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September 16, 2008
Financial Crisis, History & Society, In Other Words
(Reflections on the first era of true globalization, complete with bountiful trade, unparalleled upward mobility, liquid labor markets, secure international travel, and a blissful ignorance of the fragility of this new 20th Century World Order…)
Excerpt from Economic Consequences of the Peace by John Maynard Keynes, 1919
What an extraordinary episode in the economic progress of man that age was which came to an end in August 1914! The greater part of the population, it is true, worked hard and lived at a low standard of comfort, yet were, to all appearances, reasonably contented with this lot. But escape was possible, for any man of capacity or character at all exceeding the average, into the middle and upper classes, for whom life offered, at a low cost and with the least trouble, conveniences, comforts, and amenities beyond the compass of the richest and most powerful monarchs of other ages.
The inhabitant of London could order by telephone, sipping his morning tea in bed, the various products of the whole earth, in such quantity as he might see fit, and reasonably expect their early delivery upon his doorstep; he could at the same moment and by the same means adventure his wealth in the natural resources and new enterprises of any quarter of the world, and share, without exertion or even trouble, in their prospective fruits and advantages; or he could decide to couple the security of his fortunes with the good faith of the townspeople of any substantial municipality in any continent that fancy or information might recommend.
He could secure forthwith, if he wished it, cheap and comfortable means of transit to any country or climate without passport or other formality, could despatch his servant to the neighbouring office of a bank for such supply of the precious metals as might seem convenient, and could then proceed abroad to foreign quarters, without knowledge of their religion, language, or customs, bearing coined wealth upon his person, and would consider himself greatly aggrieved and much surprised at the least interference.
But, most important of all, he regarded this state of affairs as normal, certain, and permanent, except in the direction of further improvement, and any deviation from it as aberrant, scandalous, and avoidable.
The projects and politics of militarism and imperialism, of racial and cultural rivalries, of monopolies, restrictions, and exclusion, which were to play the serpent to this paradise, were little more than the amusements of his daily newspaper, and appeared to exercise almost no influence at all on the ordinary course of social and economic life, the internationalisation of which was nearly complete in practice.
It will assist us to appreciate the character and consequences of the peace which we have imposed on our enemies, if I elucidate a little further some of the chief unstable elements, already present when war broke out, in the economic life of Europe.
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Filed by The Editor on September 16th, 2008
July 5, 2008
History & Society, In Other Words
(See below for yet another in a series of elaborate digital frauds. Somewhat surprising is the considerable improvement in grammar and argument – it may even have been written by a native English speaker. Not surprising is the use of a decade old framework – the Nigerian 419 scheme – to lure unsuspecting Westerners into providing key banking information in exchange for a share in a large and unattributed overseas estate. The “four one nine” comes from the section in the Nigerian penal code which deals with such frauds. To hear Der Spiegel tell it: “A 419 is a mass crime, a money generator, and could aptly be described as the use of globalized methods as revenge by the losers of globalization.” Most worrisome is that the crime’s virtual beginnings take on a pseudo-realistic “Truman Show” flair, as victims are eventually flown to Lagos in person and introduced to limo drivers, hotel staff, and bank workers who carry the scam to its logical conclusion. This isn’t a miracle cure for erectile deficiency or a $100,000 qualified student loan, but a fully-integrated bricks and clicks criminal network operating within the borders of a Western resource ally, suggesting that the real “losers of globalization” might not be confined to developing states alone…)
———- Forwarded message ———-
From: Benjamin Ghanemy
Date: Sat, Jul 5, 2008 at 8:11 AM
Subject: A TRUE STORY/READ UNDERSTAND AND GET BACK TO ME
Hello,
I am Benjamin Ghanemy, British citizen and Principal assurance manager for the HSBC in London. A staff of Yokozona consultancy firm got in touch with me regarding the estate of Simeon Arag. And an investment placed under our banks management 3 years ago. I would respectfully request that you keep the contents of this mail confidential and respect the integrity of the information you come by as a result of this mail. I contact you independently of our investigation and no one is informed of this communication. I would like to intimate you with certain facts that I believe would be of interest to you.
In 1997, the subject matter; Simeon Arag came to our bank to engage in business discussions with our private banking division. He informed us that he had a financial portfolio of 8.35 million United States dollars, which he wished to have us turn over (invest) on his behalf. I was the officer assigned to his case; I made numerous suggestions in line with my duties as the de-facto chief operations officer, especially given the volume of funds he wished to put into our bank. We met on numerous occasions prior to any investments being placed. I encouraged him to consider various growth funds with prime ratings.
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Filed by The Editor on July 5th, 2008
March 31, 2008
Finance & Economics, History & Society, In Other Words
(Social entrepreneurship is at the heart of Capitalism 2.0, and the country’s leading minds are finally demanding a full system upgrade…)
Thoroughly Modern Do-Gooders
By DAVID BROOKS
Fashions in goodness change, just like fashions in anything else, and these days some of the very noblest people have assumed the manners of the business world — even though they don’t aim for profit. They call themselves social entrepreneurs, and you can find them in the neediest places on earth.
The people who fit into this category tend to have plenty of résumé bling. Bill Drayton, the godfather of this movement, went to Harvard, Yale, Oxford and McKinsey before founding Ashoka, a global change network. Those who follow him typically went to some fancy school and then did a stint with Teach for America or AmeriCorps before graduate school. Then, they worked for a software firm before deciding to use what they’d learned in business to help the less fortunate.
