The Fall of GM
“When GM goes bust, we’re all in trouble.” That way my father’s point of view in the mid 1960’s. At that point in history, GM was the biggest auto company in the world. Perhaps it was the biggest company in the world. Now it is in bankrupcy. Its bondholders, its retired workers, its suppliers, and everyone who had any kind of contractual relationship with GM will be severely burned.
The bankrupcy of GM ought to give us pause. How can a company that was once the world’s largest non-governmental institution be insolvent? If we answer this question well we might learn some very useful things about capitalism, about work, about power, and about anglophone culture. To the extent that we learn useful things and change our practices, we may prevent many more of America’s most powerful institutions from similar failures.
Returns to Scale - And its Limitations
The seeds of GM’s failure were sown early on in its existence. General Motors had grown to be the biggest car company in much the same way that Rockefeller’s Standard Oil had grown - mostly by expanding its economic reach by using profits to buy up competitors and improve margins. It was a practice of using high level economic might that depended very little on other techniques. It required that one acquire competitors by whatever means were effective. Then, one exploited commonality between lines to decrease tooling and production costs. Usually the simple fact of being big enough brought sufficient returns to scale that GM as a firm did not have to be much better than anyone at anything. It did not have to be better at marketing or manufacturing or design or testing. It merely had to be almost as good. Everything else could be done by manipulation of the levers of power.
When Tucker set up a manufacturing line to produce cars in the mid ninteen fifties, GM and other Detroit auto companies used their pull to have him prosecuted for defrauding investors. They claimed he never intended to build cars. The actual cars that he produced were never allowed to be introduced as evidence. He was shut down. He posed a threat to the standard way of doing business. And he was shut down by a manipulation of the legal system.
When the movie was made about his story in the early nineties, a good portion of the dozen or so cars he manufactured, were still roadworthy. Tucker represented the independent, entrepreneurial spirit in America. His ambition was to give Americans the choice of a superior automobile. This represented the peak of Detroit’s power. But five decades of waning power may not have changed Detroit’s way of thinking about the business, much.
In the minds of auto executives, automobiles have just vehicles of exchange. One built them to the lowest possible standard at the lowest possible cost and sold them at the highest possible price. One assumed that the consumer was ingnorant of all he could not see. Beauty in cars was skin deep. And when the paint peeled because of corrosion, that just meant it was time to buy another one. In this view of the business, reliability, performance, and pretty much everything other element of value to a customer were irrelevant if the customer could not sense it at the time of purchase. That meant a kind of race to the bottom.
For decades, Detroit auto companies had their way with the American consumer. Things began to change in 1972. That was when the first oil crisis struck. That was the year the US hit peak oil as predicted by Hubbert in the 1950’s. This would mean that oil production in the US would necessarily decline, and that the US would have to import ever more oil in order to consume the same amount as ever. That was the year OPEC cut oil exports to the US. They did the same in 1977. Oil prices spiked. Jimmy Carter signed a law requiring disclosure of fuel efficiency on each new car. Small cars soon earned a significant market niche.
Detroit exploited that niche by introducing the forgetable Vega and the notorious Pinto. But the Japanese used the event to enter the US market in a different way. An early TV advertisement featured a couple slamming the doors of their Toyota. The implicit message was “It may be a low cost car that sips fuel, but it is still a car of high production value.” The message stuck.
During this decade three Japanese car companies introduced models into the US market: Toyota, Honda, and Nissan. Each of these companies has grown. And, in fact, within the last few years - before the credit crunch - Toyota had already grown to be the world’s largest car company. Toyota has been building cars in the US for two decades using American labor and (some) American parts. And they have been building more reliable cars with less labor input than any other car maker. Honda’s cars are not far behind in terms of reliability. And they generally garner high praise for being fun to drive. Japanese car makers gained ground with American customers by building a reputation for high reliability and high value.
Given that they had serious scale disadvantages at the start, how could Japanese producers have hoped to be successful? There are many answers. The fundamental answer is that they paid less per car for labor and materials and they produced cars that earned for their brands a deserved reputation for reliability and value. And how did they do that?
US businessmen will argue that the labor unions were too strong and that they drew too much capital out of US car companies. This is probably true. But it is probably also true that this is more of an excuse than a reason.
There were two factors that made the labor cost lower for Japanese manufacturers. One is that labor rates were slightly lower. They ran non-union shops and paid wages that were high in local terms but low in comparison to union rates. The other reason was that Japanese had much less labor in their auto assembly processes than the US car companies. The Japanese had evolved a better manufacturing method.
The Stratification Problem
There are several related reasons the Japanese managers were able to get more value from American workers than American managers. One was the idea of KAIZEN. It is the idea of empowering workers to do things that allow them to become more productive. And its’s the idea that workers are invested in their work at every level. They work hard. And this work brings them not just a paycheck, but a meaningful place in society. They engage with all their talents.
Furthermore, position in society - i.e. status - is not a matter of categorical difference but one of function. The world is not split into nobility and “villains;” rather, people higher in the hierarchy have greater responibilities that account for their greater authority. They may have better educations and even better breeding; but they are not somehow categorically different from the people who labor in the factories. These are ideas that are deeply engrained in German and Japanese culture. There is a touch of this same idea in the French notion about work and place in society. It’s much less true in Anglophone countries where the notion of two classes still prevails.
A by-product of the classless workplace idea is that there is a constant dialogue that occurs vertically within an organization. It assumes that decisions are made closest to the groups that will be affected by them. And that competent people with strong training backgrounds, exercising good sense, and motivated by an interest in the success of the organization work out decisions in a way that gains the most advantages and avoids the most pitfals. Management is charged with enabling the virtually continuous flow of incremental improvements by providing financial and engineering support. Management, in this view of the world, derives power from its ability to make good decisions. And to make available the resources to implement.
Even if no practical business decisions were to come out of this dialogue, the dialogue itself creates a kind of shared interest in the business and its operations that knits together people at different levels of the organization. This sense of shared mission allows for give and take in all business arenas including negotiations about pay.
But it also produces good business decisions.
In this model good decisions are both the reason for existence of the power structure, and its product. This vertical dialogue keeps management in the loop about operations. It means that they stay connected with the part of the business that adds the real value.
In Detroit, by contrast, there was a kind of invisible line drawn between workers and management. Management was allowed to set goals and working rules for workers. They were required to make sure the raw materials showed up. And to make sure the finished goods got sold. And to make sure that new products were designed and tooling made. But if there were minor problems that cost time and money on the manufacturing floor, it was the workaround that ruled. The only thing that was to be negotiated between management and workers was compensation.
Similarly, it was assumed that a manufacturing plant, once it was built, was perfect. Nothing could be done to make it work better. Sure, there was an operating budget for keeping things in good repair, but there was no persistent attention paid to the question of how manufacturing processes could be streamlined to make them all better. All decisions were made by people at one level - the highest level with an interest in the outcome. And exempt employees rarely spoke to or saw non-exempt employees except at ceremonial functions.
Reinforcing this separation between workers and management was a culture of entitlement. Whereas in Japan the CEO’s of companies were rarely compensated more than 200 times what workers were; in the US 2000 times or more was not uncommon. Furthermore, the people who ran companies in the US were invariably promoted up through marketing and finance divisions. Anyone who actually knew about and cared about operations was treated as a second-class citizen. A manager might be “rotated through” an operating plant, but he was rarely expected to do much outside of learning what products it made.
Everyone knew that the real money came not from being good at making a product, but by being good at selling it. There may be some truth to that proposition when everyone who is selling cars sells cars that are essentially equivalent in terms of measurable value/cost. But the proposition becomes false when this is not true. Ignore operational excellence long enough and eventually you end up on the wrong side of the value proposition. You lose money. Then you go broke.
Denying the Value Proposition
This is where Detroit has been dangerously wrong for five decades. Early on it embraced designed obsolescence. Then, when Toyota and Honda began delivering cars with greatly enhanced reliability or with measurably superior fuel mileage; when Volkswagon began delivering cars with the road performance and feel that approached that of BMW; and when Volvo and Saab delivered cars with superior safety characteristics, the issue of quality began to plague Detroit. It was clear that one could not simply plead “Rich Corinthian Leather” and sell as many cars as you could ever make. One had to figure out how to deliver value in terms of reliability, drivability, fit and finish.
Improvements in reliability since the early eighties suggest that Detroit understood that it could not afford to be much worse than all its competition in every measurable quality; but it is not clear Detroit ever did get very good at managing the value proposition. When measured against most of their competition, they are both worse than the Japanese in terms of reliability - not just on average but in almost every product line - and worse than the Germans and Scandanavians in terms of performance. Instead of really trying learn how to be better, Ford and GM bought Volvo, Saab, Mazda, and Opel.
But even its foreign acquisitions did less good than they might have. There was enough expertise in those enterprises to teach American managers a few things. But it didn’t happen. Enough of the managers came up in Detroit country clubs that if any outsiders from Europe who understood operational excellence landed in the US, they were immediately gelded. Foreign ways were immediately discounted and failure was swift. The game was the only slightly different overseas. There was nothing to be gained by over-investing in foreign operations, especially in Europe. Rather, the slow strangulation of high profile brands served Detroit’s goal of focusing on high mark-up products without delivering high end performance.
What buying those brands could have brought was people who understood how one can cultivate niche markets and serve specific needs very well and competitively. They might also have brought people who understood how to hire and train highly skilled craftsmen, treat them well, and negotiate with them as adults.
But the idea of exploiting niches is one so foreign to GM that its very name denies the possibility. So what if the people who pay a high premium for a Volvo do so because they perceive high value in not being sliced to bits in the event of an accident? So what if they want to know the car has special features that help prevent accidents as well as limit injury?These all add costs. And they cannot be spread out over the entire product line. So why do it? The simple rule that governed their whole business was a kind of interchangeability of all components across all platforms that improved returns to scale. But it also led to a king of lowest common denominator thinking. The only possible place to spend in making a car better was in optional features that were bolted on at the very end of the manufacturing process
Niche markets simply could not exist in the GM framework of thinking. Then, when in the 1990’s more than half of the automobile market was “niche” markets: when Toyota, Honda, Mazda, Volkswagon, BMW, Volvo, Saab, Hyundai, and a few other companies sold most of the cars, Detroit made most of its money on pickup trucks and SUV’s. By denying the very existence of niches, Detroit had backed itself into a place where it sold niche vehicles. But the niche that they were selling into was soon to be a rapidly contracting one. Meanwhile their costs were higher than the competition because they had counted on returns to scale and consumer ignorance to save their bacon.
One question corporate strategists never quite wrestled with was this “Will the SUVs and Pickup Trucks supplant other kinds of autos?” Detroit simply did business as if the answer had to be “Yes.” But that is a daft proposition on the face of it, for it assumes that everyone is either a soccer mom or a farmer/construction worker. And that probably accounts less than 20% of the US population. In an age when fuel prices must rise because of limitations on natural resources, it is insane build a business model on the proposition of building ever larger, more fuel-guzzling vehicles.
By contrast, it is reasonable to argue that one must have at least a meaningful token position in small autos. Because the markups are so small, doing so forces one to hone manufacturing toward operational excellence. One might actually become a far better car company by competing in the economy classes and losing a token amount of money every year at it than by avoiding it and avoiding the whole question of operational excellence.
