Hollywood’s Views of Capitalism

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The free enterprise system is not inherently corrupt.

Oliver Stone’s Wall Street leads the movie-goer to believe that the securities industry is a rigged game, and that capitalism is inherently corrupt. Hard work as a means to success in the financial community is debunked, only to be supplanted by corruption and law breaking, as securities trading is seen as a game with little or no productive value. Stone presents a harsh judgment on an economic system he fundamentally misunderstands.

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Wall Street has come to be the historical revisionists’ cinematic representation of the 1980s—the so-called “decade of greed.” It, unfortunately, offers a view prevailing not only in the film industry, but in academia and the media as well. In many ways, Wall Street perpetuates a class warfare myth, with contrasts being drawn between so-called haves and have nots, or the bourgeoisie and the proletariat.

The movie’s antagonist is Gordon Gekko, a corporate raider. Gekko’s speech at the stockholders meeting of Telder Paper, his takeover target, is meant by Stone to reflect the corrupt nature of capitalism. In fact, Stone managed—knowingly or not—to provide a glimpse of why corporate raiders provide a positive service in a free market economy. Gekko states:

Telder Paper has 33 different vice presidents, each making over $200,000 a year . . . . Our paper company lost $110,000,000 last year, and I’ll bet half of that was spent in all the paperwork going back and forth between all these vice presidents. The new law of evolution in corporate America seems to be survival of the unfittest. . . . I am not a destroyer of companies; I am a liberator of them. The point is, ladies and gentlemen, that greed for a lack of a better word—is good. Greed is right. Greed works. Greed clarifies, cuts through, and captures the essence of the evolutionary spirit. Greed, in all of its forms, greed for life, for money, for love, knowledge, has marked the upward surge of mankind. And greed—you mark my words—will not only save Teldar Paper, but that other malfunctioning corporation called the United States of America.

Greed or Self-Interest?

The word “greed” in such a speech is Stone’s carrier of corruption. It is his word of choice designed to elicit a specific response from the movie-going audience. After all, how could one view greed favorably? In fact, “self-interest” would have been a more apt term, which was understood over two centuries ago by Adam Smith, the father of capitalism. Smith wrote in An Inquiry into the Nature and Causes of the Wealth of Nations: “It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from their regard to their own interest.” Self-interest removes the judgmental nature of Stone’s presentation, while encompassing not only greed, but also industry, charity, self-improvement, and altruism, i.e., any human motivation.

[Read the full story here, at Foundation for Economic Education]

Gekko’s later statements lend greater clarity to Stone’s view of the world. In reference to a Gekko plan to liquidate the holdings of an airline company, Budd Fox (the movie’s symbol of redemption as he in the end rejects the greed Gekko represents) asks, “Why do you need to wreck this company?” Gekko’s answer: “Because it’s wreckable!” Stone views the breakup of a firm as pure destruction. He is unable to understand what Joseph Schumpeter termed “creative destruction.” That is the notion that resources might be more efficiently used if freed from less profitable ventures and reinvested elsewhere. This is the dynamic aspect of capitalism that allows for renewal and growth.

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But the essence of Stone’s limited vision is captured in Gekko’s definition of capitalism: “It’s a zero sum game. Somebody wins, somebody loses. Money itself isn’t lost or made, it’s simply transferred from one person to another—like magic. This painting here, I bought it ten years ago for $60,000. I could sell it today for $600,000. The illusion has become real, and the more real it becomes, the more desperate they want it. Capitalism at its finest . . . . I create nothing. I own . . . . You’re not naive enough to think that we live in a democracy, are you, Buddy? It’s the free market.” Stone does not understand that wealth can be created, not merely shifted around, and that the free market provides the incentives for individuals to create, innovate, and take risks. He sees a rise in the price of a painting as the pinnacle of capitalism. In fact, it is in those nations that have rejected free enterprise where the only source of value is to be found in a painting, for little else is created.

Wall Street presents a view of capitalism as being controlled by the few at the expense of the many—democracy versus the free market in Gekko’s words. Stone does not understand the nature of an exchange economy, missing a fundamental point that in a free enterprise system, one must first supply a service or good in order to demand; i.e., even the most greedy individuals must supply something that fulfills the needs or wants of another individual in order to participate in an exchange economy. Individuals vote with their dollars, if you will. The phrase “democratic capitalism” seems quite natural, for example, while “democratic socialism” seems oxymoronic. Read the rest of this entry »


[VIDEO] How Can Capitalism Help End Poverty? Here’s How

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Former U.S. Treasury Secretary Lawrence Summers, Nigeria‘s former finance chief Ngozi Okonjo-Iweala and the president of the Institute for Liberty and Democracy Hernando de Soto join us at Fortune-Time Global Forum.


Ohio State Knife Attacker Abdul Artan Was Taking a Class About Microaggressions 

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Robby Soave reports: Before he was shot dead while attempting to murder a bunch of people with a car and a butcher’s knife, Ohio State University student Abdul Artan—a Pakistani immigrant who reportedly became radicalized after learning about injustices committed against fellow Muslims—was enrolled in a class called “Crossing Identity Boundaries.”

[Read the full story here, at Reason.com]

In fact, he had a group project on “microaggressions” due later this week. The assignment, worth 15 percent of his grade, required students to find a dozen examples of microaggressions on social media and explain which identity groups were the victims, according to the syllabus.

