Monday, June 15, 2015

How would you – personally – undermine a tyrannical regime?

Back in the 1970s some of us at Caltech -- and then UC -- had an interesting topic of discussion. “Say you are invited to a science conference in the USSR. What items can you bring with you that would (1) not get confiscated/destroyed by the KGB upon arrival, and (2) nevertheless, help to undermine the system and sway locals toward a freer, more open way of life?

Jeans and rock albums?  The first things border agents would seize.  Sci fi books?  Sure, bring a few.  But any large number will be taken and pulped.

“Toothpaste,” said a visiting Russian scholar, with utter conviction borne out of experience. “One fellow from JPL gave us all small tubes of American toothpaste when he visited Moscow. As soon as they ran out and we had to go back to our regular products, we all were guaranteed to hate the system, three times a day.”

Ooh, clever.  Even tasty.

But my own option was simple.  Frisbees. No simple, lightweight, inexpensive object is more inherently about freedom, looseness, ad-hoc mixing of cooperation and competition… and making up rules as you go along.  You can even play with one, all by yourself, or with your dog, or… as in this article about frisbee empowerment… just learning to feel free. 

Watch this insidious invention do its geopolitical work, here

== International Insight ==

The World Post is taking shape into an excellent contribution to your news-and-perspective feed. Editor Nathn Gardels has roped in some top contributors. (I’ve even added a few thoughts, from time to time.)  See, for example, this excellent piece decrypting the mess of conflicting wants and alliances in Yemen.

Another essay dares to challenge the assumption that Saudi Arabia is the west’s natural ally in the Middle East, especially after 60 years exporting the most radical - Wahabbist - version of west-hating Islam and relentlessly vetoing almost every attempt at peace between Palestine and Israel. “They are well aware that, given Iran's young, educated and dynamic population of nearly 80 million, its strategic position as a bridge between Asia and Europe and in control of the entire northern shores of the Persian Gulf, its rich natural resources in addition to vast reserves of oil and natural gas, and deep and old culture and influence throughout the Middle East, Afghanistan and Central Asia, Saudi Arabia cannot simply compete with Iran, if Iran's relations with the West are improved, and the crippling economic sanctions imposed on Iran are lifted. So, they are doing what they can to poison the negotiations' atmosphere…”

The notion that Iran might be a natural ally of the west does not surprise those of us who recall the world, before 1978… or who note that Iran’s vast, highly educated urban populations would leap for a rapprochement, if the mullahs’ grip loosened an iota.  Moreover, such a twist would, at a shot, reduce all threats to Israel and radicalization of Syria or Iraq.  A pipe dream?  Not to forty million Iranians.

The question is: do the younger Saudi princes realize all this?  And that their best option would be to de-radicalize first? Perhaps even — weird thought — stop blocking peace with Israel, and instead enlisting it in coalition against Iran?

Good chess players would show flexibility, right now.

== A lesson from kindergarten -- Remember your friends ==

"Chinese strategist Yan Xuetong’s book Ancient Chinese Thought, Modern Chinese Power argues that all countries must recognize and accept China's centrality to the world as the Middle Kingdom," writes Yuriko Koike in The World Post.  

In fact, that way of thinking has been China’s curse, ever since Emperor Chi’in made the transcendent mistake of uniting the Four Nations. Until that moment, those four kingdoms had been profoundly innovative and progressive… the way a divided Europe rocketed ahead in the 15th through 19th centuries. The sense of centrality -- Chung Kuo or "central kingdom" led to one calamitous error, after another. Above all, a preening attitude that drove away every potential friend.

Don't believe it? Here is the ultimate question to ask our friends -- and I do mean to call them by that word – in the Central Kingdom, in order to help talk them down from a rising nationalist boil. This is another of my... name one example challenges.

Across the subsequent four millennia, name for us one example of a great and loyal foreign friend that China ever had?

There was one. Only one, across 6000 years of civilization. Just one powerful friend who ever came - voluntarily and repeatedly (though not always vigorously or intelligently or with complete purity of motives) - to China’s aid, in times of need.  Not as a subject or satrapy, but just as a friend, seeking nothing in return.

I’ll bet you’ll never guess who it was.

Oh, the record is far from perfect.  But it is pretty good, by the standards of human history, for that one friend.  And it truly was, across all those countless centuries, China’s only friend.

And funny thing… now that I think on it… the same exact thing can be said of Japan.

Just.. one… true (though not always consistent)… friend.

== And re: China’s new (huge geographically) satellite to the north ==

‘Barack Obama has used the close of the G7 summit in Germany to deliver his strongest criticism yet of Vladimir Putin, lambasting the Russian president’s isolationist approach as the seven leaders signaled their readiness to tighten sanctions against Russia if the conflict in Ukraine escalates. “Does he continue to wreck his country’s economy and continue Russia’s isolation in pursuit of a wrong-headed desire to recreate the glories of the Soviet empire? Or does he recognise that Russia’s greatness does not depend on violating the territorial integrity and sovereignty of other countries?”’ 

I have long pondered whether to offer up my own views of Russian President Vladimir Putin.  Certainly the fawning admiration – Reagan level deification – that he gets from Fox and the American right is a phenomenon that reflects far more on the current sickness of U.S. conservatism, than shedding light on the enigma that is Putin, himself.  I guess I will put off my in-depth analysis of this fascinating, clever and strange man for some other time.

Except to say that I have one of my own unconventional, “low-probability but high plausibility” theory about what Putin might be up to. And if this theory turned out to be true – (I give 1:4 odds) -- it would make him one of the most unique and devious figures of the last one hundred years.  I will give you one hint. He might – across all his lifespan – be both consistent and sincere.  I mean utterly consistent and utterly sincere.

 If so… then wow. But even more amazing is the fact that not one analyst in the West will even contemplate it, as a distant possibility. Talk about tunnel vision.

Letting that suffice, for now, I will only conclude with this: that the “superb chess moves” of clawing back the Crimea and Donbass regions – mostly Russian speaking zones that were never much Ukrainian in the first place – should be seen in context of the earlier and vastly larger setback, the worst for any Russian leader in 400 years… the loss from Russia’s sphere of influence of the Ukraine, itself. 

“Analysts” who emphasize the former, without setting those moves in context of the latter, are nothing more than yellow so-called “journalists,” and shame on any of you who fall for it.

== Inventing Nations Must Stand Up ==

No “foreign aid” - or any other activity - has so driven world development as the U.S. trade deficit with countries like Japan, Korea, Taiwan, Malaysia, and then China and India, which financed their rapid GDP growth, uplifting up to two billion people out of poverty.

Americans - in turn - have been able to afford this uplifting deficit by inventing (or improving) things like jets, rockets, satellites, pharma, telecom and the Internet.  This has been the world's most virtuous cycle -- designed deliberately (as I have described elsewhere) by geniuses like George Marshall, Dean Acheson and Harry Truman. And make no mistake -- this process was invented by Pax Americana, deliberately, not created by the mercantilist states.

Alas, a great design can only be kept humming along when the beneficiaries understand it well enough to maintain it. And that understanding seems to be lacking where it's needed most. It’s one thing to develop your country along mercantilist lines, as did Japan, Korea, China and so on, by selling richer nations things their citizens want.  It is quite another to steal from the inventor nations the very things they are good at, the invention-rewards that they need in order to keep this virtuous cycle going.  In order to keep buying.

Kill the goose that lays your golden eggs? That is just short-sighted foolishness. State-sponsored theft of crown jewel IP is a threat not only to inventing individuals and companies and countries but to the entire global economy. It is not-only regrettable ingratitude to the only friends you ever had. It is also deeply foolish.

A number of bright seers — such as Strategic News Service director Mark Anderson — have been working hard to bring this issue forward in both international recognition, and to generate national responses. 

And now, for the first time, action seems to be afoot.  President Obama has announced measures that have a chance to materially change the balance of power between IP grabbers and their victims. This was done through an Executive Order titled "Blocking the Property of Certain Persons Engaging in Significant Malicious Cyber-Enabled Activities," and it appears to achieve in one action what years of talk have failed to achieve. Unlike the FBI indictments of five Chinese hackers and the related criticisms at the time ("They will never have to face justice while they stay in China"), this order makes sure there is enough deterrent to go around for everyone involved.


Again, in fact I am quite friendly to a rising China!  Indeed, in EARTH I depicted it sooner than probably any other author! 

Nevertheless. It is just vital that we retain a sensible context. We are the “sleeping giants.”  Always have been. Always will be. 

== And finally ==

“There are 7 billion people on earth and about 7000 languages, but more than half of the world's population speaks one of just 23 languages. This infographic, created by Alberto Lucas Lopéz for the South China Morning Post, shows the relative size of speaker population for all the languages that have over 50 million speakers.” 

Informative and good perspective... but this graphic should always be accompanied by a second one showing which languages are actively being studied as a SECOND language or used to communicate across cultural barriers.

In essence, there is only one.


92 comments:

Alfred Differ said...

As for natural allies for the 'west' in the middle east, there are only two I think make sense. One is Persia for it's ability to manage Shiite responses and for the fact that it is nearly impossible to defeat. The other is Turkey because they are the only country in the right geopolitical position to grow their wealth without outside help, thus they are the only ones who can manage the middle east independent of the opinions of Pax Americana. Both are former empires and competitors, so we should ally with both until they cooperate too much.

As for 'stuff' to help topple tyrannies, I'd argue leaving most everything including the luggage. Take your basic stuff with you (not too much of it), but leave it all if you can without making the border guards at the exit too suspicious.

