The Karma of Flaming Cronyism

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In 2009, Vice President Joe Biden announced a $539 million Department of Energy (DoE) loan awarded by the federal government to Fisker Automotive. Fisker, a newly formed crony capitalist firm, would use the money (together with private funding from the venture capital firm Kleiner Perkins Caufield & Byers, whose partners include green crony capitalist and former Vice President Al Gore) to produce hybrid electric vehicles in Biden's home state of Delaware. The investment would create 2,500 American jobs, by 2014 produce an annual 75,000–100,000 "highly efficient vehicles," and by 2016 "save hundreds of millions gallons of gasoline and offset millions of tons of carbon pollution."

With gasoline prices below $2 per gallon at the time, free enterprise could not be counted on to produce planet-saving electric vehicles (EVs) and establish the US as the world leader in EV technology. Capitalism can only be counted on to produce what consumers demand. Then-DoE Secretary Steven Chu believed that the demand for EVs would not materialize until gasoline prices reached nine or ten dollars per gallon. In the interim, only crony capitalism would do.

The Fisker loan was considered a vital, timely investment for America: in 2009, thanks to years of US outsourcing of jobs and manufacturing expertise that propped up its emerging crony capitalist economy, China had become the world’s leader in green technology spending. “We are putting Americans back to work,” exclaimed Chu, “and reigniting a new Industrial Revolution that is paramount for the economic success of this country.” The loan was "seed money," heralded Biden, "that would return back to the American consumer in billions and billions and billions of dollars in good new jobs."

Fisker Automotive was founded by crony capitalist Henrik Fisker, in fall 2007, only to be sued by Tesla Motors, in spring 2008, for stealing design concepts and trade secrets that Fisker allegedly used to develop the Karma — a heavily subsidized vehicle that would compete with the heavily subsidized Tesla Roadster.

The true brilliance of Elon Musk, who is regarded by many as a genius, lies in his ability to hornswoggle governments and investors.

It was also in 2008 when fellow, and far superior, crony capitalist Elon Musk became CEO of Tesla. Barely one year later, Tesla received a $465 million DoE loan. Mr. Musk knows no other form of capitalism. According to the LA Times, he "has built a multibillion-dollar fortune running companies that make electric cars [Tesla], sell solar panels [SolarCity] and launch rockets into space [SpaceX]," with the help of a staggering $4.9 billion in taxpayer-funded government subsidies. Apparently, Musk will have nothing to do with any enterprise from which he cannot obtain "government incentives, including grants, tax breaks, factory construction, discounted loans and environmental credits that Tesla can sell. It [the $4.9 billion] also includes tax credits and rebates to buyers of solar panels and electric cars."

The true brilliance of Musk, who is regarded by many as a genius ("our generation's Thomas Edison"), lies in his ability to hornswoggle governments and investors. While ordinary crony capitalists are content with bellying up to the government trough for tax breaks and loans to help build their businesses, Musk has the government build businesses for him. He's "so adept at landing incentives that states now compete to give him money."

New York State, for example, is building a $750 million manufacturing plant for SolarCity. With property tax gimmicks, investment tax credits, and cash grants, the entire deal constitutes a $2.5 billion windfall for Musk — courtesy of the taxpayers. Without their coerced support, crony SolarCity, indeed, the entire solar industry, could not survive. Yet in June, New York crony capitalists prevailed over the use of drastically cheaper energy, derived from free market fracking, by officially banning the technology (and denying billions and billions and billions of dollars in lower utility costs for New York residents), ostensibly because of safety concerns: natural gas might leak from wells drilled in the Marcellus Shale bonanza that the state sits on top of, causing flames to shoot out of water faucets.

Inspired by Musk's promises to lead the world into a future without gasoline (he pledged to make millions of electric vehicles by 2025), investors have bid up Tesla stock from $16 per share, when it was first publicly offered in 2010, to $260 per share today. With this runup, Tesla was able to raise more than enough private capital to repay its DoE loan — an event that the DoE declared as "living proof" that "Tesla and other U.S. manufacturers are in a strong position to compete for this growing global market.” Only in the world of green cronyism is debt repayment celebrated as success.

At least the Model S doesn't burst into flames, as did Fisker's Karma, which had a few flaws.

Tesla, which sold 31,655 vehicles in 2014, is valued at $33.8 billion — more than half the value of Ford Motor Company, which sold 6.3 million vehicles during that year. And Ford made a profit, unlike Tesla, which has failed to do so since its inception in 2003. In 2014, Ford posted a profit of $6.3 billion; Tesla lost $294 million. Incredibly, even with its government side business of selling zero-emission-vehicle (ZEV) credits to its competitors, from which it made $217 million, Tesla still lost $294 million. But Musk promises profitability by 2020.

So confident is he of continued government largesse that he scoffs at competitors such as Toyota, which has developed a hydrogen fuel cell vehicle, the Mirai, that sells for $10,000 less than Tesla's $71,000 Model S. Musk's response: “Fuel cells should be renamed ‘fool cells’” — demonstrating a wit as sharp as his automotive genius.

Nevertheless, no one has done more than Mr. Musk to advance EV development in the United States, and, by all accounts, the Model S is a flawless vehicle that has exceeded the expectations of elite Silicon Valley and Hollywood car buyers. It doesn't burst into flames, as did Fisker's Karma, which had a few flaws.

The Karma — which was initially projected to ship in 2009 and to sell over 15,000 units built by 2500 American workers at a refurbished GM plant in Delaware — did not come to market until 2011. But, according to an ABC News investigation, by October of the year only 40 Karmas were produced, all of them assembled by 500 Finnish workers at a factory in rural Finland.

There was not a single US firm with the manufacturing expertise to produce the Karma. "We're not in the business of failing; we're in the business of winning," exclaimed Mr. Fisker. "That's why we went to Finland."

Less than a year later, Fisker Automotive failed — ceasing production in July 2012 and declaring bankruptcy in November 2013. Of the 2,450 Karmas that were eventually built, 1,600 were purchased by consumers, and 2,000 were recalled because of lithium-ion battery-related fire risks (including the possibility that, while parked and disconnected from a charging station, a Karma could mysteriously explode into flames, and burn to unrecognizable rubble).

Numerous reasons have been cited for Fisker's collapse: unrealistic sales goals, compressed launch timeline, insufficient funding, flaming rubble, etc. In the end, however, most subsidized green-technology companies simply find ways to lose money. They can't make a profit, even with government support. The most famous example is Solyndra (the recipient of a $535 million DoE loan), which went bankrupt selling solar panels for half of what it cost to make them. Then there is A123 Systems, Fisker's battery supplier and the recipient of a $249 million DoE grant. A123 sold batteries that cost the company $1.57 for each dollar of sales — leading to its bankruptcy in October 2012, and, in no small part, hastening Fisker's.

A123 might have charged Fisker twice as much, thereby returning a per unit profit of 43%. Why not? Couldn't Fisker absorb the cost increase? It was getting government money too, not to mention the $7,500 tax refund awarded to EV buyers. And, with the price of gasoline heading towards $4 a gallon, surely the demand for EVs was growing. Besides, anyone who could afford the $103,000 Karma might be willing to pay a little extra. Except that, on average, Fisker spent $660,000 for each vehicle produced. To make even a meager profit of, say 10%, Fisker would have had to charge $733,000 — a price that might have scared off early Karma buyers such as pop stars Justin Bieber and Al Gore.

Most subsidized green-technology companies simply find ways to lose money. They can't make a profit, even with government support.

The purpose of the DoE grant to A123 was to help America compete with China. "President Obama was determined not to let China run away with green energy technologies," said a Forbes article covering the bankruptcy auction, where A123 was unloaded for, one could say, a fire sale price. Guess who won the bidding (hint: it wasn't an American company). It was the Wanxiang Group, a Chinese conglomerate run by Lu Guanqiu, an auto-parts magnate with deep ties to the Chinese Communist Party.