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The purpose of the class is to promote “intercultural leadership” and transform students into “actively engaged, socially just global citizen/leaders.” It seems to go well beyond merely educating students, though—it actually requires them to become social justice activists. Read the rest of this entry »


The Left Loses its Mind Over Conservative Group’s ‘Professor Watch List’ 

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Trolling Success Level 100%

Annabel Scott reports: Turning Point USA, a conservative organization made up of high school and college students, has compiled a website database of more than 200 professors at universities across the nation that “discriminate against conservative students and advance leftist propaganda in the classroom.”

“This list watches over us at our country’s darkest turning point, poised to inflame the tinder-dry, gasoline-soaked pitchforks of a mob that has just stepped boldly into the light.”

— Slate author Rebecca Schuman, hyperventilating at keyboard

The website, professorwatchlist.org, doesn’t list just any professo­r — TPUSA requires proof.

[Read the full story here, at The Daily Caller]

“This watchlist is an aggregated list of pre-existing news stories that were published by a variety of news organizations,” the website states. “While we accept tips for new additions on our website, we only publish profiles on incidents that have already been reported by a credible source.”

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“Intentionally or not, the Professor Watchlist, simply by being a self-styled watch list, has aligned itself with the ugly, frightening new political status quo. This is, indeed, a turning point in our country, a time of fear unprecedented on this continent since the Second World War. Fear of being placed on a list, targeted as undesirable, and subjected to whatever happens next.”

— Slate author Rebecca Schuman

The website also says that TPUSA is not attempting to silence the professors on the list, but instead they are exposing “specific incidents and names of professors that advance a radical agenda in lecture halls.”

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“The website has thin information in its entries and a less-than-smooth search function. That could be a reflection of how rapidly it was created to capitalize on the political climate, particularly after the election of Donald J. Trump as president.”

— Julio C. Pino, an associate professor history at Kent State

Since its recent debut, the list has seen no shortage of harsh criticism.

Slate author Rebecca Schuman deemed the watchlist “grotesque,” and called it “a stock agency for photos of self-satisfied young white people.”

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“If the professors are so scared of what’s going on in their lecture halls being made public then that is their problem, not ours. We’re not trying to prevent teachers from saying anything. All we want here is to shine a light on what’s going on in our universities and the response has been incredible.”

— TPUSA founder and CEO, Charlie Kirk, defending the list

“Intentionally or not, the Professor Watchlist, simply by being a self-styled watch list, has aligned itself with the ugly, frightening new political status quo,” writes Schuman. Read the rest of this entry »


[VIDEO] Thomas Sowell on the Vulgar Pride of Intellectuals

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Peter Robinson talks to economist Thomas Sowell about his book “Intellectuals and Society.” Robinson and Sowell discuss the fact that intellectuals play a disproportionate role in society, as evidenced by linguist Noam Chomsky‘s influence on liberal politics. Is a fancy education a high speed rail ticket to fallacy? Read the rest of this entry »


The Great Recession Enabled ObamaCare. Now the Law’s Failure Makes Reform Possible

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The Four Legs of a New Health-Care System

James C. Carpetta and Scott Gottlieb write: Donald Trump announced this week that he had chosen Rep. Tom Price (R., Ga.), a leader in the efforts to replace ObamaCare, to be his secretary of Health and Human Services. This is a consequential choice. Mr. Trump’s election, and the political realignment it represents, offers a generational opportunity to pursue a new direction for American health care. Mr. Price will now be leading the charge.

The new system should be fully consumer driven, empowering individuals to be the surveyors and purchasers of their care. Past reforms in this direction became stilted and ultimately incomplete, but the current moment offers a chance to truly rebuild from the ground up. If Messrs. Trump and Price want to make the most of this short window, they should keep four central reforms in mind.

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1. Provide a path to catastrophic health insurance for all Americans. There’s ample evidence that enrollment in insurance doesn’t always lead to improvements in health—but access to health insurance is important nonetheless. A 2012 study from the National Bureau of Economic Research found higher insurance enrollment from reforms in Massachusetts led to better results in several measures of physical and mental health.

[Read the full text here, at WSJ]

Health insurance is also important for financial security. The ObamaCare replacement should make it possible for all people to get health insurance that provides coverage for basic prevention, like vaccines, and expensive medical care that exceeds, perhaps, $5,000 for individuals.

Those Americans who don’t get health insurance through employers, or Medicare and Medicaid, should be eligible for a refundable tax credit that can be used to enroll in a health-insurance plan. The credit would be set at a level comparable to the tax benefits available to individuals with employer-sponsored insurance plans. The subsidy would be enough to make a basic level of catastrophic coverage easily affordable for all Americans.

2. Accommodate people with pre-existing health conditions. The price of insurance naturally reflects added risk. That’s why beach houses cost more to insure than a typical suburban home. Yet there is a reasonable social consensus that people should not be penalized financially for health problems that are largely outside of their control.

So as long as someone remains insured, he should be allowed to move from employer coverage to the individual market without facing exclusions or higher premiums based on his health status. If someone chooses voluntarily not to get coverage, state regulation could allow for an assessment of the risk when the person returns to the market. Read the rest of this entry »


Social Media Is Killing Discourse Because It’s Too Much Like TV

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We need more text and fewer videos and memes in the age of Trump.

Hossein Derakshan writes: If I say that social media aided Donald Trump’s election,
you might think of fake news on Facebook. But even if Facebook fixes the algorithms that elevate phony stories, there’s something else going on: social media represents the ultimate ascendance of television over other media.

