The Applause at Davos for Milei’s Defense of Free Market Capitalism “Was More Than Polite”

(p. A17) There were no marches for Adam Smith or posters of Milton Friedman at Davos this year, but the applause for the combative defense of free markets by Argentina’s new libertarian President Javier Milei was more than polite. Citing the contrast between ages of stagnation and the miracle of accelerating progress in the modern era, Mr. Milei reminded his audience that “far from being the cause of our problems, free-trade capitalism as an economic system is the only instrument we have to end hunger, poverty and extreme poverty across our planet.”

His words resonated because, as one heard in panel after panel, the empirical foundations of the fashionable statist view appear to be crumbling. For now at least, the China miracle seems to be over. Beijing isn’t only suffering one economic shock after another. Its worst problems—demographic decline, a property bubble, overinvestment in manufacturing, and fear of arbitrary state actions against both foreign and domestic businesses—are the result of government planning gone wrong. As China doubles down on repression, its economic problems get worse.

Fifteen years after the financial crisis, meanwhile, tightly regulated Europe has fallen behind the U.S. Using chained 2015 dollars to minimize the effect of currency fluctuations, total European Union gross domestic product in 2008 was 81% that of the U.S. In 2022 it was 73%, hardly an argument for the European way.

For the full commentary, see:

Walter Russell Mead. “GLOBAL VIEW; Davos Turns Gently to the Right.” The Wall Street Journal (Tuesday, Jan. 23, 2024): A17.

(Note: the online version of the commentary has the date January 22, 2024, and has the same title as the print version.)

“Xi Is Dampening the Energy and Optimism of the Chinese People”

(p. A1) A song called “Tomorrow Will Be Better” became a sensation in mainland China in the 1980s, when the nation was emerging from the poverty and turmoil of Mao Zedong’s rule.

Its inspirational lyrics, which exhorted listeners to “look upward for the wings in the sky,” came to represent a generation that was starting to believe in a brighter future.

Now people in China are listening to the song again—but for a very different reason. Videos of the song are circulating on WeChat and other communications apps, often with taglines expressing sadness about the end of that era.

“The 1980s are gone forever,” wrote one listener. “So long, those years of burning passion,” wrote another.

For many Chinese, especially those who came of age during the past 40 years of reform and opening, China appeared to be on an irreversible path forward toward more growth, openness and opportunity.

But now China’s leader, Xi Jinping, is restoring aspects of Mao’s rule, forcing people to confront a more uncertain future rooted in China’s past.

Xi’s predecessors, beginning with Deng Xiaoping, embraced market forces, growth and limited freedoms. Xi, by contrast, is placing national security over the economy, tightening government control, and putting the Communist Party—and himself—at the center of Chinese society.

A Dec. 16 [2023] article published by the party’s influential journal, Qiushi, elevated Xi to the same historical status as Mao, calling Xi “the People’s leader”—a title previously reserved for China’s Great Helmsman.

Gone is the booming China that inspired many young people and entrepreneurs to take risks and bet on the future. Home prices are falling, youth unemployment is at a record high, private investment is shrinking, the financial system is drowning in debt and deflation is setting in.

. . .

(p. A9) “Xi is dampening the energy and optimism of the Chinese people,” said Susan Shirk, a former senior diplomat during the Clinton administration and author of a recent book, “Overreach: How China Derailed Its Peaceful Rise.”

“In a system so dominated by one leader,” Shirk said, “everyone feels powerless to effect positive change.”

. . .

In Shenzhen, Deng’s reform policies helped transform the former fishing village in the shadow of neighboring Hong Kong into a cosmopolitan city of 13 million, home to globally competitive tech companies such as Tencent.

“Time is money, efficiency is life” was the slogan that guided the city’s early development.

Today, Shenzhen has a new slogan: “Follow the party, start your business”—with the party coming first.

Communist Party direction doesn’t seem to be brightening the city’s future. More than a quarter of Shenzhen’s office space sits empty after Xi started a campaign in 2020 to rein in risk-taking at private firms. The regulatory crackdown wiped out more than $1 trillion in market value from publicly-listed tech firms and triggered layoffs and business retrenchment.

. . .

Faced with growing economic headwinds and challenges to order, Xi is doubling down on Mao-style control, embracing a Mao-era tool as a way to ensure national security.

