Entrepreneurial Capitalism Offers the Best Chance “for a Life of Engagement and Personal Growth”

(p. 228) Edmund S. Phelps explores “Refounding Capitalism.” “One has to conclude that ‘generation of wealth’ is not special to capitalism. Corporatist economies are quite good at that. . . . A merit of a well-functioning capitalism (again: I do not mean free-market policy: low tax rates, etc.) is the economic freedoms it offers entrepreneurs, managers, employees and consumers–freedoms that socialist, corporatist and statist systems do not provide. . . . Ordinary people, if they are to find intellectual growth and an engaging life, have to look outside the home: these (p. 229) things can be found only at work, if anywhere. And for these rewards to be available for large numbers of people, the economy must be modern. And as a practical matter, that requires that it be based predominantly on a well-functioning capitalist system. Thanks to the grassroots, bottom-up processes of innovation, capitalism at its best can deliver–far more broadly than Soviet communism, eastern European socialism, and western European corporatism can–chances for the mental stimulation, problem-solving, exploration and discovery required for a life of engagement and personal growth.”

Nobel-Prize winner Edmund Phelps as quoted in:
Taylor, Timothy. “Recommendations for Further Reading.” Journal of Economic Perspectives 24, no. 2 (Spring 2010): 227-34.
(Note: ellipses in original.)

The original source of the Phelps quotes is:
Phelps, Edmund S. “Refounding Capitalism.” Capitalism and Society 4, no. 3 (2009).

China’s State-Owned Enterprises Lose Money and Slow Growth

NoAncientWisdomNoFollowersBK2012-10-12.jpg

Source of book image: http://s.wsj.net/public/resources/images/OB-UU147_mcgreg_DV_20121001022644.jpg

In the passages quoted below “SOE” means “state-owned enterprise.”

(p. B1) If the U.S. needs another wake-up call, it will get one this week with the publication of a bracing account of the danger that China’s state capitalism poses to global business–and to China itself. James McGregor’s new book, “No Ancient Wisdom, No Followers: The Challenges of Chinese Authoritarian Capitalism,” dissects the complex policies and state structures that produced China’s novel system. And it describes the limited recourse the U.S. and other nations have. (Full disclosure: Mr. McGregor is a friend and former colleague at the Journal.)

“The Communist Party of China has two unwavering objectives: Make China rich and powerful and guarantee the Party’s political monopoly,” Mr. McGregor writes. “At the center of this are behemoth state-owned enterprises that dominate all key sectors and have been instrumental to the country’s current success.
“As China’s global reach expands, this one-of-a-kind system is challenging the rules and organizations that govern global trade as well as the business plans and strategies of multinationals around the globe. At the same time, the limits of authoritarian capital-(p.B2)ism are increasingly evident at home, where corruption is endemic, the SOEs are consuming the fruits of reform, and the economic engine is running out of gas.”
Born in the 1950s when 10,000 Soviet advisers helped China organize central planning, the state-owned enterprises quickly became bloated extensions of the Party’s patronage and power.
. . .
The enterprises themselves, meanwhile, crowded out private competition. SOEs account for about 96% of China’s telecom industry, 92% of power and 74% of autos. The combined profit of China Petroleum & Chemical and China Mobile in 2009 alone was greater than all the profit of China’s 500 largest private firms, Mr. McGregor writes.
An independent Chinese study, he adds, says that if you subtract government subsidies from the biggest SOEs they actually lose money.
Mr. McGregor believes pressures are building within China for change–the result of SOEs that don’t innovate enough, slowing growth, an angry private sector, and a pending leadership change, among other factors. Even some top leaders say reform is needed.

For the full commentary, see:
JOHN BUSSEY. “THE BUSINESS; Tackling the Many Dangers of China’s State Capitalism.” The New York Times (Fri., September 28, 2012): B1 & B2.
(Note: ellipsis added.)
(Note: the online version of the article has the date September 27, 2012.)

Book under discussion:
McGregor, James. No Ancient Wisdom, No Followers: The Challenges of Chinese Authoritarian Capitalism. Westport, CT: Prospecta Press, 2012.

