The Return of Malthusian Equilibrium

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After the departure of Europeans from their colonies following the end of World War II, the Third World rapidly became tyrannical, and their economies began a long decline. The institutional collapse of the Third World has continued over all these years, except that in the past two decades, from an extremely low base, its economies have improved. This economic growth did not happen because the Third World liberalized its economies or adopted any fundamental cultural change in its societies. What enabled synchronous economic progress over the past two decades in the Third World was the internet and the emergence of China.

Cheap telephony and the internet came into existence in the late ’80s. The internet provided pipelines for the transfer of technology and enabled wage-arbitrage to be exploited. Also, many countries — particularly in Latin America and sub-Saharan Arica — benefited from the export of resources to gluttonous-for-resources China, the only emerging market I know of, and to the developed world, which contrary to propaganda is economically still by far the fastest growing part of the world.

Cherry-picking countries of subsistence farmers and cattle-herders for propaganda purposes tells you nothing about the sustainability of their growth.

It is hard to believe, but many countries in the Middle East and North Africa peaked economically in the 1970s. Their competitive advantage was oil, not human resources. The per capita real GDPs of Saudi Arabia and the UAE, despite the fact that they have had a relatively peaceful existence, are about half as large as they were in the ’70s. The situation is similar in Venezuela and to a large extent in Nigeria. Except for the personal use of cellphones, the information technology revolution has simply bypassed these and many other countries.

According to the propaganda — steeped in political correctness — of the international organizations, all the fastest growing economies are in the Third World. But simple primary school mathematics helps cut through this propaganda. Ethiopia is claimed to be among the fastest growing large economies. This is quite a lie. An 8.5% growth rate of Ethiopia on GDP per capita of US$846 translates into growth of a mere US$72 per capita per year. The US economy, with GDP per capita of US$62,152, is 73 times larger, and despite its growth at a seemingly low rate of 2.2%, it currently adds US$1,367 to its per capita GDP — 19 times more than Ethiopia. The situation looks even more unfavorable for Ethiopia if its population explosion of 2.5% per year is considered.

Cherry-picking countries of subsistence farmers and cattle-herders for propaganda purposes tells you nothing about the sustainability of their growth, and certainly does not in any way enable comparison with the developed world.

The developed world is growing much, much faster than the Third World. The only exception is China.

Over the past two decades, the low hanging fruit of economic growth has been plucked in the Third World. South Asia, Southeast Asia, West Asia, Africa, and Latin America are now starting to stagnate. As the tide of the economic growth rate recedes, institutional collapse will become more visible. It will be seen on the streets as civic strife. What is happening in Venezuela, Syria, Turkey, Nicaragua, Honduras, Pakistan, Congo, and South Africa — where institutions are collapsing, social fabric is falling apart, and tyranny is raising its ugly head — are not isolated events but part of the evolving Third World pattern. Once its institutions have been destroyed, there will be no going back. They simply cannot be rebuilt.

When one looks at the world map, one realizes that all colonized countries were created in European boardrooms.

On a simplistic organizational chart, institutions in the Third World may look the same as they looked when European colonizers departed, but without reliance on the rule of law, respect for individual rights, and a rational approach to problem solving — all foundational concepts propagated by the West. They have been swamped by tribalism, magical thinking, and arbitrary dogmas and rituals.

Without the foundation of rational, critical thinking, formal education merely burdens the mind. The result is that stress among the so-called educated people in the Third World is growing, and no wonder: formal education, unassimilated, can work only in narrow areas, where all you want is cogs that can do repetitive jobs in corner cubicles, without encouragement or reward for creativity. This is not a future-oriented environment; it is a merely pleasure-centric one, in which people become easy victims of cultural Marxism. Democratic politics devolved into the politics of anti-meritocratic mass rule, destroying any institutions of true self-government.

During my recent visit to Port Moresby in Papua New Guinea, a young Western girl working for a Western embassy told me that she once went out without her security force. The police stopped her car, and she was fortunate that her security arrived before the police could take her away. The negotiation between police and security was about how much it would take not to rape her. Rape is common in Papua New Guinea, as it is in the rest of the Third World; but because this was a girl working for the embassy, rapists would have had their bones broken the day after. But their bones would have been broken the day after, “too far in the future” to be of much concern.

Without institutions of liberty and protection of private property, financial and intellectual capital does not accumulate.

When one looks at the world map, one realizes that all colonized countries were created in European boardrooms. There was no country of South Africa, Zimbabwe, Congo, or even India before the arrival of Europeans. The people who now run these countries simply do not have the ability or impetus to manage such large societies. They have tribal mentalities, unable to process information outside the visible space. The rulers of modern tribes continuously increase the size of their bureaucracies, but this merely creates overcentralization, the ossification of institutions, and massive, though unseen, systemic risks. Of course, tribalism is irrational, and internecine rivalry a fact of existence that is experienced only on a moment-to-moment basis.

Before the arrival of the Europeans, most of sub-Saharan Africa had no written language and few tools, contrary to popular perception of a pre-colonial utopia. Warfare was the order of the day. Eating flesh and brains of an enemy killed in conflict was practiced from Papua New Guinea, to Africa, to the Americas. Cannibalism is not unknown even today. Contrary to politically correct versions of history, 19th-century colonization was a massive, sudden improvement for many colonized peoples, and a paradigm shifting event for the Third World.

Europeans of the 1940s clearly knew that if they left the Third World, entropy would rapidly ensue, the locals would fail to run their countries, and those countries would implode into tribal units. These wouldn’t be self-managed societies that libertarians dream of, but tribal ones afflicted with internecine warfare. That is indeed where the Third World is heading, and much of it has arrived.

Africa’s population is growing at a faster rate now than it was in 1950.

Without institutions of liberty and protection of private property, financial and intellectual capital does not accumulate. Indeed, the Third World actively destroys or dissipates any material benefit that accrue to it. This happens through war, overconsumption, expansion of the exploiting (ordinarily the governing) class, and the active destruction of capital that one sees in the crime, vandalism, riot, and other means of destroying property that characterize the Third World. Despite their extreme possessiveness, people who destroy the capital of other people fail to maintain their own. In many Third World cities, when there is a day of celebration it is easy to assume that it is the day when employees got their salaries — which disappear by the next morning, drunk away. Capital fails to be protected or accumulated; the rational structure of a productive, thrifty, and prudent culture is not there.

While people in the West are blamed for being materialistic, Third World people are often much more focused on their possessions. The great fleet of servants in India, who are destined to forever remain servants, may earn a mere $100 dollars or less a month, but must have the latest smartphone. For me it is impossible to comprehend how they pay their rent, buy food, and still have some money left to buy a phone; but I remind myself that actually they take loans to buy smartphones and are forever in debt.

And now — the population problem is becoming worse.

Consider Africa alone. Africa’s population in 1950 represented a mere 10% of the world population. By the end of this century Africa, the poorest continent, is predicted to have at least 40% of the world’s people. Africa’s population is growing at a faster rate now than it was in 1950. Given that this rate begins from a much higher base, Africa adds six times more people today than it did in 1950.

More important: in the Third World countries, population control has mostly happened within the relatively more educated, intellectually sophisticated part of society. In Northern India, to cite another example, the unstable, uneducated, chaotic, and backward part of the population is exploding in size. Southern India, which is relatively stable and better off, is falling in population.

With ease of mobility, segregation is picking up its pace. The economically best people of the Third World find it much easier to emigrate than to stay home and fight to make society better, or maintain it in its current state. In 2017 alone, 12% of Turkish millionaires and 16% of Venezuelan millionaires emigrated. So great has been the emigration from India that it is virtually impossible to find a decent plumber or electrician. Forget about finding a good doctor. In a survey, only 30% of Indian doctors could diagnose a simple ailment. Everywhere educated people move to cities, while the rest stay on in rural places. Segregation is real, leaving the underclass with a huge deficit in leaders.

There is also segregation by sector of the economy. As the private sector has evolved in the Third World, government institutions have increasingly become brain-dead, for the best brains now want to work for high salaries in the private sector, leaving state power in the hands of the worst brains. Naturally, people have become very stressed and unsure. As an emotional escape, superstitious rituals and religious-nationalism are increasing exponentially, contributing to the elevation of exploitive, sociopathic elements to positions of power.

Perhaps, payments made to people for having children must stop; instead people should get money not to have children.

It is possible that some parts of the Third World simply cannot be “governed.” A couple of years back I undertook what I consider the most dangerous trip of my life. I went to Goma in the Democratic Republic of Congo (DRC) on my own. Even for DRC, Goma is a lawless part. The Swedish police I was staying with told me one day that a pregnant woman had been raped, her fetus removed, cooked, and fed to other women of the tribe, who had all been raped. Listening to the stories of celebration of such brutalities in the Congo and elsewhere in Africa, I couldn’t but imagine what I would do if I were forced to run the DRC. I couldn’t imagine ever being able to bring it back to relative sanity without imposing the tyranny — for fear is the only restraint available in the absence of reason — for which Leopold II of Belgium is infamous.

This brings us to the terrible predicament of the Third World. Except for China, the countries of the Third World have failed to develop inner competencies and hence internal reasons to accumulate financial and intellectual capital. They have failed to maintain their institutions, which have continued to decay after the departure of European colonizers. The crumbs of economic benefits — the gifts of western technology — have been dissipated. What can be done? How would you deal with the predicament?

There is no hope unless the vast size of the underclass, who are statistically unable to participate economically, particularly in the age of AI, is reduced. Perhaps, payments made to people for having children must stop; instead people should get money not to have children. Even this first step can only happen if the Third World institutions are changed and rational leaders are imposed. But who will impose them?

The end result is obvious. With time — slowly and then rapidly — the Third World will continue to fall apart institutionally. The Third World will implode. This two-thirds of the world population will fall into tribes that, being irrational, will have no way to resolve disputes. They will enter a phase of neverending warfare, with other tribes and within their own tribes. If there is any surplus left, it will be dissipated through population growth and overconsumption. Ahead there is only entropy and a Malthusian future, mimicking the sad Malthusian equilibrium that existed before the colonizers came.




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Trump: Right on Iran?

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On May 8 President Trump withdrew the United States from the 2015 nuclear accord between Iran and the P5+1 nations (the US, Britain, France, Russia, China, and Germany). By doing so he isolated the US diplomatically (only Israel, Saudi Arabia, and some small states in the Persian Gulf support US abrogation of the agreement), and drew the ire of globalists, liberals, and the establishment media. But was Trump in fact right to pull out of the agreement?

I should mention that I have advocated détente with Iran since the 1990s. I even published an essay on the subject in Liberty back in March 2007 (“Engage Iran: A Way out of Iraq"). I still look upon the Iranian people as potentially our best friends in the Middle East. Iranians in general are more pro-Western than any of the Arab peoples. Sadly, we derailed Iran’s progress toward a western-style democracy when in 1953 we and the British overthrew the first and only democratic government in the country’s history. The Islamist tyranny that took over Iran in 1979 and still rules there today is the result of the coup d’état staged by the CIA and MI6.

The Iranian people are still potentially our best friends in the Middle East.

Obviously, we can’t turn back the clock. But if there exists a reasonable chance of Iran’s Islamic dictatorship crumbling from within, then perhaps we should do what we can to facilitate that outcome. We did something like this with the Soviet Union in the 1980s, by denying it credits and technology transfers, and by luring it into an arms race it could never win. Trump, by abrogating the 2015 nuclear accord, has begun to take Iran policy in a similar direction.

Despite Trump’s fulminations against the 2015 accord, the agreement negotiated by the Obama administration wasn’t really a bad deal. It ended Iran’s covert program to develop a nuclear weapon. Some 97% of Iran’s nuclear material was removed from the country. The inspection regime was adequate, even robust in some respects. The main weakness of the agreement was that it allowed Iran to resume enriching uranium for peaceful purposes after a 15-year hiatus. Objectively speaking, however, this was not a sufficient reason for us to withdraw from the agreement only three years after it was signed — and particularly so since the other signatories had no intention of leaving with us.

But if there exists a reasonable chance of Iran’s Islamic dictatorship crumbling from within, then perhaps we should do what we can to facilitate that outcome.

