J. Bradford DeLong's Blog, page 171

Note to Self: G-7 national income per capita growth sin...

Note to Self: G-7 national income per capita growth since 1800, according to Hans Rosling's http://gapminder.org: https://www.icloud.com/numbers/07Q5v0jKa1sohBHiO8l3Np9Gw

#notetoself #slouchingtowardsutopia #economichistory

Harry Brighouse: A Game-Changer in Accountability: Using ...

Harry Brighouse: A Game-Changer in Accountability: Using Online Discussion Boards (Even in Face-to-Face Classes): "My first lecture of the week is on a Tuesday, and most of the reading is assigned for that class. Thirty-six hours before class, the students must respond to a prompt about the reading���one that is impossible to respond to coherently without having done the reading. Settings allow you to prevent them from seeing other students��� responses until after they post. Then, they have until the beginning of class to respond to a classmate. If students post, they get credit; if not, they don���t.... In smaller classes, the effect has been astonishing. Almost all my students do almost all the reading for almost every class...

...In my upper-level classes, the total word count for 20 students is often 15,000 or more... Some comments form the basis of papers; many are, themselves, rough (and, occasionally, not-so-rough) papers. The students feel accountable to me and one another. I know what they are thinking, what they understand, and what they don���t, which has transformed my preparation for class. It hasn���t made it easier or less time-consuming, but it has made it more interesting. Instead of guessing what might be useful to students, I can make well-informed judgments about what they need. I can talk much less in class than I used to, and my talk is more useful than it was. In addition, they can each know what the others think before they come to class. In combination with a policy of making them learn each other���s names, it seems to make them much more engaged with one another. Students routinely refer in class discussions to ideas other people have posted online....

Large lectures are different. I read many posts, and so do my TAs, but we don���t read everything. Typically students write a paragraph, and the response posts are often little more than a few sentences expressing agreement. I���m not a fool, and I don���t believe for a minute that all the students do all the reading. But I have evidence that many more do it than used to....

This semester I���ve been personalizing the process for the large lecture more. I require students to sit by discussion section in the lecture hall, and the Canvas (LMS) settings make it easy to organize the online interactions by discussion section���so that each student interacts only with the posts of the other 20 students in their section (whose names they already know, after just a few weeks). Maybe this will prompt more reading and more elaborate discussions.

For a long time, I assumed that everybody else was doing this, partly because it is obvious and partly because, being basically a technophobe, I am usually 5 to 10 years behind everyone else for any given technological innovation. Some readers probably think it���s hardly worth mentioning. I���d agree if it weren���t for the fact that so many colleagues express surprise and curiosity when I describe it...

#noted

The Cold War: An Outtake from "Slouching Towards Utopia?: An Economic History of the Long Twentieth Century 1870-2016"

Post-WWII Political Economy: Stabilization

Challengers

But what about the other factors that had fatally disrupted the pre-WWI global order? Imperialism, nationalism, militarism, fascism, and a really existing version of socialism preached and practiced by Stalin and his heirs that was, in many of its modes, hard to distinguish from the barbarism that Rosa Luxemburg feared that World War I had revealed as socialism���s only alternative? Fascism had been buried in the rubble of Berlin in 1945: thereafter its attractions had been limited to those plutocrats, authoritarians, colonels, and landlords trying to run unstable con games to try to stave off popular and global civil society demands for things like land reform and a less-unequal distribution of wealth as underpinnings for political democracy and the mixed economy.

Or so we had thought.

Really existing socialism became more unattractive the more closely outsiders were able to scrutinize it���and it ran into the buzzsaw of nationalism as it became more and more clear that, in Europe at least, it involved absorption into the latest incarnation of Russian Empire. Imperialism was on the way out: the United States had not become global hegemony in order to preserve British and French colonial bureaucratic masters. And the kind of militarism that sent millions of young men to die at the front while civilians died under bombing was in bad odor.

It, was, largely, as if the world���or the world outside of really existing socialism, hidden behind the iron and bamboo curtains���had awoken from a third-of-a-century bad dream.

 

Not Utopia

The new post-World War II world was not utopia. It stood for the first time under the shadow of nuclear war, and the MAD strategies nuclear weapons strategists embraced������MAD��� both as an acronym for ���mutual assured destruction��� and ���insane���. And the world was not free from other snakes in the garden. For example, the same letter in which President Dwight Eisenhower admonishes his brother Edgar for imagining that his administration could or should roll back the New Deal and upset the social-democratic mixed-economy Keynesian order, Eisenhower boasted about how under his administration the CIA had led the coup that had entrenched Mohammed Reza Pahlavi as shah and dictator in Iran and so kept the Middle East oil states from going commie���as the Truman administration would have allowed it to do, and so largely removed the greatest ���threat that has in recent years overhung the free world���.

It is true that British Prime Minister Clement Attlee and American President Harry S Truman had nixed CIA, MI6, and Anglo-Iranian Oil Company demands for a coup. But British Prime Minister Winston Churchill and American President Dwight Eisenhower���s judgments that Iranian Prime Minister Mohammed Mosadegh���s oil nationalizations and political tugs-of-war with shah and parliament were not normal politics but the prelude to a communist takeover as had happened in 1948 in Czechoslovakia���that judgment is at the very least highly contestable.

