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Silash Ruparell

W. Somerset Maugham – The Painted Veil (1925)

7/11/2015

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My one liner: Maugham is one of the 20th Century’s great authors, and this book touches so many sides of human emotion, development and  self-realisation

‘Deb quando tu sarai tornato al mondo,
E riposato della lunga via,
Seguito il terzo spirito al secondo,
Recorditi di me, che son la Pia:
Siena me fè, disfecemi Maremma:
Salsi colui, che, innanellata pria
Disposando m’avea con la sua gemma’
 
‘Pray, when you are returned to the world, and rested from the long journey,’ ollowed the third spirit on the second, ‘remember me who am Pia. Siena made me, Maremma unmade me: this he knows who after betrothal espoused me with this ring.’

In his introduction to The Painted Veil, W. Somerset Maugham quotes from Dante to let us know  what was the inspiration of the story. The passage is from “Purgatorio” which is the 2nd volume of La Commedia Divina (The Divine Comedy). Pia de’ Tolomei was a gentlewoman of Siena. Her husband suspected her of adultery.  He was too afraid of her family and station to put her to death, so instead he took her to his castle at Maremma and left her there, with the plan that the noxious vapours there would kill her off.  However, she took too long to die and in the end he had her thrown out of the window.
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Pia de' Tolomei by Rossetti
Similarly in The Painted Veil, Walter Fane, a bacteriologist based in Hong Kong  in the early 20th century marries Kitty, a frivolous young girl who, upon
arrival in Hong Kong falls for the charms of the local cad, Charles Townsend.  Upon discovering the affair, Walter volunteers a secondment for both himself and Kitty to Mei-Tan-Fu, a fictitious colony deep inside mainland China, which is infested by cholera, in order that Walter can assist in containing the disease.  In all probability he is leading one or both of them to death.
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Cholera bacterium
Many of Maugham’s works deal with the constant conflict in humanity between the transient or frivolous on the one hand, and the more stoical values of constancy, substance and true knowledge on the other.  Take for example one of his other novels, The Razor’s Edge. The main character of the book is Larry Darrell, an American former-WW1 pilot who decides to go on a spiritual journey of enlightenment that eventually takes him to the East, while his wealthy socialite friends mostly suffer reversals of fortune and continue to be mired in the demands placed on them by the high society in which they operate.

In The Painted Veil it is Kitty’s journey from wannabe socialite to a state of knowing, understanding and world-weariness that comes through experiences of sadness, betrayal and human suffering.  Her husband Walter himself is considered a nobody in the social whirl of Hong Kong.  

“She had discovered very soon that he had an unhappy disability to lose himself.  He was self-conscious.  When there was a party and everyone
started singing Walter could never bring himself to join in.  He sat there smiling to show that he was pleased and amused, but his smile was forced, it was more like a sarcastic smirk, and you could not help feeling that he thought all of those people enjoying themselves a pack of fools.
”

A recurrent theme throughout the novel, and one which leads the reader to consistently reflect on the title, taken from a sonnet by the English Romantic
poet, Percy Bysshe Shelley:

"Lift not the painted veil which those who live / Call Life"

Even Walter’s wife hates him:

“It was laughable; he had no sense of humour; she hated his supercilious air, his coldness and his self-control.  It was easy to be self-controlled when you were interested in nothing but yourself.  He was repulsive to her.  She hated to let him kiss her.  What had he to be so conceited about?”  He danced rottenly, he was a wet blanket at a party, he couldn’t play or sing, he couldn’t play polo and his tennis was no better than anybody else’s.  Bridge ? Who cared about bridge ?”

And yet, on the cholera-infested colony of Mei-TanFu, which is where Kitty pays the price of her infidelity, none of these skills are useful.  The only Western inhabitants are the Deputy Commissioner Mr Waddington, and the French nuns in a local convent, which also serves as an orphanage for children whose parents have succumbed to the disease.