The Bear Details of Belarus Communist Tyranny

BelarusTeddyBear2012-08-07ProvinceVersion.jpg “Swedish advertising agency employees Thomas Mazetti and Hannah Frey hold a stuffed bear that was parachuted into Belarus.” Source of caption and image: http://www.theprovince.com/business/Teddy+bears+make+picnic+generals/7028460/story.html

(p. A4) The plane crossed stealthily into Belarussian airspace and headed for the capital, Minsk. At the appointed moment, the cargo doors opened, and an invasion force of tiny plush freedom fighters parachuted to the ground.

Belarus was under attack — by teddy bears.
Three members of a Swedish advertising firm planned and carried out the operation last month, adorning more than 800 plush bears with signs promoting democracy and denigrating Belarus’s authoritarian government.
Comedic touches aside, the security breach has become a major embarrassment for President Aleksandr G. Lukashenko, who has channeled his country’s meager resources into maintaining a calcified police state.

For the full story, see:
MICHAEL SCHWIRTZ. “Teddy Bears Fall From Sky, and Heads Roll in Minsk.” The New York Times (August 2, 2012): A4.
(Note: the online version of the article has the date August 1, 2012.)

Muckraking Friend of Teddy Roosevelt and Woodrow Wilson Was “Intrigued by Mussolini” and “Captivated by Lenin”

IHaveSeenTheFutureBK2012-06-22.jpg

Source of book image: http://si.wsj.net/public/resources/images/OB-NV754_bkrvst_DV_20110510153656.jpg

(p. 29) As one of the original “muckrakers,” Steffens wrote newspaper and magazine exposés that gave journalism a new purpose, . . .
. . .
He learned to write and to invest, and within nine years was the managing editor of McClure’s, one of the most popular and prestigious magazines in the country.
He was, as usual, in the right place at the right time. Volatile Sam McClure was transforming his namesake publication into a journal that would rip the veil from American life, forcing readers to confront the corruption that had seeped into every seam of their democracy. The January 1903 issue alone featured an installment of Ida Tarbell’s groundbreaking history of the Standard Oil Company; . . .
. . .
He managed to remain friends with Roosevelt and then Woodrow Wilson . . .
. . .
Intrigued by Mussolini, Steffens was captivated by Lenin, whom he interviewed briefly during the revolution. He became one of the first of that sad little band of Western intellectuals who fell head over heels for the Soviet Union. Unlike most of them, he did not deny the stories of atrocities leaking out of the workers’ paradise. Even more chilling, he simply believed them necessary to bring about the great changes to come. He never wavered from his infamous first impression of the U.S.S.R., “I have seen the future, and it works.” Instead, living comfortably on money he made from the stock market, he insisted that “nothing must jar our perfect loyalty to the party and its leaders,” and that “the notion of liberty . . . is false, a hangover from our Western tyranny.”

For the full review, see:
KEVIN BAKER. “Lincoln Steffens: Muckraker’s Progress.” The New York Times Book Review (Sun., May 15, 2011): 29.
(Note: ellipses added except for the one inside the last quoted paragraph.)
(Note: the online version of the article has the date May 13, 2011.)

The book under review is:
Hartshorn, Peter. I Have Seen the Future: A Life of Lincoln Steffens. Berkeley, CA: Counterpoint, 2011.

