Diatribes of Jay

This is a blog of essays on public policy. It shuns ideology and applies facts, logic and math to economic, social and political problems. It has a subject-matter index, a list of recent posts, and permalinks at the ends of posts. Comments are moderated and may take time to appear. Note: Profile updated 4/7/12

28 May 2010

Conservation of Money, or Why The Fed Should Manage Derivatives


[For a brief comment on the President’s minor role in the BP Oil Spill, click here.]

Introduction
What is Money?
Conservation of Money: Scarcity and the Basics
Conservation of Money: the Nuances
What Has Happened since 2008
Conclusions

Introduction

The English word “conservation” has several meanings. Some environmentalists take it to mean using less, even if doing so hurts. An example is turning the thermostat down in the winter and feeling cold, just like the English before their adoption of central heating. Others think “conservation” includes making more efficient heaters so you can feel warmer while burning less fuel. Modern usage, however, tends to distinguish between “conservation” and “efficiency.”

But there’s another meaning entirely, which few outside the hard sciences know. That meaning proceeds from the assumption that certain things are―or ought to be―fixed in quantity, so that attempts to increase or decrease their total amount are impossible or disastrous.

The paradigm is the law of conservation of matter. “Matter,” said this law, “is neither created nor destroyed.” Even today, this is largely true. We can trace pollution from Chinese power plants and factories to the “tailpipe” of North America, which spews the pollution out of New England and over the North Atlantic with winds from the west. Matter―in this case pollution―doesn’t magically disappear; we can only convert it into less harmful forms of matter.

Einstein forced us the modify this law by showing that mass and energy are equivalent. So now we have the law of “conservation” of mass/energy. We know that neither is created nor destroyed without creating an equivalent amount of the other. Nuclear power plants and particle colliders practice this law every day.

Physics has other laws of “conservation,” including conservation of linear and angular momentum. But the law of conservation of “mass/energy” is the most intuitive and easiest to understand.

Will Rogers once said of real estate, “They ain’t makin’ any more land.” Just so, no one is making any more matter, at least not under conditions and on time scales of interest in ordinary human life.

The same sort of principle, I think, can explain a lot of economics. Unlike mass/energy, money is an artificial construct. So strict conservation, of the sort “enforced” by physical law, doesn’t apply. But if we think of “conservation of money” as a principle of macroeconomics, we can explain a lot of what’s gone wrong in the world over the last century.

What is Money?

How would you define “money”? I define it as something that represents economic value by social convention or mutual consent, but whose economic value so fixed vastly exceeds its intrinsic practical value.

All the things we humans ever used for money fit this definition. We probably started with shells and beads, which were worth far less than the food, building materials and weapons for which they were traded. Ditto for silver and gold, the next step in human economic evolution.

These precious metals have some intrinsic value because we can use them to make jewelry. (Today we also use them for various industrial and high-technology purposes, although we “graduated” to paper money long before those uses became a significant part of our economy.) But because they are heavy and not very hard, silver and gold always had far less practical value than the food, housing, clothing and weapons for which we exchanged them. You can’t make a decent sword or armor, for example, out of gold or silver. So except for the very wealthy, who sometimes used them for ostentation, their primary economic use was as a medium of exchange.

Today, of course, the divergence between intrinsic and conventional value is obvious. People work all day for a few strips of specially printed paper. Business ventures rise and fall on intangible electronic or magnetic records in the proper place. The trading in our financial markets uses electrons, which we can’t even see.

By themselves, electrons are useless to us in everyday life. Furthermore, they are unimaginably plentiful. We employ gazillions of them every time we turn on an electric light, and even more when we use our electric range. Yet lots fewer, inside a bank’s computer, represent a year’s wages or a start-up firm’s sole chance for success.

Conservation of Money: Scarcity and the Basics

This definition of money contains an inherent contradiction. If the money’s intrinsic, practical worth is so much less than its economic value as a medium of exchange, won’t people spend time and effort “making” money rather than things with intrinsic value, like food, clothing, shelter, vehicles, and weapons?

That contradiction explains a lot of things. For one thing, it explains the phenomenon of counterfeiting. If you’re a good forger, it’s better for you to make fake $100 bills than to make other, less valuable things and sell them for money. Why not eliminate the middleman?

The contradiction also explains some wasteful and even more sinister things. What were the California and Klondike Gold Rushes but attempts by tens of thousands of (mostly) men to “make” money the easy way, by finding gold, and eliminate the middleman? The conquistadores’ genocide of South and some North American native peoples was in large part motivated by the same desire. The pursuit of money and neglect of things with real intrinsic value is nothing new.

These important events in the history of the Americas reflect the law of conservation of money. For money to succeed as a medium of exchange, it should be fixed in amount, or at least not easy to augment.

Shells and beads were not too good in this regard. If some people could find or make them, so could others. So as a medium of exchange, they weren’t too useful. Among other things, their use as money could distract people’s attention toward finding or making them, instead of more productive pursuits like growing food or protecting the homeland.

Silver and gold were better because they are intrinsically scarce. The Earth’s crust doesn’t contain lots of them, especially near the surface where they are easy to mine. Their weight also makes them hard to steal in bulk. So for centuries gold and silver served as useful media of exchange. They were not only impossible to counterfeit; their scarcity also satisfied the fundamental principle of conservation money. Apart from sporadic and rare “gold rushes,” their amounts were fixed, mostly in the castles and vaults of kings, princes, nobles and (later) less autocratic governments.

Because silver and gold satisfied the law of conservation of money, they served as media of exchange for centuries. But there was a problem. Their amounts were too limited for the growth of a modern industrial economy.

The distribution of these metals in the Earth’s crust had nothing to do with the development of human agriculture, industry, commerce and trade. As these features of human civilization developed, the amount of silver and gold that our planet provides proved too little. The very features of silver and gold that made them a useful medium of exchange―scarcity and relative immobility (due to their weight)―made them unsuitable for a rapidly expanding global economy.

In our country, this issue first came to a head in 1896, when William Jennings Bryan sought and won the Democratic presidential nomination. The question was whether our government could issue paper money based on a promise to pay silver or gold, not just gold alone (which was and is scarcer.)

Bryan’s famous “Cross of Gold” speech favored this so-called “bimetallism.” It examined the issue through a glass darkly, in the rotund and metaphorical language of the age. But it made two things crystal clear. First, Bryan addressed his fellow Democrats’ fear that, if they supported bimetallism, the Republicans would tar them as abandoning conservation of money and turning the medium of exchange over to an undisciplined rabble. Second, Bryan made clear his view that continuing the gold-alone standard, by providing Eastern financiers with a monopoly over a too-scarce medium of exchange, would hobble the economic development of a huge, diverse and rapidly growing nation.

Here is Bryan’s famous peroration:
“If [the Republicans] dare to come out in the open field and defend the gold standard as a good thing, we shall fight them to the uttermost, having behind us the producing masses of the nation and the world. Having behind us the commercial interests and the laboring interests and all the toiling masses, we shall answer their demands for a gold standard by saying to them, you shall not press down upon the brow of labor this crown of thorns. You shall not crucify mankind upon a cross of gold.”

As often happens in hard-fought political battles, both sides were partly right. Bryan was right in thinking that letting money men continue their monopoly of a too-scarce medium of exchange would hobble commerce. There simply wasn’t enough gold to support our exploding trade and commerce during our nation’s most rapid growth.

But the Republicans had a point, too. Disconnecting money, as medium of exchange, from the scarcity of noble metals that Nature had decreed left it up to us imperfect humans to determine for ourselves what was money and how much of it there would be.

Eventually, Bryan’s view prevailed, but it put the principle of conservation of money up for grabs. The rest of human macroeconomic history is a tale of grappling with the unintended consequences of that change.


Conservation of Money: the Nuances

Bryan dreamed of a medium of economic exchange not limited by the natural distribution of scarce metals in the Earth’s crust. That dream would not be fully realized for another half century. In late 1945, after World War II’s devastation, the great powers signed the Bretton Woods agreement, permanently replacing the gold standard with a system of floating currency exchange rates and international financial institutions.

But in the interim, many of the awful things that our Eastern bankers feared in Bryan’s day actually came to pass. There were awful booms and busts, including the Great Depression. There was hyperinflation in Germany’s Weimar Republic. The economic agony that resulted led directly to the rise of Adolf Hitler and the Nazi regime. In the absence of an agreed and naturally limited (if scare) medium of exchange, nations manipulated their currencies, and many sought control over physical riches like the “black gold” of oil through military conquest. It exaggerates little to say that the most terrible war in history was not just a struggle over territory and ideology, but also a struggle for control over resources occasioned by the absence of a clear basis for international exchange and free international trade.

But enough of history. Today we have the World Bank, the International Monetary Fund, and huge electronic markets in which national (and regional, for the EU) currencies trade in the trillions (and sometimes in nanoseconds) every day. Virtually every nation of consequence (or region, in the EU’s case) has a central bank, which controls directly the amount of money there in circulation and indirectly the value of that money relative to the currency of other nations and regions.

The purpose of this extraordinarily complex system is to let us humans, not Nature, control the amount of money available in each separate economic entity, i.e., in the world’s various nations and the EU. The conservation of money still obtains, but it’s up to fallible human beings in each jurisdiction to enforce it. (More on this point later.)

The last century’s painful spasms taught us what happens when conservation of money breaks down. If there is too little money, commerce and trade suffer, just as Bryan understood. If control of natural resources and trade (through tariffs) makes some nations feel threatened, they may go to war. Stripped of their ideological pathologies, that’s precisely what Nazi Germany and Imperial Japan did. Economic conditions were a far more important motivator of that horrendous conflict than most historians admit.

It may be too much to say that scarcity of exchange was a dominant cause of World War II. But it is fair to say that it, combined with tariffs, protectionism, and military control of natural resources, was. The open, global free market of today, with its freely adjustable exchange rates (except for China), obviates those particular causes of war. At least we humans have learned something at the cost of 50 million dead.

But what William Jennings Bryan feared is only half the story. The scarcity of money against which he inveighed is a far less common phenomenon than plenitude.

