Wednesday, April 30, 2003

A Test for German Pacifism?



Steven Den Beste thinks it is interesting that France is trying to get Russia involved in European defense. He wonders how this will play in Prague and Warsaw and Bucharest. I really wonder how this will play in Germany. The last time (about 100 years ago) France invited Russia to get involved in European defense, Germany reacted rather negatively and we got WWI.

German pasifism has been very visible, but just how passive is Germany? How passive will Germany remain with France on one side inviting Russia on the other to get involved? This may be an interesting test for German pacifism.

:: Update: John Hitz responds ::


What we regard as militarism in Germany is best identified as Prussian; it is the "face" we know from movies and books and a lot of textbooks. My response drops slightly below that threshold to what I can only regard as cultural proclivities that make a fertile soil for militarism to grow in.

Germans like order; orderly things in an orderly universe where stuff works and there is little unnecessary time wasted on conflict. Which, in any other world would make for the pacifist we have today. Acting against this is their historic location in central Europe where they have spent almost as many centuries fighting French, Austrian, Hungarian, Swedish and an occasional Spaniard as they have spent carving their own little niche in the East at the expense of the Poles, Russians, Latvians & Lithuanians (we can exclude the Estonians since they are simply dis-placed Germans that got cut off by from the rest when the aforementioned periodically reasserted their sovereignty). As a result, they have spent a lot of centuries fighting; to protect their own lands and to extend them; they may be quiet little pacifist now but the have a long history of being otherwise.

Their post-World War II experience has been one of "atonement" for what happened under Hitler and an attempt to find a "better" means of dealing with the international community. One of the reasons that Germany has been one of the principal driving forces in the EU is simple national self interest; if they can get everyone to agree to an economic union then they will have less reason to turn back to military means to implement their foreign policy. That's the good stuff. Tucked into the news articles and snippets along the way over the last twenty years (it is easier now, with internet sites that are not only German, but are kind enough to translate for the non-speaking types)there are still indications that the "old" way has not lost its identity.

As recently as the mid 70's the popular press in (then) West Germany was calling for an increase in the size and training of the Bundswher. The reason; fear that the U.S. might be willing to "sacrifice" Germany in a potential confrontation with the U.S.S.R. We moved more troops and the cries went down but never really completely disappeared. With the re-unification of Germany, the old Prussians came back into the fold plus the Saxons; East Germany had drawn most of their officer corps from the Prussians (naturally) and the line troops from Saxony. They were brought back "into the fold" just over ten years ago for all practical purposes.

Information from there "starts" with the fall of the Berlin wall and unification; but the old militarism was allowed to continue in both states for the benefit of East Germany & U.S.S.R. When Germany committed a small force to the NATO peacekeeping force in Serbia & Croatia following that affair, it was the first time combat troops from Germany had been sent out of Germany; and most of Europe was less than pleased. Interestingly enough, they performed their duties quite well and were part of the successful pacification of the area. I suppose my only point about that is that whatever they might say about having abandoned "war" as an instrument of national policy, the ability to take it back up is there, with ample historical back up to indicate that if they do, it will be with their usual attention to detail and efficiency.

In the post-Iraq world now in its embryonic stage, nothing is sure or certain. Germany has a stake in what happens in the region; not just because of legal and illegal contracts that they have with a (now former) rogue regime but the potential domino effect that our stated policy hopes to achieve. In a world where access to markets has become global and the competition for them more intense; the possibility of being eliminated (effectively) from such an area cannot be regarded lightly. If the post-Iraq Middle East becomes one engineered by the United States, and from which we reap the "lions" share of the benefit; those on the "outside" will have to consider their options. Add to that, the success that we have demonstrated using force and all you need is a nice economic down turn to get people in high places (in Germany) to re-assessing their policies and means by which they can be implemented.

Paranoid that I can be, I do not have too much trouble remembering the "climate" that Hitler crafted his rise to power in. History does not repeat itself; but given circumstances can produce similar results. I realize that I wander on this subject; like I said much of this is trying to articulate things that I have read and discussed over about twenty years meshing with my original study focusing on Eastern Europe and Germany. Is it a real danger? I don't know, for sure. I am, near as I can see, about the only one I know that even thinks this is a viable scenario.

Tuesday, April 29, 2003

Weapons of Mass Distraction



So far, US investigators have found no weapons of mass distruction in Iraq and none of the captured Iraqi officials will admit to their existance, much less point the way to them. There may or may not be any and I say, "So what?"

The focus on WMDs is becoming a weapon of mass distraction. Too many people are suggesting that if we don't find WMDs the war will have been in vain. WRONG! The war was not about finding WMDs, it was about removing the threat of WMDs.