As for Putin, he is doing what it has to do as a leader of Russia. He really doesn't have other options in the geopolitical sense. If he doesn't claw back Ukraine, Russia will eventually lose access to the Caspian. It's all over at that point.

As for China... hmpf. They cycle between central control with poverty and regional control with wealth at the cost of external exploitation. They are essentially an island nation when it comes to geopolitics, so until they export their population into other regions and take them over as the US did with westward expansion, they are probably going to keep cycling. The easy directions for their expansion don't lead to wealth producing regions unfortunately. The wealth producing regions are already heavily populated too.

Anonymous said...

Could the upper echelons of the Chinese Communist Party be fully aware of the debt China owes us, but see our very nature as a weakness to be exploited? Autocracy always has a disdain for the common people and the common people in China greatly admire America.

Frisbee is awesome, but I know exactly what will bring down the Communist Party in China: Heathcare. A large and aging population + unchecked pollution + government corruption = massive social unrest. The Cancer Plagues you mentioned in "Earth" would cripple the Chinese economy and make many people, even healthy ones, very desperate.

Do you think Tzar/Comrade Putin could be more dismayed by the loss of the Russian "empire" or the Soviet system? Is Putin a Soviet true believer lurking behind a mask of Slavic/Orthodox Nationalism? Russia is the only country stupid enough to really start a war with America and the West.

-AtomicZeppelinMan

Jumper said...

The thing to give the Russians would be a sheet of blotter acid, yes?

Matt G said...

If you download and view the Hi-Res version of the language map, you will find a couple of graphs showing which languages are spoken at all in which countries, and which languages are most popular to learn (guess which one stands out...)

Laurent Weppe said...

* "Perhaps even — weird thought — stop blocking peace with Israel, and instead enlisting it in coalition against Iran?"

Frankly, if I were an Arab leader, my very first item on my list of stuff to do regarding the state of Israel would be:
"Avoid them like the plague until the likudnik brand of ethno-religious supremacism is durably banished from power" as no one is less reliable as partners than ethno-religious supremacists.

***

* "Emperor Chi’in made the transcendent mistake of uniting the Four Nations."

Qin's folly wasn't that he united China: his most monumental blunder was becoming a follower of Shang Yang's proto-fascistic "legalism" and attempting (and nearly succeeding) to burn into oblivion every competing school of thought. A smarter leader would have spared the Hundred Schools, instead of destroying them in order to enforce the very conformism that doomed his very short-lived dynasty.

***

* "if this theory turned out to be true – (I give 1:4 odds) -- it would make him one of the most unique and devious figures of the last one hundred years"

The problem is that if Putin was a sincerely devoted to his cause as you claim is possible, he would never have suffered a robber-turned-crook like Yanukovych as his Ukrainian's satrap. This guy was from the get-go a revolution waiting to happen, and any idealistic and reasonably intelligent russian leader would have moved earth and sky to replace such a liability before his corruption and hubris predictably drove Ukraine away from Russia.
He also wouldn't spend millions funding western european far-right parties, as, once again, no one is less reliable as partners than ethno-religious supremacists.

***

* "One is Persia for it's ability to manage Shiite responses and for the fact that it is nearly impossible to defeat."

Iran can be defeated. It can't be easily crushed into craven submission, and since the chickenhawks coalition has spent the last 36 years claiming that nothing less than the mullahs' regime complete dismantling could be considered a victory, this very important nuance tends to be lost nowadays.

***

* "Could the upper echelons of the Chinese Communist Party be fully aware of the debt China owes us, but see our very nature as a weakness to be exploited?"

Actually, the Chinese Communist Party upper echelons are busy organizing their families exfiltration away from China and toward America and Western Europe. They see the current mercantilist system as unsustainable but are unwilling/incapable of reforming it so they opted to exploit it as long as possible before finally living on the eve of the next chinese revolution.

***

* "which languages are most popular to learn (guess which one stands out...)"

Which one stands out?
French! Of course!

Tony Fisk said...

Fluoridating the Russians' precious bodily fluids? Oh, the Humanity!

I note that Kingdom Holdings has reduced its stock in News Corporation from 6% to 1%. Maybe that suggests the Princes are capable of changing tactics? Too early to tell the effect it will have on News' editorials.

On other insidious acts, has anyone read this article about Ehdrigor, a fantasy RPG based on the outlook of American Indian culture? Quite intriguing.

David Brin said...

Laurent Bien sur!

A genuine Comrade VP might allow the creatio of a vast Russian oligarchy that holds all the wealth... because according to Marxist theory, that small clade is very easily decapitated and the wealth is now once again in consolidated condition, owned by the socialist state and handed over to workers' committees.

Marino said...

I don't believe the theory of Comrade Putin. If any it's the opposite, Marxism was a whithered husk covering old-style Russian Slavophile ethnonationalism since Stalin's times.
And Russia currently has no worker's movement, no unions worth of the name, nothing like the various forms of worker's councils and boards you get in Western Europe.
Putin, at the core is a Slavophile, Lenin was a Westernizer (like all the pre-Stalin Bolshevik cadres). Trust your commie reader, dr. Brin :-)

Robert said...

To go off on a brief Science tangent...

http://www.huffingtonpost.com/2015/06/15/japan-floating-solar-power_n_7588506.html

Doctor Brin recently talked about building structures over the aqueducts in California to seriously reduce evaporation. It seems the Japanese have one-upped this idea. They instead have waterproofed solar panels that float in water, using the water as a coolant to improve efficiency while reducing evaporation and algae growth.

Better yet, this could also be put over water storage ponds on farms.

So, Doctor Brin, you were right. But you were also wrong. Your idea of building a solid structure over the aqueducts would cost a lot more money than this idea, and risk being damaged in earthquakes or the like. An anchored floating system would generate power while being far more flexible in some ways.

Rob H.

Alex Tolley said...

Back in the 1980's a colleague who sold goods in the USSR found that the most useful things they needed was....rubber grommets.

My own story was consumerist. On a flight to Bermuda in 1987, I was sitting next to a young man who was an East German fisherman. The crew were all flying to Bermuda to then board a fishing vessel. While trying to communicate, he showed interest in the goodies in the SkyMall catalog, so we talked about those things. 6 months later I got a card from him. He had jumped ship in Glasgow and was living with his uncle in Scotland. The catalog has opened his eyes about the west and he wanted the western lifestyle. So I reduced the soviet population by one...and the rest is history. :)

Alex Tolley said...

A@Robert - floating PV panels look innovative, although no mention of costs. They might be ideal for the CA aqueduct as I don't think we use it for anything else but moving water. I expect the panels would have to be anchored to prevent moving with the flow.

I am less sure about general use on lake or reservoir water, as this prevents water sport use. But they could be used on settling ponds and other bodies of water, if only to power teh equipment for water treatment and associated facilities.

Robert said...

I wasn't thinking reservoirs so much as holding ponds - basically, some farms will make a man-made lake for use in watering their crops. There has been a problem with water theft in fact where marijuana growers will sneak onto land and drain the ponds of much of their water for their own crops.

They're also used out East - I know of at least one farm in Massachusetts that has its own pond it uses to water its corn growing (I would see hoses going from the pond to various fields while driving to and from work, before I started working remotely). And as evaporation is a problem with those ponds, covering them is useful. (Actually, there are some places that cover their reservoirs to lessen fecal contamination from birds that would feed at the landfill and then go to the reservoir to clean off afterward. So this would let them cover the water and provide electricity at the same time.)

Rob H.

locumranch said...



By destabilizing interdependent supply lines, almost any product can act as an economic disruptor, the classic one being 'shoe laces' (suggested in an old issue of 'Galaxy' as a precursor to alien invasion).

Speaking of which, I can't remember the last time I bought a locally manufactured clothing item as almost every cloth item I own, from socks to undergarments, shorts to slacks, jeans to shirts & bedding to blankets are manufactured in the third-world, while our over-educated first-world workers get fatter & fatter, producing very little in terms of our negative sum service industries,

Of course, it LOOKS LIKE we've done China & the third-world a huge favour by outsourcing our industrial production & becoming a debtor nation like Greece, while in reality we've sold them a bill of goods, trading our unsecured paper monies (IOUs) for durable goods like tires, batteries, rare earths & the degradation of their environment, the best part being that the poor saps won't realize that we've ENSLAVED THEM until they try to call-in our worthless notes.

Then, of course, they're royally screwed as we GREEK EXIT on a grand scale, leaving them stripped of their resources & holding 'The Bag' (uncollectible debts), a laughable occurrence if we ignore the international repercussions, the resulting little wars and the immense third-world human cost, while we rebuild, using our idle underemployed workforce & our relatively untouched raw resources.

On that day, the UAE, Saudis, Kuwaitis and the Southern Californians will get theirs, too, as they discover that their vast financial liquidities are worthless paper, and the deserts reclaim their modern metropoli, made uninhabitable by the relative dearth of air-conditioning, water and arable land.


Best

Anonymous said...

Locum, if you are going to compare any American state or region with the Arab oil barons, it is Texas not Southern California. -AZM

locumranch said...


Info on the 'Debtor Game' ('Try and Collect', 'Now I've Got You' and Transactional Analysis) is available below, as described by Dr. Eric Berne, author of 'Games People Play', published 1964:

http://www.ericberne.com/games-people-play/debtor/

David Brin said...

