At Last, the Truth About the Kochs


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Good-Bye, Uncle Kodie


The recent bankruptcy filing by the Eastman Kodak Company was a shock to me, but not exactly a surprise. It was certainly another sad reminder that the world I once knew was gone forever. I worked for the company at its Kodak Park Works in Rochester, New York in the 1960s, leaving of my own accord in 1970. A detailed autopsy of its decline and fall must await a soul with perceptions keener than mine. But I suspect its decline was a result of its very domination of the imaging market. With little competition, the company’s leaders had simply forgotten how to compete — which involves adjusting to changing market conditions, which involves making sound and timely decisions.

I hired on as a research chemist in the Organic and Polymer Chemistry Department, part of the Chemistry Division, which was part of the famous Research Laboratories established in 1912 by noted photographic theorist C.E.K. Mees. I had done poorly in graduate school — quantum mechanics and its chemical and philosophical extensions struck me as moonshine. Still, I revealed some small gift for research in organic chemistry. Of course, there were many fine organic chemists at Kodak’s laboratories, some famous, and they sent a steady stream of publications to scientific journals.

In the 1960s, Kodak was riding high. Its most profitable market was the amateur photography market. Its Instamatic camera appeared in the early part of the decade. It was a huge success, and Kodak’s amateur film business was booming. And of course, the company sold film to professional photographers, motion picture film to Hollywood, and X-ray film to the medical profession. Needing chemicals free from impurities that could harm silver halide emulsions, Kodak had long ago begun making its own. And this led it into the successful marketing of research chemicals and polymers through its Distillation Products Industries and their Tennessee Eastman and Texas Eastman Divisions.

The annual wage dividend was a result of a profit-sharing plan begun by George Eastman to discourage socialist tendencies.

I worked in Building 129, and then in Building 82, the latter a brand new research building with the best interior design for the working chemist I’ve ever seen. There were other chemistry laboratories in Building 59, which also housed the Applied Photography and Emulsion Research divisions. These two divisions were considered chimneys to the top administrative positions in the Research Laboratories and to those in the company hierarchy. In those days, the company promoted entirely from within — was this the fatal flaw?

In any event, for the plain old-fashioned organic chemist, the opportunities to learn and grow within the science were enormous. In research at a fundamental level, no one is really certain of what will yield useful results. Some with imposing credentials may think they have an accurate crystal ball, and some may even prove correct in their educated guesses. But in the long run, innovation is best served by research leaders who know when to stand aside — and how to choose people who don’t require nagging supervision. The chemists at Kodak, free to roam, were devoted experimentalists and produced a huge amount of new work, including new synthetic techniques, new reactions, and new organic compounds.

Of course, every chemist took the company course in photography, one that covered both theory and practice. It gave everyone an intellectual nudge toward the practical problems of image-making with silver-halide emulsions. And there was a photography-related testing program. Each new compound was sent to the Emulsion Research Division for testing — was it an antifoggant? A diffusion transfer agent? Did it promote undercut? And from time to time, a request would come back for more of a particular compound that had proved interesting. But I was quite free to explore my favorite field — heterocyclic chemistry. I might have done it all for room and board, but I was paid a decent salary and, in addition, got that famous annual wage dividend. The dividend was a result of a profit-sharing plan begun by George Eastman — to discourage socialist tendencies. Such rewards helped me endure the long snowy winters of Rochester.

Curiously, at each implosion, the mood was festive, and the onlookers cheered. I don’t think the cancelled-stock holders cheered.

The company had accumulated an enormous expertise in the manufacture of photographic film. It had developed the precise system of emulsion coatings, the proper mixes of silver halides, the sensitizing dyes, and the dye couplers for the amazing color processes. And with all this knowledge, and the success of the Instamatic line, came the idea that nothing would ever change. Oh, there was some distant thunder — I recall the suggestion from Varian Associates’ Edward Ginzton that his company was looking for an electric camera. This was back in the sixties, after I had bought some Varian stock. Yet within Eastman Kodak, I heard it said that, like the internal combustion engine (so help me), silver photography was such a perfect invention that it could never be replaced. Perhaps voicing this assumption was a gesture of loyalty to the company. Widely held, it lightened the burden of its top executives. Any far-reaching decisions, however imperative in the light of reality, could be postponed, if not altogether avoided. Still, as early as 1975, the executives had good reason to believe that digital imaging would, sooner or later, replace silver photography as a means of taking pictures. In that year, Steve Sasson, an electrical engineer working in a Kodak laboratory, constructed the first crude digital camera.

Looking back, I can recall seeing signs of fatty degeneration within the company. There were organizational slots being filled, but little work to occupy those who filled them. Some employees seemed to be struggling to find things to do. And I myself wondered, from time to time, why I was there. Perhaps I should have been replaced by an electrical engineer, though I couldn’t have guessed that at the time. I did leave my name on nine published papers and a number of company reports and memoranda, along with some novel unpublished work and two patents — neither patent of any real importance. My papers were sniffed at by certain academics, but I still have a collection of requests for reprints, and the papers are still referenced here and there. Certain compounds I made were superior antifoggants — but fogging isn’t a problem in digital imaging, at least not fogging by allylthiourea.