Saddam Hussein may have had WMds or he may have destroyed them long ago. The point is, the possibility that he had them or had the capability to produce and deliver them now or in the future made him and his regime a threat. And he would remain a threat until he could demonstrate that he did indeed not have any WMDs or WMD programs. This is what he refused to do for 11 years.

UN inspectors were not sent to Iraq to play an elaborate game of hide and seek. They were there to verify the evidence presented by the Iraqi government that programs known to exist had been dismantled and components known to exist had been destroyed. Most of the evidence presented amounted to someone saying "We don't have any." A lot of times they said that at the front gate while they were trucking the stuff out the back gate. At no time did Saddam Hussein's government ever fully cooperate with UN weapon's inspectors as required by the UN resolutions. Whenever Hans Blix said that progress was being made, he was generally talking about progress toward getting someone to agree that they needed to cooperate, not that they actually were cooperating and certainly not that they were actually verifying anything. Except that Blix did verify that Iraq was not cooperating.

Saddam had his chance but he blew it. Instead of voluntary cooperation with UN inspectors he chose to invite a war which drove him from power if not cost him his life. So now, whether we find them or not, we no longer have the threat. And that alone is enough to justify the war.

Monday, April 28, 2003

Risk & Reward



A friend recently asked me how a working individual could free himself from the grind of wage-earning and engage in free enterprise. His argument came down to, "The long and short of it is no matter the theory that everyone can enter the "market" practice is that the vast majority of the population are part of the "cost" of goods and services (labor), with limited ability and opportunity to be anything else."

My response follows.

"So, then, to every man his chance -- to every man, regardless of his birth, his shining golden opportunity -- to every man his right to live, to work, to be himself, to become whatever his manhood and his vision can combine to make him -- this, seeker, is the promise of America."
- Thomas Wolfe


Lets look at free enterprise. Free Enterprise is best characterized as private enterprise conducted by individuals. In most economic circles, the term free enterprise is not often used in reference to corporate activities except in comparison to fully regulated and controlled corporations.

I have been reading Wealth and Democracy by Kevin Phillips and one thing I note is a constant reference to unequal distribution of wealth. This is a somewhat puzzling reference because an equal distribution of wealth is not and never has been a goal of democratic capitalism. He eventually reaches a point where he ties the idea of equal distribution of wealth to the concept that "labor should receive due reward for the value added." The concept that I don't see mentioned is that reward is proportional to risk.

Capitalism maximizes the reward for risk, not for labor. Henry George, in Progress and Poverty states the principle that labor is compensated from profits, not from capital. In a perfect world (Theory, where everything works?), perhaps profits are always guaranteed. In the real world they are not, and that lack of guarantee creates risk.

There are at least two components required for production, Labor and Capital. (George describes Land as a third but we will put that aside for now as for the purposes of this discussion, Land and Capital can be combined.) Labor's contribution to the production process. can be described variously as energy, effort, skill, ability, or talent. Perhaps this can all be summed up as "Work". What is worked on are the resources and materials provided by Capital in the working environment created by Capital.

An individual, working for himself, provides the labor that creates added value, but he also provides the capital which creates the opportunity for labor to do anything. If the product of labor is sold for profit, the laborer is compensated from the profit. If there is no profit, the laborer is not compensated. In other words, the individual who provided all of the components required for production receives all of the rewards.

If several individuals pool their resources to do business in partnership, they may agree that each shares in the profits equally, or they may agree that the individuals share is proportional to their individual contributions. Once again, those that provide the components required for production receive all of the rewards which they share.

The employee-employer relationship is different. Employees are not partners. Employees are paid for their labor, but contrary to Henry George, they are not paid from profits. Employee's wages are paid from capital. Employees, since they are not partners provide no Capital. Employees contribute only Work. In this contribution, the employee assumes no risk. He expects to be paid for his work regardless of the profitability of the enterprise. If not profits, what is the source of the employee's wages but capital?

The entrepreneur puts his wealth at risk as capital in the hope and expectation that the value added by labor which he pays for can be sold for profit in the marketplace. Because the entrepreneur assumes all risk, all the return is his. From this return, he replenishes the capital which he has used to pay for labor and resources and anything remaining is his profit. It is the profit of capital, not of labor.

From this, it can be seen that even in the sole proprietor or partnership, it is the risk of capital that is rewarded, not the effort of labor. Labor without capital has nothing to work on, nothing to which value can be added--nothing ventured, nothing gained.

