Globalization Fail

A few weeks ago I wrote about the anomie that enveloped me when I attended the Aspen Ideas Festival. The sense that what was taking place in our economy and society was the effect of forces outside our control. The term used for this notion is globalization. So yesterday the New York Times put out a long piece about how through a combination of carrots and sticks we had gotten the Japanese auto manufacturers to put plants in America and hire American workers. The article asked this question.

For years, high-tech executives have argued that the United States cannot compete in making the most popular electronic devices. Companies like Apple, Dell and Hewlett-Packard, which rely on huge Asian factories, assert that many types of manufacturing would be too costly and inefficient in America. Only overseas, they have said, can they find an abundance of educated midlevel engineers, low-wage workers and at-the-ready suppliers.

But the migration of Japanese auto manufacturing to the United States over the last 30 years offers a case study in how the unlikeliest of transformations can unfold. Despite the decline of American car companies, the United States today remains one of the top auto manufacturers and employers in the world. Japanese and other foreign companies account for more than 40 percent of cars built in the United States, employing about 95,000 people directly and hundreds of thousands more among parts suppliers.

I posted the article on my Facebook page and got this rant back from John Papola.

Why should the corrupt crony thugs in DC prevent Americans from trading with other people just because of some stupid line on a map. The “globalization gospel” is called “freedom” and “free exchange” and its the roots of western civilization. Are you seriously proposing mercantilism? The 17th century called. It wants it’s defunct doctrines back.

But my response to John is that his vision of freedom in America is a mirage. In the U.S. those with power use it to insulate themselves from competitive forces by winning favorable tax treatment and other forms of what economists call “rent seeking.” I reject the notion that all of these changes that make it so hard to find jobs for people without college educations, are just the inevitable forces of technological change. Globalization was a choice on the part of capital to weaken the bargaining power of workers by using outsourcing. As the auto “insourcing” model proves, there is no inherent reason why U.S. workers can’t be just as productive as Asian workers. Because the Reagan administration (and every one to follow) made it easy for companies to close down factories and move jobs offshore, the rent seekers triumphed.

The irony of course is that I know John Papola hates rent seeking crony capitalism as much as I do. For a liberal like myself, it is anguishing that both Clinton and Obama have been just as obsequious to the wishes of Wall Street as Reagan, Bush 1 and 2. What we need is a new reform politics that will combine elements of market choice (such as our discussion on school vouchers) with a simple set of regulations that bring the extraordinary power of capital to heel. We will still need a smart government to build the roads, run the police and fire departments and provide a social safety net. My guess is that the Democrats are less in the bag to the 1% than the Republicans and so they are better positioned to be the messengers of reform. As I have said before, cashiering Tim Geithner and hiring Joe Stiglitz would be a good start for Obama’s second term.

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67 Responses to Globalization Fail

  1. len says:

    The question of the moment is will social agendas or economic agendas triumph in three months. The cynics are betting on social agendas because they are easier to grasp (not understand, simply grasp) and people are accepting the economic agendas as “inevitable”.

    It is the mirage of inevitability that has to be smashed and it is insulated by the social agendas.

  2. Rick Turner says:

    Note that the Japanese auto companies who have set up plants in the US tend to do so in “right to work” states. In other cases, the car manufacturers are starting from scratch and are able to make more competitive deals with the unions, not being stuck with Detroit legacies.

    As much as I recognize how needed unions once were, they pushed it all too far and helped management destroy the competitiveness of too many American manufactories. Of course, management helped in the auto industry by continuing to design stupid cars.

    Automation is leveling the playing field as far as where one chooses to build a factory. Of course, that same automation is making jobs obsolete faster than new ones are being created, and we are in a world where full employment is unlikely as it is just not necessary from a strictly supplier-to-consumer point of view. If you took away the incredible waste of the world’s military spending, you’d find us in a world where the ability to produce would go way beyond anyone’s need for goods. Or another way to look at it would be that we could all be fully employed working less than thirty hours a week and the economy could be steady state.

    It’s not just the college uneducated who are having trouble finding jobs; many recent grads in the US can’t find work, either. Some of that may just be a failure in student guidance. Colleges tend to hold themselves above the fray when it comes to training students for real jobs in the real world. I can tell you that one of the worst employees I ever had was one who majored in philosophy only to find no jobs for philosophers when he graduated. He was angry at a world that didn’t seem to want his version of brilliance…

  3. JTMcPhee says:

    @Rick Turner
    So maybe the whole World Military Industrial Imperial War Machine Thingie is actually a clever play by the Manufacturing Sector, currently eating a quarter of our Gross Global Product, to destroy consumables at a steadily increasing rate, so they have to be by replaced the efforts of Highly Paid Middle Class Techos, many of whom spend their days coming up with ever more “sophisticated” (a word that used to mean “spoiled” or “adulterated”) code and devices that are ever closer to a Terminator-style end-game?

    All these thriller novels where the plot is about some little group of Bad People who are playing a Long Game or have come up with a Killer App of one sort or another that will let them Take Over Everything, or maybe just Take Everything Down. And then some heroic dude or dude-ette swings into action and Fixes It All by some violent or inspired master stroke. Suppose the Kochs, or the Chinese mandarinate, or the Insane Israelis, or Whydone’twehearabouthimanymoradinejad, have what they believe are the Keys to the Kingdom, or that Da Vinci Codex? who’s gonna take THEM down? John Galt?

    And if the methane hyclates or whatever in the Arctic sludge really are a game-ender for the species, is anyone going to weep for Argentina or Aurora?

    Just rambling…

  4. len says:

    @jtmc: Ponder this: the same colonel who created the most popular video game in America, American Army, used by the US Army to familiarize the youngsters with being career soldiers, is now the Superintendant of the Huntsville school system. In a single year he took a system deeply in debt and transformed it into one with a surplus, and he is replacing all of the textbooks with iPads and laptops this year. He shuffled all the entrenched teams (say good ol girls and boys) by forcing the principals into different schools, has been firing teachers who can’t teach, and build a new high school without an electric fence around it.

    He has accomplished two items Jon describes as steps necessary for crossing the chasm.

    Ya never know.

  5. John Papola says:


    I’ve replied on facebook. Even though you’ve responded to me hear, by name, I’m not particularly interested in being personally attacked by Alex Bowles. The best way to avoid being jumped in a bad part of town is to not go there in the first place.