Of course he ignores the vast infrastructure of high speed rails and city metros and vast networks of glowing skyscrapers and industry and 500 million educated children that our purchases paid for. No, the only place all that money went is "worthless US paper." Uhhuh. Riiiiiight.

Alex Tolley said...

@;ocum - surely "bankrupt" California will be laughing as all those debt IOU's will be worthless paper, whilst the tangible assets we bought and the services we provided are still intact?

Of course you understand that the US can print money (unlike EU bound Greece)as long as people will buy it. So far I see no signs that US treasuries are not being accepted, based on required interest rates.

I do wish we hadn't tried to finance that high speed rail in CA. I see no logic in its construction. Now if the hyperloop could be built and it has the capacity, that would be different.

Laurent Weppe said...

* "Of course you understand that the US can print money (unlike EU bound Greece)"

Except the ECB does print money.
Sure, on paper it isn't allowed to do so thanks to some bullshit "Member-States must retain their sovereignty" clause in the treaty, but Mario Draghi's OMT program (which consist of the ECB buying by the truckload rotten bonds emitted by eurozone's states) pretty much has the same effect: without this mechanism, Greece would have defaulted long ago, been kicked out of the eurozone (and possibly the EU itself) and its population would be facing starving by now.

Alex Tolley said...

Kill the goose that lays your golden eggs? That is just short-sighted foolishness. State-sponsored theft of crown jewel IP is a threat not only to inventing individuals and companies and countries but to the entire global economy.

Let's put aside the US doing exactly the same to Britain after independence. Is the implied patent protection as virtuous circle even true. Analyses by economists show that patents are not used to ensure short term monopolies to supply the excess profits as originally intended to maintain innovation. Instead they have become weapons to reduce innovation and parasitize the system. The consumer is actually better off if profits are taken quickly by first mover advantage and then products are disseminated at low cost. While serious IP theft (e.g. military technology)is reprehensible, it is by no means clear that this is an economic problem in the modern era. As America did with Britain and Germany before WWI, eventually catching up technologically with competitors will force local invention. At this point, Chinese manufacturing is already on a par globally, and invention and innovation will start to rise in China, as it is alreday doing as can be seen in this graphic on p[atents.

Alex Tolley said...

@Laurent - but Greece cannot independently print money unless it exits the EU and return to its own currency, formerly the Drachma. All this drama over negotiation with the Troika is about getting loans and under what conditions. If it was like the UK, it wouldn't be under this constraint and could do what it liked, even if interest rates looked pretty expensive.

Greece is in a bad way, but I cannot believe that increasing austerity to make the creditors whole is in any way humane to the general population, many of whom are now unemployed. Greece needs huge infusions of cash to stimulate the economy, and debtors need to take a haircut. But such is the power of banking today, and the morals of German leadership, this isn't likely to happen. I'd be interested to see what would happen with a GREXIT. I doubt the world will collapse (Greece is too small) and even if other peripheral EU countries follow, is that so bad? maybe the EU experiment was overreaching. More interesting is if Britain was to exit.

Alfred Differ said...

The Persian core cannot be defeated... by the likes of us. History shows their mountain position to be a very tough nut to crack. It would take an army of millions to root them out of caves. It won’t work any better than it does on some of the tribes further east. Even the British had to settle for penetration of the border and then turning some of their neighbors against them. They survived the British and have pushed back into their typical zone of conflict with their neighbors along the Two Rivers. They will be around for a long time to come, I suspect. Besides, it isn’t in the interests of Pax Americana to eliminate them. They are useful at stymying a local hegemon due to religious loyalties that cross tribal lines. The British knew this too, so we’d be fools not to make use of ‘natural forces’ available in the region.

The problem with locum’s debtor game is that it assumes a context that isn’t there when it comes to a US national player. We ARE the context because we provide the security context. The security of the currency overseas boils down to our willingness to commit to providing physical security for international trade. We actually DON’T have to continue doing that since we don’t export much, but we will anyway. We inherited an empire after WWII and can’t really let go of it until we accept risks we don’t want to accept. Our economy would putter along well enough if we stopped exporting outside North America, but our self-image would suffer and we won’t accept that.

As for ‘third world’, I challenge anyone to define that term in the modern world. It made sense when I was a kid, but the world has changed a lot since then. I don’t think there IS a third world anymore.

Laurent Weppe said...

* "but Greece cannot independently print money unless it exits the EU and return to its own currency, formerly the Drachma. All this drama over negotiation with the Troika is about getting loans and under what conditions. If it was like the UK, it wouldn't be under this constraint and could do what it liked, even if interest rates looked pretty expensive."

Apart from the Deutsch Mark, every pre-euro national currencies were what we call in France "de la monnaie de singe" (literally "Monkey's Money"), which pretty much were worthless pieces of paper which not only were often brutally devalued to the point were their exchange rate histories look like a joke: take for instance the Italian Lira, The French Franc, or a personal favorite of mine, Portuguese Escudo.

This made european economies extremely vulnerable to monetary crises:
Basically, at the beginning of every crises, speculators would quickly liquidate their assets in currencies perceived as weak (IOW every damned european currency apart from the Mark and the Pound), which would cause these currencies' exchange rates to plummet creating a very real risk that import prices would raise to unbearable levels, prompting national european governments to brutally raise interest rates in the hope to limit the rates' plummeting, which in turn never failed to grind the economic machine to a halt, to the point that, for instance, the number of unemployed people in France to raise by one million (out of a workforce of 24 million people at the time) as a result of the monetary crises of 92-93.

The multitude of national european currencies never was, contrary to the claims of europhobic demagogues, a way for european states to weaken the effect of monetary crises: on the contrary, it made these worse.

***

* "But such is the power of banking today, and the morals of German leadership, this isn't likely to happen"

Something oft omitted is that the most hostile officials are not found in Germany, where Merkel actually overruled her own finance minister (who was pushing for a Grexit in the hope that the ruin that would follow would destroy Syriza), but in the IMF (which itself is under pressure by developing countries whose leaders are getting pissed that the relatively rich Greece received a lot more help than them) and among eastern (baltic nations, Slovenia, Slovakia, Austria...) and southern (Spain) european governments, who consider that they had to do a lot more effort than Greece to fix much smaller problems.

More importantly, Greece's woes are not simply the results of the banking crisis: for decades, its government indulged in what can only be called a massive program of voters' bribery funded by money borrowed by the Greek state: in fact what pisses off european authorities the most is that Greece was quick to implement spending reduction measures, but still hasn't done much to build up an efficient taxation system.

locumranch said...




In the Confidence Game of Western civilisation, the 'vast infrastructure of high speed rails and city metros and vast networks of glowing skyscrapers and industry' (etc) is what is known as the "Pay-off" or "Convincer" (aka "An actual or apparent paying of money by the conspirators to convince the victim and settle doubts by a cash demonstration") which is designed to encourage credulousness, a larger investment and eventual dependency.

But, like any Ponzi-based 'Bubble', the bill eventually comes due and, as in the case of any economy that thinks it can just "can print money (so) long as people will buy it", the problem is that people won't. The won't "buy it", not forever, not indefinitely. They will 'wake up'; they will know that they've been 'had'; and they will exact their pound of flesh even if it means cutting off their own nose to spite their face (as in Ferguson, Watts, London, Zurich, Germany and Ukraine). They will riot, set fire to their OWN HOMES and try to pull the whole corrupt temple down upon themselves & others, just to kill a few Philistines.

The Sleeper Awakes (quite possibly) when Greece exits, others follow, and the whole world realises that paper monetary promises are WORTHLESS and the 'Emperor has no clothes'.


Best.
___
The term 'third-world' will cease to have utility when the 'House of Cards that Pax Americana built' comes down.

LarryHart said...

locumranch:

The Sleeper Awakes (quite possibly) when Greece exits, others follow, and the whole world realises that paper monetary promises are WORTHLESS and the 'Emperor has no clothes'.


Depends what you think money is worth. If you work for money, spend it, and get good value for your dollar, then by definition the money was worth something.

If your complaint is that you want to hoard a stash of money away somewhere, and the world won't enforce the stable value of your treasure trove, then sure, it's just a pile of worthless paper. But that's not how most people use their money. It circulates. And while it's circulating, it is worth something tangible.

It might not be worth as much in a decade or two? That's no different than the pizza you squirrel away for a year, only to discover that it's no longer edible. Or the wine that turns to vinegar, or the house that collapses if you don't maintain it. Nothing just "holds" value forever. Why should money be exempt?

Alfred Differ said...

If I was playing locumranch’s definition game, I’d start with a dictionary definition of ‘third world’ and then show how this obviously supports the intended argument. I don’t have one handy, so I’ll wing it from memory. The third world is that region of the world not included within the West’s immediate sphere of influence (SOI) (first world) or the Soviet SOI (second world). The third world was VERY impoverished after the destruction of most of the world’s infrastructure after WWII and populations were booming to make up for the fears associated with famines, diseases, and smaller wars that tended to kill the babies of a whole lot of otherwise powerless mothers.

There is still a region of the world that did not fall within either SOI, but the Soviets are gone and the second world fragmented so much the Russian’s can barely influence it. The former third world isn’t so impoverished any more, their birth rates have mostly collapsed toward sustainment, the famines are gone, and child mortality is mostly in line with many first world nations now. Even average expected life spans have come up to mostly match the first world. If there is a third world in the old sense anymore, it is the former second world. Some of the nations in the old Soviet SOI aren’t doing well. Russia isn’t either since they have a massive demographic problem looming on their horizon. They aren’t even managing to prevent a brain drain like the Germans suffered before WWII.