Here, Walter is in his element:

“He’s doctoring the sick, cleaning the city up, trying to get the drinking water pure.  He doesn’t mind where he goes, nor what he does.  He’s risking his life twenty times a day.  He’s got Colonel Yu in his pocket and he’s induced him to put the troops at his disposal.  He’s even put a little pluck into the magistrate and the old man is really trying to do something.  And the nuns at the convent swear by him.  They think he is a hero.”

The landscapes painted by Maugham take you to the location.  As and aside, if you are interested in fin de siècle South East Asia as seen through colonial eyes, I would also highly recommend one of Maugham’s travel books, The Gentleman in the Parlour.

But Maugham’s speciality is conveying Eastern mysticism, and its impenetrability to Western eyes.  In The Painted Veil, this mystique is embodied in the Chinese wife of Waddington  An aristocratic lady who left her newly impoverished family after the Revolution to devote her life to the
Englishman.  And Kitty starts to appreciate the depth and intensity of her
surroundings and their inhabitants:

“Kitty had never paid anything but passing and somewhat contemptuous attention to the China in which fate had thrown her.  Now she seemed on a sudden to have an inkling of something more remote and sterious.  Here was the East, immemorial, dark and inscrutable.  The beliefs and ideals of the West seem crude beside ideas and beliefs of which in this exquisite country she seemed to catch a fugitive glimpse.”

Not that Maugham lets Walter get away with it either.  Walter had ‘courted’ Kitty, somewhat ineptly for many months before proposing to her. Indeed such had been his ineptitude that Kitty had not even been sure of his love interest at the moment of proposal.  But, she had been on the social scene for several seasons without any (in her mother’s eyes) ‘appropriate’ proposals, and she had accepted more of a desire not to disappoint her mother by not being left on the shelf.  It comes back to bite Walter, through Kitty’s infidelity.  And Maugham wastes no time in telling us that he was as much at fault as Kitty for marrying her in the first place, and he ultimately pays the price:

“What did it really matter if a silly woman committed adultery, and why should her husband, face to face with the sublime, give it a thought? It was strange that Walter with all his cleverness should have so little sense of proportion.  Because he had dressed a doll in gorgeous robes and then discovered that the doll was filled with sawdust he could neither forgive himself nor her.  His soul was lacerated.”

Maugham’s language is rarely flowery or sophisticated, and most of his novels are brief.  Yet, when you look back on his novels you see that you have gone on a journey with his characters, you have taken on their learning, you have wrestled with their dilemmas, you have lived in their physical space, and you have learnt about their cultural influences. 

That is Maugham’s true genius: that you don’t notice all of this until you reach the end of the journey.

The Wikipedia link to the book is here.

There was also a 2006 film which you can read about on Wikipedia here.
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Simon Winchester: Bomb, Book and Compass: Joseph Needham and the Great Secrets of China (2008)

8/1/2014

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The Blast Furnace was invented in China
Simon Winchester: Bomb, Book and Compass: Joseph Needham and the Great Secrets of China (2008)

My one liner:
How a foremost biochemist became a foremost sinologist, and single-handedly created the Western world’s understanding of China, long before it became fashionable.

 15 May 1948. “Science and Civilisation in China.  Preliminary plan of a
book by Joseph Needham, FRS.  It will be addressed, not to sinologists, nor to the general public, but to all educated people, whether themselves scientists or not, who are interested in the history of science, scientific thought, and technology, in relation to the general history of civilisation, and especially the comparative development of Asia and Europe”.


Needham, a fellow, and subsequently, Master of Gonville and Caius College Cambridge, went on to write Science and Civilisation in China, which is widely considered the foremost work on scientific development in China.  He himself wrote 15 volumes over the next 4-5 decades of his life, and further volumes have continued to be published following his death in 1995. Simon Winchester's book traces the life story of Needham and the path by which his work came into being.  And through that journey we learn much ourselves about a civilisation that for long periods of history has been far more scientifically advanced than the West. Far more, arguably, than wading through the blogs, commentaries and predictions spewed out by some of today’s “China watchers”.
 