Cuban Dissident Dies after Communist Police Beat Him in Park

(p. 12) Havana
OUTSIDE the sun is blindingly hot, and in the immigration office 100 people are sweating profusely. But no one complains. A critical word, a demanding attitude, could end in punishment. So we all wait silently for a “white card,” authorization to travel outside Cuba.
The white card is a piece of the migratory absurdities that prevent Cubans from freely leaving and entering their own country. It is our own Berlin Wall without the concrete, the land-mining of our borders without explosives. A wall made of paperwork and stamps, overseen by the grim stares of soldiers. This capricious exit permit costs over $200, a year’s salary for the average Cuban. But money is not enough. Nor is a valid passport. We must also meet other, unwritten requirements, ideological and political conditions that make us eligible, or not, to board a plane.
. . .
Thousands of Cubans have been condemned to immobility on this island, though no court has issued such a verdict. Our “crime” is thinking critically of the government, being a member of an opposition group or subscribing to a platform in defense of human rights.
In my case, I can flaunt the sad record of having received 19 denials since 2008 of my applications for a white card.
. . .
That same afternoon, as I was issued one more denial, my cellphone rang insistently in my pocket. A broken voice related to me the last moments in the life of Juan Wilfredo Soto, a dissident who died several days after being handcuffed and beaten by the police in a public park. I sat down to steady myself, my ears ringing, my face flush.
I went home and looked at my passport, full of visas to enter a dozen countries but lacking any authorization to leave my own. Next to its blue cover my husband placed a report of the details of Juan Wilfredo Soto’s death. Looking from his face in the photograph to the national seal on my passport, I could only conclude that in Cuba, nothing has changed.

For the full commentary, see:
YOANI SANCHEZ. “The Dream of Leaving Cuba.” The New York Times, SundayReview Section (Sun., April 22, 2012): 12.
(Note: ellipses added.)
(Note: the online version of the commentary is dated April 21, 2012.)

Today Is Tweflth Anniversary of Democrats’ Infamous Betrayal of Elián González

GonzalezElianSeizedOn2000-04-22.jpg“In this April 22, 2000 file photo, Elian Gonzalez is held in a closet by Donato Dalrymple, one of the two men who rescued the boy from the ocean, right, as government officials search the home of Lazaro Gonzalez, early Saturday morning, April 22, 2000, in Miami. Armed federal agents seized Elian Gonzalez from the home of his Miami relatives before dawn Saturday, firing tear gas into an angry crowd as they left the scene with the weeping 6-year-old boy.” Source of caption and photo: online version of JENNIFER KAY and MATT SEDENSKY. “10 years later, few stirred by Elian Gonzalez saga.” Omaha World-Herald (Thurs., April 22, 2010): 7A. (Note: the online version of the article is dated April 21, 2010 and has the title “10 years after Elian, US players mum or moving on.”)

Today (April 22, 2012) is the twelfth anniversary of one of the darkest days in American history—when the Democratic Clinton Administration seized a six year old child in order to force him back into the slavery that his mother had died trying to escape.

“Innovation and Invention Don’t Grow Out of the Government’s Orders”

ZhouYouguangTrendyOldGuy2012-03-07.jpg“”You can have democracy no matter what level of development. Just look at the Arab Spring.”- Zhou Youguang” Source of caption and photo: online version of the NYT article quoted and cited below.

(p. A5) BEIJING. EVEN at 106 years old, Zhou Youguang is the kind of creative thinker that Chinese leaders regularly command the government to cultivate in their bid to raise their nation from the world’s factory floor.
So it is curious that he embodies a contradiction at the heart of their premise: the notion that free thinkers are to be venerated unless and until they challenge the legitimacy of the ruling Communist Party.
Mr. Zhou is the inventor of Pinyin, the Romanized spelling system that linked China’s ancient written language to the modern age and helped China all but stamp out illiteracy. He was one of the leaders of the Chinese translation of the Encyclopaedia Britannica in the 1980s. He has written about 40 books, the most recent published last year.
. . .
His blog entries range from the modernization of Confucianism to Silk Road history and China’s new middle class. Computer screens hurt his eyes, but he devours foreign newspapers and magazines. A well-known Chinese artist nicknamed him “Trendy Old Guy.”
. . .
THE decade-long Cultural Revolution that began in 1966 wiped out Mr. Zhou’s lingering belief in communism. He was publicly humiliated and sent to toil for two years in the wilderness.
. . .
About Mao, he said in an interview: “I deny he did any good.” About the 1989 Tiananmen Square massacre: “I am sure one day justice will be done.” About popular support for the Communist Party: “The people have no freedom to express themselves, so we cannot know.”
As for fostering creativity in the Communist system, Mr. Zhou had this to say, in a 2010 book of essays: “Inventions are flowers that grow out of the soil of freedom. Innovation and invention don’t grow out of the government’s orders.”
No sooner had the first batch of copies been printed than the book was banned in China.

