Whose Free Speech?

A talk with that title was presented at SUNY New Paltz by Dana Cloud, a professor of Communication & Rhetorical Studies at Syracuse University (annual tuition: $47K). I did not attend, but the organizers kindly posted a video of the proceedings here, and I did watch that. It's a bit over an hour long and not really worth your time, but it's entertaining (and of high technical quality). If you do want to listen to it I recommend you do so soon as the link may disappear.

A caveat: I listened to the presentation last night. I do not have a transcript and I'm not going to listen to it again. So while I will make every effort to accurately recount the presenters' opinions (albeit in my own words), it may be that my memory deceives me. I apologize in advance.

The program consisted of three parts. First came an introduction from college president Don Christian, whose office funded the speaker series. (The president's office is in turn funded by students and taxpayers, whose contributions were not acknowledged.) Mr. Christian, to his credit, reiterated the College's commitment to the First Amendment, arguing that a state college has to follow the law of the land. He then hedged, pointing out that some people may be offended by other's speech, that this was problematic, and that the campus will be sensitive to people's feelings.

The second speaker (beginning at 5:59) was Jessica Pabon, an assistant professor of women's, gender, and sexuality studies. She served as the host and organizer for the event, and her introductory remarks are a summary of recent events on campus, where supposedly "marginalized groups" pushed back against "white males" basking in their privileged free speech. The current speaker series was initiated as a response, and with no sense of irony she mentions that it was generously funded and ostentatiously blessed by the (white male) president of the college.

Nobody on campus opposes Ms. Pabon's free speech, and indeed they're bending over backwards to provide her and her ilk with a forum. I think this is to their credit. Nevertheless, in Ms. Pabon's view, "white male" complaints about lack of free speech on campus, far from being an assertion of first amendment rights, are instead an act of bullying and harassment against "people of color", "women", and "LGBTQ" adherents. 

I think she opposes the first amendment, believes that speech should be regulated by some sort of racial/gender quota system, and that people like her should decide who gets to say what.

Then (at 13:30) Ms. Cloud takes the stage. Her credential for this talk is not some academic paper, but rather her experience (which she describes here) as the recipient of hateful and vile e-mail.

I myself was targeted in June after I tweeted for reinforcements at a demonstration against anti-Muslim activists, writing that if more people came out, we could “finish them off.” Of course, as a nonviolent and longtime activist, I did not intend to take or incite actual violence. The statement was taken out of context and circulated via social media across major right-wing outlets including the right-wing front Campus Reform and by Ann Coulter. [link to campus reform here--ed]

Certainly she has every right to be upset (though honestly, she should be more careful about her tweets), but nothing here is about the first amendment. Harassment and threats are not protected speech. Instead she was victimized by petty criminals--likely dysfunctional teenage boys trolling from their mothers' basements.

But the thrust of her talk didn't concern speech at all, but rather about a grand conspiracy theory to discredit "critical faculty" at America's universities. Such persecution (and here I have carefully checked the quote) "becomes part of a larger, globalist, neoliberal agenda. By attacking critical and activist faculty, the minions of the right are doing the work of global capitalism."

So who are these "critical faculty" who have been so relentlessly attacked? I didn't catch every name, but two stood out: George Ciccariello-Maher and Saida Grundy.

George, a former professor at Drexel University, out-did Ms. Cloud in intemperate tweeting by a mile. He wrote "All I Want for Christmas is White Genocide." After which he claimed he was taken out of context. Now maybe Mizzes Cloud and Pabon think that constitutes "critical thinking", but the rest of us see crackpot apeshit.

Drexel University, like any other organization in the world, is a brand. It can't allow completely kooky (and possibly dangerous) insults of its students and faculty to go unchecked. Of course they had to fire George. If nothing else he lost his job for pure stupidity.

The less egregious Saida Grundy (who I believe still has her job at Boston University) is similarly insulting of her employers' customers. According to CNN,

Her personal Twitter account has since been made private, but the Boston Globe reported some of the tweets: "why is white america so reluctant to identify white college males as a problem population?" and "every MLK week i commit myself to not spending a dime in white-owned businesses. and every year i find it nearly impossible."

That "problem population" is paying her salary (tuition: $52K), and even if there is a (slight) scholarly point behind what she says, some courteous discretion is in order. (For example, I live in a majority Black community. Out of respect for my neighbors--who treat me very kindly--I won't be putting a Trump yard sign in front of my house. It would be totally misunderstood, or "taken out of context" as Ms. Cloud puts it.)

Ms. Cloud is especially upset that funding of "critical programs" is being cut. She bemoans the lack of funding for graduate students. Of course she shouldn't be surprised--if you poke your biggest funders in the eye, surely their enthusiasm for giving money will decline. I understand that Mizzes Pabon and Cloud have every first amendment right to hate on me (a white male) as much as they want. But I don't understand why I have to pay them for the privilege of doing so.