The practice, called the “Fengqiao experience,” is named after a town in eastern China that gained national fame in the early 1960s when Mao praised the way its officials mobilized people to identify and punish so-called enemies of the proletariat—capitalists, traditionalists and the like.

People were encouraged to report on one another, with husbands informing on wives and children on their parents, leading to some of the most brutal aspects of the Cultural Revolution. After that tumultuous period, the “Fengqiao experience” faded into history.

Xi is trying to revive aspects of it to mobilize people to fix problems at the local level before they lead to widespread social unrest.

. . .

John Ling, an e-commerce entrepreneur in Shanghai in his late 40s, recalls a far more liberal environment in the early 2000s. Lured back home by China’s seemingly limitless opportunities after studying in the U.S., he started a business trading goods online.

Back then, “I did feel like you could realize your American dream in China, as long as you worked hard,” Ling recalled.

Year by year he felt greater government interference. As more capital poured into e-commerce, he said, Beijing grew concerned that the sector was diverting resources away from more strategic areas such as semiconductors, an industry in which China still heavily relies on Western firms.

Ling said it became so difficult to raise fresh funding for e-commerce that he decided to shut his venture earlier this year. “It’s all about hard-tech these days,” he said, referring to sectors now favored by the government. “But can you sustain the entire economy with just hard-tech?”

“It feels like nothing is possible” nowadays, he said.

For the full commentary, see:

Lingling Wei. “China Is Looking to Move Ahead, But Xi Revives Mao-Era Playbook.” The Wall Street Journal (Friday, Dec. 29, 2023): A1 & A9.

(Note: ellipses and bracketed year added.)

(Note: the online version of the commentary was updated December 28, 2023, and has the title “China Wants to Move Ahead, but Xi Jinping Is Looking to the Past.” The fourth and eighth paragraphs quoted above appear in the online, but not the print, version of the commentary. In other sections where the online version is more detailed than the print version, the passages quoted above follow the online version.)

The book by Shirk mentioned above is:

Shirk, Susan L. Overreach: How China Derailed Its Peaceful Rise. New York: Oxford University Press, 2023.

All Conclusions in Science Are Open to Further Inquiry

(p. C3) Victory is often temporary. In December 2014, a nurse named Nina Pham contracted Ebola from a patient in Dallas. She was transferred to the National Institutes of Health in Bethesda, Md., and treated by a team led by Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases.

When Ms. Pham was discharged, the cameras captured an indelible moment: Together with NIH Director Francis Collins, Dr. Fauci, dressed in a crisp white lab coat, walked her out with his arm draped over her shoulder. This conveyed a critical message at a time when public fear about the disease was widespread. “We would not be releasing Ms. Pham if we were not completely confident in the knowledge that she has fully recovered, is virus free and poses no public health threat,” an NIH statement read.

But scientific certainty often carries an asterisk. Six months later, doctors in Atlanta discovered that in some patients who survive, the Ebola virus could still be found hidden away in parts of the body. This did not indicate that they could transmit the disease, but it meant that they could no longer be declared “virus-free” with certainty. This episode demonstrated how quickly our knowledge about public health threats can alter. What we once thought was true for the Ebola virus had changed, and no doubt will continue to evolve.

For the full commentary, see:

Jeremy Brown. “What Past Crises Tell Us About the Coronavirus.” The Wall Street Journal (Saturday, Feb. 1, 2020 [sic]): C3.

(Note: the online version of the commentary was updated Jan. 31, 2020 [sic], and has the same title as the print version. In both the online and print versions, the first sentence quoted above is in bold font.)

In Managing Workers Firms Should “Experiment with New Forms of Freedom”

(p. C1) In a classic 1958 lecture, the philosopher Isaiah Berlin distinguished between two types of freedom. Negative liberty is freedom from obstacles and interference by others. Positive liberty is freedom to control your own destiny and shape your own life. If we want to maximize net freedom in the future of work, we need to expand both positive and negative liberty.

The debate about whether work should be in-person, remote-first or hybrid is too narrow. Yes, people want the freedom to decide where they work. But they also want the freedom to decide who they work with, what they work on and when they work. Real flexibility is having autonomy to choose your people, your purpose and your priorities.

. . .

(p. C2) We need boundaries to protect individual focus time too.

. . .

