The Wealth of Nations

Who’s wealthier, a Maasai elder or your average American?

A few years ago, my wife and I enjoyed a marvelous hike through the bush of Tanzania while on safari. After camping in the village of Nainokanoka, we set off early with Moloton, our Maasai guide, and we walked amongst the buffalo, gazelles, wildebeest, and zebra on our way to a campsite at Empakaai, a gorgeous crater lake that legions of flamingos call home.


It was positively Edenic … I still can’t believe my wife did it while pregnant …

Anyway, as we walked through some of the villages, I noticed an abundance of domesticated animals grazing around the boma— cattle, goats, sheep, chickens.

Since this was a long hike, I had lots of time to get lost in thought. And I kept pondering the question at the top of this page. (more…)

The Death of Graduate School?

The Republican tax plan is an odious hand-out to large corporations and a big 🖕 to most citizens and small businesses. Until I read this summary of the House Bill, I generally thought people who called Republicans corporatist bootlickers were being unfair. But here we are.

Anyway, two of the House Bill’s provisions are raising concerns about the future of postgraduate education: (more…)

Reflections on a Winding Road to EM Private Equity

In late 2005, I would arrive at the office early and catch up on the latest news of sectarian violence in Iraq.  It made for gruesome reading—bodies discovered in vacant houses, tied to chairs with clear evidence of torture.  A favorite tool seemed to be power drills, which were used on knees, ankles, heads.

There were suspicions that Iraq’s interior minister—Bayan Jabr—was at least partially responsible, and that members of the National Police force that he oversaw were effectively operating as Shia death squads, exacting vendettas against Sunnis and former elements of Saddam Hussein’s regime.  The sectarian violence seemed to be increasing until February 2006, when militants bombed one of Shia Islam’s holiest sites, the Golden Mosque in Samarra, kicking off an orgiastic spate of bloodletting that brought Iraq to the precipice of a full-blown civil war. (more…)

Technological Acceleration and the Wet Noodle of Monetary Policy

The American boy of 1854 stood nearer the year 1 than to the year 1900. The education he had received bore little relation to the education he needed.  Speaking as an American of 1900, he had as yet no education at all.  He knew not even where or how to begin.1

If science were to go on doubling or quadrupling its complexities every ten years, even mathematics would soon succumb.  An average mind had succumbed already in 1850; it could no longer understand the problem in 1900 … At the rate of progress since 1800, every American who lived to the year 2000 would know how to control unlimited power.  He would think in complexities unimaginable to an earlier mind.  He would deal with problems altogether beyond the range of earlier society … The movement from unity into multiplicity, between 1200 and 1900, was unbroken in sequence, and rapid in acceleration.  Prolonged one generation longer, it would require a new social mind.  As though thought were common salt in indefinite solution it must enter a new phase subject to new laws.  Thus far, since five or ten thousand years, the mind had successfully reacted, and nothing yet proved that it would fail to react—but it would need to jump.2

The Internet is the most deflationary invention of all time.3

A few weeks ago, the Fed determined that the world was not yet ready for a 25 basis point increase in U.S. interest rates.  They’re smart and monetary policy is their day job, so I’m sure they know better than I about these things.  But still, I find it all a bit befuddling.

Illustrative example.

Lately I’ve been pondering whether monetary policy has been largely ineffective at generating inflation4 because the drivers of deflation aren’t monetary in nature, but rather technological.  In 1904, Henry Adams developed a theory (“A Law of Acceleration”) on the exponential rate of technological change; and he posited that around the time we’re living in now, the rate of progress might exceed our ability to deal with it (see chart). (more…)

Henry Kissinger’s World Order and the Question of Universal Values

In our time, the quest for world order will require relating the perceptions of societies whose realities have largely been self-contained.  The mystery to be overcome is one all peoples share—how divergent historic experiences and values can be shaped into a common order.1

Two weeks into the year and I’ve already found a finalist for my “Best Books of 2015” entry: Henry Kissinger’s World Order.  The book is a richly written, thought-provoking meditation on the structure of the international system from the world’s preeminent scholar-statesman.  You won’t find a critique of it here.

I touched upon Kissinger’s thinking in my post on Adda Bozeman’s Politics and Culture in International History, so I won’t retread it; but reading the book prompted me to contemplate once more whether U.S. actions have played a role in the fraying of world order, and if so, whether the issue of “universal” values might be to blame. (more…)

Thoughts on James Fallows’s “Chickenhawk Nation”

Colleville-sur-Mer, France (2004).
Colleville-sur-Mer, France (2004).

[President Barack] Obama gave his still-not-quite-natural-sounding callouts to the different military services represented in the crowd. (“I know we’ve got some Air Force in the house!” and so on, receiving cheers rendered as “Hooyah!” and “Oorah!” in the official White House transcript.) He told members of the military that the nation was grateful for their nonstop deployments and for the unique losses and burdens placed on them through the past dozen years of open-ended war … He said that the “9/11 generation of heroes” represented the very best in its country, and that its members constituted a military that was not only superior to all current adversaries but no less than “the finest fighting force in the history of the world” … This has become the way we assume the American military will be discussed by politicians and in the press: Overblown, limitless praise, absent the caveats or public skepticism we would apply to other American institutions, especially ones that run on taxpayer money. A somber moment to reflect on sacrifice. Then everyone except the few people in uniform getting on with their workaday concerns.1

James Fallows has written one of the most important articles of the year: “The Tragedy of the American Military.”2  You should read it now; the words below will be here when you’re finished.

In the article, Fallows discusses the crisis in civil-military relations that has been building over the last 15+ years, and argues that this state of affairs has negatively impacted the country’s ability to fight and win wars.  As I read it, the three pillars of his argument on why the United States gets lured “into endless wars it cannot win” are, in a nutshell: (more…)

QE & Inequality

I believe that the policies we have undertaken have been meant to generate a robust recovery.1

Effective demand is dead in the water.2

Quantitative easing…is that, like, making math easier?3

Well, goodbye to all that.  Until the next time, Quantitative Easing.

For normal people with more interesting lives, I imagine articles headlined with the words “quantitative easing” prompt a mild degree of nausea and / or disinterest.  As for me, for the last six years4 I’ve found it hard to avoid reading pieces on the unparalleled series of unconventional monetary policies: QE 1, QE 2, Operation Twist, QE 3.  So much juicing of the financial markets, so much time I will never have back, so many unintended consequences nobody can foresee. (more…)