    Just one question for the group… if the problem is “globalization”, what is your policy solution? That’s the root of my “rant”. Do you want mercantile policies? Saying we should have school vouchers and the hyper-partisan and intellectually dubious Joe Stiglitz working in the executive branch doesn’t strike me as an answer.

    I’m excited that you’ve read Zingales. Now read The Rational Optimist by Matt Ridley. If that one sinks in, it may just kill your mercantilist streak and we can lock arms in universal minimum income, ending the Fed, and devolving power to the states. We’ll never agree on regulation. You continue to hold to the fairytale that there is a “simple set of regulations that bring the extraordinary power of capital to heel”. The history of government “regulations” is CLEARLY that they benefit politically favored “capital” and create the longest-standing monopolies in history. Big government begets big “capital”. That’s history. Anti-trust theory just jibe with actual history. The civil aeronautics boards is but one example of many throughout history. Again, see Gabriel Kolko’s “The Triumph of Conservatism”.

    Now, I can’t wait for Alex Bowles to make his appearance complete with personal insults and word-by-word parsing at a level of scrutiny he applies neither to himself nor any other writer on the site.

  6. John Papola says:

    PS… you might want to rethink using fire-fighting as the go-to example of smart, necessary government service provision:

  7. Fentex says:

    s the auto “insourcing” model proves, there is no inherent reason why U.S. workers can’t be just as productive as Asian workers.

    U.S workers are, and have long been, more productive than Asian workers.

    The choice to move production overseas was never about workers productivity, it is about capitals productivity with regards to regulation, taxation, liabilities, access to markets and leverage over workers (not their productivity).

    The eventual redistribution of infrastructure has added concerns about supply chains but those didn’t exist when the choice was made to move production.

    But still the U.S doesn’t seem that badly off if only the gains in productivity since the 1970’s were shared. I don’t think Jon and Papola are that much at odds about ambitions for U.S citizens but only over what happens in reality.

    People have espoused theories of free markets for decades now and gained political support for regulatory change on the strength of the arguments and the result has been an increasingly priviledged class concentrating wealth and eventually a financial industry that has sucked, through a regulatory framework designed for the ambition, the functioning liquidity out of the worlds economies.

    Were these free markets? If not, if one argues they were regulated vampires, how does one convince an audience that has seen the rhetoric of free markets for forty years end up here after their political consent that even more freedom for trading would have been better?

    For what most people see is the ruthless exploitation of asymmetrical opportunity. People out of work find it hard to credit that they could have made choices that would have disciplined the monsters that ate their economy.

    Personally I think the U.S’s problem is not the globalization of business, I think the problem is the withholding of the benefits from the non-priviledged majority and the simple fraud of a lying inappropriately regulated financial industry that has creamed an unearned slice off the economy.

    Not to mention a political environment of deliberate terrorizing of the U.S populace to scare people into supporting a lumbering Military Industrial Complex.

  8. John Papola says:


    Where exactly has all this free market reform taken place? Not in America over the past 40 years, save for some terrifically successful deregulation by Carter. Scandinavia, Canada, New Zealand and Australian appear to have done more free-market oriented policy reform over the past 40 years… and are the shining stars of our current “great recession”.

    To talk about American finance as a “free market” during the past 30 years simply isn’t serious discussion. The repeal of Glass-Steagal is the ideological strawman put up for this false narrative… only this had very little impact since most of the major players in the mortgage finance mess were pure commercial banks and thus never subject to Glass-Steagal. Weird right? How could a law that didn’t apply to Fannie, Freddie, Goldman Sachs, USB, Merrill Lynch, Bear Stearns and Lehman Bros be blamed for the housing boom? Beats me. But that’s what you get from Joe Stiglitz-style political narrative making.

    Finance was and remains one of the most heavily intervened sectors of the US economy. The most lightly “regulated” remains high tech and we see the difference in value creation between the two.

    Finance has been a vampiric parasite on the economy and the American worker and especially American taxpayer. No doubt about it. But I just don’t see how one can blame “free markets” or “free market ideology” for that with a straight face, given the actual facts. Blame the Fed. Blame the Treasury. Blame the global Basel regs. They’re the ones that created the moral hazard with easy money, bailouts, backstops, housing mandates and MBS capital ratio prioritization.

    Meanwhile, Walmart produced some of the most working-class friendly productivity boosts in American history through hyper-efficiency and global trade. Global trade is good. Big government, central bank cartelized finance is a disaster.

  9. Fentex says:

    Where exactly has all this free market reform taken place? Not in America over the past 40 years,

    Was it not apparent this was my point? That the free market rhetoric to which people gave political support was not used to create competitive free markets but to empower the priviledged by restructuring regulation in their favour.

    My point was that after forty years of being told this was free markets and seeing their economy stolen away U.S citizens are going to be hard to convince that free markets are a solution.

  10. len says:

    So… if the stock market is at an all time high and the corporations are showing record profits, where are the jobs for Americans and why are wages stagnant or falling?


  11. John Papola says:

    I don’t understand why you think free market rhetoric was a tool for INCREASED government intervention, Fentex. I understand that there were some using the rhetoric. But Obama has employed the opposite rhetoric with the same results.

    If your point is that free market rhetoric ends up being a tool of cronies, I don’t accept that thesis. Again, we’ve seen very good results of free market reforms, often from “left” administrations in other countries.

    I do agree that it’s been destructive to hear people saying, dishonestly, that we have “free markets”. This is nonsense that comes from the left and right. The left blames our “free market” for all the ills of the world. The right claims that our “free market” is the source of our success. We don’t have a free market.

  12. John Papola says:

    Everyone on this site needs to read The Rational Optimist. Please. There’s never been a country that reduced it’s trade through protectionism and mercantilism and saw the economy improve dramatically. South America at the turn of the century moved towards autarky and welcomed disaster. The story is always the same. Less trade. Less income and opportunity, especially for the poor. We’ve tried self sufficiency and buy local… it’s called the middle ages.

  13. Rick Turner says:

    Have any of you ever tried to export products that you manufacture?

    I have, and I do, and it’s a horrible pain in the ass, even to Canada. The layers of bullshit are unbelievable. NAFTA is NOT the small businessman’s friend, I can tell you that. And try to export to Europe or Australia where import duties are often 25%. Once again, this whole thing is gamed and tilted in favor of big business and protectionism. There is no free market…anywhere in the world…other than, perhaps, the illegal drugs trade.