No wonder Republicans no longer see higher education as a good investment.

Ms. Cloud sees university faculty as the cream of American society. As I interpret her remarks, they are the only people with the scholarly distance and critical point of view who can legitimately criticize our world. But not all faculty are created equal.

The STEM folks have sold out to the defense department, which discredits them (though to my knowledge nobody at New Paltz has any funding from DoD). The social scientists have sold out to big business by letting their research be used to manipulate the rest of us. So only the "critical" faculty remain--the vanguard party, if you will, who can lead us to the Next American Revolution.

Not really a Marxist perspective, but that notwithstanding Ms. Cloud is a comrade in the International Socialist Organization (ISO). The ISO split from the Socialist Workers Party before my time, over reasons that are no longer relevant to anything (state capitalism in the Soviet Union). Because I have no personal connections with them they are not on my Beat, though I end up covering them anyway. But rest assured, the ISO is as irrelevant a grouplet as any of the others, their academic pretensions notwithstanding.

It's hard to estimate from the video, but the audience for this talk looks to be about 50 people. They were enthusiastic, polite and engaged. There were no hecklers, and nobody tried to disrupt the meeting. During Q&A the questions weren't just softball--they were marshmallows, at least insofar as they were coherent. Apparently anybody with any critical thinking skills decided to stay home (pun intended).

The ISO is not representative of American opinion, and despite the campus-wide, aggressive advertising for this event it drew only a limited audience. Probably an audience comparable in size to what a neo-Nazi speaker would have gotten (leaving out all the counter-protesters). Neither of these groups believes in American democracy, individual liberty, or economic freedom. The best response is to just ignore them.

Further Reading:

• Book Review: Gorbachev
• Freedom Socialist Party Reads Marx
• Why the Academy Sucks

School Shootings and Socialist Action

They're depraved because they're deprived?

That, along with a thorough-going misunderstanding of the second amendment, is the substance of Socialist Action's two articles on the recent school massacre in Florida.

The first, by Bruce Lesnick and modestly entitled A surefire plan to address gun violence, advocates such reasonable & relevant goals as

• Free, single-payer Medicare for all 
• Free quality education for all
• Guaranteed jobs for all
• Slash the war budget
• Abolish the "War on Drugs"

and last, but certainly not least,

• Address the root causes of depression, anxiety and alienation.

Nobody ever accused our Trotskyist friends of being practical.

At bottom the whole article is a slur on poor people, who are painted as mindless victims/puppets of some all-powerful ruling class. Consider, for example, this sentence:

People who are happy, healthy, loved, well-educated, and constructively employed rarely become mass shooters.

One should add--just to be fair--that people who are unhappy, unhealthy, unloved, poorly educated, and unemployed also rarely become mass shooters. Fortunately mass shooters are an unusual breed. Indeed, there seems to be little correlation between the listed traits and becoming a mass shooter. The Columbine shooters, for example, arose from stable, middle-class families.

I've never been poor myself, but I did spend a year in Uganda--a country with poverty beyond the imagination of nearly all Americans. I didn't meet a single mass murderer there. Accusing poor people of being mass murderers just because they're poor is a slander.

To buttress their case that all problems in the universe have to be solved before one can make a dent in school shootings, Mr. Lesnick cites a recent book by Johann Hari entitled Lost Connections--Uncovering the Real Causes of Depression.... Mr. Hari's thesis is that the biological causes of depression are exaggerated, with more blame properly assigned to factors including childhood trauma, meaningful values, and status & respect. (Even Socialist Action's ambitious program won't address those concerns.)

I think discounting genetic and brain-chemical causes puts Mr. Hari outside consensus opinion. Still, even if he's right it hardly proves Socialist Action's case. For just as there's no clear link between poverty and random homicide, so also there is no real connection between depression and high school shootings. How many millions of people are depressed? And what tiny fraction of them go on to become high school shooters? Depression isn't much of an indicator--I think Mr. Hari's book is irrelevant here.

The fact is that school shootings are so rare that no good statistical profile of the malefactors exists. Obviously there's a screw loose somewhere. I'll hazard that it's biological as much as anything, but even if I'm wrong it's silly to think that anything on Socialist Action's to-do list is actually going to solve the problem.

Gun control won't solve the problem, either. Socialist Action also opposes gun control, but their reasoning is so absurdly ludicrous as to embarrass the NRA. The offending article is by Gary Bills, entitled Gun control & workers' militias: How socialists view the issues, originally published in 2007.

Mr. Bills completely misunderstands the second amendment, which reads in full:

A well regulated militia being necessary to the security of a free State, the right of the People to keep and bear arms shall not be infringed.