A secondary purpose behind the agreement, as the Obama administration saw it, was to promote a thaw in US-Iranian relations, with the hope that before 15 years had passed we would witness the end of the Islamic Republic and the evolution of a moderate, pro-Western regime. It has to be said, however, that the current leadership of Iran has shown no signs of softening its anti-American views. At the same time, the lifting of most sanctions on Iran after the agreement was made provided the regime with some economic relief (the Iranian economy and financial system were definitely hurt by sanctions) — and political relief, too, in that the people felt that their lives would improve once sanctions were removed. The nuclear agreement was, arguably, a lifeline thrown to a regime that was already in the process of sinking.

Moreover, Iran has continued to expand its influence in the region — in Iraq, Syria, and Lebanon, and as supporter of the Houthi insurgents in Yemen. Iran’s activities threaten to destabilize the Middle East generally, and are particularly worrisome when it comes to Saudi Arabia, its rival across the Persian Gulf and our most important ally in the Arab world. Although the US no longer needs to import Middle East oil, a crisis in the Gulf or, worse, the collapse of the pro-American regime in the world’s largest oil producer would roil energy markets and indeed the world economy.

Equally important is the fact that Saudi Crown Prince Mohammed bin Salman has initiated a program of reform in the kingdom that holds out the prospects of, first, bringing Saudi Arabia into the 21st century and, second, ending the plague of Sunni jihadism that has infected Saudi society and large swathes of the Muslim world. If Prince Mohammed is successful in this, he will have rendered a service not only to his country and the region, but to humanity as a whole. The West has a big stake in his ultimate success.

The nuclear agreement was, arguably, a lifeline thrown to a regime that was already in the process of sinking.

Containing Iran is good for almost everybody – including, ultimately, the Iranian people. The only loser would be the Iranian regime itself. Supporting a reformist Saudi regime against Iranian mischief may help damp down Islamic radicalism and terrorism worldwide. And re-imposing sanctions on Iran, as Trump has done, may be the final straw that breaks the back of a regime beset by enormous economic problems.

I could never be a Trump supporter. His personality, behavior, and many of his policies are anathema to me. He has shown no real understanding of the nuclear agreement that he decided to tear up. That said, abrogating the agreement and reimposing sanctions on Iran seems to me a legitimate geostrategic play which, if it succeeds, will have enormous benefits for the US, the world, and, it is to be hoped, the Iranian people. With his dramatic move on May 8 Trump may very well have stumbled into the right policy.




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Caracas Dispatches

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Mercedes Flanagan — I’ll call her that — a Venezuelan lawyer, television executive, and jurist, and most important, this author’s first cousin, arrived in Miami on December 15, 2017.

Flanagan. A good Latin American name, like O’Higgins or De Valera.

Mercedes was able to get here after acquiring a six-month US visa (months in the making and a miracle) and flying a convoluted route that included Trinidad and Panama City. Direct flights — or flights of any sort — have become increasingly difficult to book because of Venezuela’s paucity of convertible currency. Five days after her arrival we met at her sister’s house in Boca Raton to celebrate the holidays together. Two of her granddaughters were there, having left Venezuela three months before. They too were seeking political asylum. Mercedes had lost a lot of weight but looked good, a result she attributed to the “Maduro diet,” as Venezuela’s food shortage is nicknamed, after Nicolás Maduro, the current president. She dreads returning.

Please forgive me for that absurd phrase: “mismanaged socialist economy,” as if a well-managed socialist economy could be a reality.

“Behind the scenes,” she said, “Cubans run everything.” A surprising revelation for what was once one of South America’s richest, most sophisticated, and modern countries — and a dark irony. During the 1960s, Cuban military and guerrilla leaders funded and aided leftist insurgents. Though thoroughly defeated, they’ve made a latter-day comeback.

I asked Mercedes about the state of her finances. She answered that she was still receiving her government pension but that one-third of it had been converted into nonconvertible “economic war bonds,” useless savings certificates.

In 2017, the mismanagement of Venezuela’s socialist economy — please forgive me for that absurd phrase: “mismanaged socialist economy,” as if a well-managed socialist economy could be a reality (a socialist economy is, by definition, a mismanaged economy; to actually mismanage a socialist economy would be to insert market mechanisms into it) — drove the inflation rate of the Bolivar (Venezuela’s currency) to somewhere above 4,000%. Mercedes reported a black-market exchange rate of 102,000 Bolivares to the dollar, circa December 1. CNN now (mid-January) reports 191,000 Bolivares to the dollar.

In order to conserve cash, banks are sticklers at enforcing check cashing procedures and creating on-the-spot, arbitrary rules to deny a check.

Let’s take a closer look at this money thing. Each day, Venezuelan banks are given a fixed budget dictating how much cash they’re allowed to disburse to clients. Electronic transactions are allowed, but forget ATMs, they’re all out of cash. Outside the banks, the lines of customers waiting to cash checks in order to acquire cash are already long by opening time — translating to about an hour’s wait. In order to conserve cash, banks are sticklers at enforcing check cashing procedures and creating on-the-spot, arbitrary rules to deny a check. But here’s the kicker: the daily per client check-cashing allotment set by the government is the equivalent of between 6 and 18 US cents — often not even enough to buy a “tit’s” worth of groceries.

Yes, a “tit” or teta, as it is called, because it resembles a droopy breast. Officially, they are CLAP bags. They hold a month’s worth of groceries and toiletries that cost the equivalent of 18 US cents. The government makes them available to the poorest Venezuelans at heavily subsidized prices. But, as CNN reports, “Recently, CLAP bags have gotten smaller or been delayed as more Venezuelans slip into poverty and as the government runs out of money to import essential goods.” How ironic: a shortage of worthless cash.

Salaries are unpredictable, even for government employees. So garbage is collected perhaps once a month, according to Mercedes. One enterprising “Chávista collective” in Caracas representing about 4,000 families has issued its own, parallel currency, the panal, and its own bank, El Banco Panalero, to ease the shortage of cash. The pudgy face of the demagogue former President Hugo Chávez graces one side.

Speaking of iconic faces, renditions of Simón Bolívar’s face have been subtly altered to make him look more creole than European white by pugging his nose and darkening his skin — in other words, to have him resemble Chávez and Maduro.

Salaries are unpredictable, even for government employees. So garbage is collected perhaps once a month.

On the plus side, gasoline runs at about 60 cents a gallon — up from 4 cents a gallon not very long ago — a price that has allowed a lucrative smuggling market to thrive at the Colombian border. And Venezuelan day workers — mostly prostitutes — are now allowed into Colombia to earn some real money.

N.B.: Mercedes requested that her true identity not be revealed, writing: “The situation in Venezuela is now much worse with the cold-blooded assassination of the soldier officer for ‘desertion’ for disagreeing with the dictatorship of ‘twenty-first century socialism’ along with three civilians, one of them a pregnant woman . . . and they're not allowing family to see, identify the cadavers, or bury them. We're awaiting Maduro's announcement of the suspension of all civil rights. . . There the raids by armed ‘collectives’ controlled by the government continue with orders to spread panic so that the real, suffering population won't continue to demand their rights to food, medicine, security and free elections."




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Alas, Zimbabwe!

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I had visited several African countries, but my 2009 flight to Harare turned out to be the most stomach churning. The ongoing expropriation of farms owned by people of European descent and the associated violence in Zimbabwe was international news in those days. On the plane, I watched two movies, Blood Diamond and The Last King of Scotland. Aided by a couple of glasses of wine, the two movies and the news from Zimbabwe got mixed up in my mind. I was expecting to encounter a violent society, general chaos, and militants with AK-47s. I was craving for my plane to somehow turn around.

But Harare proved safer than many other places I had been to in Africa. When we arrived, the airport was in complete darkness because of a shortage of electricity. The officials looked bored and sleepy. Yet interesting events awaited me. I was to get arrested in Harare. I was to spend time with Morgan Richard Tsvangirai, who was at that time an international star, a hero of human-rights activists for his opposition to President Robert Mugabe, and soon to be prime minister (a position without much power) under him. I was to be befriended by a relative of Mugabe, with whom I spent two days. I was also soon to become, to use a word that is yet to find a place in the dictionary, a multitrillionaire.

When I asked for it, someone soon brought me a bundle of 100-trillion dollar bills, all for free.

Zimbabwe had recently lost control of its currency. Inflation was so rapid — reaching as much as one million percent at one point — that the nation’s money was left with no value. A few months before I arrived, people had stopped using the local currency. The only medium of transactions was the US dollar, the South African rand, or the euro. When I asked for it, someone soon brought me a bundle of 100-trillion dollar bills, all for free. By this time, you couldn’t even buy a local bus ticket with those notes.

Nothing was cheap. Even for simple food and fruit, the prices were much higher than I would have paid in Canada. A kilo of onions was US $1.60, sugar was $0.85, and potatoes were a dollar. I could have bought a cheap table fan for something between $50 and $110. A 300-gram packet of Kellogg’s cornflakes was $2.10. A 400 ml of Pantene shampoo was $7.

In Zimbabwe, labor is dirt cheap — a couple of dollars or less a day — and land amply fertile. Development economists struggle to explain why even basic foodstuffs are so expensive in such countries. Why does manufacturing from China or at least from Europe not flood into places like Zimbabwe?

The explanation is very easy, but very incorrect, politically. I will zero in on it at the end.

Despite the high price of goods that should have provided huge incentives for people to work, the roads of Harare were full of thousands and thousands of unemployed men. Those trying to do something were selling produce — exactly the same produce — from small roadside shops. Prepaid vouchers for cellular phones were being sold everywhere, partly as currency or a hedge against inflation.

In Zimbabwe, labor is dirt cheap. Why does manufacturing from China or at least from Europe not flood into the country?

But what I was exploring was the economy that represented the higher tail-end of the national GDP, which was then $606 per capita. Harare, not the hinterland, was my principal location.

Despite extreme poverty and unemployment, Harare was a safe city. I tried striking up conversations in fast-food joints with those of European descent, and contrary to what I expected, they told me about the lack of ethnic conflicts in Zimbabwe. Most of the land expropriation and violence that had been happening was the responsibility of a minority of the populace, mostly connected with the ruling party. I got the impression that it wasn’t necessarily the violent aspects of Zimbabwean culture but its relative sheepishness that allowed violent people to rule the country’s institutions and not get challenged. If a significant minority doesn’t get fired up about liberty and proper institutions, the society must fall into political tyranny and chaos. I soon lost my fear and walked around freely, but bad things managed to happen, evidence of the tyranny beneath the calm.

At one point, a policeman came out of nowhere, started shouting at me, and held my wrist while I was midway crossing a road. He was shouting at me and pulling me in the other direction. I declined to go with him unless he let go of my wrist. We agreed that I would walk with him to his small post at the corner of the road. He had seen me photographing the parliament building, which is illegal. For him not knowing that law was the ultimate crime. He was obviously looking for a bribe, but not knowing how much to give, I could have easily fallen into a never-ending negotiation. My only other option was to look important and name-drop. So that’s what I did. In a tribal society, it is pecking-order and might-is-right that rule. The rule of law is not just unimportant, it isn’t worth the paper it is written on — it is incomprehensible to anyone, including the judges.

Most of the land expropriation and violence that had been happening was the responsibility of a minority of the populace, mostly connected with the ruling party.

One evening, Morgan Tsvangirai visited the hotel bar, where I managed to have a private conversation with him. Before becoming a politician, he was a trade union leader and had worked in a nickel mine. He told me bluntly that if he came to power he would be “fair” but would expropriate whatever he needed for the good of Zimbabwe. When I told him that international investors would not put money into Zimbabwe unless they saw profits and safety for their capital, the idea made no sense to him. He seemed to have absolutely no understanding of the concepts of private property and profit. Lack of ideas was in him so palpable that I doubt he could even be labeled a Marxist.

The truth was staring nakedly at my face: Zimbabwe after Mugabe would be much worse. Ironically, that understanding had completely escaped the international media and other international organizations that were lobbying to have Mugabe replaced by Tsvangirai.

I had met a lot of well-educated Zimbabweans who were living in London and New York. They expressed their patriotism and their craving to return. But they made it amply clear that they weren’t going to do so except as expatriates with hardship allowances added to their Western salaries. In the economic structure of Zimbabwe this would simply not add up. So they did not return.