    And then good luck if you happen to be, for instance, a fantastic British musician…one of the best guitarists in the world…Martin Simpson…and you want to do a few gigs in the US. It’s not worth his while, simple as that, and there are hundreds of other foreign artists for whom the H5 Visa process is just a quagmire of stupid paper work subject to the foul moods of snippy bureaucrats. So much for free trade and artistic exchange. But, then, America is so anti-arts these days that it’s just disgusting.

  14. Fentex says:

    I don’t understand why you think free market rhetoric was a tool for INCREASED government intervention

    I don’t think it was such a tool, I think it was what people heard and were told was happening as regulations were changed. So now the public is unlikely to be easily swayed by arguments that free markets are good when they have seen what they were told were free market reforms fail.

    Trying to tell the public that what happened was not freeing of markets but instead regulatory capture and government sponsored favouritism is going to sound like the No True Scotsman Fallacy to most people who will recall consistent claims of improved market freedoms.

    Although I speak from NZ, I haven’t experienced life in the U.S so I may be mistaken about what was the publics understanding of U.S government policy, possibly confusing it with the consistent drum beat of appeals to free up markets in NZ.

  15. T Bone Burnett says:

    @Rick Turner

    Art confounds the machines.

  16. len says:

    The economist vs economist conversation is like episcopalians vs baptists: all theories and slogans, no practices or algorithms.

    A completely free economy is a circuit board composed entirely of amplifiers and capacitors but no resistors or heat sinks. No wonder you keep burning up the board. A completely closed economy is a transistor radio running on a 9volt battery. You have a few good hours of music and then silence and a paperweight. No wonder the dancing stops.

  17. len says:

    A global economy based on a free market is an illusion because of the national boundaries and systems of regulation. It inevitably creates a shadow system for gaming across those boundaries. The manifestation of this is the international banking systems. This forces all profits (surplus resources in whatever form) to the top of the system, thus the 1%, and this creates the illusion of a top-down system, aka, trickle down.

    The reality is a healthy stable economy is always bottom up.

    This is the problem, T-Bone: all systems that produce surpluses produce control hierarchies. Historically, the elites who control these use those surpluses to purchase the services of artists to produce art that creates the top-down illusion. Look at the history of art. How often have the artists deemed best in their lifetimes also been the court artists, the Salieri, the people who carved the Mayan and Egyptian stellae?

    Art is the reason to buy a new 9-volt battery. And that keeps the wheel turning to grind the wheat to feed the hands that pick the hands that turn the wheels. There is no free lunch.

  18. len says:

    And the middle ages reference is historically dubious (assigning a cause without evidence of a relationship). It is more likely that mercantilism happens because of weak national control over local gamesmanship and unbalanced relationships among the national system. In short, social agendas over economic agendas (greed triumphs equality before the law).

    Anyone who really trying to fix the system instead of gaming it would be looking for a dynamic control model without hidden couplers and loops.

  19. John Papola says:

    Thanks for the clarification. I have read so many criticisms of free market reform as being nothing but an alleged cover for corporate rip offs. That’s how I interpreted this paragraph to which I responded:

    People have espoused theories of free markets for decades now and gained political support for regulatory change on the strength of the arguments and the result has been an increasingly priviledged class concentrating wealth and eventually a financial industry that has sucked, through a regulatory framework designed for the ambition, the functioning liquidity out of the worlds economies.

    I think its a fair interpretation, but I’m totally fine with the broader point you’re now making. Yes, there have been LOTS of free market RHETORIC, especially in the USA. Bush was particularly ludicrous for this, given that he was a big-government progressive that expanded spending, regulations and entitlements to an extent unseen since the last horrendously corrupt Texan to serve in the office, the ballot-stuffing Lyndon B. Johnson.

  20. JTMcPhee says:

    Like you say, ya never know — people get religion. Or the pangs of conscience somehow break through.

    Smedley Butler kicked ass in little countries for the accretion of wealth, for some of our now formerly American corporate interests (now citizens, for purposes of taxation and responsibility, of nowhere and everywhere), until he figured out that the stuff he was doing, loosely described as “war,” was nothing but a racket, and he was nothing other than a uniformed, be-ribboned, hired thug, running the South Side for the Special People of Wealthy America.

    And Saul of Tarsus had a reported conversion experience, and came up with a multi-level marketing program, with branches including auto-da-fes and pedophilia protection services and get-out-of-Hell-free-card dispensaries, with premises as improbable in their way as the ones nominally adhered to by Tom Cruise and John Revolta. Such a huge gulf between Jesus of Nazareth, as best we can discern him through the clouds of theocratic revisionism, and Corinthians.

    All part of the Great Human Panorama.

    Can the colonel teach his motions and inspirations to others, and is all the stuff he is doing producing the kinds of citizens who might catalyze a, I was going to say revival, but maybe “birth” would be more accurate, a birth of sustainable meta-stable republican governance in this here space? Cuz there are thousands more of equal rank who are still pumping up their little corners of the Great Networked Interoperative Planetary Battlespace, and carrying on and carrying out the army-ant behaviors that are killing us.

    We all need grace. Does it follow that we all deserve it?

  21. John Papola says:


    This analogy is false:

    A completely free economy is a circuit board composed entirely of amplifiers and capacitors but no resistors or heat sinks. No wonder you keep burning up the board.

    Freer markets are more regulated than government “regulated” markets. They generally have more competition and lower barriers to entry. As a result, customers are less captured by corporate greed since they can walk to the competitor and starve the wannabe monopolist. The truly false narrative is that of government regulation as a counterweight to corporate greed. Never happened. Government intervention of the regulatory agency sort has consistently produced more cartelized, subsidized and “too big to fail” industries. It’s a magnifier of corporate greed.

    What we need is more decentralized and fragmented political power (new federalism). Having one unaccountable executive branch agency (like the Fed or SEC, for example) as your single target to capture is NOT a robust system of political economy. It’s not redundant. If you want redundancy and real regulation of excesses, you need freer entry for competition, fewer single-points-of-failure, and more heterogeneity in the operating approaches (see the monoculture produced by regulator-mandated “Value At Risk” measurement).