During my stay at Kodak, one new road to possible profit was almost, but not quite taken. The company hired a professor away from academe to establish a testing program, meant to identify potential drugs among the huge number of new compounds prepared by the organic chemists. But Kodak fired the man not long after it hired him. The “powers that be” decided they didn’t want to get involved in the making and marketing of drugs. I remember being surprised by the firing — having already made organic compounds by the boxful and sent them off to some storage area. I’ve always wondered what happened to those compounds and whether some wonder drug existed among them. Much later, of course, Kodak bought Sterling Drugs, to give it “worldwide infrastructure” — for what exactly? If it had tested its own compounds as potential drugs, it might have made plenty through licensing, without acquiring an enormous debt.

Within Eastman Kodak, I heard it said that, like the internal combustion engine, silver photography was such a perfect invention that it could never be replaced.

As I indicated earlier, the Eastman Kodak Company had for years been more than just a camera-and-film company. Eastman organic chemicals were common in research laboratories everywhere, and the company marketed its manufactured polymers through Tennessee Eastman and Texas Eastman. Yet none of these functions now belong to the parent company — all were “spun off” as the Eastman Chemical Company in 1993. The following year, Kodak sold its remaining interests in Sterling, the drug company it had bought just five years earlier. Its management team had apparently given up on its idea of diversification. It had decided instead to concentrate on its core business — and cast away those profitable but distracting assets. From diversification to downsizing in five years? This is the picture of a floundering management team.

Kodak’s decline had, I’m sure, a terrifying effect on Rochester. The misfortunes of the company nearly erased the value of Kodak stock — and in reorganizing under bankruptcy, the company cancelled the stock. It created new stock shares, but the former stockholders were left with nothing. In the 1960s, the earlier issue had risen above $140 a share, then split and headed upward toward its previous high. The annual wage dividend was calculated, in part, on the value of the common stock, and the company’s stock acquisition plan provided many employees with what they regarded as a nest egg. Local businesses prospered from Kodak’s payroll. I can recall Christmas shopping at the B. Forman Department Store. Mr. Forman would walk the floor, and once, when I told him I worked at Kodak, he said, “Good, you can have the whole store.”

Life was good in those days. Eastman Kodak was not just a company, but a city within a city, a kind of mini-civilization. There was a Kodak Park Athletic Association, whose softball team once had a pitcher named “Shifty” Gears — his feats are now recorded in the National Softball Hall of Fame. And there were the Kodactors, the employees’ prize-winning theatrical group. Many of Kodak’s professional people lived on the same street and attended the same social gatherings. For perhaps too many employees, the company was their world, encouraging the sense of a carefree existence. And it all proved to be a summer before the storm.

From diversification to downsizing in five years? This is the picture of a floundering management team.

Ah, but I recall my years at Kodak as a time of youth and affluence. I took dates to Eddie’s Chop House, heard my favorite piano player, Erroll Garner, at the Eastman Theater, and swam and sun-bathed at Ontario Beach. I recall talking to a Ph.D. candidate who had worked at Kodak and, when he got his degree, planned on returning to “Uncle Kodie.” Alas — Kodak is no longer Rochester’s rich uncle. And the world it created is now, if not gone, then greatly contracted.

Small businesses along State Street have disappeared — their clientele was mostly Kodak employees. From what I’ve read and seen online, Kodak Park, once an enormous manufacturing and research complex on Lake Avenue, is now much reduced. A number of its once-important buildings have been imploded. And curiously, at each implosion, the mood was festive, and the onlookers cheered. I don’t think the cancelled-stock holders cheered.

Markets change — and when markets change, management must respond. As Ludwig von Mises told us long ago, a business makes its profits by adjusting its total business practice to market conditions. Fujifilm, the Japanese photographic company, adjusted competently; Kodak simply failed to adjust with comparable skill. The capacity for sound decisions simply wasn’t there. Kodak’s leaders had the future in their hands, but didn’t recognize it — or found some excuse for evading the necessary decisions. In recent decades, the company had anointed a procession of George McClellans, when what they needed was a Robert E. Lee, or even a Nathan Bedford Forrest. Before stepping aside in March 2014, CEO Antonio Perez was himself a significant drain on the company’s assets. But he did smash and bash the company into some new things, leading it into and out of bankruptcy, drumming up trade in business markets. In the process, silver-emulsion coating became touch-screen technology and color photography became ink-jet printing. And now, the company’s stock is back on the Big Board. There may yet be a life for Eastman Kodak — though I suspect it will be as a mere pebble in a huge cultural and economic crater.