Mr. Bills interprets this to mean that the people have the right to form a "well-regulated militia," thus justifying his call for workers' militias. He claims that the original impetus of the amendment was precisely to form such vigilante groups. But he's got it precisely wrong, since of course the supreme court has never in the history of the republic interpreted the amendment in that way.

The modern name for a "well-regulated militia" is the police department. The amendment rightly points out that, without a police department, civilization could not long endure. It insists, however, that despite the existence of a police department, citizens still have the right to keep and bear arms for use in their own self-defense.

• Citizens do not have the right to form vigilante squads, such as what Socialist Action suggests in its title. Pursuing criminals is the duty of the "well-regulated militia."
• Similarly, citizens do not have the right to own military-style weapons, which cannot generally be used for self-defense. The responsibility for the armed forces is vested in the president, not in individual citizens.

The way I might rephrase the amendment for our age is Citizens have the right to armed self-defense until the police arrive. Since it typically takes the police 20 minutes to get anywhere, the first line of any defense is the citizen, many of whom own guns for that purpose. They have a constitutional right to do so. 

Or, put another way, when seconds count, the police are only minutes away.

Admittedly, my reformulation doesn't take into account the utter incompetence of the Broward County Sheriff's office, who were actually on the scene but then didn't do anything. Surely that re-emphasizes the importance of the second amendment.

The problem with "gun-free zones" is that they deprive citizens of their constitutional right to defend themselves and their neighbors. I think such zones are (or at least should be) unconstitutional. I agree wholeheartedly with President Trump's sentiments on the issue.

Crackpot school shooters will not be dissuaded by gun control. All that will do is render students and teachers defenseless in the face of evil.

Further Reading:

• Charlottesville
• Book Review: North Star
• The Socialist Workers Party and the Second Amendment

Louis Proyect & Identity Politics

I'm astonished at the attention Louis Proyect gives to people who don't deserve it. His recent post is an attack on Chris Hedges, who despite a Harvard M.Div. and his own Wikipedia page, is as dumb as a bag of rocks. Mr. Proyect, a man of considerable intellect, shouldn't punch so far below his weight.

Hedges' piece, entitled The Bankruptcy of the American Left, relates a discussion Mr. Hedges had with David North (chief honcho of the Socialist Equality Party (SEP)) and Charles Derber, a fellow who looks as foolish as he sounds. The lede paragraph begins,

Charles Derber, sociology prof
at Boston College (tuition $52K/year)

"There will be no economic or political justice for the poor, people of color, women or workers within the framework of global, corporate capitalism. Corporate capitalism, which uses identity politics, multiculturalism and racial justice to masquerade as politics, will never halt the rising social inequality, unchecked militarism, evisceration of civil liberties and omnipotence of the organs of security and surveillance."

On the expectation of "a monumental explosion of class struggle in the United States," David North believes identity politics is a bourgeois-inspired distraction designed to mislead revolutionaries.

He further opines that "[w]e totally reject the narrative that the working class is racist. I think this has been the narrative pushed by the pseudo-left, middle-class groups who are drunk on identity politics..."*

Mr. Derber thinks that "[i]dentity politics is to a large degree a right-wing discourse," and "It focuses on tribalism tied in modern times to nationalism, which is always militaristic."

Mr. Proyect dismisses the whole meshugaas with one sentence: "Unless we are ready to challenge injustice on all fronts, we will never create the vanguard that is so necessary today." Or, socialists (for whom I do not speak) have to fight on a battlefield that actually exists. And that certainly includes identity politics.

Mr. North's description of the battlefield--that we're on the cusp of an explosion of class struggle--is fantasy. Curious how he could be so reality-deprived I went to the SEP's website, which includes this page (not recommended unless you want to go down a rabbit hole). It consists of a history of revolutionary thought from Karl Marx to the present, including this earth-shattering excerpt from paragraph 157 (of 255, and no, I have not read the whole thing).

...but also a comprehensive Marxist analysis of the objective situation and the assimilation, by a relatively inexperienced party cadre, of the lessons of the ICFI’s struggle against Pabloite revisionism. Instead, the work of the party assumed, under Wohlforth’s direction, a largely activist character, without a clear political perspective. Wohlforth’s political and personal behavior exhibited disturbing signs of disorientation. Egged on by a new personal companion, Nancy Fields, Wohlforth’s interventions in the party assumed a frenzied, unprincipled and destructive character.

Huh? Admittedly I left out some context, but rest assured it adds nothing.

Mr. Derber's point--that identity politics "focuses on tribalism" is also wrong, but at least it's wrong in an interesting way.

So African-Americans are surely a "tribe," though perhaps ethnic group is a more precise term. They arrived as slaves from among closely related peoples in West Africa, and in the intervening 350 years have forged a unique culture in America. They tend to marry each other and have maintained relatively high fertility rates. They have certainly suffered from "racism" (surely the least of their problems) in the past, and undoubtedly suffer from it today, though the extent of that is disputed. Obama thought it was a serious issue, while Trump either dismisses it or is just not interested.

