Capitalism – Page 12 – artdiamondblog.com

FDR Ruthlessly Manipulated Political Process

(p. D8) Michael C. Janeway, a former editor of The Boston Globe and executive editor of The Atlantic Monthly who wrote two books chronicling what he saw as the intertwined decline of democracy and journalism in the United States, died on Thursday [April 17, 2014] at his home in Lakeville, Conn.
. . .
The second book, “The Fall of the House of Roosevelt: Brokers of Ideas and Power From FDR to LBJ,” published in 2004, measured some of the ideas in his first book against the history of the New Deal. It focused on President Franklin D. Roosevelt’s inner circle of advisers, a group of political operatives and thinkers often called Roosevelt’s “brain trust,” who helped conceive ideas like the minimum wage, Social Security and federal bank deposit insurance.
Mr. Janeway’s father, Eliot Janeway, an economist, Democratic hand and columnist for Time magazine (a portfolio not unheard-of in those days), was a prominent member of that group.
Michael Janeway suggested that in undertaking the radical changes necessary to yank the “shattered American capitalist system into regulation and reform,” Roosevelt and his team manipulated the political process with a level of ruthlessness that may have been justified by the perils of the times. But in the years that followed, he wrote, the habit of guile and highhandedness devolved into the kind of arrogance that defined — and doomed — the presidency of Lyndon B. Johnson, Roosevelt’s last political heir.

For the full obituary, see:
PAUL VITELLO. “Michael Janeway, 73, Former Editor of The Boston Globe.” The New York Times (Sat., APRIL 19, 2014): D8.
(Note: ellipsis, and bracketed date, added.)
(Note: the online version of the obituary has title “Michael Janeway, Former Editor of The Boston Globe, Dies at 73.”)

The book mentioned in the passage quoted above is:
Janeway, Michael. The Fall of the House of Roosevelt: Brokers of Ideas and Power from FDR to LBJ, Columbia Studies in Contemporary American History. New York: Columbia University Press, 2004.

Insider Reports on Crony Journalism at CBS and ABC

You hear a lot these days about ‘crony capitalism’ which no-one, including me, much likes. (The version I like is entrepreneurial capitalism.) But we too often forget that adjective “crony” can modify other nouns besides “capitalism.” Here are a couple of examples of crony journalism.

(p. A11) . . . skip to the second part, which is mostly a memoir and almost all about journalism. It includes one of the toughest critiques of television news ever written by an insider. From 1977 to 1989, Mr. Lewis worked for ABC News and then for CBS’s news program “60 Minutes.”
. . .
The most acute of Mr. Lewis’s frustrations came when Hewitt, the executive producer of “60 Minutes,” refused to broadcast a Lewis report on former government officials profiting as U.S. lobbyists for foreign interests unless the name of Hewitt’s good friend Pete Peterson, then chairman of the Blackstone Group, was excised from the script. In the story, a photograph showed five smiling Blackstone executives, all former federal appointees, in a Japanese newspaper advertisement seeking business for their lobbying efforts. Mr. Peterson was singled out by name in the voice-over narrative. Correspondent Mike Wallace, for whom Mr. Lewis worked directly, implored him in a shouting match to remove Mr. Peterson’s name, to no avail. But Hewitt was more subtle, simply refusing to schedule the piece for airing. Mr. Lewis bitterly relented to Hewitt’s implicit demand and quit the day after the story was broadcast.
As for ABC, Mr. Lewis reports that its legendary news chief Roone Arledge killed a tough story on tobacco at the request of “the Corporate guys,” who were fearful that the network could complicate its position in a libel suit that Philip Morris had already filed against the broadcaster.

For the full review, see:
RICHARD J. TOFEL. “BOOKSHELF; Media Manipulation; At ABC News and CBS’s ’60 Minutes,’ producers would regularly kill stories critical of the powerful and connected.” The Wall Street Journal (Weds., July 16, 2014): A11.
(Note: ellipsis added.)
(Note: the online version of the review has the date July 15, 2014, and has the title “BOOKSHELF; Book Review: ‘935 Lies’ by Charles Lewis; At ABC News and CBS’s ’60 Minutes,’ producers would regularly kill stories critical of the powerful and connected.”)

The book being reviewed is:
Lewis, Charles. 935 Lies: The Future of Truth and the Decline of America’s Moral Integrity. New York: PublicAffairs, 2014.

