The horizon is not so far as we can see, but as far as we can imagine

Month: April 2015 Page 1 of 3

Happiness and Freedom: East German Version


Picture: Fall of the Berlin Wall

Picture: Fall of the Berlin Wall

Many East Germans remember East Germany favorably:

Today, 20 years after the fall of the Berlin Wall, 57 percent, or an absolute majority, of eastern Germans defend the former East Germany. “The GDR had more good sides than bad sides. There were some problems, but life was good there,” say 49 percent of those polled.

The state with the Berlin Wall, which people died to get across, is remembered fondly?

Some of this, as the article points out, is nostalgia.  Some of it is from people who were children or not even alive when East Germany fell.

But I’m not surprised, because the happiness and life satisfaction data for East Germany showed a precipitous fall after unification, as it did in Russia after Communism fell there. (That drop has been made up since, but it was huge.)

I’m further not surprised because there were things that East Germany, in particular, did well. To start, it did community and civic association brilliantly: There were clubs for everything, people joined them, and they enjoyed them.

Happiness is strongly correlated to community: The sort of anomie which capitalist societies encourage, where you know hardly anyone well, destroys happiness.

Second, there wasn’t a great deal of inequality compared to modern capitalism. The research on happiness and equality is robust–the more equal a society, the happier people are.

Third, everyone was more or less taken care of. They may not have been taken care of with the finest consumer goods, but they had enough food, shelter, and so on.

Fourth, they didn’t have to move much. Labor force mobility in Germany today isn’t terrible, but the sure knowledge that you can stay where you were born and grew up can be as much a comfort as anything else, and it means that you don’t leave behind your community–your friends and family.

Capitalist transitions are brutal. The data from China is unambiguous: People moving from their ancestral villages to the city generally are never, personally, as happy as they were in the village.

The people interviewed in Der Spiegel’s article on East Germany tend to acknowledge the East German Stasi police state as bad, then wave it aside.

How badly has your life been affected by the fact that your government spies on you 24/7? East Germany may have had huge numbers of informants, but London has cameras everywhere and “anti-social disorder orders,” which make virtually any behaviour cops want to call illegal, illegal. Nor was East Germany’s incarceration rate nearly as high as America’s is now, and so on.

Sure, “the police state” was bad, but that wasn’t, to people who lived there, necessarily the most important thing about being an East German. Westerners believe this because of relentless cold war propaganda. Then the USSR and the Warsaw Pact fell, and our lords and masters started building their own surveillance and police states.

Still, it’s a bad sign when you aren’t even considered a better place to live than East Germany, with its Stasi. The failures of the post-Soviet era are making that period look better and better. In Russia, there is a surge of nostalgia for the USSR, for reasons which are are remarkably similar. People are discovering that, as wonderful as Levis jeans are, there is a cost to the modern consumer society in terms of anomie, corruption, and economic precarity.

Though I think I like the bitter joke from 1990s Russia best:

Everything they (Communist authorities) told us about Communism was a lie. Unfortunately, everything they told us about Capitalism was the truth.

And so the wheel turns. When capitalism, in a large region in one of the most successful countries in the West, has half the population thinking communism wasn’t so bad, something has gone off the rails. Triumphalism of the “we’ve won, so we don’t have to treat the population well” variety may well yet bite capitalists, and all of us, hard.

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Is Violence Ever Justified? Does Violence Ever Solve Anything?

Painting: Washington Crossing the Delaware

Painting: Washington Crossing the Delaware

I notice a fair number of sweet, well-meaning people saying “violence is never justified.”

This is a position I have a lot of respect for, though it’s not my position. The hard-core pacifist, who always opposes violence, is a person of great bravery.

But to say NEVER is a strong statement. In the US, if you are saying “violence is never justified” with respect to the Baltimore riots, for example, you must also oppose all the wars and killing the US is involved in.

In practical terms, that must mean that you believe that every politician who voted for war is more unethical than any rioter. You must believe that George W. Bush and Barack Obama are far fouler individuals than any rioter.