“Antonio Perez.” Forbes.
“Antonio Perez Won’t Have Many More Kodak Moments.” New York Business Journal, 1 Aug. 2013.
Appelbome, Peter. “Despite Long Slide by Kodak, Company Town Avoids Decay.” The New York Times, 16 Jan. 2012.
Brancaccio, David. “Decline of Kodak Offers Lessons for U.S. Business.” Marketplace, 20 Dec. 2011.
DiSalvo, David. “The Fall of Kodak: A Tale of Disruptive Technology and Bad Business.” Forbes, 2 Oct. 2011.
Dobbin, Ben. “Digital Camera Turns 30 — Sort Of.” NBC, 9 Sept. 2005.
“Eastman Kodak Building 23 Demolition.” You Tube, 1 July 2007, inter alia.
Feder, Barnaby J. “Kodak’s Diversification Plan Moves into a Higher Gear.” The New York Times, 25 Jan. 1988.
Fruedenheim, Milt. “Business People: Senior Kodak Officer to Head Sterling Drug.” The New York Times, 21 Aug. 1988.
“Harold (Shifty) Gears. The National Softball Hall of Fame.
Keeley, Larry. “The Kodak Lie.” CNN Money, 18 Jan. 2012
“Kodak to Sell Off Eastman Chemical Company: Restructuring: The Spinoff, Which Will Wipe Out $2 Billion of Debt, Is in Response to Stockholder Pressure.” The Los Angeles Times, 16 June 1993.
“Kodak to Sell Remaining Sterling Winthrop Unit: Drug: Smith Kline Will Buy the Consumer Health Products Business for $2.925 Billion.” Ibid, 30 Aug. 1994.
LaMonica, Paul. “The Anti-Kodak: Eastman Chemical.” CNN Money, 27 Jan. 2012.
Mees, Charles Edward Kenneth. The Organization of Industrial Scientific Research. New York: McGraw-Hill, 1920.
Miles, Stuart. “The Decline and Fall of Kodak.” Pocket-Lint, 1 Oct. 2011.
Mises, Ludwig von. Human Action: A Treatise on Economics. Third Revised Ed. Chicago: Contemporary Books, 1966.
Munir, Kamal “The Demise of Kodak: Five Reasons.” The Wall Street Journal, 26 Feb. 2012.
“The Rise and Fall of Eastman Kodak.” The Night Owl Trader, 25 Sept. 2011 and added posts.
Pfanner, Eric. “Fujifilm Finds Niche With Niche With Old-Style Cameras That Mask a High-Tech Core.” The New York Times, 19 Nov. 2013.
Scheyder, Ernest. “Focus on Past Glory Kept Kodak from Digital Win.” Reuters, 19 Jan. 2012.
“Summer Arts Theater Presents Two Plays.” Spencerport NY Suburban News, 23 July 1964. inter alia. (The Kodactors).

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The Quest for Perpetual Motion


In an apparent attempt to establish its identity as a boatload of busybodies, ExxonMobil has been running ads in which a series of adolescents tries to convince other adolescents to become engineers. The young’uns, most of whom come across as pushy and unpleasant, if not positively unbalanced by somebody’s good intentions, ask the mighty questions of our time:

Who’s gonna do it? . . .
Design cars that capture emissions?
Build bridges that fix themselves?
Get more clean water to everyone?

The answer, according to the scripted kids, is: “Engineers! That’s who! Be an engineer!

I wouldn’t mind if more kids became engineers, but I hope that someone will let them know that engineers don’t just think up a trendy “problem” and then fix it.

Consider the idea of “bridges that fix themselves.” Even I can imagine a bridge with some contraption attached to it that could make some kind of repairs on the rest of the bridge. But how much would that contraption cost? How much would it cost to construct? Who would pay for it? With what? Earned in what way? Who would maintain it? Who would supervise its operations? Who would fix it when it needed to be fixed? Who would pay all these people? Again, with what? What would the engineer who designed the “self-fixing” bridge — or the people who constructed it, or the people who are supposed to run it — have been doing if some do-gooder hadn’t commissioned him to work on such a structure? Would he have been designing something more useful, perhaps?

I have some other questions, too — larger, and almost as obvious. What kind of society makes possible the existence of engineers and the situations in which they are able to devise whatever they devise? On what assumptions, institutions, and practices is that society based? If, for example, everyone doesn’t have clean water, why is that? Is it because enough ambitious young people somehow failed to become engineers? Or is it because of some broader problem, some problem that may involve authoritarian government, superstitious resentment of “Western” science, a static, anticapitalist economy, “the tragedy of the commons” (i.e., communal ownership), a lack of respect for “women’s work” (washing, cooking, getting water) . . . Is it possible that these are problems, and that they won’t be solved by clean little TV kids who want to “fix” all the “issues” their teachers mention?

How do you find the answers to these questions? Who’s gonna do it — who’s going to study the economic history and political philosophy and social practices and moral concepts that may shed light on them? If society provides a good environment for our young engineers, how can that environment be maintained? If society goes bad, who will fix it? How? And at what price, financial and intellectual? Or will social conditions fix themselves, because some social engineer devised a political contraption to make that happen? And will it work &‐ or will it be the kind of thing that engineers used to call, derisively, a perpetual motion machine?

Because that is what the Exxon ad promotes: the idea, already far too prominent in our society, that there are self-fixing, frictionless, cost-free solutions for every problem — the idea that there is, in fact, such a thing as a perpetual motion machine.

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Bhopal, 1984


The Bhopal Disaster of 1984 was the worst industrial disaster in the history of the world. It was caused by the accidental release of 40 tons of methyl isocyanate (MIC) from a Union Carbide India Limited (UCIL) pesticide plant located in the city of Bhopal, capital of the Indian state of Madhya Pradesh. UCIL was a joint venture between Union Carbide USA and a public-private consortium of Indian investors.

When the gas leaked, all safety devices — water spray, scrubber, and alarms — failed to function. None of the employees of UCIL were affected, but there was no evacuation plan or mechanism to alert the citizens of Bhopal; and there was no suggested “antidote.” The leak killed thousands outright and injured between 150,000 and 600,000 others, at least 15,000 of whom later died from their injuries. Some sources give much higher numbers of fatalities. Tens of thousands and their next generations continue to suffer.

When constructed, the UCIL factory was in an area exclusively earmarked for industrial development and was a considerable distance away from the populated part of Bhopal. As time went by, slums developed in what had been a “green zone.” A few months before the incident, Arjun Singh, chief minister of the province, had given legal titles to those slums, which were his vote-bank. The slums were small, and were constructed of mud walls and tin roofs. No water or sewage facilities existed. The people who lived in these slums were the most affected by the gas leakage.

