Remora

There's an outstandingly dumb op-ed piece in the nyt today The 40-Year War Someone named Bill Keller has grabbed the wrong analogy and rides it to its frothing conclusion.

The analogy is that we are in the New Cold War. He gets rid of the inconvenient fact that, really, we aren't this way "There is, of course, no Soviet Union of terrorism, but as John Lewis Gaddis, the dean of cold-war historians, has been telling his classes at Yale since Sept. 11, there are striking parallels."

Striking parallels between a world wide clash between two nuclear armed nations and a disparate group of terrorists scattered about the Middle East with, at most, maybe 10 to 15,000 agents? Right. The striking parallel is between the thirst for some grand, unified thing like a Cold War among deans of cold war history and Georgetown cocktail diplomats. Actually, there is a parallel with an earlier 'war' in American history. That war, against the Barbary Pirates, was an easy victory. America's confrontation with terrorists is, similarly, a confrontation with a loosely organized group that relies on a context of sympathizers to retreat, and the low tech advantages of ambush to attack. The war against the pirates, in the Western Hemisphere, lasted two hundred years. It was never completely won, but piracy diminished because it became inconvenient for the states that had once sponsored it -- England and France -- and the object of piracy -- mainly the Spanish gold fleet -- became more of a cost to attack.The Barbary Pirates fell because they were easily located and routed.
Of course, piracy is ultimately driven by economics. Terrorism is driven by ideology. In that sense, only, one can find a Cold War parallel. As for the current salivating over the 'coming security state' -- I'll believe it when I see it. So far, we haven't even agreed to secure, at a minimum level, airports, although we were quick to secure the finances of airlines. I do sometimes wonder at the hysteria of intellectuals, who so much want there to be a moment beyond which 'everything is changed,' whether to satisfy their libertarian nightmares or their authoritarian daydreams. Those moments happen, no doubt. So far, though, the indicators are that the WCT attack wasn't one of them. Compare it to, say, the war on drugs, which kicked into high gear in the 80s after the death of basketball star Len Bias. You might think this is a grossly distorting comparison -- the WCT attack is certainly one of the great atrocities of our time. Alas, the shadows thrown by historic events can't be predicted by their gross emotional weight. While Bias' death kicked-started a disasterous set of laws punishing drug use, which in turn had a massive effect on American society, giving us proportionately one of the highest percentages of incarcerated people on earth, what has the WCT assault done? I see no comparable change in the domestic political landscape. TThere is a great desire for some great change, that is true. We want, somehow, to do something tthat is appropriately monumental as a sign of respect for the 6000 who died. But desire, here, has not yet found an object. As for the international landscape, Afghanistan can not long stay at the center of the world. All bets are off if Ben Laden is not captured or killed, but I'd certainly be cautious about predicting a forty year "Cold War."

Skip this post, it was an accident.

Remora

In these days of shadow war and shadow recession, the Bush administration is suddenly turning on a Keynsian dime -- or is it 120 billion dollars? with a vengeance. Question is: does this mean that the reign of Schumpeter, of creative destruction, was all a big mistake?

The Web, in its wisdom, offers up a digital festschrift in honor of Peter Drucker that contains Drucker's essay, Modern Prophets: Schumpeter and Keynes?

It's a brilliant piece. I disagree with Drucker's summary dismissal of Keynsian economics, which makes especial use of two time periods and, at least as he glides over the 81-82 period, is magisterially unfair; on the other hand, Drucker draws a mean geneology. He does net the connections between Keynes and the whole classical school, and unlike other conservative economists, gives the devil (aka Marx) his due as an economist. But since Drucker's heart is in Schumpeter's differance; the meat of the piece is laying out, with maximum compression, what Schumpeter's work is all about.

Here's two grafs about Schumpeter that are worth reading even if you don't follow my link to the piece (but do -- it is the weekend, right? And there's a 120 billion dollar economics proposal floating around D.C. And, like, that's a chunk of change. It makes, what, four Gates. Which I do believe should be some kind of official metric).