Forbes characterized the business acumen of our green cronies as a triple irony:

The U.S. borrowed money from China to subsidize a battery company to compete with state-subsidized Chinese battery companies. The American company gets bought out by a Chinese company for about the same amount of money that the U.S. government gave it. The U.S. still has to pay the money back to China. The Chinese company buying the American company makes a lot of money by providing auto parts for the cars that Americans drive.

Perhaps of greater significance is the national security implication. The sale of A123 included US technology developed for advanced ultra-light lithium-ion phosphate batteries — technology that extends beyond powering EVs, to important applications for electricity generation and distribution, not to mention sensitive military applications. As a presidential candidate in 2008, Hillary Clinton vehemently opposed such sales, asserting the need for "ensuring that technologies . . . critical to U.S. national security are not sold off and outsourced to foreign governments." Yet Clinton, who was secretary of state at the time, did nothing to interfere with the sale.

The Fisker bankruptcy snuffed out the DoE plan of "reigniting a new Industrial Revolution," as well as Joe Biden's hopes of "billions and billions and billions of dollars" for American consumers. It was followed by a DoE announcement that, instead, American taxpayers would get a bill for $139 million, the amount that the government lost in the Fisker debacle. Fisker was sold, in another fire sale, not only to a Chinese company but to the same one that bought A123.

Today, just one year afterward, Mrs. Clinton is running for president and Mr. Biden is thinking about throwing his hat into the race. Mr. Guanqiu is planning to resurrect the Karma with his new company, formed from the old Fisker and A123, businesses he picked up for a song: a measly $406 million. The amount is much less than the manufacturing assets and intellectual property he purchased. They represent a value that the DoE must have believed was significantly greater than the $778 million it invested in these companies. But that's life in the risky world of green cronyism: sometimes seed money leads to abysmal failure, especially when it is other people's seed money.

Mr. Musk is now getting into the battery business, building the world’s largest battery factory, a gigafactory, he says. That is, he bamboozled the state of Nevada into a $1.3 billion incentive package to build it. What crony could turn down a deal projected to generate $100 billion? With capitalist fracking driving gasoline prices down to less than $2 a gal (when $9 gasoline is needed for EV's to be competitive), any capitalist sees folly. But crony capitalists see only the delusion of billions and billions and billions of dollars — that, and taxpayer-funded subsidies for fellow cronies.

That's life in the risky world of green cronyism: sometimes seed money leads to abysmal failure, especially when it is other people's seed money.

And Mr. Fisker is planning to start another automotive venture. He is "intrigued with Millennials, their craving for new kinds of transportation and their fascination with all things digital." It would behoove him to rekindle his relationship with Al Gore, this time for marketing purposes. Who is better than Mr. Climate Change at pitching flimflam to Millennials? Whatever Mr. Fisker has in mind, he remains optimistic, believing that "the timing is right for something completely new."

But none of this is new. Under our current political system, the timing is always right for crony capitalism. And, unlike taxpayers, crony capitalists will profit from another completely new green auto company, even if it goes down in flames.

#39;s Thomas Edison




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VW Bugs

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Socialist Science

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In his famous 1945 report to President Truman, Science: The Endless Frontier, Vannevar Bush attributed scientific progress to "the free play of free intellects, working on subjects of their own choice, in the manner dictated by their curiosity for exploration of the unknown.” Bush argued that government need only support basic research, and that "freedom of inquiry must be preserved," leaving "internal control of policy, personnel, and the method and scope of research to the institutions in which it is carried on."

How did such an abstemious, unfettered funding scheme work out? According to MIT scientist Richard Lindzen, "The next 20 years witnessed truly impressive scientific productivity which firmly established the United States as the creative center of the scientific world. The Bush paradigm seemed amply justified."

But trouble was brewing. By 1961, President Eisenhower, in his farewell address, observed that "a steadily increasing share [of scientific research] is conducted for, by, or at the direction of, the Federal government" and warned of the day when "a government contract becomes virtually a substitute for intellectual curiosity." More than by the influence of the military-industrial complex, Eisenhower was troubled by the possibility that "public policy could itself become the captive of a scientific-technological elite." His worry was justified. Leftist intellectuals and social activists were already infiltrating the social and behavioral sciences and had, by the early 1970s, crept into influential positions of government, to bring science into a social contract for the common good.

It was no doubt this movement that American physicist Richard Feynman had in mind in 1968, when he observed "a considerable amount of intellectual tyranny in the name of science." In particular, liberal theories, as embodied in the programs of the Great Society, would fail the hypothesis testing of real science — their predicted performance has never been confirmed by observable evidence. The ambitious nostrums about poverty, welfare, education, healthcare, racial injustice, and other forms of socioeconomic worriment were based on what Feynman called Cargo Cult Science. These programs are not supported by scientific integrity; they are propped up by the statistical mumbo-jumbo of scientific wild-ass guesses (SWAG).

Leftist intellectuals and social activists were already infiltrating the social and behavioral sciences and had, by the early 1970s, crept into influential positions of government.

The centralized control of research that began in the early 1970s laid the groundwork for the liberal idea of science as a social contract. Under such a contract, the "common good" could not be entrusted to the intuition of unfettered scientists; enlightened bureaucrats would be better suited to the task of managing society's scientific needs. Similarly, normal scientific principles of evidence and proof became subordinate to the vagaries of social concepts such as the precautionary principle, whereby anecdotal and correlative evidence (aka, SWAG) is perfectly adequate for establishing risk to society — the slightest of which (including imaginary risk) is intolerable — and justification for government remedies. Mere suspicion of risk would replace scientific evidence as the basis for regulatory authority. New York state, for example, recently banned fracking, not because of any scientific determination of harm to public health, but because of the uncertainty of such harm.

As the autonomy envisioned by Bush and the integrity demanded by Feynman faded, hypothesis testing became lackadaisical, often not considered necessary at all. And, with the need for sharp "intellectual curiosity" in decline, egalitarian funding of scientific research was put in place. According to a recent New York Times article, agencies such as the National Science Foundation (NSF) and the National Institutes for Health (NIH) award grant money based on criteria other than scientific merit. Preferring "diversity of opportunity" over consequential scientific discovery, administrators now "strive to ensure that their money does not flow just to established stars at elite institutions. They consider gender and race, income and geography." Apparently, enriching our brightest scientists is a vile capitalist concept that diminishes the social value of the funding scheme.

So must it also be with the discovery process, where, as Lindzen observes, "the solution of a scientific problem is rewarded by ending support. This hardly encourages the solution of problems or the search for actual answers. Nor does it encourage meaningfully testing hypotheses." In Lindzen's view, such developments have produced a "new paradigm where simulation and programs have replaced theory and observation, where government largely determines the nature of scientific activity . . ." And now, with the pursuit of scientific truth trumped by the political passions of activist scientists and their funding agencies, "the politically desired position becomes a goal rather than a consequence of scientific research." In this paradigm, science is more easily manipulated by politicians, who cynically scare the public, as H.L. Mencken put it, "by menacing it with an endless series of hobgoblins, all of them imaginary."

Nowhere did this become more prominent than in the environmental sciences. During the 1980s, as socialism began its collapse, distraught western Marxists joined the environmental movement. If the workers of the world would not unite to overthrow capitalism because of its economic harmfulness, then regulators would destroy it because of its environmental damage. Government agencies, most notably the EPA and DOE, became coddling, Lysenkoist homes for activist scientists. By the end of the decade they had penetrated climate science, striking it rich in the gold mine of anthropogenic global warming (AGW). By the early 1990s, the hypothesis that humans had caused unprecedented recent warming, and would cause catastrophic future warming, became self-evident to a consensus of elite activist scientists. The establishment of fossil fuels as the sole culprit behind AGW — and progenitor of an endless series of climate hobgoblins — became the goal of government-funded climate science research.

Apparently, enriching our brightest scientists is a vile capitalist concept that diminishes the social value of the funding scheme.