He was obviously looking for a bribe, but not knowing how much to give, I could have easily fallen into a never-ending negotiation.

For whatever reason, I had come to be seen in Harare as a man wielding huge money power. A relative of Mugabe befriended me and decided to show me around during the last two days of my visit. He showed me his fleet of cars and his several palatial houses. He also showed me expropriated properties and farms of ethnically European farmers. Genteel readers may find my happily “enjoying” a trip to such farms a bit repulsive. But revulsion would simply have meant that I wouldn’t have had the experience, or have been able to write about it. We drove around Harare and surrounding areas like royalty, with the police now extremely servile. Our vehicle always picked up pace when we drove closer to police blockades.

So what does the future hold for Zimbabwe?

Zimbabweans are extremely unskilled and have a very high time preference. The moderately skilled Zimbabweans have moved on to greener pastures. Brain-drain is real, in Zimbabwe as in the rest of the Third World. None of this augurs well.

I reflected on what the “liberation” movement of Zimbabwe must have been like. I had good laughs with a lot of Zimbabweans and found them very friendly, but I found no ingredient in them that would make them fight for liberty and freedom, if they had any concept of what those words meant. The nationalist movements of the colonized countries are too sugarcoated in history books. Those movements were mainly about local goons fighting for power when Europeans were getting tired and colonization had started to become less profitable.

The truth was staring nakedly at my face: Zimbabwe after Mugabe would be much worse.

As I write this, Robert Mugabe has been removed in a coup. He had been in power since the foundation of the republic in 1980. He was, in effect, installed by a relatively rational entity: the British. No such entity exists in the extremely irrational and tribal Zimbabwe. The concepts of liberty, planning, reason, and the rule of law do not exist there. Zimbabwean democracy is incapable of finding another Mugabe. It will by definition find a significantly worse “leader.”

The world today is celebrating the end of Mugabe and the rise of new light in Zimbabwe. Zimbabweans danced and celebrated the removal of Mugabe and the appearance of their new-found “freedoms.” But behind the facade they are happy for something completely different. When they use the word “freedom” they are expecting the end of Mugabe to produce an era of free-stuff, goodies that flow without having to put in any effort. In their worldview, free-stuff should come to them without obligation to plan, invest, or strive for something more than momentary pleasure, including the pleasure of political “liberation.”

Let us zero in.

Zimbabwe was once the breadbasket of Africa. Gleaning out the key factors that made it a comparatively prosperous society is fairly easy, but hard to utter. In the old days its institutional spine was British rule and farmers of European heritage. Without their return in some form, Zimbabwe has no hope.

A year or two from now, the World Bank, the UN, and the media will again be complaining about Zimbabwe not turning out to be what they thought it would.

Of course, the milieu of Western society and international organizations is such that anyone who holds a politically incorrect view is immediately thrown out. So these organizations simply do not have the capacity to prescribe corrective action for Zimbabwe. They recite “democracy” as a treatment for all ills. But a “democratic” society that lacks the concepts of practical reason, limited government, and the rule of law does not have the ability to find a good leader. It will merely feel attraction toward the person who offers the most goodies.

A year or two from now, the World Bank, the UN, and the media will again be complaining about Zimbabwe not turning out to be what they thought it would. They will be expecting fresh elections to do the job. This demand for elections and democracy has been the never-ending, simplistic prescription of international organizations in the postcolonial world. But the prescription does not work. Zimbabwe will, unfortunately, get worse, much worse.




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Alas, Zimbabwe!

 | 

I had visited several African countries, but my 2009 flight to Harare turned out to be the most stomach churning. The ongoing expropriation of farms owned by people of European descent and the associated violence in Zimbabwe was international news in those days. On the plane, I watched two movies, Blood Diamond and The Last King of Scotland. Aided by a couple of glasses of wine, the two movies and the news from Zimbabwe got mixed up in my mind. I was expecting to encounter a violent society, general chaos, and militants with AK-47s. I was craving for my plane to somehow turn around.

But Harare proved safer than many other places I had been to in Africa. When we arrived, the airport was in complete darkness because of a shortage of electricity. The officials looked bored and sleepy. Yet interesting events awaited me. I was to get arrested in Harare. I was to spend time with Morgan Richard Tsvangirai, who was at that time an international star, a hero of human-rights activists for his opposition to President Robert Mugabe, and soon to be prime minister (a position without much power) under him. I was to be befriended by a relative of Mugabe, with whom I spent two days. I was also soon to become, to use a word that is yet to find a place in the dictionary, a multitrillionaire.

When I asked for it, someone soon brought me a bundle of 100-trillion dollar bills, all for free.

Zimbabwe had recently lost control of its currency. Inflation was so rapid — reaching as much as one million percent at one point — that the nation’s money was left with no value. A few months before I arrived, people had stopped using the local currency. The only medium of transactions was the US dollar, the South African rand, or the euro. When I asked for it, someone soon brought me a bundle of 100-trillion dollar bills, all for free. By this time, you couldn’t even buy a local bus ticket with those notes.

Nothing was cheap. Even for simple food and fruit, the prices were much higher than I would have paid in Canada. A kilo of onions was US $1.60, sugar was $0.85, and potatoes were a dollar. I could have bought a cheap table fan for something between $50 and $110. A 300-gram packet of Kellogg’s cornflakes was $2.10. A 400 ml of Pantene shampoo was $7.

In Zimbabwe, labor is dirt cheap — a couple of dollars or less a day — and land amply fertile. Development economists struggle to explain why even basic foodstuffs are so expensive in such countries. Why does manufacturing from China or at least from Europe not flood into places like Zimbabwe?

The explanation is very easy, but very incorrect, politically. I will zero in on it at the end.

Despite the high price of goods that should have provided huge incentives for people to work, the roads of Harare were full of thousands and thousands of unemployed men. Those trying to do something were selling produce — exactly the same produce — from small roadside shops. Prepaid vouchers for cellular phones were being sold everywhere, partly as currency or a hedge against inflation.

In Zimbabwe, labor is dirt cheap. Why does manufacturing from China or at least from Europe not flood into the country?

But what I was exploring was the economy that represented the higher tail-end of the national GDP, which was then $606 per capita. Harare, not the hinterland, was my principal location.

Despite extreme poverty and unemployment, Harare was a safe city. I tried striking up conversations in fast-food joints with those of European descent, and contrary to what I expected, they told me about the lack of ethnic conflicts in Zimbabwe. Most of the land expropriation and violence that had been happening was the responsibility of a minority of the populace, mostly connected with the ruling party. I got the impression that it wasn’t necessarily the violent aspects of Zimbabwean culture but its relative sheepishness that allowed violent people to rule the country’s institutions and not get challenged. If a significant minority doesn’t get fired up about liberty and proper institutions, the society must fall into political tyranny and chaos. I soon lost my fear and walked around freely, but bad things managed to happen, evidence of the tyranny beneath the calm.

At one point, a policeman came out of nowhere, started shouting at me, and held my wrist while I was midway crossing a road. He was shouting at me and pulling me in the other direction. I declined to go with him unless he let go of my wrist. We agreed that I would walk with him to his small post at the corner of the road. He had seen me photographing the parliament building, which is illegal. For him not knowing that law was the ultimate crime. He was obviously looking for a bribe, but not knowing how much to give, I could have easily fallen into a never-ending negotiation. My only other option was to look important and name-drop. So that’s what I did. In a tribal society, it is pecking-order and might-is-right that rule. The rule of law is not just unimportant, it isn’t worth the paper it is written on — it is incomprehensible to anyone, including the judges.

Most of the land expropriation and violence that had been happening was the responsibility of a minority of the populace, mostly connected with the ruling party.

One evening, Morgan Tsvangirai visited the hotel bar, where I managed to have a private conversation with him. Before becoming a politician, he was a trade union leader and had worked in a nickel mine. He told me bluntly that if he came to power he would be “fair” but would expropriate whatever he needed for the good of Zimbabwe. When I told him that international investors would not put money into Zimbabwe unless they saw profits and safety for their capital, the idea made no sense to him. He seemed to have absolutely no understanding of the concepts of private property and profit. Lack of ideas was in him so palpable that I doubt he could even be labeled a Marxist.

The truth was staring nakedly at my face: Zimbabwe after Mugabe would be much worse. Ironically, that understanding had completely escaped the international media and other international organizations that were lobbying to have Mugabe replaced by Tsvangirai.

I had met a lot of well-educated Zimbabweans who were living in London and New York. They expressed their patriotism and their craving to return. But they made it amply clear that they weren’t going to do so except as expatriates with hardship allowances added to their Western salaries. In the economic structure of Zimbabwe this would simply not add up. So they did not return.

He was obviously looking for a bribe, but not knowing how much to give, I could have easily fallen into a never-ending negotiation.

For whatever reason, I had come to be seen in Harare as a man wielding huge money power. A relative of Mugabe befriended me and decided to show me around during the last two days of my visit. He showed me his fleet of cars and his several palatial houses. He also showed me expropriated properties and farms of ethnically European farmers. Genteel readers may find my happily “enjoying” a trip to such farms a bit repulsive. But revulsion would simply have meant that I wouldn’t have had the experience, or have been able to write about it. We drove around Harare and surrounding areas like royalty, with the police now extremely servile. Our vehicle always picked up pace when we drove closer to police blockades.

So what does the future hold for Zimbabwe?

Zimbabweans are extremely unskilled and have a very high time preference. The moderately skilled Zimbabweans have moved on to greener pastures. Brain-drain is real, in Zimbabwe as in the rest of the Third World. None of this augurs well.

I reflected on what the “liberation” movement of Zimbabwe must have been like. I had good laughs with a lot of Zimbabweans and found them very friendly, but I found no ingredient in them that would make them fight for liberty and freedom, if they had any concept of what those words meant. The nationalist movements of the colonized countries are too sugarcoated in history books. Those movements were mainly about local goons fighting for power when Europeans were getting tired and colonization had started to become less profitable.

The truth was staring nakedly at my face: Zimbabwe after Mugabe would be much worse.

As I write this, Robert Mugabe has been removed in a coup. He had been in power since the foundation of the republic in 1980. He was, in effect, installed by a relatively rational entity: the British. No such entity exists in the extremely irrational and tribal Zimbabwe. The concepts of liberty, planning, reason, and the rule of law do not exist there. Zimbabwean democracy is incapable of finding another Mugabe. It will by definition find a significantly worse “leader.”

The world today is celebrating the end of Mugabe and the rise of new light in Zimbabwe. Zimbabweans danced and celebrated the removal of Mugabe and the appearance of their new-found “freedoms.” But behind the facade they are happy for something completely different. When they use the word “freedom” they are expecting the end of Mugabe to produce an era of free-stuff, goodies that flow without having to put in any effort. In their worldview, free-stuff should come to them without obligation to plan, invest, or strive for something more than momentary pleasure, including the pleasure of political “liberation.”

Let us zero in.

Zimbabwe was once the breadbasket of Africa. Gleaning out the key factors that made it a comparatively prosperous society is fairly easy, but hard to utter. In the old days its institutional spine was British rule and farmers of European heritage. Without their return in some form, Zimbabwe has no hope.

A year or two from now, the World Bank, the UN, and the media will again be complaining about Zimbabwe not turning out to be what they thought it would.

Of course, the milieu of Western society and international organizations is such that anyone who holds a politically incorrect view is immediately thrown out. So these organizations simply do not have the capacity to prescribe corrective action for Zimbabwe. They recite “democracy” as a treatment for all ills. But a “democratic” society that lacks the concepts of practical reason, limited government, and the rule of law does not have the ability to find a good leader. It will merely feel attraction toward the person who offers the most goodies.

A year or two from now, the World Bank, the UN, and the media will again be complaining about Zimbabwe not turning out to be what they thought it would. They will be expecting fresh elections to do the job. This demand for elections and democracy has been the never-ending, simplistic prescription of international organizations in the postcolonial world. But the prescription does not work. Zimbabwe will, unfortunately, get worse, much worse.




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Temporization Fugit

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As speculated in a June 7 feature here, President Trump today (June 16) announced, before a packed Miami crowd, a big change in US-Cuba policy. Though tourism to the island by American-based visitors has been technically banned by the embargo for quite some time, the 2014 Obama thaw fudged the issue in a variety of ways. President Trump has just dumped the fudge.