Why? Well, to most of us, money seems like a good thing. Everyone wants more of it, especially the politicians, central bankers, private bankers, currency and securities traders, hedge-fund managers, and economists who now control how much there is. So there is an irresistible and very human impulse to violate the principle of conservation of money on the upside. The danger that Bryan feared turned out to be much less fearsome than its opposite.

We all know now what happens when there is too much money. Inflation results. Too many dollars chase a limited number of intrinsically valuable assets, such as food, clothing, housing, cars, airplanes, medicine and computers. So everything gets more expensive. People on fixed incomes (especially pensioners) get poorer because their fixed incomes buy less. People borrow too much because they hope to pay back their loans with cheaper currency as it inflates. Savings suffer, because everyone wants to spend money now, before it loses value.

This same phenomenon―too much money―works in two ways. When it happens slowly, we call it “inflation.” When it happens quickly and affects only a few assets, we call it a “bubble.” But either way, it’s a disaster. And either way there are much the same effects: some people get poorer, everyone borrows too much, savings suffer, and normal financial prudence goes out the window. The recent asset bubble in housing and mortgages nearly destroyed the world’s economy, and we may not be through it yet. Stay tuned.

What Has Happened since 2008

To understand what is happening now, you have to understand how we’ve kept things under control since Bretton Woods. Since then there has been no gold or other precious-metal standard to keep us on the safe path of conservation of money. Preserving this essential principle and avoiding inflation has all been up to us, i.e., the fallible human beings who control our national, regional (for the EU) and global financial systems. In our country, that’s the Federal Reserve Bank, nicknamed the “Fed.”

The most important thing to appreciate is how hard it is know what is the “right” amount of money to conserve. If you have too little, you can hobble commerce and stunt economic growth. That’s what William Jennings Bryan taught us with his “Cross of Gold” speech. But if you have too much money, you get inflation and asset bubbles. If these economic horrors happen in a powerful culture like Germany’s or ours, they can have terrible effects indeed. There are reasons why Japan and Germany (after China) are now the most prudent and cautious cultures with their money.

It would be wonderful if there were some simple equation, like Ohm’s Law in electronics, to calculate the right amount of money to conserve. Just collect the necessary data, put them in your computer, press a button, and voilá, you would know what to do.

But there isn’t. And even if there were such a formula, we wouldn’t have enough reliable data to use it. Every national economy―let alone the global economy―is just too complex. The National Oceanographic and Atmospheric Administration (NOAA), with its huge supercomputers, is doing a far better job of predicting global and regional weather, but even it can only do so a week or two in advance.

So what central bankers have done for half a century is a like a law-abiding driver cruising down the road with a broken speedometer. He wants to obey the speed limit, but he can’t easily tell how fast he’s going. He has to monitor his speed by watching indirect effects, for example, what happens to other cars. If he starts passing them, he slows down. If they start passing him and honking, he speeds up.

Just so, central bankers watch two observable indicators of proper conservation of money. The first is inflation. If the cost of everything starts to rise, they know to ease up on the gas pedal and reduce the amount of money and credit in circulation. If prices start to fall, the economy falters, and people become unemployed, they step on the gas.

The second indicator that central bankers watch is floating international exchange rates. This approach is more like the other cars in our broken-speedometer analogy. If people in other countries see your currency as less valuable, it probably is. That means inflation is nigh, because your currency will buy fewer things, at least abroad. If your currency goes up relative to others’, and you consequently have trouble selling your wares abroad, you may be conserving money too much and risking unemployment at home for lack of exports.

Preserving conservation of money without ever knowing exactly how much to conserve is an heuristic, seat-of-the-pants exercise, based primarily on these two indicators: inflation at home and currency exchange rates abroad. It is an art, not a science. (How China does it without one indicator—currency-exchange-rate signals that it blocks by its pegging its renminbi currency to the dollar—is another mystery entirely.)

But what’s happened in the last few years is something entirely new, which has complicated the process immensely. Until recently, central bankers controlled the amount of money under conservation, using these two reliable indicators. Because they controlled the sources of domestic currencies and the primary determinants of domestic credit, they had a pretty good idea of how much money and credit (a proxy for money) were in circulation.

Then along came so-called financial “innovation.” “Innovative” private financiers, entirely beyond the control of central bankers, created new forms of money. And they did so without a thought for the venerable principle of money conservation.

To understand this point, it’s helpful to review the evolution of money in human history. It all started with shells and beads. Then it evolved to gold and silver. All these things are tangible. You can see them and feel them. Even the paper money now still used is tangible. Clever modern technologies, including multicolor printing, specialized paper, holograms and watermarks, make paper money hard to counterfeit; but it’s still tangible.

In contrast, the vast amount of money in circulation today is not tangible at all. It’s entirely abstract. It’s electronic records in banks and brokerage houses. It’s signed agreements on ordinary paper and their electronic images: things like mortgages, car loans, business loans, and the few remaining stocks and bonds actually printed on paper.

You might not call these things “money,” but they are. They fit our definition of abstract instruments of economic value far in excess of their intrinsic practical value as paper, electronic records, or magnetic domains on a hard disk drive. So when our private-sector financial masters of the universe created the derivatives that nearly brought the entire global economy down, they were, if effect, creating a new form of money.

Indeed, that was their very purpose. They “sold” their new form of money to the authorities (at least those who were paying any attention at all) with assurances that these new instruments would create greater “liquidity” and thereby facilitate mortgages and home purchases that otherwise would not occur.

Isn’t “liquidity” just a fancy, modern term for “money”? The derivatives the innovators created and sold were therefore to be a new form of currency, used to increase commerce in housing and related financing. In effect, the private financial innovators were selling the authorities a form of fool’s gold with which to expand the money supply, without regard to conservation of money.

To be sure, the new form of money was highly specialized. Only financial institutions could use it as a medium of exchange, and it pertained primarily (although not exclusively) to housing and mortgages. You couldn’t use this new form of money to buy a hamburger, tank of gas, or wide-screen TV.

But the new money’s specialized character was only a small saving grace. If the private bankers had issued new generalized financial instruments in the same amount, we would have had generalized hyperinflation to match the Weimar Republic’s, followed by a crash to rival the Great Depression. As it was, we just had a hyperinflated bubble in real estate and mortgages, whose bursting caused multiple effects on credit markets that nearly (but not quite) brought down the global economy.

What happened next confirms this analysis. Through the Federal Reserve, our central bankers acted exactly as you would expect them to react to a flood of new money that grossly violated the principle of money conservation. They quarantined it.

They did so by buying a controlling interest in the failing banks and other financial institutions (such as AIG) that owned it and putting it aside. They could do so at a reasonable price because the flood of new money had upset the economic system, no one knew what it was worth, and many suspected it was worthless. At the same time, the Fed “bought off” most of the “owners” of this new money (the banks, both investment and commercial) by opening the Fed money window at a near-zero interest rate, giving them free money with which to restore their profit margins through less risky business.

A second way to appreciate how the derivatives amounted to new money is to look at the numbers. Estimates of the total face value of derivatives involved in the meltdown range as high as several hundred trillion dollars. (Yes, that’s trillion, with a “tr.”) In contrast, the total value of real estate in our nation is about $42 trillion. Talk about leverage! How else would you describe novel abstract financial instruments that created “value” amounting to several times the value of the underlying assets but as “new money”?

No wonder the Fed doesn’t want to be audited! Its leaders know that when the numbers come out, two facts will become obvious. First, the private sector, entirely without adult supervision, created a parallel financial universe that amounted to a specialized form of alternative currency. And it did so without regard to the universal principle of conservation of money that had occupied and troubled macroeconomists and political leaders since long before William Jennings Bryan.

Second, once the Fed had failed utterly to foresee, supervise or avoid that debacle, it picked up the pieces by quarantining the new money so it could re-establish the principle of money conservation, quietly and without much public notice. But in an economic system in which private property and private contract are sanctum sanctorum, it had to bribe the owners of the new money, to the tune of tens of billions of dollars, in order to do so.

The public surely won’t like this story when it comes out. Politicians of both parties will have a field day, pointing their fingers of blame and recrimination. But the fact is that, once the debacle occurred, the Fed did well in quarantining the toxic new money and re-establishing the principle of money conservation. The alternative would have been a whole new specialized currency totally divorced from real economic value, and therefore from reality—a “loose cannon” in the financial system like those that repeatedly plagued the nineteenth century.

Conclusions

Unlike the derivatives themselves, the moral of this story is simple. We humans no longer use shells, beads, silver, gold or even paper as our principal medium of exchange. We use abstract intangible records in various computers and electronic systems. These records include every form of agreement and instrument capable of occurring to the fertile imaginations of people motivated by the prospect of obscene riches. All of these intangible records can and do serve the same purpose as money and therefore can become indistinguishable from money in economic effect.

Throughout human history, the trouble with money has been regulating the amount in circulation so as to obey the law of conservation of money. That amount must be just right, neither too much nor too little. What is “just right” depends on the society’s state of economic development. It is constantly changing and is devilishly hard to determine in the abstract.

Like driving that car with the broken speedometer, setting the right level of money is a job for expert, disinterested public servants with superb education and incorruptible character, free from political influence and private self-interest. In short, it is a job for central bankers and no one else. In our country, that’s our Fed.

To the extent the current financial reform legislation fails to incorporate these principles, it will only postpone the next financial catastrophe. It could be a double dip of this “Great Recession.” It could be another burst bubble and crash a few years down the road. With global financial systems so stretched by the present predicament, it could even be a second Great Depression.

Whether any of these disasters will actually happen, no one can tell. But one thing is certain. Leaving the venerable principle of conservation of money in the hands of self-interested private parties oblivious to that principle is no way to handle a monetary system based on abstractions, whose only real currency is the trust and confidence of the people and their international trading partners. If that dereliction of central-bank duty happens again, another financial catastrophe is virtually certain. The only question is when.