Ethical outrage must be proportionate to the violence and the violence in Baltimore is nothing compared to the scale of the Iraq War, or Afghanistan, or drone murders. Nor is it anything compared to the scale of police violence against Americans, especially African-Americans.

NEVER is a big word.

What most people really mean is that they condemn non-state sanctioned violence, except sometimes, like, say, in the American Revolution, or the Maidan protests.

In fact, they approve of some violence and not of other violence. Most such people, were you to dig down hard enough, are hypocrites, but some aren’t, even if one disagrees with them. If you were to allow the USSR the right to crush revolutions along with the US, and condemn the American revolution, you wouldn’t be a hypocrite, just not a very nice person.

Trying to argue about popular will and/or democracy is a slippery road, mind. For example, the numbers on the American revolution with which I’m familiar don’t show the majority of the population being for leaving British rule. Maidan overthrew a democratically elected government in the Ukraine and the French revolution was made by the Paris mob, while most people living in rural areas of France (the vast majority of the population) would have preferred to keep the Ancien Regime.

Relatedly, violence often does solve problems. The Native Americans cleansed from North America were “problems” to the settlers, and violence dealt with that problem just fine. Fascist Germany was a problem to most non-German countries, Jews, Gypsies, Socialists, Gays, and many others and violence solved that problem. Carthage was a problem to Republican Rome and violence solved that problem.

And riots, rather better organized than the Baltimore ones, granted, solved the Parisian problem with the old Regime, while the Terror, terrible as it was, did make sure that there was to be no going back–even if France was to alternate between Republics and Empires for some time.

Violence often solves problems and it often does so rather permanently.

Here is what history actually teaches us about violence: People who are better at violence than those they fight get the spoils and often keep them for a long time. You do know that the Angles and Saxons invaded Britain, yes? Then the Normans? Those people did very well out of killing the locals and wiped them almost entirely from the most fertile parts of what is today England.

Europeans conquered most of the world and Europeans today (and their descendants) are powerful and relatively rich compared to almost everyone they conquered. Many economic historians believe that imperialism and colonialism were required for the industrial revolution to really take off; and definitely for capitalism to find sufficient markets. Violence worked very nicely for Europe and especially for England and the United States.

Of course, history marches on, and eventually everyone will get their turn at the curb, their face stomped on. But history can take a long time, and multiple generations can enjoy the fruits of violence–theirs or their ancestors. Violence only doesn’t solve anything in the sense that nothing solves anything—extend history enough in any direction and all peoples eventually have a really bad day (or really bad hundreds of years or millennia). Heck, eventually, all species will go extinct.

I don’t know if violence is ever justified. But I do know that violence often does “solve” problems and I do know that peoples who insist on being entirely non-violent or bad at violence eventually discover that everything they have they hold at the sufferance of those who are good at violence.

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As Baltimore Riots

I don’t have a great deal to say about this. I’ll simply note that if you shove peoples faces into the concrete enough, it’s not strange that they will riot. Given the well documented rate at which police have been killing African-Americans (and getting away with it, in most cases), well—Baltimore is a city with a long tradition of poverty and police violence in any case.

I’m not going to wring my hands about this. It’s unfortunate, but those who want peace must work for justice, as Pope Paul VI once noted. Instead of just condemning the rioting, the middle and upper classes might bear in mind that those lower on the totem pole, and especially Blacks, live a very different life than them, one in which the police are a constant oppressive force which appears completely unaccountable.

(I will note, again, that rioters need to get it through their heads to take their rioting to the rich areas of town. Rioting in your own backyard is not particularly productive.)

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The Rise of the Islamic State


Islamic State Flag

Islamic State Flag

Der Spiegel had an excellent article on how ISIS rose to power, based on files recovered from the ex-Baathist spy master who planned most of its structure and early strategy.

It boils down to two main themes. First, ISIS set up charity offices in the territory it would later try to seize. The men assigned to those offices were tasked with finding out who the most important people in the area were and marrying into the most important families, if possible.