And just as importantly we learn something about this remarkable man, and the potential of what can be achieved by human endeavour, application, determination, and an openness to foreign ideas and cultures. Needham was after all a specialist in biochemistry. In 1939, before he was 40, he published a book on morphogenesis which was acclaimed by a Harvard reviewer as “destined to take its place as one of the most truly epoch-making books in biology since Charles Darwin.” 
 
A committed socialist throughout his life, Needham was selected by Britain’s academic community at the start of the Second World War to go to China and assist with a programme of reconstruction of China’s academic and scientific institutions, following the devastation wrought by war with Japan. And from there he didn’t look back. Already familiar with the Chinese written language through lessons from his friend / colleague / lover / concubine / and eventually in 1989, wife, Lu Gwei-djen, Needham embarked on a relentless pursuit of knowledge about China. 
 
The appendix of Winchester’s book lists “Chinese Inventions and Discoveries with Dates of First Mention”.  Here are a few: Algorithm for extraction of square roots and cube roots: 1 AD; Ball Bearings 2AD; Blood, distinction between arterial and venous: 2BC; Compass, magnetic for navigation: 1111AD; Grid technique, quantitative, used in cartography: 130 AD; Melodic composition 475 AD; Numerical equations of higher order, solution of 13C
AD; Pi, accurate estimation: 3AD; Printing, with woodblocks: 7C AD; Rocket arrow launchers: 1367 AD; Soybean, fermented: 200 BC; Watermills, geared: 3C AD.  As Needham said: “The mere fact of seeing them listed brings home to one the astonishing inventiveness of the Chinese people”.

Written in the style of a novel, Winchester's book puts us into Needham’s shoes as he travels to the  what were at the time some of the most remote parts of the planet, for example his Silk Road journey, in a truck which was a converted Chevrolet ambulance.  As he visits academic institutions, government offices and archeological sites he assembles a collection of original papers and documents detailing every facet of Chinese scientific and technological progress, and on returning to Cambridge after the War, proceeds to catalogue these, leading to the 1948 book plan.

There is of course his personal life, sympathetically and empathetically described.   His devoted wife Dorothy, who is accepting of the open nature of their marriage, is a friend and confidante of Gwei-djen. Needham’s political views, bordering on communism in an age of McCarthyism, and his sympathies with Mao’s regime, lead to frequent run-ins with the political and academic establishment.  

But we are left with the enduring notion that the pure pursuit of knowledge, and the desire to open that knowledge to society at large through painstaking effort, prevails in the end.  That a scientist trained in the supposedly physical precision of Western enquiry can be so open to the ancient scientific traditions as the genesis of his work, is a salutary lesson for all of us:

“Heaven has five elements, first Wood, second Fire, third Earth, fourth Metal, and fifth Water. Wood comes first in the cycle of the five elements and water comes last, earth being in the middle.  This is the order which heaven has made.  Wood produces fire, fire produces earth (ie. as ashes), earth produces
metal (ie. as ores), metal produces water (either because molten metal was
considered aqueous, or more probably because of the ritual practice of
collecting dew on metal mirrors exposed at night time), and water produces wood (for woody plants require water).  This is their ‘father and son’relation. Wood dwells on the left, metal on the right, fire in front and water behind, with earth in the centre. This too is the father and son order, each receiving the other in turn...As transmitters they are fathers, as receivers they are sons. There is an unvarying dependence of the sons on the fathers, and a direction from the fathers to the sons. Such is the Dao of heaven”
From Chun Qiu Fan Lu, by  Dong Zhongshu 135 BC. Quoted by Needham in Vol II, 1956.