Most demands by Labor for a "fair share" of profits is specious. To have a fair share of profits, labor must assume a fair share of risk. To assume this risk, the laborer must either provide his own capital (sole proprietor), partner with someone else with an agreement to share the profits (partnership), or purchase shares in a publicly traded corporation (stockholder).

A partnership may be the most promising arrangement from a free enterprise standpoint. In a partnership, a person with skill but no capital can join with a person with capital but no skills and agree to share profits. the sharing can be equal or can be in unequal percentages per agreement.

Otherwise, what the laborer does by becoming a wage-earner is exchange risk for the security of a steady wage. This wage is not paid at the full potential future value of the work he does but is instead paid at a highly discounted rate. The worker surrender his interest in the value created by the combination of labor and capital to his employer who assumes the risk of the marketplace.

What it comes down to is choice. Do you choose risk and the resulting possibility of great reward of great loss, or do you choose the relative security of a steady wage, even though that wage may be less than the full value created by your labor? The choice is different for each of us because each of us have our own needs, desires and responsibilities.

Risk Management



Since the marketplace rewards risk, the more risk, the more reward you can receive. This is good. What is bad, is that the more risk, the more loss you can occur. If you are an entrepreneur, wouldn't it be nice if you could reduce the opportunity of loss without reducing the opportunity for reward? In other words, manage the risk? It seems like a simple idea, and one simple way to achieve this is to lobby government to pass laws and formulate policies that reduce the risk without reducing the rewards. Usually, government's price for this is a share in the rewards because in direct and/or indirect ways, government is sharing the risk. Where this gets out of hand is when lawmakers pocket a share of the rewards and pass the risk on to the taxpayers.

The theory of democratic capitalism combines political freedom with the promise of equal economic opportunity. Economic equality in results is not promised or even implied. Contrast this with communism where political freedom is surrendered in exchange for a promise of economic equality.

Wealth creation is capitalism's strength, and I have seen it said that Capitalism's weakness is that it supports the accumulation of wealth by a small elite group. The accumulation itself is not a weakness. No matter how much wealth the top 1% accumulates, the accumulation does not reduce the access to wealth by the remaining 99%. In a communist economy, wealth is not created by the combination of labor and capital because there is no capital and no free market where price is determined by demand. There is just a relatively static amount of wealth that is redistributed to the workers in a rigidly controlled market. "From each according to his ability, to each according to his need." Production is controlled for the purpose of providing jobs and incomes for all workers, not to supply the demands of the marketplace. As a result, there is no linkage between supply and demand and the result is severe shortages and surpluses--stores full of shoes but no bread.

In a capitalist economy, wealth is created by the combination of labor and capital to produce goods and services sold in a (relatively) free market so anyone that can combine labor and capital has the opportunity to create wealth. This is just about anybody. Opportunity exists to supply the demands of the marketplace. If you can supply a product or service at a lower price and still make a profit, you will be successful. If you can't, you will fail. Unless you can find a way to keep the price high enough to cover your costs or keep your competitor's costs high enough that he can't lower the price. One way of doing this is to lobby government to create conditions in the market that are more favorable to you or less favorable to the competition.

This is the real weakness of capitalism. Instead of large accumulations of wealth, it is the unequal access to political power that large accumulations of wealth can buy. Unfortunately, the type of person that accumulates great wealth is often highly competitive. Highly competitive people play to win and all to often, rules and ethics only apply when they are caught violating them. Quite often, the same competitiveness is found in politics so the combination of business and politics all to often results in some very questionable practices.

What can be done about it? Well, if the public is not aroused, not much. This is a democracy after all and if the people aren't troubled enough to address the situation, who else can? In publicly held corporations which are usually seen as the most blatantly unethical, the capitalists are the stockholders but it is often management that engages in the questionable practices. Just as in government where the voter is ultimately responsible for who is elected to office, the stockholders are responsible for who manages a corporation. And just a most voters pay little attention to politics as long as their basic needs are adequately met, most stockholders pay little attention to management practices as long as they are getting an adequate return on their investment. As in most situations, we have met the enemy and he is us.

As an example of this, consider the recent events at AMR Corp (parent of American Airlines) in which attempts to avoid bankruptcy resulted in the CEO, Donald Carty being forced to resign by the Board of Directors. He had been deceptive in not fully disclosing information to employees being asked to make concessions to reduce costs. What he neglected to disclose was plans for funding a pension plan for senior execs that would be protected in the event of bankruptcy. While asking employees to give up salary and benefits, he appeared to not be asking execs to make similar sacrifices. As a result, he lost the confidence of the employees and the stockholders and lost his job. In his defense, even after it was clear he would have to resign, he worked hard to repair the damage and save the company. He was successful (for the time being) and at least one pilot said he showed more leadership in the last 12 hours than he had in the preceeding 2 years.