Meh. The old terms that made sense in the middle of the Cold War don’t anymore. The Cold War is over and much of the former third world decided to join the first world. That started before the Cold War was over if you pay attention to the shift the Chinese made during their long 80’s decade. There is still a lot of room to move toward free and fair markets, but mercantilism is generally better than centrally controlled (government managed) markets when it comes to keeping people alive, so it’s better in the sense of progress. Freedom doesn’t mean much to people with no tradition of liberty and no food in their bellies.

Locumranch’s confidence game description is utter nonsense. He points to what most people accept as real wealth and calls it fake. The currencies don’t matter much to me if I have my roof, a full pantry, and the means to keep them. If I don’t trust the currencies, I’ll do the traditional exchange and move my wealth into real goods and then barter using them. If I don’t have any wealth, I don’t have anything to be taken from me that can actually BE taken.

Alex Tolley said...

@Laurent - you avoided the Swiss Franc which has been very strong too.

I assume you know better about the effect of devaluations in weak currencies, but apart from deliberate currency attacks (e.g. Soros on Sterling) devaluations while balanced with higher interest rates does make a countries exports increase compared to imports and restores the strength of te currency. Greece was mainly exporting tourism (I think) and joing the EU allowed larger exports of agricultural products (plus EEC spending on poor countries). If Greece could devalue its own currency, then it would certainly increase its tourist business (unless the sights and beaches have deteriorated since I was last there in '82).

Where I do agree with you is teh miserable state of Greek taxation. It seems that Greeks agree that more taxes must be raised, as long as it isn't them.

In the US we just legally reduce taxes on corporations and wealthy individuals to break the state. Fortunately we can still print money :)

Alex Tolley said...

@Alfred - I suspect that locum is talking about sovereign debt. It is so large that it cannot be liquidated in exchange for tangible assets. You see some of that in purchases of real estate which still represents far more value than all the debt issued, but someone has to sell and corporate level RE sales are not going to be converted into tangible assets. Someone will end up holding paper IOUs. Gold bugs hope that the metal will retain its real value, but its limited availability would never support more than marginal liquidation.

At this time, the US as the largest debtor nation is effectively holding real assets for potentially worthless paper, so we should be OK. The world wants to try having another reserve currency, e.g. the Euro, but AFAIK, not much headway has been made. Despite all the FUD, the USD remains the currency of choice and there is little prospect of that changing any time soon. Maybe one day the Yuan might become the main global currency for trade and debt issuance, but China's economy will have to change a lot to allow this.

I wonder what price Crete could be bought?

Alfred Differ said...

The Greek taxation system doesn't have the consent of the governed. There isn't much they can do about it until the people decide it isn't a corrupt institution. Who is motivated to participate in a corrupt game?

The Stratfor folks point out that the ability to manage a currency is a measure of sovereignty. It is a very important one. Greece can't possibly compete with Germany in terms of exports, so their inability to devalue their currency essentially turns over their sovereignty to Germany. That applies to much of southern Europe too, but the Germans can't fully leverage their power because they depend too heavily upon exports to sustain themselves. They have little choice but to tolerate the mounting debt and tax corruption in southern nations until they decide to export elsewhere.

As a side note, the Stratfor folks are finally beginning to talk about a post-conflict Syria without al-Assad also. His loss of control in the Idlib region is what appears to be causing the shift in perspective. The future state is likely to be as messy as Libya suggesting it might make sense to draw new borders.

Alfred Differ said...

Ah. Sovereign Debt. That lovely bit of fiction many sovereigns have demonstrated to be illusions in the past. My favorite frauds are the ones who thinned the silver content of their coinage and forced their nobles to buy the garbage anyway... which then got passed down to who ever could be forced to take it. It's so much easier with fiat currencies now, but many of us know the danger.

The gold bugs are nutty in my opinion. The USD isn't going anywhere in the next half century. We practically own the oceans, dominate near-space in the military sense, and most of our economy faces inward. What little we export tends to stay in North America. Unless we do something really, really stupid the world doesn't have many options but us. They can... and should... hedge, but the Euro is a bit of a joke I think. While small nation sovereignty continues, the Euro doesn't make sense as a reserve currency. Show me a nation that can stand on it's own against strong economic pressures and I'll consider their currency.

Ioan said...

Alfred,

If I were to define third world countries: I would use this as a definition:
https://en.wikipedia.org/wiki/Least_developed_country
It's not as bad in these countries as it was in the postwar era, but most of these countries are laggards in development. Even their birth rate is higher than the global average:
https://en.wikipedia.org/wiki/Total_fertility_rate

As for the Second World, it's not that poor in the global context. Most of the countries which joined the EU have become first world. If you compare GDP (PPP) per capita, you'll find that most Eastern European countries are actually richer than the average Chinese. The exceptions (from memory) are Moldova, Ukraine, Kosovo, and Bosnia. I'm not even sure if the average Kazakh is that impoverished compared to the global median. Outside of that, the Central Asian nations haven't fared well since the 80's. N. Korea is a class by itself, which I don't really need to talk about.

Tacitus2 said...

Back from a long day of negotiations and for those who expressed much appreciated sympathy I can report that it went well. When one side is looking for trivial face saving gestures and the other side is demanding effective, long term financial and physical safety firewalls...well, you can keep on trading those commodities all day. At one point I was wondering just how far we could push things. And sure enough, they did offer to toss in the Donets Basin and most of the good beachfront of the Crimea, but I did not know what I would do with 'em so said thanks but no thanks.

Much relief.

If you set the time frame at a ridiculous 6000 years I have a nomination for China's BFF....Rome.

They always got along well, mostly one suspects because the distance between them precluded any disputes over border lands. They always had fine trade relations, Rome got plenty of silk, China got some swell glass ware and lots of gold. There was a bit of grumbling on the part of Rome regards the trade imbalance but heck, Rome mostly plundered and pillaged the gold out of Spain anyway and if you are gonna be Rome! you may as well dress your ladies in fine silk to play the part. Various intellectual exchanges also happened, but a discussion of why Hadrian built a Wall, and of how representative sculpture are went East are a little esoteric. Rome and China, two great powers that over centuries of relations never shed a drop of each other's blood...

To take on your opening challenge. What could you send to Russia that would impress and not be at all subject to confiscation?

Send our best. Our smartest, best looking young people. No visa issued until you get your teeth capped, cleaned and polished. They have to spend six months in a fitness program before going overseas, and agree to go running every morning. I am going to be a bit sexist here, but remember this is in the context of a 70s discussion. If you are a somewhat seedy, run down Russian, living in a seedy, run down Russia, and see a fabulous vision of American beauty jogging past you...hell you are going to want to run right on after and defect to the marvelous West!

So my nomination is: bright, eye catching Spandex running garb. (invented in the 1950s and certainly available in the 1970s)

Tacitus

David Brin said...

Tacitus, the Russians have plenty of beautiful women... who cannot abide their vodka-drenched male equivalents.

No, we DID send our best and brightest" over there, circa 1990. Bush Senior (may he roast as the worst president in 100 years) sent over thousands of "advisors" and I mean thousands, private and governmental, to "help with the transition from communism to an "open market society."

Yeltsin gladly embraced the advice that -- within JUST one year -- resulted in all the distributed "shares" of Russian state companies winding up in the hands of a few hundred oligarchs and their silent western pluto-pals. It was an organized rape of massive proportions and we will be paying for it, for generations.

And that is just one of TWO titanic betrayals (plus dozens of medium and lesser ones) that lie at the feet of the elder pater familias of that horrid-wretched treasonous evil clan. We had peace and friendship with a prosperous and free Russia within our grasp, had those rapists not been unleashed by that monster...

...as he took our opportunity to actually accomplish something in the Middle East, and transformed it into today's horrific mess.

Do not ever ever ever finger wag us about Clinton or Obama. The confederacy did more harm to America with the Bushes than Jefferson Davis ever could. And the GOP is not done with us.

Tacitus2 said...

Ah David

Clearly I am in a much better mood today than you are. Well, sometimes Grumblers gotta grumble I guess.

Tacitus

locumranch said...

Tacitus is more magnanimous than I for not calling your dichotomy:

A FREE Russia within OUR Grasp?? Do you know what the word 'free' means?
Are you sure that you are a libertarian?

So much for self-determination:

Sacrifice it, we must, if stands in the way of Progress!!


Best

David Brin said...

Locum you are #$#@!. What a hypocite. I am calling out the US government for having deliberately screwed 200 million people and made a mess of the 21st century.. but I guess cynical US bashing is YOUR job and sole prerogative. Get bent.

Tacitus, you raised the issue of sending over our best. Your side sent over its best and they helped to rape the ussians and the Iraqis and we will pay for it, for ages.

I have good reason to be grouchy.

Also, my wallet was stolen here in Madrid, today.

Alfred Differ said...

@David: Sorry, but I don’t think a prosperous and free Russia was within our grasp. They don’t share our culture of liberty, so we were quite deluded in our belief that sending advisors could bring about the ideal you describe. Blaming the elder Bush for that might still make sense if he purposely helped to arrange for the rape, but I think the odds are quite low that he could have stopped it no matter how hard he tried. Russian history matters. They’ve been locked in that 6000 year tradition since forever and have a justified belief in its necessity. They know what it means to live in a territory with no defensible borders with other traditionalists as neighbors. It will take FAR more than a few thousand advisors to break that tradition and no President can arrange for that miracle.