I’ve been warning about this since November 2014, when I was freed from six years of incarceration in Tehran, a punishment I received for my online activism in Iran. Before I went to prison, I blogged frequently on what I now call the open Web: it was
decentralized, text-centered, and abundant with 51kxbo1vo8l-_sl250_hyperlinks to source material and rich background. It nurtured varying opinions. It was related to the world of books.

[Order Neil Postman’s book “Amusing Ourselves to Death: Public Discourse in the Age of Show Business” from Amazon.com]

Then for six years I got disconnected; when I left prison and came back online, I was confronted by a brave new world. Facebook and Twitter had replaced blogging and had made the Internet like TV: centralized and image-centered, with content embedded in pictures, without links.

[Read the full story here, at technologyreview.com]

Like TV it now increasingly entertains us, and even more so than television it amplifies our existing beliefs and habits. It makes us feel more than think, and it comforts more than challenges. The result is a deeply fragmented society, driven by emotions, and radicalized by lack of contact and challenge from outside. This is why Oxford Dictionaries designated “post-truth” as the word of 2016: an adjective “relating to circumstances in which objective facts are less influential in shaping public opinion than emotional appeals.”

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Neil Postman provided some clues about this in his illuminating 1985 book, Amusing Ourselves to Death: Public Discourse in the Age of Show BusinessThe media scholar at New York University saw then how television transformed public discourse into an exchange of volatile emotions that are usually mistaken by pollsters as opinion. One of the scariest outcomes of this transition, Postman wrote, is that television essentially turns all news into disinformation. “Disinformation does not mean false information. It means misleading information—misplaced, irrelevant, fragmented or superficial information—information that creates the illusion of knowing something but which in fact leads one away from knowing … The problem is not that television presents us with entertaining subject matter but that all subject matter is presented as entertaining.” (Emphasis added.) And, Postman argued, when news is constructed as a form of entertainment, it inevitably loses its function for a healthy democracy. “I am saying something far more serious than that we are being deprived of authentic information. I am saying we are losing our sense of what it means to be well informed. Ignorance is always correctable. But what shall we do if we take ignorance to be knowledge?” Read the rest of this entry »


[VIDEO] 3 Ways Bitcoin Is Promoting Freedom in Latin America

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How bitcoin is allowing Venezuelans to circumvent capital controls, Brazilians to get around tariffs—and might one day improve Latin America‘s overall business climate.


[VIDEO] REWIND: Scalia on Flag Burning 

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[VIDEO] Thomas Sowell Brings the World into Focus through an Economics Lens

In this episode of Uncommon Knowledge, Peter Robinson interviews Hoover fellow and author Thomas Sowell, on 31daawos9cl-_sl250_his 5th edition of Basic Economics: A Common Sense Guide to the Economy.

[Order Thomas Sowell’s book “Basic Economics: A Common Sense Guide to the Economy” from Amazon.com]

In this interview, Sowell brings the world into clearer focus through a basic understanding of the fundamental economic principles and how they explain our lives. Sowell draws on lively examples from around the world and from centuries of history.

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James Grant Explains ‘The Forgotten Depression’

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Mr. Grant confronts the subjectivity of economic measurement head-on in his book in an enlightening discussion of whether the 1921 depression was, in fact, a depression at all.

The Forgotten Depression: 1921 — The Crash That Cured Itself, by James Grant, Simon & Schuster, 2014.

Joseph Calandro Jr. writes: To better understand the current economic environment, financial analyst, historian, journalist, and value investor James forgottendepressionGrant, who is informed by both Austrian economics and the value investing theory of the late Benjamin Graham, analyzes the Depression of 1920–1921 in his latest work, The Forgotten Depression: 1921 — The Crash That Cured Itself.

[Order James Grant’s book “The Forgotten Depression: 1921: The Crash That Cured Itself from Amazon.com]

Grant understands that despite the pseudo-natural science veneer of mainstream economics the fact remains that economic value is inherently subjective and thus economic measurement is also subjective. Mr. Grant confronts the subjectivity of economic measurement head-on in his book in an enlightening discussion of whether the 1921 depression was, in fact, a depression at all.

Was It a Depression?

Grant concludes it was a depression, but mainstream economist Christine Romer, for example, concludes it was not a depression. As Grant observes, Ms. “Romer, a former chairman of the Council of Economic Advisors, presented her research, titled ‘World War I and the Postwar Depression,’ in a 1988 essay in the Journal of Monetary EconomicsThe case she made for discarding one set of GNP estimates for another is highly technical. But the lay reader may be struck by the fact that neither the GNP data she rejected, nor the ones she preferred, were compiled in the moment. Rather, each set was constructed some 30 to 40 years after the events it was intended to document” (p. 68).

In contrast, Mr. Grant surveys economic activity as it existed prior to and during 1920–21 and as it was evaluated during those times. Therefore, five pages into chapter 5 of his book, which is titled “A Depression in Fact,” we read that:

A 1920 recession turned into a 1921 depression, according to [Wesley Clair] Mitchell, whose judgment, as a historian, business-cycle theorist and contemporary observer, is probably as reliable as anyone’s. This was no mere American dislocation but a global depression ensnaring nearly all the former Allied Powers (the defeated Central Powers suffered a slump of their own in 1919). “Though the boom of 1919, the crisis of 1920 and the depression of 1921 followed the patterns of earlier cycles,” wrote Mitchell, “we have seen how much this cycle was influenced by economic conditions resulting from the war and its sudden ending. … If American business men were betrayed by postwar demands into unwise courses, so were all business men in all countries similarly situated.”