For the full story, see:
SHARON LaFRANIERE. “THE SATURDAY PROFILE; A Chinese Voice of Dissent That Took Its Time.” The New York Times (Sat., March 3, 2012): A5.
(Note: ellipses added.)
(Note: the online version of the article has the date March 2, 2012.)

“Human Progress Is Built on Man’s Desire to Correct His Mistakes”

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

(p. A17) Yu Hua is one of China’s most acclaimed novelists, hugely popular in his own country and the recipient of several international literary prizes. He brings a novelist’s sensibility to “China in Ten Words,” his first work of nonfiction to be published in English. This short book is part personal memoir about the Cultural Revolution and part meditation on ordinary life in China today. It is also a wake-up call about widespread social discontent that has the potential to explode in an ugly way.
. . .
Mr. Yu argues that corruption infects every aspect of modern Chinese society, including the legal system. Historically, Chinese peasants with grievances could go to the capital and petition the emperor for redress. Today, Mr. Yu writes, millions–yes, millions–of desperate citizens flock to Beijing each year hoping to find an honest official who will dispense justice where the law has failed them at home. What will happen when they discover that their leaders at the national level are just as corrupt as those at the local level?
The violence and deprivations of the Cultural Revolution are by now well known, but Mr. Yu’s reminiscences add color and texture to what the world has learned in recent years about that lost decade. The youthful Yu Hua is something of a wise guy and a schemer, pitting himself against bureaucratic inanities. It is sometimes impossible to know whether to laugh or cry.
. . .
As awful as the Cultural Revolution was, in Mr. Yu’s telling its horrors sometimes pale next to those of the present day. The chapter on “bamboozle” describes how trickery, fraud and deceit have become a way of life in modern China. “There is a breakdown of social morality and a confusion in the value system of China today,” he states. He writes, for example, about householders around the country who are evicted from their homes on the orders of unscrupulous, all-powerful local officials.
Mr. Yu’s portrait of contemporary Chinese society is deeply pessimistic. The competition is so intense that, for most people, he says, survival is “like war.” He has few hopeful words to offer, other than to quote the ancient philosopher Mencius, who taught that human progress is built on man’s desire to correct his mistakes. Meanwhile, he writes, “China’s pain is mine.”

For the full review, see:
MELANIE KIRKPATRICK. “BOOKSHELF; Cultural Lexicon; People, leader, reading, revolution, disparity, copycat and bamboozle–some words that serve as a springboard for critiques of China.” The Wall Street Journal (Weds., December 7, 2011): A17.
(Note: ellipses added.)

The book under review is:
Yu, Hua. China in Ten Words. New York: Pantheon Books, 2011.

Marco Rubio’s Parents Worked Hard so He Could Do Something He Loves

RubioMarco2012-02-04.jpg

Marco Rubio. Source of photo: online version of the NYT article quoted and cited below.

(p. 10) Your parents came to Miami from Cuba in the 1950s. Your dad became a bartender, and your mom worked as a hotel maid, among other jobs. Was it always clear that you wouldn’t follow them into a service job?

The service industry is hard, honorable work, but early on my parents drove it into us that a job is what you do to make a living; a career is when you get paid to do something that you love. They had jobs so I could have a career.
. . .
Koch Industries, Goldman Sachs and Morgan Stanley are among your top career campaign contributors. What do you say to people who believe that they’re investing in you so that you’ll push to overhaul the tax code to their benefit?
People buy into my agenda. I don’t buy into anyone’s agenda. I tell people what I stand for, and the things I’ve stood for were the same at the very beginning, when none of those people were giving me money.

For the full interview, see:
ANDREW GOLDMAN, interviewer. “TALK; Marco Rubio Won’t Be V.P.” The New York Times Magazine (Sun., January 29, 2012): 10.
(Note: ellipsis added; bold in original.)
(Note: the online version of the interview has the date January 26, 2012.)

