Totalitarianism Today

TOTALITARIANISM TODAY

Monday, December 23, 2002

Spite from New York.

The conundrum over how to teach ethics in business school continues. A Businessweek survey wants to know how you feel about the ethics training that businessmen need for "the real world". As the debate rages on, New York Attorney General Eliot Spitzer blames the University of Chicago's free-market breeding for "corporate crooks, dirty air, and pricey drugs" in Businessweek. University of Chicago b-school students, however, don't seem to agree with Spitzer. I think Spitzer does not help his case for hands-on economic intervention with such ridiculous statements.

Sunday, December 22, 2002

America by Robert Creeley

America, you ode for reality!
Give back the people you took.

Let the sun shine again
on the four corners of the world

you thought of first but do not
own, or keep like a convenience.

People are your own word, you
invented that locus and term.

Here, you said and say, is
where we are. Give back

what we are, these people you made,
us, and nowhere but you to be.

Sunday, December 22, 2002

The economic new year for the EU.

The Economist agrees that more remains to be done after the Copenhagen summit. Economic problems have combined with political ones to produce the intractable situations that technocrats love most. EU Economic Affairs Commissioner Pedro Solbes warned on Thursday that economic momentum in the euro-zone was showing no sign of picking up, as newly released data revealed that industrial output in the zone fell 0.2 per cent in October from September. Labor costs continue to rise, as pensions threaten to take large chunks out of the Euro treasury. Euro-zone labour costs expected to rise 3.5 per cent in third quarter. Which means more strikes.

All of this stands in stark contrast to the good news coming from Brussels. The EU current account surplus more than doubled in third quarter. I'm not sure why the EU still has a current account surplus, given German and French defaulting on Schengen conditions. It should be interesting to watch as the US account deficit threatens to spark deflationary trends, probably most conspicuous in the housing and real estate markets. Could Europe undergo inflation as the US remains mired in deflation? If I were Greenspan, I would run.

Saturday, December 21, 2002

Liberalism in the age of terror.

The New York Times' excellent scavenger hunt for what is left of the Left continues this week with an article by Edward Rothstein where he makes explicit the threats posed by the new war on terrorism to conventional classical liberalism.

Much of political modernity, with its ideas of democratic rule, individualism and human rights, actually represents a triumph of classical liberalism. In fact, attitudes like Mr. Lott's aside, much contemporary conservatism honors similar ideas, making it less an opponent of liberalism than an alternative interpretation of the liberal world.

This is one reason that events since 9/11 have been so traumatic. While ethical and political acclaim for this larger sense of liberalism in the West is uncontested, it is barely present in Arab governments, virulently opposed by Islamic radicalism and rejected by many in the growing Muslim fundamentalist populations in European urban centers. Meanwhile the United States has been engaged in a new form of war, one goal of which is to transform preliberal societies into modern democracies while protecting against incursions at home. This requires an uncompromising scrutiny of liberalism's doctrines, ambitions and limitations.

Rothstein defends leftists like Michael Waltzer who have moved towards what is now the neoconservative-center in their political philosophy.

Last spring in Dissent magazine, for example, Michael Walzer argued in an essay called "Can There Be a Decent Left?" that the overemphasis on civil liberties misses the real nature of the threat. Mr. Walzer more broadly accused the American left of having been "stupid, overwrought, grossly inaccurate" in its condemnations of the United States. Its rationalist and materialist analyses, he continued, have also led to an inability "to recognize or acknowledge the power of religion in the modern world." The left has thus become alienated from its own country, he said, and unrealistic in its expectations. Comparable arguments have been made by Todd Gitlin in Mother Jones and by Michael Kazin in the current Dissent.

Rothstein is at his most interesting when he brings the philosophy of John Rawls into the picture. In his strategy, Rothstein attempts to ground the exceptional situations (i.e. the current war on terrorism) in the lack of prior conditions for a just liberal society. Simply put, you can't apply liberal philosophy to a scenario lacking the underpinnings or assumptions of liberalism.

Rawls began that essay stipulating that he would consider only peaceful, nonexpansionist, legitimate governments who honored human rights. The same limitation applies to Rawls's vision of "justice as fairness." He imagined that if a group of people were designing a just society without knowing what their place in that society would be, behind that "veil of ignorance" they would make sure that the society would be most fair to its least privileged members because that is who they might end up being. Inequalities in intelligence, character and wealth would still exist, but in Rawls's view "men agree to avail themselves of the accidents of nature and social circumstance only when doing so is for the common benefit."

But this noble ideal assumes that human decisions have a fundamentally rational foundation, that material goods are the main measure of privilege, that an interest in egalitarianism is paramount, and these hypotheses are surely not universally accepted.

Rawls's notion of fairness also assumes an almost static world that can be managed without worrying about the irrational and the unexpected. But it is in response to challenge and disruption that the system would be tested. In the face of internal challenge and external attack, Rawls's system might even display the kind of intolerance outlined by Mr. Walzer.