African-Americans are an ethnic identity, and will necessarily practice identity politics. It's inevitable.

The LGBTQ (occasionally written with more initials) is a collection of people who are in some way gender-different (or alternatively, gender-abnormal). They are a small minority of the population--depending on how you define the acronym probably less than 5%. They are typically infertile and can't reproduce themselves (lesbians are an exception). What offspring they do have are not usually LGBTQ. Further, in the near future it is possible that the gay male population will steeply decline--just as the Downs Syndrome population is declining today--because of selective abortion.

These people are certainly not a tribe. Identity for this group means something very different than it does for African-Americans. The latter are justly insulted by being compared to the LGBTQ community (such as it exists).

White Americans are not an ethnic group--and on this almost all Leftists are mistaken. Instead they are a collection of many tribes, some of whom royally hate each other. I'm informed here by two books (both of which I recommend): Albion's Seed, and the Eleven Nations of North America. Indeed, much of today's politics can be explained by the longstanding rivalry (and mutual hatred) between Yankees and Scots-Irish. The latter are the most populous tribe in America--about 60 million strong. Obama represented Yankee America, while Trump owes his election to the Scots-Irish. This is identity politics pure and simple, but it's not a generic "white" identity.

Finally, 51% of the population--women--is supposed to be an identity. This makes no sense. Women, like men, owe more to kin and clan than they do to some gender abstraction. Scots-Irish women are not about to become raging feminists. For that matter, neither are most African-American women. The whole thing is silly.

And here our foolish friends may have stumbled on to something true--Mr. Derber criticizes Sheryl Sandberg's version of feminism. Similarly, I think the #metoo movement is an upper-class phenomenon. Alpha males (the top 1% of our gender) have the wealth, power, and sex appeal to have their way with women, mostly because women are attracted to wealthy, powerful, and sexy men. Women achieving any relationship with alphas tend to be beautiful, intelligent, talented, or all of the above--in other words, they're elite females. Of course when things go wrong they complain, hence #metoo.

Beta men don't have that hold over women, and most women have sufficient backbone to resist boorish advances from the beta sort. So the problem does not scale to the 99%--it's upper-class self-pity.

Women are not an identity. They're too attached to their fathers, husbands, brothers and sons to hold any real animus against the "patriarchy." Only among infertile members of the upper class and childless academics does feminism have a foothold.


*Superficially this position is similar to the Socialist Workers Party (SWP), which is actively trying to recruit Trump supporters to revolutionary politics (albeit with no apparent success). At the same time they do not hide their pro-immigration, anti-racist, pro-gay-rights agenda, about which they hope to educate white workers. In their view there is no contradiction between identity politics and building the Party. In other words, unlike Misters Hedges, North & Derber, the SWP can keep two ideas in their head at the same time--which implies they have at least double the IQ.

Further Reading:

• Sex and the Alpha Male
• Book Review: Eleven Nations of North America
• Louis "Lyndon LaRouche" Proyect

Arnold Kling's Moonshot

I'm a great Arnold Kling fan--I've favorably reviewed two of his books on this blog (here & here). I follow his blog daily--it's one of my favorite reads. Mostly I agree with him. But I have to take issue with his post from a few days ago, entitled A Moonshot to Overthrow Neoclassical Economics, along with the similarly titled article, here.

A moonshot is the Big Thing that a person wants to accomplish in life. In other contexts it might be called a vision statement, or a passion. Though a moonshot is typically much less practical than those--a goal for striving rather than achieving. Mr. Kling's moonshot is "to be a leader in overthrowing neoclassical economics. A better approach would focus on mental-cultural factors and rapid evolution."

I think he gives neoclassical economics a bum rap.

In his account (and I don't disagree) neoclassics begins with two "essential propositions":

1) Production is a process that employs two primary factors--labor and capital. 

2) The distribution of returns to labor and capital reflects their respective contributions to the production process.

He notes that Marxists disagree with the second axiom--they believe capital steals a disproportionate share of the proceeds--and he acknowledges they might be right. But that, in his view, is quibbling over a detail. Mr. Kling's critique is much more damning--he denies the validity of the first premise.

Instead a third axiom must be included:

[Y]ou have to pay attention to what people believe. What they believe affects what they value, what they think constitutes a good investment, what conduct they believe is appropriate when buying and selling, how they interact in their work environment, and so on.

Mr. Kling says that culture matters. In a slightly different context others insist that institutions matter. And of course they do--does anybody deny that? Indeed, Paul Romer took the idea to the nth degree and attempted to build a city de novo in the Honduran jungle, endowed from the beginning with good institutions. I don't think that worked out very well.