Zionists “Risk Their Lives for an Idea”

(p. C1) . . . , without hesitation or (for the most part) complaint, proudly responding to the call-up, Israelis stand ready to defend their nation. They risk their lives for an idea.
The idea is Zionism. It is the belief that the Jewish people should have their own sovereign state in the Land of Israel. Though founded less than 150 years ago, the Zionist movement sprung from a 4,000-year-long bond between the Jewish people and its historic homeland, an attachment sustained throughout 20 centuries of exile. This is why Zionism achieved its goals and remains relevant and rigorous today. It is why citizens of Israel–the state that Zionism created–willingly take up arms. They believe their idea is worth fighting for.
Yet Zionism, arguably more than any other contemporary ideology, is demonized. “All Zionists are legitimate targets everywhere in the world!” declared a banner recently paraded by anti-Israel protesters in Denmark. “Dogs are allowed in this establishment but Zionists are not under any circumstances,” warned a sign in the window of a Belgian cafe. A Jewish demonstrator in Iceland was accosted and told, “You Zionist pig, I’m going to behead you.”
. . .
What is it about Zionism that elicits such loathing? After all, the longing of a dispersed people for a state of their own cannot possibly be so repugnant, especially after that people endured centuries of massacres and expulsions, culminating in history’s largest mass murder. Perhaps revulsion toward Zionism stems from its unusual blend of national identity, religion and loyalty to a land. Japan offers the closest parallel, but despite its rapacious past, Japanese nationalism doesn’t evoke the abhorrence aroused by Zionism.
Clearly anti-Semitism, of both the European and Muslim varieties, plays a role. Cabals, money grubbing, plots to take over the world and murder babies–all the libels historically leveled at Jews are regularly hurled at Zionists. And like the anti-Semitic capitalists who saw all Jews as communists and the communists who painted capitalism as inherently Jewish, the opponents of Zionism portray it as the abominable Other.

For the full commentary, see:
MICHAEL B. OREN. “In Defense of Zionism.” The Wall Street Journal (Sat., AUG. 2, 2014): C1-C2.
(Note: ellipses added.)
(Note: the online version of the commentary has the date AUG. 1, 2014.)

“In the Name of God and of Profit”

Writing of the period of the mid to late 1300s in the area of Florence:

(p. 114) The surviving archive of a single great merchant of this period, Francesco di Marco Datini of nearby Prato–not, by any means, the greatest of these early capitalists–contains some 150,000 letters, along with 500 account books or ledgers, 300 deeds of partnership, 400 insurance policies, several thousand bills of lading, letters of advice, bills of exchange, and checks. On the first pages of Datini’s ledgers were inscribed the words: “In the name of God and of profit.”

Source:
Greenblatt, Stephen. The Swerve: How the World Became Modern. New York: W. W. Norton & Company, 2011.

McCloskey’s “Great Fact” of “the Ice-Hockey Stick”

Source of image: http://www.bombayharbor.com/productImage/Ice_Hockey_Stick/Ice_Hockey_Stick.jpg

(p. 2) Economic history has looked like an ice-hockey stick lying on the ground. It had a long, long horizontal handle at $3 a day extending through the two-hundred-thousand-year history of Homo sapiens to 1800, with little bumps upward on the handle in ancient Rome and the early medieval Arab world and high medieval Europe, with regressions to $3 afterward–then a wholly unexpected blade, leaping up in the last two out of the two thousand centuries, to $30 a day and in many places well beyond.
. . .
(p. 48) The heart of the matter is sixteen. Real income per head nowadays exceeds that around 1700 or 1800 in, say, Britain and in other countries that have experienced modern economic growth by such a large factor as sixteen, at least. You, oh average participant in the British economy, go through at least sixteen times more food and clothing and housing and education in a day than an ancestor of yours did two or three centuries ago. Not sixteen percent more, but sixteen multiplied by the old standard of living. You in the American or the South Korean economy, compared to the wretchedness of former Smiths in 1653 or Kims in 1953, have done even better. And if such novelties as jet travel and vitamin pills and instant messaging are accounted at their proper value, the factor of material improvement climbs even higher than sixteen–to eighteen, or thirty, or far beyond. No previous episode of enrichment for the average person approaches it, not the China of the Song Dynasty or the Egypt of the New Kingdom, not the glory of Greece or the grandeur of Rome.
No competent economist, regardless of her politics, denies the Great Fact.

Source:
McCloskey, Deirdre N. Bourgeois Dignity: Why Economics Can’t Explain the Modern World. Chicago: University of Chicago Press, 2010.
(Note: ellipsis added.)