Here is the wikipedia link to the author.  There is no wikipedia entry for the book.
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Lessons from Fiction: Part 2 - How Societies adapt to Disruptive Change

12/31/2012

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My one liner: How do societies adapt to Disruptive Change? Exerting discipline through fear. Labour skills reflect society’s needs. Why “National Patrimony” matters.  Being local versus global depends on society’s current needs. We are crucially dependent on our modern communications networks. Opportunity Cost determines Resource Allocation. Life Experiences give us important intuitive skills. Just some of the lessons learned from World War Z.

As 2012 draws to a close, I have taken the opportunity to publish the second in the occasional series, Lessons from Fiction.  The subject is “How Society adapts to Disruptive Change”

The book which gives us some rich insights is World War Z (2006) by Max Brooks.  Written as the account of an agent of the United Nations Postwar Commission, World War Z is a series of post-war interviews with all sorts of people from all over the world who lived through a fictional apocalyptic war.

The war was a 10-year conflict against Zombies, following a Zombie pandemic which originated in China (and was originally covered up by the Chinese government), spread to South America via the illegal donor trade, and finally came to prominence following an outbreak in South Africa.  Zombies are devoid of intelligence and are motivated only by the desire to consume human flesh.  Shortly after being bitten by a zombie, a human will “die” and then become a zombie itself.  The only way to destroy them is to destroy the brain.  They do not tire, and are as strong as the humans they infect.  At peak, there were 200 million zombies threatening humanity, and the book alludes to the human race coming to the brink of extinction.

Here is a YouTube simulation of a Zombie attack (unrelated to the book), originating in Peru.
Which is obviously quite an unlikely thing to actually happen. However, it got me thinking what might be real-world applications.

An interesting paper on the mathematics of containing a zombie outbreak is here.  Its major conclusion is that only quick, aggressive attacks can stave off the doomsday scenario of the total collapse of society.  The paper points to some possible applications of the analysis, including martyrdom-based religious extremism.  Is that why we observe quick and aggressive military strikes against alleged terrorist strongholds ?

And what of the current financial crisis ? “Zombie banks” was a term first coined by Edward Kane during the Savings and Loans crisis of the late 1980s. It describes an insolvent financial institution that continues to exist simply because it benefits from government guarantees of its ability to repay its debts.  Such banks become a drain on the resources of the state whilst fulfilling no useful asset allocation function.  Many commentators argue, and I agree, that much of our current financial system suffers from this malaise.  Modelling the negative systemic impact of keeping zombie banks afloat (as opposed to letting them go) would I think be an interesting field of research. 

But that’s a digression.  Back to the book. The personal accounts tell of people’s survival stories, their roles in discovering or overcoming the threat, and the social, geopolitical, economic and physical changes that people, nations, the environment went through during that period.

Clearly an extreme fictional tale, but extremely well-researched, such that we may draw some interesting conclusions as to how societies behave during times of extreme disruption.

Discipline can be exercised through Fear

The Russian army had its own way of ensuring that its soldiers would fight for the cause.  It stripped the soldiers of their own humanity, and their ability to decide for themselves.  The result was total submission to the mission. An insight into how repressive societies coerce and co-opt their citizens into the national project, whatever that may be.  The 20th century saw this on a grand scale, with millions of people induced to oppress and murder to compatriots so that they become collaborators in the scheme of the dictator.  Decimation also incidentally appears in Roman and Greek mythology.  The three Parcae were the Roman female personifications of fate (see previous post on this subject).  Nona spun the thread of life, Decima measured the thread of life and Morta cut the thread of life.  Not much research available on the internet, but it makes one wonder why the name of the preserver of life refers to partitioning into tenth parts.

“To decimate… I used to think it meant just to wipe out, cause horrible damage, destroy… It actually means to kill by a percentage of ten, one out of every ten must die… and that’s exactly what they did to us…

The Spetznaz had us assemble on the parade ground, full dress uniform no less… ‘You spoiled children think democracy is a God-given right.  You expect it, you demand it ! Well, now you’re going to get your chance to practice it’

… ‘What did he mean ?’