Furthermore, one knows that eventually fuel must become expensive. So making small cars keeps one in a position of being able to move toward smaller cars the next time fuel prices go up. This is but one strategic error Detroit has made. And it has been making it since the 1970’s.
By the mid 1990’s one might argue that Detroit must have chosen to build trucks and SUV’s out of necessity - the necessity of a set of companies playing a losing hand. Detroit’s niche had always been to make cars that were cheaply wrought or ones that were wasteful of resources. The Japanese had no domestic markets for these vehicles, so Detroit could still have some advantages here. So it focussed on these areas. But even here it was not safe. Toyota brought its skill in making reliable cars to the truck and SUV market. It leveraged it reputation for reliability and scored meaningful hits on Detroit’s home turf with the likes of the Toyota Land Cruiser.
Bad Decisions - Consequence of Culture
We might all disagree about which decisions were GM’s worst. Or which choices doomed Detroit to failure. But the simple fact that it has been losing market share to Toyota and Honda for four decades is a testament to the fact that it is making worse decisions than Toyota and Honda for four decades. Back in the mid 1980’s there was an article in a major business publication that told us Japanese management held US workers in high regard for their skill, knowledge, dedication, and energy; but they viewed US managers with contempt. Perhaps there is something to be learned from the way managers of Japanese and continental European companies manage.
Since that moment, the Japanese had their little problem with banking, suggesting that not all Japanese ideas are uniformly good. But we have had our own little problem with banking. And during the two decades of retrenchment in Japan, the Japanese have continued to invest heavily in their own automated manufacturing lines. The Japanese have more industrial robots per capita than any nation on earth.
Whether this is a good business practice remains to be seen, but there can be no question that the Japanese are serious about being good at manufacturing. Americans, on the other hand, are serious only at being good at investing. It’s good to be good at investing. But it’s a short-sited view. The people who invest capital usually get the short term return; but it is generally where manufacturing operations are profitable that great wealth is generated. When a nation ships its stock of capital offshore, the bulk of the wealth generated from that capital accrues offshore. The Germans and Japanese understand this well. Americans seem completely oblivious.
The idea of investing to improve on-shore productive capacity fits hand-in-glove with the idea of Kaizen. For example, if one finds that one is paying manufacturing workers too much to make a good profit, then the goal must be to improve the productivity of the workers by increasing automation. Or by using some other high impact technique such as building out the product line so that even with marked increases in productivity, there is still a need for each worker. But in every case it requires a kind of joint interest in the long term success of the business. One cannot manage from quarter to quarter or year to year. One must take a long term view of the the business that , in ten years, sets one’s own organization far ahead of where it is today. In the case of the Detroit car company, long term is defined as being roughly the duration of a labor contract - a couple of years, maybe. And every technological change is fought because it increases business risk -especially changes that would bring big improvements in anything.
A great example of this is the Fiero. In the early 1980’s an ambitious manager decided to build a mid-engine two-seater sports car within the Pontiac brand. For reasons that are impossible to understand, he got enough support to start production. The car was ambitious for a number of reasons. One was that it used all plastic (through color) body panels that were virtually immune to denting, rusting, or scratch damage. The car was well received by the press. During its one or two years in production it sold well and it had even garnered its own cult following. What was truly amazing was that it broke every rule in the book. It was well built, reliable, sporty, stylish, and yet it sold for about the cost of a subcompact. When Pontiac stopped production everyone outside Detroit asked “Why?” To many, it seemed like the best answer was because it simply went too far. It appeared that the most compelling reason for its being withdrawn was that it was so good it made everyone else look bad by comparison. And, if the rumor is correct, that was the end of that particular manager’s career at GM: he was fired because he was so damn successful at creating customer value.
Inside American business, the problem of making bad decisions, is not just an issue of choice. It is an issue of identity. The process is lampooned weekly in Scott Adams’ Dilbert cartoon strip and the BBC program The Office. Americans make bad decisions partly because we have embrace bad mental habits in our mental conception the workplace and the various relationships that exist in that context.
The Wrong Work Ethic
One of the issues is that management in many companies in the US operates on a “clubby” mentality: The company is viewed as a club. The offices are its clubhouse. (We are tempted to think of nine-year-olds and treehouses…) Exempt employees are its club members who are elected for their good looks, brains, and athletic prowess. Or maybe because they are well connected. Education at an exclusive, expensive private university is a kind of imprimateur marking suitable club members.
Issues of technical competence are of little or no importance. Showing up at work matters not because it allows one an opportunity to work and produce wealth, but because it is symbolic of commitment to the club. It is possible for institutions to get by on this sort of culture for some time. But when they are pitted against rivals that have more productive ethics, they are doomed to failure.
A friend of mine worked in the IT branch of a major financial company in Manhattan. He joked that people showed up at 9:00. They would drink coffee and hang out in each other’s offices until lunch. Then, to look industrious, they would have sandwiches delivered to their offices. Then they would hang out in each others offices until about 3:00. At about 4:00 everyone would realize that they had a day’s worth of work to do. They would go to their own offices and work until 8:00 or 9:00 pm. Then they would go home. They would return the next day dog-tired and incapable of mounting any meaningful effort. So they would spend most the day going from office to office bragging about what long hours they worked. One’s work status depended most on being present and visible. And maybe on being good looking or witty.
In a business publication some time ago I remember reading of how German workers who came to the US were shocked at the lax culture. They were shocked to see how US workers treated the work place as a place for socialization. In contrast, when in Germany they would go to work, hardly ever talk to their cohorts at work, and then leave promptly at 5:00. Evidently the French do much the same, except they leave earlier. Paris’ afternoon rush hour starts around 2:30. The European conception of the workplace is that it is a place to work. It is not a place to socialize. Europeans work hard, expect results, and go elsewhere to socialize.
Common to the European and Japanese cultures are ideas that value training, competency, focus, and hard work. It assumes specialization and specific spheres of influence based on technical competency. This body of thinking has many consequences. One is that Japanese and European exempt employees can be quite effective during their work days. The French, for example, have the highest GNP per hour worked. Another is that when one views the work place as a place to produce output rather than a place to acquire status, one behaves toward problems differently.
This idea of technical competency allows all decisions to be made at the lowest level possible. It assures that exceptions are handled more quickly and in ways that will typically have the leas possible negative impact on the business.
By contrast, in “clubby” cultures, decisions are management’s reason for existence. And problems are signs of failure. Should ever a problem rear its head in an institution with clubby nature, the management reaction is simply to make the problem go away. The first two or three steps involve a denial of the problem’s existence. In some cases evidence of a problem disappears after it has been denied effectively at high levels. A good chain of management is defined by its ability not to cause problems to be solved, but to cause them to disappear. If nothing else works, one simply silences the person who brought the problem to the attention of others. There are hundreds of techniques to doing this ranging from discrediting the person to firing them. There are firms where such techniques are much more useful in acquiring positions of rank than are demonstrated ability in actually making the reason for the complaint disappear.
In such an atmosphere, the very act of observing a problem tempts disclosing it. And disclosure means punishment and tempts dismissal. This trains the whole organization to be oblivious to problems and to deny problems in the face of any and all evidence of problems. Only management consultants are allowed to see problems. But even here, management consultants must go around to every business of the same kind, see that everyone’s business is in serious danger of collapse because of the same problem, then they must recommend to all their clients some incremental solution that poses no threat either to the entrenched power structure or to the way the company sees itself. In such a culture, it is only a matter of time until the institution collapses.
Specialization and Technical Competency
Not every US company has this sort of a problem. A friend of mine worked at Hewlett Packard in the early nineties. HP had come up as a maker of high-end electronic instrumentation. It had a reputation for no-holds-barred product excellence and high margins. It had just gotten into the laser printer business, and it had brought its culture of excellence into that business. This friend would tell me stories about the way business decisions were made at HP.
One of the questions that people frequently asked in business discussions was “Are you technical or non-technical?” The assumption behind this question was that two kinds of issues bear on a business decision. One is technical issues. These are ones that require a deep understanding of the way things actually are. You cannot convince a broken glass that it is not broken. You either have to repair it or get a new glass. Technical people are good at understanding this sort of thing - much better than non-technical people, usually. The other type of issus is non-technical issues which deal much more with the way things are perceived, the way people are influenced, the way power and resources flow within an institution. Technical people are sometimes much less good at understanding these sorts of things. So when a person makes an assertion in a business meeting, it is helpful to know whether that assertion is backed by the authority of expertise.
No good business plan of action could go forward unless the technical people understood how to overcome the technical obstacles. No business plan could go forward unless the non-technical people understood how to overcome other kinds of business obstacles. The question implicitly gives credence to this idea. ( We note in passing that the question could persist long after the practice of managing in the way we just mentioned has ceased. For instance, it could be used to disqualify people from voicing legitimate concerns. And in such cases it would serve a purpose opposite to the one we attributed to it..)
The question itself betrays a number of bits of brilliance that might help explain HP’s early success. It suggests that business decisions take into consideration technical and non-technical ideas. It suggests that competence and good judgment in one’s field of expertise ( technical or non-technical) are highly valued. It demonstrates an implicit assumption that people are expected to come to the table with core competencies, and that decisions rely on the competencies and good judgements of all specialists. This is a sign of a workplace where work is defined in terms of delivering value to customers more than it is in terms of gaining personal status.
Decisions are not imposed from the top down. They percolate up from the operating groups of the company. It is suggestive of the idea that people at all levels are expected to voice objections and suggest problems before decisions are made.
This is an idea completely consistent with the Japanese idea of kaizen. It is an idea consistent with the continental European idea of highly trained crafts-people. It is an idea NOT consistent with the idea of business place as club. It is not consistent with the Adam Smith idea that a person in a craft or trade can learn all that there is to know about it with three weeks of on the job training.
Canary in a Coal Mine
The failure of GM is not a result of the financial crisis. My wife, who spent twenty some years as an executive in a health-care company predicted six years ago that GM would collapse if it did not get its health care related expense problems fixed. And, in fact, a huge part of GM’s financial collapse owes to financial obligations it owes in support of health care costs. Had the UAW been served by the Japanese health care system, those costs would already be something like half of what they are today and GM might not yet be entering bankrupcy. So GM’s failure ought to tell us something about the cost of not fixing health care in the US.
But Rick Waggoner, until recently the chairman of GM, insisted right up until the day he was thrown out that GM would never seek bankrupcy protection. Either he was completely delusional, or he was unwilling to publicly admit a serious problem. What is scary is that within the clubby atmosphere of the Detroit business world it is precisely this aspect of his behavior that was the most likely to get him the chairmanship. And it was the most likely to keep him there while that mentality was responsible for filling the chairman position.
The clubby practice of denying problems has kept Detroit from being as good as its competition at design, manufacturing, or reliability for something like five decades. It has imperilled American Motors, Chrysler, Ford, and GM. AMC went out of business long ago, though its Jeep brand - still plagued with reliability problems ( ironically ) staggers on as part of an ailing Chrysler.