To avoid such a second catastrophe, Congress must give our Fed all the authority it needs. It should have the power to preclude and to regulate the development of new money equivalents (i.e., new financial instruments) of any sort. It must have the power to forbid their use without its own prior approval, in order that it be able to perform its vital stabilizing role in maintaining the conservation of money.

The Fed should also have the power to require the terms of any new monetary instrument to be standardized, published on the Internet, and observed scrupulously by all parties engaged in commerce. It should be able to monitor the total amount of new instruments outstanding, find out who owns them, and have the power to suspend or curtail their use. Finally, the Fed should be required to analyze and report publicly, at least semiannually, the effect of any new instruments on the conservation of money and the financial system generally.

In a national economy that recently attained the dubious distinction of deriving 41% of its profits from the financial sector, we don’t need new types of money. What we need is to calibrate the money we’ve got more effectively to our economy, applying the principle of conservation of money that we began to understand 114 years ago, with Bryan’s “Cross of Gold” speech.

People who grow things, invent things, make things, and perform services create economic value. Money is just a means of trading in the value they create. It is a tool, not an end in itself. Any nation that makes money an end in itself―let alone ignores its conservation and therefore its relationship to real value―is begging for historical oblivion. And as our recent catastrophe amply demonstrates, such nation is likely to realize its death wish sooner and more suddenly than anyone can imagine.

The President and BP’s Disaster

Some readers may be disappointed that I have not yet commented on the BP Oil Spill. The reason is simple: I have little to say. The Spill is a terrible, avoidable tragedy. The longer it goes on, the worse it gets. The silver lining in the cloud is that it might, just might, get more people to re-examine a stupendously stupid national energy policy that has lasted thirty years too long.

I hate to seem uncaring, but the Spill is at worst a regional tragedy. Failure to solve our financial problems, as discussed in the post above, would be a national or global tragedy. It could put us into a double-dip recession, a replay of the Great Depression, or permanent third-world status. So however much it hurts to see innocent birds dying in chemical goo, whether and how soon we get financial reform right is infinitely more important than the Spill to our collective future.

What did evoke a strong response from me was Charles Blow’s column in the New York Times today, recommending that the President improve his “spin” game by getting emotional. Here’s my reaction to that suggestion:

I am sick and tired of hearing and reading people beat up on our President, even with the best of intentions.

Two months ago I was in a foreign country, proudly telling my colleagues that I thought we might have a chance to avoid becoming a third-world country because bare-minimum health-insurance reform managed to pass the House by three votes. Skilled, well-meaning politicians (including four other presidents) had tried for a century, but only the President’s leadership succeeded.

In the last two months alone, the President has had to deal with the following crises, in rough order of importance:

1. A near financial meltdown in Europe, still ongoing, occasioned by fear of default by Greece, possibly followed by Portugal, Spain, Ireland and Italy;

2. The sinking of a South Korean ship by a sick regime headed by a deranged leader, who has nuclear weapons and appears willing to do anything to insure his son’s succession as the world’s worst tyrant;

3. A clumsy attempt by Brazil and Turkey to insert themselves into longstanding, delicate efforts to solve the “Iranian question;”

4. An increasingly precarious political situation in both Afghanistan and Pakistan, as corrupt, incompetent and extremist elements (including the Afghan president and his brother) push back against progress made with our blood and treasure;

5. The complete systems failure of our electronic securities markets, in the so-called “flash crash,” which after several weeks no one has come close to explaining; and

6. An attempt by an inept, homespun terrorist to blow up Times Square.

It’s not as if the President is coasting along and taking it easy. In a mere sixteen months, his hair has started to turn grey.

And with good reason. Virtually every institution in our nation, with the possible exception of our military, has been neglected, misled or mismanaged for thirty years. Now the bill is coming due. Yet there is still a substantial minority of people (and a filibuster-capable minority in Congress) who think all this is government’s fault, and that everything would be fine if we just drowned our government in a bathtub and turned our affairs over to benevolent and supremely competent corporations like BP.

As for the oil spill itself, Coast Guard Admiral Thad Allen―self evidently the most intelligent and capable on-the-scene, on-screen manager―has said the federal government has no assets and no expertise to stop the oil flow. What part of no assets and no expertise don’t people understand? After thirty years of letting Big Fossil control our nation’s energy policy for their own profit, what would you expect?

And you expect our President, who runs just one of government’s three branches, to solve all this in sixteen months? Get a grip!

Already the President has apologized for not doing the only thing that any president could have done, namely, clean house at the Minerals Management Service more quickly. He apologized even without any strong evidence that his doing so would have made any difference.

The oil spill is indeed a terrible tragedy. But if you want someone to blame (besides BP and MMS), try looking in the mirror. Every one of us is guilty for failing to drive less, refusing to buy more fuel-efficient vehicles, and failing to demand a rational long-term national energy policy, even if it might cost a bit more in the short run.

As for emotional tone, please, please watch a few British movies. Maybe they’ll help you understand that people with reserve, like the President, don’t have to tear the scenery to care deeply.

UPDATE: 5/30/10 Today, the New York Times' columnists all piled on. Maureen Dowd, Frank Rich, and even Tom Friedman (although he had other points as well) all seconded Charles Blow. They all averred that things would get much better if the President would just find his inner Hulk and stomp and shout a bit.

Then the followers of Glenn Beck, the member of Congress paid and threatened to tow the party line, the ideologues who’ve wanted to drown government in a bathtub for thirty years, and the folks who dislike the President (consciously or unconsciously) for no other reason than the color of his skin will suddenly wise up and listen up. Are these pundits serious?

By now it should be obvious to anyone who can think straight that a failure of government to regulate and manage was a primary cause of our economic meltdown and an important contributing cause of the Great BP Oil Spill. Yet Big Banking and Big Fossil want folks to believe that things would be much better if only government were even less intrusive than it has been for a generation.

As far as I can tell, the only people who believe that are people (including Republican members of Congress) who’ve been well paid to believe it, people who’ve been taught it for thirty years and are too old or stupid to think for themselves, or people who tend to follow the guy (it’s always a guy) with the most certitude and the loudest voice. Unfortunately, there are a lot of such people, and the Limbaughs, Becks and Pauls of the world are getting an unprecedented number of them to vote.

For better or for worse, we live in a democracy, and there are no intelligence tests for voting. So the only way to change our rapidly declining national glide path is for more people to wise up. If a global financial meltdown and the worst oil spill in U.S. history won’t accomplish that, then it will undoubtedly take a series of even greater shocks.

The President can abandon his true character and stomp and shout all he wants, but only more hard experience will change these stubborn minds. Unfortunately, the rest of us will have to suffer right along with them.

So get ready for a double-dip recession, whose shape will match the monicker of our worst president and the one who reduced right-wing ideology to patent absurdity for anyone who can think: Dubya.


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21 May 2010

The Korean Philosopher’s Dilemma


[For an update on Tuesday, May 25, click here.]

Of all the places on Earth where another war could break out, the Korean Peninsula is the most dangerous. There are several reasons for this.

The first is the threat of nuclear war. Nuclear weapons under control of an erratic and unstable leader like Kim are the world’s worst nightmare. He has threatened war repeatedly. He has even threatened first use of nuclear weapons. (Iran has done neither.) Now he has risked provoking war by sinking the South Korean Navy ship Cheonan.

Even without nuclear weapons, the Korean Peninsula would be the world’s most dangerous place. Nowhere else on Earth have inimical armies of so many soldiers (at least a million), faced each other over such a short distance (the so-called “Demilitarized Zone”) for so long a time (56 years since the “Armistice”). Nowhere else does a democracy that has made such an extraordinary success in peaceful commerce face a four-million person starving army fed bellicose propaganda for half a century.

The Korean Peninsula is also unique in what is at stake. In many respects, South Korea is the Athens of Asia. It has made a successful transition from authoritarian rule to real democracy. It has wrought the world’s greatest “economic micracle” since Japan’s, rising from the ashes of war to become a global leader in cars, shipping, semiconductors and consumer electronics. Everyone who owns a Hyundai or a Samsung or LG camera, TV or screen can personally attest to this economic miracle.

Seoul is a gem of a city, particularly its newer parts. I have described its grandeur and charms in an earlier post and won’t repeat the description here. But I suspect that Seoul is as impressive in its modernity, size and prosperity as any Chinese city, the more so because it represents the fruits of real democracy.

Seoul reflects all that the South Korean people have achieved in half a century. But it is literally under the gun. The DMZ is so close to Seoul, and the North has so many conventional rockets aimed at Seoul from the nearby DMZ, that it exaggerates nothing to say that Seoul has a gun to her head. The world has not seen anything like this since Athens and Sparta two millennia ago.

The final and most important risk factor is timing. People tend to forget the horrors of modern warfare, especially when life is as short and hard as it is in North Korea.

Less than sixty years ago the Korean Peninsula became a vast butcher shop. North Koreans old enough to recall the carnage would have to be at least in their mid-sixties, maybe closer to 70. (Ten years old―the minimum age of reason―plus 56 equals 66. Reaching puberty during the war would put the age closer to 70.) With life span so short and so many purges by an erratic leader, it’s safe to assume that few in North Korea’s ruling class, let alone its middle ranks, have clear memories of that long-ago war.

Why is that important? Because clear, personal memories of war’s horrors make leaders cautious. In 1962, Nikita Khrushchev and his colleagues made a sensible deal with us to avoid nuclear Armageddon; the devastation of their country a mere seventeen years earlier was still fresh in their minds. Despite all its bluster and threats, Iran has made no serious moves to start a war against Israel or anyone else. No doubt one reason is freshness in memory of its war with Iraq, thirty years ago, in which at least half a million Iranians died.

But North Korea’s present military and political leadership have little personal recall of the war that divided their peninsula. Kim himself was born in 1941 and was only thirteen when the war ended. He was also the privileged son of a modern (so-called “Communist”) Asian emperor. His chief advisers, military and political, likely have similar histories. Lack of personal experience of war creates temptation to military adventures like the sinking of the Cheonan, as leaders seek imagined advantage and glory with no personal understanding of modern war’s industrial-scale carnage, devastation, suffering and death.