We would be the ones to decide who would be punished. Broken up into groups of ten, we would have to vote on which one of us was going to be executed. And then we… the soldiers, we would be the ones to personally murder our friends… We could have said no, could have refused and been shot ourselves, but we didn’t.  We went right along with it. We all made a conscious choice and because that choice carried such a high price, I don’t think anyone ever wanted to make another one again.  We relinquished our freedom that day, and we were more than happy to see it go.”
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The Parcae (Nona, Decima and Morta) by Peter Paul Rubens. They are spinning the Fate of Marie de' Medici. Decima is responsible for determining the fate of a person.
Labour skills reflect Society’s needs

When disruption comes, the labour market changes abruptly.  In a Zombie war, modern weapons do not work. Additionally, say goodbye to modern manufacturing methods, large scale agricultural production, non-essential service occupations, mass-media as a leisure pursuit.

Gradual disruptions could also have this effect; if you believe that environmental or economic changes will in the future make people less mobile, then skills which emphasise real production and output will be more valuable than those which value intangible services or agency.

“You should have seen some of the “careers” listed on our first employment census; everyone was some version of an “executive”, a “representative”, an “analyst”, or a “consultant”, all perfectly suited to the pre-war world, but all totally inadequate for the present crisis.  We needed carpenters, masons, machinists, gunsmiths.  We had those people, to be sure, but not nearly as many as were necessary.  The first labor survey stated that over 65 percent of the present civilian workforce were classified F-6, possessing no valued vocation.  We required a massive retraining program.  In short, we needed to get a whole lot of white collars dirty.”

One by-product of this could be an improved sense of emotional well-being, with people feeling that what they do is socially useful.  The evidence on this is not clear-cut either way.  Some studies suggest that once basic human needs are met above a certain level (measured by GDP per capita) then there is no international correlation between happiness and income, although within countries rising income is related to rising happiness (the so-called Easterlin Paradox).  Others argue that there is indeed an international correlation also.  Not for debate here, but it does seem intuitive that what people value is "relative" well-being.   In a world where everyone has more equal personal wealth (in this case because of the need to fight a common enemy), then they derive more utility from contributing to their local community. 

Certainly the author seems to imply that people are happier when they are more connected to their community.
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Under what circumstances could this vocation become desirable ?
“I met one gentleman on a coastal ferry from Portland to Seattle.  He had worked in the licensing department for an advertising agency, specifically in charge of procuring the rights to classic rock songs for television commercials.  Now he was a chimney sweep.  Given that most homes in Seattle had lost their central heat and the winters were now longer and colder, he was seldom idle.  “I help keep my neighbours warm,” he said proudly.  I know it sounds a little too Norman Rockwell, but I hear stories like that all the time.  “You see those shoes, I made them,” “That sweater, that’s my sheep’s wool,” “Like the corn ? My garden”.  That was the upshot of a more localised system.  It gave people the opportunity to see the fruits of their labour, it gave them a sense of individual pride to know that they were making a clear, concrete contribution to victory.”

The modern communications network is irreplaceable

Satellites are used for a number of civilian applications: navigation and positioning; communication (including telephony, internet, television and radio); weather forecasting; earth mapping (including agricultural yields, forestry, and geology).  Not to mention military uses.  All of our modern communication depends on them: the world as we know it would literally fall apart without them.  In the novel a team of astronauts mans the International Space Station (ISS) in order to keep a small number of satellites in orbit. The team was not guaranteed any passage back to earth, but given the importance of keeping satellites working they decided to stay on the ISS anyway….
ConstellationGPS
Animation depicting the orbits of GPS satellites in medium Earth orbit.
National Patrimony determines economic well-being

One of the biggest lessons of World War Z is in my opinion the importance of a term which I think is much under-used “National Patrimony”.  The concept is has been the subject of a previous post, Why the West rules…For Now, and it refers to the accumulated store of a country’s wealth and resources.  In its narrowest definition it may consist of natural resources and financial holdings, but it should really be broadened to cover the entire endowment of attributes and heritage that a country possesses, for example its culture, national identity, homogeneity, role of government, integration with other countries.