Sunday, April 27, 2003

Terrorism and Palestine



The state of Israel was established by UN resolution 181 on 29 November, 1947 and the nation came into existence on 14 May, 1948 with the expiration of the British Mandate. Israel's right to exist is thus affirmed by the UN and has never been recended by that body. On the other hand, the Arab world and the Palestinians living in the geographic region that became Israel did not accept the resolution and immediately attacked the new state. Since that time, it is the Arabs and Palestinians, not Israel that have been in violation of the UN resolution. Subsequent UN resolutions have ignored this simple fact: the Palestinians have no legitimate demands upon Israel and can have none until they accept the original UN resolution establishing the State or Israel. Since this resolution also established a separate Arab Palestinian state, and since the Jews accepted the resolution when it was passed, just acceptence of Resolution 181 by the Palestinian Arabs would appear to be a solution to the problem. But it is no longer that simple.

Initially, Palestinians resisted Israel by conventional military means with the assistanced and support of the surrounding Arab states of Jordan, Syria and Egypt. When these efforts proved ineffective and were abandoned in 1973, the Palestinians turned to political terror. If they had confined the terror to targets withing Israel, the world may have paid little notice, but the targets were not confined to Israel. The terrorism became international in an attempt to coerce the international community to support the Palestinian cause.

There is an aspect of international terrorism that we must take into account. Some terrorism has political purpose, but many of the acts of radical Islamic terrorism such as 9/11 have no political motivation even though they do have secondary and tertiary links to political causes. For a study of this aspect, read Al Qaeda’s Fantasy Ideology, By Lee Harris

Palestinian terrorism is strange mixture of both politics and fantasy. The Palestinian grievance against Israel is that it exists, and the only way that Israel can address this grievance is to disappear. Israel is not going to do this and is not going to agree to any settlement that would allow this to happen. In this, the Palestinians are pursuing a fantasy. With the embracing of the Paslestinian cause by radical Islamic fundamentalists, the fantasy is deepened. Rather than the Islamic fantasy becoming rational, the Palestinian rational has become more fantastic.

The war on terror is inextricably linked to the Palestine problem. And much as we may feel a need to get Israel and the Palestinians to resolve their differences, we can't afford to do so unless we can separate the negotiations from the actions of the terrorists. If the message is that terrorism forced, impelled or pressured us to bring Israel to the table, we lose and the world loses. The message will be loud and clear that international terrorism works and works well and what worked in Palestine will be copied by others around the globe. Terrorism will increase and not decrease and if we are seen as the ones that pressured Israel to give in, we will be the primary target.

Our stand has to be that regardless of the grievances, the use of international terror illegitimizes those grievances. As long as the terror continues, any negotiations that result in any consideration of those grievances will be a victory for terrorism and not a blow against it. So before any negotiations can start, the terror must stop with no amnesty offerred. But can the terrorism stop? Can the terrorist leadership afford to stop? As Steven Den Beste says, probably not.

Israel is fighting for nothing short of national survival. The Palestinian demand for right of return is suicide for Israel. The only solution is a separate Palestinian state with no right of return to Israel, but while Israel may accept that, many Palestinians (not to mention many Arabs) will not. Another key issue no one wants to talk about is Jerusalem. Israel wants it. The Palestiniians want it. More importantly, the Jews want it and the Muslams want it. As long as the Dome of the Rock and al Aqsa mosque sit on the Temple Mount, I fear there will be no resolution possible and the moment the Dome and the Mosque are gone, there will truly be holy war. The best we can probably achieve is a very uneasy peace for a while until the troubles flare up again over the Jerusalem issue.

I have seen suggestions that Jerusalem should become an open city, administered by the UN as called for in UN resolution 181. UN administration of Palestine is part of what started the problem in the first place so that really sounds like a good idea. sheesh.

Saturday, April 26, 2003

Liberty and Responsibility



An individual is a free citizen. An isolated individual, in contact with no other person, has unlimited and unrestricted liberty. Anything and everything is permissible, though not everything is possible and certainly not everything is profitable.

When one free individual comes in contact with another free individual, something has to be worked out between the two so that there is mutual respect for each other's rights to "life, liberty and pursuit of happiness". If the two are to live together in harmony, they must mutually agree to allow their individual liberties to be restricted to some extent.

If a large number of individual are involved, the agreements and compromises may be codified and a system set up whereby the agreements may be administered fairly and justly. For example, a Constitution that establishes a constitutional government.