Locke and Smith Showed How Economic Life Has Moral Value

(p. 241) Andrzej Rapaczynski discusses “The Moral Significance of Economic Life” in the most recent issue of Capitalism and Society. His abstract summarizes the argument (p. 242) compactly: “Much of the modern perception of the role of economic production in human life–whether on the Left or on the Right of the political spectrum–views it as an inferior, instrumental activity oriented toward self-preservation, self-interest, or profit, and thus as essentially distinct from the truly human action concerned with moral values, justice, and various forms of self-fulfillment. This widely shared worldview is rooted, on the one hand, in the Aristotelian tradition that sees labor as a badge of slavery, and freedom as lying in the domain of politics and pure (not technical) knowledge, and, on the other hand, in the aristocratic medieval Christian outlook, which–partly under Aristotle’s influence–sees nature as always already adapted (by divine design) to serving human bodily needs, and the purpose of life as directed toward higher, spiritual reality. . . . As against this, liberal thinkers, above all Locke, have developed an elaborate alternative to the Aristotelian worldview, reinterpreting the production process as a moral activity par excellence consisting in a gradual transformation of the alien nature into a genuinely human environment reflecting human design and providing the basis of human autonomy. Adam Smith completed Locke’s thought by explaining how production is essentially a form of cooperation among free individuals whose self-interested labor serves the best interest of all. The greatest “culture war” in history is to re-establish the moral significance of economic activity in the consciousness of modern political and cultural elites.” Capitalism and Society, December 2013, vol. 8, no. 2, http://capitalism.columbia.edu/volume-8-issue-2.

Source:
Taylor, Timothy. “Recommendations for Further Reading.” Journal of Economic Perspectives 28, no. 1 (Winter 2014): 235-42.
(Note: italics, and ellipses, in original.)

Schulman Grants that Kochs “Have Sincere Political Views that Go Beyond Being Just a Cover for Their Companies’ Interest”

“The Koch brothers, from left: William, Charles, David and Frederick.” Source of caption and photo: online version of the NYT review quoted and cited below.

(p. 12) “Sons of Wichita” may strike some readers as surprisingly pro-Koch. . . . [Schulman] grants Charles and David two key concessions: They have sincere political views that go beyond being just a cover for their companies’ interest in lower taxes and fewer regulations, and many of their political activities have been right out in the open, rather than lurking in the shadows. He seems to be almost in awe of Charles, the most mysterious of the brothers, who runs Koch Industries by a system he devised called Market-Based Management. Summarizing, but not dissenting from, the views of Charles’s employees, Schulman calls him “a near-mythic figure, a man of preternatural intellect and economic prowess,” adding: “He is unquestionably powerful, but unfailingly humble; elusive, but uncomplicated; cosmopolitan, yet thoroughly Kansan.” It’s noteworthy, Schulman argues, that for decades the Koch family was definitely not welcome in the Republican Party. That they came to stand for Republicanism, at least in the minds of liberals, in 2010 and 2012 is testament to their persistence, to the weakening of the traditional party structures and to their success in making libertarianism a mainstream rather than a fringe ideology. “It’s a brilliant, extraordinary accomplishment,” Schulman quotes Rob Stein of the liberal Democracy Alliance as saying about the Kochs’ rise to influence.
. . .
Even the Tea Party movement is not entirely dependent on intravenous feeding from the Kochs or that other favorite liberal villain, Fox News. And elements of Koch-style libertarianism, connected to the interests of major donors, now live within the Democratic Party too — not just on social issues like same-sex marriage, but on economic and regulatory ones too. “Sons of Wichita” reminds us that political outcomes depend far more on ideas and organization, and the energy and persistence devoted to them, than they do on the balance of power between good guys and bad guys.

For the full review, see:
NICHOLAS LEMANN. “Billionaire Boys Club.” The New York Times Book Review (Sun., MAY 25, 2014): 12.
(Note: ellipses, and bracketed name, added.)
(Note: the online version of the review has the date MAY 23, 2014.)

The book under review is:
Schulman, Daniel. Sons of Wichita: How the Koch Brothers Became America’s Most Powerful and Private Dynasty. New York: Grand Central Publishing, 2014.