My old professor in general chemistry (Norman Nachtrieb--now deceased) told us that "science is the art of successful approximation." Ideal gas law is valid as long as intermolecular forces are assumed to be negligible. A step in an engine cycle is adiabatic as long as no appreciable heat escapes into the environment. The words "negligible" and "appreciable" are purposely left vague, and depend on how precise an answer one actually needs in the result.

Economists have a similar concept--ceteris paribus--which means all else equal. Put that phrase in front of anything an economist says and you've got the economic equivalent to "negligible" and "appreciable." Of course, what with economics involving humans rather than molecules, the approximations are much rougher and the degree of precision much less. Still, at least in this sense economics is just like chemistry--it is the art of successful approximation.

One common approximation is to limit the timeframe during which a result is expected to hold. At picosecond scales (light-matter interactions) almost everything is adiabatic. For long-lived radioactive decay processes (the uranium half-life is billions of years), nothing is adiabatic. Completely different approximations will apply in the two cases--indeed, they can't even talk to each other.

In that sense economists have it easy--economic timescales don't vary by 30 orders of magnitude--maybe only by four or five (from a few weeks to a few centuries). Still, timescales matter, and this is where Mr. Kling's analysis breaks down.

Implicit in neoclassical economics are those two, essential, prefatory words: ceteris paribus. The axioms are not divine writ, but only hold as long as everything else remains equal. Thus we'd expect the approximation to be successful only for a relatively short period of time. How long is that time? Do many people make economic forecasts beyond a year? Even the Fed doesn't dare estimate anything more than four or five years out--and they're roundly mocked when they do even that. Ten years is beyond anybody's ken--ceteris is no longer paribus (pardon my Latin).

And Mr. Kling knows that. He says that culture changes, and furthermore, evolves. He further claims that it's changing more quickly than before. And therefore the all else equal assumption is invalid at nearly any timescale. Of course that's wrong--it is certainly possible to predict many economic phenomena (interest rates, corporate profits, unemployment) on a quarterly or even annual basis. Those predictions (especially the short term ones) are right more often than not. Culture does not change that fast.

Contrary to Mr. Kling, I think culture changes are on a generational timescale--roughly 30 years. My children grew up in a different part of the country than I did, and their mother (my wife) is Filipina. So obviously they see the world differently from me (though there is also considerable continuity). But now that they're 30 years old (give or take), those attitudes are mostly baked into the cake. For the next 50 years their cultural expectations will not significantly change.

I think Mr. Kling is mistaken in his claim that cultural evolution is speeding up. It's not. We're talking 30-year timescales here, minimum. It may even be longer since life expectancy has gotten longer. Within that timeframe, for the few-years horizon of neoclassical economics the ceteris paribus approximation makes sense.

What is more rapidly changing is technology, often known as structural change. That's the way mainstream economists refer to something not being equal. And like physical scientists they treat it with fudge factors, as a perturbation from the original result. Obviously if the structural change is huge (the engine explodes), that's not a fair approximation. But in the real world structural change happens slowly--driverless cars aren't anticipated to be mainstream for another 30 years.

So, over the two or three year window during ceteris paribus, neoclassical economics is a good approximation. Or, as scientists working at a blackboard might put it, a good first approximation, for which more refined iteration may be indicated. Mr. Kling's criticism is valid, but only over longer timescales when the two axioms no longer hold.

Mr. Kling does have a legitimate complaint. Approximate models will never give you exact results. Calculating theoretical implications out to four significant digits is a waste of time. It's computer gaming. Many econometric models seem to me to fall under this category (though I'm not expert).

But economists are not alone in falling in love with their computers. Scientists suffer from the same disease--in our current day so-called "climate scientists" are extending models far beyond where they can reasonably be expected to hold.

Further Reading:

• The Lenin of Libertarianism
• Tradable vs. Non-Tradable Goods
• Book Review: The Complacent Class

SOTU

So I was disappointed in Trump's speech in two ways. First, it was much too long. He spent too much time applauding "heroes", most of whom didn't seem all that heroic to me. Otto Warmbier's parents, for example, deserve our sympathy I suppose, but it's a stretch to think they are "heroes". I found that whole thing corny and not worth the time, but then I acknowledge I'm not a typical listener.

Second, we were all led to believe that it would be a "bipartisan" speech. And my model of Trump (a secret Democrat) predicted he would have done that. But he didn't. While there were a few bones thrown to the Democrats, they were very few, and the speech was mostly aimed toward the Republican side of the house. Indeed, he looked almost exclusively at the Republicans, casting only occasional glances toward the Democrats. It's as if they weren't even there.

Why?

One possibility is he intended it to be a bipartisan speech, but then missed the target. That's possible, but somehow I doubt it. This is a guy who understands media better than anybody else on the political planet--I can't imagine he'd get this wrong by such a wide margin.

The other possibility is that he thinks he can beat the Democrats, and rather than compromise he went in for the kill. If you judge by the faces on the Dems, that certainly seemed to be true--they all looked desperately unhappy.

