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I lived for a bit, but did not suffer, under military dictatorship in Turkey, briefly the same in Greece, and visited Spain under Franco and I worked against the torture of prisoners in Portugal under Salazar and in the former Soviet Union from afar. My friend Otto lived under East German Communism and spent time in the Gulag in Vorkuta. And my late friend Andra treated the tortured victims of BOSS, the Bureau of State Security in South Africa.
It is all coming back to me: the sleazy incompetence, the lies, the ruling families’ corruption, the oppressive atmosphere, the nervousness and the press where nothing meant what it said…..but hey great novels get written under dicatorships, so we should be in for a gala season in the USA….the new Pamuk, Sinopoulus, Lorca, Saramago, Pasternak, Wolf, and Coetze….
This is an extremely good and important article from Simon Kuper in the UK Financial Times, that could have been written specifically for my optimistic, it will all turn out right friend RH. I don’t think it will turn out well, and Kuper has some interesting disciplines for systemic caution from Taleb, and Kahneman and Tversky among others:
The Minuteman story is especially scary and I would add: the Airforce Academy in Colorado Springs is in the hands of religious fanatics and the quality of leadership from there I experienced ten years ago was appalling compared with West Point or Annapolis or their British equivalent service academies. I have posted it in full to avoid it being behind a fire wall: it is too important for that.
How to avert catastrophe:‘We need to expand our imaginations. The next catastrophe may take an unprecedented form’
“When Nassim Nicholas Taleb was a teenager in Lebanon in 1975, an ethnic civil war broke out. Locals were baffled. They had thought they lived in a “stable paradise”. Once the unforeseen catastrophe began, even Taleb’s grandfather, the deputy prime minister, “did not seem to know what was going to happen any more than his driver, Mikhail”, wrote Taleb in his 2007 classic, The Black Swan: The Impact of the Highly Improbable.
In 1940, when Daniel Kahneman was a Jewish boy living in Paris, the Germans invaded France. Kahneman’s family decided to stay put. Then came the Holocaust. While the family was in hiding, Kahneman’s father could not get treatment for his diabetes, and died. Kahneman was left wondering why humans fail to foresee catastrophe.
Black Swan has just been reissued. Almost simultaneously, Michael Lewis has published The Undoing Project, about Kahneman’s intellectual collaboration with fellow psychologist Amos Tversky. Both books share an argument: people make bad judgments and terrible predictions. It’s a timely point. The risk of some kind of catastrophe — armed conflict, natural disaster, and/or democratic collapse — appears to have risen. The incoming US president has talked about first use of nuclear weapons, and seems happy to let Russia invade nearby countries. Most other big states are led by militant nationalists. Meanwhile, the polar ice caps are melting fast. How can we fallible humans avert catastrophe?
Today’s elites are often mocked for failing to foresee the financial crisis of 2008 but, in fact, such blindness is standard. In 1914, few people expected the first world war: the historian Niall Ferguson has shown that bond prices held up that summer, meaning that investors didn’t foresee higher government borrowing. Forecasters also missed the Holocaust, China’s Cultural Revolution and September 11.
Our western generation is particularly ill-equipped to foresee catastrophes, because our countries have hardly experienced any since 1945. (We tend to forget our various close shaves with nuclear war, accidental and otherwise.) Now we are like Taleb’s famous turkey. Every day, he gets fed by a nice farmer. The turkey’s risk analysts make a forecast: based on past trends, he will keep getting fatter. Then, just before Thanksgiving . . .
How not to be that turkey? Taleb has some tips:
• You can’t know which catastrophe will happen, but expect that any day some catastrophe could. In Tversky’s words: “Surprises are expected.” Better to worry than die blasé. Mobilise politically to forestall catastrophe.
• Don’t presume that future catastrophes will repeat the forms of past catastrophes. The only catastrophes we seem able to imagine are ones that have happened before. After September 11, the US re-engineered itself to prevent another September 11. Now the cliché is that we’re back in the 1930s. Even Donald Trump, complaining about US intelligence agencies, asked, “Are we living in Nazi Germany?” However, we need to expand our imaginations. The next catastrophe may take an unprecedented form.