In today’s globalised world Cuba’s isolation and self-dependence in relation to the above attributes has been very much a handicap.  In the post-apocalyptic world physical and   cultural isolation, a nationalistic mindset, disproportionate investment in healthcare, and the psychology of being accustomed to face a common adversary, all became important assets in the flourishing of Cuba as the world’s wealthiest country.  

This is surely true of any era in time.  When analysing the relative outlook and capabilities of different countries, do we not put too much emphasis on flow items (deficits / surpluses, income levels, growth items, outputs, etc) ?  Surely in any era or cycle it is the National Patrimony of a country that determines its economic well-being.

“Cases were small and immediately contained, mostly Chinese refugees and a few European businessmen.  Travel from the United States was still largely prohibited, so we were spared the initial blow of first-wave mass migration. The repressive nature of our fortress society allowed the government to take steps to ensure that the infection was never allowed to spread.  All internal travel was suspended, and both the regular army and territorial militias were mobilized.  Because Cuba had such a high percentage of doctors per capita, our leader knew the true nature of the infection weeks after the first outbreak was reported… By the time of the Great Panic, when the world finally woke up to the nightmare breaking down their doors, Cuba had already prepared itself for war… The simple fact of geography spared us the danger of large-scale, overland swarms.  Our invaders came from the sea, specifically from an armada of boat people.  Not only did they bring contagion, as we have seen throughout the world, there were also those who believed in ruling their new homes as modern-day conquistadors.”
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Catedral de San Cristobal, Havana. And Cuba as the world's financial centre ?
Opportunity Cost determines Resource Allocation

The first thing that my Economics teacher at school taught us in our first lesson was: “There is only one cost which matters: Opportunity Cost.” Governments and administrators face choices all the time, since they do not have infinite resources.  In the Zombie attack the realisation that governments came to was that it was impossible to protect and save the whole population.  And, more objectively, once you have decided which cohort of the population you are going to save, then the remainder can actually be turned into an asset to fight against the threat by acting as a decoy.  In the book, all governments eventually adopted a version of the “Redeker Plan” as first developed by Paul Redeker during the apartheid era in South Africa.

Brutal and chilling, yes.  And clearly much too extreme for any peace-time decision making.  However, it does remind us government policy-making must by definition favour one group over another.  This could have profound implications in areas such as healthcare, where currently most governments do not explicitly allocate resources based on quantitative measures of their outcomes.  Quality Adjusted Life Years (QALYs) were an early attempt at this (what will be the patients quality of life and how long will he live, if you apply a given treatment ?), and some stories in the media suggest that hospitals do operate such policies unofficially. I think that with budget constraints in the future, such resource allocation will become more explicit.  

“This is where [Paul] Redeker stepped in.  His revised Plan Orange, appropriately completed in 1984, was the ultimate survival strategy for the Afrikaner people.   No variable was ignored.  Population figures, terrain, resources, logistics… Redeker not only updated the plan to include both Cuba’s chemical weapons and his own country’s nuclear option, but also, and this is what made the “Orange Eighty-Four” so historic, the determination of which Afrikaners would be saved and which had to be sacrificed… Redeker believed that to try to protect everyone would stretch the government’s resources to the breaking point.  He compared it to survivors of a sinking ship capsizing a lifeboat that simply did not have room for them all.  Redeker had even gone so far as to calculate who should be “brought aboard”.  He included income, IQ, fertility, an entire checklist of “desirable qualities”, including the subject’s location to a potential crisis zone.  ‘The first casualty of the conflict must be our own sentimentality’ was the closing statement for his proposal, “for its survival will mean our own destruction.”  Orange Eighty-Four was a brilliant plan.  It was clear, logical, efficient, and it made Paul Redecker one of the most hated men in South Africa.”