 

But Progress!

But like the similar period before 1910, economic growth enough was fast enough and equitably distributed enough that few thought revolution or a radical restructuring of institutions was in order; wealth and status were respected enough that the right wing sought to slow down rather than stop the pace of historical change; and forms of society that left-wingers saw as unfreedom were being eroded at a pace fast enough that people could see society as once more on the road to utopia. And in the Thirty Glorious Years after World War II, it all happened faster than it had before 1910: there were three decades of inventions and innovations that had not been implemented outside the United States and that formed a great backlog, and there was an example of how to forge the future: the America that had played its share in winning World War II not with blood but with mass production, and that did not come with mass executions of high cadres and government officials and continent-spanning networks of concentration camps.

There were other factors as well. To some degree the creation of the social-democratic mixed economy came about because and no one in Europe wanted a repeat of interwar experience. To some degree it came about because the governments in power were Christian democratic and social democratic rather than socialist. They believed that the ���mixed economies��� they were building should have a strong pro-market orientation. For such governments, as noted above, Marshall Plan and other aid gave them room to maneuver���without such aid, they would have soon faced a harsh choice between contraction to balance their international payments and severe controls on imports.

But there was one other fact about post-World War II that cemented the social-democratic mixed-economy Keynesian order that drove a generation of the fastest economic growth and the greatest advance in human prosperity and liberty the world had hitherto seen: it was the Cold War.

 

Before the Cold War

There was not supposed to be a Cold War.

Marxist theory���at least that branch of Marxist theory that became the cultic revealed religion guiding at least the official pronouncements of the governments ruling from behind Stalin and Mao���s Iron and Bamboo Curtains���was very clear on what was to come. Capitalism, in Lenin���s view, needed imperialism. Imperialism produced militarization with its enormous demand for weapons and colonies that offered captive markets. These were essential to preserve near-full employment, and so stave off the catastrophic economic crises���like the Great Depression���that would otherwise produce communist revolution. But imperalism also produced war. Thus capitalism was staving off revolution from economic catastrophe by courting revolution through political-military catastrophe.

As Lenin���s successors saw it, the capitalist-imperialist powers had successfully delayed revolution from the late 1890s though imperialism and militarism, but had then fallen into the catastrophe of World War I. And that brought Lenin to power in Russia, and the creation of the first really existing socialist country���or, rather, union of countries: the U.S.S.R. was a ���union��� of ���republics��� that were ���socialist��� and also ���soviet������that is, power was held by workers��� councils. In theory. Practice is always complicated. But that was as far as the revolution managed to march in the aftermath of World War I.

As Lenin���s successors saw it, the capitalists had then after World War I concluded that parliamentary democracy and representative institutions were no longer compatible with their continued rule, hence they swung their support behind fascists: Mussolini in Italy, Hitler in Germany, Franco in Spain, Petain in France, Tojo in Japan. But this did not remove the need for imperialism and militarism, but rather sharpened it. The second great imperialist war, World War II, had been worse than the first. That had led to the really existing socialist world���s expansion to the Elbe and the Adriatic���although not before Hitler���s legions had nearly destroyed the Soviet Union.

As Lenin���s successors saw it, after the post-WWII consolidation, they had five tasks:

Build up militarily to defend the territories of really existing socialism, because the fascist-militarist-capitalists might well try once again to destroy world socialism militarily���there were American generals who had wanted to start World War III the day after World War II had ended, there was at least one ex-president who thought that the U.S. had fought on the wrong side in World War II, and the U.S. had advanced scientific weapons of unbearable power.

Extend the really existing socialist order to the new territories.

Build up economically to create truly human societies, both to realize the promise of socialism and to demonstrate to peoples in the capitalist world how good life could be.\

Stand ready to assist socialist movements in capitalist countries when they decided they were strong enough to attempt a revolution.

Lie low.

If they accomplished those tasks, then the logic of imperialist-militarist-capitalism would start to work again. The capitalist powers would clash again, in another catastrophic world war. And provided the really existing socialist block could keep its head down and survive, in the aftermath it would expand again. That was the Soviet Union���s strategy: defend, rebuild, and wait, for history was on their side. Waging a cold war was not the strategy.

 

The Korean War

Stalin, however, had exhibited a taste for snatching up territory when he thought it could be taken cheaply���starting with the suppression of the Mensheviks in Georgia at the end of the Russian Civil War. After World War II, however, Stalin curbed his appetite. He did not impose a communist government on Finland, but let it remain democratic as long as it was disarmed and joined no potentially anti-Soviet alliances���and as long as its government was riddled with Soviet agents. He cut off support to the communist party in Greece���largely. He counseled Mao to join a coalition with Chiang Kai-shek (the Cantonese romanization of Jiang Jieshi) and wait.

But in 1948 Stalin could not resist snatching up Czechoslovakia in a coupe d���etat. And Mao ignored Stalin, defeated Chiang Kai-shek, and chased him and his Guomindang to Taiwan. A Cold War had begun. But U.S. plans to wage it seriously���boosting defense spending to 10% of national income and deploying U.S. armies as tripwires and more-than-tripwires all across the globe���remained planners��� fantasies, until the Korean War.