It is inevitable that a few brands will disappear over the next decade. It will not be long before the category “commuter car” becomes a special category. And, in fact, it will not be a great surprise if some cities begin to try to create special incentives to drivers to use smaller, cheaper electric powered commuter cars.
But the bigger question is how far will the Anglophone world need to fall behind the rest of the world in order to discover that:
1) Operational excellence and technical competence counts. The notion of continuous improvement implicitly acknowledges the idea that problems exist and need to be solved. It implicitly depends on technical competence and good judgement.
2) Decisions must be made on the basis of information not just on the basis of preserving power. When considerations of power usurp the decision making process, bad decisions are made. And the consequence is a more serious erosion of power. Power is a natural consequence of good decisions.
3) The workplace is a temple for the sacred purpose of generating wealth, and power is a natural consequencs of being good at this. If one thinks of the workplace as being a place to gain status or power first, then one risks trading business assets and advantages for personal gain. That’s a morally reprehensible point of view.
4) Entitlements don’t create wealth; they create fiefdoms, slave plantations. What creates wealth is an efficient means of production or distribution. And what creates excess wealth is an incrementally more efficient means of production or distribution. Once everyone else has learned your tricks, you need to create new ones; so you must cultivate expertise and set it to work within a culture that is very good at defining and implementing low risk incremental change.
GM’s failure ought to teach us these lessons. If we learn them well, we might yet forestall a general economic disaster. Apart from the sheer monumental good fortune of its accidental discovery five centuries ago, America’s good fortune as a nation stems from healthy institutions of all sorts. It depends completely on a low level of institutional corruption and on a high level of sanity, wisdom, expertise, and business intelligence. It depends on hard work at all levels. It depends on productivity at all levels. It depends on management that is actively engaged in identifying problems and fixing them. It depends on capital and on a continuous re-investment of profits in the efforts that improve effectiveness at all levels. It depends on a high level of trust and trustworthiness among all interested parties in an institution.
All of these attributes were compromised by the clubby atmosphere that smothered Detroit. GM is bankrupt. So are the practices that got it there.
No commentsWSJ Out of Touch?
There was a terrific graph in the Wall Street Journal yesterday (pC1). It showed pay in the financial sector normalized against pay in all other non-farm endeavors over the last century. A hundred years ago the ratio was around 1.5. For every dollar people in other non-farm jobs earned, people in the financial sector earned a dollar and a half. This ratio climbed until the early 1930’s. Then it levelled off around 1.6. In 1940 it fell precipitously to 1.2. It continued to drift downward until 1980 when it was almost at parity. Since 1980 it has risen steeply. In 1998 it exceeded 1.6. And recently it has exceeded 1.7 - the highest level in at least a century. The financial industry has been seeing outsized pay for almost the last three decades.
What is one to think of this? On the one hand, we note that with the expansion of America’s middle classes, with their growing ability to save and invest, has come a dramatic increase in the amount of capital seeking good management. Even in the ninteen fifties and sixties, investment in the capital markets was seen as an endeavor of rich people. But by the end of the 1980’s everyone with a good job was salting money away in the capital markets. Assuming some modest returns to scale and inprovements in productivity due to improving IT systems, it seems reasonable to assume that pay in the sector would increase. It would be in everyone’s best interest for it to do so, so long as the financial system grew more efficient at allocating a growing pool of resources.
A second factor in assessing the rise in financial sector pay is the argument that the financial sector works by allocating resources to the most efficient means of production. A healthy financial sector does this better than an ailing one. And it is definitely worth a lot of money to get this allocation system working efficiently. This is a reasonable and supportable argument. And to the extent that rising pay in the finiancial sector has led to more efficient means of production - in excess of the premiums to pay within financial sector itself - we are all better off for it.
We are not prepared to argue whether these conditions are strictly satisfied. The market is not always completely efficient. That, however, is the topic of another discussion.
Moving beyond that issue we see two monumental problems that attach to the situation of stratospheric pay levels within the financial industry: Transparency and Opportunity Cost.
There is a lot of talk about transparency. Not coincidentally, the same WSJ page features and article about regulations pertaining to derivatives and other esoteric financial instruments.
There ought to be discussions about this, because when wealth is transferrred to the financial system in excess of the value added by that system, we all become impoverished. Lack of transparency is the magic that makes such a transfer possible. Madoff’s whole scheme worked because of lack of transparency. He claimed to have magical powers. And people believed him.
Lack of transparency leads to chicanery: It is what makes that transfer seem desirable when it is actually not so. There are a thousand highly paid political operatives working on resoring transparency. And if capitalism is to function correctly, they damn well better take a good crack at it. In light of this work ther is a glimmer of hope that it will be fixed by good legislation. ( In Journal-Talk, Regulation)
When all the processes in the financial market are open, frank, truthful, unbiased, unpuffed, unwrapped, and in plain view of all interested parties, there is some small hope that the market can approach efficiency. The size of the distortions tends to be limited, at least. When it is otherwise - when the distortions become a huge part of the system, the financial industry will swallow up great gobs of capital, pay it to its operatives, and weath-making enterprises - companies that manufacture and distribute goods and services that add real value to peoples’ lives - will quickly starve for lack of capital. That is the fast-track to serfdom.
The second problem with stratospheric pay in finance is opportunity cost. Every economic activity requires an input of talent. When all talent flees any activity it is usually not long before the activity stands on shaky ground. It is not long before it begins to crumble. When I was leaving college, for instance, steel producing companies were losing money on US operations. There were lots of reasons. Part of it was that factory floor pay in the US was an order of magnitude higher than it was in the far east. And unskilled labor in the far east was more productive. So it made sense to invest there rather than here. In any case, steel companies, when they offered jobs to degreed engineering graduates, paid the worst. So on average, they probably also got the worst. This drove them into a kind of inevitable downward spiral. There still exist a few specialty steel makers. But most of the industry is located offshore.
Every manufacturing industry in the US competes for talent with the financial industry. It does so for engineering, business, and finance professionals. If the financial industry is paying more than any manufacturing industry, where will people with the best talent go?
There is absolutely no question that finance needs good people to allocate resources among businesses. But what if all businesses are handicapped by their inability to hire the best talent? The process of efficient allocation no longer produces the best economic result. I am told by my wife who graduated from Columbia Business School in the late 1980’s that almost all the best people specialized in finance. They planned to work on Wall Street because that’s where they could make the most money. At that point in time the ratio between finance and other non-farm pay was 1.2. In other words, that level of pay proved no hinderence to the financial system in terms of attracting talent. The additional fifty cents on the dollar amounts to excess profit drained from the capital pool that could be used to rebuild manufacturing in the US or rebuild a crumbling infrastructure.
The readers of WSJ tend to be more closely connected with the financial system than readers of any othe publication, so it is not unexpected that WSJ should advocate for their interests. The readers of the WSJ will likely be people who view with suspicion and animosity any regulation that threatens to derail the gravy train. Maybe, though, that is precisely what needs to happen.
No commentsConservative vs Liberal
For some time I have been playing with the idea that good political decisions can only be made when the issues are framed by the right thesis and antithesis. When these are all categorically wrong, a good decision is impossible. When even one side is wrong, the chance of a good decision probably falls below half. The goal of this piece is to create a list of interests that frame political decisions and assign their defense to Liberal or Conservative . The idea is that when liberal and conservative points of view are engaged in defending the right sorts of ideals and poltical principles, there is some hope that political dialogue can find good solutions generally consistent with the broad interests of the body politic (i.e. all the people affected by legislation created by these debates.)
| Conservative | Liberal |
|---|---|
| Individual Strength & Achievement | Institutional Strength and Effectiveness, Especially Public Ones |
| Right Action | Right Thought |
| Educate for Commerce & Industry | Educate for Shared Culture & Good Government |
| Trust Myself, My Group, My Country | Be Skeptical. Seek Useful Ideas. Seek Friends, and Make Allies |
| Depend on the Known, Old, Trusted | Seek New Modes of Thought, Expression, Action |
| Be Tough, Be Virtuous | Be Smart, Be Cool |
| Government Should Leave Me Alone | Government Should Help Society Work Better |
| Conserve Capital | Protect Environment, Protect Laborers |
| Wealth Lies in Ownership & Productivity | Wealth Lies in Commerce & Efficient Distribution |
Take, for example, the question of education. On one hand education provides shared experiences, shared values, shared culture that allows the possibility of a civil dialogue on issues. It also, properly executed, would give us the tools to look at questions from different points of view and to better assess arguments on the basis of the merits of the evidence. It would allow us to reach informed decisions rather than simply aligning with our group. On the other hand, education must make us productive and effective in the economic sphere. Otherwise our society becomes weak and servile in an economic sense. If we build a society that is especially weak in a liberal sense, then we all become slaves of a wicked, corrupt, but highly effective central authority.
Sadly, America has a second rate education system that is worse at preparing Americans for all academic pursuits than are most European systems. And we have a system that is worse at preparing Americans for all vocational/technical pursuits than certainly the German educational system. By no measure is it first rate.
There are many reasons for the decline, many of which have to do with adult’s attitudes about education. But some of the reason lies in the Reagan era decision to dumb down education to make Americans good only at the three R’s Restin’, Recitation, and Revival Meetin’s. There’s no thinkin’ involved. Because that threatens the powers that be. And, evidently the same people imagined that vocational training just makes workers more expensive, not more productive. ( It’s thinking as old as anglophone economics: it’s one of the great fallacies of Adam Smith’s Wealth of Nations. )
The problem arises because conservatives do not have a position on education that drives us to be more productive as people. Conservatives do not argue that we need to be better in vocational training. And they argue against the utility of science. This is strictly medieval thinking. And it threatens to eliminate the middle classes. The problem of inferior education also arises because liberals tend to undervalue the social, political, and cultural values and tools of thought that are rightly taught in liberal arts colleges, in high schools, and in elementary schools.
Getting the educational system to work is more than getting public policy straightened out. But that step is necessary.
Turn next to the issue of individual liberty. America has very nearly come off the rails entirely. One of the great problems of modern conservatism since about 1880 is that conserving individual liberty has been at odds with conserving capital. Large institutions find convenience and profit in trampling the property rights, the environmental rights, the privacy rights and personal liberties of individuals. In matters of labor and commerce the Democratic party has tended to represent the interests of individuals against corporations.
But conservatives have represented themselves as the party of personal liberty - freedom from government intrusion - even as they attempted to eliminate all checks on abitrary executive power agianst individuals. There was precious little space for liberals to defend personal liberty. Fortunately this is a category that has had some constitutional protection. But no attribute of political life can be preserved in the absence of deep support both in individuals and in institutions.
These two examples raise the question of how well all of the interests of a democratic society can be represented by a two party system. For it is inevitable that conflicts of logical consistency will arise from time to time within a party’s framework making it impossible for a party to effectively advocate for issues that are rightly in its scope of interest.
I set out in an attempt to describe a kind of canonical policy framework (in its form now, far from complete) that would frame issues in a way that would lead to productive policy debate and good decisions on public policy. It still seems like a good exercise. But it might prove that no two party system is capable of managing all policies over the whole univers of political discourse in a way that is both consistent and productive of good results.