Life Experiences give us important intuitive skills
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Fengdu Ghost City, China
The experience of the older generation is to be highly valued.  Regular readers of this blog will know that I rant about the inexperience of the 40-something world leaders that we have these days. What happened to the 60 and 70-year olds who have seen the world, achieved something in alternative careers, and truly understand how the world works ?  In World War Z, these were the people who understood the true ferocity of what was about to happen.  Sometimes it is just intuition.  One of the first interviews in World War Z is with a Chinese doctor called to an outbreak in Fengdu, where nobody yet understands that they are faced with a Zombie outbreak.  But one old lady senses something serious is about to happen because she has seen calamity many times before…

“I’ve never see Fengdu as anything but a cheap, kitschy tourist trap.  Of course this ancient crone’s words had no effect on me, but her tone, her anger… she had witnessed enough calamity in her years upon the earth: the warlords, the Japanese, the insane nightmare of the Cultural Revolution… she knew that another storm was coming, even if she didn’t have the education to understand it.”

And finally...

Many more accounts in the book than alluded to in this review, and much to reflect on.  Which makes this book a sci-fi / fantasy novel that is eminently accessible to the Reader on the Clapham Omnibus.

The Wikipedia link to the book is here.

There’s a movie due out in June 2013, by the way.  But it looks like it doesn’t really follow the structure of personal accounts where the outcome is already known.  It seems more like Brad Pitt Saves the World.

Which is fine I suppose. 

Here’s the trailer…
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Leigh Skene - The Impoverishment of Nations (2009)

9/30/2012

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My one liner: A commonsense overview of post-crisis world economic trends. A global macro handbook for an international investor, and a basic primer for a non-specialist looking to understand what the future holds for the world economy.

I am surprised this book has not received more attention. This was another of the books I bought during the summer at the closing-down sale of England’s Lane books that I have referred to in various previous postings.  A reminder of the rightful place that local  independent bookstores should be playing but no longer can in this age of e-books (yes, I do own a Kindle)  and online shopping.  We are being fed content through our electronic networks, and perhaps we are forgetting how to seek out nice things in the physical world. But that is a topic for another posting.

When the global financial crisis began in 2008, we all started to (re-??) learn some fundamental truths, most of which were of the nature of “not everything can keep going up forever”. In the Impoverishment of Nations, author Leigh Skene introduces us to some further fundamental truths, which are also fairly obvious, but which still don’t seem to be grasped by many policy-makers. This is what can give this book wide appeal.  To the layman it can provide a roadmap of where our economies are likely to head over the next few years, and we can draw our own conclusions about what that might mean for us personally.   

There is also, I believe, much to digest in this book for the professional investor, since if some of Skene’s global macro predictions are true, then one could use them to construct an international investment portfolio.

Take for example, Skene’s Fifth Basic Truth (he has 10, which appear in a nice
one-page list at the end): We can’t borrow our way out of debt. Blindingly obvious if you put it like that, and yet, governments (or their Central Banks) are engaging in what is referred to as Quantitative Easing (QE).  Basically, this involves a Central Bank printing money which it then uses to purchase financial assets (typically government bonds) from banks. QE is supposed to stimulate economic activity because it increases the excess reserves of banks, so that they can lend this cash out to individuals and companies (particularly small companies). The problem is that this won’t work according to Skene.  That is because there is too much private debt already in the economy.  The man in the street already has a mortgage and other loans and credit card debt.  Hence, a polite “Thanks, but no thanks,” to the offer of additional credit. The chart below which I have hand-copied from Skene’s book illustrates this quite nicely. And if you want to follow up on what has happened in the last three years (more of the same, basically), then take a look at the latest NY Fed Household Debt and Credit Report Q2 2012.
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An additional effect, only peripherally addressed by Skene, is the move towards capital  tightening via the new Basel III Capital Adequacy rules.  In a nutshell, these are requiring banks to hold more “Tier 1” (allegedly  high quality) capital against their liabilities.  Which means that the supply of credit from banks is possibly tightening also. And with bond yields at all time lows, the“velocity” of money, or speed with which money goes round the economy may well have slowed down significantly as people hoard cash. May I be so bold as to suggest (as Skene indeed does) that now is in fact time to break the world’s habit of pro-cyclicality. Surely now is the time to be loosening regulations, capital requirements and barriers to business, and tightening them when economic activity eventually starts to pick up.  Yes, some allegedly “systemically important”institutions will then topple, but I would suggest that after 2008, this possibility is already “priced in” anyway.
 
