only interested in making their way to Germany or Britain, the xenophobia is likely a strategy to mollify Hungary’s burgeoning ultraright groups like Jobbik and their voters.
Of course even as Mr. Proyect penned those words Germany closed its border with Austria, forcing Austria to secure its Hungarian border. Anticipating this, the Hungarians built the razor-wire fence.

Mr. Proyect is correct in saying that "Hungary takes the cake." The country really is more xenophobic than most in Europe, and accordingly its fascist movement, Jobbik, is stronger. But he's wrong to condemn Mr. Orban. I think he should read an article by George Friedman that describes the tightrope that Mr. Orban has to walk. The Hungarian body politic will simply not tolerate a large refugee influx, and were Mr. Orban to allow that it would quickly lead to Jobbik taking power.

I do not speak Hungarian, but over the years I have probably spent cumulatively several months in the country. I think two observations clarify why Hungary is more refugee-averse than most countries.

Mr. Proyect--ace historian--probably knows about the Treaty of Trianon, though I'll hazard most of my readers do not. But I will guarantee that every Hungarian schoolchild is intimately familiar with it. When I visited Szeged, a city a few kilometers from the Serbian border, the first thing my host told me about the place is that it was historically at the very center of Hungary. For prior to the Trianon agreement in 1920, Hungary included most of Vojvodina (Vajdasag in Hungarian), a bit of the Croatian coast, and all of Transylvania (Erdely). Today's Slovak capital, Bratislava (Pozsony), was once the seat of an Hungarian empire.

Hungarians feel, almost to a person, that the Treaty of Trianon was a grave injustice. Sober people, undoubtedly including Mr. Orban, have come to terms with it. But much of the population--especially those whose families came from the former lands--remain very bitter. This is the root of Jobbik. Their principle concern is to retrieve lost lands, especially Transylvania, for Hungary. The Trianon Accord is a big reason why "Hungary takes the cake."

One result of the Treaty is that the Hungarian rump state--modern Hungary--is practically monoethnic. Of people declaring their ethnicity to the census bureau, 98% claim to be Hungarian. The largest minority are Roma, and they are certainly not integrated into the society.

This leads to the second reason why Hungary is different. Hungarian is not an Indo-European language, and is radically different from all other languages in Europe, apart from Finnish. It is very distantly related to Turkish. Even an international word such as police in Hungarian becomes an unrecognizable rendorseg. Hungarian is a famously difficult language to learn, and likewise, for Hungarians learning English is a real challenge.

So don't let those talented, multi-lingual Hungarian expats fool you--very few people in Hungary speak any language besides Hungarian. In the northwest corner of the country, near the Austrian border, German is widely spoken. In Budapest, German and tourist English are often understood. But outside of that it's pretty exclusively magyar.

Mr. Proyect's account of the billboard in Hungarian doesn't surprise me at all.

The result is the country is isolated. Hungarians' understanding of the outside world is limited. They don't travel much. I believe that the level of political discourse is correspondingly very shallow. It's an atmosphere that breeds paranoia and xenophobia. Yet again, "Hungary takes the cake."

Under these circumstances it is truly impossible for any Hungarian government to accept even a small number of refugees. One doesn't have to be a fascist to turn them away. I think Mr. Proyect is too hard on Mr. Orban. He is not a fascist, but he is Hungarian, and he knows the country he lives in.

Note: My daughter got married over the Labor Day weekend. That, along with the house guests that have only recently departed, accounts for the sparse blogging.

Further Reading:

Saturday, August 29, 2015

Stock Market Decline Signals End of World

Newsflash: Stock markets sometimes go down. Recessions occasionally happen.

The Militant's Brian Williams ruins an otherwise perfectly good article with breathless predictions of catastrophe. At the end, his soothsaying is completely detached from reality, as even he admits. The article's final words:
Whether the stock market will continue to tumble this week, or take a breather, the capitalists have no answer to the crisis of their system. The crisis will deepen.
Facts be damned--we're doomed no matter what.