• Don’t follow the noise. Terrorist attacks and Trump’s tweets are spectacular. But some catastrophes unfold silently: climate change, or people dying after they lose their jobs or their health insurance. (The financial crisis was associated with about 260,000 extra deaths from cancer in developed countries alone, estimated a study in The Lancet.)
• Ignore banalities. Most westerners instinctively tune out serious news because they have learnt that it rarely affects their lives. In the US in particular, so-called “TV news” is, in fact, entertainment. It fixates on “stories” such as Trump’s spat with the actor Meryl Streep. But these distractions have become dangerous. We now need to stretch and bore ourselves with important stuff.
• Strengthen democratic institutions. The only western state designed specifically to ward off catastrophe is the Federal Republic of Germany. Unelected German judges are charged with defending the constitution against the people, if necessary. By contrast, France now exists under an endless state of emergency. If Marine Le Pen becomes president in May, she’ll have a fairly free hand.
• Strengthen the boring, neglected bits of the state that can either prevent or cause catastrophe. Examples are the collapsing dam in Mosul, Iraq, or the US’s ropy nuclear command centres. Eric Schlosser, author of Command and Control, reports that in 2013 the general overseeing the Minuteman III intercontinental ballistic missiles “was removed from duty after going on a drunken bender” in Russia, where his exploits included “asking repeatedly if he could sing with a Beatles cover band at a Mexican restaurant in Moscow, and insulting his military hosts”. A year later, nearly 100 Minuteman launch officers were caught cheating on their proficiency exams. Then a launch officer was jailed for 25 years for running a violent street gang. These people have the keys to launch nukes. A check-up may be in order.
• Listen to older people who have experienced catastrophes. Taleb notes that elephant tribes often rely on elderly females to assess threats.
• Be conservative. Many Americans hope Trump will “shake things up”. As Noam Chomsky says, the risk is that he will. Often it’s smarter to maintain a flawed status quo. In Taleb’s words: “Don’t mess with complex systems, because we don’t understand them.”
Stock markets hit all-time highs after Trump’s election. What could possibly go wrong?
email@example.com; Twitter @KuperSimon
2017 Ten Commandments for Progressive US Politics:
1) Do not fire on your own side: friendly fire sucks. Save your ammunition for the enemy: the GOP and Trump and yes they are the enemy, not something to empathized with, only understood to defeat.
2) Think strategically: make moves after you have figured out how the enemy will respond and factored that into your decision making and be ready to adapt if your strategy is not working/the enemy’s response is unexpected.
3) Learn from your mistakes in the past and learn from your future mistakes as you make them: make the Democratic Party a learning not blaming organization. And learn from the enemy.
4) It’s the economy stupid, so time the Democrats had a real strategy to run the economy in a way that provides value add, sustainable jobs and is based understanding economics
5) It’s the planet stupid: no planet no economy so build sustainability into your economic policy.
6) Build coalitions and building coalitions means you can’t be purist, you have to trade and make compromises. This is not corrupt if the coalitions are interest based and principled
7) Understand the system before attempting to hack it
8) Restore democracy by overturning gerrymandering and voter suppression
9) A vision without a strategic path to deliver it is worthless
10) We need a new generation of young leaders who understand and can operationalize all this. Where are they?
Interesting article in Real World Economics:
Military Keynesianism and the Military-Industrial Complex
December 27, 2016
“Theories of Military Keynesianism and the Military-Industrial Complex became popular after the Second World War, and perhaps for a good reason. The prospect of military demobilization, particularly in the United States, seemed alarming. The U.S. elite remembered vividly how soaring military spending had pulled the world out of the Great Depression, and it feared that falling military budgets would reverse this process. If that were to happen, the expectation was that business would tumble, unemployment would soar, and the legitimacy of free-market capitalism would again be called into question.
Seeking to avert this prospect, in 1950 the U.S. National Security Council drafted a top-secret document, NSC-68. The document, which was declassified only in 1977, all but explicitly called on the government to use higher military spending as a way of preventing such an outcome.
NSC-68 marked the birth of Military Keynesianism. In the decades that followed, military expenditures seem to have worked as the document envisaged. The basic process is illustrated in Figure 1. The graph shows the relationship between U.S. economic growth and the country’s military spending. The thin line plots the annual rate of economic growth against the right scale. The thick line shows the level of military spending, expressed as a share of GDP and plotted against the logarithmic left scale. Both series are smoothed as 10-year moving averages to emphasize their long term tendencies.