And no doubt Stalin heard whispers that he was being overly cautious, and had lost his nerve as a result of the shocks of World War II.

In 1950 the strongman Kim Il Sung, whom Stalin had installed in North Korea at the end of World War II when the Russians occupied the north off the country above and the Americans occupied the south below the 38th parallel, begged him for tanks and support to take over the south. There were then no U.S. garrisons in the south. The U.S. had declined to send troops to support Chiang Kai-shek���it had sent weapons, but had stopped when it realized that the most effective way to arm Mao���s People���s Liberation Army was to ship weapons of the Guomindang. Moreover, the U.S. was for decolonization���the British out of India, the Dutch out of Indonesia. While the U.S. was happy to provide logistical support to the French war against the communist Vietminh in southeast Asia, it wanted the French to promise independence rather than further colonial rule as the endpoint. U.S. strategic thinking was that in Asia it should use air and sea rather than land power as its weapons.

In June 1950 Stalin let slip the dog of war that was Kim Il Sung and his Soviet-trained and supplied army. The Korean War began, as the U.S. surprised Kim Jong Il, Stalin, Mao, and itself by rallying the United Nations to send an army, largely provided by the United States but formally a force of the United Nations as an organization, to defend the order that had been established in the American zone of occupation that was to become South Korea���and perhaps create a single unified Korean nation as well.

Fighting raged all across the Korean peninsula, from near the Yalu River in the north to the port of Pusan in the south. South Koreans and North Koreans fought on land; Americans fought on land, in the sea, and in the air; Chinese fought on land; Russians fought in the air (with 350 planes shot down). In three years, somewhere between one and two million Korean civilians died, 5% to 10% of the population; perhaps 400000 South Koreans were abducted from their homes and taken to North Korea; and the military dead and missing were, roughly: 500000 Chinese, 300000 North Koreans, 150000 South Koreans, 50000 Americans, 1000 British, 1000 Turkish, 500 Canadian, 400 Australian, 300 Russian, 250 French, 200 Greek, 150 Columbian, 130 Thai, 120 Ethiopian, 120 Dutch, 100 Belgian, 90 Filipino, 30 South African, 30 New Zealand, 3 Norwegian, 2 Luxembourgese, and 1 Indian soldier. The U.S. Air Force dropped half a million tons of bombs during the war���that is 40 pounds of bomb for every North Korean then alive.

The United States did not use its nuclear weapons���it was a war, but it was a limited war. U.S. theater of operations commander Douglas MacArthur asked for their use at the end of 1950 when Chinese People���s Liberation Army attacks forced the United Nations��� army to retreat from near the Yalu River back to south of Seoul. The Pentagon and U.S. President Harry Truman refused. Starting in March 1951, with the battlefront stabilized near the 38th parallel that had divided North and South Korea before the war, the Pentagon and Truman began to seek a ceasefire and a return to the status quo ante bellum���to the state of things before the war���leaving neither victor nor vanquished.

Yet the war dragged on for two more years. And the casualties mounted: military comm https://www.britannica.com/event/Kore... anders on both sides thought that leverage at the peace table was to be gained by attritting their adversary���s forces and depriving them of jumping-off points in case the war was widened. Key, in the minds of United Nations commanders Matthew Ridgway and James van Fleet, was the ���Iron Triangle��� about 12 miles on each side, near the 38th parallel, running from Pyonggang in the north to Kimhwa in the east to Chorwon in the west.

The ultimate sticking point in the negotiations, however, was the status of prisoners of war. The Chinese and North Koreans wanted all prisoners of war returned to their countries of origin. The United Nations and the South Koreans wanted to keep prisoners of war who wished not to return from being forced to do so. On March 5, 1953, Soviet Dictator Josef Stalin died of a stroke. Stalin���s heirs decided that the Korean War was pointless and should end. Mao���s negotiators accepted the United Nations���s prisoner-of-war position. 10000 of 15000 Chinese prisoners of war decided not to return to China 5000 or 70000 North Korean prisoners of war decided not to return to North Korea. 327 South Korean prisoners of war decided to stay in North Korea, as did 21 Americans and 1 Briton. 18 of the 22 eventually returned to the western bloc. However 8000 missing from the United Nations forces (and 80000 missing from the South Korean forces) remained unaccounted for. Most of them surely died in battle, but���

And so the current state of things���with North Korea under the autocratic rule of the current Kim dynasty which has presided over the worst famine of the post-World War II period, and with South Korea independent and now a rich industrial power and a democracy���began.

 

Consequences: The U.S. Government Spends to Fight the Cold War

In the aftermath of the Korean War, the United States saw itself as having a new role.

To start with, western Germany looked analogous to Korea���a country divided by what had originally been intended to he a military occupation boundary but had become permanent. That it could not be snatched up cheaply was not wholly reassuring, because Stalin had also exhibited a certain degree of bad judgment: in addition to allowing Kim Il Sung to launch the Korean War, there was the unsuccessful attack on Finland in 1939, and there was mother of all miscalculations, the belief that the way to deal with Hitler was to become his ally and then watch Nazi Germany and the western democracies exhaust themselves in trench warfare. Perhaps Stalin���s successors would exhibit a similar appetite for conquest on the cheap, and a similar weak grasp of geopolitical realities.