So take DACA. The Dems want to grant citizenship to 600,000 Dreamers. Trump raised them by a factor of three--his proposal will naturalize 1.8 million Dreamers. I certainly support that! I can't imagine that the Dems will seriously be able to oppose it.

But of course it comes with a catch, or actually three catches: build a wall; end chain migration; end the visa lottery.

So here's the asymmetry: for Republicans those three catches are vote movers. Stronger border security is a core issue for the Republican base. And most people--even Republicans--are generally sympathetic to Dreamers. Trump is on the popular side of the issue in all ways, and will grab independent and even Democratic voters.

The Democratic base, on the other hand, cares passionately about naturalizing Dreamers. But Trump has conceded that issue--by a factor of three! The other stuff is down in the weeds--important to politicos, but not the kind of thing that's going to drive Dems to the polls.  Outside of a college campus it really is hard to argue against more border security and a rationalized legal immigration system.

So in 2018 the Dems are running on Dreamers, for which Trump has outbid them, and on opposing some small-scale,  commonsense reforms in immigration. They can't win.

Then there was the shtick about standing for the flag. Super-wealthy, entitled NFL players can't even pay respects to military veterans (according to Trump). It tars the core Democratic base as being unpatriotic and makes them unappealing to a larger number of voters. This is another vote loser for the Dems.

And more. Do the Dems really think they can win elections by going soft of N. Korea or Iran? Are they really going to oppose new infrastructure because Trump wants to shorten the permitting process to under two years? Are they going to campaign to put millions of people out of work for the sake of stupid EPA regulations?

Even the Jerusalem thing helps Trump, not so much with voters, but by putting daylight between the Dems and their important Jewish donors.

It is pretty clear that Trump believes he can win the 2018 midterms. He doesn't think he needs to compromise with the Democrats at all.

So I don't know if that will work out as planned. We'll see what happens in about nine months.

Further Reading:

• Trump's Strategy
• Trump & Trotsky
• Good Trump, Bad Trump

Book Review: Gorbachev

"Gorbachev is hard to understand." So said the man himself, characteristically using the third person, as quoted in William Taubman's excellent biography, published in 2017. And true enough: understanding Gorbachev means knowing the man, his time, his country and his historical circumstances. Was the collapse of the Soviet Union historically inevitable? Or was it the fault (or credit) of Gorbachev? Or did Gorbachev simply hasten what would have happened anyway, albeit perhaps not for a couple of decades?

However hard it is to understand Gorbachev, it is very easy to like him. Born in 1931 in Russia's Stavropol region, he grew up in a peasant household during times of famine, purges and war, all of which touched his family. For all of that he still managed to have a happy childhood, close to both his parents (esp. his father) and grandparents. Ambitious at a young age, along with his father he served as a combine driver harvesting 8,888 centners of grain, earning him the Order of the Red Labor Banner in 1948, one of the USSR's highest medals.

So young Mikhail Sergeyevich grew into a man: garrulous, confident, friendly, loyal, and extraordinarily well-read, especially considering his semi-literate family.

That, along with native intelligence and a prodigious work ethic, earned him a place at Moscow State University (MGU)--the Harvard of Russia, both then and now. There he studied law (in a country that didn't really have any), and met the love of his life, Raisa Maximovna Titorenko. She, also brilliant, studied philosophy. They were married from 1952 until her death in 1999.

Following university in 1955 Gorbachev was sent back to Stavropol, a posting neither he nor his wife initially wanted. He began his career as a minor functionary with Komsomol, cashing in not only on his MGU credential, but also the Red Labor Banner. In 1969 he was chosen as general secretary of the Stavropol region, a job he held until 1978.

Such a rise required much ass-kissing, and yet somehow Gorbachev never lost his original idealism. He worked hard to make Stavropol a better place, and it began with agriculture. That mainstay of the local economy suffered from notoriously low productivity. Supposedly new machinery arrived broken, other inputs arrived late or not at all, and what was harvested couldn't be properly stored or transported. Most seriously, the peasants were not motivated to work on the kolkhaz (collective farm), from which they derived little benefit.

Gorbachev understood that the extreme centralization of all decisions in Moscow was the leading problem. He railed against that, trying to earn as much autonomy for his people as he could. And in whatever small measure he could affect the outcome he tried, though mostly to no avail. His efforts did succeed in raising his profile in Moscow.

At least as important to his future was that Yuri Andropov served as his mentor, not least because he shared his disciple's idealism. Andropov, also from Stavropol, later served as Brezhnev's successor as USSR General Secretary. In 1978 Gorbachev was appointed Central Committee secretary in charge of agriculture. Such an important portfolio meant he could return to Moscow and join the Politburo.