Very early in the morning of December 3, 1984, I was awakened by incessant honking and sirens.

As I write this, 29 years after the incident, the factory, now in disrepair, has been under the direct control of the government for over 15 years, but it has yet to be dismantled and cleaned. To research this article, I visited the factory. I entered the premises, with no barriers or security to stop me. Children were playing around. The roofs were falling apart. There were still bags of substances lying there. As one of the documented victims, I even tried to collect the money due to me, just to experience how the system was working. I did that five years ago but procrastinated about finishing my article, for reasons I will explain.

A lot has been written about the conduct of UCIL, but little attention has been paid to the conduct and character of the state and people of Bhopal. It is clear to me that the state washed its hands of all responsibility. So did the people.

A superficial observer might see the tragedy as merely one of the most visible features of a land of catastrophes. Yet its origin was in the human mind and its development depended on the specific defects of a collective worldview.

Dystopian 1984

My parents’ house is only a block away from the highway in suburban Bhopal. Very early in the morning of December 3, 1984, I was awakened by incessant honking and sirens. Noise and lack of personal space are an essential part of life in India. My brain would have flawlessly filtered out the noise and let me sleep, had it not identified an unusual flavor in it.

We had recently been witnessing horrible riots. About a month earlier, Prime Minister Indira Gandhi had been killed by her Sikh bodyguards. Early in the year, Indira had sent army tanks and commandos into the Sikhs’ most sacred temple, although their mission could have been achieved by simply disconnecting the water supply. Indira had run a brutal and murderous regime in separatist Punjab, a predominantly Sikh state, but she had the "moral" support of most Indians. What followed her murder was a pogrom against Sikhs around the country, organized by the ruling Congress Party. Sikhs were raped and burned alive in Bhopal. Their properties were destroyed. The servile armed forces and police were mostly silent spectators.

My acquaintances affirmed that the Sikhs deserved what they got. When the stories came out that the police had pulled the fingernails out of some people, against whom there was no evidence, most of my acquaintances seemed to have no moral qualms about it.

Asking myself what new was happening on the morning of December 3, I went to the rooftop of my parents' house to check. There were thousands and thousands of people on the highway. Cars jammed the roads. I had never seen so many cars; there weren’t many in the city, and those that existed were mostly owned by the government. Every self-respecting bureaucrat had a siren on his car. The cars were all going in one direction, and with a very strong sense of purpose: out of the city, as fast as they could. This was clearly an exodus. Winter mornings in India are very smoggy, from biomass burning for heating, cooking, and Indian cities’ preferred way of disposing of roadside garbage. What I smelled, however, was not the normal smoke, or the ever-pervading smell of India, which has scores of sources, including the rotting feces of the majority of Indians who still go out in the open.

Only many hours later did All India Radio announce a minor, insignificant gas leakage in Bhopal. By this time, hospitals were overflowing, hundreds had died, and human and animal corpses littered the streets.

A cold sweat broke out on me. My legs felt numb. This too was something we experienced quite regularly in life. Even under normal circumstances, nerves were at the breaking point, particularly the nerves of those who tried to live by reason and evidence and a sense of causality and who did not have the warped instinct of relieving tension by perpetuating it. Each premonition of something bad evoked a blurry sum of earlier, unpleasant memories. Human beings have an amazing capacity to block such memories, but the crux of the incidents still survives in the subconscious, influencing much of our behavior and personalities all our lives.

That cold morning of December, standing alone on the rooftop, I knew something terrible was afoot. Normally, however, such challenges would never lead us to live by the alien concept of a more fulfilling and productive life. The challenge was to preempt personal destruction in a society in which nearly everyone considered it his duty to run other people’s lives, a society in which reason and objectivity had absolutely no place. It was a life of tug-of-war, of wasted energies and unnecessary sufferings. The mode of discussion offered “expediency” as a supreme “moral” value. It was based on rhetoric and soundbites. Anything could be rationalized away, for nothing was held by philosophical anchors. The mindset of the people was rooted in the medieval period and incapable of communicating on the grounds of logic, reason, and evidence.

And now a very major crisis was in progress.

Gas leak!

I woke up my parents and took their radio — an unlicensed, smuggled one — to see if Mark Tully of the BBC, or the Voice of America, or Deutsche Welle had some news. These were our only sources of real news. Alas, Bhopal, a city of a million people, was then relatively unknown, and the international organizations did not have their tentacles there. All India Radio (AIR) was playing the music of state-funded musicians. Only many hours later did AIR announce a minor, insignificant gas leakage in Bhopal. The announcement was lumped together with irrelevant and marginal items. By this time, hospitals were overflowing, hundreds had died, and human and animal corpses littered the streets.

A half-dead family of six, friends of my dad, arrived from their place very close to the Union Carbide factory. They brought in the first news, about a gas leak. In the afternoon, we heard a rumor that the factory had been set on fire by the families of the victims and was leaking a much higher quantity of the gas, and that the fire was spreading to the nearby, massive petrol tanks of the state-owned companies. I thought that something akin to a nuclear bomb was in the making. This rumor made logical sense. The conduct was what one might expect from the people of Bhopal: their first instinct would be to set Union Carbide on fire rather than help their families or remedy the problem. Another exodus began, one far larger than the one that occurred in the night. We had no other choice but to join the herds.