As a result of the Korean War, by the middle of the 1950s there was a full U.S. army���corps, divisions, airwings, and the standard enormous logistical tail���sitting in West Germany waiting for Stalin���s successors to attempt in Germany what Stalin, Mao, and Kim Il Sung had attempted in Korea: the reunification by force of a country that had been divided in the armistice that ended World War II. Stalin���s successors were largely unknown: the only solid thing about them was that they had flourished under Stalin and shot a couple of their own number in the power struggle that followed Stalin���s death. ������By the mid-1950s the U.S. was spending on the Cold War a huge scale. What had before June 1950 been the fantasies of national security staffers and planners became reality. They pushed U.S. national security spending up to 10% of national income after the Korean War had come to an end provided a strong floor to demand and employment in the United States as well.

A good deal of this spending was for the U.S. to project its Cold War military power far beyond its borders. U.S. bases and troops found themselves permanently deployed on every continent save Antarctica. Roughly three-quarters of a percent of U.S. national product in the mid 1950s was ���net military transactions������expenditures abroad by the U.S. army which generated no dollar inflow. In Europe, the increase in net U.S. military transactions did much to offset the winding-down of the Marshall Plan: the forces of the Supreme Allied Commander, Europe, of the North Atlantic Treaty Organization thus provided one more secure source of demand for European production during Europe���s booms in the 1950s and 1960s.

 

Waging the Cold War

Peaceful Coexistence

Nuclear forces that U.S. planners regarded as perhaps inadequate to deter a Russian nuclear strike or conventional-force invasion of western Europe struck Russian planners as dangerously close to the forces the U.S. would need to wage and win a nuclear devastation or conventional occupation of Russia. And all Russian planners remembered the burning of Moscow by the Crimean Tartars in 1571, the occupation of Moscow by the Poles in 1610, the invasion by the Swedes in 1709, the occupation of Moscow by the French in 1812, the German-dictated Peace of Brest-Litovsk in 1918, and Hitler���s invasion in 1941. From 1956 on the formal policy of the Soviet Union was ���peaceful coexistence���. The Russians would, of course, continue to support just revolts against colonialism and capitalism. But war between the superpowers? Off the table. The U.S. and the U.S.S.R. would coexist. Really existing socialism would triumph in the end, of course. But its triumph would be by example, not by military force.
���From the other side of the hill, the U.S. policy became one of ���massive retaliation���: ���contain[ing] the mighty landpower of the communist world��� by be[ing] willing and able to respond vigorously at places and with means of its own choosing���. This policy, pointedly, did not take a nuclear-weapon response to a conventional provocation off the table, and did not restrict retaliation and deterrence to the particular theater of conflict. But the keyword, I believe, is ���contain���: the U.S. and indeed the western NATO alliance policy for the Cold War was one of containment. As U.S. diplomat George Kennan put it, the right strategy was one of ���holding the line and hoping for the best���, for since ���ideology convinces the rulers of Russia that truth is on their side and they they can therefore afford to wait���, it was the case that ���Soviet pressure��� can be contained by the adroit and vigilant application of counter-force at a series of constantly shifting geographical and political points���.

And there was more: ���the issue of Soviet-American relations is in essence a test of the overall worth of the United States as a nation among nations���. Thus:

The thoughtful observer of Russian-American relations will find no cause for complaint in the Kremlin's challenge to American society. He will rather experience a certain gratitude to a Providence which, by providing the American people with this implacable challenge, has made their entire security as a nation dependent on their pulling themselves together and accepting the responsibilities of moral and political leadership that history plainly intended them to bear���

If only the United States could, Kennan believed, truly be a City Upon a Hill. If only it could, as John Winthrop had preached back in 1630: ���follow the counsel of Micah, to do justly, to love mercy, to walk humbly with our God��� so that ���he shall make us a praise and glory that men shall say of succeeding plantations, ���may the Lord make it like that of New England������������then the U.S. and the western NATO alliance would have nothing to fear from the Cold War. The Americans who ran foreign policy overwhelmingly agreed. The only possible exception was 1969-1976 Secretary of State Henry Kissinger and his erratic boss President Richard Nixon. Kissinger���s international-relations professor colleague Stanley Hoffman believed that ���Henry, in his melancholy, seems to walk with the spirit of Spengler at his side���; and Admiral Elmo Zumwalt said that Kissinger talked to him about how America was part of a civilization that had seen its best days and needed to accommodate the rising power of Russia, which was a Peloponnesian War-era ���Sparta to our Athens���. The others saw no reason to panic.

Soviet paramount leader Nikita Khrushchev said the same thing, but less��� diplomatically, in 1956: ���Whether you like it or not, history is on our side. We will bury you.��� Probably the Russian ������� ������ ��������������������� would have been better translated as: ���we will have to dig your grave��� or as ���we will outlast you���. Later on Khrushchev clarified: ���I once said, ���We will bury you���, and I got into trouble with it. Of course we will not bury you with a shovel. Your own working class will bury you.��� The Soviet Union had lost perhaps 27 million people killed and starved in World War II. Nobody in it wanted a World War III.