If one wants liberty in Russia, one is going to have to help arrange to break what it means to be Russian. They need an Enlightenment era of their own as I’m sure you know. The post-Cold War period was not the time to bring it to them. It WAS the right time to encroach upon them and deprive them of their ability to screw their neighbors the same way they harm themselves. Squeeze them until their tradition breaks and then do it again and again and again. THAT will deliver the message a few thousand advisors can’t speak to deaf feudalists.

A.F. Rey said...

So my nomination is: bright, eye catching Spandex running garb. (invented in the 1950s and certainly available in the 1970s)

As I recall, one of the X-Men (Colossus) was Russian, so I suspect that they are quite familiar with good-looking people running around in spandex. :)

Tacitus2 said...

David

sorry to hear about the wallet. On a recent trip to Italy I actually used a money belt and also gave serious thought to a "decoy wallet" that contained nothing but a piece of paper with the words: "Fare non Rubare" (Thou shalt not steal)

Tacitus

Paul SB said...

Here's a trick from magician Apollo Robbins on an episode of Brain Games: get a big cup of soda, drink it (or otherwise dispose of it if you are not inclined to get diabetes) but instead of throwing the cup away, put your money and credit cards in it. Any thief will grab your wallet, but is unlikely to steal your trash. Of course you would look pretty weird going up to a cashier and whipping your Visa out of your drink, so when you plan on spending, slip the money/plastic out into your pocket when no one is looking.

Day late and dollar short, but maybe for future reference...

locumranch said...

All rise for the 'Ode to Joy':

With total unemployment at 24% and youth unemployment at 55% in Spain, the 'enlightened' optimistic individual would celebrate the Social Progress (the redistribution of wealth) that the theft of his wallet represents.

Travel is so broadening, don't you think?, having the unique ability to challenge our most treasured preconceived belief systems.

I remember Spain from my travels, circa 1976: The scorch of the sun, the noon siesta, the 10pm suppers (Calamares en Su Tinta), the US flags burned in effigy & the exotic chants of 'Yankee Go Home', my only misgiving being my inability to explain that it was only US Republicans (but NEVER EVER the Democrats) who were responsible for the most despicable aspects of US foreign policy.


Best

SteveO said...

Not the 70's, but I did participate in a little bit of anti-tyranny activity...

The business school here at the University had a project to make a course of study for women entrepreneurs available for free online - all you had to do was sign up. Professors available to chat with, etc.

It was presented in English - and Farsi.

I know of no more delicious and insidious action than to offer for universal access a way to empower highly educated women, but highly restricted under the current regime.

So nowadays I wouldn't bring anything but a memorized web address.

Also, this work convinced me that Iran is the natural ally of the US in the Middle East. Individually they LOVE the US, even after the revolution. The Saudis *should* feel threatened by thawing relations with them.

Alex Tolley said...

I don't think the US deliberately screwed the Russians. There were enough advisers who went over with good intentions to reform the institutions. Unfortunately one assumption was that free markets would sort themselves out proved wrong, they need solid institutions to back up those markets and prevent the looting that happened. My understanding was that state owned companies were sold on favorable terms, or given, to connected people or sometimes to the top managers. Over a period of time, this consolidated the power of a number of oligarchs plus the Russian Mafia. This is rather like the pattern in US in the 19th century (and starting to happen again today).
So I don't see a deliberate policy, nor do I see Bush Snr. as the disaster president at all in this regard.

As for Gulf War 1, you can take your choice about the decision making. Iraq was an aggressor, even if that was helped by poor communication by ambassador(?) Gillespie. The war was a genuine coalition supported by the UN. The decision to hold back from getting Hussein, but instead bottling up the state could be argued each way. But AFAIK, this was a not anything like the lies that Bush Jnr told to start GW 2, which was not just egregious, but had a consequences we are dealing with today, and that Obama is not really helping to resolve.

I would put G W Bush as one of the worst presidents ever, and arguably should be jailed for criminal activity that may be worse than Nixon's.

Alex Tolley said...

I agree with SteveO that Iran is likely a natural ally of the US. It was under the dictator Pahlavi, installed as a "puppet" by the US.

Unfortunately the Shah epitomized what the super-wealthy are trying to do today. See the resonance with this section extracted from teh wikipedia entry:

"With Iran's great oil wealth, the Shah became the pre-eminent leader of the Middle East, and self-styled "Guardian" of the Persian Gulf. In 1961, he defended his style of rule, saying "when Iranians learn to behave like Swedes, I will behave like the King of Sweden".[44]

During the last years of his government, the Shah's government became more centralized. In the words of a US Embassy dispatch, "The Shah's picture is everywhere. The beginning of all film showings in public theaters presents the Shah in various regal poses accompanied by the strains of the National anthem...The monarch also actively extends his influence to all phases of social affairs...there is hardly any activity or vocation which the Shah or members of his family or his closest friends do not have a direct or at least a symbolic involvement. In the past, he had claimed to take a two-party system seriously and declared, "If I were a dictator rather than a constitutional monarch, then I might be tempted to sponsor a single dominant party such as Hitler organized".[45]

By 1975, he abolished the multi-party system of government in favor of a one-party state under the Rastakhiz (Resurrection) Party. Mohammad Reza Shah's own words on its justification was; "We must straighten out Iranians' ranks. To do so, we divide them into two categories: those who believe in Monarchy, the constitution and the Six Bahman Revolution and those who don't...A person who does not enter the new political party and does not believe in the three cardinal principles will have only two choices. He is either an individual who belongs to an illegal organization, or is related to the outlawed Tudeh Party, or in other words a traitor. Such an individual belongs to an Iranian prison, or if he desires he can leave the country tomorrow, without even paying exit fees; he can go anywhere he likes, because he is not Iranian, he has no nation, and his activities are illegal and punishable according to the law".[46] In addition, the Shah had decreed that all Iranian citizens and the few remaining political parties become part of Rastakhiz.[47]"


You can see the similarities to various ideas and pundits speaking for the right wing and their wealthy sponsors. There are also strains of the responses to 9/11 to anyone doubting the war policy. Iran in the Shah's era is a possible foreshadowing of the US' "crazy years" that we seem to be plodding towards.

Alex Tolley said...

OT. Walmart can't pay it's workers a decent wage, but it has stashed $76bn in tax havens that presumably enrich the shareholders.

Wal-Mart Has $76 Billion in Undisclosed Overseas Tax Havens

The IMF just released a report about global inequality and says that "trickle-down" doesn't.
Money quote: "For example," the paper states, "[too much inequality] can lead to a backlash against growth-enhancing economic liberalization and fuel protectionist pressures against globalization and market-oriented reforms."
If only the elites would meet as they do in "Existence" before it is too late.

Laurent Weppe said...

* "you avoided the Swiss Franc which has been very strong too."

What did I wrote?
I wrote:
"Apart from the Deutsch Mark, every pre-euro national currencies"

Swiss is
1. Not part of the Eurozone
2. Not part of the European Union

which disqualifies from being part of this list, and that not even taking into account the fact that Swiss:

3. Owns its currency's strength to the fact that it's the world' oldest tax haven.

***

* "devaluations while balanced with higher interest rates does make a countries exports increase compared to imports and restores the strength of te currency"

Depends which kind of exports and imports: West-European countries tend to exports a lot of luxury and high-added-value products while importing a lot of raw materials: the rise is raw materials price will offset the (often modest) added gains from exports, especially considering that exporting european companies and their owners have the nasty habit of hoarding as much of their profits as possibles in tax havens.

***

* "Greece was mainly exporting tourism (I think) and joing the EU allowed larger exports of agricultural products (plus EEC spending on poor countries)"

European aids did tremendously increase agricultural productivity, the problem is that even with these, Greece is not much of an exporter of foodstuff: the country is far from being self-sufficient: poor soils (the result of 30 centuries of overuse) and frequent droughts (which are not getting better thanks to Global Warming) mean that the country's agricultural output can only feed around half its population: as a result the crops it exports (cotton, tobacco, olive...) are offset by all the food it imports. Hell: they import Tomatoes from Holland.

And if you add the fact that given the current state of the european treaties, it's is actually not possible (as in not legal) to leave the Eurozone without leaving the European Union, it means that leaving the Euro would pretty quickly cause the local agriculture to collapse for wants of funding.

So let's summarize:
Greece leave the Euro and the EU
-> As a result, its agriculture productivity collapse, demanding even more imports of foodstuff
-> The Drachma being deemed a worthless currency backed by an untrustworthy government gets violently devaluated, causing the import prices of food and fuel to rise even higher.

A Grexit is pretty much a zimbabwean scenario.

Laurent Weppe said...

* "so their inability to devalue their currency essentially turns over their sovereignty to Germany"

That's bullshit.
Do you know when Greece had to turn over their sovereignty to Germany?
In 1897
That's not a typo: in the late XIXth century, the country bankrupted itself (approximately 75% of public loans borrowed between 1828 et 1892 were embezzled by the ruling class: the most surprising thing about it is that it took that long for Greece to go bankrupt), and as a result, it's main creditors, France, Britain and Germany decided to directly administrate the country, which they did through an "International Financial Commission" based in Athens but as the name implied, controlled by Greece's international creditors, from 1897 till Eleftherios Venizelos took over in 1910. Being able to print its own money back then helped jack shit: since Greece's creditors viewed the Drachma as worthless monopoly money, they brutally asserted their power over Athens which proved to be absolutely powerless to stop them.

It bears to be repeated over and over: the fetichizing of national currencies as magical bringers of sovereignty is nothing more than worthless wishful thinking.