An important portfolio--yes--but also known as a graveyard for political careers. For improving the abysmal state of Soviet agriculture was nigh an impossible task, failure for which redounded to the secretary. Gorbachev, despite dramatic effort and frenetic activity, failed as much as any of his predecessors.

Brezhnev, long since senile, finally died in 1982. He was succeeded by an already ill Andropov, who in turn left the job to the similarly decrepit Konstantin Chernenko, who passed in March, 1985. His logical successor was Andrei Gromyko, already 74 years old, a dour apparatchik and longtime foreign minister.

In a typical display of tactical genius, Gorbachev bought off Gromyko by promoting him to the largely honorary post of Chairman of the Presidium of the Supreme Soviet. And so the younger man became General Secretary by unanimous vote of both the Politburo and the Central Committee.

For the first three years or so of his reign, Gorbachev had the full support of the Politburo. Everybody knew that the Soviet economy was collapsing, that the war in Afghanistan had to end, and that the Cold War with the US couldn't continue. The country was bankrupt. Even without Gorbachev the status quo was no longer viable.

But Gorbachev was different. Unlike his predecessors, he loved the public limelight, and thoroughly enjoyed street walkabouts among everyday people. And he could talk--too much actually. Unlike Brezhnev, who in rare public appearances read from a script, stumbling and mispronouncing words, Gorbachev spoke expertly and extemporaneously. That led to a joke:

Gorbachev is much worse than Brezhnev. He doesn't even know how to read.

Soon came the two words that would define the rest of Gorbachev's life: glasnost and perestroika, meaning, respectively, openness and restructuring.

Glasnost was relatively easy, albeit painful. The immediate purpose was to make economic statistics transparent and public--you can't fix a problem you can't see. But what happened was the wholesale revelation of Stalin's crimes. This was very painful, especially to the older generation who venerated the old man. And especially to the elderly members of the Politburo who took the whole thing as an assault on Communism. It was at this point the first cracks in Politburo began to appear. Yegor Ligachev (1920 - ), initially a staunch Gorbachev ally, gradually turned against him.

Perestroika, obviously necessary, was much harder to accomplish. Gorbachev got off on the wrong foot trying to improve productivity by taxing vodka--that went over like a lead balloon. While he understood that decentralization was crucial, actually doing that meant firing thousands of bureaucrats, all of whom fought desperately for their jobs.

In the end perestroika was no more successful than Gorbachev's initial efforts to reform agriculture. The Soviet economy went from bad to worse, and Gorbachev's popularity went down with it.

Only in foreign affairs was our man reasonably successful. He pulled out of Afghanistan. He had very good relations with Margaret Thatcher, Helmut Kohl, and especially Francois Mitterand. He loved the accolades he got from Western audiences, which he no longer received at home.

By the end perestroika had changed its meaning. It was obviously no longer possible to restructure the economy within the Communist system--perestroika had gradually morphed into counter-revolution (my term). I think Gorbachev should have accepted the 500-day program, which would have intelligently privatized the economy (unlike what Yeltsin did a couple of years later).

From 1985 to 1988 Gorbachev was mostly in control of the situation. Beginning in 1989 the wheels started to come off the bus, and by 1990 the master tactician could no longer keep up with events. In 1991 came the reactionary (and completely incompetent) coup, after which Gorbachev essentially gave up, ceding the limelight to Boris Yeltsin.

Gorbachev is an honorable man. I thought so then, and I think more so now after reading Taubman's book. He refused to engage in violence. He was not personally corrupt. He refused to fire people--partly for Machiavellian reasons (keep your friends close, and your enemies closer), but also because he felt sorry for people. At the end this strategy no longer worked.

He may not have been responsible for the demise of the USSR--that probably would have happened anyway, if not in 1991 then only a few years later. But that it happened peacefully without brutal ethnic conflict or civil war--that I think is largely due to Gorbachev's honor and moral sense.

And for that we can all be very grateful. He is a good and important man.

Further Reading:

• 100 Years After October Revolution
• Book Review: "Trotsky"
• Book Review: Lih's Biography of Lenin

Bitcoin & Big Box Stores

The current issue of The Militant contains two articles of economic interest. One, by Terry Evans, is about bitcoin, while the other, by Brian Williams, covers the travails of big box retail. The paper is alone on my Beat in paying any attention to the economy at all. Further, they're the first to make any comment about bitcoin. While I'll take a smidge of credit given that my recent posts about bitcoin may have been a prompt, they still deserve praise.

Both articles suffer from the same fundamental flaw: they assume that capitalism is in a crisis.

Obviously that's completely wrong. The global economy is running strong, with no recession on the immediate horizon.

Mr. Evans writes,

For decades, as capitalist profit rates have tended to decline, the bosses have been plowing their cash into speculation — or hoarding — rather than investing in capacity-expanding plant equipment and employment.

There's a contradiction here: where does the cash hoard come from if profits are declining? Putting more cash into "speculation" requires cash to begin with, which can only come from profits and/or wages.