 

Non-Aligned Nations for Which the Cold War Was an Opportunity

For leaders and would-be leaders of both independent and colonized nations and nations-to-be during the first post-World War II generation, the Cold War was, more often than not, a blessing. Leaders could press the United States to encourage Britain and France to accelerate decolonization. Before independence, they could observe that if decolonization was delayed, the Russians and the Chinese would use the grievances justly felt by the colonized to build support for insurgencies that would add that nation to the Communist Bloc. After independence, they could declare themselves ���nonaligned���, as the movement started at the Bandung Conference in Indonesia by then-Indonesian strongman Sukarno and then-Indian Prime Minister Nehru was called. Nonaligned nations could then call for bids of support from both sides in the Cold War. The hotter and more important the Cold War, the more both sides would be willing to spend to support a nonaligned government that was trying to decide what its political and economic system should be.

 

Nations for Which the Cold War Became a Threat

On the other hand, the hotter the Cold War, the more likely it was that a government or a popular movement trying to steer its own course would be pulled up short by the choke-chain of one of the superpowers, and people would die. Yugoslavia and Finland managed to pursue their own paths���but the Red Army stepped in to enforce the party line and discipline in East Germany in 1953, in Hungary in 1956, in Czechoslovakia in 1968, Afghanistan in 1978. The U.S. sponsored coups or sent troops to overthrow governments into Iran and Guatemala in 1954, Cuba in 1961, Cuba in 1973, the Dominican Republic Nicaragua in 1981, Grenada in 1983. Plus there were the cases where the Cold War turned genuinely hot: Korea (5 million dead), Vietnam (2.5 million dead), Ethiopia (1.5 million dead), Angola (500000 dead), and more.

And there were governments that attacked their societies because of the Cold War: somewhere between 100,000 and 500,000 of Indonesia���s hundred million were murdered in 1965 in The Year of Living Dangerously, when strongman Suharto used an attempted communist coup as a pretext to sideline previous strongman Sukarno and then slaughter everyone in Indonesia whom anyone said might be a communist. The Khmer Rouge in 1975-9 killed two of Cambodia���s 8 million people for no reason whatsoever���and still China and the U.S. backed the Khmer Rouge against the Cambodian government the Vietnamese installed in 1979. And there were many, many more.

 

Teetering on the Edge of Nuclear Armageddon

Even more, the world teetered on the edge of thermonuclear war during the Cuban Missile Crisis of 1962. Russian paramount leader Nikita Khrushchev was somewhat surprised by the bellicose reaction of American President John F. Kennedy to Russia���s deployment in Cuba of missiles like those the U.S. had previously deployed in Turkey next to Russia���s border. Khrushchev wrote to Kennedy: ���We and you ought not now to pull on the ends of the rope in which you have tied the knot of war, because the more the two of us pull, the tighter that knot will be tied. And a moment may come when that knot will be tied so tight that even he who tied it will not have the strength to untie it, and then it will be necessary to cut that knot, and what that would mean is not for me to explain to you, because you yourself understand perfectly of what terrible forces our countries dispose������ The U.S. promised not to overthrow Cuban communist dictator Fidel Castro by force. Russia withdrew its missiles from Cuba. The U.S. withdrew its missiles from Turkey. Both agreed to keep the U.S. withdrawal a secret so as not to create a ���Kennedy backed down��� campaign issue that the Republicans could use against the Democrats in the 1962 and then 1964 elections. And a lot of misleading histories were written by and based on reports from Kennedy administration insiders over the following two decades.

There were other teeters. In 1960 the moonrise was mistaken by a NATO radar for a nuclear attack���and the U.S. went on high alert even though Russian paramount leader was in New York at the United Nations at the time. In 1967 NORAD thought a solar flare was Soviet radar jamming, and nearly launched its bombers. In 1979 the loading of a training scenario onto an operational computer led NORAD to call the White House, claiming that the U.S.S.R. had launched 250 missiles against the United States, and that the president had only between 3 and 7 minutes to decide whether to retaliate. In 1983 Lieutenant Colonel Stanislav Petrov refused to classify an early warning system missile sighting report as an attack, and dismissed it as an error. And in 1995 Russian President Boris Yeltsin opened his nuclear weapons control briefcase when the launch of a Norwegian northern lights-studying rocket was interpreted as an attack. In 1983 the Red Air Force mistook an off-course Korean airliner carrying 100 people for one of the U.S. RC-135 spy planes that routinely violated Russian air space to test the competence of Russia���s air defenders and shot it down; Red Air Force pilot Gennady Osipovich continues to believe he shot down a spy plane. In 1988 the U.S. Navy cruiser Vincennes���at the time in Iranian territorial waters without Iran���s permission���shot down on on-course Iranian airliner carrying 290 people.

#slouchingtowardsutopia #strategy #coldwar #highlighted

Refinding the Path Toward Utopia: An Intake from "Slouching Towards Utopia?: An Economic History of the Long Twentieth Century 1870-2016"

Recall the pre-1913 post-1800 progress of humanity in the direction of a utopia of material abundance.