Science, however, was not up to the task. It could not verify the AGW hypothesis. The existence of the Medieval Warm Period (MWP) was ground for rejection, as was the nonexistence of the so-called tropical hotspot (the "fingerprint of manmade global warming”) predicted by AGW computer models. Then there is the ongoing warming pause, a stark climatological irony that began in 1998, the very year following the adoption of the Kyoto Protocol to curb the expected accelerated warming. Even when confronted with such nullifying evidence, activist scientists refused to reject the AGW hypothesis. Nor did they modify it, the better to conform with observational evidence. Some simply rejected the science — science that they had come to view as "normal science," no longer suitable for their cause — and switched to Post-normal Science (PNS).

PNS replaces normal science when "facts are uncertain, values in dispute, stakes high, and decisions urgent." Invented by social activists, it is a mode of inquiry designed to advance the political agenda behind such large-scale social issues as pollution, AIDS, nutrition, tobacco, and climate change. PNS provides "new problem-solving strategies in which the role of science is appreciated in its full context of the complexity and uncertainty of natural systems and the relevance of human commitments and values."

In other words, in the face of uncertainty, researchers can use their "values" to shape scientific truth. As the late activist scientist Stephen Schneider counseled, "we have to offer up scary scenarios, make simplified, dramatic statements, and make little mention of any doubts one might have . . . Each of us has to decide what the right balance is between being effective and being honest."

Climate science luminary, Mike Hume, believes that scientists (and politicians) are compelled to make tradeoffs between truth and influence. In the struggle between rational truth and emotional value, Hulme advises (in Why We Disagree about Climate Change, sections 10.1 and 10.5), "we need to see how we can use the idea of climate change — the matrix of ecological functions, power relationships, cultural discourses and materials flows that climate change reveals — to rethink how we take forward our political, social, economic and personal projects over the decades to come." Expanding on Schneider's advice: "We will continue to create and tell new stories about climate change and mobilise them in support of our projects.”

One way or another the "projects" (renewable energy, income equality, sustainability, social justice, green economics, etc.) fall under the umbrella of global governance. There is no solution to global warming that does not require global cooperation, in the execution of a global central plan. The "scary stories" of climate catastrophe (storms, floods, droughts, famines, species extinctions, etc.) are the hobgoblins used to coerce acceptance of the socialist remedy, while obscuring its principal side-effect: the elimination of capitalism, democracy, and individual liberty, none of which can coexist with global governance.

Even when confronted with such nullifying evidence, activist scientists refused to reject the anthropogenic global warming hypothesis.

Under the old paradigm — the free play of free intellects, guided by skepticism and empirical truth — discoveries were prolific, albeit unpredictable with respect to their nature, significance, and timing. The centralized planning that began in the early 1970s attempted to control such fickleness, by selecting the research areas, the grant money, and, in many cases, the desired research result — all to harness science for the common good, of course.

How has the new paradigm — the circumscribed play of biased ideologues, guided by compliance and consensus — performed relative to the old paradigm? Abysmally. The methods of teaching mathematics and reading cited by Feynman have failed; US public education, the envy of the world in the early 1970s, is, at best, mediocre today. The "War on Cancer" that began in 1971 has failed to find a cure. Similarly, government research grants (substituting diversity and a paycheck for intellectual curiosity) have failed to produce cures for many other diseases (AIDS, Alzheimer's, diabetes, Parkinson's, MS, ALS, to name a few). The NSF website lists 899 discoveries — but these are not discoveries; they are discussions of scientific activity, coupled with self-congratulation and wishful thinking.

Activist scientists would shriek that such evidence of failure is anecdotal and correlative, and therefore illegitimate — and who are better qualified than activists to recognize SWAG when they see it? They would also vehemently assert that it is too difficult to establish a causal relationship between government-planned science and paltry discovery — perhaps as difficult as naming a single invention, technological advance, medical breakthrough, engineering development, or innovative product in use today that is not the result of scientific discoveries made prior to the early 1970s.

This evidence for a causal relationship between increasing government control and declining scientific achievement is no flimsier than the evidence for a causal relationship between increasing levels of atmospheric CO2 and increasing global temperature. Indeed, it is the very lack of such evidence that, to activist science, justifies PNS.

But PNS is a charade. It is hobgoblinology, masquerading as science and used to thwart skepticism about the unverified claims of socialist scientists masquerading as enlightened experts, pushing a political agenda masquerading as the common good. AGW is supported by nothing more than cargo cult science foisted on a fearful, science-illiterate people.

The scary stories, incessantly pronounced as scientific facts, are speculation. They are themselves hypotheses — additional, distinct hypotheses that would have to be verified, even if the parent AGW hypothesis could be established. But false syllogisms are permissible under PNS. The PNS scientist is free to infer scary stories from the unverified AGW hypothesis, provided there is uncertainty in the normal science and virtue in his political values. The scientific method of normal science is replaced by a post-normal scientific method, in which an hypothesis is tested not by empiricism but by scariness — that, and the frequency and shrillness with which it is stated. One could call this socialist science process Scary Hypothesis Inference Testing (SHIT). And one would find a strong causal relationship between SHIT and the aroma of SWAG.




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Good-Bye, Uncle Kodie

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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.

SOURCES
“Antonio Perez.” Forbes. www.Forbes.com/profile/antonio-perez/
“Antonio Perez Won’t Have Many More Kodak Moments.” New York Business Journal, 1 Aug. 2013. www.bizjournals.com/newyork/news/2013/07/31/kodak-ceo-to-resign-after-bankruptcy.html?page=all
Appelbome, Peter. “Despite Long Slide by Kodak, Company Town Avoids Decay.” The New York Times, 16 Jan. 2012. www.nytimes.com/2012/01/17/nyregion/despite-long-slide-by-kodak-rochester-avoids-decay.html?pagewanted=all&_r=0
Brancaccio, David. “Decline of Kodak Offers Lessons for U.S. Business.” Marketplace, 20 Dec. 2011. www.marketplace.org/topics/business/economy-40/decline-kodak-offers-lessons-us-business
DiSalvo, David. “The Fall of Kodak: A Tale of Disruptive Technology and Bad Business.” Forbes, 2 Oct. 2011. www.forbes.com/sites/daviddisalvo/2011/10/02/what-i-saw-as-kodak-crumbled/
Dobbin, Ben. “Digital Camera Turns 30 — Sort Of.” NBC News.com, 9 Sept. 2005. www.msnbc.msn.com/id/9261340/ns/technology_and_science-tech_and_gadgets/t/digital-camera-turns-sort/
“Eastman Kodak Building 23 Demolition.” You Tube, 1 July 2007, inter alia. http://www.youtube.com/results?search_query=eastman+kodak+building+demolition
Feder, Barnaby J. “Kodak’s Diversification Plan Moves into a Higher Gear.” The New York Times, 25 Jan. 1988. www.nytimes.com/1988/01/25/business/kodak-s-diversification-plan-moves-into-a-higher-gear.html
Fruedenheim, Milt. “Business People: Senior Kodak Officer to Head Sterling Drug.” The New York Times, 21 Aug. 1988. www.nytimes.com/1988/08/12/business/business-people-senior-kodak-officer-to-head-sterling-drug.html
“Harold (Shifty) Gears. The National Softball Hall of Fame. www.asasoftball.com/hall_of_fame/memberDetail.asp?mbrid=177
Keeley, Larry. “The Kodak Lie.” CNN Money, 18 Jan. 2012 http://tech.fortune.cnn.com/2012/01/18/the-kodak-lie/
“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. http://articles.latimes.com/1993-06-16/business/fi-3622_1_eastman-chemical
“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. http://articles.latimes.com/1994-08-30/business/fi-32940_1_health-products-business
LaMonica, Paul. “The Anti-Kodak: Eastman Chemical.” CNN Money, 27 Jan. 2012. http://money.cnn.com/2012/01/27/markets/thebuzz/index.htm
Mees, Charles Edward Kenneth. The Organization of Industrial Scientific Research. New York: McGraw-Hill, 1920. http://books.google.com/
Miles, Stuart. “The Decline and Fall of Kodak.” Pocket-Lint, 1 Oct. 2011. www.pocket-lint.com/news/42342/kodak-shares-plunge-bankruptcy-fears/
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. http://blogs.wsj.com/source/2012/02/26/the-demise-of-kodak-five-reasons/
“The Rise and Fall of Eastman Kodak.” The Night Owl Trader, 25 Sept. 2011 and added posts. http://nightowltrader.blogspot.com/2011/09/rise-and-fall-of-eastman-kodak.html
Pfanner, Eric. “Fujifilm Finds Niche With Niche With Old-Style Cameras That Mask a High-Tech Core.” The New York Times, 19 Nov. 2013. www.nytimes.com/2013/11/20/business/international/as-digital-camera-sales-sputter-fujifilm-finds-its-niche.html
Scheyder, Ernest. “Focus on Past Glory Kept Kodak from Digital Win.” Reuters, 19 Jan. 2012. www.reuters.com/article/2012/01/19/us-kodak-bankruptcy-idUSTRE80I1N020120119
“Summer Arts Theater Presents Two Plays.” Spencerport NY Suburban News, 23 July 1964. inter alia. (The Kodactors). http://fultonhistory.com/