Unfortunately, one of the problems with Rawls' variety of liberalism is precisely its inability to take account of local variations and local knowledge. Rawls' notion of fairness is only fair to those who prefer to live in Cambridge, Massachussets. And Rothstein assumes almost utopian conditions for the practice of political liberalism-- only in a completely liberal society can you have a liberal foreign policy. While it throbs with conviction, Rothstein's argument lacks that necessary component more commonly known as "evidence". Rothstein can't save the modern Left from its inner contradictions. It will take more than rehashing to clean this mess up.

Saturday, December 21, 2002

Soros gets fined by the French.

Billionaire philanthropist and "third-way" advocate George Soros was found guilty of insider training. After a 14-year investigation, a French court today convicted the American financier George Soros of insider trading and fined him 2.2 million euros ($2.3 million), the amount prosecutors said he had profited from the trading. Slightly less than happy with this verdict, Soros indicated that he will appeal.

Saturday, December 21, 2002

Bar associations in California attempt to blackball the Boy Scouts.

Gone are the days when being a Boy Scout meant joining a tradition of working with nature and peers towards individual psychic and intellectual independence. Boy Scouting in this day and age entails a political commitment to repress homosexuals, or so sayeth the Supreme Court of California, who is currently considering a proposal that would prohibit the 1,600 judges in the state from belonging to the Boy Scouts because of its refusal to accept openly-gay men. Bar associations in San Francisco and Los Angeles have requested that the Court make changes to the state law, which prevents California judges from joining groups that discrminate on the basis of sexual orientation. Nonprofit youth organizations are exempt from this rule. If the California bar associations have their way, however, sex will be at the center of almost every decision to form a group or an association.

Saturday, December 21, 2002

In a newsletter from John Basil Utley.

Arnaud de Borchgrave writes about the financial mismanagement of security threats;

For a superpower that spends over $1 billion a day on defense, $20 billion plus on wiping out Taliban and planting the seeds of democracy in Afghanistan, and is now prepared to blow $100 billion on a war to change regimes in Iraq, $29 million was first thought to be a misprint.

Not only was the "pound-wise-penny-foolish" amount correct, but it also brought to mind a similar attempt to rub the print off a dollar bill for what is arguably one of the most critically urgent tasks for draining the swamp of terrorism — $35 million to reform Pakistan's madrassas (Koranic schools) where some 5 million young boys, including contingents from most Muslim countries, have been taught to hate America, Israel and India during the past decade, all generously bankrolled by Saudi Arabia's Wahhabi clergy.

It appears that the US has failed to provide Anglo-ally with adequate information about Saddam's violations. Ironic, given the countless number of time the phrase "material violation" comes from the television. Utley adds, tongue-in-cheek-- "Maybe because we don't have any". Anyone care to demonstrate otherwise?

Saturday, December 21, 2002

Craving the commie propaganda

The postcommunist period globalized everything from black markets to currency speculation to fishnet stockings, back again. Relics of communism have moved from reality to collector's items, and the craving for kitsch has become a collector's epidemic. That said, things are obviously changing in the transition states. One of the collections I would love to start includes radio and tv broadcasts from the communist period. A little hint as to why....

Radio Tirana painted a rosy picture of how everybody was happy, healthy and working so hard for the good of the country that Albania had become self-sufficient, Taylor said. It portrayed big evil capitalist countries where most people were unemployed and could not afford to send children to school while youngsters lay in the streets drunk on Coca Cola and Pepsi, two beverages Albanians only tasted after 1990.

"The Socialist economy does not know anarchy or crises in production. It does not throw workers onto the street because of bankruptcy or enterprises closing down," proclaims one transcript of a story broadcast in August 1979. What the stories did not mention was that Albania was a poor and repressive state which denied its citizens basic freedoms and shot dead many who tried to travel abroad.

Saturday, December 21, 2002

Germany looks a little peaked.

Military clumsiness in Kabul left seven dead today. Officials report that a German military helicopter crashed in an industrial neighborhood of Kabul on Saturday, killing five international peacekeepers aboard and two children on the ground. And while peacekeeping ain't as peaceful as it used to be, the horizon for German festivities doesn't look so promising either.

The potential for a beer shortage certainly isn't making German hearts any lighter. Apparently, the ever-ambitious German government enstated a measure to counter growing trends towards non-reusable containers. Customers will pay a higher price for bottles, yet recieve change when and if they return the containers."Will there be enough beer?" asked Germany's best-selling daily in bold letters on its front page on Thursday. "Large retailers are planning to stop selling canned drinks altogether. It could mean that beer in returnable bottles will be in short supply." It's a scary thought for Germans, as Germany is the world's leading producer of beer with some 1,200 breweries nationwide.

Saturday, December 21, 2002

Good movies for game-theory conversations.