Now they work 80 hours a week, fighting bureaucracies and funding restrictions in order to build, say, mentoring programs for single moms. Earlier generations of benefactors thought that social service should be like sainthood or socialism. But this one thinks it should be like venture capital.
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Filed by The Editor on March 31st, 2008
January 18, 2008
Finance & Economics, Financial Crisis, History & Society, Politics & World Affairs
(An expanded look at the role corporations and hospitable business environments have played in stabilizing the anarchic system of international relations. This work is based on an earlier paper which focused on the “rise of the modern corporation” as a key independent variable in the calculus of global security…)
Private Risk, Public Reward:
Stabilizing Frameworks and the Rise of Corporate Hegemony
By Devin DeCiantis | ISP-351 | Economics & Security
“The modern corporation as an institution is entitled to much more respect than it has frequently received.
It is, in fact, an institution at a cross-road in history,
Capable of becoming one of the master tools of society - capable also of surprising abuse.”
- Adolph Berle, Jr. The Twentieth Century Capitalist Revolution, 1954
Traditional theories about power structures have focused on the role of states as principal agents in international affairs. In aggregate, these theories justify most of the major geopolitical incidents that have shaped the modern world order, but none of them effectively do so on their own. That’s not to suggest that existing theories based on political cooperation don’t have their place among the predictive frameworks of the 20th century. Many of them have helped to explain some of the century’s most important economic and security inflections. This paper simply suggests that where prevailing theories break down, a careful examination of the often quiet and understated rise of the modern corporation may offer a compelling supplementary explanation.
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Filed by The Editor on January 18th, 2008
January 16, 2008
Finance & Economics, History & Society, In Other Words, Politics & World Affairs
(In this recent Times OpEd, Rochester economics professor Steve Landsburg points out how easily John Q. Public overlooks cause and effect in 21st century markets.
Let’s review: 1) goods and services require labor and capital to produce; 2) the price of labor and capital impact an item’s ultimate price; 3) factors of production are much less expensive in the developing world; 4) a decades-long public war on inflation in the developed world has prevented the price of goods from increasing in step with wages; however, 5) wage growth is now slowing and inflation has reached a 17-year high; thus 6) in their quest to find the lowest price, consumers who rebel against off-shoring jobs are simply biting the hand that feeds them, because; 7) free markets can’t produce wealth, they only facilitate transfers of wealth in a zero sum game; and 8) as prices grow faster than inflation, any repatriation of manufacturing capacity or protectionist trade policy will only make matters worse.
In a nutshell, America can’t produce a $1 flashlight or a $2,500 car, but as long as consumers expect these price points to endure, the market will continue to reallocate factors of production over the hills and far away. The lesson is simple: trade isn’t inherently evil, but hyper-consumerism sure brings out its claws…)
What to Expect When You’re Free Trading
By STEVEN E. LANDSBURG
ROCHESTER–IN the days before Tuesday’s Republican presidential primary in Michigan, Mitt Romney and John McCain battled over what the government owes to workers who lose their jobs because of the foreign competition unleashed by free trade. Their rhetoric differed — Mr. Romney said he would “fight for every single job,” while Mr. McCain said some jobs “are not coming back” — but their proposed policies were remarkably similar: educate and retrain the workers for new jobs.
All economists know that when American jobs are outsourced, Americans as a group are net winners. What we lose through lower wages is more than offset by what we gain through lower prices. In other words, the winners can more than afford to compensate the losers. Does that mean they ought to? Does it create a moral mandate for the taxpayer-subsidized retraining programs proposed by Mr. McCain and Mr. Romney?
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Filed by The Editor on January 16th, 2008
December 15, 2007
History & Society, In Other Words
(”That’s what Chess is all about,” insists renegade Grandmaster Bobby Fischer. “One day you give your
opponent a lesson, the next day he gives you one.” In a world of anarchic intra-state relations, the question of governing dynamics has inspired countless political scientists since Machiavelli first reflected on the lessons of power. Perhaps not surprisingly, the lessons of chess provide a useful analogy in that never-ending debate…)
Check republics
Sally Feldman in New Humanist
This summer the Iraq Chess Federation’s annual tournament took place at Kufa, near Najaf. It was a serious contest, attended by regional champions from all over the country. Between games there was feasting and rejoicing as a ray of optimism briefly shone through the prevailing bleakness.
The event was especially significant since the influential Shia clergyman Grand Ayatollah Sistani had only just announced his belief that chess should be “absolutely forbidden”. And this is in the country where the modern game is believed to have originated – at the court of the Caliph Haroun al-Rashid in Baghdad ten centuries ago.
But while the carnival atmosphere in Kufa was a celebration of chess as a joyous assertion of freedom, it can also be a tool of oppression. In the tiny and desolate Russian republic of Kalmykia chess is rampant. Despite the region’s gruelling poverty and unemployment, its eccentric president, Kirsan Ilyumzhinov, has invested £25 million to build a “Chess City” complex on the outskirts of the city of Elista. He has also insisted on compulsory chess lessons for every child over six, with a special school for the most promising players. Widely regarded as a corrupt dictator, Ilyumzhinov is also president of the World Chess Federation, an honour scorned by his detractors.
“He’s a pathological liar with serious psychological problems,” said Semyon Ateyev, the director of the Kalmykia Bureau of Human Rights. “We don’t have any economic development, because he spends his whole time organising chess tournaments.”
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Filed by The Editor on December 15th, 2007