    Notice that when the tech bubble burst, nobody got a bailout. The economy didn’t implode into a financial crisis. That’s what healthy political economy looks like. I believe it went down like that because silicon valley is the most free market sector of our economy (or was). When the same bust came to the highly “regulated” housing financial and banking sector… along came the crony bailouts (Bush/Paulson/Geithner/Obama/Summers) and crony “reforms” by the cronies themselves (Dodd/Frank).

    What was revealed as the tide rolled away was a series of corporate pirates like Enron and Worldcom who could only hide their piracy during a boom. Those firms don’t exist today. That’s healthy. Citigroup is still alive. That is not healthy. Thank Uncle Sam for that. It’s his fault the zombie lives.

  22. len says:

    he was a big-government progressive that expanded spending, regulations and entitlements to an extent unseen since the last horrendously corrupt Texan to serve in the office, the ballot-stuffing Lyndon B. Johnson.

    Once again, more theory and sloganeering and a bit of slander. Still nothing that is provable or testable, so no model that can be applied to test against observed outcomes and relationships.

  23. John Papola says:


    By the way… I’m quite flattered that you devoted a whole blog post just to one of my facebook comments. I don’t think my personal opinions are quite worth of such attention, but it’s neat none the less. So thanks.

  24. JTMcPhee says:

    “creamed an unearned slice”?

    From what I read, the “financial industry” (SIC) has conjured up something like a quadrillion dollars in counterfeit “money,” many times the priceable value of all the human-generated stuff on the planet, in the form of various fraudulent wagers that “everyone agrees” are somehow required to be made good, both sides of the bet being fully paid off, by people who are limited to creating REAL wealth, the kind that buys a loaf of bread or a gallon of Behr paint or the co-pay on an antibiotic prescription.

    That is not a “slice.” That is such an enormous, toppling, breaking tsunami of manufactured “debt” that the rest of us have to face and suffer, that most of us are simply (along with the other physical global effects of the processes that have as their Acme our present incipient departure as the Great Capstone Species) waiting for the crush and the drowning.

  25. len says:

    This analogy is false:

    No it isn’t. Note the modifier “completely”.

    Freer markets are more regulated than government “regulated” markets.

    Now we have an equivalence: “freer”. We are moving towards the same model. We may be quibbling on kinds and types of controls (say, components, analogously, resistors, capacitors, amplifiers, gates, and so on that slow, hold, increase and route values).

    It isn’t that the government is all bad or all good or that all local systems are (that is a scale quality, not a kind or type quality). It is that the system is unbalanced and because of other issues (social agendas in politics, greed, etc) is becoming uncontrollable except by gross controls (very big programs) and these have been abandoned (politically unfeasible) so all we are seeing is microcontrols (little pieces of legislation) and these are either temporary or very local relief. Meanwhile at the scale of the system, it catches fire or crashes with the latter being most probable at this time.

    It is more likely that when the tech bubble burst, the system could absorb it. Capacity or resilience is the term you want to understand. The Bush era tax cuts and two wars on top of globalization where your prime competitors are heavily centralized and their leaders are engineers removed the resilience. Note that the Bush era attempted or claimed to be decentralizing and the leaders are lawyers.

    Our society is being turned against us. We misunderstand the failure modes of capitalism while our competitor completely understood the failures of communism and used that imbalance to flip us on our backs then picked our pockets while helping us stand back up.


  26. JTMcPhee says:

    Maybe “globalization” refers to that currently-being-glassy-eyed-ignored little tidbit that the Special Post-National People have taken maybe $30 trillion in real wealth out of those stupid little nation-states and placed it into the capable, culpable hands of “Swiss Bankers”? What do these mothertruckers DO with all that? Is it now just a habit, a machine set in motion that will just keep stripping the planet and the people on it of everything “of value,” until all that’s left is the Soylent Corporation with its C-suite-ers eating the last bits of caviar while we mopes recycle ourselves through the algae vats?

  27. John Papola says:

    What part of my assessment of Bush is untrue? Spending did expand. So did entitlements. So did regulations and regulatory agency expenditure. He dubbed his progressivism “compassionate conservatism”. That is sloganeering. My summary of his failed presidency is not. Nor is it a theory. It is just a quick account of events.

  28. len says:

    @John Papola

    He applied energy to the wrong controls for the wrong goals. Is it better to entitle or create values (not the same as creating jobs: jobs are a means). I agree with what you are saying. I’m trying to get you to be specific about the controls and control values and which processes these control and what values they change.

    Think for a moment of an economy as value in motion.

    The problem for Republicans is Romney is a “job creator” but a value-destroyer. As JTMc notes, they are taking off the top and socking it away. It isn’t being reinvested. They aren’t compassionate conservatives or really compassionate anything. They are hoarders and they use the hoard to rejig the system to keep taking more out of the system without putting enough back. Profiteering over land care produces a dust bowl.

  29. len says:

    Marvin Hamlisch died. Rats!

    “Music is truly an international language,” Hamlisch said on his official website. “And I hope to contribute by widening communication as much as I can.”

    Did that. See you in the light.

  30. len says:


    Basically yes, except it collapses first and they die in a hail of gunfire or sneak off to live in South America like their secret heroes. Once an orc, always an orc.

    But you point out something very important: systems driven past their not-to-exceed parameters are like helicopters, they lose lift and stall. a) you have to know what that speed is and b) you have to value your life and your cargo enough not to exceed it.

    So this is as you point out often, a failure of values. It is supported by an illusion of infinite growth just like those computer trading programs. I don’t know how they are designed or their goals but if they are based on he who tradest fastest getteth mostest at micro-transaction scales, they will destroy the “lift”, that is, somewhere the actual numeric values go exponential and they crash (a computer cannot actually trade a transcendental value or compute it; it can only exchange a symbol for it and then the values are abstractions or non-real, say imaginary).

  31. JTMcPhee says:

    @John Papola
    Everyone on this site needs to read “Debt: The First 5,000 Years.” Please. It’s going to be gobbledygook to anyone steeped to the gills in Libertarian tracts and True Beliefs, but Graeber might open some eyes to the really strange perversions that are the fundamental myths of economics (“barter was the first form of monetary exchange — NOT”, and the only transactions that count are those arm’s length dealings between “equals,” forget about all the other aspects of human interaction that make up the tapestry of REAL “exchange,” and a whole lot of other insights) especially the more purblind, virulent forms of that fake discipline espoused by Free Marketeers.