AIR did not have any news in the afternoon, for the “irrelevant” news had already been announced once. By this time, our political leaders were safely in the higher-altitude resort town of Pachmarhi, about 200 km away, where all hotels were owned by the government. Earlier in the night, when I was watching from our rooftop, it was to this town that the cars with sirens and flashing lights were taking our utterly spineless and irresponsible politicians and bureaucrats. They had hijacked whatever small emergency services we had. It is important to note that ambulances mostly did not exist, as they don’t even today.

The conduct was what one might expect from the people of Bhopal: their first instinct would be to set Union Carbide on fire rather than help their families or remedy the problem.

Once settled down in Pachmarhi, the official class started issuing self-righteous, brave instructions. They decided that there was no need for the people of Bhopal to evacuate, so they issued orders to petrol stations to close. Our telephones, as usual, were not working. Moreover, all out-of-the city phone calls had to be made manually, using an operator of the state-run telephone company. Even on a normal day, he was difficult to find. That day and for several weeks thereafter, he had gone missing. Tens of thousands of people were now arriving, sitting on the rooftops of trains, hoping to get information about their relatives. Everything that could go wrong was going wrong in that overcentralized system.

For months thereafter, the government was administered from the distant resort town. Even after our rulers returned, their food and water continued to be imported from faraway places. For over a year, the state continued to give us minimal information, if at all. We lived like helpless victims in a war, ever cautious and ever nervous. I am confident that this incident would have stayed out of the news were there no multinational company involved and had the state not realized that there was a opportunity to benefit from it.

For a couple of decades from that day, the sound of sirens would make my heart pound and my palms and armpits sweat. Indeed I am finishing this article after much procrastination, with my psyche revolting against my efforts to relive those days.

The immediate aftermath

For many days after the incident, I worked as a volunteer in government hospitals. There was a serious shortage of doctors, as most had run away. Hospitals were manned by student doctors. Every space was occupied, with several people on the same bed, people on the floors and in the corridors, on the roads leading to the hospitals, and in the parks outside. There was no one to look after them; they were dying miserable deaths.

We were given a bunch of different tablets to distribute to those dying. I asked a doctor on duty how I should decide what to administer. He responded with complete equanimity, “Give whatever.” Later we ran out of them all. Either way, except for a couple of VIP rooms with dedicated resources for the well-connected, these were hospitals in name only. The VIP rooms were empty, because the VIPs had escaped the city unscathed.

The Bhopal incident would have stayed out of the news were there no multinational company involved and had the state not realized that there was a opportunity to benefit from it.

For a few days I worked to collect information about those missing. What struck me most was that so often if someone’s daughter was missing she was not even mentioned. Indians at that time had no concept of getting compensation for a calamity like this. The state-owned insurance companies hardly paid anything, even to victims of road accidents. A few days after the incident, when people got to know that there might be compensation involved, they started mentioning their missing daughters. It took me many years to understand this attitude. For the same people, a daughter missing for a night was suspicious and not acceptable to the family. We collected the people’s information on scraps of paper, which I am sure never went into any official records.

What went deep into my teenage heart during those initial days was that most people behaved deplorably. People of Bhopal had killed and raped Sikhs. Of course, only a small minority had actively participated, but not for lack of interest, only for lack of “courage." As I have said, most that I knew gave their intellectual support to the anti-Sikh pogrom. That day in Bhopal when the gas was leaking, drivers ran their cars over other people without blinking their eyes. I wondered how, for those in such misery, thought of a possible illicit relationship their daughter might have had during the night as more important than her wellbeing.

Our utterly spineless and irresponsible politicians and bureaucrats had hijacked whatever small emergency services we had. It is important to note that ambulances mostly did not exist, as they don’t even today.

My "help" at the hospitals was a complete waste of time and energy, and emotionally draining. Disgusted, I stopped volunteering. It was obvious in my mind that given the individual mindsets, the culture, and the institutions, what was happening was nothing exceptional. The Bhopal gas tragedy was a product of our karmas.

I had never known a life without fear. I still vividly remember the fear that the blackouts during the Indo-Pak war of 1971 generated in us, when I was only four years old. Then came famine. Through most of the 1970s, even our relatively well-off, well-connected family had to depend on rationed sugar and oil or on the black market. Indira appointed herself a dictator in 1976 and instituted emergency powers in the hands of the police. My elders lived in constant fear of the warrantless arrests the police could make. One of my relatives had to pay several thousand dollars in bribes for the crime of owning an imported cigarette lighter. Our family and others had to melt away precious gold coins of major historical value, the only alternative being to deposit them at a government office for no compensation while taking the risk of possible arrest. Then the problems of terrorism started in Punjab, in Kashmir, and in the northeastern provinces. There was a constant state of tension with Pakistan. We lived a life of continual, amorphous, chronic anxiety.

Were the people of Bhopal going to reflect on their deeds and thoughts, their irrationalities and superstitions and their worldviews that had placed a huge brigade of rude and uncultured pests in positions of power? Would they see the causal link between their worldview and the spontaneous emergence of extremely corrupt institutions? Would their medieval thinking give ground to rationality? A major tragedy has a possibility of focusing people’s minds. Was the gas tragedy going to make people see how their dependency, totalitarianism, lack of pride and self-respect, their expediency with no moral underpinnings, and their lack of respect for others had generated nonstop catastrophes and had created fissures for sociopaths to rise to positions of power?