So depression it was … (p. 71)

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Interestingly, there are a variety of similarities between “The Forgotten Depression” of 1921 and “The Great Recession” of 2007–2008. For example:

  • War finance (the currency debasement and credit expansion associated with funding war) has long been associated with economic distortion including World War I, which preceded “The Forgotten Depression.” Such distortions unfortunately continue to the present day.
  • Scandal is also associated with booms and busts; for example, the boom preceding “The Forgotten Depression” had Charles Ponzi while the boom preceding “The Great Recession” had Bernie Madoff.
  • The booms preceding both financial disruptions also saw governmental banking regulators not doing a very good job of regulating the banks under their supervision.
  • Citibank famously fell under significant distress in both events.
  • Both eras had former professors of Princeton University in high-ranking governmental positions: Woodrow Wilson was president of the United States at the beginning of “The Forgotten Depression” while Ben Bernanke was chairman of the Fed during “The Great Recession.”
  • On the practitioner-side, value investor Benjamin Graham profited handsomely from the distressed investments that he made during “The Forgotten Depression” while his best known student, Warren Buffett, profited from the distressed investments that he made during “The Great Recession.”

The Crash That Cured Itself

Despite similarities, there are noteworthy differences between these two financial events. Foremost among the differences is the reason why “The Forgotten Depression” has, in fact, been forgotten: the government did nothing to stop it. Not only were interest rates not lowered and public money not spent, but interest rates were actually raised and debt paid down. The context behind these actions is fascinating and superbly told and analyzed by Mr. Grant. Read the rest of this entry »


Socialist Self-Deception: Einstein and the USSR to Bernie Sanders and Venezuela 

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Even socialists who traveled to the Soviet Union and saw its immense poverty with their own eyes could not be shaken from their faith.

To explain our insane fascination with socialism, I have pointed to a growing body of academic research, which suggests that we are, by nature, envious of and resentful toward people who amass “disproportionate” wealth and power.

Moreover, research suggests that we find it difficult to comprehend, let alone appreciate, what Friedrich Hayek called extended order — or the use of specialization and trade to create “an information gathering process, able to call up, and put to use, widely dispersed information that no central planning agency, let alone any individual, could know as a whole, possess or control.”

Our minds have evolved to deal with issues faced by our hunting and gathering ancestors (e.g., an exchange of meat for favors), not to deal with issues facing us today (e.g., outsourcing the assembly of the iPhone to China to make it more affordable in America). The extended order, in other words, has evolved in spite of, not because of, our best efforts.

Today, I want to address another reason behind the persistent appeal of socialism: the power of self-delusion, or our ability and willingness to go on believing in things that are patently not true.

Soviet Five-Year Plan propaganda poster.

Soviet Five-Year Plan propaganda poster.

Consider the following two examples. In 1985, my Czechoslovak aunt Kate visited the USSR. She was a committed Communist Party member all of her adult life, and, as a reward, she was given a chance to spend a couple of weeks in the workers’ paradise. When she returned, I impetuously asked her if she had brought me anything. “Nothing,” she replied much to my disappointment, “the USSR is a very poor country.” Yet Kate never wavered in her commitment to the principles of communism and remained a party member until 1989, when her entire value system came crumbling down along with the Berlin Wall.

[Read the full story here, at Foundation for Economic Education]

Some ten years later, an American college professor of mine recalled his own visit to the USSR. In 1970, he and his wife spent two weeks in Leningrad, Moscow, and Kiev. During their stay in the communist country, he was shocked by the poverty and inefficiency he saw. (From Kiev, he wrote a letter to his parents in New York, which I have transcribed, with his permission, below.) All the other tourists that he met expressed similar sentiments.

When he returned to the United States, however, he kept on reading reports in mainstream publications, including Time magazine and The New York Times, which maintained that the Soviet economy was working. These reports were written by people who lived in the USSR, spoke Russian and had Soviet friends. As such, he concluded that the impressions he had made during his stay in the USSR were not valid.

If the above two examples failed to convince you of the power of self-delusion, consider our Nobel Prize-winning physicist from Ulm.

Einstein was a self-declared socialist. In 1949, he even published an essay titled “Why Socialism?” In it, Einstein wrote, “The economic anarchy of capitalist society as it exists today is, in my opinion, the real source of the evil [of human suffering]… I am convinced there is only one way to eliminate… [this evil], namely through the establishment of a socialist economy.”

It is striking that the most brilliant scientist of the 20th century, who escaped from national socialist Germany (Hitler called his party “socialist” for a reason) and moved to the capitalist United States, published an essay castigating capitalism and calling for socialism — while Stalin was still alive and busy butchering millions of Soviet citizens. Read the rest of this entry »


Michael Auslin: Trump’s Success or Failure Lies Partly with Asia

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In order to be successful in Asia, Trump will have to reassure allies, create common ground with potential partners, and not cede any ground to our main challengers. Doing so does not necessarily mean dramatically changing U.S. policy or suddenly forcing a crisis with China. It does, however, require having a clear policy and placing the maintenance of Asian stability at the top of U.S. policy goals.