In fact, the Euro, overseen by a Central Bank whose directorate counts only three Germans out of its 25 members grants a lot less influence to Germany than the de factor dominance of the Deutsch Mark over continental currencies during the pre-Euro years: the Bundesbank was amongst the most powerful voice among the austerian faction, and it was simply ignored by the French and Italian ECB presidents who helmed the institution during the crisis: ignoring the Bundesbank's demands would simply have been impossible before the Euro.

Alex Tolley said...

@Laurent
A Grexit is pretty much a zimbabwean scenario.

I hope it doesn't turn out to be such a mess. Greece seemed OK in the early '80's when I last visited. Of course a lot can happen in 30 years. But clearly they are between a rock and a hard place, and someone has to blink. It really depended on whether the creditors will get their pound of flesh or not.

You make a good point about EU agriculture supports. I didn't realize how much Greece exports as ag products. OTOH, Tourism and shipping, both services should gain, and tourism is such a huge employer. What I don't know is how much capacity Greece could add, without despoiling the value. I visited Santorini in 1976, but a friend visiting the island a decade later described a much more developed place. The Hawaiian island Maui has been overdeveloped in my opinion, wrecking the beauty that it once had. Greece might end up the same way if it tries to add tourist capacity.

I hope it turns out well-ish, because given its history, a economic collapse will not end well.

Alfred Differ said...

Cribbing again from Stratfor articles:

The state of Iran is a complex collection of tribal groups and religious convictions. Some of them are just as hard to eliminate as the core group in Tehran. For the core Persian group to hold the state together, they don’t have a lot of choices except to suppress these other groups in some fashion. If they fail to do so, their neighbors can be used against them by foreign interests much like the British did. The last group to successfully defeat them was the Mongols, but modern subjugation methods aren’t likely to reproduce that piece of history. There is no one in the intersection set between those who have the power, resources, people, and motivation to do it, so the primary thing the Persians have to defend against is a foreign influence turning their internal neighbors against them. They manage this by dividing them and turning them against each other like any other empire does. For example, the Kurds are often their own worst enemy due to internal divisions exploited by the empires (one of them being Persia) in which they have lived. This history is important to remember to make sense of the Shah’s actions. A Secret Police force obviously isn’t in the tradition of liberty, but it IS a useful tool for a feudalist.

Whether or not the Persian’s experience Enlightenment, they don’t have much choice but to try to dominate Mesopotamia where the Islamic State is currently challenging them. There is no wealth generating core within the Iranian state as its borders stand today. Most of the people are up north near the Caspian, but the oil fields are in the south near the Persian Gulf thus vulnerable to border incursions. To be anything more than a puppet state, they must try to influence actions in modern Iraq and at a minimum neutralize Arab influence there. Absent that, they are at the mercy of neighbor states. Acceptance of that would conflict with their history and culture, so no matter who leads them, they must deal with this need. Since mountainous terrain is where old cultures find refuge to survive the traumas of history, they face the kind of complexity there that our Enlightenment did not have to face.

Once we recognize their needs, it will be no problem making use of them as our natural ally in the region. Once we recognize that they won’t be our puppet state either, it will be no problem making use of the other natural ally there too. Doing this would restore a very old balance that didn’t survive the aftermath of WWI. We can do this and should both for their own populations and those of their immediate neighbors who do not understand the nature of Westphalian states.

Alex Tolley said...

@Laurent
It bears to be repeated over and over: the fetichizing of national currencies as magical bringers of sovereignty is nothing more than worthless wishful thinking.

Using Greece as the example does not make this a generally applicable statement. All that you say about how lowered exchange rates are true (I saw that in the UK), but it is also true that lowered exchange rates will eventually increase exports and decrease imports, restoring the trade balance. This might be an ideal situation that can be subverted, but there is enough economic data to support the theory. Greece may be an exception.
What is clear is that once a state is bound to using a currency it has no control over, then its hands are tied in that dimension, leaving only fiscal levers, and in the case of the EU, those levers cannot be imposed as import tariffs. The Drachma might be a poor currency to return to, but with some discipline it shouldn't become like teh Zimbabwean dollar. (That might be wishful thinking of course).

Alfred Differ said...

@Laurent Weppe: Mmm. I have to suspect there were other things going on near Greece in 1897. The Ottomans still existed as a slowly collapsing empire with Greece in their SOI. I’ve no doubt the other European empires wanted their slice of turkey.

Greece screwed up by not recognizing that the Cold War is over and the huge deficits they run would no longer get brushed away to maintain the wall of isolation around the Soviets. (That wall applies only to the Russians now and passes north of them through Romania.) They have nothing much to offer the world in terms that would produce the income needed to finance their spending except to be a dumping ground for German exports. That they’ve gone as long as they have is due to German tolerance and their reliance on exports for internal incomes.

From where I sit, the EU is Germany when it comes to economics. National sovereignty movements have to deal with this by pulling out of the currency union or face the fact that the Germans will wake up one day and realize they won. Their 20th century wars were stupid. There economic power isn’t.

Zen Cosmos said...

Re: your Chung Kuo comment: Sincerely hope that David Wingrove's Chung Kuo science fiction series does NOT come true in whole or even in part...

David Brin said...

It does not wash. The RUssian people were all handed shares of state companies with full knowledge they would sell them in an instant, for almost nothing, to cabals of local crooks backed by Bush cronies as bankers The KNEW this would happen. There are dozens of ways the companies could have been shared out in a fashion that avoided this. It was a pure scam... the biggest in the history of our species.

Likewise to declare the alternative was marching on Bagdhad is pure horse hocket. Schwarzkopf begged for 48 hours to take BASRA and save the shiite arabs from being slaughtered by Saddam. It is what Bush Sr. PROMISED, IN OUR NAMES! His betrayal of those shiites... when we were protecting the northern kurds... was just about the most evil thing any US president has ever ever ever done...

... and it CREATED -hand crafted - the present mess.

Duncan Cairncross said...

Commenting about “IP” and China
There are three types of “IP”
Copyright
Patents
Knowledge about how to do something

Copyright
China is guilty as sin of ignoring copyright
But this effects movies, music and to a lesser effect books
No real effect on industry and prosperity

Patents
Patents only last 20 years – and only cover “new” ideas
IMHO patent law is mainly used now to try and stop competition – and slow down progress

Knowledge about how to do something
This is where the problem is
Some MBA decides that he can get his company’s product made cheaper in China
They show the Chinese how to make them
Then the Chinese make the devices for themselves and sell them, undercutting and eliminating the old market

I now have a lovely remote temperature sensor with a laser to show where it is measuring, these used to be $200+
I paid $12
Not covered by patent (well over 20 years old)
The original company had been making good money until somebody tried to be clever and get them made in China
Now they are screwed

Alex Tolley said...

The RUssian people were all handed shares of state companies with full knowledge they would sell them in an instant, for almost nothing, to cabals of local crooks backed by Bush cronies as bankers The KNEW this would happen.

Evidence please. Just reiterating your opinion louder doesn't cut it. And when you say "cronies" do you really mean the Carlyle Group?

Yes the failure to support the shiites was egregious realpolitik. But that is "just about the most evil thing any US president has ever ever ever done"?. Hyperbole. Read some history.

bruce said...

The only effective Soviet disruption of the US economy was the invention and dissemination of of Tetris.

Mel said...

Bringing material that's confiscated gives you a chance to subvert the border guards. Project Gutenberg recently published the second edition of Paul M.A. Linebarger's (yes, him, right?) _Psychological Warfare_. It mentions a leaflet that was dropped into Japan during WW II. It started "Enemy! Waring! This is an Enemy Publication, issued by the United States Government. Finder is Commanded to take this to the Nearest Police Station Immediately! Enemy!" The pamphlet was written to be read by and to influence Japanese police officers. Linebarger writes that the cover urged the policemen not to keep the pamphlet, nor to destroy it, but to pass it on up through channels to their superiors as an instance of enemy propaganda.

Laurent Weppe said...

* "Greece seemed OK in the early '80's when I last visited."

Of course it seemed ok: the problem is that Greece was already deeply dependent of european aids even back then, and Greece leaving the Eurozone now would mean losing the very aids that kept it afloat for the past four decades: basically the european equivalent of an american red state seceding and suddenly having to function without federal fundings.

***

* "But clearly they are between a rock and a hard place, and someone has to blink"

The problem is that the european institution themselves are between a rock and a hard place: if Greece is kicked out of the EU, it will jeopardize the whole european project, as it will make the EU appear as ruled by a club of callous rich people willing to starve those who do not toe the line; if Greece keeps receiving prebends without reforming its corrupt, clientelist state, it will also jeopardize the whole european project, as it will make the EU appear as willing to allow parasitic beggar states to bankrupt themselves only to be bailed out by their too complacent partners.

That's why european authorities were originally much more sympathetic to Syriza than most media outlets reported: many european leaders thought that a far-left party would be willing, eager even, to establish a more robust taxation system.
Except Tsipras had an altogether different project: basically, what he wanted was to demand more money to the EU, use it to fund ambitious keynesian policies, and, once unemployment went down start tackling reforming taxation and the state. In another context, this might have been the smart thing to do, but given Greece's past history, creditors simply refused to grant the country another enormous loan simply against the promise to fix things once employment goes bellow 10%.

Laurent Weppe said...

* "What is clear is that once a state is bound to using a currency it has no control over"

European States ceased having control over their currency long before the first Euro banknote was even printed.