"Classical economics considered innovation to be outside the system, as Keynes did, too. Innovation belonged in the category of "outside catastrophies" like earthquakes, climate, or war, which, everybody knew, have profound influence on the economy but are not part of economics. Schumpeter insisted that, on the contrary, innovation - that is, entrepeneurship that moves resources from old and obsolescent to new and more productive employments - is the very essence of economics and most certainly of a modern economy.


He derived this notion, as he was the first to admit, from Marx. But he used it to disprove Marx. Schumpeter's Economic Development does what neither the classical economists nor Marx nor Keynes was able to do: It makes profit fulfill an economic function. In the economy of change and innovation, profit, in contrast to Marx and his theory, is not a Mehrwert, a "surplus value" stolen from the workers. On the contrary, it is the only source of jobs for workers and of labor income. The theory of economic development shows that no one except the innovator makes a genuine "profit"; and the innovator's profit is always quite short-lived. But innovation in Schumpeter's famous phrase is also "creative destruction." It makes obsolete yesterday's capital equipment and capital investment. The more an economy progresses, the more capital formation will it therefore need. Thus what the classical economists - or the accountant or the stock exchange - considers "profit" is a genuine cost, the cost of staying in business, the cost of a future in which nothing is predictable except that today's profitable business will become tomorrow's white elephant. Thus, capital formation and productivity are needed to maintain the wealth-producing capacity of the economy and, above all, to maintain today's jobs and to create tomnorrow's jobs."

This is the shit. But it's implications for understanding business unfold when one understands that innovation can be tied to multifarious forms of profit-making -- including using the power of the State in various ways, from promoting regulation to using the judicial power, to make money. This simple fact of business life is systematically overlooked by the right and most of the left, who define themselves with regard to a false picture of state-private enterprise interactins.

Drucker goes on to talk about how WWI monetized economies. Read the essay. When the Web offers you stuff like this for free, you have to admit, it is pretty cool.

Remora
Sometimes you come upon a fact that you know has an essayistic depth to it, if you only had the time, or the mental capacity, to write the essay. For instance: last night I read this anecdote about Hans Christian Andersen. Since he lived in fear of awakening in a coffin, "he always carried a card with him saying, "I am not really dead," which he put on the dressing table whenever he stayed at a hotel abroad, to prevent some careless doctor from wrongly declaring him dead." -- Buried Alive, by Jan Bondeson.
Now the Walter Benjamin in me takes that as an image applicable to every modernist artist -- didn't they all carry with them, at least metaphorically, some card saying 'I'm not really dead?' And what kind of sentence is that, anyway? Who, after all, is the speaker? What kind of truth claims can the dead make? There's a good reason that wills begin with a declaration of health -- we only trust the living.

Remora
Did you know that war reporters have their own association? Well, now you do. This link is to an article by Michael Griffin laying out the depressing Afghan specs: a famished country, bickering warlords with onerous pasts, and the Taliban, a far from medieval creation -- as everybody likes to call it. It is, instead, an ultra-modern creation, a faith based militia wrung from the despair of the poor.
Institute for War & Peace Reporting

Griffin's assessment of the Northern alliance sounds alarmingly like those groups that the US propped up to resist Saddam H. in Iraq. They are simply without a vision, or any support beyond the money they can get from somebody to pass around. . Rabanni, one would think, would have learned a few things by being dumped by the Taliban army. Last graf, and one hopes that the US is taking this to heart:

"And they are far from unanimous in supporting Zahir Shah, the former king, as the UN-recognised president, Rabbani, has bluntly dismissed any suggestion that the monarchy should be restored, while the Uzbek, Tajik and Shia have little loyalty to a Pashtun king who has spent the toughest years of the war in an Italian villa."

Dope.
Let's talk about airport security.
Not a hot issue for yours truly, until recent unpleasant events sort of put it right under my nose. And yours. We all got a deep whiff of it.

I interviewed Adam Gopnick yesterday, for a Chronicle profile. In the course of the interview, we agreed that one of the ironies of the WTC assault was that it might signal the end of privatization. The irony, here, is that will to privatize is reaching its limit, and perhaps retreating, under a president who is more committed to privatizing the commons than any president we have ever had. Or at least any president since Herbert Hoover.