Source of book image: http://media.npr.org/assets/bakertaylor/covers/s/sons-of-wichita/9781455518739_custom-bd178f0c1a2667e448cf13ff7df2850774d77dd8-s6-c30.jpg

Phonograph Allowed Middle Class to Bring the Show to Their “Castle,” Like Kings Already Could

(p. 218) Once Edison’s marketers squarely addressed the urban middle class, they devised advertising that made prospective customers feel as entitled to enjoy the pleasures of recorded music as anyone. “When the (p. 219) King of England wants to see a show, they bring the show to the castle and he hears it alone in his private theater.” So said an advertisement in 1906 for the Edison phonograph. It continued: “If you are a king, why don’t you exercise your kingly privilege and have a show of your own in your own house.”

Source:
Stross, Randall E. The Wizard of Menlo Park: How Thomas Alva Edison Invented the Modern World. New York: Crown Publishers, 2007.

Government Pushed Kiewit to Ignore Worker Safety

Source of book image: http://d202m5krfqbpi5.cloudfront.net/books/1369819962l/17934699.jpg

(p. C9) Boston Harbor’s filth is legendary. It was mock-celebrated in the 1966 song “Dirty Water.” The city’s water-treatment plants were hopelessly inadequate, and barely treated sewage had been pouring into the harbor for decades.
. . .
The Deer Island Sewage Treatment Plant was supposed to solve these problems. Begun in 1990, the $3.8 billion facility would process human and industrial waste on a small island in Boston Harbor and then send it through a 9.5-mile tunnel into the deep waters of the Atlantic. Fifty-five vertical pipes called risers spurred off the tunnel’s final section to further diffuse waste before releasing it into the sea. Temporary safety plugs, likened to giant salad bowls, had been placed near the bottom of each riser to keep water from seeping in before construction was complete.
These plugs were a source of conflict between the tunnel’s owner, the Massachusetts Water Resources Authority (MWRA), and the company they hired to build it, Kiewit, “the Omaha-based construction giant” that, Mr. Swidey notes, “had built more miles of the U.S. highway system than any other contractor.” The director of MWRA, Doug MacDonald, had left a job as a partner in a Boston law firm to take over the authority, a behemoth of 1,700 employees and, at the peak of harbor cleanup, an additional 3,000 construction workers. Mr. MacDonald’s job included mollifying various parties who disagreed about how the Deer Island project would reach completion: Kiewit; the tunnel’s designers, mostly out of the picture by 1998; ICF Kaiser Engineers, hired by MWRA to protect its interests and act as Mr. MacDonald’s eyes and ears; the union “sandhogs” who bored out 2.4 million tons of rock to create the tunnel; the Occupational Safety and Health Administration, ostensibly looking out for worker safety but seeming more interested in handing out fines; and, though federal funds for harbor cleanup had long since dried up, “a bow-tied federal judge who served as the cleanup project’s robed referee, threatening stiff fines or worse if the deadlines he imposed were not met.”
. . .
The problem weighed most heavily on Kiewit. The firm was contractually obligated to deliver on time, subject to late-fee penalties of $30,000 a day, and to cover cost overruns. More, Kiewit had fronted the construction costs and would only be paid by selling the tunnel, piece by piece, to MWRA. The contract further obligated Kiewit to provide “lighting and ventilation (or breathing apparatus) for the personnel” that pulled the plugs but, in what seemed a senseless conflict, mandated that the plugs “could be removed only after the tunnel was completed,” writes Mr. Swidey, “meaning after the sandhogs had cleared out, taking their extensive ventilation, transportation, and electrical systems with them.”
Kiewit protested that clearing the tunnel of its life-sustaining infrastructure would make “the risk of catastrophe [to the workers pulling the plugs] . . . exponentially higher !” They offered several sound alternatives. In response, ICF Kaiser accused them of just wanting their payday. After a “year-long memo war,” Kiewit capitulated, cleared the tunnel and hired a commercial dive team to go into a pitch-black airless tube.

For the full review, see:
NANCY ROMMELMANN. “BOOKS; One Mile Down, Ten Miles Out; Their oxygen was starting to get thin. On the verge of passing out, Hoss radioed back to the Humvees. The reply was an expletive, and the line went dead.” The Wall Street Journal (Sat.,March 15, 2014): C9.
(Note: ellipses between paragraphs, added; ellipsis inside last paragraph, in original.)
(Note: the online version of the review has the date March 14, 2014, and has the title “BOOKSHELF; Book Review: ‘Trapped Under the Sea’ by Neil Swidey; In 1999, five deep-sea welders had to traverse a tunnel beneath Boston Harbor with no breathable air, no light and no chance for rescue should things go horribly wrong.” )

The book under review is:
Swidey, Neil. Trapped under the Sea: One Engineering Marvel, Five Men, and a Disaster Ten Miles into the Darkness. New York: Crown Publishers, 2014.