Do you even know how the Euro project started? It started during the summer of 1969 when the newly elected french president Pompidou abruptly decided to devaluate the French Franc: this completely took Germany by surprise, and as a result, Chancellor Willy Brandt decided to let the Mark float freely, which provoked an immediate and brutal increase of it's exchange rate.

So long as the exchange rates between the west european currencies didn't fluctuate too much or too quickly, it was possible to maintain a common economic policy and plan the european budget ahead, but this brutal change proved that
1. Even Germany hadn't as much control over its own currency as it thought (Because let's be clear: no one in Germany wanted their national currency's exchange rate with their main economic partner's currency to increase by 20% in a matter of days)
2. Administrating the fledging union wouldn't be possible if the different currencies were subject to such wide and rapid fluctuations. (should France suddenly pay 20% more to the European budget to cover for the devaluation, or should the other countries, including Germany step in and fill the gap left by the devaluating country?)

Every crisis or sudden change that followed (Nixon canceling the dollars-to-gold convertibility, the energy crises of the seventies, François Mitterrand attempting a solo french keynesian reflation, the Black Wednesday of 1992) demonstrated, time and again, the same fact:
European member states had virtually no control over their fickle national currencies, and every time they tried to manipulate their exchange rate in advantageous way, it backfired, one way or another.

So instead of dozens national currencies whose emitting countries had little to no control over, we came up with a common currency emitted by a central bank which does have real control over it.

***

* "From where I sit, the EU is Germany when it comes to economics"

Germany's worth approximately 21,5% of the EU total GDP (and 28,5% of the Eurozone). That's a lot, but far from enough to impose its will over the rest of the Union.
The real central block comes in the form of the founding states (Germany, France, Italy, Benelux), which represent 70% of the EU's GDP:
When the six founders reach a consensus, they pretty much run the European show, when they don't, that's when the other member states get to decide the Union's policy.
Make no mistake: when Germany's views are imposed, they are because its five older partners all gave their blessing.

Alex Tolley said...

@Laurent - wasn't the DM's rapid rise an example of teh market impounding the information about the trade balance (amongst other things)? I don't why De Gaulle devalued the FF, but I am guessing that he saw a trade imbalance with Germany.

To my mind this is exactly why floating exchange rates are better than fixed rates.

Exchange rates can be very volatile, but most large businesses hedge their currency exposure to control this for their planning.

Alex Tolley said...

@Laurent - I thought the EU doesn't want Greece to default is that this could infect other weak states. IIRC, the same argument was made for Eire, so every effort was made for Eire to comply.

Marino said...

another one for the registry: the new encyclical letter about the environment, up to and including Mary as Mother of the World

Howard Brazee said...

I've always made that observation about second languages when someone talks about how widely spoken a language is. It matters.

I was in USAF pilot training in the 1970s with Saudis and Iranians in my class. That was the first time I was aware of the big cultural difference where Iranians were much, much closer to USAmericans. Later on, I have gotten to know Iranian-Americans and time and time again, I have found they are much more like us than Arab-Americans.

Now "like us" doesn't mean better or worse. It just means what it says. Still, I have been puzzled why Saudi Arabia is still the good guy and Iran is still the bad guy. Are we better off with that than with the reverse?

reason said...

David,
I can't agree with you about IP. IP is one the major causes of inequality, because the reward is only given to the winners of a cut throat competition. It rewards winning and not effort. Most perniciously in the case of pharmaceuticals.

reason said...

Howard Brazee,
yep - I really are a bit puzzled about Iran vs Saudi Arabia. It seems once a prejudice is established it is very hard to break.

David Brin said...

Mel, good stuff.
Howard interesting and yes, Rupert Murdoch's partners... who own and operate the Bush Clan... are terrified we may rapproche with Iran.

Reason, IP ended 10,000 years of civilization castrating secrecy. You are utterly clueless. Yes, every generation sees new efforts to turn old reforms into new ways to cheat! And much about today's patent law needs to be tuned to undercut trolls and monopolists and restore its original purpose. But please, show me the great human advances spurred by Heron's steam engines, by Bagdhad Batteries, by Antekithera devices...

...um... you can't? Too bad you are unable to parse how I just proved my point. Keep trying till you can.

----
That A. Tolley would acrually try to teach me disputation maturity is simply laughable. Go look it up yourself, fellah.
Carlysle and others told Yetsin "mail a certificate for a perapita split of every state company to every Russian." Sounds fair huh? Only the SAME MAILING LIST was then used to send non competing offers to buy the shares at five rubles each. Without any prospectus to their actual value, even if the companies were liquidated and only valued at their capital stock.

Zero govt or other advice and frantic-speedy efforts to ensure there's be no competing offers. Backed by western bankers, then, a hundred or so front men then bought up most of the shares, then used proxy votes to render the rest diluted and valueless. By value, it was the greatest heist in human history by at least an order of magnitude.

This is not about "teaching" Russians how to be western. Anyone would know that will take generations. It is about doing the transition slowly and carefully enough so that the corruption is kept below 50%, instead of stealing EVERYTHING. Which is what Bush Sr. and his cronies did, raping Russia (and us) at the very point of victory in the Cold War. Which is exactly what they did leaving Afghanistan to the moujehadeen, after the Sovs pulled out. And exactly what they did letting Saddam kill a million people, when he should have been left festering in a rump, oil-devoid Sunni backwater around Bagdhad, while joyous southern Shiite arabs and northern Kurds danced rings of joy and gratitude around us.

Watch the movie THREE KINGS to see what we did to them and why they will always, always always hate Americans for betraying them, when their liberty and lives were in the palm of our hands.

Find a comparable crime. FDR not bombing the concentration camps? Maybe similar numbers. But FDR had excuses. The Bushes had none, zero, zip. Just evil.

Oh, and anyone who turns attention to my emotion here... to distract from facing these facts? Frantic-hysterical ostriches.

Alex Tolley said...

@DB That A. Tolley would acrually try to teach me disputation maturity is simply laughable. Go look it up yourself, fellah.

Hah! I wasted quite a lot of time trying to verify your claims of Bush raping Russia and got nothing but conspiracy sites. Your view is demonstrably well outside the mainstream. If you want to make such claims, then YOU need to provide evidence, as I am perfectly entitled to accept the mainstream view.

As for Bush Snr being the most evil president ever because of his Iraqi policy. All I can say is that IMO your moral compass is badly in need of adjustment.

You are absolutely entitled to be a "Bush hater", just as there are "Clinton haters". But when your reasons are not backed up with solid evidence, then there is no basis to accept your reasoning.

reason said...

David - I'm not saying IP is useless, just that I'm not convinced that as it is currently used its benefits exceed its costs. And maybe there are better solutions.

David Brin said...

reason, then moderate your stance. Those who today screech that patents are INHERENTLY evil are militating to return to 6000 years of blocked human progress that only ended when we learned a method to draw innovators out of the shadows. Want reform? Then talk about THAT! WE'D ALL LOVE TO SEE YOUR PLAN.

As for the doppel who has replaced a blogmunity member I used to respect, I am dropping out for another month reading anything A Tolley writes. He is not a troll, and is intelligent and hence I'd never block him. But I got better things to do.

It is plain fact that Yeltsin, at the behest of western advisers, sent a "share" of every state company to every Russian, and these were instantly followed by cheap buy offers that used the same mailing lists and had no competition. It is a fact that oligarchs owned most formerly socialized state companies within a year. If you want to dispute that, go ahead. Dispute the sun rises in the east. I just haven't time for you.

Jesus, those facts aren't under dispute by anyone at all. The only tinfoil hat claim of mine is that it was deliberate!

And when 100% of the outcomes from BOTH Bush spans in office turned out negative for the citizens of the US, the burden is not on me, to prove it was deliberate.

At that level, (or even 90% or even 75% negative outcomes) the burden of proof falls upon flaming morons who claim "deliberate" should never even be considered.

No such consistent pattern should be ignored, the way this one has.

locumranch said...


I think I get David's argument: Republican Party politicians are evil because they INTEND to be evil, but Democratic Party politicians (to whom David imputes GOOD intentions) are therefore 'good' despite numerous evil actions & outcomes.

Ergo, we must also conclude that Alex's comments are both GOOD and rational if we assume that his INTENTIONS on sharing them with us were also good and rational, but we MUST conclude those same comments to be both irrational and evil if we assume the worst of Alex's intentions.

You stand corrected, Alex, as do we all.


Best

David Brin said...

Gawd locum is illogical even for locum. Um... You know darned well that outcomes are NOT universally negative across Democratic presidencies. In fact, they are almost always positive in almost every metric of US national health.

But you knew that. And hence, your remark does not qualify as subjective snarking but as deliberate objective falsehood-telling.

Alfred Differ said...

@David: >>The only tinfoil hat claim of mine is that it was deliberate!

Okay?

That still doesn't leave us with your claim that a free and prosperous Russia was within our grasp. It leaves us having the work of generations to do helping them fend off criminals/oligarchs from with their system and a number of our own if your claim regarding their intent is correct.

From where I sit, had the work of generations been started, it would have been premature at that time. To stop the rape, we would have had to occupy them through the use of enough advisors to construct social institutions they don't have. That's nation building, right? Pax Americana is amazingly strong, but it isn't omnipotent.

Beat up Bush Sr for being one of the criminals as much as you want, but there is an alternative explanation that I think is more credible. The wealth and power had to be assigned somewhere and we REALLY didn't want a repeat Russian Civil War. We resolved the issue with who owned what in order to resolve the issue of who had control over the nukes. From a geopolitical sense, this boils down to our national need to prevent a vacuum creating chaos in a region with a huge number of weapons of mass destruction.