For all that, The Militant is the only paper on my regular beat that takes economics seriously. Mr. Williams does a creditable job as their lead reporter on the issue, and this article is no exception. He's got the facts mostly right.

This is both true and important:
World trade in the first half of 2015 has tumbled to the lowest level since 2009. Steel, oil, iron ore, copper, aluminum and nickel are contracting. The Bloomberg Commodity Index, which follows a basket of 22 raw materials, is at its lowest point in 16 years.
In China, where production is mostly geared for export, exports dropped 8 percent in July from a year earlier, and auto sales dropped 7 percent. Manufacturing in August shrank at the fastest pace since 2009.
And finally there's this, though I'd put a different spin on it.
“The trigger was most likely the sudden deterioration of leading economic measures, energy prices, and industrial commodities, both in the U.S. and globally,” investment analyst John Hussman wrote in his weekly column Aug. 24.
I think these facts get to the nub of the issue and the news is not good. I, too, think that the economy is in for a rough patch. I predict a recession, and mostly for the reasons Mr. Williams cites.

So no question that global trade is declining, and when trade declines we're all getting poorer. If international trade is shrinking, then it's hard to imagine that trade within national borders (domestic trade) is growing. So Mr. Williams is right to suggest that the Chinese economy may very well be in recession, government statistics notwithstanding.

Mr. Williams adduces that this conclusion also follows from the fall in commodity prices. But here he is in error, as summarized by Scott Sumner's catchy phrase Never reason from a price change. For prices can change for two reasons: either slack demand means there is a contraction in the amount consumed, or cheaper production has increased supply leading to lower prices that way. The former is an adverse demand shock to the economy, while the latter is a beneficial supply shock.

The decline in oil prices is due to American fracking--that is a supply shock. By making oil cheaper it benefits all users of oil, i.e., all consumers. It makes us richer. That cannot be the cause of recession.

On the other hand, nobody has been fracking for iron ore. While the world's supply has greatly expanded over the years, the current price decline looks to be due to shrinking demand, notably from China. This is an adverse demand-side shock, and will result in a shrinking of the economy, possibly leading to recession.

Mr. Williams conflates these two effects--he's reasoning from a price change. The fall in commodity prices is, in fact, a complicated phenomenon whose effects probably cancel out.

Nevertheless, the hard truth is that China cannot continue to grow at a rate substantially faster than the global economy, which looks to be in the 3-4% range. China has maxed out because it has fully deployed its excess agricultural labor force into the cities, and it is a country in long-term demographic decline. It's growth rate going forward will not be significantly faster than that in the US or Europe.

Also, China can no longer export its way out of recession. It is simply too big--the world is not big enough to consume all of China's output. So China will have to grow domestic consumption to maintain growth. There's a lot of room for that--Chinese are still poor people--but they're going to have to make substantial changes to their political and economic institutions for that to happen.

So the world has to readjust to diminished, long-term growth prospects in China. Another word for that is recession, which is what I think will happen. But contra Mr. Williams it does not auger the end of the world. Why? Because while Mr. Williams correctly cites the overproduction of commodities as a drag, that is only a small bit of the economy. Services make up almost 80% of the American economy, and over 40% of the Chinese economy. Commodities have little effect on the service sector, and hence are a relatively small contributor to growth.

The headline article in the same issue of The Militant is also relevant. It concerns the looming expiration of union contracts with the steel industry: ArcelorMittal, USSteel, and ATI, among others. At the latter, workers have been locked out at a plant near Pittsburgh. The piece--actually a series of articles by multiple authors--reports on labor actions happening around the country.

The issues focus around pensions, healthcare, overtime, and working conditions. Plants near Birmingham and Philadelphia are closing. "The price of steel has dropped sharply in the past year," consistent with Mr. Williams' analysis.