When ISIS went active, they had complete files on the power structures of every area. They knew who had power, who was likely to oppose them, and, to put it crudely, where they lived. Their enemies knew next to nothing about them, but they they were able to bribe, blackmail or kill anyone who was in a position to be useful or pose a threat.

Second, and especially interesting, the initial ISIS force was comprised almost entirely of people not native to Syria. On the face, this seems like a bad idea, but lack of local ties, combined with ferocious operational security, meant that ISIS could move its troops from place to place and the locals couldn’t easily track those movements.

ISIS soldiers who were local would have talked, their movements would have been easy to track. Foreigners with few to no local ties, not so much.

As a result, ISIS was able to make a small army effectively much larger than it seemed. They would march almost all their troops to the next theater, and because their enemies didn’t know it, they couldn’t take advantage.

The result of this was that ISIS’s local enemies, the local elites, were often unable to effectively oppose them (since they got dead or blackmailed if they did). Additionally, ISIS possessed operational flexibility their armed opposition didn’t have.

The entire article is worth reading if you’re interested in how ISIS rose and worth thinking on how it could be applied elsewhere, or stopped. It’s also an excellent reminder that the best of the forces rising in the Islamic world are staffed and run by people who are brilliant and not to be underestimated. (They ought to be the best; a very harsh Darwinian selection has been run on them.  Slip up, wind up dead.)

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Obama Tries to Make His Bones Again with the Trans-Pacific Partnership

Apparently Obama is angry at progressives for attacking the Trans-Pacific Partnership. 

“What I am averse to is a bunch of ad hominem attacks and misinformation that stirs up the base but ultimately doesn’t serve them well. And I’m going to be pushing back very hard if I keep hearing that stuff,” Obama told a small group of reporters on the call.

Of all the criticisms, “The one that gets on my nerves the most is the notion that this is a secret deal,” he said. “Every single one of the critics saying this is a secret deal, or sent out e-mails to their fundraising base that they’re working to stop a secret deal, could walk over and see the text of the agreement.”

No: Every critic doesn’t have access. Only a partial version of the deal is available to the public, and only because it was leaked.  The very idea that these deals should be done in secret is fundamentally anti-democratic. They do it because they know people would object if they knew what was in them.

The Electronic Frontier Foundation has a good summary of what’s wrong, in terms of copyright enforcement. 

In short, countries would have to abandon any efforts to learn from the mistakes of the US and its experience with the DMCA over the last 12 years, and adopt many of the most controversial aspects of US copyright law in their entirety. At the same time, the US IP chapter does not export the limitations and exceptions in the US copyright regime like fair use, which have enabled freedom of expression and technological innovation to flourish in the US. It includes only a placeholder for exceptions and limitations. This raises serious concerns about other countries’ sovereignty and the ability of national governments to set laws and policies to meet their domestic priorities.

Go read the rest if you want to be sick to your stomach.

The bill also includes takings tribunals, in which firms would be able to sue governments for violating the terms of the deal. (In the past, such tribunals have been used successfully to sue for such things as banning additives which cause cancer, since the lost sales are a loss for the company involved.)

Obama made his bones by completing the Wall Street bailout. Now, before he finishes his term, he wants to give the people who can make him filthy rich after he’s no longer President a big, fat, slobbery kiss that will make them billions. This may well be, to him, the most important thing he’s done in his entire presidency:

In a meeting with reporters in the US Capitol, Senator Sherrod Brown of Ohio said his caucus has been “talked to, approached, lobbied, and maybe cajoled by more cabinet members on this issue than any [other] issue since Barack Obama has been president. And that’s just sad.”

Brown continued: “I wish they had put the same effort into the minimum wage. I wish they had put the same effort into Medicare at [age] fifty-five. I wish they had put the same effort into some consumer strengthening on Dodd-Frank.”

Like all Presidents, even George W Bush, Obama has done both good and evil. But the TPP, from what we know, is almost entirely bad and no one should trust a deal like this that is largely secret.