One effective strategy seems to be blocking quiet time in the mornings as a window for deep work, and then coming together after lunch. When virtual meetings are held in the afternoon, people are less likely to multitask—probably in part because they’ve been able to make progress on their own tasks.

. . .

Flexible work is here to stay, but companies that resist it may not be. One of the biggest mistakes I saw companies make before Covid was failing to experiment with new forms of freedom.

For the full commentary, see:

Adam Grant. “The Real Meaning of Freedom at Work.” The Wall Street Journal (Saturday, Oct. 9, 2021 [sic]): C1-C2.

(Note: ellipses added.)

(Note: the online version of the commentary was updated October 8, 2021 [sic], and has the same title as the print version.)

If Standards of Merit Are Too Narrow, the Solution Is to Improve Them, Not to Reject Merit

(p. A17) In recent decades, . . ., it has become clear that the definition of merit reflected in quantitative standards was too narrow and created new forms of exclusion. This has led some thinkers to reject the idea of merit and view it as an affront to individual equality and social solidarity.

This overreaction is wrong in theory and damaging in practice. Whenever the ability to do a task well matters, so does merit. Our current challenge is not to discard merit, but rather to understand it better—and use this new understanding to extend opportunities to all who can take advantage of it.

For the full commentary, see:

William A. Galston. “POLITICS & IDEAS; Merit Means More Than Grades and Tests.” The Wall Street Journal (Wednesday, July 26, 2023): A17.

(Note: ellipsis added.)

(Note: the online version of the commentary has the date July 25, 2023, and has the same title as the print version.)

Super Agers “Have a Purpose”

I have personally benefitted from Vernon Smith’s longevity, since he graciously wrote two drafts of a positive blurb for my Openness to Creative Destruction book.

(p. A5) Vernon L. Smith, 97, is a very busy man.

The economist at Chapman University just finished writing a book about Adam Smith and works about eight hours a day, seven days a week in his home office in Colorado Springs, Colo. He enjoys chatting with friends on Facebook and attending concerts with his daughter.

“I still have a lot of stuff to do. I want to keep at it,” said Smith, who won the Nobel Prize in economics in 2002.

. . .

(p. A10) Researchers studying “super agers,” people over 80 who have mental faculties of people decades younger, said strong social relationships are important for keeping brains sharp.

The same is true for people who live beyond 100, said Stacy Andersen, a behavioral neuroscientist at Boston University and co-director of the New England Centenarian Study.

“They have a purpose. They have things they want to go out and do every day,” Andersen said.

Smith says his work and his family keep him motivated and driven.

“I want to go to at least 106,” he said.

For the full story, see:

Dominique Mosbergen. “Several Factors Help Ward Off Mental Decline.” The Wall Street Journal (Friday, Feb. 16, 2024): A5.

(Note: ellipsis and bracketed year added.)

(Note: the online version of the story was updated Feb. 15, 2024, and has the title “How to Stay Mentally Sharp Into Your 80s and Beyond.” The last sentence quoted above appears in the online, but not in the print, version of the article.)

My book mentioned above is:

Diamond, Arthur M., Jr. Openness to Creative Destruction: Sustaining Innovative Dynamism. New York: Oxford University Press, 2019.

FDA Delays Apple Offering Consumers Quick and Convenient Blood Pressure Readings

Doesn’t the FDA do harm by requiring that Apple watch blood pressure monitor be equal in accuracy to a standard clinical blood pressure monitor? Many people will not take the time and effort to get frequent readings from a standard blood pressure monitor in a clinic. But many of them would check their blood pressure conveniently on their watch. Isn’t a less accurate reading better than no reading at all?

(p. A1) Apple’s widening effort to turn its nine-year-old watch from a luxury timepiece into the ultimate all-in-one medical device is taking it into territory that is legally treacherous as well as potentially profitable.

. . .

(p. A2) “The studies that we’ve seen are not yet reassuring that they’re ready for prime time or for clinical use,” said Jordana Cohen, associate professor of medicine and epidemiology at the University of Pennsylvania.

To secure Food and Drug Administration clearance for selling a blood-pressure monitor, companies must demonstrate through the FDA’s 510(k) process that their device’s accuracy is comparable to an existing, already cleared device, she added.

Similarly, tracking glucose through noninvasive skin sensors is generally less precise than direct blood analysis, with factors such as skin tone and temperature affecting accuracy.