So it is very clear that there will be fewer steel workers in the future than there are today.
  • There is too much global manufacturing capacity. Some plants have to close.
  • Workers will become more productive--jobs will be lost through automation.
  • Competitors from overseas and non-union mini-mills will reduce the competitiveness of closed-shop companies.
Thus the union's battle is already lost. It is only a question of how long they can hold out.

Here is a poignant demand.
Workers now pay no premium and have a total annual deductible of $600 for family coverage, Arabia told the Militant. ATI is demanding a $214 monthly premium with a $6,000 to $8,000 deductible. “It’s a plan designed to keep people from using it,” Arabia said. “Plus new hires will get only a health savings account of $500 per year, and no pension, just a 401(k) plan.”
Organizers clearly hope that capitalists will pay for continued pension and health benefits. But capital never pays operating costs (unless the firm is going bankrupt). Capital is for investment. Operating costs will always be borne by either the customer (higher prices) or by the employee (lower wages). As the size of the workforce shrinks, the existing employees will shoulder an ever growing burden paying pensions for retirees.

Just ask the United Mine Workers how that has worked out.

Further Reading:

Friday, August 21, 2015

Book Review: Walmart

The Retail Revolution: How Wal-Mart Created a Brave New World of Business, by Nelson Lichtenstein, is a marvelous book. Published in 2009, I wish I had read it years ago.

Despite Mr. Lichtenstein's credential as a Leftist college professor unduly critical of Walmart*, this is not a hit piece. Though I have no independent ability to judge the facts, there was little in the book that didn't ring true to me. While Mr. Lichtenstein does not hide his own perspective, he makes a good faith effort to accurately represent the opinions of others, especially the company. Better than that cannot be expected.

The key question, to my mind, is this: Is the world a better place because of Walmart? Mr. Lichtenstein asks that question only indirectly, quoting Hillary Clinton.
"Is Wal-Mart a good thing or bad thing for America?" Hillary Clinton, who had served six years on the Wal-Mart board, answered cautiously. "Well, it's a mixed blessing," she said, noting both the inexpensive goods the company brought to rural America as well as the controversy over the company's health insurance program and its failure to promote women to management ranks.
Well, of course. Nobody can seriously claim that Walmart is an unalloyed good with no demerits. But still, if you add up the balance sheet I think the answer to that question is pretty obvious. The company substantially raised the standard of living for millions of people in rural America by selling quality goods at low prices. It invented a whole new way of doing retail, eliminating wholesalers, middlemen, and jobbers, thereby reducing costs. It provided jobs to hundreds of thousands of low-wage workers in the US. And it started China on a path to becoming the world's second largest economy.

The world is unequivocally better off because of Walmart. I think if you pushed Mr. Lichtenstein to the mat and forced him to answer he'd agree with that.

Mr. Lichtenstein evades the question by taking us on a grand tour of all the demerits--a fascinating and informative read to be sure. But at the end of the day it's something of a red herring. For example, he describes in great detail the unfortunate lives of women workers in Chinese factories. They work very long hours for low pay in tedious jobs under dangerous conditions. Factory fires occasionally kill hundreds. The government imposes apartheid-style rules on them (hukou) preventing them from becoming residents in the cities where they work.

It's terrible, awful, no-good. We should all be happy that circumstances in China are gradually changing for the better. But Mr. Lichtenstein's description, while not inaccurate, is somehow irrelevant.

He misses the mark in two ways. First, he blames almost everything on Walmart. If it weren't for the Bentonville behemoth squeezing suppliers and turning a blind eye toward illegal factories, then none of this would have happened. Instead, Mr. Lichtenstein implies, our Chinese friends would be earning $15/hour working in bright, airy factories, all while smiling and singing songs, just as depicted in those socialist realism posters.

But Walmart is just a link in the chain. Consumers (especially Walmart consumers) can't buy toys unless they're cheap. Walmart operates on very thin margins and has to squeeze its suppliers. Those, in turn, cut corners to maximize the business that comes their way. The subcontractors are under pressure to deliver on time and under budget. The Chinese government--more crooked than most--insists on its cut.