So if you had to rate the world’s hotspots on a scale of one to ten, the Korean Peninsula would fill the first four places.

Who is responsible? The answer is obvious: Kim Jong Il and a few dozen senior military and political operatives. While holding North Korea’s 24 million people in a virtual prison camp, they threaten a peaceful, prosperous society of nearly 49 million people with imminent destruction. And they use that threat to extort things from the world: acquiescence in their nuclear adventures from everyone, plus oil and rice from China.

This situation is a philosophy professor’s hypothetical come to life. Should a few dozen people, progenitors and captives of a perverted slave culture, be allowed to threaten the peace, stability, prosperity and happiness of some 73 million, and indeed the world? If there is no justification for murder here, there never is.

Of course there is no merit in provoking a war to prevent one. Today’s cautious approach of the South, China and the six parties is warranted. But there may be a way to provide deterrence, as well as perhaps cut short any war that starts by miscalculation.

We have a strong rule against assassinating foreign leaders. But every rule has exceptions. Our President George H.W. Bush reportedly tried to assassinate Saddam after he invaded Kuwait. Saddam reportedly returned the favor―an act that undoubtedly served as psychological, if not official, motivation for his son’s foolish invasion of Iraq.

Neither assassination attempt succeeded, but the son’s war eventually caused Saddam’s death indirectly, through an Iraqi judicial process. The world has a clear image of Saddam, unshaven and unkempt, crawling out of a hole in the ground surrounded by American troops.

That scenario will never occur in Korea. We have neither the money nor the troops to invade North Korea successfully. And in the final analysis, China probably wouldn’t let us.

But we do have the most accurate and effective unmanned airborne weapons in history. We’ve got medium-range, submarine-based and intercontinental ballistic missiles that Kim can only dream of. We have cruise missiles. We have the Predator drones, which are proving so effective in Waziristan. Many can carry cluster weapons, bunker busters, air-to-air missiles, and short-range, low-yield nuclear weapons.

What would happen if we simply announced a new policy: if North Korea begins a war, on whatever alleged “provocation,” Kim and his top leadership immediately and automatically become fair game, wherever they may be, including in an airplane or a public appearance, anywhere in the world?

Any such announcement should make clear that there is no change in our general policy against assassination. But Kim is a pathological case, in every sense of that word. Our announcement would make that point clear and repeatedly assert the uniqueness of this case.

Right now, our deterrence lacks credibility. Although we have the capability, no one believes that we will incinerate Pyongyang with a 50 megaton thermonuclear warhead if war starts. And they’re probably right: too many innocent people would die, and too many nations have or are developing nukes to weaken the taboo against using them.

But what if we declared at the outset that the purpose of any retaliation would be killing the perpetrators, not their innocent internal victims? And what if we sent a carrier task force to patrol the Japan Sea, plus a few specially-outfitted nuclear attack submarines, to make our threat credible? If nothing else, that threat would keep Kim and his minions cowering in bunkers for the duration of any conflict, disrupting command and control. If might also make Kim’s underlings and successors more amenable to reason and perhaps more interested in mutiny.

Why wait for actual war crimes to act? Why not declare now what will be a capital crime―starting a war―and impose the death penalty in advance, executable immediately, any time the criminals are vulnerable? Kim and his minions may scoff for public consumption, but with Taliban dying almost daily in Waziristan, they may privately think twice.

Update: Cracks in the Wall (5/25/10)

Today Kim pre-empted South Korea’s imminent informational and economic sanctions. Late last night, Korean time, he imposed an unprecedented freeze in relations with the South. His freeze did not mention (or apparently include) the private South Korean corporations that employ an estimated 40,000 North Koreans in a near-border industrial park.

Two goals of Kim’s freeze are obvious. By “striking first,” he is trying to establish an internal narrative that the coming economic hardship (from the South’s sanctions) is a necessary austerity measure in reaction to the South’s “aggression.” While that narrative sounds absurd to us, it may fly with the North’s serf population, which has no access to outside media and is undoubtedly unaware of the South’s claim that the North recently sank the Cheonan.

Second, the freeze intensifies the North’s perennial mood of bellicose paranoia, which Kim and his father have fostered to cement their twisted rule from the beginning. That mood makes Kim’s serfs, like the horse in Animal Farm, complain less about their blinders and work even harder on less food. As I have noted before, the current goal of intensifying the fear is to let power pass to the Dear Leader’s anointed prince without notice or objection.

The Wall Street Journal’s experts discern a third goal of Kim’s: discrediting the increasingly hostile conservative regime of South Korean President Lee Myung-bak, in what the Journal’s experts portray as something of a personal feud. I think that motive is overblown. It would be hard for the North to “discredit” the South’s leadership more than to convince its serfs (as it has tried to do for decades) that the South is on a hair trigger, waiting to invade at the slightest provocation or sign of weakness. As for attempting to influence the South’s elections, believing that the South’s free and well-educated voters will not see through this obvious ploy insults their intelligence. It’s hard to believe that even Kim is that stupid or deranged.

The least-discussed cause of the North’s “pre-emptive freeeze” is by far the most important. The South has decided to resume long-discontinued FM radio broadcasts northward, as well as loudspeaker broadcasts ostensibly audible ten to fifteen miles beyond the DMZ.

This measure has made Kim especially furious. He has authorized his soldiers to shoot out the loudspeakers. But it’s not so easy to shoot down radio waves.

It’s beyond my comprehension why these broadcasts were ever discontinued. Three things have allowed Kim and his father to maintain 24 million people in a state of virtual serfdom for several decades: (1) totalitarian methods, including relentless propaganda, (2) modern weapons, now including crude nuclear devices, and (3) a nearly complete blackout on news from the outside world.

The North’s news blackout has no parallel in the world today, when even Iranians watch Al Jazeera and CNN and surf the Internet. It is unprecedented since Nazi Germany and the height of the old Soviet Union’s Stalinist terror. In the age of global telecommunication, North Korea remains hidden behind an iron curtain that not even the last century’s worst tyrants could match. Why?

One of the greatest miracles of the twentieth century was the fall of the Soviet Union without a shot fired. What made that miracle possible was decades of straight news, plus entertainment, broadcast into Soviet territory by the Voice of America and Radio Free Europe.

Despite clumsy Soviet attempts to “jam” these broadcasts, they informed the Soviet intelligentsia and ruling class just how ridiculous Soviet propaganda was. By the late 1980s, everyone of consequence inside the old Soviet Union knew just how much more prosperous and happy the West was, and how little (apart from its own paranoia) it bore evil intentions toward the Soviet (now Russian) territory or state. (I have direct personal knowledge of these points, which I’ll make public when I drop my anonymity.)

Information is power. Accurate information, which subsequent events corroborate, is self-verifying. These truths, plus our nuclear deterrent, were what caused the Russian people to reject Soviet lies, peacefully and irrevocably. The same thing will work in North Korea, given enough time.

Kim is smart enough to know this. That’s why he’s tried to label news broadcasts directed northward as acts of war. But Kim has threatened war so often that it’s hard to take him seriously. Now the South’s leaders have apparently decided to call his bluff.

We Americans, whose technology created the Internet, commercial satellite communication, and the global cell-phone revolution, should help in every way we can. The surest way to keep Kim’s twisted regime from passing to yet another generation of imbecile dictators is to open the North’s serfs’ eyes and ears. Whatever our present state of national decline, we know how to do that.

Kim is old, sick and weak. His son, young and inexperienced, has not yet entrenched his power, or Kim would not be playing brinksman to seat him. The South’s leaders, who have the most at stake, have decided to go forward. Apart from Kim’s death, their plan to give the serfs a glimpse of life outside their castle walls is the cheapest, most effective, most humane and least risky way of resolving the Korean philsopher’s dilemma.

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18 May 2010

Coming Unglued


[For an update on May 20, 2010, click here.]

Remember Doug Adams’ Hitchhiker’s Guide to the Galaxy? In it, an advanced species programs a monstrous computer to calculate the answer to “life, the universe and everything.” After an eon or so or continuous computing, it spits out the result: “42.”

Adams’ masterpiece was the first attempt to combine humor and science fiction. Yet oddly enough it got the right answer, within about two percent. Today the real answer to life, the economy and everything is forty-one, not forty-two.

What’s forty-one? That’s the percentage of all US business profits that our financial sector reached, for the first time, this decade.

You read that right. Now think about it. Up to two-fifths of all profit in the entire US economy now come from lending or manipulating money or proxies for money like stocks, bonds, futures and derivatives. Only 59% comes from productive enterprise like growing food, making clothes or shoes, building houses, or assembling cars, planes or computers.

When our species first made the transition from shells and beads to precious metals like gold and silver, money was supposed to be a medium of exchange, a facilitator of trade in things with real value. Now up to two-fifths of profit come from working with the shells and beads.

It is as if 41% of workers in a factory got paid for sitting and fondling their machines. But even that analogy is too tame. As we all know, the money fondlers get paid much better than most of us. If profits are riches (which they are!), then we Americans collectively bestow a big share of our national riches on money fondlers. Shades of Silas Marner!

What do those people do to deserve that level of remuneration? Well, some of them lend money to businesses that do real things. But as well all know from reading the news, that’s not the part of finance that makes big bucks. What makes big bucks falls under two headings: swindling and gambling.

The public and our legal system are slowly waking up to the swindling. I don’t know how you define swindling, but here’s how I define it. Swindling is knowingly selling something at a higher price because the buyer has a misconception or insufficient knowledge to evaluate the sale. It’s taking advantage of what you know that the buyer doesn’t. A classic example is selling a used car for a higher price because the buyer doesn’t see a hidden defect.

Let’s take a few recent examples. You buy health insurance with a pre-existing-condition exclusion. You read the brochure, and it convinces you the insurance company will be there if you get sick. But you’ve had a few visits to the doctors and a few medical tests over the last few years. You don’t know that, if you get sick, the insurance company will go over all those visits and tests with a fine-toothed comb, looking for any hint of a pre-existing condition as an excuse for refusing to insure your illness. This particular swindle will soon be history, courtesy of our President, but a whole lot of people called him a socialist or Nazi for ending it.