The classic Industrial Revolution period���1800 to 1870���had seen material productivity and living standards rise by perhaps one-quarter worldwide, with an average growth rate of perhaps one-third of a percent per year. Growth had been faster���greater than one-half percent per year���in the countries that were to become the G-7, even though two of its future members, Italy and Japan, as of yet showed few signs of significant industrial-era growth. Then 1870-1913 the modern corporation, the industrial research lab, the manufacturing value chain, plus globalization���the land and submarine telegraph cable, the iron-hulled screw-propellered ocean-going steamship and the railroad, and global migration���pulled the world forward with a large jerk: a more than tripling of growth, with a more than doubling of growth rates in the industrial core that was to become the G-7 and substantial participation elsewhere even where factories were not build. A Mexico, for example, saw its productivity levels double between 1870 and 1913. An Argentina, for example, saw its productivity levels triple. And growth in Italy and Japan for the first time kept pace with that in their future G-7 partners.

The pre-World War I order allowed for peace (if an imperial ���peace���), and growth (albeit not ���convergence���, either between or within countries) at a pace that doubled material standards of living���the order of things that Keynes called:

this economic Eldorado���. What an extraordinary episode in the economic progress of man that age was which came to an end in August, 1914!��� The projects and politics of militarism and imperialism, of racial and cultural rivalries, of monopolies, restrictions, and exclusion, which were to play the serpent to this paradise, were little more than the amusements of his daily newspaper���

And the well-thinking had thought progress at the 1870-1913 pace was ���normal, certain, and permanent, except in the direction of further improvement���. The future G-7 in 1913 was twice as productive as it had been in 1870, and the rest world on average at least 50% richer.

Then from 1913-1938 things fell apart. Worldwide growth fell back to its 1800-1870 pace. At the 1913-1938 pace of average growth it would take not 30-50 years for productivity to double, but more like 80-120. An Argentina, heavily invested in the growing world division of labor, found its trading links heavily damaged by war, depression, and protectionism: it appears that Argentina in 1938 was poorer than it had been in 1913, as was Spain (albeit Spain was then at the end of the civil war sparked by Franco���s attempted coup). British national income per capita grew at only 0.40%/year, French at 0.35%/year, and Canadian at only 0.11%/year from 1913 to 1938. Of the future G-7, only Germany and Japan maintained and even accelerated their pace of growth and industrialization at nearly 2%/year. Outside, only the Soviet Union claimed economic and political success���with some reason, but even at the time and more in retrospect it was properly classified as more dys- than utopia.

And then came the catastrophe of World War II: 50 million people killed (out of the 2.3 billion then alive), and something like two years��� worth of global production worse than wasted, as it was devoted to killing people and destroying wealth and capital.

Post-World War II, prospects for a return to growth like that seen over 1870-1913 seemed slim. Neither the pre-World War I order nor any substitute had been rebuilt. It had turned out to be a ���delicate organization��� built in a sense on a bluff: upper classes that received income���broadly���did not consume but invested it, while working classes���broadly���allowed upper classes to continue receiving income. World War I had ���disclosed the possibility of consumption to all and the vanity of abstinence to many��� the bluff was discovered���.

And yet it happened. From 1938 to 1973 growth in the G-7 jerked forward again: not at the 0.76%/year pace of 1913-1938 or even the 1.42%/year pace of 1870-1913, but at an average pace of 3.0%/year. That is a material wealth doubling time of not the 90 years or so of 1913-1938 or even the 50 years of 1870-1913, but 24 years: less than a generation. Thus the G-7 was three times as well-off in 1973 as it had been in 1938. Japan grew at a previously unseen 4.7%/year���in spite of Curtis LeMay���s firestorms and two atomic bombs that incinerated Japanese cities in 1944-1945. Canada and Italy grew at more than 3%/year. But they were not alone���Mexico and Spain as well as others achieved that rate of growth as well. The French call this period the Thirty Glorious Years: the Trentes Glorieuses.

Keynes had thought that the pre-World War I order was built on a bluff: the working classes believed they could not claim more income than the market gave them because laissez-faire was the only system allowing even a modicum of prosperity; the upper classes believed they should not spend more lavishly because laissez-faire guaranteed them high profits from reinvesting their dividends and rents. But that had been revealed as a bluff. On what alternative foundations was the order that enabled the growth of the Thirty Glorious Years built?

#slouchingtowardsutopia #economicgrowth #thirtygloriousyears #highlighted

Brahma Chellaney: China���s Tiananmen Reckoning: "In a ...

Brahma Chellaney: China���s Tiananmen Reckoning: "In a night of carnage on June 3-4, 1989, the Chinese authorities crushed the pro-democracy protests with tanks and machine guns. In Eastern Europe, the democratization push led to the fall of the Berlin Wall just five months later, heralding the end of the Cold War. But the West recoiled from sustaining its post-Tiananmen sanctions against China.... After a long post-massacre boom, China���the world���s largest, strongest, wealthiest, and most technologically advanced autocracy���is entering a period of uncertainty.... The Tiananmen Square protests in 1989 were inspired by the watershed May 4, 1919, student demonstrations against Western colonialism at the same site. But whereas Xi recently extolled the May Fourth Movement in a speech marking the centenary of that event, he and the CPC are edgy about the Tiananmen anniversary. This year also marks the 60th anniversary of a failed uprising in Tibet against Chinese occupation. And it is ten years since a Uighur revolt killed hundreds in the Xinjiang region, where more than one million Muslims have now been incarcerated as part of a Xi-initiated effort to 'cleanse' their minds of extremist thoughts. Then, on October 1, the People���s Republic of China will celebrate its 70th birthday...