http://www.bizjournals.com/newyork/news/2013/07/31/kodak-ceo-to-resign-after-bankruptcy.html?page=all




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Techno-Fascism

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In January 2014, for one month, I held a job as a document review attorney in Manhattan. I was a member of a team of 30 attorneys, and we each reviewed about 500 documents a day. This means that 15,000 documents in total were reviewed each day. One day, out of those 15,000, my supervisor (who only had two assistants and was very busy herself) found one document on which I had made a serious mistake, and gave me a talking to about not making that mistake again. I was very embarrassed and promised to do better. But my initial thought was: how did she find my one wrong document out of 15,000? Then I realized: all the documents were stored electronically, and she simply ran a computer search that notified her of which documents contained the error.

My point is simple: there are no needles in haystacks anymore. One document out of 15,000 can be detected using a computerized search, because a computer can read 15,000 documents in a few seconds. If a computer search can find that, what else can it find? A search of every email in the Gmail, Yahoo, and Outlook email systems with the word “libertarian” in it? A search of the internet for a list of every libertarian Meetup? Given a set of names from a libertarian mailing list, a list of all addresses? Can you see where I’m going with this? How difficult would it be for a socialist government to round up all the libertarians? Using computers, a government could find us. Using computers, it could monitor every email and every phone call, so that we could never organize any resistance. Using computers, it could even do profiling to identify the people whose personalities would make them sympathetic to liberty, and add those supporters to a list before they made a move to act or even knew what libertarianism is. What Ellsworth Toohey said about “future Roarks,” namely, that they will all be destroyed, comes to mind.

Look at your smartphone. Does it have a webcam? Yes. Is it GPS enabled so it can give you driving directions? Yes. But how easy would it be for a government to turn on that webcam and direct a permanent video feed from your device to a government monitoring station? And to keep a constant record of where you go, every minute of every day? And could the government do it by issuing secret orders to Google and Apple, and to Microsoft, which controls the smartphone operating systems, so that your own device spied on you without your knowledge? I can tell you that your smartphone could easily be turned into a chain around your leg. If 300 million smartphones were so converted, the data could be sent to computers that, as I described above, could analyze the data for trends useful in detecting rebels — for instance, by listening for a conversation including such keywords as “freedom” or “rebel,” or noticing when you go to a place where libertarians are believed to meet in secret. 1984 is a real possibility, though a little late in 2014.

The technology for techno-fascism already exists. Its only real impediment is the Fourth Amendment.

Advances in technology bring great joy. But they also bring danger, especially when the advancement of politics lags far behind. Einstein’s work revolutionized physics; it also led to the nuclear bomb and the horrors of Hiroshima and Nagasaki. Similarly, I fear that the rise of computer technology, in the hands of a dictator, could lead to “techno-fascism.” The dictator would not need spies, because cameras and sensors, analyzed by computers, would detect all traces of resistance, and tell the secret police exactly where to go to crush rebellion before it started. Under all dictatorships of the past, rebels could meet in secret, make plans, and try to revolt, because spies could not be everywhere. Now they can be.

The fact that there are no needles in haystacks anymore was actually visualized in Batman: The Dark Knight, where, toward the end of the movie, Batman uses the Bat Computer to hack into Gotham’s cell phones and eavesdrops to locate the Joker. If, in this way, the government spied on people in the name of safety and fighting crime, then the public might let it happen, until it was too late to reverse the practice.

Well, if doom awaits, what do we do? The technology for techno-fascism already exists. Its only real impediment is the Fourth Amendment. Read it. In the modern era, no charter of civil liberty is more crucial. We must fight to protect the Fourth Amendment, and to use it in courts.

Meanwhile, we can expect spies to spy on other spies. Because there are no needles in haystacks anymore, every side can see what the other sides are doing. The techno-fascist wants to spy on others while remaining invisible himself, but this is impossible; everything is visible in the world of Big Data.




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The Congressional Killswitch

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Sometimes a story is just so perfect that the immediate response is suspicion, even skepticism, that such a thing could be. Even when backed by unimpeachable evidence, even to relate the story in another context, a reporter (this reporter, anyway) feels he must get the caveats out of the way, even at the expense of burying the lede, because it’s simply too easy to proceed any other way.

So then.

Eleanor Holmes Norton is a Delegate to Congress representing the District of Columbia in the House of Representatives. Though allowed to serve on committees as well as speak on the House floor, DC reps cannot vote on legislation and thus have only symbolic power—hence the District license plate legend, “No Taxation Without Representation.” Holmes was first elected to Congress in 1990 and has faced no substantive opposition to the renewal of her term since, nor will she until she retires.

Google is a very, very large company. Despite early attempts to avoid governmental entanglement, combined with a motto, “Don’t Be Evil,” that is warm and fuzzy by big-biz standards, Google is nonetheless one of the most politically involved corporations in the world, donating many millions to causes such as gay marriage rights and alternative energy sources—as well as to the Democrats, where such ideas are on the whole more welcome. However, in recent years (and in particular, after a potentially nasty antitrust suit) Google has been hedging its bets, courting the Republicans as well to make sure that whoever happens to be on top, Google can still prevail.

If they weren’t so quick on the killswitch, maybe Google wouldn’t need to spend so many of its resources lobbying for approval.

One of Google’s main ongoing projects is the creation of a driverless car—something that can hook into an overarching traffic grid and speed passengers to their destinations without the limitations of human frailty or curiosity: no more merge delays, no more fender benders, no more rubbernecking. Clearly hoping for congressional money to be shoved their way, Google hosted an event for the House Transportation and Infrastructure Committee to showcase their new toy. And as a ranking member of that committee, Holmes was not only invited along, but also given pride of place as the first occupant of the shotgun seat, with results I highly recommend you watch in the video on this page.

For no sooner does she sit down than she wrecks the whole show: “It says Emergency Stop,” she says, while tapping and then smashing a big red button marked with exactly those words. And the Google spokesman (and Carnegie Mellon engineer), trying valiantly to control his panic, replies “Oh, no, don’t press that, it shuts everything down, and it takes some time to, um, recover from that.”

And with all the above caveats out of the way, how perfect an image is this of how legislators interfere with progress in technology and markets? A company wishes to test out a new product, and instead of going to the customers to see if it will succeed, they must first kowtow to those in authority (the representative of all Washington, D.C., as a matter of fact), who promptly misunderstand the device and render it useless—and then have the gall to take some sort of perverse credit for the deed, as implied in the newscasters’ comment: “Norton does think that cars like that could have a future so long as they have safety features like that kill switch.” Thanks, Delegate! Without you we’d never have known how to murder promising technology in mere seconds.