The following is an expanded version of an essay that first appeared in the Nikkei Asian Review.

 writes: The shock from Donald Trump’s stunning upset victory will eventually wear off, but the world will continue to obsess over his planned policies as he begins to lay out his governing agenda. For the nations of the Asia-Pacific, perhaps the biggest news was Trump’s reiteration of his vow to quit the Trans-Pacific Partnership on his first day in office next January. Given the expectations that TPP would help create a new strategic architecture for America in Asia, fears once again abound that Trump will reduce America’s position in the broader Indo-Pacific region.

“Despite the longevity of these relationships, Trump will inherit an alliance system that is under strain. First, his campaign rhetoric singled out both Japan and South Korea, our two main Asian allies, for not paying enough to support the U.S. forces that are based in their countries.” 

Yet how well President-elect Trump deals with Asia will be a major factor in determining whether his presidency is a success or not. If he chooses to try and isolate America from half the world, then he may well find himself dealing with serious and unexpected crises that will shake the global economy and change the balance of power.

“He suggested that he might “walk away” from the alliances, if they do not increase their contributions. Moreover, Trump mused openly about letting both Japan and South Korea develop a nuclear weapons capability, thereby ending the decades-long U.S. policy of extended deterrence that prevented a nuclear arms race.”

Despite the attention paid by the Obama Administration to the Asia-Pacific, the regional geopolitical environment has deteriorated since 2009. China has become bolder, and has changed the balance of power in the South China Sea, at the same time that it is facing growing economic and political risk at home. North Korea continues to develop its nuclear and missile capabilities. America’s allies have become less convinced of the credibility of U.S. commitments, while other Asian nations have sought to avoid being drawn into a competition between America and China.

“Yet surprising some of his critics, just a week after winning the election, Trump met with Japanese Prime Minister Shinzo Abe, in New York. The meeting came at Abe’s request, and after an equally important phone call with besieged South Korean president Park Geun-hye, seemed to indicate that Trump recognized the importance of close ties with America’s Asian allies. “

[Read the full story here, at AEI]

In order to be successful in Asia, Trump will have to reassure allies, create common ground with potential partners, and not cede any ground to our main challengers. Doing so does not necessarily mean dramatically changing U.S. policy or suddenly forcing a crisis with China. It does, however, require having a clear policy and placing the maintenance of Asian stability at the top of U.S. policy goals.

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Trump and US Allies

America’s postwar policy in Asia has had the overriding goal of preventing any one power from dominating the region. It has pursued this goal by maintaining an open, rules-based system that encourages trade and exchange, and creates norms of behavior that lead to greater cooperation. The primary means of ensuring the stability of that system has been the six decade-old U.S. alliance structure, often referred to as the “hub-and-spokes.” Centered on Japan (whose treaty was signed in 1960), along with South Korea (1953), Australia (1951), the Philippines (1951), and Thailand (1954), the alliance system is not merely about U.S. commitments to protect its treaty allies; rather, it has evolved over time into a way to facilitate a permanent, forward-based U.S. presence in Asia. This, in turn, has made the U.S. commitment to maintaining stability more credible than it would be otherwise. Read the rest of this entry »


Castro, Chavez, and ‘Bad Luck’

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Castro and his ilk showed us that under socialism, the powerful grow rich — and everyone else grows poor.

Robert Heinlein once wrote:

Throughout history, poverty is the normal condition of man. Advances which permit this norm to be exceeded — here and there, now and then — are the work of an extremely small minority, frequently despised, often condemned, and almost always opposed by all right-thinking people. Whenever this tiny minority is kept from creating, or (as sometimes happens) is driven out of a society, the people then slip back into abject poverty.em

This is known as “bad luck.”

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Glenn Reynolds writes: I thought about this statement this weekend, reading two news stories. The first was about the tide of Venezuelans taking to boats to escape Venezuela’s economic collapse. As The New York Times reported, “Venezuela was once one of Latin America’s richest countries, flush with oil wealth that attracted immigrants from places as varied as Europe and the Middle East.”

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“Although many among Western political and entertainment elites still think of Fidel Castro fondly, such people are, at best, what Lenin called ‘useful idiots.'”

“But after President Hugo Chávez vowed to break the country’s economic elite and redistribute wealth to the poor, the rich and middle class fled to more welcoming countries in droves, creating what demographers describe as Venezuela’s first diaspora.”

[Read the full story here, at USAToday]

Now, in their absence, things have gotten worse, and it’s poorer Venezuelans — the very ones that Chavez’s revolution was allegedly intended to help — who are starving. Many are even taking to boats, echoing, as the Times notes, “an image so symbolic of the perilous journeys to escape Cuba or Haiti — but not oil-rich Venezuela.”

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Well, Venezuela was once rich. But mismanagement and kleptocracy can make any country poor and Venezuela — as is typical with countries whose leaders promise to soak the rich for the benefit of the poor — has had plenty of both.  Read the rest of this entry »


Michael J. Totten: A Visit to the Dystopian Havana that Tourists Never See

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Michael J. Totten continues:

…I’ve always wanted to visit Cuba—not because I’m nostalgic for a botched utopian fantasy but because I wanted to experience Communism firsthand. When I finally got my chance several months ago, I was startled to discover how much the Cuban reality lines up with Blomkamp’s dystopia. In Cuba, as in Elysium, a small group of economic and political elites live in a rarefied world high above the impoverished masses. Karl Marx and Friedrich Engels, authors of The 51cayyoticl-_sl250_Communist Manifesto, would be appalled by the misery endured by Cuba’s ordinary citizens and shocked by the relatively luxurious lifestyles of those who keep the poor down by force

[Order Cuban exile Humberto Fontova’s bookExposing the Real Che Guevara: And the Useful Idiots Who Idolize Him” from Amazon.com

Many tourists return home convinced that the Cuban model succeeds where the Soviet model failed. But that’s because they never left Cuba’s Elysium.