Nothing excites me more than the thought of a movie which combines what I love most about economics (game theory, experimental economics), philosophy (hermenuetics, ordinary language, and context), and stimulus for conversation. Off the top of my head, several movies immediately come to mind under this rubric. Who can forget the thrill of discussing the zero-sum assumptions of that coketale classic, "Wall Street"? Or the strategic bets at the base of "Hunt for Red October"? Or how "Artificial Intelligence" presented a challenge to mainstream notions of agency and rational actor models? And there are more.

Director Ron Howard's "A Beautiful Mind", most compellingly reviewed by A.O. Scott for The New York Times, attempts to script the mental landscape of John Nash, who discovered the Nash equilibrium. Towards the end of the film, you will either kick yourself for presuming Jennifer Connelly's prior state of reason, or admire her for the strength of her love.

Pulitzer-prize winning playwright David Mamet's directorial debut, "House of Games", explores the world of professional gamblers and confidence men. Roger Ebert has a few interesting things to say about this film, until his comments dissolve into insipid whining-- Ebert's characterstic tone:

"The basic idea is this," the con man (Joe Mantegna) explains to the woman who has become his student (Lindsay Crouse). "It's called a confidence game. Why? Because you give me your confidence? No. Because I give you mine."

He demonstrates. They are in a Western Union office, pretending to wait for money to be wired to him. A man enters and asks the clerk if his money has arrived. It has not. He sits down. Mantegna gets him into conversation, finds out he is a Marine who needs bus fare to get back to Camp Pendleton, and smoothly says, "You're in the Corps? I was in the Corps." Having established this bond, Mantegna offers to give the guy the bus fare, just as soon as Mantegna's own wire arrives. He gives his confidence. He shows he trusts the other guy. Of course, the other man's wire arrives first, and of course he offers Mantegna money. The beauty of it is, in the entire transaction, Mantegna has never asked for money--only offered it.

This fraudulent offering of trust underlies one Mamet film after another, and yet is never repetitive because it unlocks unlimited dramatic possibilities. There is hardly ever a slow moment in Mamet's films because even small talk, even passing the time of day, is fraught with the hidden motives of the speakers. Even when nothing seems to be happening, our attention is held by the illusion that something must be happening, but we can't spot it. This is Mamet's con on us. He offers us his confidence that we can follow his plot.

How might game theory approach the classic "cat and mouse"? Given all the overlay of games in this film, what intrigues me the most is trying to discover the rules or assumptions to which the chacacters respond at any given time.

Another game-theory-thinking film is French director's Alain Resnais "Last Year at Marienbad", which has been called everything from "surrealist" to "avant-garde" to "non-linear"-- how about just French? Surprisingly enough, Roger Ebert waxed poetic about this art-house film:

Yes, it's easy to smile at Alain Resnais' 1961 film, which inspired so much satire and yet made such a lasting impression. Incredible to think that students actually did stand in the rain to be baffled by it, and then to argue for hours about its meaning--even though the director claimed it had none. I hadn't seen ``Marienbad'' in years, and when I saw the new digitized video disc edition in a video store, I reached out automatically: I wanted to see it again, to see if it was silly or profound, and perhaps even to recapture an earlier self--a 19-year-old who hoped Truth could be found in Art.

Viewing the film again, I expected to have a cerebral experience, to see a film more fun to talk about than to watch. What I was not prepared for was the voluptuous quality of ``Marienbad,'' its command of tone and mood, its hypnotic way of drawing us into its puzzle, its austere visual beauty. Yes, it involves a story that remains a mystery, even to the characters themselves. But one would not want to know the answer to this mystery. Storybooks with happy endings are for children. Adults know that stories keep on unfolding, repeating, turning back on themselves, on and on until that end that no story can evade.

The film itself presents a riddle of seduction, "a mercurial enigma darting between a present and past which may not even exist, let alone converge". The characters evade stereotyping; the gambler, M, is a particularly ravishing figure for analysis.

Who is "he"? M, the gambler, the apparent husband of the Woman? It certainly fits the narrative paradigm. The Gambler is the master of the Seven Game, one which he never loses. He quickly engages the Stranger in the Game... and of course the Stranger loses. As an anonymous guest later observes, "The beginner always wins. Simply take an even number... the lowest whole uneven number. It's a logarthmic series. You pick a different row each time, divide by three... seven times seven equals forty-nine."

Resnais makes it all the more captivating through his inclusion of the game of nim.

Other notables include: "Pi", which approaches markets from the position of numbers theory; political drama "Return to Paradise" presents a prisoner's dilemma with a twist, in which neither criminal faces jail time if he refuses to confess, but if neither confesses, a friend will be put to death; and the possibly most poignant "War Games", showing a defense department computer, which, after repeatedly playing tic-tac-toe, discovers grim trigger strategies and concludes that nuclear war is a "strange game - the only winning move is not to play."

We are all actors. Some of us, however, seem more mindful of our scripts than others. Awareness and rational engagement provide two very sexy ways in which to explain human agency and behavior.