    And Graeber’s explication, with the benefit, not of the circular repetitions of those Founding Falsehoods of all those economists, but of actual scholarship in history and anthropology, of all the various ways humans have organized over the last 5,000 years (in relatively smaller groups, of course) to collect and distribute the necessities of life, and how hierarchies develop, and what can maybe be done to build feedbacks that limit the inevitable predatory and parasitic impulses, might be of more value than all the corner-shot dancing on the heads of pins by all the “Markets Want To Be Freeists” whose thinking all starts from some pretty puny and shriveled and myopic and interesting but demonstrably wrong assumptions.

    That reification/personification thingie called “The Market:” What is that supposed to be mad up of, again? Bear in mind that the “invisible hand” Adam Smith was referring to, back in the day was, indeed, the Hand of God Almighty. Is H/She running things? According to which catechism?

  32. len says:

    Can the colonel teach his motions and inspirations to others, and is all the stuff he is doing producing the kinds of citizens who might catalyze a, I was going to say revival, but maybe “birth” would be more accurate, a birth of sustainable meta-stable republican governance in this here space?

    If we can accept that a small downtick in productivity is worth a big uptick in quality, yes. That was the trade off for the civil rights act, JTMc. We decided it was worth losing a certain amount of work productivity if over time it returned quality of life for all. We’re still in the midst of that transition. This is where so many fail as managers and value creators: they mistake rate for production and quantity for quality.

    We all need grace. Does it follow that we all deserve it?

    The point of grace is that it is given, not deserved. Otherwise it would be a reward, a merit. The other point is it is afforded not sacrificed. Grace given is the hallmark of true love.

  33. Rick Turner says:

    Len, given the stats for black unemployment and incarceration, I don’t see the huge improvements we should be seeing. But then, government intervention seems to have included bringing tons of drugs into the US…heroin and cocaine…to fund clandestine wars. There are some strange parallels to the British run opium trade in China in the 19th Century, and there certainly have been yet another set of unintended consequences.

    We may need a good dose of isolationism to figure out how to do globalization…

  34. len says:

    Another key, JTMc, is “habit”. If you change their habits, their circumstances improve. Then they believe. It doesn’t matter what they believe as long as it reinforces the right habits. That is the struggle in religion, particularly, Christianity. We allowed the roots to be poisoned.

    It’s fundamental to behavioral semiotics: beliefs are a means to sustain habits with minimum rewards, not the absence of rewards. You rebuild a culture from the inside out, from the branches to the leaves. It only works if the roots to the trunk are healthy enough to survive the transition while the oxygenating systems are degraded. So we are in a season of hell. This will pass.

  35. len says:

    @Rick Turner

    It isn’t linear change, unfortunately, and yes, the drug culture, the easy money and the need for esteem while the sustaining systems, the cities, are drained of energy all make this a really hard transition.

    We don’t need isolation as much as we need to learn to jam together solo. Grateful Dead style. How did they do that? Correct me if I am wrong because you know or know people who know: they respected each other on stage and the drummer had the strength of an oak trunk.

    Respect precedes love. If we can build that over fear, then you may see something that will look like a miracle: exponential change, a sudden transformation where one day the sound is a chaotic mess, and the next, it’s music.

    Obama and the rest of us should learn something: no one performs well with their back to the audience or without the respect of the rest of the band. Once we learn to respect each other, then we will have a quality performance.

    Why does T-Bone get the big bucks? He always produces quality even if the act only breaks even and the investors realize a marginal profit immediately, he always produces quality and marginal profits sustained over time produce real wealth.

    He respects the artists. In return, they give their best work.

  36. len says:

    One problem, Rick, is a panglossian belief about the ease with which dominant cultures can change the values of minority cultures and vice versa. It takes more than jobs and money to do that. Opportunity is not enough; habits have to change and again, then beliefs follow. Freedom to choose implies freedom to choose unwisely because one still believes choices are limited. This is true of both the dominant and the minority culture.

    And there are unintended consequences in local domains. For example, OBWAT can be credited with the birth of Americana. Americana includes bluegrass. In some areas, (where I live), the bluegrass community is one of the most bigoted homophobic groups we have and they are not poor: they are the heart of the country club mc mansion kkk. And that movie strengthened them. Unintended, only locally true and hopefully of short duration, but significant. They are the same people who love the flag and Jesus and guns and now they wrap all in the same bundle with a polished banjo and mandolin. They don’t mean to be hateful. They believe they are under attack and they think it is time to fight. It is an accidental reinforcement of the coupled symbols, but affective nonetheless. Oopsie.

    That is why we have to be careful with art: it triumphs but it also varnishes. A brightly polished table with hidden cracks is not going to hold the weight you place on it without shims.

    Sometimes it is the best you can do until you can replace it. As I said, we accept a downtick and a marginal gain that if sustained eventually produces real wealth. Patience.

  37. John Papola says:


    I’ll read Debt. You read The Rational Optimist.

  38. Fentex says:

    From what I read, the “financial industry” (SIC) has conjured up something like a quadrillion dollars in counterfeit “money,

    The effect of the preposterous leveraging of finances was to create opportunity to skim from the original wealth. This was the mechanism for the rip off.

    It was creating an illusion of productivity and as a result financial industries have expanded from some ~5% of GDPs to about 20% on the strength of complex games of three card monte.

    Personally I think governments should operate their own bank for handling simple savings and financial transfers as essential infrastructure.

    Let private banks fight for purposeful investment on their own strengths and at peoples own risks.

  39. Fentex says:

    If we can accept that a small downtick in productivity is worth a big uptick in quality, yes.

    When I was younger I helped my brother in his wrought iron business build and install gates and fences. At this time I used to wonder about the more crudely machined product we built compared to labouriously hammered Victorian examples.

    “Why isn’t anything as hard worked today?” I wondered, and the answer was fairly obvious. Workers were getting a bigger cut of the pie and didn’t work themselves to death for the scarps permitted them and modern tools made it possible to be as effective, if not as pretty, cheaper and quicker.

    You can have quality if you want to pay for it, but there’s more to the price than what’s in any one persons pocket.

  40. Fentex says:

    The problem for Republicans is Romney is a “job creator” but a value-destroyer

    From a distance I think his financial attitudes and economic policies are the least important thing about him. He’s an insular idiot with no solid connection to reality having been protected from it by wealth his whole life.