Closer to our financial meltdown is Goldman, Sachs’ alleged derivative swindle. The firm created unregulated and horrendously complex financial instruments whose values ultimately depended on the success of thousands of individual home mortgages. It invited people to bet that those values would stay constant or go up. That sounds like a mere gamble. But the SEC says Goldman didn’t tell buyers that someone betting on the other side had designed the derivatives to go down. If the SEC can prove its case, that’s a swindle.

Goldman is hardly alone. As lawyers and regulators dig through the huge mass of records of our financial near-collapse, a striking picture is emerging. The erstwhile pillars of our financial sector―names like Bank of America, Bear Stearns, Citigroup, Merrill Lynch, Morgan Stanley, etc.―stand accused of swindling, or creditors or aquirers trying to feed off their carcasses claim that these firms themselves were swindled.

So far, these claims are mostly unproven allegations. But so much smoke without fire would flout history, human nature, and common sense. The picture that regulators and lawyers are painting is of a dog-swindle-dog financial culture, devil take the hindmost. And the devil almost did, until we taxpayers bailed them out.

The gambling is much, much easier to see. Why? Because that’s what firms accused of swindling fall back on. Remember Goldman’s public defense in the SEC suit? Stripped to its essence, it was: we weren’t swindling; we were running a gambling parlor. We got A to bet that housing would survive; we got B to bet that sub-prime mortgages would tank. What’s wrong with that? Isn’t gambling as American as Las Vegas and apple pie?

Now look at the stock markets lately. Once in a while, a stock will move because something real happens in a firm’s business. Boeing’s stock falls when its Dreamliner schedule gets delayed yet again, or when engineering speed bumps are publicly reported. Apple’s stock goes up when its much-hyped iPad comes out, and again when a million sell in a few weeks.

But most of the increasingly volatile market fluctuations have absolutely nothing to do with the merits or accomplishments of individual businesses. They are “bets” on the general economy or a sector of it. They are gambles.

Greece, with an economy 2% of ours, gets a cold. The whole world sneezes, and the markets tank. The EU comes up with a trillion dollar bailout, and the indices fly up, overshoot, and oscillate. People gamble on the volcano in Iceland. They gamble on the BP oil spill. They gamble on the weather, the pace of global warming, and political reaction to it. They gamble on the outcome of patent disputes that not even the lawyers trying them dare to call in advance.

In all these things, the line between gambling and swindling is a thin one. The SEC says it’s swindling to sell a bet to B designed by A to go south. But is it swindling for a currency trader to make a bet based on decades of experience and mainframes full of historical and current data, and to sell the other side to a rube who’s read about currency trading in Money magazine? That may depend on the eye of the beholder.

Whether you call it gambling or swindling, we’re not done yet. Whatever you call it, it’s coming at us faster, bigger and fiercer. Because now the gamblers and swindlers needn’t act personally. They can program computers to do their gambling and swindling for them. And with (so far) lax regulation, they can hook those computers together in automated “markets,” which can “trade” millions of times per second. We can all now gamble on financial instruments at the speed of light.

Anyone who’s ever dealt with a gambling addiction knows what to expect. Before real reform occurs, things have to come really unglued.

The first shudder of our ship coming unglued was the “flash crash” of May 6. In a mere hour, the Dow index dropped about 1,000 points, and then recovered a bit. Some stocks lost 90% of their values during the hour-long crash.

It’s now nearly two weeks later. As the Wall Street Journal reported today, “SEC staffers are combing through thousands of trades” during the crash, by hand, so far without a clue as to what caused it.

When I read that, I laughed out loud. The average day on Wall Street sees billions of transactions. A billion is a million thousands. So if it took two weeks to get this far, it will likely take 500,000 weeks to get to the bottom of things. Our descendants will have an answer in the year 11,625.

The public, the traders and the regulators have no mental conception of the speed of computers, the amount of data they can handle, and the rapidity with which things can go awry. And the gamblers don’t brook any interference with their computerized gaming. When the SEC sued Goldman, the markets went down. Today, when the clueless regulators seriously proposed “circuit breakers” and the Germans imposed limitations on short sales and other gambling in the financial industry only, the Dow lost 115 points.

Free-market fundamentalists have teamed up with the gamblers and swindlers. “Let the markets go!” they scream. “Markets are never wrong; limiting them is. Let the game roll on!”

In this uncertain climate, when gaming and swindling have reached as high as 41% of national business returns, it is no wonder that women stand against the tide virtually alone. Evolution has given them the sad duty of feeding the kids when men with grandiose schemes come home empty-handed, or don’t come home at all.

Today, women like Congressional Oversight Panel Chair Elizabeth Warren, SEC Chair Mary Schapiro, and FDIC chief Sheila Bear are all that stands between us and our computerized, unregulated financial system coming totally unglued. Only if they stand firmly in the doorway, pointing out the way to Gamblers Anonymous and its twelve-step program, do we have a prayer of bringing our financial sector’s huge and wildly fluctuating share of our national business profit back to productive use.

Update (5/20/10): Today the Senate passed a financial reform bill. Two of the four Republican Senators voting for it were women, namely, Maine’s two female senators, Susan Collins and Olympia Snowe. (The other two were men, Scott Brown of Massachusetts and Chuck Grassley of Iowa.) The number of women in this tiny group of enlightened Republicans is way out of proportion to the number of female senators, let alone Republican female senators.

I think this is no accident. Women seem to get the fact that a national economy like Las Vegas is not sustainable. Men seem to fall for their gambling’ buddies braggadocio, the line that we need all the gamblers and swindlers lest they go offshore and enrich other nations. I say let them go (if anyone else really wants them), and let a bigger chunk of that 41% of profits go to people building our Dreamliners, iPads, windmills, solar cells, nuclear power plants, and Chevy Volts.

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08 May 2010

“Intelligent Design” and Engineering: A Tale of Orwellian Word Theft


By itself, the term “intelligent design” is neutral and innocent. It means no more than a plan for something made by someone smart.

A foreigner who acquired English late in life could be excused for mistaking the term’s current meaning. He might think it describes the acts of engineers: people who design our cars, planes, highways, computers and software. He might think it connotes the work of an architect or draftsperson.

An especially insightful foreigner might even think the term describes the work of enlightened politicians or government administrators. When they use economic learning to craft new laws that exploit people’s natural, selfish incentives for the greater public good, isn’t that “intelligent design”?

Our Founders thought so when they wrote our Constitution. For the first time in human history, they designed a nation on rational principles. They built in freedom of speech and religion, the presumption of innocence, the promise of equality before the law, human rights and limited government. And they carefully calibrated checks and balances to keep bullies and tyrants in check. Our Founders were unabashed social engineers.

When we celebrate our Constitution on the Fourth of July, we will celebrate our Founders’ intelligent design. We will recall their social engineering of an entire society, the most successful yet in human history (although now in clear decline). We will laud the intelligent design of men, not God.

On hearing the term “intelligent design” for the first time, a foreigner to our culture could be excused for thinking about all that. But of course that foreigner would be wrong.

In cultural context, the term “intelligent design” now refers to a single thing. It connotes a politico-religious theory that evolution is wrong or unproven and that we―the human race―were designed by some supernatural Deity, just as an engineer at Toyota or Hyundai might design a car. Let’s call this meaning “Intelligent Design,” with capital letters.

Leave aside for a moment the philosophical debate. Leave aside the fact that believers disparage Charles Darwin’s work and its thousands of practical legacies, including our understanding of how bacteria develop antibiotic resistance and evolve into “superbugs.” Leave aside the fact that, in so doing, believers in Intelligent Design belittle one of the greatest collective achievements of human civilization: real understanding of biology and our own origins.

We’ll return to some of these themes a bit later. But for now, let’s keep our focus on words.

How did the neutral, positive phrase “intelligent design”―apt for any act of good engineering, social or otherwise―come to connote a religious view of reality based on faith and little else? Our country’s very plan, our Constitution, is itself a product of intelligent design by humans. So are our airplanes, cars, miracle drugs, computers, software, roads, bridges, TVs, radios, and the Internet. How did the radical right steal the phrase for an unproven religious theory, thereby removing it from the things we see, feel, use and rely on every day?

Right-wing propagandists are hardly masters of history, science, logic or math. But they are certainly masters of philology, the science of the meaning of words.

You might call their central weapon “applied philology.” They can take a positive word like “liberal,” which once meant open, tolerant, enlightened, generous and compassionate. In one generation they can turn it into an image of a promiscuous, atheistic, cowardly, drug-sodden freeloader.

They can take a movement like Nixon’s “Southern Strategy,” which was intelligently (and diabolically) designed around racism and regional resentment. Then they can“rebrand” it as a “Tea Party.” In so doing, they can expunge the stench of slavery and the Civil War and capture the positive aura of Northern Massachusetts, our most progressive state, and our Founding.

They can transform an adjective like “Democratic” beyond recognition. Not ten years ago it referred to a member (or the platform) of one of our two political parties, with neutral or positive connotations. Without anyone seeming to notice, they substituted the harsher and jarring noun, used as an adjective, thereby converting the party’s image into a barely concealed epithet: “Democrat.”

The greatest word theft was of “government.” In my childhood the word meant safety, stability, confidence and security. Government had just brought us through the Great Depression and our greatest war. It was developing an intelligent strategy of deterrence and containment, which would resolve a worldwide struggle with the Soviet Union peacefully. Government would go on to develop worldwide commercial air travel, tame polio, eliminate smallpox, create a universally admired system of higher education and research, put men on the Moon, and create the Internet and release it for commercial use.

Despite these monumental achievements, right-wing propaganda managed to convert “government”—our own democracy—into an inept, stupid, bumbling, incoherent, big-spending idiot. Government did make some big mistakes, including the War in Vietnam, but it didn’t really change much. What changed was people’s minds and the images in them. The government that had saved them from economic collapse, several different tyrannies, and dread diseases, and that had given them collectively the highest standard of living in human history, became their buffoon and their enemy.