Pre-Obama’s thaw, regulations allowed Americans to visit Cuba under a variety of categories, including a people-to-people category — once their itinerary had been vetted by the Treasury Department. Under that category, only organized tour groups with a detailed itinerary were allowed to visit, with the intent of American folks and Cuban folks getting to know each other.

Compliance with the travel regulations in all categories will be strictly enforced.

On December 2014, President Obama eliminated the vetting process and allowed visitors to vet themselves on an honor system. At the same time, visitors returning from the island weren’t scrutinized, only questioned perfunctorily or not at all, about their compliance with US government regulations.

According to CNBC, “President Trump's policy restricts this form of travel to Cuba for individuals. Americans pursuing this type of travel would have to go in groups.” And their compliance with the travel regulations in all categories will be strictly enforced.

But the ultimate aim of the new policy is to restrict American tourist dollars going to businesses owned by the Cuban military's holding company, GAESA. "The profits from investment and tourism flow directly to the military. The regime takes the money and owns the industry. The outcome of the last administration's executive action has only been more repression and a move to crush the peaceful, democratic movement," Trump said in Miami on Friday.

The ultimate aim of the new policy is to restrict American tourist dollars going to businesses owned by the Cuban military's holding company.

According to Fox News, The policy calls on Americans traveling to Cuba to use "private businesses and services provided by the Cuban people, rather than businesses and services provided by GAESA." In effect, government hotels and resorts are out. US-based visitors must use private B&Bs and restaurants otherwise known as casas particulares and paladares.

The new policy does not go into effect until the new regulations are issued. We await the Cuban government’s reaction . . .




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Volo, Veni, Velo, Vidi

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Cosa ni pensi di Trump? (What do you think of Trump?)

It was a question my wife Tina and I were asked our very first day in Sicily and nearly every other day on our 30-day bicycle circumnavigation of the island this February. The question was usually prefaced by apologies, either verbal or physical, as if it were a too-personal intrusion (unusual for Europeans, who generally disdain small talk — unless it’s banter — in favor of meatier fare). It was always asked in earnest, never in a challenging manner.

One Dutch couple in the little town of Taormina combined both approaches. On finding out we were Americans, they kiddingly asked if we’d be able to return home. Trump had just issued his ill-conceived travel ban and we were unaware of it, news being an unnecessary intrusion when I travel. We joined in their kidding about America’s new president until I reminded them of Geert Wilders, the Netherlands’ version of the Donald, at which point they sheepishly concurred and demurred. Ditto for a Polish couple whose criticism of Trump was more earnest until I reminded them of the Kaczynski brothers’ populist policies. They said Poland was a new democracy, subject to mistakes, while they expected more from the US, a mature democracy. I replied that I was glad we were still, at least, young at heart.

The Italians, however, were transparently curious. They didn’t trust their media and wanted an eyewitness opinion. One averred that he’d heard Trump was another Hitler. I told him Trump wasn’t as bad as Mussolini or Berlusconi, with only a pussycat’s handful of “bunga, bunga.”

Taormina is a small, picturesque, ancient town atop an impossibly steep hill. It boasts the best preserved (outside of Greece) 3rd-century BC Greek theater. We were about two-thirds done with our counterclockwise bike tour of the island when we were taken aback by Italian soldiers in full deployment eyeing us at Taormina’s medieval gates. Curious, I approached one and politely asked the way to Corso Umberto I, the location of our lodging. He smiled and said we were on it.

At our B&B I asked our host why the town was occupied by the army. “Trump-Putin summit,” he answered.

Incredulous, I gesticulated, “Today? Two or three days . . . soon?”

When Tina and I had circumbiked Iceland, we’d visited the house where the Reagan-Gorbachev summit was held. We’d lingered long, savoring the very spot where the Cold War had ended. Would Taormina rise to the occasion?

Not a chance, according to The Economist. One anti-Trump acquaintance observed that it was fitting that Trump — a man of business who wants respect — and Putin, a gangster, should meet in the birthplace of the Mafia.

“No, no,” our host answered, “Maggio (May).”

The following morning we headed to the Greek theater. Next door, the Grand Hotel Timeo, an historic old hotel, was closed for renovations. The Timeo counted among its guests Goethe, Kaiser Wilhelm II, Edward VII, D.H. Lawrence, Truman Capote, and now, we assumed, either Trump, Putin, or both. Adjacent, the street was being dug up by workmen upgrading the communications infrastructure — with soldiers overlooking. Yet Italy never ceases to amaze. Between midnight and 6 AM, all the soldiers disappear. Go figure.

Our Thing

Today, according to one source, the Mafia lies dormant in Sicily, having moved what operations it still retains to Calabria, Italy’s boot toe. Many of the business establishments we passed sported a window sticker declaring that they’d joined Addiopizzo, an organization of businesses that refuse to pay protection money and that rally around one another when fingered. Tourist curio shops sell Sono il padrino (I am the godfather) T-shirts and coffee cups, many with your name custom printed. Marlon Brando’s Don Corleone character pictures are everywhere. There is even an anti-Mafia museum, the home of CIDMA (Centro Internazionale di Documentazione sulla Mafia e Movimento Antimafia), in the town of Corleone, 60 km south of Palermo.

Up until the mid-1990s the La Societa Onorata, or Cosa Nostra, was no joke. But then, in 1982, Tommaso Buscetta, a “man of honor,” turned rat when he was arrested. After four years of interrogation under magistrate Giovanni Falcone, 584 Mafiosi were put on trial — the maxiprocesso or supertrial — in a specially constructed bunker in Palermo, Sicily’s capital. The trial took two years and sometimes descended into farce with loud and disruptive behavior, some defendants acting as their own lawyers flamboyantly spouting nonsense, indulging in non sequiturs and endless sophistry, another one literally stapling his mouth shut to signify his commitment to omerta, the code of silence, and another feigning madness with outbursts so disruptive he had to be put into a straitjacket. The trial resulted in 347 convictions, of which 19 were life imprisonments.

It would surprise no libertarian that the Mafia’s roots lie in government failure, specifically a law enforcement failure.

The men of honor struck back, as they had every time in the past. In 1988 they murdered a Palermo judge and his son, then an anti-Mafia prosecutor, and finally, in 1992 Falcone and Paolo Borsellino, another courageous anti-Mafia magistrate. But this time they’d gone too far. In January 1993, the authorities arrested the capo di tutti capi, or boss of all bosses, Salvatore (Toto) Riina, the most wanted man in Europe. He was charged with a host of murders, including those of magistrates Falcone and Borsellino, and sentenced to life imprisonment, effectively decapitating the organization (which might turn out to be a Hydra).

It would surprise no libertarian that the Mafia’s roots lie in government failure, specifically a law enforcement failure. Sicilians had always sought independence and only reluctantly joined Italy in 1861 after Garibaldi promised them autonomy. Between 1200 and Italian unification, Sicily was ruled — usually at a distance and often as an afterthought — by Germany, France, Aragon, Spain, Savoy, Austria, Naples, and England, mostly in that order. Not strong enough to guard their independence, Sicilians would invite an outsider to help them rid themselves of the occupier du jour. The new bosses liked the island, refused to leave, and ruled desultorily, leading to revolt and a repetition of the cycle. It was a prime environment for the nurturing of brigands and private militias specializing in protection.

The word mafia was first used in 1863 to describe that special combination of thievery, extortion, and protection by organized groups. Serious anti-Mafia campaigns began in 1925 with Benito Mussolini, who promised to make government work. It didn’t work, at least permanently. The “men of honor” fought back, joining an unexpected ally: the US government.

Anticipating the Allies’ invasion of Europe through Sicily in 1943, the US wanted to ensure that the landings, launched from North Africa, would be greeted with respect. In 1936 Charles “Lucky” Luciano, capo di tutti capi of Mafia operations in America, had begun serving a 30 to 50 year sentence in federal prison, having been convicted of 62 counts of compulsory prostitution. In 1942 the US Office of Naval Intelligence approached Luciano, who was still running his operation from inside prison, seeking help with the Sicily landings.

Lucky and the Navy struck a secret deal: (1) East coast dockworkers, controlled by the mob, would not go on strike for the duration of the war and would actively resist any attempts at sabotage; and (2) the Sicilian Mafia would grease the skids for the Allies’ invasion through espionage, sabotage, and prepping of the local population. In return, Luciano’s sentence would be commuted and he would be deported to Sicily after the war.

It is worth pointing out here, for context and perspective, that this controversial but successful Mafia-US Government cooperation on national security set the precedent for (and reduced the absurdity of) the CIA’s 18-year-later Castro assassination attempt collaboration.

In 1968, the Italian government again went after the Mafia, following a protracted inter-Mafia killing spree that caught many innocents in its crossfire. However, out of 2,000 arrests only 117 Mafiosi were put on trial and most were acquitted or received light sentences. It was this First Mafia War, its subsequent acquittals — attributed to crooked politicians and policemen — and a Second Mafia War in the early 1980s that galvanized public opinion against the Mafia and invigorated magistrates Falcone’s and Borsellino’s prosecution.

Africans, Greeks, Romans, and Vikings

Sicily is indirectly one of my ancestral homelands. The Vikings, later known as Normans, invaded the island in 1061, only five years before their invasion of Britain. Gerhard, my original progenitor (on my mother’s side, as far back as I can trace) was one of those northern Germanic-Norse warriors who sacked and occupied Rome in the 8th century. His lineage, during Italy’s Norman invasion, became Gherardini and later, during Britain’s Norman invasion, Gerald. Soon thereafter, taking on the Welsh “son of” prefix, it became Fitzgerald, my mother’s maiden name.

The Greek city-states had no formal organization among them; they shared only a language and culture.

Sicily is at the crossroads of the Mediterranean. Its indigenous people — about which little is known — were displaced and incorporated by invading Sicels, Elymians, and Phoenicians, who later became known as Carthaginians (in present-day Tunisia, only 96 miles away from Sicily, with a stepping-stone island in between). By 800 BC, Greek merchants had established trading posts that soon developed into colonies that later became independent, with Syracuse (the home of Archimedes), Himera, and Akragas (today’s Agrigento) becoming some of the world’s largest cities at the time. In all, there were seventeen major Greek cities on Sicily, entangled in ever-changing alliances and wars with one another, with cities in Greece proper, and with cities in the broader Greek world and even outside it.

It’s important to note the political structure of these entities. Unlike Rome, a unified, centrally administered empire, Greece consisted of independent city-states not only in the area of present-day Greece but extending from the Black Sea all the way to Spain, North Africa, France, and Italy. They had no formal organization among them; they shared only a language and culture.

Enter Rome. Between 264 and 146 BC, Rome fought Carthage (Tunisia) for control of the Mediterranean in the three so-called Punic Wars, eventually prevailing and, to prevent any resurgence, sacking and burning the city of Carthage, condemning 50,000 survivors to slavery. The victors took control of Sicily in 241 BC and turned it into Rome’s first province. Tragically, Archimedes became a casualtyof the conflict between Rome and Carthage.

During the disintegration of the Roman Empire, Sicily came under the rule of German and Norse tribes, first the Vandals and then the Ostrogoths. But as the Roman Empire reorganized itself in Constantinople, Byzantine Greeks returned to Sicily, turning it, for a short time, into the capital of the Eastern Roman Empire at Syracuse in 663.

And then came the Arabs. After defeating the Byzantine Greeks in 827, immigrants from all over the Muslim world settled and intermarried with the Sicilians. Palermo became the second-largest city in the world after Constantinople.

The Norman Conquest, begun in 1061, took ten years, but resulted in a golden age for the island under Kings Roger I and Roger II, until about 1200 when the female heir to the throne married a Hohenstaufen and the island came under the control of the Holy Roman Emperor. Under the Normans, Christians, Muslims, Byzantines, and everyone else got along splendidly, imparting to the island its unique Arab-Norman-Byzantine architectural style.