Gilder’s Information Theory of Capitalism Will Boost Morale of Innovative Entrepreneurs

Source of book image: online version of the WSJ review quoted and cited below.

(p. A13) Individuals like Ford and Jobs are key figures in the economic paradigm that George Gilder lays out in “Knowledge and Power.” He calls for an “information theory of capitalism” in which the economy is driven by a dynamic marketplace, with information widely (and freely) distributed. The most important feature of such an economy, Mr. Gilder writes, is the overthrow of “equilibrium,” and the most important actors are inventors and entrepreneurs whose breakthrough ideas are responsible for “everything useful or interesting” in commercial life.
. . .
Aspiring owners shouldn’t look to “Knowledge and Power” for practical advice on starting a company, but Mr. Gilder’s case for the central role of entrepreneurship might boost their morale. Certainly his argument could not be more timely. Census Bureau data show that startups were responsible for nearly all new job creation from 1996 to 2009. Yet entrepreneurship itself (as measured by new business formation) has been stagnant for about two decades. Thus the important question for America’s future may well be, as Mr. Gilder says, “how we treat our entrepreneurs.” He persuasively shows that creating a more supportive climate for entrepreneurs–by clearing away burdensome regulations and freeing information from its current imprisonment–will result in a more prosperous and vigorous society, creating not only more jobs but more Jobs.

For the full review, see:
MATTHEW REES. “BOOKSHELF; The Real Market-Maters; Economists as far back as Adam Smith have undervalued entrepreneurs–the restless, inventive, job-creating engines of the economy.” The Wall Street Journal (Tues., March 18, 2014): A13.
(Note: ellipsis added.)
(Note: the online version of the review has the date March 17, 2014, and has the title “BOOKSHELF; Book Review: ‘Knowledge and Power’ by George Gilder
Economists as far back as Adam Smith have undervalued entrepreneurs–the restless, inventive, job-creating engines of the economy.”)

The book under review is:
Gilder, George. Knowledge and Power: The Information Theory of Capitalism and How It Is Revolutionizing Our World. Washington, D.C.: Regnery Publishing, Inc., 2013.

Little Estonia Prepares Defense Against Russia’s Evil Empire

Toomis Hendrick Ilves, President of Estonia. Source of photo: online version of the WSJ article quoted and cited below.

(p. A13) Perched alone up in eastern Baltic are Lithuania, Latvia and Estonia. Their fear of Moscow propelled them to become the first and only former Soviet republics to seek the refuge of NATO. But now doubts are appearing. The West has responded tepidly to the Crimean aggression. Military budgets are at historic lows as a share of NATO economies. The alliance, which marked its 65th anniversary on Friday, has never faced the test of a hot conflict with Moscow.

In this new debate over European security, Mr. Ilves plays a role out of proportion to Estonia’s size (1.3 million people) and his limited constitutional powers. A tall man who recently turned 60, he has the mouth of a New Jersey pol–he grew up in Leonia–and wears the bow ties of a lapsed academic. Americans may recall his Twitter TWTR -0.15% feud two years ago over Estonia’s economy with economist Paul Krugman, whom Mr. Ilves called “smug, overbearing & patronizing.”
. . .
Estonia managed on Thursday to get NATO’s blessing to turn the brand-new Amari military airfield near Tallinn into the first NATO base in the country. This small Balt tends to be proactive. While European governments axed some $50 billion from military budgets in the last five year amid fiscal belt-tightening, Estonia is only one of four NATO allies to devote at least 2% of gross domestic product to defense, supposedly the bare minimum for security needs.
“It lessens your moral clout if you have not done what you have agreed to do,” Mr. Ilves says of defense budgets. His barb hits directly at neighboring Lithuania and Latvia, which both spend less than 1% of GDP on their militaries.

For the full commentary, see:
MATTHEW KAMINSKI. “THE SATURDAY INTERVIEW; An American Ally in Putin’s Line of Fire; Estonia’s president, who was raised in New Jersey, on how Crimea has changed ‘everything’ and what NATO should do now.” The Wall Street Journal (Sat., April 5, 2014): A13.
(Note: ellipsis added.)
(Note: the online version of the commentary has the date April 4, 2014.)