The data show a co-movement of the two series, particularly since the 1930s. The rise in military spending in preparation for the Second World War coincided with a massive economic boom. Military spending had risen to 43 percent of GDP by 1944 and averaged 20 percent of GDP during the 1940s. This rise was accompanied by soaring economic growth, with annual rates peaking at 18 percent in 1942 and averaging 6 percent during the 1940s (the peak levels of the early 1940s cannot be seen in the chart due to the smoothing of the series).
After the war, military spending began to trend downward, but remained at very high levels for the next couple of decades. The adoption of Military Keynesianism, along with the wars in Korea and Vietnam, helped keep military expenditures at 12 percent of GDP during the 1950s and at 10 percent during the 1960s. Economic growth during this period averaged over 4 percent—lower than in the Second World War, but rapid enough to sustain the buoyancy of American capitalism and the confidence of its capitalists.
Both big business and organized labor supported this set up. The large corporate groups saw military spending as an acceptable and even desirable form of government intervention. At the aggregate level, these expenditures helped counteract the threat of recession at home and offset the loss of civilian markets to European and Japanese competitors—yet without undermining the sanctity of private ownership and free enterprise. At the disaggregate level, many large firms received lucrative contracts from the Pentagon, handouts that even the staunchest free marketers found difficult to refuse.
The large unions endorsed Military Keynesianism for different reasons. They agreed to stay out of domestic politics and international relations, to accept high military expenditures, and to minimize strikes in order to keep the industrial peace. In return, they received job security, high wages and the promise of ever-rising standards of living.
The consensus was aptly summarized in 1971 by President Nixon, who pronounced that ‘we are all Keynesians now.’ But that was the peak. By the early 1970s, the Keynesian Coalition of big business and organized labor started to unravel, Military Keynesianism began to wither and the welfare-warfare state commenced its long decline.”
Jonathan Nitzan and Shimshon Bichler
I guess I spent some of 2016 arguing with conspiracy theorists, especially of the Alt Left variety, so I thought I would list the meta problems I experienced:
- Conspiracy theorists have a grossly exaggerated sense of how much control anyone has over events. Random path dependent accident, incompetence, kamikaze self-sabotage (like electing Trump or Brexit) are far more influential than deliberate conspiracy in most of the unfolding of events in the real world.
- Noise conceals signal.There are some real conspiracies like Nixon’s treason in the 1968 election to back channel sabotage the Vietnam Peace talks, Watergate, Reagan’s treason in conniving with Iran to keep the American hostages during the 1980 election, Bush’s Iraq War WMD conspiracy and Putin’s rigging the recent election for Trump. But conspiracy theorists drown out and discredit the real conspiracies. Benghazi nonsense conceals Putin’s play.
- Conspiracy theorists suffer from industrial scale Confirmation Bias: they trawl for evidence and only listen to that which supports their theory. I have never seen a conspiracy theorist seek counter evidence, let alone change their mind/their conspiracy theory in the light of new evidence. I ask them what evidence would make them change their mind: and they lapse into silence or repeat their conspiracy about the conspiracy or ad hominem me.
- When the evidence they present is demolished or shown to be absent, they double down by saying this only shows how deep and wide the conspiracy runs.
- They usually lack a sense of humor, especially the ability to laugh at their theories, which is a helpful quality: to not take ourselves too seriously.
- Most conspiracy theorists have never run anything or they would know just how hard conspiracies are to create and conceal. Heck running things is hard enough without creating elaborate conspiracies.
- The best way to understand the world is to look at the systemic forces at work. To map them and figure out how they play out in reality. This not only helps avoid conspiracy theories over-simplifications, but also gives us a much better grip on what to do to improve things.
- I suppose that 2016 was the most conspiracy influenced election. It’s just not the conspiracy the theorists focus on.
- I often ask conspiracy theorists for examples of conspiracy from their own lives, and I get either stony silence or paranoia
- And to role model the above humor, here is my favorite conspiracy theory mocking cartoon: yep they have gotten to me too: 🙂