    He would make appalling decisions based on a fundemental absence of knowledge of the world. Please do not elect that man.

  41. JTMcPhee says:

    JP, I’ll take a crack at it. Wonder which one of us will slam the mental doors, put our figurative fingers in our ears, and start the “Lalalalalala” first? Or for those of us who have put such enormous effort into mastering a complex dialect and catechism, who will come up with the most facile dismissives in that inevitable, ineluctable, reactive critique?

    For the species’ sake, it ought to all be aboutidentifying key motivators and images and values and controls that might keep us from stoopidcide… I don’t have lists and primers, just the sorrowful sense that we just aint built to last. The telomeres have done their duty, time for apoptosis…

    But what the hell, I’m off to visit my daughter and grandkids, so let us gather rosebuds while we may.

  42. Rick Turner says:

    Fentex, my son has a business doing high end architectural metal work. High dollar stuff that will last for decades. He does have as much business for himself, his partner, and their nine employees as he wants. There is long term economy in buying the best. It lasts…

  43. len says:

    I was thinking in terms of control over defects as quality, but I deal with systems that can ignore errors until a flight crew is killed by a service crew too inexperienced to ignore the errors. OTOH, in a contracts driven business, reputation is 80% of the appeal. So it is in my best interests to see to it my colleagues spend more time training each other and looking for ways to improve the process than time spent screwing each other over to advance. It is amazingly difficult to get them to do that when the examples they see around them counsel otherwise. There is a real difference in leadership and management. You can create jobs without creating value.

    In any business I’ve ever worked, the most important important components to improve to increase quality are people.

    As to your point, Fentex, it is true that there are break even price points for sophisticated product particularly repeat purchases. That is why it is important to stress the quality of the artists as well as the art. The average buyer has an average income and can only buy so often so it is important to price relative to the frequency of buying opportunity.

    On the other hand it is not necessarily true that prices rise linearly with quality. CD prices fell dramatically from the average of $18 to $10 yet you can still buy very high quality music if you want it in that price range. My guess is that is where the technology impacts on production were absorbed and did not go into the pockets of the artists who have to work just as hard to maintain quality skills.

    Note that a 99 cent dialog is still in the same range as the ten dollar ten song CD and some of that should be coming back to the artists and that is where Lowery is asking for better deals from the digital distributors. Those are market issues that will work themselves out or should but won’t if piracy sucks all the advantage out of the technological improvements.

    The cost of quality is relatively constant. If the opportunity to sell falls relative to purchasing power, then yes, cheaper made product results and Gresham’s Law prevails. Big bands didn’t become bad bands; small bands became better to compete for fewer opportunities. Evolution isn’t increasing complexity; it is adaptation relative to opportunity. Fitness isn’t quality. It is survival. That is the essence of Mean Streets.

    If you have the power to choose, nicer is better. From that point of view, one may want to be not so easily convinced of market inevitabilities. If one has the power to create values, one has the power to change the course of evolution. Creating jobs isn’t enough. They have to be good jobs.

  44. len says:

    99 cent download. Spell correctors…

  45. Rick Turner says:

    Len, the amusing thing is that most spell checkers would not have caught that. Dialog is spelled correctly. You need spell check + context analysis to catch that kind of thing!

    And speaking of artists getting paid…I recently found my 1967 album on iTunes where it’s been for sale for well over a year; it’s also on Last FM, and we’re about to be profiled by Ed Ward on Terry Gross’ “Fresh Air” on NPR in an “appreciation” piece which could kick up sales into the dozens. So where’s the money? None of us in the band knew about this; we’re all listed as songwriters. So maybe there’s only enough for a round of cappuccinos, but those are OUR cappuccinos. Sheeesh!

    T-Bone, Steve Soles used to hang out with us in the Village…downstairs from Marc Silber, and Happy and Artie Traum…

  46. len says:

    I didn’t type dialog. It decided that was what I did type. Technology is still a little dumber than me and I take comfort in that.

    We only found out Ground Level Sound was selling in the Pacific Rim when a BMI check for a few dollars showed up. My YouTube page is over 51k views. Monetization reports $0.00 in earnings. The choir will perform my choral piece Aug 29th. So the reward is knowing how, sharing and knowing the trek has been mostly fun. No regrets.

    But you’re outselling me! I may get Sanka or something. I really must get to work on the War With Canada. It could be my last chance to do something worthy of getting on NPR. :)

    T-Bone is a good man. You’ve had a helluva good run of friends, so…. GET TO WORK ON THE BOOK YOU LAZY SOD!!


  47. Rick Turner says:

    Len, were you really trying to type the title of that Chuck Berry song, “My Ding-a-ling”?

  48. len says:

    Not me, Rick, but yanno these technologies have an evil sense of humor, so it could happen.

    Meanwhile, here’s something to think about regards the content apokyclips. We’ve discussed edge servers as alternatives to the megaclouds. Now Xerox PARC is looking at a way to evaporate those clouds and return some control over authentic copies:

    as an alternative to the four horsemen:

    Apple will hate this but what goes around, etc.

  49. T Bone Burnett says:

    The internet has been gridlocked from the git go.

  50. len says:

    Adapting frequency hopping to what became CDMA helped the traffic but it was never designed to stream video. There is no doubt the Internet as we know it will be replaced and that is the opportunity to introduce more content safeguards. Evolving it away from the big iron server farms is a different problem but possible with edge server concepts (using the nearest storage with a local copy). The articles aren’t that technically explicit but do state that copy authentication is part of the design. How quickly this could be pushed into the system, how it would be administered, yadda are all questions worth asking.

    It says there are business opportunities here. Entrenched interests usually fight change and underdogs embrace them. “It’s the same old story, a fight for love and glory.”

  51. len says:

    Here are two pretty good articles that speak to how the technologies change and why those changes can be bumpy. The first is the effort to rearchitect HTTP to speed it up and make it more secure. Note the work done at Google then moving to the IETF. As soon as any work goes into an open standards committee, things get bumpier despite published best intentions.

    The second is the evolution of Ethernet, notably the work of Metcalfe. This is a bit more techy in the days before geeky. This is a better sense of how prior work is leveraged into new work and the way initial fielding conditions in local environments shape the system as they try to scale it up. Also bumpy.