That doesn't mean the details of the actions you describe didn't happen exactly as you describe. It means Bush Sr might have been acting as a President should. An individual's morals don't mean much in geopolitical terms. We screwed 200 million people to avoid chaos among billions.

reason said...

David,
I think it is a very bad idea to internationalise the IP system further when it is in such a disfunctional state. That will make reforming the system even more difficult.
Dean Baker http://www.cepr.net/blogs/beat-the-press/ has some good ideas for reform.
I have some other ideas. In particular I do not like standards being owned by private organisations that also use the standards (giving them an unfair advantage going forward). In general I do not like scientific patents being owned by manufacturers. I think patent owners should be forced to licence several independent manufacturers. In some areas (like pharmaceuticals), I really don't think that even tied funding should come from manufacturers. One idea I had of how this could work is that independent research organisations receive donations and these donations then become a (pseudo-)currency for bidding for licences of the resulting patents. (In an extreme version you can only use donations to organisations other than the one whose patent you are licencing - but at least the independence of the research institute needs to be assured).

I really don't think the ethics of science and the ethics of business are compatible (sort of a version of the ideas in Systems of Survival by Jane Jacobs).

Jonathan S. said...

I still think Andrew Jackson is ahead of either of the Bushes on the "most evil president ever" front...

Alfred Differ said...

@reason: I don't know enough of your background to guess, but I've heard people talk about the ethics conflicts between business and science before and I've rarely found they understood what the science community is actually like. Both are markets of a sort with science trading social reputation and fitting the description of a gift market. We can be quite cut-throat.

Usually when I hear people talk of ethics conflicts, they have a Hollywood understanding of scientists. I don't know if you are in that situation, but from my own experience I don't see a lot of conflict. Both markets require a high degree of liberty among the participants to function properly, so cheating is always an issue.

Duncan Cairncross said...

Re IP

The patent system works quite well with "conventional" industry
and has contributed a LOT to our advances over the last 300 years

Pharmaceuticals and Software (which is protected by copyright?)
No it's a disaster
We NEED to rework the system - X prizes??

Bio-Tech - ???
Don't know - I have a horrible feeling that it will be bad

Overall the Patent system does work well but it needs serious re-working in some areas

Alex Tolley said...

@Laurent here is a nice piece by the FT's Martin Wolf on the Greek issue.

http://equitablegrowth.org/2015/06/16/must-read-martin-wolf-divorce-greece-haste-repent-leisure/

Jumper said...

I didn't read Reason's remarks that way; I inferred him to mean the ethical systems may be similar but they shouldn't be considered identical, meaning temptations to avoid this complication may lead to further complication.

For example, while "branding" goes on in science establishments, it's not the bottom line, as it is in business. Strict adherence to truth is not a core value in business. In its best light, it's a strategy.

Alfred Differ said...

@jumper: Ah. That interpretation makes more sense. Thanks for offering it up. 8)

reason said...

Alex Differ
my father was a scientist (public sector - or at least sort of). I also had two uncles were scientists. I started my working career as a research economist which I originally approached as if it was science and discovered that wasn't wanted. Now I work in IT.

reason said...

oops
Sorry mixed up names there Alfred Differ.

In your case maybe your background is giving you a different perspective (with you having absorbed moral norms from two distinct environments and mixed them together. I see science as progressing as much from negative results as positive results - the one that gets the Eureka moment, is standing on the shoulders of ten who didn't. In its deep nature science is co-operative endeavour - whatever the motivations of the individuals concerned. You might say of course that so is capitalism.

Let's just say that I remember my father travelling the world to talk to "competitors?" in places as diverse as Israel, Germany and Japan, and getting visitors from all over the world as well. He wasn't making deals, he was sharing information.

reason said...

One question:
does anybody here think that the way the IP system works for pharmaceuticals is anything other than obscene?

reason said...

Alfred Differ,
I'll point out the difference in another way, the bosses in business are salesmen (even if all they are selling is ideas to their staff). To my father a salesman was anathema, they were form before substance people, he was a substance before form guy. He was ultimately answerable to the truth, they are ultimately answerable to their customers.

I remember somebody who knew him much less well than I did commenting that he was an environmentalist. I never actually remember him that way. He just thought that reality doesn't make political comprimises - if something is a poison it is a poison.

Tim H. said...

On pharmaceutical IP, I feel one must distinguish between the established system and the players gaming it. They really do deserve a payday even if they didn't do the original research, running the certification gauntlet is no mean feat. Just not for eternity.

Paul SB said...

Reason, I once worked for telecommunications company, monitoring their construction crews laying down and repairing fiber-optic lines. Once I saw a little lizard run by and mentioned it, and that was all it took for the engineers to label me an "environmentalist" and raise their voices about how those "environmentalists" shut down their work and make everybody lose their jobs. Since this never actually happened (shutting down work or losing jobs) I assumed that "environmentalists" were the conservative equivalent of the bogey man. Perhaps an example of what Tacitus called weaselspeak.

But the form-over-substance vs. substance-over-form comment brings up another difference between business and science. To a scientists a poison is a poison, to a businessman a poison is only a poison if it affects his profits.

On a more cheery note: I took my son to see "Inside Out" last night. Given that I have spent the last 16 years seeing little else but kids movies, you wouldn't think I would be anxious to heap praise on yet another Pixar creation. However, even though it was not really pedagogical in any obvious way, I think a lot of kids will see this movie and later in life be inspired to learn something about how our brains work, and maybe overcome some of the anti-science/nerd/geek stigma to become a new generation of neuroscientists. I was surprised, though, to see not just a lot of families at the theater, but a number of couples without children enjoying the show, so maybe it's not just the dad in me.

Locumranch said...

Please don't put words in my mouth, otherwise there would be no room there for my feet. What I meant was this: Good (and/or Evil) INTENTIONS are no guarantee of like outcome.

Ergo, you can't conclude that a bad outcome means evil intent, nor vice versa, nor can you conclude that Alex meant to disrespect you by challenging your conclusions about Bush and Russia.

Best

Alex Tolley said...

@reason does anybody here think that the way the IP system works for pharmaceuticals is anything other than obscene?

I don't think it is obscene, but it has clearly become dysfunctional and needs reform.

On the BigPharma side, their problem is that they are runn9ing out of easy targets and small compounds. The cost of trials is getting silly. As a result the period of monopoly profits has shortened and so they try a lot of ways to maximize those profits. It starts to get really dysfunctional when diseases researched are only chronic ones, and also "lifestyle" ones that you never knew existed (shades of P K Dick?). The orphan drug development program is good, but unfortunately these drugs tend to be extremely expensive. Biotech companies developing injectable biologics seem to charge extremely high prices, and in one case a company that was acquired had its main product's price doubled for no reason that the acquirer could. Buying off generic companies to not make the cheaper generic should, IMO, be illegal. It is also likely that the TTIP is going to benefit BigPharma too.

From the consumer side, the US clearly pays a lot more for drugs than elsewhere, even comparably wealthy European countries. Deliberate blocking of Medicare's ability to negotiate drugs prices is dysfunctional. Trying to block Canadian imports in an attempt to prevent price arbitrage is a more problematic issue.

When I was in that industry, it was supposed to be very ethical, although angles were played. Today the pressure to generate growing profits is driving increasing bad behavior. But what is the Rx to change this?



Alex Tolley said...

@locum nor can you conclude that Alex meant to disrespect you by challenging your conclusions about Bush and Russia.

Thank you.

Alfred Differ said...

@reason: We have our salesmen too. Research teams have to acquire good talent in for that slot or they might run into trouble funding the work. Also, every researcher who grooms grad students is also in sales. You can’t propagate your ideas and chase down all the research opportunities without convincing the next generation to pursue it with you. Researchers who avoid sales either wind up going it alone or joining teams who already provide that talent. Some of the bigger teams are downright corporate in nature with all the internal politics you’d expect in a commercial business.

The thing to remember is that non-profits (charitable or not) are just as much businesses as those with profit motives. Once you work out the differences in organizational motives and core values, the social structures we all build to collaborate aren’t very different in their details. We’ve been trading for a few thousand generations now using essentially four variants on market participation collaborations. If you want an IT analogy, consider what software engineers call a ‘design pattern.’ Our collaborative groups only use a few no matter their motives and values.

David Brin said...

Jonathan S. - Andrew Jackson’s betrayal of the Cherokee was morally as bad as Bush Sr’s betrayal of the Iraqi shiites. Though more folks did in the latter and the effects on world stability were much worse. Jackson’s economic mistakes were based on his primitive time, while Bush’s were outright deliberate. Above all, we had a better entire planet in our hands - in 1991 - and the Bushites threw it all away in service to a foreign power.

You cannot say that about Jackson.

===

onward

reason said...

By obscene I mean charging very high prices - ridiculous when compared to MARGINAL cost - to a small desperate group (to some extent of course exploiting the risk sharing provided by insurance) rather than lower prices to a greater number.

Peter Andersson said...

Better than toothpaste - tampons!

Women who fleed from former Yugoslavia in the 90s could hardly believe how much better those were in free Europe than back home.

Travc said...

If you haven't seen it, you should watch the recent Frontline eps. "Putin's Way": http://www.pbs.org/wgbh/pages/frontline/putins-way/
The basic thesis is that Russia isn't a failing democracy, it is a succeeding kelptocracy.