For the full story, see:

Dalvin Brown and Aaron Tilley. “Tech and Legal Hurdles Hinder Apple’s Quest for Medical Watch.” The Wall Street Journal (Friday, Dec. 29, 2023): A1-A2.

(Note: ellipsis added.)

(Note: the online version of the story has the date December 28, 2023, and has the title “Apple Keeps Chasing the Ultimate Health-Tracking Watch—but It Could Take Years.”)

Outnumbered Kibbutz Volunteers with M16 Rifles Defended Their Families Against Hamas Terror

(p. A1) At 6:56 a.m. on Oct. 7, [2023] Moshe Kaplan sent an urgent alert to his volunteer security force in Mefalsim, a kibbutz of 1,000 men, women and children in southern Israel where he served as security chief.

“There’s a shooting in the village from the gate!” he texted after militants fired at his car as he drove past the main entrance. Attackers later blew open a pedestrian gate nearby with explosives and flooded into the kibbutz.

Kaplan rushed home to grab his armored vest, helmet and M16 rifle, then drove off to check another gate on the northwest corner. There he found armed men were already inside the razor-wire security fence that encircled the community.

“Terrorists in the kibbutz! Terrorists in the kibbutz!” he yelled in a second, panicked voice text, begging his men to hurry. Gunshots sounded in the background. He had trained a dozen men for this moment, a surprise attack from nearby Gaza.

. . .

(p. A10) Mefalsim was one place that day where nothing for the Hamas attackers went according to plan.

Soon after Kaplan’s call for help, his volunteers rushed from their homes in helmets and protective vests worn over the T-shirts they had slept in, toting M16 rifles. Outnumbered and fighting alone or in pairs, the men mounted a life-or-death stand, communicating via walkie-talkie and WhatsApp texts to track the militants and send each other help.

They believed they had to hold off the insurgents long enough for the Israeli army to arrive. At first, they hoped the soldiers would be there quickly. But as minutes passed, and the fighting grew worse, they realized they would have to fight alone.

. . .

Palestinian gunmen who flooded out of Gaza killed 1,400 Israelis and took close to 200 hostages, terrorizing and shooting people at more than 20 Israeli towns and military bases and thousands at an all-night music festival not far from Mefalsim.

In town after town, attackers blasted through security fences that encircled Israeli villages near Gaza, gunning down residents, burning houses with families inside and taking hostages.

. . .

Video from a security camera at the main gate of Mefalsim captured some of the carnage that took place outside the main gate of the kibbutz as people fled the outdoor music festival and tried desperately to get inside, pursued by militants. A man in a white shirt was shot as he ran toward the entrance. He grabbed his right arm and dropped to the pavement, blood spilling from around his head.

Armed fighters emerged from a wooded area minutes later. Several ran to the fallen man and shot him again. Drivers who abandoned cars to hide in the bushes were attacked with grenades. A person pulled from the bushes was shot and bludgeoned with a rifle butt. The video was posted by South First Responders, a group of emergency personnel working in southern Israel, and verified by The Wall Street Journal.

. . .

Over the next hour, there were several gunfights. Security volunteers hunted for the militants who were moving alone and in pairs on residential streets. Two attackers were killed in the garden of a house by four Israeli soldiers who were home on a weekend leave. Two of the soldiers suffered minor wounds from grenade fragments.

Reskin, the landscape architect, came within sight of the main gate and saw a large group of attackers exchanging what looked like congratulations. He fired and they scattered. He next went into a nearby residential neighborhood and joined Idan Mayrovich, the team’s medic. As they walked, they saw Idan Kadosh, a resident, shooting with a handgun from his window, and he joined their patrol.

. . .

No Mefalsim residents were killed or taken hostage, protected by a dozen residents, many of them former Israeli soldiers, who had prepared for years to defend the kibbutz.

Mefalsim also got lucky. Although the defenders didn’t know exactly how many attackers infiltrated the kibbutz, they estimated it was probably around 25 to 30, a group smaller than those that attacked other local communities, which suffered far more casualties.

. . .

“There is a feeling of discomfort that we survived, and others did not,” security chief Kaplan said.

But Mefalsim, at least, had survived.