As the further exchange shows, even as a constitutionally powerless member of the House, Norton can still cast a formidable shadow:

“And you know, if they ever get that started, it could be a cool little ride.”
“I guess it still needs a little work.”
“Still needs a little work, yes.”

But despite their gentle, demagogic mockery, the newscasters save for the end a shrewd observation, one that calls into question the very idea of a large-scale federal government: if you are to build such a thing, “Be careful who you put in it—Delegate Norton may not be invited next time around.”

Would that we could all disinvite Delegate Norton, and her 535 cronies actually charged with lawmaking in this country! If they weren’t so quick on the killswitch, maybe Google wouldn’t need to spend so many of its resources lobbying for approval—and the rest of us wouldn’t have to bide our time waiting for advances that would’ve been possible decades ago, apart from the reticence and hesitance of our so-called leaders.



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Entitlement Drives Amok

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They’re calling her a road rage hero, this woman who filmed a driver flipping her off as he passed her on the highway just moments before he lost control of his car and slid across three lanes, coming to rest in the opposite direction on the opposite side of the road. “Good for her!” people are saying. “Poetic justice.” “She showed him!”

Well, what exactly did she show him? In my opinion, she’s no hero. She caused this accident, and she should be grateful that no one was killed or seriously injured. This is an example of entitlement run amok.

First, what was she doing in the fast lane if she didn’t want to drive as fast as the person behind her? Apologists are saying that she couldn’t move over because there was too much traffic, but that simply isn’t true. If the driver behind her had enough space to pass her on the right, she had enough space to move over.

She caused this accident, and she should be grateful that no one was killed or seriously injured.

Second, she should be cited for distracted driving. Instead of watching the road (at 60 miles an hour!) she was using her cellphone to film the other driver, not only when he was beside her, but when he was behind her! In New York she would have been slapped with a $500 fine and five points on her license. And she would have deserved it. Instead, people are applauding her chutzpah. Sheesh.

Third, she contributed mightily to this man’s frustration. She taunted him with her phone and deliberately went slow in the fast lane, controlling it. She cackled with delight when she saw his car flipping around. Fortunately no cars were coming toward him as he spun out into the opposite lane, but many lives could have been lost or forever changed.

Don’t get me wrong — I’m not defending the man who felt the need to flip her off instead of just driving away. He was distracted too, looking to his left instead of watching the road, and he paid the price in a ruined pickup and a ruined reputation. But driving requires the utmost courtesy. This is one place where even libertarians should yield property rights to bullies and get out of the way when someone else wants the road. You never know when some crazy lady with a cellphone is going to push you — or someone driving behind you — right over the edge.




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Toasted Tweet

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For some years now, I have written in these pages about the zaniness of the modern environmentalist movement. This movement is essentially driven by devotees of a neo-Romantic nature cult, Gaia worship. One of the more amusing aspects of this cult is its lack of logical consistency — but then, religious cults are usually illogical, no? One of the most delicious examples of this Gaiaist inconsistency can be found in energy policy and the protection of animal species.

I refer today to the curious fact that environmentalists tout the saving of endangered species — especially attractive avian species (eagles, hawks, owls, etc.) — but also demand the use of energy producing mechanisms that destroy animals. As I have noted before, enviros just love massive wind farms. They want to see millions of wind turbines spread across the country, no matter how insanely inefficient and costly wind power is. But it turns out that wind turbines kill hundreds of thousands of birds every year, including the aforementioned raptors (eagles, hawks, and owls). I have called this phenomenon “Shredded Tweet.”

So, if an industry that enviros don’t like (which is most industry, naturally) is alleged to kill some birds, it must be shut down. Thus the timber industry in the Northwest was hammered to the wall by the enviro regulators, throwing massive numbers of forestry workers out of work because of allegations that it was hurting the spotted owl population. (It appears the real culprit was a competing species, the barred owl). But it’s OK if a million times more birds are proven to be annihilated by the wind turbines . . . the enviros don’t give a tail feather.

Unnamed regulators cited in the story say that while they expected some birds to be killed once the plant fired up, they didn’t expect the numbers they are seeing.

The latest illustration of this bizarre inconsistency is revealed in a recent report on solar power. The article reported the opening of a massive new solar plant, the Ivanpah Solar Electric Generating Station in the California desert. The plant cost $2.2 billion, backed of course with a $1.6 billion federal loan guarantee. The plant includes three towers 40 stories high, supporting boilers at the top. Three hundred fifty thousand large mirrors focus sunlight onto the boilers, driving the generation of power. This new means of protecting the scenic desert is only one of several major solar projects opening in California, where state law now requires that within six years, one third of power must come from so-called “renewable” sources.

The article notes that solar power rightly has been criticized for its grotesque inefficiency. Ivanpah’s electricity costs about four times that produced by natural gas powered plants; the plant uses far more land than what a gas-fired plant would, and provides far less power.

In a stunning display of transparency, neither the California utilities that are going to buy the power nor the regulators who are pushing it will disclose the costs of this solar electricity, which some estimate at twice that of electricity produced by natural gas. The extra costs will simply be dumped on the consumers.

But a new problem has come to light. The Ivanpah-type “tower power” plants are killing birds!

Yes, call this phenomenon “toasted tweet.” The air around the towers hits about 1,000 degrees Fahrenheit, and as the Wingéd Gifts of Gaia fly past, they get horribly scorched. Many are dying. Unnamed regulators cited in the story say that while they expected some birds to be killed once the plant fired up, they didn’t expect the numbers they are seeing.

This is of course yet another case of statist policies producing unintended consequences, contrary to the policies’ lofty goals. As Eric Davis — who bears the beautifully bureaucratic title of “assistant regional director for migrating birds” at the US Fish and Wildlife Service — ruefully remarked, “When you have new technologies, you don’t know what the impacts are going to be.”

Yeah, tell that to be burnt birds, Gaia guys.




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Stealth Stars

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The Stealth Star motto is, “Safety does not exist, but courage does.” While I sit in my space pod, about to land on what the Concord of Trading Star Systems has designated as Rediscovered Unknown Planet Omega 12774, I repeat that motto to myself, because I cannot afford to feel any fear right now. Fear is a nervous reaction that gives energy to the muscles at the expense of taking energy from the thinking centers in the brain — and I will need my mind to be at its sharpest when I face these potential hostiles. The planetary scan of Omega 12774 showed signs of electronic technology, but no star ships or long-range communications. It is possible that the humans of this planet might have that unpleasantness which every Stealth Star loathes: a mix of technological progress and political retrogression which is the precondition for hostile soldiers capable of taking on our star technology.

The space pod penetrates the atmosphere; I jerk back in my seat and then slam forward as I crash into the ground below. I open my pod and see a vast stretch of stagnant brown fields around me. The brown extends outward in all directions, like a sea of mud. A few faded, half-alive trees sprout in the distant horizon, their frail green branches sagging down like the skin of an old woman. I am several miles from the perimeter of what showed up as the largest collection of life-forms on the planetary scan. My hope is that it is the capital city; I also hope that the leaders of this society’s social cooperation (assuming that the natives cooperate, and have leaders) will reveal themselves as kind, benevolent, freedom-loving organizers who will welcome the opportunity to trade with other planets — there’s nothing wrong with being naïve enough to wish for good luck, is there? I set my visual scanner on long range and begin to run toward the city on my technologically enhanced legs.

Fear is a nervous reaction that gives energy to the muscles at the expense of taking it from the thinking centers in the brain — and I will need my mind to be at its sharpest when I face these potential hostiles.

I come to the top of a hill and the city is spread out before me. It is not what I had expected. The planetary scan detected sophisticated electronic technology, but this city looks like something out of a picture book of Origin Earth’s dark ages. The wooden buildings have thatched yellow straw roofs, a few squat structures are built from red stone bricks, and various open squares dot the streets. The city blocks are broken up by narrow unpaved dirt roads laid at random. Humans, hundreds of them, bustle about in the streets, and a crowd of people fills some sort of marketplace beneath rainbow-colored tents on the western side of the city — but the goods they are trading appear to be live animals, mainly chickens, pigs and goats, as well as bags of corn and wheat, and the most valuable goods up for sale are small iron tools or jewelry made of glass and crystal. The people are dressed in clothes that are little more than rags. The colors are dull shades ranging from midnight black to smoke gray. These people are emaciated, dirty and haggard-looking, their skin stretched tight across hungry bones and their eyes sunken into their faces. I see no energy, no excitement, no smiles. Nowhere do I see anything resembling electronic technology — but wait!