This astounding transformation occurred through the miracle of right-wing propaganda and word theft. Now for many the word “government” is no longer a descriptive noun or adjective. It has become an epithet about which clear thought is impossible.

In politics words are weapons. They are most effective as weapons when the target doesn’t see them coming. That is precisely what is happening to our intellectuals. Not only don’t they resist this “rebranding” of common words and concepts basic to our heritage. They are complicit in it. Why? Because it falls below their radar.

Intelligent people, let alone great thinkers, think in concepts. To them, a word is like a label on a box. What matters is what’s inside the box, not the label. Their ability to think in concepts aids their acquisition of foreign languages, their development of leaps of imagination, and their own efforts at intelligent design.

So when someone changes or removes the label―no matter what their motive―smart people hardly even notice. With Shakespeare, they believe a rose by any other name would smell as sweet. They focus only on what’s inside the box.

But right-wing propagandists are smarter in one respect. They understand that most people are not intellectuals. They know how many never open the box to examine what’s inside, but just read the label.

Control the label, and you control the concept. Control the concept, and you control the thought. Control the thought, and you control the mind. That’s the right wing’s Orwellian formula.

The “rebranding” of words is one of the most powerful and effective tools of propaganda ever conceived. Most of us smart people hardly noticed. It is so effective that people can call a president they dislike (mostly because of his mixed race) a “Nazi,” “Communist” and “fascist”―sometimes even in the same breath.

The President’s detractors don’t even notice the logical contradiction. Ignorant of history, the don’t realize that these groups fought each other to the death, in the millions, during the last century. The logical contradiction inside the box doesn’t matter, either to them or to their puppet masters, as long as the label on the outside has a negative connotation.

So what does all this have to do with Intelligent Design and engineering? Plenty.

I mentioned social engineering first because our right-wing wordmasters have made that phrase pejorative, too. But our Founders knew exactly what they were doing, and their box was full of social engineering. That label didn’t appear on the box because it didn’t exist in Colonial times. But the concept was there, and our Founders enthusiastically endorsed it.

Engineering of all kinds―physical and social―was and is what has made our nation great. We tamed the wilderness by agricultural engineering, turning forest and prairie into field and pasture. We mastered the size of our huge new land with engineering, first of canals and waterways, then of railroads, and more recently of interstate highways, aircraft, and the Internet. We beat our enemies in the world’s greatest war by engineering the best weapons, including the very first nuclear weapons. We conquered the world’s greatest scourges, including sepsis, polio, diphtheria, tetanus, typhoid, smallpox and cholera, with engineered vaccines, antibiotics, and proper hygiene and sanitation. We tamed the Mississippi and its horrible diseases (including yellow fever) with locks, flood gates, levees, swamp drainage, and insecticides. We made our lives more healthy and comfortable and less smelly with intelligent design of artificial heating and air conditioning, flush toilets, and modern plumbing. These advances―among so many others―were products of human engineering, human intelligent design.

As with physical engineering, so with social engineering. Our forebears discovered early on that markets work better than monopolies, so we engineered our national economy based on free and open markets. We engineered our legal system, with antitrust law and intellectual property, to foster the competition and innovation that free markets are supposed to produce.

When free markets kept producing debilitating boom-and-bust cycles, culminating with the Great Depression, we modified our intelligent design. We invented the “mixed” economy, which relies on well regulated free markets. That single act let us emerge from the Great Depression, win our greatest war, and later produce the most meteoric rise in living standards in human history. We are now in the process of figuring out how to “re-engineer” our economy and our markets to prevent yet another great bust like the one still in progress.

Human intelligent design, i.e., engineering, is the primary source of our success as a people.

The theory of Intelligent Design steals the words and the concept, takes it out of our hands, and puts it in God’s. It warns us not to tinker with what God has designed―including us―lest we err and cause unintended consequences. It encourages fatalism, a submission to presumed supernatural authority that has always distinguished other cultures from ours.

Theft of the concept of engineering also has other pernicious effects. First, it encourages submission to worldly authority, our ruling class. If God is the only engineer, and if human social engineering is suspect, then who organizes things on Earth? Our largely unseen ruling class does: people like Bill Gates, Lloyd Blankfein, the Pope, Pat Robertson and other informal religious leaders and, yes, even the affable Warren Buffet. Abdication of public engineering is a surrender of democracy to those who pull the strings in private.

The second pernicious effect of stealing the concept of engineering is more subtle. By opposing the theory of evolution (the foundation of all modern biology) Intelligent Design creates a social and political reaction against science generally.

Democracy is popular rule. Engineering (intelligent design by humans) is the means by which democracy betters the human condition, socially and materially. Science, including economics and sociology, provides the theory and cognitive infrastructure that allows engineering to achieve that end. Undermine any of these links in the chain, and you undermine the ability of human societies to better their condition.

Who gains? The ruling class, of course, especially those whose wealth and power derive from the status quo. Someone has to control society’s direction. In a democracy, that’s someone is supposed to be us, the people. But someone also has to inform the people how to achieve their ends. Science does that by explaining how the world works, using rigorous observation, experiments, and mathematical analysis. Engineering shows the means, outlining alternative options and explaining their costs and benefits. (And honest engineering, like economics, never promises a free lunch.)

Are modern science and engineering complex? Sure. But one of the greatest modern physicists, Richard Feynman, once said something profound. No one, he said, understands a theory unless he can explain it to his three-year-old daughter in a way that makes sense to her. By that rule, any good engineer (or politician) should be able to explain the benefits of any social or physical program without resort to God, mystery, or authority.

You may not understand Einstein’s special theory of relativity, or the algebraic Lorenz Transformation that is its mathematical infrastructure. But you can understand that rapidly moving radioactive particles decay more slowly than those at rest, thereby proving a central (and counterintuitive!) tenet of that theory: moving clocks slow down. If you are interested enough, you can even see charts and graphs from experiments proving the point.

Follow the explainers; beware the mystifiers! That’s a good recipe for democracy.

But there are different levels of explaining. For thirty years, the right wing has “explained” economics with three principles. Free markets work best. Markets self-correct. Regulation confines and costs. But how do these principles work? That’s a mystery. The best the ideologues can come up with is Adam’s Smith’s “invisible hand.” In the final analysis, that hand, like God, is a matter of faith. The foundation of conservative economics is faith in mystery.

And so we had the extraordinary spectacle of Alan Greenspan. Trained in the best twentieth-century quantitative tradition, he could do the math. He had superb mathematical intuition. He spoke like an oracle, using convoluted, euphemistic sentences that required oracular interpretation.

But in the end, all Greenspan’s knowledge and skill boiled down to simple faith in the invisible hand. He confessed that his most important decisions—the ones that helped subvert our entire economy—were wrong. But his confession was not of mathematical error, which other economists might have seen and corrected. It was a much more insidious error of misdirected faith. Our chief economic engineer had “explained” himself not in logic, but in mystery.

The contradiction of Alan Greenspan epitomizes the last thirty years of American politics, since Ronald Reagan. On the one hand, it encourages the view the God is the only engineer; that organisms as complex as us could not possibly have arisen from accumulated random mutations, disparaged as “accident.” Yet on the other, it asserts that no human can successfully engineer a society or a market, that the accidental operation of unfettered free markets is more “intelligent.”

That contradiction is wide enough to steer an ocean liner through, but no one seems to have noticed. And even if intellectuals do, it’s subtle enough to be hard to explain to the masses.

So the ruling class’ logic is simple. “Intelligent Design” is for God, who Designed us. We humans are poor engineers, and especially poor social engineers. So don’t try to plan, design, engineer, or regulate. Let the rules that God put in place hold sway, especially in unregulated markets and unregulated commerce. Accept your fate, however sorry it may be. And if that plan somehow seems always to promote the ruling class’ own economic interests and retard others’ social and even physical progress, isn’t that God’s plan, too?

Is this a conspiracy? As I’ve explained before, I don’t think so. The ruling class is neither that diabolical nor (if the truth be told) that smart. Except in some businesses, it’s not a very good planner or engineer itself. It just wants to be let alone to pursue its own selfish ends.

The ruling class lets story tellers like Beck, Limbaugh and Rove spin their entertaining yarns, and watches. When an entertaining yarn, a creative lie, or a successful word theft catches on, the ruling class adopts and supports it. It does so just as it supports the Tea Party movement, not because it believes in that movement for a moment, but because that particular rabble serves to promote its continued dominance and transient economic interests.

Call it opportunism. Call it adaptation. Call it conspiracy if you like. But the right wing’s propaganda, word thefts, and lies present a clear challenge for those who can see. They support a desultory tyranny, made by half-reluctant despots over weak minds. However desultory, in thirty years that intellectual tyranny has served to enrich a small coterie of quite undeserving men beyond their wildest dreams and bring a great nation to its knees.

Words are not these half-reluctant despots’ only weapon. Money and fear are powerful, too. But twisted words have a power that smart people often underestimate, for they can control weak minds.

For those of us who think and write, words raise a special question. Are we going to let the right wing, for the economic advantage of a few, continue to steal our national heritage by reserving engineering for God and His representatives on Earth, whom the rich keep in their pockets? Or are we going to resist?

I, for one, am going to resist. I will use the word “Democrat” as a noun, only for an individual member of my party. For my party, its platform, and its principles, I will use the proper adjective “Democratic.” I will use that word because it is correct both grammatically and substantively. If the right wing claims that it is democratic, too, let them prove it by deeds, not words.

I will abandon the word “liberal,” which demagogues have stolen beyond retrieval. Instead, I will use the word “progressive,” which is more resistant to theft and distortion. Who can oppose progress?

I will not use the words “intelligent design” for the work of a Deity whom I cannot see or show to others. I will use it, synonymously with “engineering,” for all marvels wrought by human planning and regulation, which I can see and show to others, and which made our nation great.

When I use the term “social engineering,” I will use it not with diffidence, but with pride. For I know it is the essence of our two-plus-century experiment in democracy.

And I will never use either term to urge my fellow citizens―those who see the label but don’t look inside the box―to abdicate their Reason to some unnamed higher power. Why leave engineering to an Almighty, who usually turns out to be a mask for selfish and shortsighted interests of the ruling class?