Since the individual is inherently free, All governmental authority derives from the authority that the individuals give to the government. The government exists and governs by the consent of the governed. Government therefore can never give anything to the people, it can only take from them, and then it can only take what it is allowed to take.

One major problem we have today is that too many people seem to think that government is the implement of an all-powerful entity known as "society" and that everything flows from the government to the individual. Many have been taught that this is the way it works, and many find it convenient to believe because such belief absolves them of any personal responsibility.

This is not the case. A society is made up of individuals, and the action of a society is the sum total of the actions of the individual members. Society can't force the individuals to comply with arbitrary rules and regulations, though society may make it easier for the individual to choose to comply rather than resist. It is still a matter of individual choice: No one ever does anything that they do not choose to do even though they may not be aware of making the choice.

As long as a significant majority of the individuals that make up a society hold the same or similar beliefs, the actions of the society will reflect those beliefs and the society will assume that the rectitude of those beliefs is obvious. However, problems arise when these beliefs are based on false premises. For example, the belief that society as a whole is inherently responsible for the welfare of individuals. Society may assume this responsibility as a result of the belief of its members, but since a society exists only because it has been formed by like-minded individuals, it is the individuals that are inherently responsible for the welfare of the society, not the other way around. The society will flourish only when the individuals that comprise it accept that responsibility.

Why I prefer the Bush(43) administration to the last one



Lets start with two areas, the economy and foreign policy.

Economics:

The previous administration and its supporters gave and continue to give no credence to supply-side economic policies even though these policies have been historically successful when they have been allowed to operate. OTOH. the more politically correct classic (demand-side) economic policies have been barely adequate. The purported failures of supply-side policies (Reaganomics) are more due to interference and obstructionism by opponents than by flaws in the policies.

The current administration is not fully supportive of supply-side policies but is much less anti than were the previous administrations beginning with Bush41 (remember, it was GHWB that called it "voodoo economics" and I don't think he ever got past that view.) As a result, there is probably less potential for economic damage from Bush43 even if there won't be much progress until we have an administration that fully supports supply-side policies.

Foreign Policy:

Immediate situations can obscure and/or sidetrack the pursuit of long-term goals. When you are up to your ass in alligators, it is easy to forget that your original objective was to drain the swamp. On 9/11 we (hopefully) woke up to the fact that we are up to our ass in alligators. We can't drain the swamp (economically, environmentally, or politically) until we deal with the alligators. This administration shows a willingness and intent to do this. The last one was content to poke at the alligators with sharp sticks when they got too aggressive (which only made them mad and more aggressive). Of course, one big reason the alligators became aggressive in the first place was that many of the supporters of the last administration liked to feed the alligators and some even tried to keep them as pets.

The current administration may make mistakes in foreign policy, but they will come from trying to deal with a real problem rather than from trying to avoid dealing with the problem by doing as little as possible.

Bush is a different kind of president that we have come to expect. He is blunt, says what he means and means what he says. He doesn't quibble a lot over the meaning of "is". I may not always agree with what he says, but at least I have little doubt about what he is saying. The only thing I was sure of with the last administraion was that if their mouths were open, they were probably lying.

There. That probably leaves you saying "what the hell is he talking about?"

Who am I? (no, I'm not really a cat)



I'm an American. More specifically, I'm a Texan, 5th generation. My GGGGrandfather came to Texas from Tennessee in 1836. I'm white, male, married, and self-employed. Politically, I'm generally independent but right now I'm more supportive of the current Republican administration than I am of any visible alternatives.

We live in a strange world. Especially in the USA and especially when we are talking about political orientation. Liberals are called "Conservatives" and conservatives are called "Liberals". Under these circumstances I am a liberal (aka Conservative).

I am a proponent of supply-side economic theory (Reaganomics) as these theories have demonstrated their effectiveness when allowed to operate.

In Foreign Policy, I guess I would be called a Jacksonian. "You leave me alone and I'll leave you alone. You play fair with me and I'll play fair with you. But if you screw with me, I'll kill you." This sounds like a good foreign policy.

I consider myself a Christian but hold to no orthodox version of Christianity. In fact, I am probably quite unorthodox. I believe in the Biblical teachings of Jesus Christ but I don't think many Christians do or even know what they are. But I'm not evengelical and I'm not going to try to convert you to my views.I expect the same from you.

I will be posting here from time to time, probably on a very irregular basis for the next few months while I evaluate various blogging tools. But I will post on a variety of subjects and eventually, I may start taking comments. If I do, I may respond to comments, I may not. I may post them, and I may not. If you want to see your comments posted on the web without restriction, I suggest you start your on log. Freedom of the press belongs only to those that own the presses.