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“Outside its small tourist sector, the rest of the city looks as though it suffered a catastrophe on the scale of Hurricane Katrina or the Indonesian tsunami. Roofs have collapsed. Walls are splitting apart. Window glass is missing. Paint has long vanished. It’s eerily dark at night, almost entirely free of automobile traffic.”

had to lie to get into the country. Customs and immigration officials at Havana’s tiny, dreary José Martí International Airport would have evicted me had they known I was a journalist. But not even a total-surveillance police state can keep track of everything and everyone all the time, so I slipped through. It felt like a victory. Havana, the capital, is clean and safe, but there’s nothing to buy.

[Read the full story here, at City Journal]

It feels less natural and organic than any city I’ve ever visited. Initially, I found Havana pleasant, partly because I wasn’t supposed to be there and partly because I felt as though I had journeyed backward in time. But the city wasn’t pleasant for long, and it certainly isn’t pleasant for the people living there. It hasn’t been so for decades.

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“The revolutionaries promised liberal democracy, but Castro secured absolute power and flattened the country with a Marxist-Leninist battering ram. The objectives were total equality and the abolition of money; the methods were total surveillance and political prisons. The state slogan, then and now, is ‘socialism or death.'”

Outside its small tourist sector, the rest of the city looks as though it suffered a catastrophe on the scale of Hurricane Katrina or the Indonesian tsunami. Roofs have collapsed. Walls are splitting apart. Window glass is missing. Paint has long vanished. It’s eerily dark at night, almost entirely free of automobile traffic. I walked for miles through an enormous swath of destruction without seeing a single tourist. Most foreigners don’t know that this other Havana exists, though it makes up most of the city—tourist buses avoid it, as do taxis arriving from the airport. It is filled with people struggling to eke out a life in the ruins.

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“Communism destroyed Cuba’s prosperity, but the country experienced unprecedented pain and deprivation when Moscow cut off its subsidies after the fall of the Soviet Union.”

Marxists have ruled Cuba for more than a half-century now. Fidel Castro, Argentine guerrilla 51sbtklpshl-_sl250_Che Guevara, and their 26th of July Movement forced Fulgencio Batista from power in 1959 and replaced his standard-issue authoritarian regime with a Communist one.

[Order Humberto Fontova’s book The Longest Romance: The Mainstream Media and Fidel Castro” from Amazon.com

The revolutionaries promised liberal democracy, but Castro secured absolute power and flattened the country with a Marxist-Leninist battering ram. The objectives were total equality and the abolition of money; the methods were total surveillance and political prisons. The state slogan, then and now, is “socialism or death.”

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“Karl Marx and Friedrich Engels, authors of The Communist Manifesto, would be appalled by the misery endured by Cuba’s ordinary citizens and shocked by the relatively luxurious lifestyles of those who keep the poor down by force.”

Cuba was one of the world’s richest countries before Castro destroyed it—and the wealth wasn’t just in the hands of a tiny elite. “Contrary to the myth spread by the revolution,” wrote Alfred Cuzan, a professor of political science at the University of West Florida, “Cuba’s wealth before 1959 was not the purview of a privileged few. . . . Cuban society was as much of a middle-class society as Argentina and Chile.” In 1958, Cuba had a higher per-capita income than much of Europe. “More Americans lived in Cuba prior to Castro than Cubans lived in the United States,” Cuban exile Humberto Fontova, author of a series of books about Castro and Guevara, tells me.

[Read the full text here, at City Journal]

“This was at a time when Cubans were perfectly free to leave the country with all their property. In the 1940s and 1950s, my parents could get a visa for the United States just by asking. They visited the United States and voluntarily returned to Cuba. More Cubans vacationed in the U.S. in 1955 than Americans vacationed in Cuba. Americans considered Cuba a tourist playground, but even more Cubans considered the U.S. a tourist playground.” Havana was home to a lot of that prosperity, as is evident in the extraordinary classical European architecture that still fills the city. Poor nations do not—cannot—build such grand or elegant cities.

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“Between 1960 and 1976, Cuba’s per capita GNP in constant dollars declined at an average annual rate of almost half a percent. The country thus has the tragic distinction of being the only one in Latin America to have experienced a drop in living standards over the period.”

But rather than raise the poor up, Castro and Guevara shoved the rich and the middle class down. The result was collapse. “Between 1960 and 1976,” Cuzan says, “Cuba’s per capita GNP in constant dollars declined at an average annual rate of almost half a percent. The country thus has the tragic distinction of being the only one in Latin America to have experienced a drop in living standards over the period.”

“By the 1990s, Cuba needed economic reform as much as a gunshot victim needs an ambulance. Castro wasn’t about to reform himself and his ideology out of existence, but he had to open up at least a small piece of the country to the global economy. “

Communism destroyed Cuba’s prosperity, but the country experienced unprecedented pain and deprivation when Moscow cut off its subsidies after the fall of the Soviet Union. Journalist and 51pumxdqs8l-_sl250_longtime Cuba resident Mark Frank writes vividly about this period in his book Cuban Revelations.