As I've said many times, "profit rates" is an ambiguous concept, and in no meaningful way can they "tend to decline." They're certainly not declining now! Still, Mr. Evans is correct after a fashion--there are relatively few opportunities for investment today and therefore there is a savings glut (Larry Summer's term). This leads to low interest rates and a corresponding rise in asset prices, including bitcoin.

But this has nothing to do with a crisis in capitalism. There are at least two other explanations.

1) Demographics. The American population is barely growing at all, and arguably our labor force is shrinking. Fewer workers require less capital, and thus because of continued high profits there is more spare cash left over.

2) Technology. More industries are being computerized. Moving parts (and labor) are being replaced by computer chips--e.g., carburetors supplanted by electronic fuel injection. Computer chips are cheap, which means much less capital is required.

To buttress his case Mr. Evans cites that financial whiz kid, Jack Barnes, specifically a piece written in 2002. Mr. Barnes

explains speculative bubbles are “a manifestation of what Marx called commodity fetishism, the illusion that commodities and capital somehow have a social meaning in their own right, independent of the social labor that went into creating them, a life of their own.”

I think that's gibberish. It sounds like Mr. Barnes advocates a return to a barter economy.

The value of any object is a collective hallucination. A dollar is worth a donut only if a donut is worth a dollar. Both Dunkin' and I imagine that to be true, and hence a market is made in donuts. If they don't want to sell me a donut at that price, or if I don't want to buy one, then donuts will no longer "have a social meaning in their own right," whatever that means.

A Loonie coin is a token, sustained by collective hallucination. However, only Canadians share that imagery. Bring Loonies south of the border and you'll find they won't buy you a donut or anything else. We don't hallucinate about Loonies down here, and per Mr. Barnes we have a better grasp on reality. Does that mean Canadians don't "have a social meaning in their own right?"

Bitcoin is also a token. It has value as long as people believe it has value. There are reasons for people to hallucinate that, which I detailed in my previous post. I do not believe bitcoin's value will go to zero.

By the way, today bitcoin touched $10,000, or nearly a 50% drop from its all-time high. If bitcoin was in a bubble, then it certainly isn't in one now.

Here is Mr. Williams' lede:

While the big-business media has boasted that retail sales were up during the 2017 holiday season — 3.8 percent higher than the year before — the crisis of the bosses in the retail industry continues to unfold as growing numbers of U.S. retail and apparel companies face increasing debt, bankruptcy and competition.

On the one hand he acknowledges consumers are doing well--we got 3.8% more stuff than we got last year. Hurray!

Yet the retail industry is supposedly in crisis, suffocating under debt, bankruptcy and competition.

Later in the article he cites leveraged buyouts as a major culprit, by which speculators took companies private by foisting on them enormous debts. These capitalists, he tells us, made short-term gains while somehow (mysteriously) escaping the long-term losses.

There are two ways of financing any business: debt and/or equity. How capital is structured makes a big difference to the investor, but on net it makes little difference to the firm. The Coase Theorem says that financing via debt or equity or some combination won't matter at all except insofar as transaction costs are different.

That is, an insolvent firm will go bankrupt no matter how it's financed. Either the company will default on its bonds, or the share price will head towards zero. The net outcome is precisely the same. Conversely, a successful company will have a growing share price, or be able to float new bonds at very favorable rates.

So the problems in the retail industry have nothing to do with leveraged buyouts--they'd be just as much in trouble if they relied on selling shares. Toys "R" Us went bankrupt only because technology rendered the company's business model obsolete. A big-box toy store can't compete against Walmart on price, nor against Amazon on selection and convenience, nor with the corner Ma & Pa store on sales of high-end, bespoke items for a niche market.

When was the last time Mr. Williams has ever been to a Toys "R" Us store? I'll hazard never. Even I, when my children were still children, never went to Toys "R" Us. So why should a whole bunch of employees sit around all day waiting for no customers to walk through the door? It is surely much better--for them and for society alike--if their labor is invested in something useful. Or, in Mr. Barnes' precious phrase, doing something that has "a social meaning in [its] own right."

This is the problem with socialists: they're Luddites. No progress is allowed. However novel and revolutionary Sears, Roebuck or Toys "R" Us may have been in the past, we now need to keep them on no matter what--frozen in amber.

Let the companies go bankrupt. So what of the bondholders lose their fortune. Surely Mr. Williams doesn't feel sorry for them--and neither do I. In today's economy (4.1% unemployment) the former employees of those companies will be instantly reemployed more productively. The workers will make out just fine.

The big winner will be consumers--people with children who like to buy quality toys at cheap prices and maximum convenience.

Further Reading:

• What Marxists Don't Understand About Economics
• Louis Proyect and the Pro-Poverty Girl
• If You Really Care About the Poor