...But the anniversary of the 1989 Tiananmen crackdown is the most portentous.... The party has relied on brute force since its inception, including to seize power. During the rule of the PRC���s founder, Mao Zedong, tens of millions died in the so-called Great Leap Forward, the Cultural Revolution, and other state-engineered disasters. Adolf Hitler was responsible for an estimated 11-12 million civilian deaths, and Joseph Stalin for at least six million. But Mao, with some 42.5 million, was the undisputed champion butcher of the twentieth century. And his blood-soaked rule influenced his successor, Deng Xiaoping, who ordered the savage assault on the Tiananmen demonstrators. The CPC���s survival in power reflects not only its willingness to deploy massive violence, but also its skill at distorting reality with propaganda and snuffing out dissent. But how long can the world���s oldest autocracy continue to sustain itself? By dispensing with collective leadership and orderly succession, Xi has already undermined the institutionalism that made post-Mao China resilient to the forces of change that helped to unravel the Soviet empire....

#noted

http://fold.cm

Henry Farrell: The American Right's Torquemada Option: Weekend Reading

Henry Farrell: The American Right's Torquemada Option: "On the Ahmari/Kimball/Peterson/Deneen thing. When anti-modern conservatives decide that the liberal world is depraved they can either withdraw from it-the Benedict Option, or cleanse it of the corruption of tolerance. Call it the Torquemada Option https://en.wikipedia.org/wiki/Nemesis_the_Warlock. And the moderate success that some modern figures-such as Orban-have enjoyed in taking over the university system and forcibly purging it of those who would pollute our youth with gender studies and the like give old time reactionaries like Kimball some hope it can be done...

...But the Torquemada Option threatens to split open the whole IDW/Heterodox Academy/@conor64 alliance by clarifying the stakes. It's easy to build common cause against what you see as liberal intolerance when you keep things nice and fuzzy. It is rather harder when your mates insist on making it clear that what they are opposed to is the liberalism, and that they are A-OK with the intolerance as long as their side is in charge of intolerating. Indeed, that they believe, as per Ahmari, that tolerance towards the unbelievers is itself an obvious wrong.

The Jordan Peterson/Orban https://hungarytoday.hu/orban-meets-jordan-peterson-in-budapest/ clinch to denounce "political correctness" rather gives the game away. If what you care about is tolerance and heterodoxy, you do not make common cause with Orban for very obvious reasons. If increased heterodoxy, alternatively is merely a stepping-stone towards a world where you and/or your allies can better impose your own orthodoxy on those around you, it makes all the sense in the world.

There is a genuine space for a conservatism/classical liberalism that builds from elements of Adam Smith, Locke etc, through Popper and others towards a real interest in openness. There's also space for that to sharply criticize people on the left who, like those on the right and center, have their own tendencies towards intolerance. Though they should too look to keep their own house in order. But the alliance that has been built around the IDW etc is intellectually unsustainable. Or, more precisely, it would be unsustainable if those who have joined from the soi-disant liberal side were willing to look at the intolerance of those they have allied themselves to...

#weeekendreading #publicsphere #orangehairedbaboons

Richard Feynman: Math and Science: "How am I going to exp...

Richard Feynman: Math and Science: "How am I going to explain to you the things I don���t explain to my students until they are third-year graduate students? Let me explain it by analogy: The Maya Indians were interested in the rising and setting of Venus as a morning ���star��� and as an evening ���star������they were very interested in when it would appear. After some years of observation, they noted that five cycles of Venus were very nearly equal to eight of their ���nominal years��� of 365 days (they were aware that the true year of seasons was different and they made calculations of that also). To make calculations, the Maya had invented a system of bars and dots to represent numbers (including zero), and had rules by which to calculate and predict not only the risings and settings of Venus, but other celestial phenomena, such as lunar eclipses. In those days, only a few Maya priests could do such elaborate calculations. Now, suppose we were to ask one of them how to do just one step in the process of predicting when Venus will next rise as a morning star���subtracting two numbers. And let���s assume that, unlike today, we had not gone to school and did not know how to subtract. How would the priest explain to us what subtraction is?...

...He could either teach us the numbers represented by the bars and dots and the rules for ���subtracting��� them, or he could tell us what he was really doing:

Suppose we want to subtract 236 from 584. First, count out 584 beans and put them in a pot. Then take out 236 beans and put them to one side. Finally, count the beans left in the pot. That number is the result of subtracting 236 from 584.

You might say, ���My Quetzalcoatl! What tedium���counting beans, putting them in, taking them out���what a job!���

To which the priest would reply:

That���s why we have the rules for the bars and dots. The rules are tricky, but they are a much more efficient way of getting the answer than by counting beans. The important thing is, it makes no difference as far as the answer is concerned: we can predict the appearance of Venus by counting beans (which is slow, but easy to understand) or by using the tricky rules (which is much faster, but you must spend years in school to learn them).