This is just a very quick sketch of the idea. My hope is to expand upon this in the future, both by adding items to the chart and by explaining the entries. The main goal is to provide principled positions on big-issue sorts of policy that allow productive policy debate. We note in passing that we have tried to frame positions on both sides of the aisle in positive terms because the public “goods” that each side is defending are worthy of defense.
Perhaps this exercise will lead to a strong argument that a two party system is incapable of reaching a good decision a large portion of the time because of the logical limitations on internal consistency and lack of independence between category areas.
No commentsPeak Wingnut - A Helpful Idea?
Dave Neiwert and Sara Robinson over at Orcinus have been doing an exemplary job of keeping us up-to-date on the hate-mongering of the authoritarian far right. It’s a place I like to go when I wonder if it’s just me or if the world really is going crazy. And I feel reassured, a little, that it’s not just me. Sara’s recent piece - nicknamed “Peak Wingnut” by a comment writer - speculates whether the right wing spin machine is going to spin the “wingnuts,” dervish-like, far out of control and into violence. They make a powerful argument that there is a real risk of this happening. And it is especially convincing if one has been visiting Orcinus for a while and hearing the case develop.
As much as I love to go there, as much as I agree with Sara, as much as I buy her arguments, as much as I see the same events, hear the same words, interpret them in parallel ways, I also have a sense of unease about the project.
One of the arguments Sara makes is that the far right has been dividing the country up into “us and them” for a long time. And that this divisive technique is inherent to the authoritarion point of view. Fair enough. I agree. But one of the curious side-effects of the work is that by focusing on groups that possess the characteristics she abhors, she, coincidentally does the same thing. The language is gentler. The focus is on their bad behavior and their unfortunate psychological makeups (Wingnuts are authoritarians. And that makes them psychos. This is the subtext.) And the question that keeps coming up is “What are we to do with people like this?”
The problem with this is that we are aping a behavior in “wingnuts” that we rightly deplore. Rather, what we need to ask is “How do we create a dialogue that changes the equation?”
…
It is a property of people who were in their teens and twenties during the 1960’s to view political power in a particular way. During the 1960’s one did whatever it took to get attention for one’s cause. One created a political group to protect that cause. One pushed that cause as far as one could, to hell with the consequences on society. It’s a kind of Bolshevik “take no prisoners” approach to political power. It achieved political ends that most people less than fifty years old will agree were laudible.
The great problem with this frame of mind is that it enforces the mental practice of aligning with a group over the mental practice of evaluating ideas on their own merit. What happens next is that ideas cease to be the currency of political discourse. Rather, all of political discourse is about allocation of power. And the symbols that belong to that task. Political discourse is targeted at bringing people into the group and making them loyal members. And about closing the door to the influence of outsiders. Political parties and groups of all sorts become more insular. And before long the whole political process freezes up because of a kind of brittleness that pervades every individual, every institution, every component in the political process.
Fueled by bone-deep racism, an unnatural terror of liberal government, frustration over the economic downturn, and fears about America’s loss of world standing, they said, the militant right wing is indeed rising again. Their numbers are up, their talk is turning ugly, and it’s not unthinkable that we could be in for a wave of domestic terrorism unseen since the mid-90s.
In fact, I live in a place with deep right wing roots. And I heard two remodelling contractors whispering in my hallway that they were pretty sure the President would not last out his first term, but would end the same way Kennedy did. This is not the kind of thing we heard even in the 1990’s. We are in a worse place.
Thing is, these are not inherently bad people. They are people who have a psychological make-up that embraces a particular point of view. And they have been fed on a public rhetoric of nationalism, jingoism, hatred and lies preached by the rabid right for thirty years.
There is a very important question about how to make sure that they do little real damage in the short term. But the real question is how to restore their correct relationship with society. Part of that task involves changing the voices they hear in public, the tone and the tenor of the people they listen to on radio and television. Part of the task involves figuring out how to bring the bottom thirty percent of the nation back into society. How do we provide good jobs? How do we provide health care? How do we provide social services? How do we make them feel safe and secure? For it is ultimately a great sense of insecurity and anger at perceived injustice that fuels their rage.
That rage was cultivated by the reactionaries who followed Reagan. Reagan mirrored the methods of sixties radicals by simply choosing a different set of political propositions, selling them by appealing to greed and hatred, and using the political capital to demolish opponents. His own success at this transformed the Republican party from a group of men who acted like Eisenhower - who built the interstate highway system and warned Americans of the dangers of the military-industrial complex - to men like Gingrich, and Dubya whose whole agenda appears to be oriented to sustaining a highly abstract form of pillage of every fungible asset held by the US.
Not only did the backlash to the sixties-style Bolshevism create them, but it kept them in power for sixteen of the last twenty-four years. And it kept liberal politicians cowed and frustrated. The results have been so ugly that people under the age of fifty have resoundingly repudiated not just the Republicans in question, but the whole Bolshevik approach to the political process. Obama’s ascendency represents a repudiation of the notion that who has the power has his way with the system. It represents to people under fifty a hope that political discourse can become both civil and productive of good public policy.
I am encouraged by Obama’s lead. He has attempted to make dialogue a centerpiece of his political modus operandi. It’s a refreshing change from the authoritarian styles of the Bushes and Reagans. But Obama’s administration has its own share of left-leaning Bolsheviks. And the Republicans have circled the wagons and taken a totally obstructionist role. So the hope that Obama created of a new age of dialogue remains more of a hope than a reality.
The impression from outside the beltway, at least, is that there are two groups with mutually incompatible views of the world running Washington. They have grown incapable of talking to each other. And the question is not so much how to adopt policies that create the most good for American people and institutions, but rather “Who is in control?” Outside the Oval office, it is still the adolescent activists and the counter-activists of the same era who are in control.
Despite inroads made by Obama and the under fifty crowd, the dream of bringing Americans together in a dialogue, every day, seems more and more difficult. The fracturing of the media has meant more views find expression, which is very helpful. But it also has meant a kind of breakdown.
Before the fragmentation process started in the 1980’s there was an effort throughout the media to present information without filtering it through a partisan filter. But with the rise of the Murdock empire, even institutions as large and influencial as the Walls Street Journal have seen ideology filter news. For example, WSJ made no mention of the election of Barack Obama on the day after the election. As if the President didn’t count because he had the wrong sort of political views. And the photo of Arlen Specter that accompanied his change of party announcement made him look completely looney. Even if it were true that six decades of association with Republicans has made him so, it is truly not a sign of unbiased reporting to make him look gratuitously bad.
So, how do we bring even-handed reporting and productive dialogue back into the political arena? Here are some ideas:
- Speak more about common interests and shared ideals and less about fractious issues.
- Speak more about problems, solutions, ideas, policies, and programs and less about people and processes.
- Focus discussions on finding common ground in interests and principles.
- Speak less severely about the psychological deficiencies of opponents and more about ways to persuade and encourage constructive engagement. Exchew name-calling, ad-hominem attacks, calling into question a person’s intelligence, mental stability, or sanity. We have different physiologies and different life experiences. And unless we are willing to systematically eliminate those who are not like our own ideal selves, we will all be happier if we can live together peacefully, with civility, and with respect.
- Attempt to be truthful and balanced.
- Focus less on the horrific and scandalous and more on the possible and necessary.
- Make political discussions less strident and more thoughtful.
- Introduce ideas and points of view that are not compliant with partisan points of view - any of them - but ones that still make sense to reasonable, apolitical people.
- View arguments to be less about winning and losing (which makes debate a zero-sum game) and more about being an organized and systematic search for valid propositions - things that reasonable people will agree with. (which makes debate a means of increasing knowledge)
It may be that we have gone so far with polarization that the only purgative to the poison is a terrifying and destructive social upheaval. I hope that is not so. But it is clear that fact has played an ever-diminishing role in all of political discourse and political power considerations have played an ever-increasing role. It is almost to the point at which if a person is not strongly aligned with a political organization, he has no voice. And people of one partisan persuasion have become deaf to all the noises made by people of the opposing party persuasion.
A failure of the body politic to recognize and come to grips with the most fundamental and obvious facts is the inevitable result. One is reminded of the story of the emperor’s clothes. Only a naive child is willing to state the obvious, that the fine suit of clothing the king is wearing is not simply diaphanous - it is non-existent. In the fable, the whole world fell silent and blushed at the recognition of the gap between truth and accepted political dogma. But in our political climate instead of such a statement creating a great stir, it goes completely unnoticed amidst the cacauphony of political gamesmanship.
I respect Neiwert and Robinson for their great integrity, for their formidable insight, for their persistence, for the power of their prose, and for the depth and commitment of their readers and commentators. As I said, I find Orcinus a source of encouragement and sometimes inspiration. But I earnestly look forward to the day when their work is irrelevant. I wish I knew how we might get there.
1 commentAmerica’s Opium War?
It’s a curious thing; almost as if the editorial board at the NYT doesn’t have time to read the articles its reporters turn in. On page A7 (01May09) there is an article by Benjamin Weiser entitled “Afghan Linked to Taliban Sentenced to Life in Drug Trafficking Case.” At first blush it’s just one more of those “Taliban=Drug Trafficker” stories. Haji Bashir Noorzai, an Afghan, is tried and convicted of moving opiates in large quantities within his native country. And he gets life in prison. Simple enough.
Or is it?
One question the case raises is this: What right does the United States have to try citizens of other nations - who have no official connection with he US - for acts they take in their own nations? In trying and sentencing Noorzai, the US is implicitly asserting a right to try, convict, and sentence people who live in other lands and are subject to other laws, and whosee behavior is not governed by US law.
A noteworthy early and very public example of this behavior was the capture and prosecution of Panama’s President Manuel Noriega by the Bush Administration in 1989. It was a matter of fact that Noriega was entwined with the CIA and that he was also deeply involved in drug trafficking and illegal arms trafficking.
In a syndicated column in 1984 Drugs, Drugs Everywhere and no Solution in Sight William F. Buckley states
Fifty, perhaps sixty percent of all crime is drug related. Ninety percent of illgal drugs reaching the country come in through organized crime. … There are now 4 million frequent cocaine users, 10 million occasional users. The cost of heroin and coke, three years after President Reagan’s big anti-drug campaign was launched are half what they were, which tells us that drugs are more ubiquitous than ever.
Maybe that was the point of the program. And maybe Noriega was making it difficult for the concession to make money. So he was nabbed and thrown in prison on charges that were close enough to the truth that they might stick.
Whatever might have been the motivations to invade, kidnap Noriega, and try him for breaking laws that would not apply to him as a citizen and leader of a sovereign nation, it seems to be a clear violation of the tenet of sovereignty upon which international law is based. It’s hard to understand how one might argue that the US actually has a right to incarcerate citizens of other nations for acts they have committed in their own lands. Other nations, in fact, view the Noriega capture as an act of war, not of law enforcement: and view his incarceration in light of being a prisoner of war, not a common criminal. If one is viewing it in terms of international law, it’s very difficult to believe in national sovereignty and see it any other way.
Between World War II and that day in 1989 when Noriega was captured, it is impossible to find another example of the US removing a citizen of a foreign nation forcefully from his homeland and trying him under US law for acts committed in his own nation. But the treatment of Noriega set the precedent by which Dubya would kidnap and detain purported al Qaeda operatives.
Ironically, as the Bush family was pressing for the right to capture people in other lands and imprison them outside the bounds of any legal doctrine that would allow it, they were simultaneously denying all protections of law under either the US Constitution or the Geneva Convention. The second Bush administration perpetually defended its rights to treat people held at Guantanamo Bay arbirtrarily, beyond the reach of the protections of law. That is not how one treats criminals or war criminals. Not if one cares about learning and making public the nature of their crimes.
The practice of swooping into a country, scooping up people, and throwing them into jail is unprecedented among civilized nations. Civilized nations consider the capture of their citizens by another nation an act of war or of kidnapping. Or both. To behave otherwise is to deny the idea that nations have soveriegn control over their citizens and the resources within their borders. That, in turn invites all sorts of nasty behavior. In fact, it invites chaos.
The practical problem with trying citizens of other nations in US courts for actions they have taken in the sovereign nations of which they are citizens is that it sets up a dangerous precedent. It implicitly invites other nations to do the same to citizens of the US. For example:
Imagine an American, a female divorcee travelling in a nation that follows Sharia law, say the fictitious nation of Irajistan. She refuses advances of a minor government official. By some means not relevant to the story, he finds out she is a divorcee. And that she was not faithful to her previous husband. This means that she has broken Sharia law. The official charges her with infidelity, has her tried; and she is stoned to death. This is precisely the kind of world we are creating if we kidnap people from other nations, try them (or not) in US courts for breaking US law in other sovereign lands, and incarcerate them.
Noorzai travelled to the US of his own accord to “meet with government officials, lured.. by two goverment contractors who said the Americans wanted to talk with him about terrorism financing and promised him safe passage home. Instead, after 11 days of talks with federal agents, he was arrested.” One can make the argument that luring a person into the US is different from kidnapping them. But the issue of reciprocity is the same; the woman in the fiction above was in Irajistan of her own accord. It is impossible to argue that (from a western point of view) she deserved to be stoned to death.
The second question raised by the Noorzai story concerns certain relationships in commerce and political power. The headline and a sentence in the second paragraph hint at Noorzai’s connection with Muhammed Omar. It’s as if the editorial board want us to see the story as one more link between the Taliban and drug smuggling.
The tribal leader Haji Bashir Noorzai, whose case drew wide attention because of his prominent role in the drug trade and his ties to Mullah Mohammed Omar, the fugitive leader of the Taliban, was found guilty last fall of taking part in a conspiracy that sent tens of millions of dollars worth of heroin around the world, including to the United States.
At first glance, the casual juxtaposition of Mullah Mohammed Omar and language about drug trafficking causes us to link the two facts mentally. But in actual fact, the sentence barely asserts any link, and the article never shows any sort of relationship between Noorzai and Mullah Omar. After parsing the quoted sentence carefully one realizes that one might just as well say “Noorzai, a petty drug smuggler and tribal leader lived in Afghanistan when it was ruled by Mullah Omar.”
The fact is, the Taliban, when they had complete control of Afghanistan eliminated opiate production altogether. If Noorzai held with the Taliban and enforced their position on opium production and distribution, he would be innocent of the drug charges. Alternatively, if Noorzai had been a major drug trafficker, he would have been part of a coalition to oppose Omar in order to restore the trade.
Noorzai claimed he did help the US invasion, so maybe he hoped to be a drug smuggler. But the charges against him suggest he was, at best, a bit player in the drug supply chain. Recall that Afghanistan, since the US invasion, has seen opiate production climb from nil to about $50 billion per year in street value. Even if Noorzai managed to distribute one hundred million of dollars’ worth of opiates in the course of the eight years, this amounts to about 0.25% of the Afghan production. Noorzai was not a big fish. He was neither a major Taliban operative nor a major drug smuggler. Perhaps he deserves to be in jail, but the case has no material effect on the business of the cartel.
How does one account for the turn of events? Perhaps he was prosecuted for working outside an officially sanctioned cartel. Or perhaps he was prosecuted just so that there would be another story equating Taliban with drugs. In neither case is the truth about Afghanistan being accurately reflected in the press - at least not in the headlines and ledes.
Interestingly, the story reminds us of the recurring nexus of arms and drugs and CIA operatives. Noorzai “once led a force of mujahedeen fighters in the war between Afghanistan and the Soviet Union” and “had helped the US recover stinger missiles that the CIA had provided to Afghan rebels.” During the invasion of Afghanistan, Noorzai’s tribe “collected and gave the American authorities thousands of Taliban weapons” - a service for which he was not directly paid. So why did he render it? Noorzai has close and trusting ties with CIA contractors. The article suggests as much, else whe would not have come to the US. What was he hoping to gain? A concession, perhaps.
It’s another of many stories suggesting the possibility that contractors working for the CIA and/or for certain arms of the military were involved in drug smuggling enterprises in Afghanistan. With $50 billion/year at stake, it is inevitable that some sort of de facto trade of arms for drugs would occur.
It is helpful to start the story with the Soviet involvement in Afghanistan starting in 1979. Mujahedeen resisted, using arms surreptitiously supplied by the US. That required CIA “contractors” who would deal with the likes of Osama bin Laden. Sometimes they provided arms. Sometimes training or logistical support. But in any case they cultivated a close working relationship. From the Afghan/Mujahedeen point of view, the arms were the most valuable thing they could get from the relationship. But it is impossible to view all Mujahedeen as being interchangeable. And CIA contractors had to choose which groups would get what and how much. How were they to choose? Part of that choice must have been a quid pro quo. The Mujahedeen had something to trade that was extremely easy to transport, and extremely valuable.
That was opium. So the mujahedeen traded opium for arms. CIA contractors might have gotten some or all of the weapons gratis from the DOD. But they certainly would not distribute them for free if they stood to make tens or hundreds of billions of dollars for the same effort, trading in opiates.
Assuming this happened on any scale - and it is naive to imagine that it did not - the second worst thing that could happen to the business was the Soviet withdrawal from Afghanistan in the late 1980’s; for it made US arms less valuable, opening up the possibility of alternative distribution networks.
Who was poised to capitalize on this? Al Qaeda. They had connections with the producers. All they would have had to do to reap much greater profits was to establish direct contacts with foreign distributors and cut out the US middlemen. Suggestive of the fact that they were in the process of doing this is the fact that al Qaeda was deep into the blood diamond business in the mid 1990’s. Especially when peace has broken out, that’s the currency the drugs/arms business.
Curiously, this line of reasoning might give al Qaeda a motive for wanting the Taliban removed. Assuming the eradication of opium was not their own idea to weaken the existing distribution system so as to allow them to rebuild it from scratch, eliminating the Taliban would be the only way they might continue building their drug-smuggling empire. But it seems unlikely that they would have hoped for a US invasion which would risk setting the very operatives who sold them arms in direct contact with the Afghan suppliers.
There is no question that al Qaeda was a criminal operation, that it did smuggle arms, that it did trade opiates for arms, and that it did attempt to grab tens of millions of diamond to use as currency in its smuggling operations. It is more of a leap of logic to assert that al Qaeda somehow threatened the cartel.
If, however, we suspend disbelief and assume that al Qaeda operatives were jailed in Guantanamo for approximately the same reason Noriega was jailed in Miami - threatening the family business - then all the language about “national security” and all the efforts to detain without public oversight begin to make sense.
It’s the timing that tells the story, though. The worst thing that could happen to the business was the Taliban’s complete eradication of opiate production; for Afghanistan supplies roughly 90% of the world’s heroin. It threatened the collapse of the whole distribution network which had to operate on stored inventory while the Taliban was being overthrown. Furthermore, the Taliban had created stability in the region for the first time in decades, obviating the need for arms. It was a terrible blow to many interests.
Cast in this light, one might reasonably wonder to what extent the US recent actions against al Qaeda and the Taliban echo those against Manuel Noriega long ago. Do both represent defenses of commercial turf?
No commentsSecret Banking Sham
I just bought these great glasses. I put them on and everyone says “My, you look thinner.” Now, when I go into banks tellers smile at me. When I go into restaurants, waitresses smile at me. When I go into gymnasiums people nod approvingly. I walked into my doctor’s office wearing them. They took my weight and blood pressure. The doctor looked at the numbers and said “Well, I wouldn’t really worry about these numbers because obviously they are irrellevant to you. I can see that you aren’t fat.” These are really great glasses. And, in fact, they are so good that they make me want to get out more. Who knows maybe I will eventually come to resemble the new me everyone sees. Or perhaps not.
The magic glasses parable came to me as I was contemplating the article at the Economist (link above) advocating more transparency and less regulation. At first I saw it differently; but I think it is useful to consider the possiblity that our society is simultaneously embracing more government involvement and less transparency in the world of finance. That, in fact, if banks get to magically make risk go away by using less conservative and more abstract valuation models they may be donning the kind of magic glasses we talked about; that may make them look better in the short term. But in the longer term it is bound to make them less stable when downturns occur.
I will be the first to advocate for temporary government involvement because it is better than collapse - which seems the only other alternative. But long term governmental direct participation industry, commerce, and allocation of resources always tempts corruption. Lack of transparency aids in hiding corruption. The only answer is free markets and sound, well enforced regulation. The question for government is not whether it ought to govern (as the whole of the Republican party apparatus appeared to advocate for some time) but how?
The answer is “well.” And the means to that is by discussing policy openly. While I just happen to agree with most of Obama’s policies, it is not his policies that I find so deliciously refreshing as it is his style of governance. He welcomes discussion and is open to dissent. He proposes key principles upon which we can agree and he lets us focus on working out the details in open discussion. This kind of discussion is illuminated by transparency. Transparency - the free and open flow of all information crucial to making a decision - is of vital importance to the proper function of markets and democratic governments. Systematic behaviors that stifle transparency or promote bad judgement in light of good information ought to be considered corrosive to the very liberal principles upon which these institutions are built.
No commentsWorthwile
Why Bristol Palin is Different -
Jon Swift points out that what matters is not teenage pregnancy per se but whether one is librul or conservative. Conservatives know that teenage pregnancy is bad. So it doesn’t really matter too much if they do it. But libruls don’t know it’s bad. That’s evil.
Why aren’t more conservatives standing up and defending Bristol Palin? Why can’t we unequivocally state there should be different standards for liberals and conservatives? One of the problems with liberalism is that they believe everyone is the same and that all morality is relative. But if there is anything that conservatives reject it is the idea of moral equivalency.
What’s old is new again:
No commentsCorruption dominates the ballot-box, the Legislatures, the Congress, and touches even the ermine of the bench. The people are demoralized.The newspapers are largely subsidized, homes covered with mortgages, labor impoverished, and the land concentrating in the hands of capitalists.The urban workmen are denied the right to organize for self-protection, imported pauperized labor beats down their wages, a hireling standing army, unrecognized by our laws, is established to shoot them down…
The Great City - Chapter 44 - Departure of Shabu
When the word came to Shabu that his father’s powerful friends had convinced him that Shabu’s governance had been so terrible, and that his advocacy for the tribe had been so inept that Shabu could no longer rule the great city, Shabu was very angry. He called a great council of his advisers to find out what action to take.
“In the first place, there is no hope of defying your father. He is a god to the most powerful families in both military and commerce. Most of the men loyal to you owe their places in your government to your father; and they are, therefore, more loyal to him than to you. But you can stall for time. Tell him you need four years to prepare the new prince to rule the Great City. “ This was the first item of unanimous consent.
“In the second place,it is imperative that we reward our friends for their support. So we must write IOU’s from the public coffers to those who supported us. These must be such great sums of money that there is no hope that all the people of the great city now living will be able to pay them off in their lifetimes. And so their children will be forced to work as slaves to fulfil the promises we made to our friends.”
And so the arms merchants and the prayermakers and the owners of great estates were given heaps of gold and promises for more gold than was in the whole kingdom.
“In the third place, there is no question of your leaving the Great City in a condition that can be easily governed. You must divide its inhabitants into factions. The rich vs the poor. The north vs. the south. The uplanders vs the valley dwellers. The worshipers of Vall against the heathen. The old against the young. The men against the women. Even the blind must be turned against those who might help them navigate the world in blindness.” Shabu’s men hired prayermakers to shout from the towers of the minarets. In the rich neighborhoods the prayermakers heaped scorn on the poor for being stupid, uneducated, dirty, shifty, lazy, untrustworthy, and poor. In the poor neighborhoods prayermakers heaped scorn on the rich for being greedy, insensitive, lazy, criminal, and abusive of public trust. The educated were turned from issues of policy to issues of personal well-being. The underclasses were taught to trust only the prayermakers. The heathen were taught to despise the simplicity of the faithful. The faithful were taught to dispise the waywardness of the heathen.
“Finally, we must present the new prince with a problem so big that no other problem seems important and so difficult that there exists no acceptable solution. Then, when he takes power we can mock him from every corner of the Great City both for what he does and for what he does not do. And we can mock him regardless of the choices he makes.”
Shabu’s advisers were at a loss to know what sort of problem would be big enough, serious enough to satisfy these criteria. But Shabu had a quiet adviser with a bald head and a gravelly voice named Ynech. “Suppose the great city were on fire.”
“But we have well trained men. We have equipment. We have procedures. We have firebreaks. We have water in great vessels.”
“So, we need to move the trained men into another country to fight a war. We need to hire mercenaries who are actively hostile to procedures and training and who love nothing better than to get drunk while on duty. We need to sell the equipment. We need to store cooking oil in great open pottery vessels all along the firebreaks so that a single rider on a horse with a torch and a great hammer can ride from vessel to vessel at night, lighting the oil and breaking the pots. And in this way he can set light to the whole of the Great City in an hour’s time. Have the prayermakers invent reasons for each of these new policies.”
So it was ordered. So it was done.
Even before the day of that Shabu was to hand governance of the Great City over to young prince Ambao who would replace him, citizens of the city were nervous about the pots of oil lining the great fire-breaks. A few of those pots had already been set alight “to light the darkness and make the city safe at night.” But it was evident there were cracks in many of the pots, especially the ones that were lit. Where were the firemen? The firemen had been sent away. What about their untrained replacements? They were lying in a stupor in the brothels.
What about the idea of men taking up their own fight against the threat? The pots of oil had their own guards whose public purpose was to keep the pots safe. These guards would let no man near the fire breaks. But little known to the citizenry, each guard had hidden a hammer nearby. And on the agreed signal, they would break the pots. It would not take an hour to set the whole of the Great City alight. It would take twenty seconds. Ynech’s plans were always technically brilliant.
Finally the day arrived. Shabu and his small council left the Great City. As soon as they were outside the city walls, the signal was given. And in twenty seconds the whole of the Great City was in flames.
Young Ambao had seen it coming. But he was not in a strong position. If he accused Shabu of orchestrating the fire, he would lose his place to a prince less able and less principled than he. All he could do was to fight the fire. This would not be easy. Not only were the firefighters gone, but a year back Shabu had imported slaves who, bucket by bucket had drained the lake to irrigate a crop of indigo that his minions had processed into dye and sold to Distant City. There was only enough water for drinking and bathing until the next seasonal rains. The only other resource was a huge heap of heavy twill fabric.
So Ambao organized the people of the city into brigades. Their goal was not to put out the fire where it burned out of control - these areas were lost - but to keep the fire from spreading to new places by beating out young flames with the heavy twill cloth. A tiny amount of water was applied to the cloth until it was just damp. Then the cloth would be swung at tongues of flame as they moved into new territory. This effort would save great swathes of the city, even as others were lost.
It was a great gamble since the twill cloth had some value on the open market but there were few out-of-town buyers for Great City real estate. He was destroying a thing of commercial value to save something that was not. So maybe from a purely commercial standpoint it was not a sound decision. But before the rainy season would come winter. And people of the Great City would die of freezing weather if too many of the homes were destroyed. Furthermore, Great City did much business with entities from far places. And if the whole city burned, all of this would be lost. Much more than the value of the buildings would be destroyed by fire. And hundreds of time the value of the cloth would be lost.
Still, it was a gamble. It might not work. Groups of untrained men, women, and children swatting flames with wet twill was not a pretty site. People did not know how to wield the twill well. Some tried to take on flames that could never be put out this way. Others simply folded up the twill and planned to sell it at a profit when the stocks ran out. But many of the citizens fought the flames well and bravely. Many homes were saved. And many places of business with their stocks of goods survived, too.
This did not, however, cause the prayermakers and the other friends of Shabu to issue utterances of praise. Instead, they mocked the efforts.
“Ha! Ambao has undertaken to fight fire with combustable materials! He is a fool. And those who follow him are slaves and idiots.”
Or
“Ha! Look how Ambao is wasting water. All that water is going to be needed for spring planting of indigo, if the rains are late.”
Or
“Great City never burned like this while Shabu was prince of the city. What kind of ineptitude on the part of Ambao caused this conflagration?”
These kinds of questions and comments were yelled from the minarets by the prayermakers. They were shouted from the high windows in the quarters where men of commerce lived. There were even men in the poor neighborhoods who earned their meager livelihoods by whispering these same doubts to whom might listen.
Even as we speak, the Great City is burning. Even as we speak, Ambao is fighting the fire. Even as we speak Shabu’s friends are mocking his efforts.
What must prince Ambao do next?
No commentsWhat’s Wrong With the Media? Why Care?
It’s broken. Not just a little. The media in America is fundamentally broken. The most essential social purpose of media is open public policy discourse. Open public discourse is vital to a democratic way of life. Yet the US has repeatedly failed to attain and maintain a high level of public discourse in most of its media. A few magazines prove an excption. And there are some minor bright spots in TV and radio. What started out being not particularly good has lurched from mediochre to insipid and then veered toward destructive. It is not uniformly so, but to a remarkable extent main stream media is a wasteland. Too many of its offerings actively gnaw at the fragile fabric that holds society together.
The Shallowness Problem
In 1832 Alexis de Tocqueville noted that American newspapers were principally commercial rags. He noted that Continental newspapers were full of thoughtful commentary, political analysis, and generally good writing but that American newspapers had only stripped down stories about trivial events, and ads. He did note that, at least east of the Hudson, people tended to live in vital communities that assembled regularly and engaged in political discourse orally. He admired the vitality and inclusiveness of such a system, even if he imagined the level of discourse to lack sophistication. In some ways, we might suppose it worked just a little like the internet of today, except that common interests tended to be geographically shared then, whereas today they are based more on interests, competencies, and political inclinations.
Much has not changed in America. In all but the most specialized media, trivia trumps thoughtful analysis, commerce trumps all. There is one nationwide newspaper that gets delivered free to a lot of hotel rooms whose level of discourse is so shallow I have never been able to make it through the first paragraph of any story. But I am not a patient reader; maybe the good stuff starts in paragraph 13. We must imagine that this free newspaper meets the needs of its advertizers, else the paper would fail. Yet does’t a newpaper by virtue of its mode of circulation have some obligation to inform?
Quid Pro Quo
It seems to me there is a quid pro quo here. America is a democratic republic. The only way that it can hope to be governed well is if its citizens - the ones who choose the political leaders - make good choices. They do not choose once and then stop. They keep on choosing. This choosing process offers a chance of sweeping corruption, bad behavior, and bad policy out of office. The process only works to the extent that most of the people are both effectively educated and well informed. Montesquieu would point out that they must also be truly virtuous - knowing what is good for society and striving to get that. It’s a crucial point, but part of another discussion. In order for Americans to be well informed, the press is policed almost not at all by the government. This is both good and necessary. But it implies a return obligation. It requires that media operate in a way that does not sabotage good public discourse. It is not a very odious requirement. But it is a strict one.
Substitute Products for Good Discourse
It is a categorical mistake to imagine that the sole purpose of media is to inform the political process. In fact, this may rightly be just the tiniest bit of what it does. But in the grand scheme of things, one can judge all media content the basis of whether it is particularly helpful to a society, innocuous, or harmful. And a society that fails to make this judgment risks self destruction.
There are several sorts of media content that stand in the way of good discourse. One is pablum. It is soporific to good sense and sensibility. Its mode of operation is to lull people to sleep. It is not a physical sleep, but a moral one. It is a kind of secular “opiate of the masses.” In a society full of the pains of inequality and injustice, a modest consumption of such opiates may be a necessary part of the cost of living in a socially cohesive society. I Love Lucy was mindless; but it was fun. But it has the same side effect as an opiate. It makes us want more of the same stuff. And it draws us away from doing harder but more necessary thinking.
In small doses pablum is pretty innocuos. One person’s drivel is another person’s fun, sometimes. There is a scene in a recent indy film that illustrates the point. The main character has a crazy brother whom we find mischievous, bright, fun. He is very quirky, and very lovable. In the middle of the film he commits suicide while watching “Everybody Loves Raymond” because he cannot figure out why anybody would. I understand his quandry. The observation both helps us understand a bit about what pablum is and what it is not. If I am not mistaken, the television show ran for a number of seasons and was considered a commercial success. It may still be running. And judging from the twenty eight seconds I endured of one episode long ago, it seemed about as harmless as it was vacuous. There is no reason to place any sort of sanction on this stuff. We imagine that good editors and program managers know it when they see it. And we must hope that they prevent their particular media channel from being completely overcome by it.
Another form of media product is shill fill. Shill fill is content that masquerades as news or information but whose purpose is primarily commercial. The purest and most open example is the infomercial. But at least the infomercial has the decency to inform us of the provenance of the material, so we may judge it accordingly. There are more subtle forms. If one picked up a newspaper in the mid 1980s and for five years running could find a new story about how high cholesterol was a ticking time bomb and a silent killer, one might reasonably ask whether the story had any connecton to a new family of patented pharmaceuticals designed to lower blood cholesterol. I remember the cholesterol scare of the mid 1980’s. I still have a cookbook or two written by then prominent nutrition writers at prominent newspapers advocating low cholesterol or low fat diets. One writer fumes at how the egg industry stood in the way of progress. Today we find informed writers telling us to eat eggs to lower cholesterol.
There is no question that commercial interests sponsor media that support political points of view most consonant with their interests. Consider rags like “National Review” and “Weekly Standard.” It’s hard to go a week without seeing a number of new articles in each advocating for making our military “Bigger” or “Harder.” I get emails about the same thing every day. But I would not mistake them for good journalism. And these “papers” are very generously supported by a passel of military contractors.
Shill fill can actually serve a public good. But for it to do so properly, it must be written in a way that informs the reader of the special point of view of the writer. And it must be edited with more than a modicum of skepticism. Cholesterol-lowering drugs proved a success in lowering cholesterol. There is more question about whether they saved lives or cured heart disease. The hype generated to make room for the drugs shifted us from eating meat to eating fried potatoes and corn meal. This made us fat. It may or may not have changed our risk of heart disease on account of cholesterol, but it raised the risk of heart disease and on account of obesity and triglyceride levels. The drugs that started this conversation were a raging commercial success. But society has paid a high cost for it.
I can read a prominent city newspaper and find what appear to be shill fill articles several times a year. I may not pick up that paper as often as two days a week. I rarely read more than the front page of two or three sections. I wonder how many articles really are shill fill. Especially if we expand the definition to cover private interests of government officials.
A third category of media product that gets in the way of good public discourse is trash talk. This is typically a radio or television format designed to lampoon “people who are not like us.” It tends to have a more rural audience, although one could argue that at times SNL has wondered into this territory. Rush Limbaugh may be the early prototype. But Rush, at least in his early days, did try to be funny. And while the general thrust of his work I believe is mistaken, some of his points are worth considering. But what started out as lampooning morphed into attacks. And what once were subtle attacks now occasionally turn into open calls or incitations to do violence.
I spent perhaps a minute with Michelle Malkin once. Having stopped viewing television some years before, I had never seen her nor heard of her. I had no idea what I was in for. By forty five seconds I began feeling mounting nausea. By sixty my entire concentration was focussed on suppressing the impulse to put a chair through the televison. No idea what she said. And that’s the point.
It is one thing to lampoon the foibles of people. We all have them. And each group in a society will specialize in its own sort. Sometimes they need to be laughed at. This is probably both a desirable and necessary form of political discourse. Lampooning people simply to put down their behavior or qualities because “they are not like us,” however, has already stepped over the line. This is the stuff of racism and race baiting. And it is not the race part of it that makes it the problem. It is the way in which it destroys respect for ways of being that are different from “ours.”
Fundamentally it has nothing to do with race; it has rather to do with identity groups, tribes. Call it fundamentalism, provincialism, tribalism, ethnic intolerance, red-state wretchedness, wingnutism, whatever one calls it, the act is morally degrading. It degrades the person talking. It degrades the listener. It degrades the target of the trash talk. Each person or group in the equation turns out to be worse off as a result of it. Even the advertizers lose. Their markets are splintered in the process and their brands’ goodwill is defiled. The former raises the cost of advertizing by requiring more careful targeting. The latter simply tarnishes the luster of the brand with everyone. Being respectful breeds respect. Being disrespectful breed disrespect.
A good analyst might be able to produce seven, ten, or five hundred more categories descriptive of media practices that either actively or passively degrade the level of public discourse. But I am going to stop with three because I set out intending to talk about the third one.
Shredding the Fabric of Society
Bad media behavior has a number of insidious effects. First, there is the opportunity cost. Each time something meaningless fills pages, it diverts attention from real problems.
As interested as I am in good political discourse, I imagine my limit to be a few hours of it a week. I am fond of programming that gives me insights about society and my own humanity. I am tempted to reduce “good programming” to “BBC shows produced before commercial TV in Britain.” And good journalism to “the several Economist articles a year that are not obvious apologetics for completely unregulated lassez faire economics.” Sure, there is a lot of good information out there. But very little of it is soundly synthetic. When pieces are good at synthesizing lots of information, they too frequently ignore ideas and evidence that contradicts the point of view. It’s hard to get a really balanced view of an issue. Even most of the pieces in the Economist do a perfunctory job of presenting an opposing view.
But even such feeble pretenses passed out of media practice when the Reagan administration withdrew the “fairness doctrine” that required media outlets that used public airwaves to give multiple points of view on an issue. With the advent of FOX network, we get “all bias all the time.” It’s a network that actively promotes narrowmindedness, provincialism, bias, anger, bigotry, and hatred. And one of its products is trash talk. For example, characterizing people who have a differing point of view as Nazis. Or comparing moslems to fascists with the term “islamo-fascist.”
The real, monstrous cost of trash talk is that it destroys civil society. It tears down bridges that span gaps between groups in society and it builds walls between them. It fosters intolerance. It closes minds. It reinforces prejudices. It encourages ingorance and rewards closed-mindedness. It drives us to be as stupid, and intolerant as we feel naturally inclined to be. It nurtures fundamentalism. It cultivates ethnic hatred. This is the path we must follow if we wish our society to be reduced to the behavior of the Tutsis and Hutus of mid 1990’s Rwanda.
Ethnic hatred is seductive. Every group tends to think of itself as being superior. It is human nature. If there is any social or political area in which America has clearly outstripped the rest of the civilized world it is in its ability to amalgamate disparate cultures - suppressing the tendencies of groups to behave destructively and separately as political entities and economic entities, while encouraging ethnic groups to retain positive cultural practices and identities. It is not the primary reason for success, perhaps; but had America failed here, failure in other areas would have followed. Trash talk threatens failure. Hatred breeds repression. And repression strangles freedom. It’s not a many-stepped process to get from bad discourse to bad government. The latter sticks to the former like a shadow.
The moment we let this impulse toward fundamentalism, tribalism, parochialism be the singular impulse governing political discourse is the day we doom American history to follow the trajectory of the history of the Balkans. Or of Rwanda. In both of these cases ethnic hatred and tension is endemic. A recent book review in the Economist talks about the latest definitive history of Montenegro. It mentions how the book’s author, who was in the state in 1990 witnessed its occupants wantonly killing, pillaging and plundering with a kind of gusto that clearly communicated ” This is what we do. Our ancestors have done it forever; our descents will do it forever more. It is a time-honored and much loved tradition. It is our life; to kill and plunder” This is the end to which trash talk must lead us. Society splinters into tiny mobs whose reason for existence is killing the “other,” pillaging, plundering. It explains the perpetual strife in the Balkans going back 500 or 1000 years or more. And it explains “going Hutu.”
Trash talk will lead us to ends we can neither imagine nor endure. Democracy is not stable under a cascade of trash-talking media. It will come crashing down. And when it does, the government will put a whole new world of programming directors in charge. The irony will be that there is a good chance that they will lack imagination. Programming will become dull and utilitarian, but it may better serve the public interest to some extent than the programming of today that features the Limbaughs, the Colters, and the Malkins. Still, to those who view the media as a cash cow, such events would prove a catastrophic. Thus, it is in the media’s best long-term interest to act with at least a modicum concern for the public interest. If it fails to sustain democracy, it will lose its own franchise in the process. For society at large, the blow promises to be every bit as severe.
Rampant political and economic opression will probably be part of the mix. The nightmare scenario is that the rich upper class might manage to get the miserable lower class to hack the middle class right out of existence, either literally by “going Hutu” or figuratively by voting for disastrous public policies. Perhaps it could not happen today. But the trash talk we now hear has edged perilously close to driving precisely this scenario. What one is left with in this scenario is a banana republic like the worst Latin American countries of long ago where unstable governments swing perpetually between opressive Fascism and opressive Communism. There has been a thirty year economic trend in the US in this direction. And it has been driven by media chants of and ritual offerings to the greedy gods of laissez-affaire economics. Under Dubya the chants and drumming have grown louder. And the offerings of blood and treasure more costly.
This is all speculative. But the recent trend is worrysome. If things go in the same direction and at the same rate for thirty more years as they have done for the last thirty, democracy as we experience it is doomed. We may not have that long. There is no reason to believe that the trend must continue. If we are really lucky, long before that America will experience a series of shocks that will begin a process in which we re-examine the assumptions that set us on a destructive path. And we will begin to make course corrections. Iraq may be the first of them. It may also be the least. So some of the correction is likely to come about without media help.
Recourse
Still, the media plays a vital role in shaping political discourse in America. And if it does not owe a duty to the democratic system to which it owes its very existence or to the people who make up its audience and buy its advertisers products, at least it owes a duty to its shareholders to preserve long-term equity. For one reason or another, the media must act responsibly. If it loses its soul completely, permanently, irrevokably its franchise must follow close behind.
For some years the people who staffed and oversaw the FCC viewed broadcasting as a use of a public resource - the electromagnetic spectrum - which required in return some augmentation of the public good. In this view of the world free speech reigned, but there was a civic obligation a broadcaster had to fulfil. A television or radio station would have to provide a certain amount of programming that met certain public needs to satisfy licensing provisions. This did not require much. It did not guarantee much. But it did require something. It amounted to much more than nothing.
Over the last decade or two, and especially under the Dubya administration, the view expressed publically by the FCC has changed. Today it more closely resmbles the notion that the broadcast system is a public resource to be exploited to maximize profit - like a vein of copper ore. And that any provision that the FCC imposes on broadcaster ought to be exclusively to that end. The result is higher media concentration, less programming variety, more homogenaity, and less local content. And a brand of political discourse that is clearly biased and destructive. Almost all of this may rightly be seen as harmful. Homogenaity, assuming innocuous programming, could actually serve to reverse forces of Balkanization. But most of the rest of the trends sacrifice public social goods for private ones. This defies the purpose of good governance.
The most insidious problem is media concentration. It creates a world in which a single entity or a small group of people controls all of public discourse. Under the best of conditions this is undesirable. Even the best and brightest people are either good and bright only in one tiny area of expertise, or they are less good and bright about lots of things. It takes a lot of experts and a lot of conversation to Most people are mostly wrong. To make matters worse, power corrupts. So if one starts out as a well meaning media mogul, the likelyhood of remaining one for a long time is infinitessimally small.
But the really big problem is that public discourse is made of a huge number of views. Our tendency in America is to think dualistically, giving to each question two possible answers. Our whole dualistic mindset is badly adapted to all political discourse. Real world issues never pose such questions. The hard part of getting hold of and mastering an issue is creating meaningful categories and relationships, then formulating questions based on these categories and relationships. A concentrated media is just barely able to do lip service to the second side of a dualistic problem. It has no hope of framing good questions in a many dimensional concept space.
The more parties there are working on a problem the more hope there is of getting real and effective answers to real social problems - not just faux answers that suit the needs of special interests. A highly concentrated media has no hope whatsoever of doing this well, even if they set out to do so. Especially not in a land where political discourse is already a characterized by tradition of dualistic, shallow and simplistic thought.
So the first part of the solution is to change the political philosophy of the FCC board so that it represents public interests over private ones. Once the FCC is properly constituted to represent public interests over private ones, it might be better at reconning the costs of media concentration and at requiring broadcasters to air programs that encourage broad ranging and vitally varied ideas and formats that either serve the public interest or do not blatantly undermine it.
The second part of the solution, and probably the most important, is for the media to view its mandate to deliver discourse on political subjects that is broad, deep, far ranging, multifaceted, thoughtful, penetrating, well informed, and concensus-building. It must do this because of its perpetual debt it has to a free and stable open society. And to its stockholders. It is a huge responsibilit. There are only a handful of publications that come close to meeting this high standard. And only a few programming channels who have, from time to time done so with certain programs.
Finally, government needs to do someting about trash talk. It is a touchy issue. There are a number of cases in which trash talk is clearly political and by virtue of that is presumed unconditionally protected. My guess is that Limbaugh, though he is mostly mean, his facts are frequently wrong, and he does encourage tribalism, does at least some good in making us aware of questions that are useful to contemplate. For the most part he is subtly divisive; not openly so. I neither like him nor agree with him; but what little I know of his work suggest that he is generally not over the line. There are others who would not agree. And they might be right.
But there are a number of cases in which trash talk is clearly incendiary: it openly provokes violent behavior or attitudes. Spocko’s Brain had a collection of such cases until a large media conglomerate shut down his site with a cease and desist order. Michelle Malkin and Ann Coulter come to mind; but I may be confusing my own reaction with that of other people. My guess is that if I watched enough, I could find places where they clearly cross the line; but it is a prejudice, not an informed judgment. If there is no case in which Malkin or Coulter’s language is simply incendiary, herding people into tribes or provoking them to plunder, then there certainly are cases with other radio or television talk shows. And they need to be stopped.
Bad words offend. But they do no lasting damage to the fabric of society. The government has chosen to ban them on air. And this is a supportable position. I find the ban convenient to my own tastes but I am not sure I agree with it. Hate speech, trash talk, language that tribalizes America, however, needs to be banned because it shreds the fabric of society. A free society cannot endure it for long. And once it is shredded, only one thing can put it back together: a terrible, repressive regime. We might have learned this from the disintegration of Yugoslavia. But we didn’t. We might have learned it from the disintegration of Iraq. But it seems we haven’t yet. Let us hope we can learn it before their fates have become ours.
No commentsBad Reasoning about the Badness of Death
Jim Holt became popular with his “Stop Me if You’ve Heard This: a History of Philosophy in Jokes.” It is, we understand, a clever way of wrapping philosophical ideas in jokes so that people who don’t wish to study philosophy at a university might become acquainted with the ideas of philosophers. The humor draws us to the ideas. It’s an ingeniously fun way to bring people to philosophical ideas. It’s a brilliant idea and a noble undertaking.
Holt, this week, reviewed the ideas in Cricthley’s Book of Dead Philosophers in the NYT book section. This time things are backwards. He sets out to make philosophers look ridiculous but succeeds in becoming the butt of his own joke. He spends most of his review space ostensibly refuting Epicurus’ arguments on why it is not logical to fear death. Epicurus’ argument goes like this:
1) Death is annhililation, so there is nothing to worry about.
2) Whether I die young or old, it doesn’t matter, either way I am dead.
3) Your existence in death is essentially like your existence before being born. There is no more reason to fear one more than the other.
It seems impossible to interpret the sense of “death” in this argument as anything other than the experience simply being dead: that is the best interpretation of the first clause. There is no sense in which the argument addresses what happens before that - how one comes to be dead, the processes, the experiences, or the implications of death on the living. The argument is simply about how one experiences the state of being dead in the first person.
We intend to argue:
1) There is nothing logically wrong with Epicurus’ argument.
2) Whether it is logical to fear death depends upon whether death actually is annihilation.
3) Either way, it is not unreasonable to fear death.
We may end up arguing for a conclusion not incompatible with Holt’s; but we worry greatly about the path he takes, because it persistently confuses the experiences of being alive with those of being dead.
Holt trots out some refutations by Nagel “Just because you don’t experience something as nasty … doesn’t mean it’s not bad for you. Suppose a person has a brain injury that reduces him to the mental condition of a contented baby.” Nagel argues that this is bad in the same way death is bad. Therefore death is bad and to be feared. But this argument fails to see the experience from the point of view of the person experiencing it. If one is actually having the experience Nagel describes, fear plays no role; for in that state one is neither anxious nor fearful nor in pain. It fact, billions of people regularly seek to exist in this state by taking alcohol or other mind-altering drugs. Some arrive and never leave. We may judge that to be bad; or we may not. But the badness associated with it has nothing to do with the way the person in question experiences it.
We might reasonably fear being in that state; but the reason we would fear it is not because of what one might actually experience when in the state. Rather, fear arises from a realization that we would have failed to meet an expectation of how we “ought” to be - namely rational, functional human beings capable of exerting control over our environment. We fear the loss of control. Having control over our environment may be a reasonable expectation of being alive, but it is clearly not a reasonable expectation of being dead. That’s one big difference between Nagel’s two cases.
Holt, in reasoning about the second argument, once again misunderstands the point of view. He asserts, “The second argument is just as poor. It implies that John Keats’s demise at 25 was no more unfortunate at 25 than Tolstoy’s at 82.”
Is Holt arguing that Keats’s experience after death was somehow worse than Tolstoy’s? I wonder how he would demonstrate that? That is what one would have to prove to demolish argument 2). But he does not attempt it. Instead, Holt points out “The amount of time you’re dead matters only if there is something undesirable about being dead.” This, of course, is the nub of Nagel’s argument. And it is why Nagel’s argument comes perilously close to violating the first premise set by Epicurus. Any contradiction here is Nagel’s, not Epicurus.’
Once again, Holt trots out Nagel to refute the third argument “… there is an asymmetry between the two abysses that flank your life. The time after you die is time of which your death deprives you. You might have lived longer…” Or you might have been born earlier.(1) Once again, Nagel’s argument succeeds only when one starts with the assumption that the experience of being dead is to be feared. But that’s not a logically tenable assumption upon which to base the argument; for that is what we are arguing to begin with.
One may reasonably wonder what Epicurus really thought. Was Epicurus seriously proposing that it was unreasonable to fear death? Or was he arguing that there is no logical imperative to fear death? Perhaps he was doing the latter simply to make a point. There is a great difference between the two. Logic is but the grinding machinery, not the food in thought process. If Epicurus was arguing that there was no logical imperative to fear death, his argument relies on the stated assumption that all sensation and feeling cease with death. Experience ends there.
If this assumption is correct, there is no logical imperative to fear one’s own death. It is an argument that has considerable force. And it can help one live a life with less fear of death. That’s can be both a liberating and an ennobling end; and it is an end to which most religions are disposed.
If, on the other hand one believes that one experiences pain after death, then there is reason to fear. The whole of the logical force of Epicurus’ argument rests on the idea that first person experience of all sorts ends with one’s own death.
Nagel and Holt argue as if Epicurus believed that it is unreasonable to fear death; and that, therefore, no reasonable person actually fears death. Their reasoning does not adhere to the bounds set by Epicurus. It is not unreasonable to argue that, despite Epicurus’ logical construction one might reasonably fear the process of dying; for it can be fraught with pain. One might even fear the state of death itself, despite logical arguments to the contrary. The difference is that good reasoning can take into account emotive inputs. In fact, good reasoning must do so.
Hume observed that all properly motivated actions arise from proper feeling; and reason properly serves empathetic emotions. He argued that if one asked “why?” to any explanation of moral propositions often enough and long enough, one always ended up with a statement about happiness or unhappiness. Death makes us unhappy. Pain makes us unhappy. Injustice makes us unhappy. Not just in the first person, but in the second and third person.
Epicurus was interested in happiness, too. If one believes all experience ends at death, it is illogical to argue that one is unhappy when one is dead. This does not make us stop fearing death; it only helps us understand it is not logically consistent to do so. We fear death not because of the logical imperative to do so but because this is physiologically the way we are wired. Fear is functional; but it is not always logical.
Today we are rediscovering that the worst criminals are, in fact, psychopaths. They are not stupid people; in fact, many appear to be remarkably intelligent and logical. They are, however, people for whom proper empathetic emotions are suppressed or absent. They experience perverse pleasure in observing the pain and suffering of others. By contrast, people who are socially oriented and well - adjusted are informed by empathetic feeling. This gives force to the idea that in the real world, moral action is informed by proper empathetic orientation, not by the force of pure logic.
Holt clearly understands the distinction between logical and reasonable, between pure reason and reasoning in the service of empathetic emotions: he exploits it in a rhetorical flourish at the end of the essay referring to the rather fearful “Falangist cry ‘Vive la Muerte’ - long live death.” This is an appeal to our emotions, not to logic.
We have reason to fear that cry since it is a reference not to one’s existence after one has ceased to exist, but to the whole painful process of dying. It is also a reference to our own experience of the tragedy of loss associated with the death of another. But the fear aroused by that cry has almost nothing to do with Epicurus’ argument.
Holt’s argument employs a time-honored philosopher’s trick of using the same word to signify materially different things. In the Epicurean argument, the linguistic token “death” stands for first person experiences after one is dead. Nothing else. There is, however, no point in Holt’s discussion in which Holt is referring to the same thing. Mostly, Holt is talking about experiences of the living in the face of death. (2)
In some cases he uses the same token to refer to death in some abstract, hypothetical case. Or to death as we now imagine it, anticipate it, and fear it. The abstraction includes both the process of dying and the possibility that the death occurs to someone else. For example, if we were to assume that Keats died leaving a wife, young children, and a parent or two to survive him, then there is a great measure of pathetic feeling surrounding his death. If we were to assume that Tolstoy died after all his known relatives and even his own housekeeper were dead, then there is nobody to mourn his passing. This makes Keats’ death more tragic to all living observers. Similarly, we can assume that civilization lost more in Keats’ death than in Tolstoy’s because the latter, presumably, had fewer good pieces of literature left in him.
The tragedy of Keats’ death is realized not by Keats himsel so much as it is by everyone else. Holt pretends otherwise.
Where the Falangists show up, however, “death” refers not only to death in the third person, but also to the process of experiencing the pains associated with dying in the first person. It refers to death of others brought on by violent means, especially by some institution that has no legal or moral authority to do so. It refers to the fearful pains associated with dying a violent death in the first person. It is certainly reasonable to fear, for instance, the process of being hacked to death by partisans. But this process is not at all what Epicurus was referring to.
Holt is confusing the things we experience after ceasing to exist with those we experience during process of transitioning to that state. He is confusing things we experience after the death of others with those we might experience after our own death. One might as well confuse what one remembers of one’s own experience of birth (what is null) with
i) The birth of others
ii) All the things that preceded our own birth.
Doing so logically nullifies the existence of others. And it denies history.
Epicurus’ argument is a logically sound one. To reject it, one must reject the first premise. If one can fully accept the first premise, then one must logically end where Hume did, asserting no logical reason to fear being dead. That, however, very much different from fearing the Falangist cry - it’s as different as being alive and being dead.
NOTES
(1) If one accepts the premise that when one is dead, all experience ceases, then there can be no difference between the experience that precedes life from the experience that follows it. To try to argue that there is would be as silly as mounting a deep inquiry into what happened before the start of the Big Bang - i.e. the start of time. When there is no matter there is no time; where there is no time, there is no “before.”
(2) It may seem like a trivial distinction - the distinction between dying and being dead; but it is no more trivial than the distinction between the process of having your house painted and living in a freshly painted house, or the distinction between the process of getting a root canal and living thereafter with a tooth that doesn’t hurt. A failure to make these vital distinctions can lead to serious errors of judgment. I hate getting root canals and I hate having my house painted, but I enjoy living with the outcomes.