Vaclav Havel Fought for Freedom

HavelVaclavMourningWenceslasSquare2012-01-21.jpg“Mourning; Thousands gathered on Sunday in Wenceslas Square in Prague, some under a Czech national flag, to marke the death of Vaclav Havel.” Source of caption: print version of the NYT obituary quoted and cited below. Source of photo: http://4.bp.blogspot.com/-PGUPpCvWzRQ/Tu9C59lXdJI/AAAAAAAAAEQ/0lcI7EfO8P4/s1600/Vaclav%2BHavel%2B3.jpg [The photo appeared on p. A10 of the print version of the obituary, but was not included with the online version.]

(p. A1) Vaclav Havel, the Czech writer and dissident whose eloquent dissections of Communist rule helped to destroy it in revolutions that brought down the Berlin Wall and swept Mr. Havel himself into power, died on Sunday. He was 75.
. . .
A shy yet resilient, unfailingly polite but dogged man who articulated the power of the powerless, Mr. Havel spent five years in and out of Communist prisons, lived for two decades under close secret-police surveillance and endured the suppression of his plays and essays. He served 14 years as president, wrote 19 plays, inspired a film and a rap song and remained one of his generation’s most seductively nonconformist writers.
All the while, Mr. Havel came to personify the soul of the Czech nation.
His moral authority and his moving use of the Czech language cast him as the dominant figure during Prague street demonstrations in 1989 and as the chief behind-the-scenes negotiator who brought about the end of more than 40 years of Communist rule and the peaceful transfer of power known as the Velvet Revolution, a revolt so smooth that it took just weeks to complete, (p. A10) without a single shot fired.
. . .
He never stopped preaching that the fight for political freedom needed to outlive the end of the cold war. He praised the American invasion of Iraq for deposing a dictator, Saddam Hussein.
He continued to worry about what he called “the old European disease” — “the tendency to make compromises with evil, to close one’s eyes to dictatorship, to practice a politics of appeasement.”

For the full obituary, see:
DAN BILEFSKY and JANE PERLEZ. “VACLAV HAVEL, 1936-2011; Czechs’ Dissident Conscience, Turned President.” The New York Times (Mon., December 19, 2011): A1 & A10.
(Note: ellipses added.)
(Note: the online version of the obituary is dated December 18, 2011, and had the title “VACLAV HAVEL, 1936-2011; Vaclav Havel, Former Czech President, Dies at 75.”)

Karl Marx “Had Engels Embezzle Money for Him from His Father’s Firm”

(p. 419) One of the few figures who actively sympathized with the plight of the poor was also one of the most interestingly improbable. Friedrich Engels came to England at the age of just twenty-one in 1842 to help run his father’s textile factory in Manchester. The firm, Ermen & Engels, manufac-(p. 420)tured sewing thread. Although young Engels was a faithful son and a reasonably conscientious businessman – eventually
he became a partner – he also spent a good deal of his time modestly but persistently embezzling funds to support his friend and collaborator Karl Marx in London.
It would be hard to imagine two more improbable founders for a movement as ascetic as Communism. While earnestly desiring the downfall of capitalism, Engels made himself rich and comfortable from all its benefits. He kept a stable of fine horses, rode to hounds at weekends, enjoyed the best wines, maintained a mistress, hobnobbed with the elite of Manchester at the fashionable Albert Club – in short, did everything one would expect of a successful member of the gentry. Marx, meanwhile, constantly denounced the bourgeoisie but lived as bourgeois a life as he could manage, sending his daughters to private schools and boasting at every opportunity of his wife’s aristocratic background.
Engels’s patient support for Marx was little short of wondrous. In that milestone year of 1851, Marx accepted a job as a foreign correspondent for the New York Daily Tribune, but with no intention of actually writing any articles. His English wasn’t good enough, for one thing. His idea was that Engels would write them for him and he would collect the fee, and that is precisely what happened. Even then, the income wasn’t enough to support his carelessly extravagant lifestyle, so he had Engels embezzle money for him from his father’s firm. Engels did so for years, at considerable risk to himself.

Source:
Bryson, Bill. At Home: A Short History of Private Life. New York: Doubleday, 2010.