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02 May 2010

Iran Policy


[For replies to Greg’s comments on the previous post, click here.]

One of the things we Americans do poorly, or not at all, is take advice or guidance from anyone else. In addressing the “Iranian threat,” we might improve our grip on reality by analyzing why other nations act the way they do.

Russia and China both disfavor strong measures in dealing with Iran. They oppose harsh sanctions and are trying hard to discourage a pre-emptive strike by Israel or by us. Why?

Some of China’s motives seem obvious. China is far from Iran geographically and not a major target of Islamist terrorism. So to China the “Iranian threat” is remote. And China could use Iran’s oil.

That’s as far as cynics’ reasoning goes. But there may be another reason that inspires less cynicism. Of all the nations on Earth, China has the broadest, longest and deepest experience in diplomacy and international power politics. It has a rule and tradition against trying to interfere directly with other nations’ internal affairs. Why?

Cynics might say that China itself doesn’t want to be messed with, as it had been by Western colonial powers for most of the last two centuries. But there may be more to it than that. Maybe China’s multi-millennial experience with diplomacy taught it that attempts to interfere in others’ internal affairs just don’t work, and often backfire. The Chinese are a very practical people, not prone to bouts of silly abstract theorizing. They adopted Communism much later than the Russians―only to unify their fragmented and chaotic nation―and yet rejected it about two decades earlier.

Maybe a culture’s longevity brings a sort of practical wisdom. Maybe the Chinese know something that our young American culture is just beginning to learn, the hard way.

Russia’s motives are even more instructive. Russia is much closer to Iran than we are. As the recent subway attacks in Moscow showed, it is just as much a target of Islamist terrorism. It might be even more a target than we: it has had several centuries of direct conflict with Islamic people to its immediate south, where there is no dearth of resentment of the Russian bear.

Vladimir Putin is one of the world’s smartest leaders. Unlike China, Russia doesn’t need Iran’s oil; it has plenty of its own. So under these circumstances why doesn’t Putin see the “Iranian threat” the same way we do? Could it be he understands Iran better than we do?

There are strong parallels between Iran today and Russia during the Cold War. Russia’s pyrrhic victory in World War II cost it one-seventh of its population and devastated Russia west of the Urals. Just so, Iran’s huge losses in its war with Iraq (which we instigated) decimated the generation of Iranians that is now coming into power.

Maybe Russians understand how this sort of experience fosters national insecurity, paranoia, bluster and threats. Maybe when they see Ahmadinejad rant and rave, they think of General Secretary Khrushchev banging his shoe on the podium at the U.N. and shouting “We will bury you!” Maybe when they make that comparison, they smile. Maybe they also recall how Khrushchev, after all his bluster and threats, made a sensible deal with JFK to avoid Armageddon during the Cuban Missile Crisis.

Russians have even more reason to fear “appeasement” of aggressors than we in the West do. We had our Neville Chamberlain. They had their Stalin, who made a vain deal with Hitler, which Hitler broke. In the resulting war, Russians lost much, much more than any Western nation did. Maybe they understand the risks of appeasement just as well as we do but see today’s risks differently.

One thing is clear. The analogies of Iran to Nazi Germany and the Holocaust are vastly overblown.

Iran today is nothing like Nazi Germany in the 1930s. If it were, Iranian opposition leaders Mir-Hossein Mousavi and Mohammad Khatami would be incarcerated or dead, and their disappearance would have been covered up. They are still very much alive and active, if intimidated. And if Iran were Nazi Germany, there would be no opposition press, and the small Jewish community still in Iran, which the government rightly distinguishes from Israel, would not exist.

True, Iran is arming itself with various missiles and warplanes. True, we don’t know (and the Iranians themselves don’t seem to know) whether Iran intends to develop nuclear weapons.

But we do know two things. First, the pace and threat of Iran’s arms production is nothing like Nazi’s Germany’s. Toward the end of the period between the two world wars, Germany devoted most of its massive industrial power monomaniacally to arming itself. It only took a handful of years to make Germany far and away the predominant military power on Earth, whether measured by men under arms, the sheer number of weapons, or their technological sophistication. What saved us was our two oceans, our tremendous industrial capacity, our ingenuity in converting it to war production, the heroism of Britain and its Commonwealth, Hitler’s strategic and tactical blunders, and the Soviet people’s tragic sacrifice.

In contrast, Iran today is impossibly outmatched by the West (and by Russia and China individually) in arms, armies and technological sophistication. A single American (or Russian) nuclear submarine could reduce all of Iran’s important cities to radioactive rubble in fifteen minutes, if it came to that. A squadron of nuclear-armed Israeli aircraft (or missiles) could do the same. Comparing Iran today to Nazi Germany at the outbreak of World War II―whether in capability or intentions―is ludicrous.

Comparing Iran’s policy today to the Holocaust is equally ridiculous. The Holocaust was a massive, officially sanctioned genocide against a peaceful, innocent and helpless internal minority in Germany (Jews). Hitler and Goebbels used it to inflame Germans’ feelings of general resentment (occasioned by the lopsided Treaty of Versailles that ended World War I) and to help “justify” the enormous sacrifices that their plan of world domination required of the German people.

Nothing of the kind is going on in Iran, where a small community of Jews lives unmolested. Ahmadinejad’s quarrel (which hardly all of Iran’s leaders or people share) is with Israel, which Iran’s leaders view as a now-superior regional rival. Rightly or wrongly, Ahmadinejad and other Iranian extremists also decry Israel as an invader and and conqueror, foreign to the region, which ought to be expelled.

But Iran is hardly alone in that regard. How much it intends to expend, sacrifice and suffer to achieve that end remains to be seen, as does how much Iran’s people will let it. The mere existence of the opposition, as well as the government’s inability to suppress it, suggests that neither all of Iran’s leadership nor its people are eager to make the necessary expense and sacrifice. Memories of the pain and futility of the costly war with Iraq are still fresh, particularly among the demographic cohort now coming into real power in Iran.

Even in war production, Iran appears to be a reluctant aggressor. Its military production is proceeding by fits and starts. All its weapons so far, especially its missiles, have dual use. Some Iran gives proxies to fight Israel. Most it stockpiles for use in a feared invasion by the US. Arming proxies is hardly unusual. It is a tried-and-true adjunct of international politics, practiced so often by us, the Soviets, the Chinese and others, during and after the Cold War, as to seem unremarkable.

As for nuclear weapons, Iran’s leadership―let alone its people―are clearly ambivalent about the need for them. If Iran really were hell bent on developing nuclear weapons, it would have them by now. But large factions of its leadership and people don’t see the need or the benefit. Most of them are from the intelligentsia, on which the leaders must rely for any project so sophisticated. In contrast, most of Nazi Germany’s intelligentsia were fully on board with Hitler’s war plans, or were coerced into active cooperation indistinguishable from support.

Nuclear power is another matter. Iran has little to sell the rest of the world but oil, and its oil reserves are limited. Developing nuclear (and solar) power for future internal use, while selling its oil for money to develop its infrastructure and improve its lot, is just rational economic policy. Trying to deny Iran rational economic policy (developing nuclear power for peaceful internal purposes) insults Iran’s sovereignty and Iranians’ intelligence and only precludes rapprochement.

That seems like a good way for us to start a war. China and Russia seem too smart for that. So far we have not been as clever.

The final issue in Iran policy is sanctions. We have good evidence that they don’t work. They didn’t work against Iraq; containment and the no-fly zone did, at least as long as we tried them. Sanctions haven’t worked against North Korea, although that nation is perpetually on the brink of starvation. They worked in South Africa, but only because that nation was facing a bloody internal revolt, based on race, by the vast majority of its people. No similar situation exists in Iran. (When and if change comes in Iran, it will be chaotic but largely peaceful.)

Common sense suggests that sanctions against Iran will do more harm than good. They will increase Iranians’ sense of isolation and resentment against the US, which already has considerable justification [search for “amnesia”]. They will therefore hinder the opposition and increase the regime’s opportunities for demagoguery. In short, they will decrease the likelihood of peaceful “regime change,” as happened spontaneously in Russia, and increase the risk of war.

Of course we should deny Iran the equipment and technology used to build weapons, whether nuclear or not. We already have a comprehensive international program, developed during the Cold War, for that purpose. We also should strive to insure that Iran cannot use foreign banking and financial resources to fund terror. But to deny Iran peaceful trade in such things as food, medicine, flowers and consumer electronics (having no possible military use) would be counterproductive. It only increases the risk of war.

Denying Iranians access to books, media and information would be especially stupid. The more the Iranian people and their leaders (who are generally literate and well educated) know about us and Israel, the less likely war will be.

The primary goal of international foreign policy should be to avoid another unnecessary war in the Middle East. Adopting policies that make belligerence and war more likely does not seem the best way to reach that goal. A secondary goal is to help Iran get over its inferiority complex and well-justified paranoia as soon as possible. Encouraging the outside world to gang up on it, whether militarily or economically, does not seem a particularly clever way to achieve that end.

Much has been made of Roberts Gates’ secret memo to the President laying out military options. Some think its very existence hints that Gates sees the President’s policy as remiss. But Gates is the Secretary of Defense. In earlier, less Orwellian days, we used to call his position Secretary of War. His job is to analyze military options and risks whenever there is the possibility of war, however remote. If he didn’t provide that memo, he would be remiss.

The memo’s secrecy speaks volumes. If it said that we or the Israelis could wipe out Iran’s nuclear enrichment facilities with any long-term benefit, and with few risks or adverse consequences, there would be no need to keep it secret. The President or his opposition would make it public in order to increase the pressure on Iran. But no one believes that. Joint Chiefs Chairman Admiral Mullen hinted as much, before the memo, when he said there are no military solutions.