You’d think that with such a mixture of peoples Sicilians might resemble Polynesians. They don’t. They range from white to swarthy (with a few black Africans — recent arrivals — mostly from Nigeria and Ghana), with blonde, red, brown, and black hair. The only physical trait they all seem to share is a so-called Roman nose — large, protruding and sometimes sporting a hump a third of the way down the bridge.

Around Sicily in Low Gear

Sicily is at the same latitude as Salt Lake City. Tina and I chose February for our trip because we’re cheap, hate crowds, and love to bike in the cold and rain. In Milazzo we paid €40 per night for a fully furnished apartment, smack dab in the center of town. We took advantage of the deal and spent two nights there. But not just for that.

Milazzo, a city on a spectacular peninsula on the northeast of the island, is charming, clean, and delightful, with a lively passeggiata, or evening promenade, where seemingly the entire town dresses up and walks the sidewalks, streets, and waterfront, visiting, tippling, eating gelato, marzipan, biscotti, cannoli, and any of the dozens of sweets and pastries that Sicilians love. This pre-Lenten time being Carnevale, the children were outfitted in elaborate costumes.

Inhabited since prehistoric times, the town is dominated by a massive hilltop fortress built, in successive enlargements, by the Normans, Swabians, Aragonese, and Spanish. We were the only visitors to the fort. At one time it had held captured prisoners in its Spanish enclave. Inside, to our complete incredulity, there hung the purported skeleton of an English soldier inside “the coffin,” one of the most prevalent torture and execution methods, often seen invarious movies set in medieval Europe.The victimswerestripped naked andplaced inside a metal cage, roughly made in the shape of the human body.The cage wasthenhung from a tree, gallows,or city walls until the victim died of dehydration, starvation, or hypothermia. Birds and bugs ate the bones clean. No ropes or barriers separated this grisly exhibition from the fort’s visitors. Tina shook the Englishman’s phalanges reverently, not believing she could do so and thereby reach into the past, perhaps even into the poor man’s soul, so easily, spontaneously, and without a mediative ritual.

Was it real? The interpretive sign implied so. The bones were real enough, though the teeth and ribs were reconstructions, with the rib cage ligaments being some sort of plastic; the skeleton was held together with metal clips, as real skeletons usually are. Was it the Englishman’s actual bones, or a skeleton donated for the purpose of illustrating what had happened? Who knows?

 

Nino, the only person we met there, stopped to engage us. An elderly, scholarly gentleman with a wide Van Dyke sans mustache, he introduced himself as the resident historian. When I told him I was an American archaeologist, he invited us into his offices and collection of goodies: theater masks from the Arab period, erasable wax writing tablets from the Roman occupation, authentically-made replicas of trinacrias throughout the ages. The trinacria is the 3-legged symbol of Sicily, with a Gorgon’s head at the center. It graces the center of the Sicilian flag. Go ahead and Google it. Irrespective of what you’ll find there, Nino convincingly demonstrated its Celtic and Indian roots.

Daytime temperatures hovered in the low 50s; rain was not infrequent, though never torrential. We were aiming for 50 kilometers per day, average, including rest and tourist days, for the entire 1,123 km circumference. Traveling across or around a country by bike is to experience the country mano a mano, so to speak, with all its smells, sounds, and sights in slow motion — not to mention the many personal interactions that are inevitable in low gear.

The island is mountainous; we trained hard for two months before the trip, and it paid off, though the roads we chose — secondary, mostly — were expertly engineered for grade. Our objective was to hug the coast all the way around, counterclockwise. At one point, a landslide had obliterated a portion of the via nazionale upon which we were riding. The detour took us up into the mountains on a tertiary road. It was so steep that Tina and I had to push each loaded bike up with both of us pushing the handlebars. On the other hand, the freeways were engineering and construction marvels. One expressway girdles the island, cutting across peninsulas and corners, sometimes receding quite some distance from the coast. It is almost perfectly flat, achieving this miracle with long tunnels and impressively long and tall bridges.

Our biggest concerns were traffic and the problem of booking our lodgings, usually B&Bs or apartments. Many places were closed for the season; those that weren’t almost always presented a language problem. We preferred apartments. Sicilian restaurants don’t open until 8 pm and seldom serve before 9 pm — an impossible eating schedule for all-day bikers accustomed to eating dinner between 5 and 6 pm and getting an early start the next day. But we still sampled some of Sicily’s unique dishes. Here are two of them (don’t say Liberty has never published recipes):

Gnocchi

  • Potato and rice flour marbles
  • Crumbled Italian sausage
  • Chopped almonds
  • Pistachio paté — finely ground pistachios in extra virgin olive oil (pistachio butter?)
  • Garlic
  • Dry white wine
  • Garnish with halved cherry tomatoes and fresh mint

Linguine

  • Ground lamb and ground pork in equal proportions
  • Chopped pistachios
  • Almond paté — finely ground almonds in extra virgin olive oil (almond butter? sans sugar!)
  • Garlic
  • Dry white wine
  • Diced red bell peppers or pimentos
  • Serve with Sicilian Nero d’Avola wine (or blood-red orange juice)

Keep Calm and Pedal On

At Marsala, the town that invented its eponymous sweet wine, we gawked in wonder at the narrow medieval streets paved in marble. Feeling a bit lost, I asked a traffic carabinieri for directions.

Italian traffic cops are very friendly. They’re armed with ridiculous ping-pong paddles with a red circle in the middle, which are holstered in their boot cuffs when not deployed as badges of authority. They do not inspire or command respect. Whenever they wave that silly paddle I’m reminded of the Black Knight in Monty Python and the Holy Grail insisting he’s still effective in spite of his missing arms and legs. These cops are seldom seen except at accident sites and infrequent radar speed traps.

We’d been warned about Italian traffic being a heavy-metal roller derby without rules. In truth, Sicilian traffic was complete anarchy, with cars breaking every traffic rule imaginable, from speeding and running stop signs and traffic lights to double and triple (and even sidewalk) parking to driving backwards down one-way streets and up and down pedestrian-only venues — anything to get an advantage. Most drivers were talking on the phone, texting, eating, gesticulating, and even drinking. Many gas stations included bars! Some drivers drove with their heads out the window while smoking so as not to smoke up the car.

Italian traffic cops are very friendly. They do not inspire or command respect.

But the anarchy, to no libertarian’s surprise, works. Without adherence to rules, every driver is 100% aware of his environment and expects the unexpected at any time. Drivers are also very polite and have quick reaction responses. It’s as if every Sicilian driver had graduated from the Bob Bondurant School of high performance driving. It’s no exaggeration to say that we saw more driving schools in Sicily than we’ve seen anywhere else — by far.

Right of way is not determined by rules (though they do exist) but rather on a first-come basis. It takes nerve as a pedestrian, biker, or even car to gingerly nose out into traffic without the right of way. In the US, cars would honk, drivers flip the finger, and accidents ensue. In Sicily, traffic politely accommodates you.

Essential to this driving environment is the Italian car horn. Mastering its grammar is nearly as difficult as mastering tones in Mandarin. There are special toots and combinations of toots for nearly any situation, but almost none of them aggressive or panicky. When approaching from behind, vehicles would warn us — at a discreet distance — of their approach with a distinctive honk, never varying and never startling. It was different from a greeting honk, which also varied according to whether the greeted person was in a vehicle or on foot, a man or a woman. There were distinctive tootles for dogs, either as warnings or greetings. The claxon language of Sicily is so well developed and intuitive that we identified one honk as a question, “What are you going to do?”, with the anticipated accompaniment of a hand gesture. Traffic jams were not advertised by blasts and blares; they were considered unavoidable aspects of driving in congested conditions.

We couldn’t believe Italian bikers, all dressed identically in the latest biking gear, packed tightly together like a school of minnows, taking up an entire lane, oblivious to vehicles and racing at top speed on wheels skinny as dental floss. They all waved at us and shouted ciao! Even biking pairs would ride side by side taking up an entire lane, ignoring traffic. We never quite adopted that custom, nearly always riding in single file. But traffic would always treat bikes as full-fledged vehicles, passing only when appropriate and seldom crowding them.

One large group stopped to engage us. We’d noticed that no biking group ever included a female, so I asked, “Don’t Italian women ride bikes?” One fellow piped up that the women were home cooking. Everyone laughed.

Greeks, Fascists, Old and New Gods

Sicily’s most impressive ruins are its Greek temples and theaters. The one in Agrigento is where Aeschylus directed and presented his tragedies. It and the one in Taormina are still used annually for Greek play festivals. Most are well preserved and protected yet totally accessible to the public, unlike Stonehenge, which, understandably, is now cordoned off. The Temple of Concordia (440 BC) in the Valle dei Templi is the largest and best-preserved Doric temple in Sicily, and one of the best-preserved Greek temples anywhere.It was converted into a Christian basilica in the 6th century and dedicated to the apostles Peter and Paul by the bishop of Agrigento.

Roman ruins are fewer. Their surviving mosaics are protected and cordoned off. Many Arab mosques, on the other hand, were converted into Christian churches, yet retained much of their Moslem flavor.

But it was the Fascist and German pillboxes along the south coast and edging up the west and east coasts that really struck a nerve. There were many, without signs or fences; they were simply abandoned, ignored, and often graffitied. One, outside of Messina, had been incorporated within the waterfront promenade and painted colorfully. The pillboxes recalled for us Tina’s uncle Bernie, who had participated in the US invasion of North Africa and then in the invasion of Sicily. Its south coast is invasion-friendly, with sandy beaches and a level hinterland. Approaching Gela, an old Greek city with a large, decommissioned petroleum refinery on its outskirts, we tried to put ourselves in Bernie’s boots. It was the first Sicilian city liberated by the Allies.

We pedaled across to Syracusa, looking forward to another rest and tourist day in Ortygia, Syracusa’s peninsular core and the nexus of its ancient Greek settlement. Right downtown, in the center, stand the remains of a temple to Apollo. The old gods still rule! Some of the narrow medieval streets can’t accommodate a classic Fiat 500, a smart car or, much less, a Mini.

Wending our way up the east coast, we were distracted by a road closure and detour that set us riding in circles. Finally — as in the old saying about “when in . . . do as . . .” — we cut through the closure, rode against traffic, and found a quiet spot for lunch. Suddenly, faintly visible in the distance but nearly taking up the entire horizon and the hazy sky above, loomed Mt. Aetna. At nearly 11,000 feet, rising right out of the water, it is an overwhelming sight, covered in snow and spewing smoke. Our plans to climb it came to naught: this winter’s snowpack had been exceptionally heavy, and all the approach roads were still blocked.

Just as well — soon after, Vulcan vented, spitting hot ash and lava onto the snowpack and causing spectacular explosions. Part of Aetna’s ski resort was destroyed. This is nothing new: 22 seismic stations monitor volcanic activity to defend Catania, the city at the mountain’s foot, and the surrounding towns. Signs along the road prohibit bikes, pedestrians, and motorbikes during eruptions.

Soon we hit the Riviera dei Ciclopi, where towering hunks of lava rise out of the sea. According to legend, these were thrown by the blinded Cyclops, Polyphemus, in a desperate attempt to stop Odysseus from escaping. One of the bigger blobs, La Rocca di Aci Castello, emerges from an underwater fissure and upholds a 13th-century black Norman castle built on an earlier Arab fortification. Inside, a small museum displays a bizarre collection of prehistoric skulls. From here on up and all across the north shore of Sicily, Norman lookout towers dotted high coastal salients, medieval parodies of the WWII pillboxes along the south coast.

Two days after Taormina we spotted the Calabrian coast, Italy’s boot toe. At the city of Messina, the Straits of Messina are only 1.9 miles wide at their narrowest, but plans for a cross-strait bridge have been put on hold in consideration of the prevalence of earthquakes and the strong currents. Appropriately, a huge and impressive statue of Neptune fronts city hall.

Turning the bird beak’s northeast corner of the island, we entered the mountainous north coast, where we were blessed by a constant tail wind. Cefalù, where we laid over for two days, is a compact medieval fishing town, nestling below the 1,000-foot La Rocca, a sheer-sided limestone mountain upon which previous embodiments of the town were built. Only one line of weakness provides an approach to the top — the endless steps that lead to the old fortifications. Imagine a fully kitted-up medieval soldier, laboring under a barrage of rocks, arrows, and hot oil, scaling his way up the then-stairless acclivity that today (with steps) takes a good half hour to negotiate.