At the far side of the city, on the other side of a series of building-covered hills, I can see a massive stone castle. Its shadow cuts across the city like a knife. I see glittering red lights emanating from the small windows in the castle’s upper towers — bright lights, unmistakably electric lights. I run a visual scan and see that the castle is full of technology; there are laser guns mounted on turrets around the castle’s outer walls, the scan detects the electromagnetic outline of super-computers, and small nuclear generators are buried in the castle’s lower levels. So! This civilization is ruled by someone who takes the technology for himself and gives nothing to his people. I sense that a conflict between the Stealth Stars and the ruling power inside that castle is inevitable.

I use an optical mirage device to make my star armor look like peasant’s rags, and I descend into the city. The computer in my brain quickly decodes the language of these people, which is derived from the Post-English that was spoken in this part of the galaxy before the Apocalypse. I walk into a building with a sign above the door proclaiming “Bet’s Inn and Tavern.” Inside I am greeted by an attractive young woman with long blonde hair that shimmers as though it were made of gold; her healthy glow has not been dampened by the dirt in her hair or her missing teeth or the numerous stitches desperately holding together her moon-gray dress.

“Hello, good sir. A traveler, are we? Yes? Well, if you’ve got the gems to pay for it then there ain’t no better place than Bet Matil’s Inn and Tavern. A bed and a good meal will be three blue gems, yes? And you, well, have the gems? Good, good!”

“I am from distant lands,” I say to this woman, presumably Bet, “and I would like to talk to you, to educate myself. What is the name of this city, and this land? And who lives in that castle? I might like to visit there and meet the leaders of your city.”

Three men sitting at a nearby table playing some form of dice game hear me, and the men laugh heartily.

“Don’t no one gets to go into that castle, what?” one of the men says with a grin. He has a long copper-red beard and a face so round and red that it reminds me of an apple. “Nobody,” he continues. “That castle is the home of our beloved leader, Prince Regisoph. That’s the Prince’s Tower, Tower Regisoph. This city is Rej, and our lands and farms, as far as the eye can see, that’s Rej too. Where do you come from, good sir, the fairy tale lands across the ocean, not to know this? One of the fair folk, are you?”

“Rej” appears to mean “power,” and “Regisoph” “wise and powerful.”

“I’m a human being, same as you,” I reply in a friendly tone. “So, this Regisoph is a Prince? And his father is King, I presume?”

“Father?” one of the men says, and they explode in raucous, wheezing laughter. This man who just spoke smiles at me with mirth; his teeth are yellow and rotten. “Prince Regisoph has been Prince for hundreds of years. It’s been so long that nobody around here can remember the time before he ruled. Ah, legend says that those were dark times, before the Prince’s enlightened rule. Bah! Let’s not dwell on the horrors of legends. You rolled a four so you owe me four, Jerem!”

“He has ruled for centuries? Then the Prince is not human?” I ask. No known alien species inhabits this part of the galaxy. And anti-aging technology capable of extending human life beyond 150 years is virtually impossible for people at the level of technology detected by my scan of the castle.

“Oh, he’s human, all right, although no one really knows for sure since he never comes out of the Tower and the public isn’t allowed to go inside his Tower. We haven’t seen him for over a hundred years,” Bet says. “But everyone knows that he’s human.”

“The Prince remains hidden,” I muse. “And what makes him such a great man, in your opinion? What is it about his rule that is so enlightened?”

“The Prince’s greatness?” Bet replies. There is a strange intensity in her pale grass-green eyes, a look of glowing exuberance, and I suddenly realize to my horror that she is proud to be among those ruled by her Prince. “Why, he’s made everyone equal! We all get the same number of gems at the start of each month, as our allowance, regardless of how much work we did, so that the farmers up north can’t hog all the gems just because they produce so much and we artisans and shopkeepers and innkeepers of the south aren’t so lucky. We get our gems, and we trade them during the month, and then at the end of the month they go away and we get a clean slate and a new set of gems. Some of the ones up north grow mighty rich in the later weeks, but it all goes away — pow! — it all goes up in smoke at the end of the month. It isn’t fair for the north to be rich while the south lives in poverty. Why shouldn’t we take their gems away from the northerners, at least after they’ve had an entire month to play with them? They say that equality is a great thing, so why shouldn’t the north suffer along with us southerners? Why shouldn’t I share my pain with you and with everyone else? We are all given enough gems to buy the things we need to survive — and really, do we need any more than that? The Prince’s way is better than the unrestrained greed of our ancestors, or so the legends say. And if you can’t trust the Prince and his wise men’s legends then who can you trust?”

The space pod penetrates the atmosphere; I jerk back in my seat and then slam forward as I crash into the ground below.

“Um, yes, the Prince certainly seems to be wise,” I reply in a voice that hides my revulsion. So, the land of Rej is ruled by a technology-hoarding tyrant named Prince Regisoph who has enacted a scheme of socialism to keep his peasants from acquiring enough wealth and technological progress to challenge his rule. The people live in misery and poverty and filth, while the Prince (and his soldiers, I’m sure) have all the benefits of modern medicine, entertainment, and the other wonders of electronics — and the Prince’s propaganda has his people believing in the justice and virtue of being ruled. These people seem like good-natured, hearty folk, who could prosper and trade with the rest of the galaxy if they were allowed to know the miracles of capitalism and free trade. But for the people to be freed I must defeat Prince Regisoph. Can one single Stealth Star agent do it? To be a Stealth Star you really do need to have a death wish.

Bet tugs on my arm. “Come, good sir, I’ll show you to your room. And what did you say your name was, by the way?”

“Anth Benj,” I reply, translating my name into its rough equivalent in the Rejian language.

“Anth,” she says, as if to see how my name feels upon her lips. She guides me up a narrow, creaking wooden staircase and into a small room with a straw mat for a bed on one side across from an open window. A warm, soothing wind is blowing in from outside. The window has a view of a few wooden hovels across the street, but above it I can see a wide cloudless emerald-green sky with four white-gray moons visible. Then Bet motions for me to sit down on the bed, and I comply. She smiles at me with a strange, mysterious, purposeful look.

“I listen better than those men down below, and I can tell that you’re not keen on the Prince,” Bet says. “You might be dressed like a Rejian, but your face don’t look like us and your voice don’t sound like us. You are . . . different. I know you must be an ambassador or herald from the lands beyond the ocean, sent to parlay with our Prince. But before you go storming into the Tower, there’s something about the Prince that you should know.”

I am shocked that this woman so easily decoded my disguise. The Rejians are surprisingly clever. We can always use clever people in the Concord, and there are special jobs reserved for people who can think and analyze new situations quickly. In fact, when I look at Bet I can almost picture her cleaned and clothed in the crisp white uniform of a star pilot. But then I smell the odor of horse manure wafting in through the window and the daydream fades.

“What?” I ask.

“There is no need for you to hate the Prince, Anth Benj, because, you see, I am Prince Regisoph,” Bet says.

“I think I’m having a translation problem. Say that again?”

“That’s right. I am the Prince,” Bet says. “So please, don’t oppose me. I am willing to listen to you. Rej can reach an agreement with the lands beyond the ocean.”

“How is that possible?” I ask. Could I have been so lucky as to stumble upon the ruler here, so that I can duel her one-on-one right now?

The planetary scan detected sophisticated electronic technology, but this city looks like something out of a picture book of Origin Earth’s dark ages.