Extreme distrust of the state

Eventually it became clear that the Union Carbide factory would cease to exist. It was time to empty some of the bigger chemical tanks. When the time came, the state told us that the process was going to be flawless. The “brave” politicians and bureaucrats, of course, went to the resort-town of Pachmarhi, to watch the event from a safe distance. But on this occasion, people refused to trust them. Bhopal, a city of over a million people, was a ghost town for several days. The Indian army, which has a major base close to Bhopal, and which did show up during the aftermath of the gas tragedy, was brought in to police the streets.

My elders lived in constant fear of the warrantless arrests the police could make. One of my relatives had to pay several thousand dollars in bribes for the crime of owning an imported cigarette lighter.

The Union Carbide tragedy shook people up. They had seen, with all the nakedness, the harms that the state causes, harms that in the West are usually hidden behind a softer façade. People in Bhopal had seen the utterly irresponsibility of a state that had monopolized the crisis management machinery and then hijacked it when the crisis erupted. Society realized that behind all the brave sounding talk of the state were extraordinarily spineless and timid people, with absolutely no sense of individual responsibility. “They are worse than animals,” people would say.

Over those months, I saw people becoming increasingly anti-statist. There were open discussions about making bribery legal, making it a mere transaction cost rather than a huge impediment. People frequently discussed the possibility of privatizing not only industries but particularly law and order, and crisis management machinery.

More of the same

Within months Bhopal faced another wave of social turmoil. On this occasion, the Indian government increased the scope of its affirmative policy for lower caste people in educational institutions. Riots erupted in Bhopal and in the whole of the province. The increase was designed not only to distract but to offer stolen crumbs to those who had suffered most, to make them cling to the idea of government as their savior. In the meantime, the opposition political party, BJP, was strengthening its political position by calling for construction of a Hindu temple at the exact location of a mosque in the town of Ayodhya. This was to lead to another series of nationwide riots. When I was living in the UK in 1992, one of the top news items I watched on the BBC one day was Hindu gangs freely roaming the city of Bhopal. On this occasion, Sikhs were on the side of Hindus! The people of India were extremely gullible and could be manipulated in whatever way desired by the sociopaths running the country.

Bhopal was fortunate that the UCIL was owned by an American company. Had it not been a foreign company, not a penny would have been paid to the victims. To get compensation from Union Carbide USA, making an utter mockery of the sovereignty of India, the Indian government took the case to an American court. The American court (figuratively) threw the papers to the floor. Social pressure against Union Carbide in America was the impetus for the payment. An amount of $470 million dollars was paid to the Indian government, which accordingly passed a law, the Bhopal Gas Leak Disaster Act of 1985, to usurp all the money, appointing the state as the trustee of all the claims and at the same time taking away individual people’s notional right to file cases against Union Carbide. Only a part of the money was to be distributed.

The state insisted that the people of Bhopal line up outside its dirty offices, manned by abusive and repulsive bureaucrats, to collect about $4 every week. The total paid was about $500 to those who did not suffer significant physical, visible injuries. I did not want to humiliate myself and did not see the worth in lining up to collect a mere $4 a week. But in an attempt to understand the state of affairs, and in order to write this article, I went to that office to claim my money. The office proved itself by far the worst I had ever seen in my life. Given that hundreds of thousands of people had walked that space, begging and groveling, for $4 a week, it had developed a Stalinist aura, perhaps worse. When the head of the department entered the office, it was as if a curfew had been declared. Everyone was expected to stand up and stand still. I stayed sitting.

After much cajoling the babu looked at my document. But in his file my name had been erased and someone else's had been overwritten. The corrupt office had stolen my due. Despite valid documents in my hand, I had no chance of getting my money unless I paid a bribe. (I have no intention in using this article to claim my $500. If however this article leads to an investigation, I will donate twice as much to an organization that looks after the gas victims.)

Bhopal was fortunate that the UCIL was owned by an American company. Had it not been a foreign company, not a penny would have been paid to the victims.

It seemed at one point that the people of Bhopal would fight for a smaller, more responsible state. But given their groveling character and readiness to sacrifice any values for small scraps of money, the state, ironically, became only bigger. They now had a monstrous new Department of Gas Tragedy. The guy on the street, alas, does not rebel, because he lacks integrity. When he is victimized, he does not challenge those in power. His instinctive reaction is to get into a position of unearned power where he himself can victimize others. It is the triumph of a deeply embedded psychology of “might is right” and the absence of a sense of justice.

India continues to be a land of catastrophes. In 2012, over 143,000 people died on Indian roads. In India’s mostly non-moving traffic, there are 100 deaths for every 100,000 vehicles; in China there are only 36, and in the US, only 15. On average, seven people die each day on the railway tracks, just in the city of Mumbai. Only recently, 115 people lost their lives in a stampede not too far from Bhopal.

Rationality has no place here. The state will not change until the medieval mind has changed. Despite our overt claims that we would like it small and free of corruption, the state will never go away until we realize our own personal contribution to feeding it.

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The Mediocre Inherit the Earth


I hated public school. It was hell for learners who were faster or slower than the norm. Even 40 years ago, it catered to the mediocre. The curriculum lumbered along like a brontosaurus, every subject belabored until Joe and Jane Average achieved mastery.

In sixth grade, we had a kid in our class named Sidney. He was at the opposite end of the learning curve from me. I was always bored, he perpetually perplexed. I was “weird” because I was brainy (the term “nerd” had not yet become common), and poor Sidney was mercilessly picked on because people thought he was stupid. They would shout at him as if he were hearing-impaired, mock the way he spoke, trip him up when he walked by, and just generally make his life miserable.