Indeed, there don’t appear to be. A pre-emptive strike is not an option. It would likely fail to destroy all of Iran’s nuclear capability, some of which may be underground (figuratively or literally), and a determined Iran would just rebuild. Starting a series of successive pre-emptive strikes would be madness: they would keep Iran and the US (or Israel) in a perpetual state of war, inflame anti-American (or anti-Israeli) sentiment and help recruit terrorists from among the world’s 1.3 billion Muslims. They would help entrench the Basij and the current regime, waste resources that Iran and the US (or Israel) need to build their own societies, and disturb the neighbors, with unpredictable results.

It is therefore hard to conclude (as Gates reportedly said in a public remark) that this state of affairs would be preferable to Iran having a nuclear weapon―let alone nuclear power without weapons capability. Iran having nuclear weapons but never using them (an outcome that US and Israeli deterrence could assure), would be preferable, especially in light of the medium-term possibility of peaceful regime change in Iran. The old Soviet Union had nuclear weapons―lots of them―but never used them.

Gates’ quote makes sense only as an implied threat. Skillful diplomacy can and should use threats, express or implied, to discourage Iran from developing or using nuclear weapons. To some extent our relationship with Iran is one of bluff and bluster. If Iranians can bluff, so can we. But the benefit of actually carrying out threats when doing so might lead to yet one more unnecessary and tragic war is, in Mark Twain’s words, greatly exaggerated.

Being prepared is one thing. Of course we should be prepared for any contingency, as should the Israelis. But provoking a war (with pre-emptive strikes or massive economic sanctions) is quite another. Bringing on war to prevent war simply doesn’t make good sense. The best approach to Iran, as it was with the vastly more menacing Soviet Union, is readiness, strategic deterrence, and patience.


Reply to Greg’s Comment on Previous Post (The Case for Nuclear Proliferation)

Dear Greg,

Thanks for your thoughtful, well-written and diplomatically phrased comments. They invite precisely the kind of civilized dialogue that I hoped this blog would foster, but seldom does. I am particularly grateful because I suspect that many people share the same misgivings that you express so well.

Although you apologized for it, I also appreciate your dividing your comments into two parts. I view your second comment as far more serious and worthy of discussion than the first. The first one, in my view, reflects insufficient understanding of the complexity of uranium enrichment and nuclear weapons. So I’ll start with the “easy” part and tackle the harder one last.

1. The “individual” threat. Threats involve two elements: intention and capability. I have no doubt that many individuals and small groups would like to have and use nuclear weapons. They include Al Qaeda Central, its many affiliates, Hamas, Hezbollah, and perhaps even some elements of organized crime. So intention may be there. I will not dispute that point.

The issue is capability. Notwithstanding the many James Bond (and other) movies that depict individuals or small criminal groups developing nuclear weapons (or even more advanced fictional ones), the practical risk of that happening is negligible. Now and for the foreseeable future, only organized states with some level of industrial modernity will have to ability to develop atomic bombs. Here’s why.

Uranium enrichment requires huge resources. The first is massive amounts of electrical power. I forget the exact figure, but our own uranium enrichment during World War II required a substantial fraction of the entire electrical output of the United States. (My memory says 10%, but don’t quote me on that number.) That’s why we built our centrifuge “farm” in Oak Ridge, right next to huge hydroelectric plants.

I can’t see how any small, “underground” group, let alone an individual, could command that level of resources. Nor can I see how he or it could keep that level of industrial development secret for the years needed to enrich enough uranium to create a nuclear weapon.

Electrical power is just the beginning. Merely making the centrifuges to use it requires advanced materials and advanced industrial technology.

As their names imply, the difference between Uranium 235 (the fissionable isotope) and 238 is three units of atomic weight, or 1.2%. Separating the two requires turning both isotopes into uranium hexafluoride gas, which is both highly toxic and corrosive enough to destroy robust stainless-steel tubes in days. You have to spin the centrifuges so fast (thousands or revolutions per minute) that this tiny difference in atomic weight causes the isotopes to separate. And this you must do continuously, for weeks and months, in thousands of centrifuges operating continuously and simultaneously, 24/7, even to hope to get a fissionable “critical mass” of highly enriched uranium..

Even that’s not all. Once you have the critical mass, you then have to design an implosion weapon, with suitable (and very precisely) shaped fissionable fragments, plus precisely designed and arranged “triggers” of conventional explosives, with electronic signals timed to the microsecond to explode them.

North Korea’s experience illustrates how hard this last step is. It would not have tested its weapons without a fissionable critical mass. Yet it took nearly two years to get from its initial duds to an apparently successful weapon. A whole nation subject to one-man rule, with a four-million-person army, required that delay just to build a decent trigger.

There is no single secret to making a nuclear weapon. There is a whole secret industrial infrastructure. You need nuclear physicists, chemists, metallurgists, materials scientists, mechanical engineers, explosive experts, electronic engineers, and precision machinists, computer programmers, and technicians. Each of these specialists holds a secret part of the puzzle. In short, you need something like the Manhattan Project, which commandeered the best and brightest scientists, engineers and technicians and the material resources of a great nation for four whole years.

The history of nuclear weapons bears out this analysis. The “original” members of the “nuclear club”―the US, Britain and France―had collaborated on the relevant physics and engineering for years before and during the Second World War and shared some important secrets. The Soviet Union took four additional years to develop a working weapon, despite its postwar paranoia, the extreme focus of its absolute dictatorship under Stalin, and its alleged theft of nuclear secrets via the Rosenbergs. Iran―a nation of 70 million people with a fairly advanced industrial infrastructure―has taken the better part of a decade and is still not there.

Today part of the Nuclear Nonproliferation Regime is an elaborate system of controls over products, technology and information, designed to prevent any part of those secrets from falling into the wrong hands. The “nuclear club” members observe its restrictions religiously, which is why it’s been so hard for Iran to get useful tubes for its centrifuges. If it now has them, as it boasts, it is probably because it developed them indigenously, from scratch, perhaps with aid from sympathetic Pakistanis or North Koreans.

So the notion that an individual or tiny group could duplicate this feat is, in my mind, fantastic. It’s about as likely as our Sun going nova and turning our planet and solar system into celestial toast. You might as well worry about one as about the other.

There is a small risk that a nuclear state, whether or not intentionally, might supply a small group with a weapon or two. That I admit. But as you also acknowledge, the threat of nuclear retaliation by the victim (if a nuclear power), creates a strong incentive not only to avoid providing the technology deliberately, but also to guard it carefully. If Iran ever becomes a nuclear power, you can bet it will guard its secrets and its weapons as carefully as it does the Ayatollah, for fear of massive nuclear retaliation by Israel or the US.

2. The goal of a nuclear-free world. Your second comment, I think, raises much more serious issues. I have no quarrel with the goal of a nuclear-free world in the abstract. In fact, when I was much younger I attended rallies supporting that goal. Linus Pauling, the Nobel-Prize-winning chemist, spoke movingly at one of them.

As history developed and I got older, however, I came to believe that such a world is impossible to achieve in practice. I still think so.

Developing nuclear weapons takes an entire specialized industrial infrastructure and its corresponding secrets. But once a nation has nuclear weapons, they are compact and easy to hide. I can conceive of no reliable legal, social, technological or other practical means―let alone a foolproof one―for keeping a nuclear power from hiding some or all of its weapons, in a cynical ploy to maintain military supremacy, while other nuclear powers destroy theirs in a naïve attempt at total disarmament.

It seems to me that any serious attempt at total nuclear disarmament would expose honest “good” countries to treachery and blackmail by the bad ones. Until we achieve universal trust, honesty and good faith among nations―in which case we won’t need either war or nuclear weapons―I can’t see total disarmament as anything other than an invitation to treachery and disaster.

Reducing nuclear arsenals, rather than eliminating them, is another matter entirely. Nuclear weapons are so terrible in effect that no power, nuclear or not, would attempt a sneak attack on any nation that had them, even a handful, if there were the smallest risk of effective delivery. So I think the goal of reducing nuclear arsenals dramatically (perhaps to as low as a dozen weapons per nation) is practical and feasible.

For example, four thermonuclear weapons on each of three advanced nuclear submarines might practically assure our own deterrence. What nation would risk losing its four leading cities on a gamble that not one of our three submarines would get through?

In this respect I think China has been much more sensible than we and Russia. It has only a small nuclear arsenal for deterrence. It never invested in anything like the massive US and Soviet arsenals. Our own recent disclosure [subscription required] of over five thousand active weapons (and over thirty thousand at the height of the Cold War!) shows the absurdity of our Cold-War paranoia. Detonating a mere fraction of those weapons, even just several hundred, would likely have extinguished all higher life on Earth.

I have enormous respect, bordering on reverence, for the President’s political skill and understanding of public sentiment. I think he proposed the goal of a nuclear-free world in order to secure his left flank and maintain the moral high ground, while he works for a more modest achievement: substantial reductions in arsenals, a moratorium on proliferation, and perhaps a nuclear-free Middle East (which even Ahmadinejad today proposed).

I have no doubt he recognizes how many people wish that nuclear weapons would just go away. But I also have no doubt that he’s smart and realistic enough to know how dangerous getting there would be in the world’s present state of social and political development.

Two last points and then I’ll close. In my view, the risk of a wayward asteroid or comet hitting the Earth and causing our extinction as a species is about as high as a nuclear war between small powers. It is now much higher than the risk of our extinguishing ourselves with all-out nuclear war between major nuclear powers. For that reason, as I explained in my post, I don’t think humanity should give up nuclear weapons or missile delivery vehicles, which could help us ward off errant celestial objects.

Finally, I just don’t believe you can put the genie back in the bottle. We are living the ancient myth of Prometheus. We have discovered nuclear fire, and now we must use our reason and humanity to control it. We can’t forget or extinguish our knowledge of fire, especially as the worst among us crave it. We have to use our reason and humanity to control our use of that knowledge for our own preservation and advancement as a species.

As I’ve written in another post, that knowledge almost led us to extinguish ourselves as a species in 1962. Today, the risk of humanity’s extinction seems much smaller. If the President is successful in substantially reducing nuclear arsenals, we will be much safer still. That in itself is a goal worthy of the President’s talent and skill, and one he is much more likely to achieve than universal nuclear disarmament.

Best,

Jay

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