Economists are peculiarly prone to hubris. The Keynsian school in the sixties were vocal in their claim that they could micro-manage the national economy with little more than a slide rule (remember slide rules?) and up until 1969 this looked to be the case. The neo-liberal school of the nineties were making the same claim of mastery. This time the idea was confining political intervention in the economy to whatever Alan Greenspan decided was the case. And privatize electricity, water, transport, prisons, and just, hell, all government services. In both cases, what broke the back of the claim was the neglected political side of political economies. As the stock market slips away from the New Economy dream of Dow 30,000! - ah, James Glassman's bestseller, a true nineties monument! -- we have two great events in the field -- the California Power Crisis and the hijacking of four planes -- which seem to mark a moment.

But the politics of each event is confusing. In the case of the hijackings, the kneejerk reaction of the Bush Whitehouse -- the plan to shuffle money to the airlines -- is starting to have, I think, a subliminal political effect, because it is an extension of the 90s exception to the party line that free markets are self-regulating, in line with Greenspan's doctrine of "too big to fail." While the airlines throw their employees out the window without parachutes (reserving the golden parachutes for their management), Washington has been throwing public money at the airlines. So what does the public get in return? Does it get safety, at least?

No. The short answer is no. The long answer is that the security at airports and on airlines is still in the hands of the cheapest solution -- the temp guards, and the absurd proposition that pilots not only do the flying, but operate as tackles for any passenger problem as well.

Here's the NYT story:
Bush Differs With Bill Over U.S. Role in Screening

Two grafs that limn the politics of the thing:
"The federalization bill was drafted by Senators Ernest F. Hollings of South Carolina, chairman of the Committee on Commerce, Science and Transportation, and John McCain of Arizona, the committee's senior Republican. Mr. Hollings said today that he was not likely to back down.
"When the president privatizes the Border Patrol, air traffic controllers and the F.B.I.," the senator said, "then I will privatize screeners."

But in its draft, the administration argues that federalizing all or most passenger and baggage screeners would require the government to create a "new federal entity, in excess of 20,000 employees." The Senate legislation "would create insurmountable transitional difficulties that would further threaten and possibly ground the aviation system," the proposal says."

Now, Senator Hollings is being rather hypocritical, since he was the New Democrat's new democrat, and has never before made a fuss about, say, privatizing prisons -- which is at least as dangerous as privatizing "the FBI" (and the record of the FBI is such that I wouldn't hold it up as a shining example of a successful government organization). But the emotion, which had never before been injected into the issue, except by the Free Marketeers, is now present on the other side.
For the best article on the shabby state of airport security, see this New York magazine piece, by Robert Kolker.

Remora
Interesting article about the fall of SwissAir from a Swiss point of view:
Largeur.com [ Article - ATTACK ON SWITZERLAND - Les banques et la fin de Swissair ]

Last graf, explaining that Swiss banks, even though profitable, decided to pull the plug on their nation's airline, sounds an interesting premonitory note:

A la place des banques (grandes et petites, al�maniques ou genevoises), je ne me r�jouirais pas trop. Le flinguage de Swissair �tait pratiquement achev� quand est intervenue la catastrophe du 11 septembre. On sait qu'elle a d�clench� chez les Am�ricains une crise de phobie du secret bancaire. On a vu vendredi le Conseil de s�curit� de l'ONU voter au pas de course et � l'unanimit� une r�solution demandant la transparence des op�rations bancaires pour lutter contre le terrorisme. Si cette fureur inquisitoriale ne retombe pas comme un souffl� � ce qui est possible �, la banque suisse sera appel�e � vivre des heures tr�s sombres.

If I were in the banks' place (the small ones and the great ones, german or genevan), I wouldn't be celebrating. The wasting of Swissaire had practically been achieved when the catastrophe of the 11th September happened. As we all know, that launched, among the Americans, a veritable phobic reaction to banking secrecy. Friday the UN Security council voted as an agreed upon item, unanimously, a resolution demanding transparency in banking operations for fighting against terrorism. If this inquisitorial furor doesn't pass like a breath of air -- which is possible -- the swiss banking establishment will be called upon to lives some pretty dark hours.