To understand how subtraction works���as long as you don���t have to actually carry it out���is really not so difficult. That���s my position: I���m going to explain to you what the physicists are doing when they are predicting how Nature will behave, but I���m not going to teach you any tricks so you can do it efficiently. You will discover that in order to make any reasonable predictions with this new scheme of quantum electrodynamics, you would have to make an awful lot of little arrows on a piece of paper. It takes seven years���four undergraduate and three graduate���to train our physics students to do that in a tricky, efficient way.

That���s where we are going to skip seven years of education in physics: By explaining quantum electrodynamics to you in terms of what we are really doing, I hope you will be able to understand it better than do some of the students!

Taking the example of the Maya one step further, we could ask the priest why five cycles of Venus nearly equal 2,920 days, or eight years. There would be all kinds of theories about why, such as, ���20 is an important number in our counting system, and if you divide 2,920 by 20, you get 146, which is one more than a number that can be represented by the sum of two squares in two different ways,��� and so forth. But that theory would have nothing to do with Venus, really. In modern times, we have found that theories of this kind are not useful. So again, we are not going to deal with why Nature behaves in the peculiar way...

Richard Feynman (1985): QED: The Strange Theory of Light and Matter (Princeton: Princeton University Press: 0691024170) http://amzn.to/2iXkx5Z...

#noted #teachingeconomics #berkeley

Jeremiah: 22: 12-10 KJV: Weekend Reading

Jeremiah: 22: 12-10 KJV: "Thus saith the Lord: 'Go down to the house of the king of Judah, and speak there this word, and say: "Hear the word of the Lord, O king of Judah, that sittest upon the throne of David, thou, and thy servants, and thy people that enter in by these gates. Thus saith the Lord: 'Execute ye judgment and righteousness, and deliver the spoiled out of the hand of the oppressor; and do no wrong, do no violence to the stranger, the fatherless, nor the widow, neither shed innocent blood in this place...

..."For if ye do this thing indeed, then shall there enter in by the gates of this house kings sitting upon the throne of David, riding in chariots and on horses, he, and his servants, and his people. But if ye will not hear these words, I swear by myself", saith the Lord, "that this house shall become a desolation". For thus saith the Lord unto the king's house of Judah:

Thou art Gilead unto me, and the head of Lebanon: yet surely I will make thee a wilderness, and cities which are not inhabited. And I will prepare destroyers against thee, every one with his weapons: and they shall cut down thy choice cedars, and cast them into the fire. And many nations shall pass by this city, and they shall say every man to his neighbour, "Wherefore hath the Lord done thus unto this great city?" Then they shall answer: "Because they have forsaken the covenant of the Lord their God, and worshipped other gods, and served them". Weep ye not for the dead, neither bemoan him: but weep sore for him that goeth away: for he shall return no more, nor see his native country...

#weekendreading #orangehariedbaboons

David G. Blanchflower: Recessions Elude Economic Forecast...

David G. Blanchflower: Recessions Elude Economic Forecasters: "I served on the MPC from 2006 to 2009.... From around October 2007 onward, for many months in a row I started to vote for interest rate cuts, mostly on my own.... Eight people on the MPC had the same opinion, and I had a different one, so there were only two opinions. I felt as if I had the weight of the British people on my shoulders. As the famous Liverpool football club battle cry from the Kop End that sang out loudly the other day in the 4-0 defeat of Barcelona, from the old Gerry and the Pacemakers song, 'Walk on with hope in your heart and you���ll never walk alone'.��Some years later, Gordon Brown... apologized for appointing me 'to that awful job'. I still believe Gordon Brown and Ben Bernanke saved the world...

...The governor of the Bank of England had no idea what was going on in the British economy in 2008 as the biggest recession in a hundred years hit. It turned out that when the U.S. sneezed, the U.K. caught pneumonia. Lord King even said this, sitting two seats from me, on the Sept. 11, 2008, a few days before the failure of Lehman Brothers, at another meeting of the Treasury Select Committee meeting: ���I do not think we really know what will happen to unemployment. At least, the Almighty has not vouchsafed to me the path of unemployment data over the next year. He may have done to Danny, but he has not done to me.��� The unemployment rate had increased from 5.2% in April 2008 to 6.0% in September 2008 and would reach 7.9% a year later. The right answer was that it was going to go up and by a lot...

#noted

Franklin M. Fisher (1989): Games Economists Play: A Nonco...

Franklin M. Fisher (1989): Games Economists Play: A Noncooperative View: "As a teacher of mine (probably Carl Kaysen) once remarked some thirty years ago, it may very well be the case that one cannot understand the history of the American rubber tire industry without knowing that Harvey Firestone was an aggressive guy who believed in cutting prices. Maybe so. But then, as someone else (probably Mordecai Kurz or Kenneth Arrow) remarked to me a few years ago, the job of theory is to discover what characteristics of the rubber tire industry made such aggressive behavior a likely successful strategy. Absolutely right. That question would be answered if we had a generalizing theory of oligopoly. As it stands, we are a long way from an answer...

#noted