The Moslems conquered the town from the Byzantines in 858, after a long siege. After another long siege, the Normans, under King Roger I, captured the city in 1063. To celebrate his victory, Roger commissioned what is regarded as Sicily’s finest mosaic, Christ Pantocrator, in the apsis of the cupola.

Heading back to Palermo we stopped at the old Greek city of Himera, supposedly one of Hercules’ (or Herakles’) early haunts. Little remains of the once-important and sprawling city-state. For nearly a century Carthage tried to capture the place, and to fend off the attackers — initially 300,000 strong, it is said — Himera had to cede its independence to Gelon, ruler of Syracuse. In 409 BC, Hannibal finally conquered it and razed it.

As we approached Palermo we were torn by conflicting emotions. On the one hand, we were energized by our sense of accomplishment and anticipation of celebration. On the other, we dreaded navigating Palermo’s choked and complicated streets — both good reasons to spend a day playing tourist. But bike travel in congested medieval cities is ideal. Not having to negotiate one-way, six-foot wide streets in a car or find parking is a tremendous advantage.

Palermo holds many treasures. Palazzi of past nobility illustrated the fact that, In spite of the long roster of foreign rulers, it was only through the indigenous aristocracy — which, being Sicilian, commanded more allegiance than the actual rulers — that each conqueror was able to exert any control over the island. The Spanish, first as Aragonese and then as subjects of a unified Spain, ruled Sicily for about 500 years, deeply influencing the Sicilian dialect — a boon to my lack of Italian and knowledge of Spanish. But they also brought the hated Inquisition, which targeted the landed gentry, the rich, and the educated in order to try to break their informal control of the island.

Our tour guide (required) through the dungeons of the Inquisition preserved an extraordinary chronicle that required interpretation: the prisoners’ graffiti. Some were simple groupings of four vertical lines with a diagonal slash — tallies of days. Others were elaborate paintings, hiding subtle anti-Spanish messages. One was a depiction of Christ’s crucifixion with the Roman soldiers outfitted as Spaniards. Another was the Nicene Creed in English.

Interrogation, always under torture, was called “a conversation with God.” No prisoner was ever released except for forced labor. All were executed, most of them burnt at the stake. One prisoner managed to kill an Inquisitor, a unique event that ended our tour on a righteously vengeful note. The prisoner’s revenge, for all the outrage it caused, actually prolonged the poor man’s life; the only punishment the prelates could muster was to delay his death and prolong his torture. But demands that the Inquisitor be canonized came to naught.

Sicily has subsequently managed to separate church and state, for the most part, although an actual, physical bridge still exists. Palermo’s cathedral and parliament are connected by two arches. Vaguely reminiscent of the Palace of Westminster, the buildings are a striking example of the Norman-Arab-Byzantine style. Inside the cathedral we visited the tombs of the Norman kings, still revered as having presided over a Sicilian golden age.

Walking along the waterfront on our last evening in Sicily, we stood at the seaside railing and gazed out over the Mediterranean, reflecting on a wonderful trip. A woman across the street behind us, cleaning her house, was taken by the sight and snapped our picture with her phone, out the open window. As we walked away she motioned us over. She showed us the photo and indicated that she wanted to send it to us, explaining in Italian that she was “a romantic” and the sight of us touched a chord.

Arrivederci!




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Cashless and Thoughtless

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There has been a lot of push from international organizations to make poor societies around the world copy Western institutions, and recently to go cashless. Blind to differences in cultures, these international organizations have hugely over-estimated the organizational capabilities of people in the emerging markets — in the Middle East, South Asia, Central Asia, Africa, and Latin America.

Anyone who has spent a sensible amount of time in emerging markets — not in five-star settings but as a normal person — knows that in these countries, an organization of two people often has one person too many. It is also evident that the two tends to expand into dozens, hundreds, and thousands, either because of the local desire to subsidize more people or because of the need to instigate a Western-style bureaucracy to control the whole thing.

Erroneously assuming that we are all the same, that specific cultures do not matter, and that all that matters is training and incentives, there was a huge push for globalization.

In these culturally very different markets, companies and institutions — Western concepts, which do not transplant well without the underlying European culture and values — can never stay nimble. To maintain control, internal bureaucracies must grow to provide checks and balances, because workers fail in independent thinking, work ethics, honesty, and cooperation. Creativity stays conspicuous by its absence.

Despite seemingly low labor costs — as low as a couple of dollars a day in wages — the costs of keeping such organizations together grows exponentially with size. Growing bureaucracies require additional checks and balances. Without the cleaning mechanism of European values and the control systems they provide, these organizations invariably accumulate dead mass, which keeps growing cancerously until they crumble under their own weight. Organizations that do not have constant blood transfusions and external subsidies tend to disintegrate rather rapidly. The price of keeping them together is extremely high.

In a climate already characterized by political correctness, a certain wisdom that Europeans had accumulated about the colonized world had evaporated by the time the USSR era ended in the late 1980s. Erroneously assuming that we are all the same, that specific cultures do not matter, and that all that matters is training and incentives, there was a huge push for globalization.

German companies moved their factories to Eastern Europe, a region of relative cultural closeness to Germany. But many factories have since moved back. The anticipated cost savings turned out to be the exact opposite. All kinds of configurations of Western corporate investment in emerging markets were tried, with similar results.

The problem is that these emerging markets’ societies are tribal. In such cultures you need the glue of violence, subsidies, and massive bureaucracies to keep organizations in place. The experiments of the past 500 years with colonization and Western education show that it is not easy — when it is even possible — to wean societies away from tribalism. Bigger and bigger organizations were put in place in emerging markets, but they tended to remain poor and in strife. The intervention of Western economic methods created an unnatural gap between the poor and an entrenched elite, rendered more entrenched by the possession of whatever new wealth was produced.

Many factories have since moved back. The anticipated cost savings turned out to be the exact opposite.

There is only one solution: keep organizations in these emerging markets as small as possible, remembering that tribal instincts ironically propel them to make their organizations big. Never subsidize big organizations, for if you do, besides providing services that add value you create operations that are a massive drag on the economy, full of endeavors that consume wealth instead of producing it.

This brings us to the current drive to go cashless.

India has recently attempted to reduce the use of cash, ostensibly to reduce corruption but actually to further centralize the economy by creating a medium of exchange that the government can constantly monitor. Naturally, it is also creating a national ID card system. Both of these are in direct conflict with what India should do as a tribal, medieval society.

Let’s consider the sequence of steps required to operate an online bank account in India.

Start with slow internet connections and frequent interruptions in electricity. Add extremely unwieldy websites, websites that do not open properly. My browser often gets hung up on these sites. My password has a limited validity and must be renewed regularly by using the old password and a one-time password sent to my mobile phone; and a lot goes wrong during this “simple” process. Once inside the account, however, I may need another one-time password and an additional transaction password to complete my business.

Most people actually walk down to their bank branch to do the so-called online transaction — a clear instance of the fact that trying to modernize any system beyond its natural capacity in a tribal society increases the costs and makes it more difficult. This is the persistent irony of modernization.

My Indian banks charge me fees and commissions I never agreed on. They then top it up with taxes on “services” provided. Bank statements are ridden with so many charges that only the rare person has time or patience to sort them out, particularly when the banks are crowded, and getting someone to talk to you on the phone is extremely difficult. When you get through to an agent, he usually knows nothing.

The frustration of the people has been steadily increasing. Instead of easing their lives, the reduction of cash has added significantly to the burden.

It gets worse, especially if you are the so-called common man. I know my way around pretty well, but I frequently get stuck. And here is a country where 25% of the population is officially illiterate and where engineers and doctors choose to apply for jobs as janitors, mostly because their degrees are no more than paper. It is a country where a large proportion of those who claim to be literate struggle to sign their own names, let alone show themselves capable of reading a sentence. Imagine how they would deal with forced digitalization of the currency system. This will end in disaster.

Even now, in the last six months that India has been trying to reduce the usage of cash, the frustration of the people has been steadily increasing. Instead of easing their lives, it has added significantly to the burden.

Notably, however, none of this means that people have gone against the Indian prime minister, Narendra Modi. He is winning election after election, and most people simply love him. When not facing banking problems in real time, they are actively in support of Modi’s attempt to go cashless. One must remind himself that this is a tribal, irrational society. People often cannot connect simple dots that are right in front of them; not even the so-called educated ones can do that. They tend to do exactly more of what created the original problem, which in this case is irrational authority.

Any tribal society contains the impetus to make bigger, and more complex systems of authority. Tribal people want nannies. They feel secure in big structures, despite the fact that such structures actually make them less safe. Tribal people demand free stuff, without any feeling of gratitude to any real source of wealth. Governments meet that emotional need, while doing little else for their subjects.

Any rational leader would make an aggressive attempt to counter a tribal society’s willingness to increase the sizes of its institutions. But tribal societies do not easily produce rational leaders. They operate through expediency, not through rationality or objective moral thinking.

The IMF and the World Bank think that these emerging markets need better institutions. They think these countries need to reduce corruption, which is one of the reasons for the push towards going cashless. Locals in these countries agree. The irony is that these locals haven’t a clue about what corruption means — their tribal worldview means that they do not see corruption from a moral perspective. They merely look at the need to end corruption as a tool of expediency to improve their personal lives. They may think that everyone should stop asking for bribes, but they do not include themselves individually in that equation. Any sane, non-tribal person can see that this does not add up.

Tribal societies do not easily produce rational leaders. They operate through expediency, not through rationality or objective moral thinking.

Contrary to the view of many libertarians, even when privatization does happen, there can only be limited improvements. Indian companies — for they have tribal people as ingredients — are instinctively dishonest. They lack a work ethic and, unconstrained by morals, they rampantly abuse their clients. For example, I used an online Indian travel agency to buy an international ticket. After tens of attempts the money left my bank account — but I never got my ticket. The company said I never paid. No one knows whether it was the bank or the agent that was at fault. Eventually the agent refunded my money to the bank, but then the bank blocked that money. I had to run around the bank, which could not trace that blocked money. I shouted, screamed, and threatened, but in this entangled mess, I don’t really know who was the culprit. I do know that big organizations and forced-from-the-top digital money simply do not work.

Given the low-trust culture, Indians prefer immediate exchange of goods for money and vice versa. If you pay for a later delivery, you undertake huge risks that your goods might never arrive, and if they do arrive it is not unlikely that you might receive substandard goods. If you sell goods for payment at a later date, your money might never come. No wonder 95% of Indian consumer transactions happen in cash, with goods exchanging hands exactly at the same time that cash is paid.

India’s attempts to go cashless will end in a disaster. This will become obvious in a few months, not years. But India is merely an example. The situation with most of the emerging markets is exactly the same (with China, perhaps, as the only exception).

The lesson is that poor countries are poor for a reason, despite all kinds of tools of technology — particularly the internet — that are available to make their economies rapidly converge with that of the West. Western institutions worked in the ex-colonies as long as Europeans ran their institutions. With Europeans long gone and European values no longer underpinning them, the institutions have increasingly become hollow structures — what one sees everywhere in Africa, South Asia, and the Middle East, with the exception of a few small countries. An attempt to go cashless is a tribal attempt to centralize, exactly when their institutions, including the institution of the nation-state, another European import, are imploding.




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Corruption Revisited

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I was born in India, and not long ago I returned for an extended visit — which occasioned many thoughts that might be used in answer to the question that people frequently ask me: “Has India changed?” By this people usually mean, Is India on its way to “development”? Here is an attempt to answer.

What is the free market?

Ask middle-class Indians what they mean by the “free market.” They will often define it as a system in which corporations are given free rein to expropriate properties of rural people so they can build modern factories. They believe that the government should be allowed to pay a fraction of the market price to acquire farmers’ land to build infrastructure. They think that India would not grow if corporations and government were not subsidized by the rural segment of society. For them, the “free market” is a system in which individual forces are pooled for the greater good of India.

In India, an overt caste system has continued to disappear, particularly in urban areas — but scratch the surface and you find that it is deeply entrenched. When reminded of wretchedness and poverty, the well-off middle class likes to counter with talk about a high standard of living. In a country where more than 50% of the people have no toilets, and similar numbers have no electricity, water supply, or access to primary healthcare, one has to ask what is meant by that high standard.