For the full story, see:

David S. Cloud and Anat Peled. “A Kibbutz Defeated Hamas Attack.” The Wall Street Journal (Wednesday, Oct. 18, 2023): A1 & A10.

(Note: ellipses and bracketed year added.)

(Note: the online version of the story has the date October 17, 2023, and has the title “When Hamas Attacked, This Israeli Kibbutz Fought Back and Won.”)

“Discrimination on the Basis of Race, Which DEI Does, Is Literally the Definition of Racism”

(p. B1) Ackman and Musk, two billionaires with wide followings on X, which Musk owns, have . . . taken up the fight against DEI, giving it a bigger platform.

“Discrimination on the basis of race, which DEI does, is literally the definition of racism,” Musk posted in January [2024].

. . .

Ackman has frequently focused on DEI in the context of college campuses, where he says such initiatives foment antisemitism.

For the full story, see:

Tali Arbel. “Diversity Groups Urge Ackman, Musk Pushback.” The Wall Street Journal (Thursday, February 8, 2024): B1 & B10.

(Note: ellipses and bracketed date added.)

(Note: the online version of the story was updated Feb. 7, 2024, and has the title “The Case Against Ackman and Musk’s Anti-DEI Stance.”)

Modern Law Tries to Rule Out Error and Accident at the Expense of Individual Freedom

(p. C9) Philip K. Howard’s “Everyday Freedom: Designing the Framework for a Flourishing Society” is a slim book propounding a colossal, sometimes unwieldy, thesis. Beginning in the 1960s, Mr. Howard argues, American law was transformed from a system designed to guard individual freedom and accountability into one in which bad outcomes are impossible. Modern law, he writes, is “an elaborate precautionary system aimed at precluding human error. Anything that goes wrong, any accident or disappointment, any disagreement, potentially requires a legal solution. Instead of charging officials to do what’s sensible, modern law presumes that the gravest risk is to leave room for judgment of people in positions of authority.”

The consequence, he observes, is a society of people who feel they can’t make decisions without thick rule books explaining best practices and legal protections if their decision turns out badly.

For the full review, see:

Barton Swaim. “Bring Back the Smoke-Filled Rooms.” The Wall Street Journal (Saturday, March 2, 2024): C9.

(Note: the online version of the review has the date March 1, 2024, and has the title “Politics: ‘The Primary Solution’ by Nick Troiano Plus ‘Everyday Freedom’ by Philip K. Howard.”)

The book under review above is:

Howard, Philip K. Everyday Freedom: Designing the Framework for a Flourishing Society. Garden City, NY: Rodin Books, 2024.

Akio Toyoda Had the Courage to Predict the Current EV Debacle

On Nov. 25, 2022, I ran a blog entry that reported on the severe criticism that then-Toyota-President Akio Toyoda [sic] was receiving for his skepticism that charging infrastructure and consumer preferences were ready for an immediate full switch to electric vehicles. Because he had the courage to keep Toyota focused on hybrids, consumers now have more of what they need and want. As a result Toyota prospers. In a capitalist system, firms run by executives with foresight and courage receive their just reward.

(p. B1) TOKYO—Gasoline-electric vehicles are flying off dealer lots in the U.S. and generating a windfall for the reigning hegemon of hybrids, Toyota Motor.

Toyota on Tuesday [February 6, 2024] forecast a record $30.3 billion net profit for the fiscal year ending March thanks to higher sales of hybrid vehicles in all of its major markets. The results sent Toyota shares up 4.8% in Tokyo to close at a record high.

Hybrid sales grew last year at a faster clip than sales for pure electric vehicles in the U.S. and some other markets. Signs have emerged that the EV push might have gotten ahead of U.S. consumers who are worried about charging problems and higher prices. That has steered them toward less expensive hybrids, which can be filled up with gasoline.

Automakers that had been rushing to pivot toward full EVs are now reconsidering. General Motors said last week it would introduce some plug-in hybrid models in North America after facing pressure from dealers. Ford Motor said last year it would seek to quadruple its hybrid sales in the next five years.

For the full story, see:

River Davis. “Toyota Is Cashing In As Hybrid Sales Boom.” The Wall Street Journal (Wednesday, February 7, 2024): B1-B2.

(Note: bracketed date added.)

(Note: the online version of the story has the date February 6, 2024, and has the title “Toyota Cashes In on Booming Hybrid Sales.”)