[Order Mark Frank’s bookCuban Revelations: Behind the Scenes in Havana” from Amazon.com]

“The lights were off more than they were on, and so too was the water. . . . Food was scarce and other consumer goods almost nonexistent. . . . Doctors set broken bones without anesthesia. . . . Worm dung was the only fertilizer.” He quotes a nurse who tells him that Cubans “used to make hamburgers out of grapefruit rinds and banana peels; we cleaned with lime and bitter orange and used the black powder in batteries for hair dye and makeup.” “It was a haunting time,” Frank wrote, “that still sends shivers down Cubans’ collective spines.”

By the 1990s, Cuba needed economic reform as much as a gunshot victim needs an ambulance. Read the rest of this entry »


Jeffrey Tucker: Thomas Carlyle, the Founding Father of Fascism 

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The originator of the great man theory of history is British philosopher Thomas Carlyle (1795-1881), one of the most revered thinkers of his day.

The meaning is obvious from the words. The idea is that history moves in epochal shifts under the leadership of visionary, bold, often ruthless men who marshall the energy of masses of people to push events in radical new directions. Nothing is the same after them.

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Adam Smith

“Liberalism was always counterintuitive. The less society is ordered, the more order emerges from the ground up. The freer people are permitted to be, the happier the people become and the more meaning they find in the course of life itself. The less power that is given to the ruling class, the more wealth is created and dispersed among everyone. The less a nation is directed by conscious design, the more it can provide a model of genuine greatness.”

In their absence, nothing happens that is notable enough to qualify as history: no heroes, no god-like figures who qualify as “great.” In this view, we need such men.  If they do not exist, we create them. They give us purpose. They define the meaning of life. They drive history forward.

Great men, in this view, do not actually have to be fabulous people in their private lives. They need not exercise personal virtue. They need not even be moral. They only need to be perceivedscreen-shot-2016-05-23-at-115256-pm as such by the masses, and play this role in the trajectory of history.

[Read the full text here, at Foundation for Economic Education]

Such a view of history shaped much of historiography as it was penned in the late 19th century and early 20th century, until the revisionists of the last several decades saw the error and turned instead to celebrate private life and the achievements of common folk instead. Today the “great man” theory history is dead as regards academic history, and rightly so.

Carlyle the Proto-Fascist

The originator of the great man theory of history is British philosopher Thomas Carlyle (1795-1881), one of the most revered thinkers of his day. He also coined the expression “dismal science” to describe the economics of his time. The economists of the day, against whom he constantly inveighed, were almost universally champions of the free market, free trade, and human rights.

His seminal work on “great men” is On Heroes,  Hero-Worship, and the Heroic in History (1840). This book was written to distill his entire worldview.

“Carlyle was not a socialist in an ideological sense. He cared nothing for the common ownership of the means of production. Creating an ideologically driven social ideal did not interest him at all. His writings appeared and circulated alongside those of Karl Marx and his contemporaries, but he was not drawn to them.”

Considering Carlyle’s immense place in the history of 19th century intellectual life, this is a surprisingly nutty book. It can clearly be seen as paving the way for the monster dictators of the 20th century. Reading his description of “great men” literally, there is no sense in which Mao, Stalin, and Hitler — or any savage dictator from any country you can name — would not qualify.

“Rather than an early ‘leftist,’ he was a consistent proponent of power and a raving opponent of classical liberalism, particularly of the legacies of Adam Smith and John Stuart Mill. If you have the slightest leanings toward liberty, or affections for the impersonal forces of markets, his writings come across as ludicrous. His interest was in power as the central organizing principle of society.”

Indeed, a good case can be made that Carlyle was the forefather of fascism. He made his appearance in the midst of the age of laissez faire, a time when the UK and the US had already demonstrated the merit of allowing society to take its own course, undirected from the top down. In these times, kings and despots were exercising ever less control and markets ever more. Slavery was on its way out. Women obtained rights equal to men. Class mobility was becoming the norm, as were long lives, universal opportunity, and material progress.

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“A good case can be made that Carlyle was the forefather of fascism. He made his appearance in the midst of the age of laissez faire, a time when the UK and the US had already demonstrated the merit of allowing society to take its own course, undirected from the top down. In these times, kings and despots were exercising ever less control and markets ever more. Slavery was on its way out. Women obtained rights equal to men. Class mobility was becoming the norm, as were long lives, universal opportunity, and material progress.”

Carlyle would have none of it. He longed for a different age. His literary output was devoted to decrying the rise of equality as a norm and calling for the restoration of a ruling class that would exercise firm and uncontested power for its own sake. In his view, some were meant to rule and others to follow. Society must be organized hierarchically lest his ideal of greatness would never again be realized. He set himself up as the prophet of despotism and the opponent of everything that was then called liberal.

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“Carlyle would have none of it. He longed for a different age. His literary output was devoted to decrying the rise of equality as a norm and calling for the restoration of a ruling class that would exercise firm and uncontested power for its own sake. In his view, some were meant to rule and others to follow. Society must be organized hierarchically lest his ideal of greatness would never again be realized. He set himself up as the prophet of despotism and the opponent of everything that was then called liberal.”

Right Authoritarianism of the 19th Century

Carlyle was not a socialist in an ideological sense. He cared nothing for the common ownership of the means of production. Creating an ideologically driven social ideal did not interest him at all. His writings appeared and circulated alongside those of Karl Marx and his contemporaries, but he was not drawn to them.

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“Why the state? Because within the state, all that is otherwise considered immoral, illegal, unseemly, and ghastly, can become, as blessed by the law, part of policy, civic virtue, and the forward motion of history.”