Middle-class Indians think that India would not grow if corporations and government were not subsidized by the rural segment of society.

In fact, the Indian middle class is devoid of empathy for poorer brethren. Its members often fail to count their chauffeurs, maids, guards, and servants as human beings. These poor people are lucky if they get $100 per month for 12 or more hours of work a day, with no days off or vacations. The situation gets much worse outside the urban areas.

In India one must pay a bribe for everything one gets, and paying a bribe is usually not enough; one must grovel at the feet of those in power. Any sane person who wants to survive must stay politically well-connected, learning to exchange favors in an entangled mess. One can understand why Indians who must live in India may need to tone down their opposition either to the backwardness of society or to the tyrants that backwardness creates.

Most of the media is indirectly controlled by the government, for without government advertisement revenue it is hard to survive. Meanwhile, India consistently ranks among the most dangerous places for journalists. Freedom of speech in India is a myth, and even the richest and most powerful live in chronic anxiety.

Speaking of riches — the Indian GDP is $1,718 per capita. The average Indian is economically poorer than the average African. It is understandable why Indians try to emigrate. Given a chance, most would. Those who fail prefer to sing to the glory of mother India — and those who emigrate, alas, end up doing the same thing.

There is only one way to make sense of all this: by understanding the underpinning cultural forces.

India is a pre-rational society. It is deeply tribal and superstitious, allowing little space for forward planning or long-term thinking. In such a society, people are driven by a compulsive need for material gains but not by compassion, fairness, or goodwill for others. An irrational society has by definition no moral instincts; life is lived not by values but by expediency.

One must pay a bribe for everything one gets, and paying a bribe is usually not enough; one must grovel at the feet of those in power.

India has imported the easy, entertainment aspects of Western society, but it has forgotten to import — actually completely failed to see — the way of reason, of continuity between cause and effect. The Indian diaspora sings to the greatness of India, not because it believes in it — for if it did, it would return to India — but because to the tribal mindset a glorified India gives increased self-confidence. If lobbying for India in the West adversely affects the poor, downtrodden people who live in India, this is of no significance to the voluntary exiles.

Deep culture is entrenched and resistant to change, even after people — including very well educated people — have moved to a new society. It may not change for generations, if it changes at all.

Why international organizations fail

Financial corruption is only the tip of the cultural iceberg.

Economists and international organizations long to help India set up big factories and enter the modern world. Yet despite flashy isolated data, during the 70 years of so-called post-independence, modernization has impoverished the country. The problem is that much of it proceeds by force.

Indian corporations are extremely dependent on government support: direct subsidies, regulatory favors, and overt transfer of wealth from poor people. One might call it legal plunder or corruption.

In India’s tribal society, in which any organization of two people has one person too many, real growth comes from the informal sector. The formal economy is often the pest, but money lent to the informal sectors earns as much as 36% a year — while the same money lent to the formal sector earns a negative real-interest rate. Of course, the informal sector contributes little to taxes.

International organizations should be, but are not, encouraging growth in the informal sector. These organizations operate with a very shallow definition of corruption. For them, tax avoidance, bribery and the exchange of favors are the only corrupt practices. They endeavor to fine-tune institutions in emerging markets so as to remove corruption in public institutions, unconcerned that these institutions might be incompatible with growth.

They also want to educate voters. They want to enforce the separation of judicial, executive, and political functions, and they invariably fail. They fail to understand that to a pre-rational culture, separation of the three arms of the government is unimaginable.

Despite flashy isolated data, during the 70 years of so-called post-independence, modernization has impoverished the country.

Indian institutions have continued to degenerate since the British left. What exists today is merely the facade of what the British abandoned 70 years back. Western institutions did work in India as long as the British ran them, but those days are over. Once destruction of those institutions has been completed — and they are now in an advanced stage of decay — they can never be rebuilt. India will then be on course to becoming a recognized banana republic.

International organizations fail because they don’t think that culture matters. They think that people are blank slates. They think that locals always strive for the “right” institutions. To them, local history, religion, habits, and values have no significance. They believe that all people care about is economic growth and as long as the “right” institutions can demonstrate better growth, locals will offer their support.

But corruption in India exists because of the underlying corruption in the culture. Given the circularity of the statement, “corruption” is perhaps the wrong word. “Irrationality” is a better replacement.

Managed disintegration

With the best efforts, changing a culture is a long affair. It is entirely possible that cultures never fundamentally change. They cannot be changed unless the institutions that might reform them are compatible with them. Without compatible institutions, evolution of culture cannot happen — a society with incompatible institutions is confused and fails to see causality. The more irrational a culture, the more decentralized its institutions must be; but ironically, the tribalism of such societies creates the poison of totalitarianism from the bottom up. An enlightened ruler — one who cannot come into existence through democratic means — would allow such a society to disintegrate politically, for he would know that eventually nature would lead it to that future. Decentralization and the managed disintegration of India is what international institutions should be striving for.

Corruption in India, in the rest of South Asia, and in the Middle East, Africa, and South America is a product of irrational cultures, worsened by incompatible institutions. International organizations might do a patch-up job, but they will eventually fail and will make the situation worse if they focus on financial corruption, which is only a distressing symptom.




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A Normal Country in a Normal Time Ever Again?

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The collapse of the Soviet Empire in 1989–1991 closed an important chapter not only in Russian history, but in our own as well.

For 50 years after Pearl Harbor, the United States, a nation enjoined to isolation by its founders, had labored to save Western civilization, and indeed the world, from Nazi and Soviet totalitarianism. It had won through against both enemies, though at considerable cost to itself.

The war of 1941–1945 against Nazi Germany and militarist Japan cost the lives of 400,000 soldiers, sailors, airmen, and Marines. We must, of course, never forget the sacrifice those men made for victory. Lost lives aside, however, the war actually benefited America tremendously. We emerged from it as the greatest military power on earth, with unchallengeable air and sea power and a monopoly on the atomic bomb. Our economy in 1945 accounted for almost 50% of the world’s total output; we possessed a wealth of modern plant and equipment, and we were far ahead of the rest of the world in most if not all cutting-edge technologies. Our infrastructure was the most modern and efficient in the world, and there was more (such as the national highway system) to come. Our debt was high, but we owed most of it to ourselves, and were quite capable of paying it off. The terrible days of the Great Depression were over, seemingly for good; the soup kitchens and shantytowns of the 1930s were gone, while an expanding middle class that for the first time included blue-collar workers was enjoying a prosperity greater than any other nation had known.

If culturally the America of 1945 was in no way comparable to Periclean Athens or Augustan Rome, there was nevertheless a certain vitality evident in American arts and letters. Modernism was in its heyday, and its capital was no longer Paris but New York. The undifferentiated mass barbarism of the postmodernist present was, in the period 1945–1965, almost inconceivable.

We emerged from World War II as the greatest military power on earth, with unchallengeable air and sea power and a monopoly on the atomic bomb.

The costs of the Cold War against Soviet Communism were both more subtle and more profound than those incurred in World War II, although it was not until the 1960s that these costs began to be felt. Dallas and its legacies — the presidency of Lyndon Johnson and his war in Vietnam — initiated a period of decline in American power, prestige, and prosperity. The fall of Saigon in 1975 and the Soviet invasion of Afghanistan in 1979 (the latter, as it turned out, the last in a series of Communist takeovers in what was then known as the Third World) seemed to mark a turn in the historical tide. Not that communism, as a doctrine and system of government, could stand comparison to Western values; it most assuredly could not. But the West, and particularly the United States, appeared to be in terminal decline. By the late 1970s a failure of will, of morale, was palpably in the air. Vietnam looked increasingly like an American version of the expedition to Syracuse — that unnecessary and, ultimately, disastrous campaign undertaken by ancient Athens, and memorably recorded in the pages of Thucydides.

Yet Athens, despite its defeat at Syracuse, and despite waging war simultaneously against Sparta and the vast Persian Empire, rallied and regained the upper hand in the Peloponnesian War. It was only later that war à outrance and treason within brought about Athens’ final defeat and the end of its primacy in the ancient world.

America in the 1980s rallied in a similar fashion, emerging from the nadir of defeat in Vietnam to challenge Soviet imperialism once more, and then, by a policy of peace through strength, giving the sclerotic Soviet system a final push that sent it to its well-deserved place on the trash heap of history. With this the 50-year struggle against totalitarianism was over, and freedom had triumphed. Or had it? At just this moment, in 1990, Jeane Kirkpatrick, formerly Ronald Reagan’s UN Ambassador and a prominent neoconservative, published an article in the National Interest. It was titled “A Normal Country in a Normal Time,” and it put forth a vision utterly different from that held by most of her fellow neocons, who in the aftermath of victory were advocating that the United States seek to achieve “full-spectrum dominance,” i.e., world domination.

Kirkpatrick, a card-carrying member of the foreign policy establishment, began her essay by stating that a good society is not defined by its foreign policy but rather by the “existence of democracy, opportunity, fairness; by the relations among its citizens, the kind of character nurtured, and the quality of life lived.”

Kirkpatrick put forth a vision utterly different from that held by most of her fellow neocons, who in the aftermath of victory were advocating that the United States seek to achieve world domination.

She went on to write that “Foreign policy becomes a major aspect of a society only [emphasis added] if its government is expansionist, imperial, aggressive, or when it is threatened by aggression.” The end of the Cold War, she averred, “frees time, attention, and resources for American needs.”

Kirkpatrick’s vision was right for America in 1990, and it remains so now. But that vision, alas, has never been fulfilled.

In her essay Kirkpatrick warned that foreign policy elites — the denizens of government bureaucracies, universities, and thinktanks — had become altogether too influential and powerful during the 50 years’ emergency, and that their interests were by no means aligned with those of the citizenry as a whole. She made two other very important points: that restraint on the international stage is not the same thing as isolationism, and that popular control of foreign policy is vitally necessary to prevent elite, minority opinion from determining the perceived national interest. With respect to the latter point Kirkpatrick neither said nor implied that the American people should make policy directly. She acknowledged — correctly — that professional diplomats and other experts are required for the proper execution of national policy. But policy in the broad sense must reflect the views of the people and must be circumscribed by the amount of blood and treasure the people are willing to sacrifice for any particular foreign policy objective.

Her concept of a polity in which the citizenry sets or at least endorses the goals of foreign policy admittedly has its troubling aspects. For one thing, it is far from certain that the citizenry as a whole — the masses, to be blunt — will choose to adopt wise policies. In Athens the expedition against Syracuse was enthusiastically endorsed by the Assembly, and history is replete with further examples of the popular will leading to disaster. Flowing from this is a second problem: the ability of clever demagogues or cabals to sway or bypass popular opinion in favor of policies that are inimical to the general interest, and that often turn out to be disastrous. Post-World War II American history provides numerous examples of this: the CIA’s 1953 overthrow of a democratic government in Iran at the behest of British and American oil interests, with consequences that we are still trying to deal with today; the Bay of Pigs (1961), which set in motion a chain of events that nearly led to nuclear annihilation during the Cuban Missile Crisis; the wars in Vietnam and Iraq, both of which received initial popular support as a result of outright deception perpetrated by a few powerful men with an agenda. (The phony Tonkin Gulf incident opened the way to escalation in Vietnam, while the falsehoods about WMD, anthrax, and Saddam Hussein’s connection to 9/11 made possible George W. Bush’s war in Iraq.)

Even the 1940s had their dark side, for those years were marked by the beginning of the modern “Deep State.”

Nevertheless, the alternative to popular control over foreign policy is the placing of the nation’s destiny in the hands of an elite that, by its very nature, typically has little understanding of the needs and desires of the people as a whole. Such elites are, unfortunately, quite prone to committing disastrous errors of judgment — witness the events mentioned above. Plato’s guardians are rarely found in the flesh. Gibbon pointed to the Five Good Emperors who reigned over Rome in the period 96–180 CE, which the historian characterized as the happiest and most prosperous time in human history. But these men were almost the exceptions that prove the rule. British policy in the 19th century was guided by statesmen such as Palmerston and Salisbury — men who understood both Britain’s interests and the limits of its power. For a brief period of ten years, between the fall of France in 1940 and the decision to march to the Yalu in Korea in 1950, American foreign policy received, in general, wise elite guidance. These were critical years, and we should be thankful that men such as George Marshall and Dean Acheson were in power at that time. But except for that brief span, elite leadership of American foreign policy has entailed economic and blood costs far in excess of those we actually needed to pay. Even the 1940s had their dark side, for those years were marked by the beginning of the modern “Deep State.”