    While we always try to fix things at the level of culture and legal infrastructure, when the gear supports you, the gig goes better. Eventually the two have to coalesce for the best results. See Pete Seeger alledgedly trying to get the Newport techs to turn off Dylan’s electricity. The boos did the nasty work that day but the electricity stayed on and the boos died down. Dylan went electric, folk rock was born and so many years later, there is Pete on the Colbert Report and a renewed effort to get him the Nobel Peace Prize. Patience is a beautiful thing.

    “The change it had to come. We knew it all along.”

  52. Rick Turner says:

    The 1965 “Dylan goes electric” thing has been incredibly misunderstood over the years and written about time after time by people who weren’t there. I was there…in about row five in the fenced off area in front of the stage reserved for performers and anyone with back stage access. I played main stage that year with Ian and Sylvia, and so I had a pretty good view of what was going on both on and around the stage.

    There may have been some booing from the crowd, but there wasn’t as much as has been reported. The performance was sloppy…not enough rehearsal with the guys in the Butterfield band + Al Kooper, and the mix was rough, to say the least, probably because of Paul Rothchild (or it may have been Joe Boyd) being hassled too much about the volume which the system couldn’t really handle, and Dylan’s set was extremely short which was a major problem for the crowd and Peter Yarrow. Yeah, the old guard…Seeger, Yarrow, Bikel, etc. were upset with the Newport performance, but it really it was Dylan’s moving on past obvious protest songs in the Guthrie mode that bothered them. They had loved Dylan as the heir-apparent to Woody and just didn’t get it when the songs went into much more surrealistic realms. “Maggie’s Farm” is a long way from “Masters of War”.

    I was hanging around with some of the folks from the Kweskin Jug Band that night at Newport, and we all thought Dylan’s set was thrilling if rough. But Dylan’s “going electric” was just part of a whole movement. All the folkies I knew at that point were listening to the British Invasion bands…the Stones, the Kinks, the Yardbirds, the Beatles; the Lovin’ Spoonful played the Club 47; Sonny and Cher were happening, and Dylan’s “going electric” owed a lot to the earlier combination of acoustic and electric instruments by Richard and Mimi Farina and also to the Byrd’s success with “Mr. Tambourine Man” which was released barely a month before Newport 1965.

    Too much has been read into that evening in 1965, and every time I read about it, the writer seems not to have actually been there but is repeating and perhaps building upon the words of others who weren’t there. And that’s a whole other subject…

  53. len says:

    Too much has been read into that evening in 1965, and every time I read about it, the writer seems not to have actually been there but is repeating and perhaps building upon the words of others who weren’t there. And that’s a whole other subject…

    Then there is Taplin saying Dylan cut it short and was sitting on the steps backstage dejected and he was there.

    Of course people who weren’t there read too much into it. That is how legends are made. This is how I react when people tell me about the Nazi Germans in the space program.

    Gotta write that book, Rick, so guys like me who weren’t there don’t make a mess of history for a cause instead of the mess that it really is without a cause.

  54. Rick Turner says:

    A lot closer to my recollections:

    Yeah, Paul Rothchild was mixing. After Newport, he went on to produce, among others, the Doors, Bonnie Raitt, and jazz guitarist Pat Martino. Paul had been the manager of the Club 47 in Cambridge in the early ’60’s but got busted for a footlocker full of pot that he’d imported from Mexico. I ran into him in Toronto in the spring of ’65, and then saw him at Newport. About ten years later, Paul wound up distributing the guitars and basses I was making as part of Alembic.

    Tumultuous times yield vastly different memories… I wonder how these times will be remembered. You’ve already got Romney seemingly forgetting Romney-care…

  55. len says:

    You guys are so much fun to hang out with precisely because you all were in the same time at the same place in different spaces. I’m convinced the way we learn from history is by understanding how the Rashomon effect creates the myth but the reality is it’s own lesson. We learn what we wish to be. Jon can remember a guitar case and how Dylan felt but can’t remember the face of the pilot. You hear the crowd but you remember the futzed tech. There is a balance to it and a reality that is less artificial than the myth. It is dimensional: a real gig the way real gigs happen, the randomization of best intentions.

    Along the lines of spell checkers could be our downfall because trusting the intelligence of the machine can have unintended consequences, here is a real sentence from a real technical manual I was editing today:

    “When to Accomplish Smoothing: when an advisory is generated at the desecration of the maintenance officer.”

    We’re looking for the supporting procedure, parts, tools and drawings now.

  56. Rick Turner says:

    If I didn’t have to earn a living and run a business and be a dad, I’d get the book done! There’s a lot of it “in the can”. More as I can get to it…

  57. len says:

    We all have our excuses but time makes no apologies. :)

    Maybe if I keep jogging your memory with my inaccuracies, you’ll write a paragraph every day or so to correct me and voila, it will be done. That’s a book I’d be willing to steal.

    Meanwhile I’m going on a Donnie the Q. campaign to help a black democrat try to beat an entrenched republican incompetent for a congressional seat. The DNC has written off this state and that’s no help, but hey, I’m tired of having to apologize for alabama because we keep sending extremist assholes to represent us. Might as well fight.

  58. morgan s warstler says:

    It is too bad Taplin doesn’t just stick to this…

    “What we need is a new reform politics that will combine elements of market choice (such as our discussion on school vouchers) with a simple set of regulations that bring the extraordinary power of capital to heel.”

    An EASY compromise is for me to say Taplin can have any regulation he wants as long as it requires half as many public employees to manage it.

    The more he makes the rule simple, and arbitrary and less open to interpretation, the less bureaucracy is needed to enforce it, to interpret it.

    But when push comes to shove, Taplin won’t accept that he has to craft policy SPECIFICALLY so that it runs efficiently or it doesn’t get to run at all.

    GOV2.0 is an amazing thing.

    Just start with a blank slate and assume that every single person carries a smart phone, and you aren’t allowed to have any government offices.

    This gameplay mkes it clear the kind of govt. we need to have an pay for.

    Citizen A sees a pothole and takes a picture, and by the end of the day whichever qualified citizen has bid the lowest to fix the pothole knowing he will be fined the amount paid if it doesn’t take, has fixed it.

    In between is a computer program, and no public employees.

    Unionized public employees are an evil even FDR stood against….

    They are THE ONLY REASON I trust the right more than the left to solve our problems.