Rather than an early “leftist,” he was a consistent proponent of power and a raving opponent of classical liberalism, particularly of the legacies of Adam Smith and John Stuart Mill. If you have the slightest leanings toward liberty, or affections for the impersonal forces of markets, his writings come across as ludicrous. His interest was in power as the central organizing principle of society.

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Here is his description of the “great men” of the past:

“They were the leaders of men, these great ones; the modellers, patterns, and in a wide sense creators, of whatsoever the general mass of men contrived to do or to attain; all things that we see standing accomplished in the world are properly the outer material result, the practical realization and embodiment, of Thoughts that dwelt in the Great Men sent into the world: the soul of the whole world’s history….

One comfort is, that Great Men, taken up in any way, are profitable company. We cannot look, however imperfectly, upon a great man, without gaining something by him. He is the living light-fountain, which it is good and pleasant to be near. The light which enlightens, which has enlightened the darkness of the world; and this not as a kindled lamp only, but rather as a natural luminary shining by the gift of Heaven; a flowing light-fountain, as I say, of native original insight, of manhood and heroic nobleness;—in whose radiance all souls feel that it is well with them. … Could we see them well, we should get some glimpses into the very marrow of the world’s history. How happy, could I but, in any measure, in such times as these, make manifest to you the meanings of Heroism; the divine relation (for I may well call it such) which in all times unites a Great Man to other men…”

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And so on it goes for hundreds of pages that celebrate “great” events such as the Reign of Terror in the aftermath of the French Revolution (one of the worst holocausts then unknownexperienced). Wars, revolutions, upheavals, invasions, and mass collective action, in his view, were the essence of life itself.

[Order Jeffery Tucker’s book “Bit by Bit: How P2P Is Freeing the Worldfrom Amazon.com]

The merchantcraft of the industrial revolution, the devolution of power, the small lives of the bourgeoisie all struck him as noneventful and essentially irrelevant. These marginal improvements in the social sphere were made by the “silent people” who don’t make headlines and therefore don’t matter much; they are essential at some level but inconsequential in the sweep of things. Read the rest of this entry »


How VR Has the Power To Make You Care

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Thanksgiving Weekend Primatologist Browser Tabocalpyse

Across The Line‘ is the latest example of VR attempting to evoke empathy.

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Alice Bonasio

Alice Bonasio writes: There’s an iconic scene in Blade Runner where Harrison Ford’s character Deckard meets the replicant Rachel for the first time, but he doesn’t know she’s not human. He then uses a test called Voight-Kampff  to determine whether or not she’s a real person. The test consists of a series of questions designed to elicit emotion. The idea – which is beautifully challenged later on in the film – is that machines are incapable of such empathetic responses.

Empathy, in other words, is what makes us human.

With an emerging consensus that the immersive nature of VR is particularly effective in triggering those empathetic responses, we’re seeing artists throughout the creative industries exploring new possibilities for storytelling – with a purpose. Chris Milk’s UN-Commissioned Clouds Over Sidra showed the plight of refugees through the eyes of a 12-year old Syrian girl, while the National Theatre’s Immersive Storytelling Studio production HOME/AAMIR transported viewers to the infamous Calais ‘Jungle’ camp.

VR can even make people feel more empathetic toward more abstract things like the environment, as was recently shown with the Crystal Reef project – showcased this year at the Tribeca Film Festival by researchers from the Virtual Human Interaction Lab (VHIL) at Stanford. The simulation, where you watched the devastating effects of ocean acidification caused by man, served to connect people to the consequences of their own actions in a much more tangible way.

[Read the full story here, at uploadvr.com]

Journalist and Filmmaker Nonny de la Peña – Co-Founder of the Emblematic Group and affectionately known as the “Godmother of VR” – has long explored the power of Virtual Reality experiences to break through viewer apathy. Her pioneering work often transports viewers into uncomfortable situations – such as a line for food handouts outside a shelter in LA, where you see a man collapsing from hunger next to you – and makes them re-think their outlook on often controversial issues.

The latest of those projects is Across The Line, an experience which tells the story of a young woman going to an abortion clinic. I viewed it recently at London’s Raindance Film Festival – where it was selected for this year’s VR showcase Arcade – and spoke to la Peña and their partners at the Planned Parenthood Federation of America (PPFA) to find out more about how the project developed and what the reaction to it has been like so far. Read the rest of this entry »


[VIDEO] Milton Friedman on the True Cause of the Great Depression 

Milton Friedman corrects the record on the cause of the Great Depression. Debunking the myth that is what from high speculation on wall street. Milton Friedman was an American economist who received the 1976 Nobel Memorial Prize in Economic Sciences.

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16 Nov 1930, Chicago, Illinois, USA --- Notorious gangster Al Capone attempts to help unemployed men with his soup kitchen "Big Al's Kitchen for the Needy."  The kitchen provides three meals a day consisting of soup with meat, bread, coffee, and doughnuts, feeding about 3500 people daily at a cost of $300 per day. --- Image by © Bettmann/CORBIS

16 Nov 1930, Chicago, Illinois, USA — Notorious gangster Al Capone attempts to help unemployed men with his soup kitchen “Big Al’s Kitchen for the Needy.” The kitchen provides three meals a day consisting of soup with meat, bread, coffee, and doughnuts, feeding about 3500 people daily at a cost of $300 per day. — Image by © Bettmann/CORBIS