As usual, the TPP is about constraining Democracy, not just internally, but by locking countries in to laws which they then can’t change without abrogating the trade deal.

I covered this in “Free Trade is Elites Betraying Their Own Population“.  You should read it.

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The Three Types of People Who Wind Up Rich and How They Destroy the Wealth of Others

Models of economics which don’t handle power are marginal at best. They serve only to describe what happens in situations where no one has enough power to set the rules or where there is a central authority which acts to keep any other actor from having enough power to set the rules.

The Standard Model of Power in Markets

Assume that people want two things: They want stuff and they want security. That is to say, they want to know they can keep what they have.

People who become rich usually fall into one of three categories:

1) People who lucked out by being in the right place at the right time (many people who became rich in the internet bubble, for instance, just happened to be working at the right place at the right time);

2)People who are obsessed with something that other people value highly. Like many musicians in the era of mass-produced music before the rise of the internet. Or like J.K. Rowling. These people are also lucky, in the sense that the products of their obsessions are highly marketable at the time of  output;

3) People who are obsessed with making money. They think of little else and have devoted their life to it.

In all three cases, once you’re rich, the needs that drove you there don’t go away. Wealth effects people, but it rarely changes either the obsessive need that drove them, nor the human need for security.

The second group is the least dangerous because their primary motivation was never money and their obsession drives them away from thinking too much about money.

The first group, those who got lucky, are the rank and file of the “I’ve got mine, screw you. Jack” brigade. This includes people far beyond those who became truly rich, like those who worked at startups by luck or those who won the genetic jackpot and inherited; it also includes those who won the generational jackpot: the GI Generation, for example, or older Boomers.

The GIs may have been born during the Great Depression, but they spent their prime working years during the greatest general wage increase of the last few centuries. They bought houses when they were cheap, then they benefited from the massive appreciation of housing values from a multi-generational period in which house prices increased faster than wages, capped by an actual housing bubble for those who lived long enough.

In generational terms, they were born on second (though not third). They had the GI Bill, great jobs, great job security, great pensions, great health care, and so on.

They lucked out. It’s not that they didn’t work hard for what they got, but the same amount of work in a different time or place wouldn’t have reaped the same rewards.

People like this become conservative. The GIs start off as the footsoldiers of post-war liberalism, but they wind up Reagan Democrats. They have theirs and they vote for politicians and policies which make sure that what they have is secure. The net result of those policies has been to pull the ladder up after them–to make their children and grandchildren less prosperous.

If you got lucky, then preservation of capital is the first rule. People who got lucky are against high taxes, because they can’t expect to make more money.  They are especially against high taxation of unearned income, because their advantage is unearned income–their houses, stock portfolios, bonds, and so on. Their money makes money.

These are their interests. Most people act on their interests as filtered through their beliefs.

Thus, we come to group #3. The people who made a ton of money and who did so because that was their goal; they were always obsessed with money. This group also includes those people who came into a lot of power because they were obsessed with power, though the dynamic is a bit different.

These people still have the need for security. The best security is the legal protection of no one else being able to join your business. Some businesses have this quality innately. For instance, suppose you are the cable or phone provider to an area. You have the phone lines, you have the cable; it’s unlikely anyone else can drive those lines.

But the government, in the 90s, forced phone providers to lease their phone lines to internet providers (dial up, for ancients). So even having a physical monopoly isn’t security if the government acts against you.

High speed internet, over phone or cable, is not something those companies in the US (or Canada) are forced to allow other companies to sell.

The first concern for someone who is wealthy is getting protection from whoever is politically powerful. Government, if you wish, though it can be warlords or Kings or the local tribe, depending on the culture. They need sanction to keep what they have.

This is especially true of businesses which aren’t natural monopolies: selling weapons to the government, for obvious reasons, or; selling music, which could be copied by anyone (say hello to copyright laws); being a lawyer and not wanting too many other people to act as lawyers (say hello to bar exams and law schools); selling genetically modified food of which people are scared (make GMO labeling illegal). Creating money out of thin air, which is what banks, brokers and so on do, might be considered the ultimate monopoly. They sure don’t want Joe Blow to be able to say “I have one hundred thousand dollars, and if Goldman Sachs (in the 00’s) can create money through leverage at 41/1, I can too.”

Creating and lending money is a valuable perogative, one worth defending.

And what if everything goes wrong? What if, despite all your money, and all the defenses you’ve bought, you lose everything anyway?

Be clear: This is what happened in 2007 and 2008. If you take into account counterparty risk and you mark assets to market (value them at what they could be sold for), every bank and major brokerage in the United States, and probably all of those in Europe, was bankrupt.

Bankrupt. Even the ones who made the right bets, like Goldman Sachs: because if all their counterparties go under, so do they.

This sort of risk, the kind that is backed up by the full credit of the United States, requires owning government. It requires knowing the central bank is yours and will act to save you.

The first thing a capitalist does when he or she gets rich enough, is buy the system.

They do this for three reasons: 1) to secure their current privileges; 2) to provide a backstop in case of disaster; 3) to create new opportunities.

The consequence of these actions is to drive up prices and keep out competition. It is explicitly to reduce competition, because competition is a danger. The fewer entities controlling more of a market, or controlling politicians, the more money is made and the more secure the current (and future) fortune is.

What this does is destroy the future.  To those who are currently in power, the future cannot be allowed to happen until they control it: until they are the ones who will make a profit from it.This doesn’t mean all distruptive change is impossible. There are, even today, many factions amongst the rich: Wall Street, Oil, Silicon Valley, etc.. They have interests in common, and cooperate around those interests, but they are competing to see who will control the future.

This doesn’t mean all disruptive change is impossible. There are, even today, many factions amongst the rich: Wall Street, Oil, Silicon Valley, etc.. They have interests in common, and cooperate around those interests, but they are competing to see who will control the future. Largely, they agree on the basics–things like continually extending copyrights, for example, or free movement of capital, or making regulations so that government can’t enact laws which would make their business go away. They agree about low taxes on capital and low wages (Apple and other Silicon Valley companies conspired to keep engineer wages low by not bidding against each other). They agree about unions not being too powerful.

Anywhere Capital has consensus, if they have been able to buy the system, it is virtually impossible to do anything against their consensus.

Gays have rights because it’s not important to most rich and powerful people that they don’t; and it is important to some of them (say, Tim Cook) that they do.

Effective wages have stagnated or dropped for over 40 years now because it is important to most rich and powerful people that they do; your wages are their costs.

Unions have lost massive power because rich and powerful people find that in their interest–even those in industries without unions want them kept weak so they will never have unions.

Concentrated wealth quickly turns into concentrated power and concentrated wealth will always be inimical to widespread prosperity. Wealth is power when it is concentrated. Wealth that is not disproportionate is not power. If it is not power, it cannot protect wealth.

If you allow any group, especially any small group, to obtain disproportionate wealth, they will always use it to protect their wealth.

Part II will discuss how the drive for further wealth leads to the vast impoverishment of everyone outside the wealthy and a small retainer class. Part III will discuss how moderate concentration of wealth can lead to general progress for everyone.

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Austerity in the EU—in Rap

The entire video is worth watching, but if you want to skip to the meat, go to 3:37. This is one of the most accurate portrayals of Lagarde (in charge of the IMF) and Merkel I’ve seen. Better than most written analysis.

Also, funny.

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Libyan Refugees and European Intervention

Perhaps, as Europe destabilized Libya through invasion and then failed to re-stabilize it afterwards, the Europeans should stop caviling about Libyan refugees and start rescuing them and helping them settle in Europe?  (America and Canada might wish to follow suit.)

It could just be that intervening militarily in other countries should be the last resort, done very rarely. I know most European governments don’t care about the people they kill with their interventions, but the blowback in terms of terrorism, refugees, and economic effects might be worth considering?

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