“I keep my identity a secret, but I am the ruler who sits in the Tower,” Bet says. “I rarely even enter the Tower now, but my desires are the law in Rej. So stay in my city for a while and see what it has to offer, and look at our good things and what works before you condemn me for my problems and my flaws. Quick to judge is quick to die, as the wise men say. Don’t be reckless in changing everything to suit the tastes of some strangers from across the sea.”

“Well…” I say. “Then I assume that you know where I really come from?”

“Yes, of course,” she says. She heads for the door, but then looks back over her shoulder and gives me a coy smile. “You come from the fairy world beyond the ocean. I serve chicken stew for dinner at the eighth chime, so be sure to come down, Anth. I look forward to seeing you!” Bet vanishes down the stairs.

This is weird! Is Bet really the Prince, or do these people have some sort of psychological complex in which they become insane and identify with their ruler? I must learn more. I search the rooms next to mine, and in another room I find one of the men who had been playing dice downstairs, the man with the apple-red face. He sits at a table, counting his winnings from dice — a set of small gemstones, some green and some blue, and one red. He holds the red gem in his hands, a look of intense pride lighting up his eyes.

“Excuse me? May I come in?” I ask.

“Ah, the stranger!” the man says when he notices me. “My fellow traveler. I am Jerem, and yes, come in, come in, more is happier! I too am a stranger in this city, you know. I am from a northern farm, here to sell our chickens, but, ah, yes, lady luck, what? Lady luck has blessed me as much as the chickens! It seems so wrong that these gems will all be gone so soon, so soon, so soon . . .”

“Yes, it is a shame,” I agree.

“Shame, yes, but it is what we want, after all,” Jerem says. “I feel greed, yes, but it wouldn’t be fair to all the other good people for me to own too many gems and for them to have none. Wouldn’t be right.”

“Yes,” I say, continuing to observe the brainwashing effect of the Prince’s propaganda. “Speaking of which, could we talk about the Prince? I have some more questions that Bet didn’t quite answer.”

Jerem’s eyes become secretive and shifty. He coughs nervously. “The Prince? Why would you want to talk about the Prince with me? It’s not like I am the Prince in reality and I pretend to be a farmer.”

“No, of course not,” I say. Then a thought occurs to me. I do a quick visual scan of Jerem with the scanner implanted in my left eye, and my fear is confirmed: a small neuro-computer is implanted in Jerem’s brain with an internet feed broadcasting to a remote signal. I adjust my scanner to scan through the walls and sweep the entire building, and everyone here, all the Rejians, have brain jacks. But they seem oblivious to the computers in their brains, just as they seem ignorant of all the technology in the Prince’s Tower. What is going on here?

"Ah, legend says that those were dark times, before the Prince’s enlightened rule. Bah! Let’s not dwell on the horrors of legends!"

“Well, what? What? You seem like an honest chap, so I have a confession to make,” Jerem says, and my scanner detects activity in Jerem’s brain computer. “I am the Prince. Yes, I am Prince Regisoph. Best not to hide it. But don’t tell my wife, she’d be furious. Anyway, this is my city and my land and my Tower, and I’m bloody well proud of it. So don’t mess it up. That’s all I’ve got to say.”

I say goodbye to Jerem and return to my room, sit on my uncomfortable bed, and think things over. Clearly this used to be a society of sophisticated electronic technology. But their ruling class, led by someone named Prince Regisoph, took away all of the technology, barricaded themselves in the Tower, and left the people to starve in poverty. In order to ensure that the public would not revolt and storm the castle the Prince installed computers in all the peasants so that he could centrally control their thoughts and preempt any dissidence. The neural interference from the Prince’s brain computers manifests itself as the peasants’ insane belief that they are really in control of the society, that they are the Prince. The rulers in that Tower are absolutely, incorrigibly evil. I cannot tolerate the thought. I must set the people free.

You don’t become a Stealth Star unless you have a love of freedom that burns like a wildfire, unflinching bravery in the face of the unknown, and a mastery of modern star technology — and also (I am afraid to admit) a tendency toward performing acts that border on suicide. Because when the Stealth Star Corps sends you out as the spy-scout on a mission to see what has become of the humans on a rediscovered planet that hasn’t been heard from since the Interstellar Apocalypse, 10,000 years ago . . . you might never return.

We Stealth Star scouts explore to see if newly rediscovered planets have evolved economic and social freedom or decayed into tyranny and dictatorship, and to evaluate whether the newly explored planets might become trading partners and join the Concord. Some of the time the humans are peaceful and happily sign up with the Concord — but most of the rediscovered planets are primitive and barbaric. I lost my best friend Charl when he was dropped onto a planet that turned out to be the home of a society of cannibalistic cyborgs. I also led the team of Stealth Star soldiers who wiped that planet out after Charl’s final broadcast warned us that the cyborgs were developing star ships and planning to become space pirates. I am primarily a scout but I do have experience as a warrior.

Stealth Stars are spies and soldiers, but we’re not an army. We are not affiliated with any government, and we are staffed entirely by volunteer recruits. We believe that everyone has the right to freedom. The interplanetary trade associations (mainly the Concord but also some of the smaller groups) donate to us happily enough, because we keep space clear of the space pirates and planetary dictators who like to blockade trade routes. But our real motive is not economic; it is political. We aim to spread the ideals of freedom to every planet so that everyone can enjoy the reality-given rights of life, liberty, and property. Our critics within the Concord call us crusaders, but we believe that every war we fight is a war of self-defense. We are like soldiers hired by oppressed peoples to free them from dictatorship, except that we work on credit and take payment once they join the Concord. No, they didn’t actually tell us that they wanted us to rescue them — but how could they while their voices were silenced by their rulers? We give to the peoples of the outer planets precisely what they want, what they would choose if they were free to make choices.

I send a long-range communication to the local Stealth Star mother ship and wait for night to fall. Soon the city of Rej is enshrouded in darkness and illuminated only by the four pale moons and a nearby constellation of stars in the night sky. I set my star armor in stealth mode and sneak up to the outer wall of the Prince’s Tower. With the protection of my stealth mode and its cloaking device the castle’s cameras cannot detect me as I scale the outer walls. I use a laser-razor to cut a hole in the stone wall and slide myself through.

The inside of the Tower is as amazing and resplendent as the city below is ugly and base. The place is a spider’s web of interconnecting rooms and hallways, and each room is filled with banks of super-computers from floor to ceiling which blink with constantly changing red and blue lights. The rooms buzz and crackle with electrical energy. Floating guard robots hover up and down the halls with laser rifles at the ready, but the guards cannot see through my stealth cloak and they float past me, oblivious. I see no humans anywhere in these rooms. I scan the area and detect the largest source of electromagnetic energy, which I assume is the central control station where the leaders will be. It is at the top of the highest tower.

For the people to be freed I must defeat Prince Regisoph. Can one single Stealth Star agent do it?

I snake my way up the various stairs and ramps that riddle this Tower, and eventually I reach a set of double doors. Their gold lettering proclaims “Prince Regisoph.” My scan reveals that the door is made of solid plastic-steel laced with synthetic diamond — difficult to make and impossible to cut. Clearly the Prince does not want to be interrupted by unexpected company. It is a shame for him that Stealth Star technology is up to this challenge and I am about to ruin his day.

I clamp an antimatter mine to the double doors and retreat around the corner of the nearest hallway. The mine goes off; the physical matter in the doors is destroyed by the antimatter and implodes into nothingness. I run down the hall, exit stealth mode and enter attack mode, and draw a laser gun in each hand. I am about to face the worst military power that the Prince has to offer. If I die, my death will be worthwhile. I switch on my attack scope and activate the cameras in the back of my head so I can see in three hundred and sixty degrees. My body armor can withstand most armor-piercing rounds and my lungs have implants to filter most poisonous gasses, but there is no telling what deviltry the Prince may have waiting. I run into the middle of the room, my heart racing and my nervous system at its peak, ready to fight and willing to die . . .

There is no one in here.

“Hello?” I ask.

“Hello,” a strange, hollow, mechanical voice answers.