And Chinese workers are all to happy to go work in the factory. Especially considering the alternative: walking very slowly behind a water buffalo in some rice paddy somewhere, with no chance of ever having a better life.

Despite his prejudice, Mr. Lichtenstein does tell the truth:
Factory wages are low--about one hundred dollars a month--but far higher than in agriculture, and they are rising fairly quickly because of the labor shortage generated by the export boom in toys, garments shoes, and electronic devices.
Thank you, Walmart!

The second miss stems from Mr. Lichtenstein's misunderstanding about the role of capital. In 2015 Walmart earned about $16 billion on revenue of $486 billion, or approximately a 3% margin. My understanding (Mr. Lichtenstein doesn't tell us) is that the company has kept margins mostly constant over the years. That means as costs go down, then prices also go down instead of margins going up. The Walton family owns roughly 50% of the company. Therefore in round numbers, 1.5 cents on every dollar of sales at Walmart goes to them.**

So contrary to Leftist (and Mr. Lichtenstein's) imagination, the Waltons are not paying for Walmart employee's health insurance. They don't earn nearly enough money to make that possible. Shareholders never pay operational expenses. So who is paying that bill? There are only two other choices: the employees themselves, or the customers. Both of them are poor.

Progressives are simply delusional if they think health insurance is paid for by the shareholders. I think it is odd that Mr. Lichtenstein, along with most of the Left, is so upset about Walmart employees being subsidized by local governments, e.g., Medicaid or Medicaid-like programs. Surely taxpayers on average are richer than Walmart's customers. By saving their customers' money and pushing their employees onto the government's nickel, Walmart is helping poor people in ways that progressives should applaud.

Likewise, Mr. Lichtenstein happily recounts how local governments stick it to evil corporations:
In effect, these California cities were leveraging their zoning authority to recreate a set of mini-New Deals that ensured a more progressive distribution of the wealth generated by private interest ... But Wal-Mart would not play ball.
And good for Walmart! All of these extra costs that sundry civic corruptocrats thought were good ideas had to be paid for somehow. Those all come out of the hide of either customers or employees. Why does Mr. Lichtenstein want to make Walmart's employees poorer? A tax on Walmart isn't a blow to the wealthy--instead it's just ripping off poor people. And all the more so for Walmart since their customers are as poor as their employees.

Mr. Lichtenstein recognizes as much. In the new normal he envisions, Walmart will have to raise prices to cover the expenses of a "living wage," presumably not just for Americans but also for Chinese. He's never heard of market elasticity, i.e., when prices go up sales volumes go down. If Walmart could raise prices without hurting revenue they would certainly do so. The fact that they haven't means that they can't.

Walmart employees are precarious workers, which I defined as workers whose income depends sensitively on the market. That's true not just for the hourly employees, but also for Walmart's managers. Mr. Sam fired his executives with abandon when they no longer served the company. No loyalty there.

But unlike Mr. Lichtenstein, I think that precarious workers are our most productive citizens. They waste nothing! How different they are from government bureaucrats and professors who are immune from market forces. Those people are parasites.

The true road to wealth is not by government mandate or union featherbedding. No. Instead Mr. Sam got it right with his company's first mission statement: To give common folks the opportunity to buy the same things as rich people.

If you want to criticize Walmart, then the extent of their failure to live up to that aspiration is the place to start.

Down With Poverty!

*Mr. Lichtenstein hyphenates the company's name: Wal-Mart. However the firm no longer uses the hyphen. Except in quotes I use the current spelling: Walmart.

**The web, including Wikipedia, claims the Walton family collectively is worth $143 billion. But total Walmart equity is only $81B of which they own only half. And 50% of $80B does not add up to $143B, so something is wrong. I don't believe the $143B figure.

Further Reading: