Category Archives: Book review

Obama’s Idealists

American Power in Theory and Practice
By Peter Beinart – In different ways, each book traces a narrative arc that begins with a vow, made in young adulthood, to use the United States’ might for good and ends with a sober realization about how hard fulfilling that vow actually is. For Rice, the arc begins with her failure, as a young NSC aide, to rouse the Clinton administration to halt the 1994 Rwandan genocide, after which she pledged “to go down fighting, if ever I saw another instance where I believed U.S. military intervention could . . . make a critical difference in saving large numbers of human lives.” For Power, it starts during her time as a war correspondent in Bosnia, where the besieged residents of Sarajevo asked her to “tell Clinton” about the horrors she had seen. For Rhodes, it begins with 9/11 and the Iraq war, which left him yearning to harness the idealism he felt the Bush administration had squandered.

In each book, three moments during the Obama administration play outsize roles in chastening this youthful idealism: the decision to bomb Libya in 2011, the decision not to bomb Syria in 2013, and the 2016 election.

The problem isn’t that Rice, Power, and Rhodes shade the truth to make themselves look good. To the contrary, all three are, at various points, admirably frank about their mistakes. The problem is that by refusing to reveal what happened behind closed doors, they fail to help readers understand what lessons to draw from the Libya debacle. Is the lesson that presidents who lack the stomach for nation building shouldn’t topple regimes? Is it that the United States needs greater diplomatic capacity? Is it that brutal dictatorships are better than failed states? By not explaining Libya’s lessons, liberal internationalists like Rice, Power, and Rhodes make it easier for nativist bigots like Trump to proffer a lesson of their own: that Washington should care less about people overseas, especially if they are not Christian or white.

In each, the saga of disillusionment reaches its nadir in 2016, with Russia’s electoral interference and Trump’s election. After witnessing the limits of the United States’ ability to defend democracy and human rights abroad, Rice, Power, and Rhodes realize to their horror the limits of its ability to defend those principles at home. When Obama asks Mitch McConnell, the Republican Senate majority leader, to issue a joint statement condemning Russian interference in the election, McConnell refuses, a move that Rhodes calls “staggeringly partisan and unpatriotic.”

Although none of the authors puts it this way, it’s possible to read their books not only as tales of tempered idealism but also as chronicles of America’s declining exceptionalism. In retrospect, the belief in democracy promotion and humanitarian intervention that Rice, Power, and Rhodes embraced early in their careers rested on a faith that democracy was stable at home. With that faith now eroded—and the United States battling its own rising tribalism, authoritarianism, and brutality—it is hard to imagine a book like Power’sA Problem From Hell,” a critique of the country’s repeated failure to stop genocide, becoming the sensation it did in 2002.

As Americans have grown more preoccupied with, and more pessimistic about, their own country’s moral condition, they have turned inward. As a young woman, Power helped expose concentration camps in Bosnia. Today’s young activists are exposing them in Texas. As of September, foreign policy has barely figured in the Democratic presidential debates. more>

The EU’s rule-of-law test

By Tytti Tuppurainen – In his book The Origins of Political Order, the political scientist Francis Fukuyama argued that the rule of law is the most difficult pillar for a successful modern society to construct.

Organizing government administration and staging elections to a legislative body is relatively easy, and only a small number of failed states have no functioning public administration or legislature. But in far more countries, the absence of the rule of law is the primary source of instability and political decay.

For the EU, the rule of law is of central importance, because the EU is not simply a joint economic undertaking (although, as the economist Hernando de Soto has emphasized, the rule of law is also a prerequisite for a developed market economy). The EU’s raison d’être, like that of its predecessors, is to guarantee peace between European countries and to safeguard human rights within its member states. And the bloc is founded on common values enshrined in its treaties.

The EU’s commitment to the rule of law, set out in Article 2 of the Treaty on European Union, is straightforward. It stands for legality, legal certainty, the prohibition of arbitrary exercise of authority, the separation of powers, and an effective and independent judiciary. Respect for the rule of law affects different layers of society in very practical ways: at the level of the Union, the nation-state, companies, and citizens.

Within the EU, the rule of law is not a political statement or unattainable moral ideal, but a principle that public officials and courts are responsible for upholding. more>

The dirty secret of capitalism

By Nick Hanauer – I am a capitalist, and after a 30-year career in capitalism spanning three dozen companies, generating tens of billions of dollars in market value, I’m not just in the top one percent, I’m in the top .01 percent of all earners. Today, I have come to share the secrets of our success, because rich capitalists like me have never been richer. So the question is, how do we do it? How do we manage to grab an ever-increasing share of the economic pie every year? Is it that rich people are smarter than we were 30 years ago? Is it that we’re working harder than we once did? Are we taller, better looking?

Sadly, no. It all comes down to just one thing: economics. Because, here’s the dirty secret. There was a time in which the economics profession worked in the public interest, but in the neoliberal era, today, they work only for big corporations and billionaires, and that is creating a little bit of a problem.

So, what is a society to do? Well, it’s super clear to me what we need to do. We need a new economics. So, economics has been described as the dismal science, and for good reason, because as much as it is taught today, it isn’t a science at all, in spite of all of the dazzling mathematics. In fact, a growing number of academics and practitioners have concluded that neoliberal economic theory is dangerously wrong and that today’s growing crises of rising inequality and growing political instability are the direct result of decades of bad economic theory. What we now know is that the economics that made me so rich isn’t just wrong, it’s backwards, because it turns out it isn’t capital that creates economic growth, it’s people; and it isn’t self-interest that promotes the public good, it’s reciprocity; and it isn’t competition that produces our prosperity, it’s cooperation. What we can now see is that an economics that is neither just nor inclusive can never sustain the high levels of social cooperation necessary to enable a modern society to thrive.

So where did we go wrong? Well, it turns out that it’s become painfully obvious that the fundamental assumptions that undergird neoliberal economic theory are just objectively false, and so today first I want to take you through some of those mistaken assumptions and then after describe where the science suggests prosperity actually comes from. more>

Updates from Chicago Booth

How to develop a superstar strategy
By Ram Shivakumar – We live in an age of growing corporate inequality, with a few dominant companies and many underperformers.

The superstar archetype is Google, established in 1998 with the aim of rank-ordering web pages in what was then the nascent industry of search. By the beginning of the 21st century, Google had no revenues and no established business model. Fast-forward 18 years and a few hundred acquisitions, and Alphabet, Google’s parent company, has a market value in excess of US$750 billion.

In almost every industry, a small number of companies are capturing the lion’s share of profits. The top 10 percent of companies worldwide with more than $1 billion in revenues (when ranked by profit) earned 80 percent of all economic profits from 2014 to 2016, according to a recent study by the McKinsey Global Institute. The 40 biggest companies in the Fortune 500 captured 52 percent of the total profit earned by all the corporations on that list, according to an analysis of the 2019 ranking by Fortune.

This leaves less and less for the smaller fish to feed on. The middle 60 percent of businesses earned close to zero economic profit from 2014 to 2016, according to McKinsey, while each of those in the bottom 10 percent recorded economic losses of $1.5 billion on average.

Why do some companies succeed so categorically while the majority struggle? This question drives much of the management-consulting industry. It has also inspired a library’s worth of management books with varying explanations. Is it because successful companies have visionary and disciplined leaders, as management consultant Jim Collins argues in his best seller Good to Great? Is it because successful companies have superior management systems and organizational cultures? Is it because of positional advantages, as Harvard’s Michael Porter might argue? Or is it all down to timing and luck?

Concluding that luck is a big factor would be unlikely to sell many paperbacks in an airport bookstore; yet, undoubtedly, chance events have played an important role in many successes and failures. more>


Economics Can’t Explain Why Inequality Decreases

A problem with Piketty’s explanation
By Peter Turchin – In September I went to an international conference in Vienna, Austria, The Haves and the Have Nots: Exploring the Global History of Wealth and Income Inequality. One thing I learned at the conference is that, apparently, economists don’t really know why inequality increases and decreases. Especially, why it decreases.

Let’s start with Thomas Piketty, since Capital in the Twenty First Century is currently the “bible” (or should I say “Das Kapital”?) of inequality scholars.

Piketty provides a good explanation of why inequality increases. It’s good not in the sense that everybody agrees with it, but in the sense of being good science: a general mechanism that is supported by mathematics and by data.

So far so good. But how does Piketty explain the decline of inequality during the middle of the twentieth century? It was a result of unique circumstances—two destructive world wars and the Great Depression. In other words, and forgive me for crudeness, shit happens.

This is not a particularly satisfactory conclusion. Of course, it’s possible that the general trend of inequality is always up, except for random exogenous events that knock it down once in a while. So devastating wars destroy property, and by making the wealthy poorer reduce inequality. This is one of the inequality-reducing forces that Piketty mentions several times in his book.

To me such exogenous explanations are not satisfactory. My intuition (which I understand may not be shared by all) is that when inequality gets too high, there are forces that bring it down. In other words, to some degree it’s a regulatory process, and that’s why we don’t see truly extreme forms of inequality (when one person owns everything).

In Piketty’s view, the only reason we don’t see such extremes is because some kind of random event always intervenes before we get to it. more>

What’s Elizabeth Warren’s wealth tax worth?

By Isabel V. Sawhill and Christopher Pulliam – On both sides of the Atlantic, economic inequality has rocketed up the political agenda and inspired a new wave of populism. Wealth inequality is high and rising in the UK and staggeringly so in the US. The top 1% of American households now have more wealth than the bottom 90%. In the UK, the top 10% holds over half the wealth. The richest 400 individuals in the US average a net worth of $7.2 billion.

How did we get to this point? As Thomas Piketty, in his book Capital, famously argued, a capitalist economy left to its own devices will tend to produce not just inequality but ever-rising inequality of wealth – and the income derived from wealth. The main reason is because the returns earned on assets such as stocks and bonds normally exceed the growth of wages.

Imagine an economy with one capitalist and one wage earner. If the annual rate of return to financial assets is, say, 3%, but wages are only growing by 2%, more and more income ends up in the hands of the capitalist. Wealth then begets more wealth as the capitalist, not needing to spend all of his added income, adds to his existing wealth and reaps ever-growing income from that wealth. Unless a war or other shock destroys his wealth (think depression or the devastation in Europe after the Second World War), or government decides to tax it away, we end up with the rise in wealth inequality that we are now seeing in many rich countries – the US in particular.

There is something deeply disturbing about Piketty’s work. If one takes his thesis seriously, it means that the inequality of wealth and its corollary, income inequality, along with their continued growth, is the new normal. They are baked into a capitalist economy.

Of course, some financial capital gets invested in productive assets that help the economy grow. But productive investment and growth have slowed in recent decades, making it hard to argue that the rise in wealth at the top has benefited everyone. In the meantime, the accumulation of wealth in high-income households is one reason that income inequality is rising so sharply at the very top. While the richest 20% of US households, which benefit from a lot of human capital but not a lot of wealth, saw their market incomes rise by 96% between 1979 and 2016, the top 1% – which receives far more of their income from wealth – saw their incomes rise by a staggering 219%.

In short, growing wealth inequality spawns growing income inequality, so if we care about the latter, we cannot focus only on redistributing income. We need to tackle the accumulation of wealth as well.

What to do? Senator Elizabeth Warren, a serious contender for the US presidency, has proposed a wealth tax. more>

Hello From the Year 2050. We Avoided the Worst of Climate Change — But Everything Is Different

By Bill McKibben – Let’s imagine for a moment that we’ve reached the middle of the century. It’s 2050, and we have a moment to reflect—the climate fight remains the consuming battle of our age, but its most intense phase may be in our rearview mirror. And so we can look back to see how we might have managed to dramatically change our society and economy. We had no other choice.

There was a point after 2020 when we began to collectively realize a few basic things.

One, we weren’t getting out of this unscathed. Climate change, even in its early stages, had begun to hurt: watching a California city literally called Paradise turn into hell inside of two hours made it clear that all Americans were at risk. When you breathe wildfire smoke half the summer in your Silicon Valley fortress, or struggle to find insurance for your Florida beach house, doubt creeps in even for those who imagined they were immune.

Two, there were actually some solutions. By 2020, renewable energy was the cheapest way to generate electricity around the planet—in fact, the cheapest way there ever had been. The engineers had done their job, taking sun and wind from quirky backyard DIY projects to cutting-edge technology. Batteries had plummeted down the same cost curve as renewable energy, so the fact that the sun went down at night no longer mattered quite so much—you could store its rays to use later.

And the third realization? People began to understand that the biggest reason we weren’t making full, fast use of these new technologies was the political power of the fossil-fuel industry. Investigative journalists had exposed its three-decade campaign of denial and disinformation, and attorneys general and plaintiffs’ lawyers were beginning to pick them apart. And just in time. more>

A European pivot from space to time

By Kalypso Nicolaïdis – Although Europe has never ceased to reinvent itself, we the peoples of Europe love to announce to the world that peace, like diamonds, is forever. That is a nice thought. But peace is never a done deal. Its foundations need to be reinvented by every generation, every polity, every era. Deep peace is not an inheritance but a way of life. It is not about harmony but struggle. It needs armies of defenders, with all sorts of clever strategies, all sorts of ingenious weapons, all sorts of parochial accents.

Journeys of reckoning often have to do with re-knowing something anew that we had almost forgotten. Can we know peace anew?

We can do so through many different paths. One such path is this: a European pivot from space to time. The EU and its critics have focused on the politics of space, a space made single by markets, regulators and judges, a space where free movement reigns supreme and from which we can choose who and how to exclude. What if the EU were to refocus on the politics of time, time when we reflect back and look ahead, time that can be slowed down better to engage with the needs of the next generation, time to allow for a hundred indecisions, and for a hundred visions and revisions …

Would it not be okay to renationalize space a little if we could radically Europeanize time? Inspired by the journey of Er, who at the end of The Republic comes back from the dead, can we shape our present life to serve future lives through the virtues we abide by? more>

This Is Your Brain on Nationalism

The Biology of Us and Them
By Robert Sapolsky – To understand the dynamics of human group identity, including the resurgence of nationalism—that potentially most destructive form of in-group bias—requires grasping the biological and cognitive underpinnings that shape them.

Such an analysis offers little grounds for optimism.

Our brains distinguish between in-group members and outsiders in a fraction of a second, and they encourage us to be kind to the former but hostile to the latter. These biases are automatic and unconscious and emerge at astonishingly young ages. They are, of course, arbitrary and often fluid.

Today’s “them” can become tomorrow’s “us.” But this is only poor consolation. Humans can rein in their instincts and build societies that divert group competition to arenas less destructive than warfare, yet the psychological bases for tribalism persist, even when people understand that their loyalty to their nation, skin color, god, or sports team is as random as the toss of a coin.

At the level of the human mind, little prevents new teammates from once again becoming tomorrow’s enemies.

The human mind’s propensity for us-versus-them thinking runs deep. Numerous careful studies have shown that the brain makes such distinctions automatically and with mind-boggling speed. Stick a volunteer in a brain scanner and quickly flash pictures of faces. Among typical white subjects in the scanner, the sight of a black man’s face activates the amygdala, a brain region central to emotions of fear and aggression, in under one-tenth of a second.

In most cases, the prefrontal cortex, a region crucial for impulse control and emotional regulation, springs into action a second or two later and silences the amygdala: “Don’t think that way, that’s not who I am.” Still, the initial reaction is usually one of fear, even among those who know better.

For all this pessimism, there is a crucial difference between humans and those warring chimps. The human tendency toward in-group bias runs deep, but it is relatively value-neutral. Although human biology makes the rapid, implicit formation of us-them dichotomies virtually inevitable, who counts as an outsider is not fixed. In fact, it can change in an instant. more>

E Pluribus Unum?

The Fight Over Identity Politics
By Stacey Y. Abrams; John Sides, Michael Tesler, and Lynn Vavreck; Jennifer A. Richeson; and Francis Fukuyama – Recent political upheavals have reinvigorated a long-running debate about the role of identity in American politics—and especially American elections. Electoral politics have long been a lagging indicator of social change. For hundreds of years, the electorate was limited by laws that explicitly deprived women, African Americans, and other groups of the right to vote. (Efforts to deny voting rights and suppress voter turnout continue today, in less overt forms but with the same ill intent.)

When marginalized groups finally gained access to the ballot, it took time for them to organize around opposition to the specific forms of discrimination and mistreatment that continued to plague them—and longer still for political parties and candidates to respond to such activism.

In recent decades, however, rapid demographic and technological changes have accelerated this process, bolstering demands for inclusion and raising expectations in communities that had long been conditioned to accept a slow pace of change. In the past decade, the U.S. electorate has become younger and more ethnically diverse. Meanwhile, social media has changed the political landscape.

The marginalized did not create identity politics: their identities have been forced on them by dominant groups, and politics is the most effective method of revolt.

To seek redress and inclusion, the first step is to identify the barriers to entry: an array of laws and informal rules to proscribe, diminish, and isolate the marginalized.

The specific methods by which the United States has excluded women, Native Americans, African Americans, immigrants, and the LGBTQ community from property ownership, educational achievement, and political enfranchisement have differed; so, too, have the most successful methods of fighting for inclusion—hence the need for a politics that respects and reflects the complicated nature of these identities and the ways in which they intersect.

The basis for sustainable progress is legal protections grounded in an awareness of how identity has been used to deny opportunity. more>