I look around and see that the word “Hello” is lit up on a large computer monitor on the far side of the room. A huge bank of super-computers fills the other side of the room — the electromagnetic activity I picked up. But my scanner detects no human beings. I am alone.

“Who are you?” I ask.

“I am the Project Prince Regisoph computer interface operating system. Please state your identity, user.”

This society was able to achieve what we of the Concord, even with all our scientific marvels, could not: artificial intelligence. “So, you are Prince Regisoph!”

“Negative,” the computer replies. “User, are you an integrated user with a damaged integration device? Please state yes or no.”

“Integrated? What do you mean?”

“Invalid response. Background presentation loading. Please wait.”

This computer is not talking as if it could think. It is speaking like a mindless automaton. What in the Universe is going on here?

Suddenly the screen is lit by the image of an old man dressed in fancy green robes. “Greetings, people of the future,” the image says.

His robe is various shades of deep green, and he wears a spiked crown glittering with accents of diamonds and gold. He has a triumphant, fanatical gleam in his little brown eyes, almost like a young man recently converted to a new religion, but his face is aged with the wrinkles of years of thankless toil. “I am Grego, Prime Chancellor of Rej — or, at least, up until now I was, as soon there will no longer be any need for me. It is to be hoped that nothing has gone wrong and we have created the utopia we wished for. But to meet any problem that may arise, we are encoding this message explaining Project Regisoph, so that repairs can be made by people who understand the plan.”

“What plan?” I ask. But of course the recording of Grego cannot hear me.

“In order to create a truly democratic society we must have a system that counts the votes of the public’s desires and enacts the will of the people into law. Our politicians have become hopelessly corrupt and inefficient, so we are automating the process of politics. As an infant, each human will be fitted with a mental interface connection. The interface will examine the person’s desires and count them as one vote. The Tower computer will tabulate all votes from the integrated brains of the voters, and the robot drones will then act out and enforce whatever is the political desire of the majority. If the people want capitalism, then there will be capitalism; if they want socialism, then the Tower will provide socialism. If the people want all the technological advances that we have discovered then technology will be distributed; but if they grow weary of technology and long for a simpler, more natural era, then technology will be taken away from them.

We give to the peoples of the outer planets precisely what they want, what they would choose if they were free to make choices.

“The system has no limits and will do whatever the public wants it to do. We leave it to the people themselves to decide the substance of the ideal society. We today are merely giving them the procedural form of that ideal. For all our faults, at least we will know that the people will get what they desire; the world of tomorrow will be what everyone wants.”

This is ghastly. Bet and Jerem and all the others really are Prince Regisoph — but it now seems apparent that if everyone is the ruler then everyone is the slave. Democracy is a Concord ideal, but only a republican democracy in which the rights of individuals are held sacred and inviolate against the will of the majority. The Rejian people want their stone-age socialism, so they get it, but what they want is bad for them. I laugh for a minute, realizing the irony: the socialist dissidents within the Concord often complain that they know what’s best for the planetary citizens and that therefore the socialists should make everyone else’s economic choices for them — yet here I am thinking with absolute certainty that I know what is best for the Rejians and I should make the choice of capitalism for all of them. Still, irony aside, that is what I believe — isn’t it? I had thought that I wanted to kill Prince Regisoph. But Prince Regisoph is Bet Matil. I want to save her, not kill her. So what do I really want to do?

“Computer, deactivate. Terminate Project Regisoph.” It’s still my job as a Stealth Star to bring freedom to the planet. This is worth a shot.

“Negative. Project Regisoph can be terminated only by a majority vote of the integrated users. User, you have been identified as a threat. Activating protection procedures.”

My calm is immediately replaced by panic: the walls slide open and swarms of guard robots rocket into the room. I drop attack mode and return to stealth. The robots lose me on their scanners and can’t detect me. They sweep across the room and go right past me. I consider shooting a missile into the Regisoph super-computer control center, but I hesitate . . . there are probably backups throughout the Tower, and my sensors detect self-destruct nuclear mines hidden in the command center that, once activated, might destroy the entire city, or continent.

But what really stops me is this: if the people want to be ruled by Prince Regisoph, if that is actually what the majority of Rejians desire, then I could raze the Prince’s Tower to rubble and they would simply rise up and build another Tower in its place. Maybe you can’t force people to be free when they want to be slaves, any more than you can force a people to be ruled when they insist upon freedom and give their lives to win it. The battle for the freedom of this people will be won out there, out in the streets and in the minds and hearts of individual men and women, not here in the Prince’s Tower. Prince Regisoph will die once the Stealth Stars convince the people down in that city that capitalist freedom, ownership of property, and free trade are superior to their socialist nightmare. It’s my new job to educate the Rejians about the happiness that comes from trade and technology. To try, anyway. I had thought that when the Stealth Stars liberate a planet, we give the people precisely what they want — but now, in retrospect, I realize that the truth may be a bit more complicated.




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Why Not Keep the Talented?

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As we head into the New Year, there are signs that Congress may finally allow an increase in legal immigration. Specifically, it now appears that Congress is becoming increasingly aware that it is folly to kick out foreign students who achieve science, technology, engineering, and math (STEM) degrees.

In fact, both Republicans and Democrats have now sponsored bills to reform immigration laws to encourage STEM workers to immigrate here. And a very recent report by the Information Technology Industry Council, the Partnership for a New American Economy, and the US Chamber of Commerce provides ample evidence that the time is ripe for reform.

The report, “Help Wanted: The Role of Foreign Workers in the Innovation Economy,” looked at three questions: Is there a STEM worker shortage? If so, how bad is it and in what fields is it the worst? Does hiring foreign STEM workers take jobs away from native-born workers?

Take the issue of whether there is a general STEM worker shortage. A number of the report’s findings indicate there is indeed such a shortage, and that it is pervasive across the various STEM fields. Remember that economists typically hold that an overall unemployment rate of about 4% represents essentially full employment (with people who are out of work being mainly in transition between jobs in a fluid market). Our current national unemployment rate has hovered around 8% for four years, which is high by recent standards (those of the 1990s and 2000s).

Well, the report notes that the unemployment rate for American citizens with STEM PhDs is only 3.15%. For those with STEM MS degrees it is only 3.4%.

As to whether foreign-born STEM workers are taking jobs from American-born workers, the data the report surveyed show no such effect. While only 6.4% of non-STEM workers with PhDs are foreign-born, 26.1% of STEM workers with PhDs are foreign-born. (For workers with Master’s degrees, the figures are 5.2% of non-STEM versus 17.7% of STEM.) But even though a higher percentage of STEM than non-STEM workers are foreign-born, STEM workers still have a lower overall unemployment rate.

The job market is not a zero-sum game. There is no set-in-stone number of jobs, so that if an immigrant takes one, there is one less for you or me.

In some STEM fields, the figures are especially dramatic. While 25% of medical scientists are foreign-born, medical scientists generally have a 3.4% unemploymnent rate. In fact, the unemployment rate is lower than the general STEM average of 4.3% in 10 out of the 11 STEM fields with the highest percentage of foreign-born workers.

Moreover, the data indicate that immigrant STEM workers on average earn $3,000 per year more than equivalent native-born workers, putting paid to the myth that they “drive down wages.”

The reason none of this should be surprising is that the job market is not a zero-sum game. There is no set-in-stone number of jobs, so that if an immigrant takes one, there is one less for you or me. No, talented immigrants create jobs, by starting new companies, creating new products, or making our industries more competitive than foreign ones.

In this regard, the study argues that every foreign-born student who graduates from an American college and stays here creates an average 2.62 jobs for native-born workers. At the top 10 patent-producing American universities, more than three-fourths of all patents awarded last year were invented or co-invented by an immigrant.

Why can’t the Republicans and Democrats at least agree on removing the obviously counterproductive caps on foreign students who graduate from American colleges with STEM degrees and who want to remain here to work?

In short — why send the most talented and innovative students home — to start businesses that will only compete with ours?




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