Even at the age of 11, I couldn’t figure out why a child deserved to be bullied because of something he couldn’t help. Had Sidney chosen his learning disability? Supposing I was weird already, so I might as well make the most of it, I befriended him. I was one of only a handful of kids, that whole year, who treated him like a human being.

I got through elementary school by believing that adulthood would be different — that in the grownup world of work, people would be nice to each other. This basically held true for the first 19 years of my working life, when I juggled duties at a small insurance agency. Then I moved into the big corporate arena, and found myself right back in sixth grade.

Big corporations don’t even know what fair competition is. They’ve never had to practice it, and they do nothing to encourage excellence in their employees.

The all-American myth is that the business world rewards smarts and initiative. We’re told (or at least, we used to be) that even the Sidneys among us could get ahead if they worked hard, that the mediocre were constantly challenged to improve themselves, and that the brainy would lead them all. In reality, things are quite different.

Big corporations, many of which got where they are by lobbying the government to drive their competitors out of business, don’t even know what fair competition is. They’ve never had to practice it, and they do nothing to encourage excellence in their employees. Backbiting, conniving, bum-kissing, and total conformity are the tooth and claw needed to survive in this jungle. Truth has no currency; all that matters is what the bosses want to hear.

Employment in a large corporation is serfdom. It has little, if anything, to do with free enterprise. Everyone is terrified of originality and initiative. In every interview, a job applicant is asked the same inane questions. The right answers are not the truth, but what the interviewers want to hear.

“Do you have initiative?” Of course you do. “Are you a team player?” You’d better be. You certainly need to know where you see yourself in five years — in the hive, productively droning away.

Public schools prize conformity. They turn out good little drones. Young people graduate from them knowing nothing but how to be useful to the system — how to fit in. By the time they reach adulthood, any glimmer of originality has been bored or bullied out of them. Thus are they ready for the only function they are fit to perform: serving their corporate lords.

Sidney once walked several blocks from the store to my house balancing a watermelon on his head. He wanted to reward me for my friendship by bringing me something nice. Loyalty tends to be rewarded. But in corporate America, it is a commodity no longer prized. Instead of earning our trust, the new feudal order prefers to motivate us with fear.

I sometimes wonder what became of Sidney. Did he end up in the mailroom or the warehouse of some large company? He was capable of learning, if anyone had the patience to teach him. Apparently no one at our school did. Possibly he works in some charity-funded enterprise, but more likely he’s being taken care of by the government.

Big corporations are taken care of by the government; it follows that they want everybody around their fiefdoms to be taken care of in the same way. That is one reason, perhaps, why so many of their executives pay money to modern-liberal and “progressive” causes. Through taxation, inflation, the expensive misdirection of Medicare and Medicaid, and the exorbitant cost of socialized medicine, the state has gradually chiseled away at the edifice of protection that employers large and small used to afford their workers. As we are discouraged at every turn from taking care of ourselves, soon there will be nobody left to care for us but government. Which, I suspect, is exactly the plan.

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What's in Your Wallet?


Am I the only one troubled by so-called loyalty cards — those wallet-fattening, discount-generating, grocery store-checkout minor irritants? When the cards were first introduced at my local Safeway I was urged to sign up, with the slogan, “The savings are in the card!”

Well, I was skeptical, but I decided to look into it. Right from the start, I was turned off by the information required on the application. It also seemed to me that — as The Economist pointed out in its November 5 issue — the expense of setting up and running rewards programs increases a retailer’s overhead. So I asked the attendant (usually busy manning a checkout till, but now temporarily signing up rewards card customers instead) how increased overhead could generate discounts?She stared at me blankly.

One chief executive from a Canadian firm that runs a card scheme explains, “The real value-added (from loyalty cards) is the data.” As The Economist further elaborates, “By cleverly using the information collected when customers’ cards are swiped at checkouts, the companies can offer them well-targeted discounts. Even small shifts in buying habits, multiplied by very large numbers of customers, can provide a welcome boost to profits.”

I’m not convinced. And neither is Wal-Mart, the world’s largest retailer, which proclaims (through Asda, its British subsidiary): “No Clubcard. No gimmicks. Just lower prices every day.”

Unwilling to sign up at Safeway, I switched to buying groceries at Albertson’s, which at the time had no loyalty cards. But it wasn’t long before both Albertson’s and Fry’s (Kroger’s) — the only other alternatives in Prescott, my home town — also jumped on the bandwagon. What to do?

Club cards come in two forms: a credit card-sized rendition and a key chain-tag mini-card. One day, through sheer luck, I found a dropped mini-card in the Albertson’s parking lot. Voila! Now I could cash in on discounts without revealing personal information.

On my next trip to the grocery store, my favorite checkout gal noticed I’d acquired a loyalty card. She kidded me about capitulating. I told her I’d found the card. So she asked me what the big deal was. I told her I was very skeptical about the whole card concept, explaining that I couldn’t understand how additional overhead could generate discounts, and that I objected to providing personal data and purchasing habits. I summed it up by saying, “Adolf Hitler would have loved to find out who was buying kosher food.”

She responded diplomatically: “I never thought of it that way.”

Then, just as suddenly as it had adopted them, Albertson’s dropped its loyalty card program in Arizona. However, they continue the scheme in Nevada — a sure sign of corporate ambivalence.