The Deep State, quite real though unacknowledged by most academic historians and the mainstream media, amounts to a partnership between nonstate actors and various groups inside government, working together to shape and carry out policies that are generally contrary to the popular will, and often to the national interest as well. The Deep State is not a second, shadow government or conspiracy central, with permanent members who manipulate puppets in the White House and the halls of Congress. Rather, it consists of shifting or ad hoc alliances between government insiders and groups of powerful people or institutions outside of government. The former are sometimes elected officials, sometimes holders of key posts in the bureaucracy or the military. Such alliances are typically formed in the name of “national security” but often benefit only the ideological, institutional, or pecuniary interests of Deep State actors.

Some of the nonstate actors are “respectable” (the big New York banks, the oil majors, defense contractors), while others are by no means so (the Mafia, international drug traffickers). But whether they can be mentioned in polite company or not, their influence has often been felt in the councils of government, and particularly with respect to American foreign policy. For example, the swift transformation of the CIA, originally conceived as an intelligence-gathering agency, into a covert operations juggernaut was the work of men drawn mainly from Wall Street law firms and investment banks. These men went on to cooperate with the Mafia in places such as Cuba, extending an overworld-underworld partnership that went back to World War II.

Malign influences of this sort had been present since at least the end of the Civil War, but in earlier times had been limited to buying votes in Congress or persuading the executive to dispatch the Marines to establish order and collect debts in Latin American banana republics. The great expansion of government in World War II, and especially during the Cold War, allowed the Deep State to metastasize. The collapse of the European colonial empires and the simultaneous ascension of America to superpower status meant that after 1945 the American Deep State could extend its tentacles globally.

The turning point was probably the National Security Act of 1947, which created the CIA, the Joint Chiefs of Staff, and the National Security Council. These institutions, and particularly the first two, were (and to an extent still are) beyond the effective control of either the Congress or the president of the moment. And they are not alone. The various intelligence services and the military, or parts thereof, often pursue agendas that are at variance with official policy as set out by the president. They sometimes partner with each other, or with powerful institutions and people outside of government, to achieve mutually desired objectives. President Eisenhower, with his immense personal popularity and prestige, was able to hold the line to the extent of keeping us out of another shooting war, though he nevertheless felt compelled to warn the people, in his farewell address, of the growing power and influence of the Deep State, which he termed the Military-Industrial Complex.

The “deep events” of the 1960s, ’70s, and ’80s — Dallas, Vietnam, Watergate, Iran-Contra — cannot be understood without reference to the Deep State. The role of the Bank of Credit and Commerce International (BCCI) in Iran-Contra is a good example of the Deep State in action. I mention BCCI specifically because its peculiar history has been revealed in several well-researched books and in investigations by the Congress. But the role of BCCI in Iran-Contra (and much else besides) is just one of the many strange manifestations of the Deep State in our history. The Deep State’s activities sometimes remain forever dark, are sometimes only partially revealed, or if revealed are explained away as aberrations.

The loss of liberty that resulted from the emergence and growth of the Deep State was real and perhaps irreversible. By the 1960s, the machinery of domestic surveillance, created in embryo by J. Edgar Hoover even before World War II, included spying on the populace by the FBI, CIA, NSA, and the military. Domestic spying was reined in somewhat during the 1970s, only to be ramped up again under Reagan in the 1980s. These abuses were part of the price paid for victory in the Cold War. Whether such abuses were inevitable under Cold War conditions is debatable; I personally would characterize them as the effluvia typical of a bloated imperium.

The Deep State’s activities sometimes remain forever dark, are sometimes only partially revealed, or if revealed are explained away as aberrations.

Be that as it may, the Cold War did end in a real victory, and with victory came the hope that the worrisome trends (“worrisome” is doubtless too mild a word) that the struggle against totalitarianism had initiated or exacerbated could be reversed.

It was therefore highly encouraging when in 1990 Kirkpatrick published her article calling on America to become once again a normal country. That the call was sounded by a leading representative of the neoconservative movement, rather than someone from the Left, was quite promising. If a hardliner such as Kirkpatrick could see the light, perhaps other important leaders of the American polity would, too.

In the 1990s there were some indications that we were heading in the right direction. Under Bush the First and Clinton, defense spending decreased by about 30% from Cold War highs. Internally, signs of health began to emerge — for example, the decline in crime to early 1960s levels, and the return to a balanced federal budget (the latter, admittedly, achieved with some accounting legerdemain). A slow but steady healing process appeared to be underway.

In retrospect, one can see that these were mere surface phenomena. America’s role in the world did not undergo a fundamental reappraisal, as Kirkpatrick’s thesis demanded. The almost bloodless Gulf War of 1991 (paid for by our allies) seemed to indicate that empire could now be done on the cheap. Meddling elsewhere — in Somalia, Bosnia, Kosovo — reinforced this view, even though Somalia turned out badly (and of course Bosnia eventually became a hotbed of Islamic fundamentalism and jihadism, which is the state of affairs there today). In the 1990s pundits and average citizens alike began to speak openly of an American empire, while of course stressing its liberal and benign aspects. “We run the world” was the view espoused across a broad spectrum of public opinion, with dissent from this view confined to a few libertarians and traditional conservatives on the right, and some principled thinkers on the left.

At the same time, Deep State actors were attempting, both openly and covertly, to prevent any return to normalcy (if I may use that term), while promoting their agenda of American supremacy. Certain academics and intellectuals, lobbyists, defense contractors, and government officials with their eyes on the revolving door were all working assiduously to convince the Congress and the people that a return to something like a normal country in a normal time was a dangerous proposition. In fact, of course, there was no longer any need for America to maintain a huge military establishment and a worldwide network of bases — for there was no longer any existential threat. Russia was at that time virtually prostrate (nor did it ever have to become an enemy again), China as a danger was at least 25 years away, and Islamic terrorism was in its infancy — and could moreover have been sidestepped if the US had simply withdrawn from the Middle East, or at least evacuated Saudi Arabia and ended its one-sided support for Israel. But in the end these facts were either ignored or obscured by influential people with foreign policy axes to grind, assisted by others who had a financial stake in the maintenance of a global American empire.

The almost bloodless Gulf War of 1991 (paid for by our allies) seemed to indicate that empire could now be done on the cheap.

One group, The Project for the New American Century, stands out for its persistence and drive in seeking to advance a particularist agenda. It is no exaggeration to say that the members of this group — which included not only such faux intellectuals as Bill Kristol, but men with real power inside and outside of government, such as Dick Cheney and Donald Rumsfeld — prepared the way for the Iraq War and the Patriot Act. The blueprints for both the war and the Act were prepared by these men even before 9/11. September 11, 2001 was of course a turning point, just as 1947 had been. The neocons, the Deep State, had won. When the towers came down it meant that “full-spectrum dominance” had triumphed over “a normal country in a normal time.”

The Project for the New American Century closed its doors in 2006, but the neocons live on, and persist in calling for more defense spending, more interventionism, and more government restrictions on civil liberties. And they are joined by other voices. The liberal interventionists who surround Hillary Clinton are best characterized by the term neocon-lite. They, like the neocons, see Obama as far too passive a commander-in-chief, even as he wages war by proxy and drone in the Middle East, Afghanistan, and Pakistan, and continues the state of national emergency first declared by George W. Bush on September 14, 2001. The state of emergency gives extraordinary wartime powers to the executive, even in the absence of a declared war. Some of the powers that the commander-in-chief possesses under the declaration are actually secret. Obama, who has the authority to end the state of emergency, has instead renewed it annually since taking office. The Congress, which is required by law to meet every six months to determine whether the state of emergency should be continued, has never considered the matter in formal session. (The Roman Republic, in case of a dire emergency, appointed a dictator whose power automatically expired after six months’ time. Only under the empire was a permanent autocracy instituted.)

At the same time, the systematic domestic surveillance authorized under the Patriot Act, far more extensive than anything J. Edgar Hoover or James Jesus Angleton (CIA Chief of Counterintelligence, 1954–1975) ever dreamed of, has been left virtually intact by the Obama administration and the Congress.

Obama’s successor, whether Republican or Democrat, is almost certain to be more interventionist abroad, and equally or more unfriendly to civil liberties at home (Trump seems mainly concerned with getting our allies to pay more for the protection we give them, as opposed to cutting back on our worldwide commitments, while his apparent views on civil liberties are not encouraging). America, it appears, is incapable of dialing back on imperial overstretch. Yet what vital American interest is served by meddling in places like Yemen or Ukraine? What ideals are fulfilled by supporting the suppression of democracy in, for example, Bahrain? It seems clear that American elites, both inside and outside government, simply cannot bring themselves to let the world be, cannot abandon the concept of a global order organized and run by the United States.

With distance comes perspective. As time passes it becomes ever clearer that George W. Bush’s war in Iraq represented a second American Syracuse, a defeat with catastrophic consequences. It is quite true that, as in Vietnam, our forces were not beaten in the field. But the greater truth is that the political objectives in Iraq, as in Vietnam, were not achievable, and that this could and should have been recognized from the start. Today most of Iraq is divided between a corrupt and incompetent Shia-led government under the influence of Iran, and an ISIS-dominated territory in which obscurantism and bloodthirsty brutality hold sway. Such are the fruits of the successful march on Baghdad in 2003. Trillions of American dollars — every penny of it borrowed — were thrown down the Iraqi rathole, as the Bush administration abandoned the principle of balanced budgets and the prospect of paying off the national debt, something that appeared eminently possible at the beginning of its term in office. The dead and the maimed, Americans and Iraqis, suffered to no purpose.

The liberal interventionists who surround Hillary Clinton are best characterized by the term neocon-lite.

Americans are a resilient people. America’s institutions, despite obvious flaws, are superior to those of its enemies and rivals. America recovered from the Syracuse of Vietnam and not only salved the wounds of that war but went on to defeat its main competitor in the arena of world politics. But can America recover from a second Syracuse?

Compare the state of the nation today with that of 1945, or even 1965. Admittedly, not everything has gone to rot. The advances achieved by women and minorities — racial and sexual — have given us a better, freer society, at least on the social plane, compared to 50 years ago. Advances in technology have in some respects brightened our lives. But the heavy hand of government and the machinations of the Deep State have brought the country to the brink of bankruptcy, enmeshed us in foreign lands where we ought never to have trespassed, and put limits on basic freedoms of speech and privacy. Broad-based prosperity and the economic optimism of the past are gone, perhaps forever, because of adventurism abroad and elite mismanagement of the economy at home.

The current ruptures in the governing duopoly, Republican-Democrat, are clear evidence of dysfunction at the highest level, and of the citizens’ discontent. Yet the election of 2016 will be fought out between a bloviating, ignorant real estate tycoon and a tired, corrupt ex-First Lady. The former knows little of the Washington machine or the intricacies of the Deep State; I predict that, if elected, he will be reduced to a virtual puppet, and the fact will never dawn on him. Hillary, on the other hand, is very comfortable with the status quo, no matter what she may say to placate the supporters of her rival Bernie Sanders. Neither Trump nor Clinton — or anyone else with power, either — appears to have a clue about the real nature of the crisis we are in, much less how to bring us out of it.

A normal country in a normal time? Never again, I think. The future appears quite dark to me.

* * *

Author’s Note: Some readers of Liberty may be unfamiliar with the concept of the Deep State, or may reject it as mere conspiracy-mongering. In fact, the Deep State (or parts thereof) has been discussed in several well-researched books. A newcomer to the idea might begin by reading Philip Giraldi’s article, “Deep State America,”which appeared on the website of the American Conservative on July 30, 2015. Read it. I take issue with Giraldi in one respect: his total focus on the New York-Washington axis of power. The Sun Belt also plays a huge role in the Deep State. Jeane Kirkpatrick’s 1990 article, by the way, cannot be read free online, but is available through JSTOR.




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