    EVERYONE ought to work for profit, those that don’t are lesser souls.

  59. len says:

    Citizen A sees a pothole and takes a picture, and by the end of the day whichever qualified citizen has bid the lowest to fix the pothole knowing he will be fined the amount paid if it doesn’t take, has fixed it.

    1. How are bids selected given competing bids at the same bid price?
    2. How are work results measured?
    3. Who assesses and administrates the fine?
    4. Who brokers a litigated case for the failure of the repair given collateral consequences?
    5. If a bid or an outcome is protested, see 4?
    6. Who provides the code given 1 through 5?
    7. Who administers the code given 1 through 6?

    These are just a few of the obvious questions.

    Complexity is never destroyed. It is moved to another part of the code. The best one can hope for is a well-layered framework free of bugs. How often have you used one of those?

    No free lunch.

  60. Rick Turner says:

    Ahh, and then every pothole fixer will be driving around with a pick and shovel in their trunk making potholes to fix! The old “solution in search of a problem” scam!

    And #1 is easy…someone’s brother-in-law…

    #2…well, I guess it cannot sink more than “X” inches below the surrounding surface in “Y” days

    #3…some local Sicilian businessman who used to hang out at the Triangle Social Club on Sullivan St. Google for it… my ex-wife used to work next door…

    #4…an ambulance chaser

    #5…No, see Guido…

    #6…See #5

    #7…See #6

  61. len says:

    Here is something for 2:

    Now, the question is are the constraints expressed tight enough to actually detect problems or loose enough to hide them? There is a technical way to detect it if one is XML-savvy enough to do it. There is a political way to detect that: are the technical people being required to use a newer version of XML Schema that can encode co-occurrence constraints? There is a budgetary way to detect that: is the newer version a line item in the contract(s) for the geeks doing this work?

    You have to know the precise questions for the precise roles and you have to be able to understand the answers. If the wrong people ask the right questions of the right people, you are no better off. Move those terms around and you get the same results.

  62. len says:

    Here is what you need to understand about that example: the values for the swaps are local to the contract or state laws. Under the principle of separation of concerns, the programmer has to decide to put the values in a) the program code (the actual programming language enumerated list) b) the schema for the data (an XML schema that may or may not be able to check the co-occurrence constraints depending on the version of the language specified in the contract) or c) a separate code list that gets pulled into the schema depending on the local contract or state.

    C is the correct answer from a programmatic perspective. The problem is has the FpML language been represented to the press or governing authority as a means to solve the problems of derivative swaps. In theory, it helps but everything depends on where the values are placed as to the correctness of the contractual citation. Separation of concerns may make it possible to hide the actual values or show them in context, then so much for transparency if you don’t see them with labels. It’s a shell game.

    Here is a typical and correct response from a programmer:

    I don’t really see a problem with holding the enumerations in a file of their own and versioning them separately to the main xsd. That’s no different to external code lists, and it avoids the separate additional validation step.

    Notice the complete lack of concern about anything but programmatic efficiency.A smart pundit said this morning that the current Presidential campaign could be typified as “Community” vs “I got mine.”. Note: that is separation of concerns in spades. Now let’s go fill some potholes.

  63. Rick Turner says:

    Len, just a personal observation…I do not think in a programmer’s brain. Too much geek jargon is kind of off-putting to me and totally obscures what I think you’re trying to say in what I think is a political/communitarian way. Hence when so much is translated over to programmer-talk and then back, there is a huge amount of intent lost in translation. I think we all communicate best when we try to avoid the jargon of our individual professional specialties and speak and write in clear and plain common English.

  64. len says:

    Point taken but precision forstalls predictable counter-arguments. A schema is a computable way to describe the values of some document or database record, and co-occurrence constraints describe relationships among those values. Say, the width and length required of a guitar neck for a specific type of wood given the tension/pitch and number of strings, etc.

    In palin talk: when someone suggests that we can use the web to replace the government or enhance transparency, the devil is in the details of the design. Worse, it is a relentless and very fast devil that is expensive to incarnate and even more expensive to exorcise. Worse than that, the people you will hire to implement the plan have different priorities than you do and may even covertly despise yours. Worse even than that is those that hired them may have very different priorities. J.P. Morgan commissioned FpML for documenting derivitive trades. There may be cause for concern. :)

    The web was fielded witlessly and by amateurs.

  65. len says:

    Enumerated list: values for a type. For example,

    Rock: classic, new age, punk.

    YMMV by specialty.

  66. JTMcPhee says:

    I think I will go try to work on the other side of the Tower. I hear those people are still speaking a language with something other than similar grammatical conventions — nouned and verbed and other-parts-of-speeched out of a dictionary that I think I actually recognized some words in.

    Recalling now my years as an attorney, semi-master of complex statutes and regulations in one tiny corner of the US Code and Code of Federal Regulations and all the “secret law” that resides in policy and guidance documents and letter opinions and opinions of regional and general counsel and all the other shit that K Streeters swim in and stir and manipulate for the benefit of the few.

    Still seems to me that without some kind of simple, straightforward spiritual compass and fundamental ethical rule(s), it always leads to Babel and the destructiveness of unbridled self-interest. Except in circumscribed domains of goodness, where synergies blaze and meanings are empathic and immediate.

  67. len says:

    without some kind of simple, straightforward spiritual compass and fundamental ethical rule(s), it always leads to Babel and the destructiveness of unbridled self-interest. Except in circumscribed domains of goodness, where synergies blaze and meanings are empathic and immediate.

    The constraints by a sense of projected context have fabulous social returns if the projection is designed to do that. Someone asked me how I could accept the big bang theory, evolution and advanced physics and still be a Christian. I told them because in the first case, science and evidence make sense and in the second case I don’t require it to make sense if it makes me happy even if it is sometimes inconvenient.

    I imagine that is how Ryan justified Ayn Rand until she became inconvenient.

    Justice is understood one heart at a time. The neo-cons and their tribe don’t care if what they do makes no sense as long as it makes them happy. That is why the fundamental practice of Christianity is not “self” but “others”. The spirit synergizes self-worth with the good of society, or simply when the needs of the many outweigh the needs of the few or the one. This is why the virtue of selfishness isn’t virtue and believing that it does typifies an undeveloped and immature spirit.

    Ultimately spirit evolves from a true understanding of what makes one happy.

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