Somewhat defeating the purpose of the program is another fast-spreading policy among card issuers: complementary card swiping. Many chains, including ones in Canada, now authorize checkout attendants to swipe loyalty cards for tourists, visitors, and folks who forget their card. All a customer needs to do is ask.

When Wal-Mart finally opened up a supercenter in Prescott, it was a mixed blessing. The city council threatened to use eminent domain to evict recalcitrant lease holders from their property to make room for the Wal-Mart. One council member condemned the abuse of eminent domain but justified the council’s actions by rationalizing that eminent domain would not actually be used — just threatened.

But that’s another story. At least now Prescott has some card-free choices.

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Making Sauerkraut


Last spring, I took advantage of low cabbage prices and the still cool temperatures in the cellar to make my biannual batch of sauerkraut. I spent a pleasant hour turning ten dollars in raw materials into 50 dollars worth of kraut. Making the kraut requires hand mixing of salt, cabbage, onions, etc., a process that always makes me think of John Locke and property.

Locke’s Second Treatise talks about the individual taking raw, worthless land (as in America) and converting it into property if “he had mixed his labor with it and joined it to something of his own and thereby made it his property.” Locke undoubtedly knew that the word “property” comes from the Latin proprius and means “one’s own” or part of the very person himself. Locke (and Ayn Rand) felt that property was that which the individual needed to earn a living and avoid being a slave.

In Locke’s time, raw forest and prairie abounded and was worthless. Productive farmland was needed to make a living by most people — hence his emphasis on the effect of work on raw land. Nowadays, farmland in much of the U.S. is reverting to forest, but there has emerged plenty of raw material open to anyone for exploitation — an innovative business idea, and possibly a vague theoretical concept that could be turned into a brilliant invention or, as in my case, cheap cabbage to make sauerkraut. No matter what the raw material, adding labor makes it become the property, a part of the very substance, of whoever found and developed the unexploited potential.

Property in this Lockean sense seems to be restricted to things that an individual develops, evolves, or uses and are part of how he makes a living, what he thinks, or how he fits in with others. The property owner, personally involved in the production and enjoyment of his property, becomes so closely identified with the object that it becomes almost indistinguishable from himself. It’s only a small leap to see that the lived life of the individual also develops from raw potential.

I’ll illustrate this framework with my personal circumstances. My education and training, work history, experience, and business contacts are my formal means of making a living. My home, automobile, the books and computers that I use to entertain myself are certainly my property. My thoughts and dreams, the videos that I make, my conversations, the articles that I write, my family, friends, and my civic life (serving on several voluntary boards, etc.) — in short, the stuff that constitutes my daily lived experience, was either conjured out of nothing by focused work or grew out during a long quiet life. All this must be reckoned among my properties. I consider the customs, habits and hopes that can be construed as features of a moral life as part of my being and so my property as well.

But there is the second sense of “property” that is more troubling for me. As a result of working hard and living frugally I’ve accumulated unexpended work as savings and pensions that are invested in various financial instruments. I’d like to reflect on how this form of property, which I’ll call “investments,” differs from the property of my day-to-day lived life.

Let’s say that I buy 100 shares of some large corporation. Was my involvement anything more than doing some research on that stock and putting it into my online stock account? Is this investment really embedded in my life? The corporation was started many years ago by individual owners who made it their property and embedded in their lives. Ownership was eventually divided among an ever enlarging circle of partners, share holders, and lenders. It’s now divided in a million ways, but very few of the present owners either understand or have the information necessary to make good business decisions. Most are not critically dependent on this one stock and see it only as an accounting entry in a properly diversified portfolio.

This company has in fact become a public-private partnership run by an incestuous gang of managers and directors, all cooperating with government officials and forming a kind of nomenklatura. It typically plays fast and loose with ethical business practices, sponsors ad hoc laws to restrict competition, obfuscates losses, makes money with which it handsomely rewards the in-group, buys politicians, and keeps the stockholders placid.

Such companies can be vindicated to some extent. They cause big things to happen; large projects get built, and markets remain tranquil. The accusation of greed (one of the seven deadly sins) makes no sense when directed at these impersonal entities. Corporations are at once property and also hold property, and those property rights must be respected. Analytically, corporations are fungible, that is, can be bought and sold on a whim (try to sell my professional status on the stock market). It is individuals, not corporations, that hold the spoon; these companies are surprisingly vulnerable to changes in public tastes.

From my perspective, investments have evolved naturally in a normal free-market economy as the main insurance we have against age and illness. Stocks and bonds (and a Social Security check, if I can cut a chunk out of the pig’s ass as it waddles past) are necessary for a time when I can no longer earn a living by using my Lockean property. My CPA points out that wealth is important, not because it allows the individual to do nothing, but because it allows the individual to make better decisions. Investments do affect the owner in good ways.

But it irks me that I have no choice but to invest in such Juggernauts (an apt metaphor for ponderous objects of worship that sometimes crushed their devotees). I’m alienated from these investments; their methods and effects do not reflect my moral and intellectual values. They often operate against the commonweal and employ arbitrary political power that is foreign to my nature. They are impersonal and therefore amoral. Their investments are often mysterious, chaotic, and irrational. They are unprincipled, untethered from moral codes.

How can I deal with my disquiet?

I could follow news events regarding my holdings and sell my stock when I see something that particularly irks me. Boycotts can be employed when corporations cross some ill-defined moral line. I can vote or run against politicians who take money or do favors for corporations. Corporations won’t hire anarchists like me, so working on the inside is not an option.

In short, I can’t do very much. It's not the least bit like making sauerkraut.









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