I digress.  Back to the book.  Where are the upcoming battlegrounds for natural resources ? Well, some interesting perspectives from Skene. First, the world will not run out of oil.  Reserves from tar sands and shale gas will provide our energy needs for decades if not centuries to come. That said, this doesn’t mean energy prices fall. Indeed, quite the opposite, geo-political forces are the prime driver of energy prices and are pushing them upwards.  Developed-world consumers will adjust by consuming less energy, and hence will have lower living standards.  My own view, for what its worth, is that the newly accessible shale gas and tar sands reserves and fracking etc will constitute an in-built stabiliser on the oil price, both upwards and downwards.  It is hard to see $200
per barrel without a concomitant large infrastructure investment in new types of extraction.  Likewise, you wouldn’t think that much of this new investment would be sanctioned (unless by  a government with deep pockets) at $50/barrel-oil.  Sounds like a collar on the oil price to me.

Skene thinks, and I  sort of agree, that the elephant in the room is Water. Which is a little bit of a mixed metaphor. May I quote from the book, because I can’t express this any better:

“The world’s population has doubled since 1950, but global demand for water is doubling every 21 years.  Only 2.5% of the world’s water is fit for human consumption, and two-thirds of that is locked away in icecaps and glaciers. Unlike other commodities, no new water reserves will suddenly be discovered, there is no substitute for water and just about everything and everyone relies on it....Big reserves of fresh potable water lie in underground aquifers that provide more than half of the water in America, up to 80% in Europe and Russia and 25% worldwide.  They contain 30 times more water than all the world’s lakes, and hundreds of times more than all the world’s reservoirs...[T]he vast aquifers took millions of years to form and replace themselves extremely slowly...Depletion of global groundwater supplies by an estimated 4% annually...One in ten of the world’s major rivers fail to reach the sea for part of the year, including the Colorado, Yellow, Indus and Ganges...Agriculture uses 70% of the world’s water.”
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The Ganges Delta
Consequence: water shortages, food shortages and a much more potent brake on rising living standards than rising energy prices.  Desalination and other infrastructure improvement help a little, particularly for the 30% of demand that is industrial and residential. But it won’t impact on the 70% needed for agriculture.  And irrigation is becoming more difficult because of lack of access to water.

A couple of slightly negative comments. First, the author then gets all Malthusian on us. He starts by referring to Malthus, and saying that in 1798 Malthus predicted that population growth would outstrip food growth, but didn’t factor in the arrival of the industrial revolution. But then Skene falls into the same trap of suggesting that Malthus’prediction will now come to pass as the world’s population grows to 9 billion.  

But who is to say that we are not in the midst of a second, or third or whatever, industrial revolution already ? And anyway population is according to data cited by the author, predicted to peak at 9 – 9.5 billion by 2070. Or maybe we will eat less meat, which is the largest consumer of water.  Self correcting mechanisms again ? Second, I wish this item had been included in the list of Ten Basic Truths, as it is an extremely important issue.

The essence of the book is that advanced developed nations have a long period of adjustment to go through which will likely lead to lower living standards after six decades of rising ones. Having borrowed largely for consumption over the last century or so, rather than investing savings into productive assets (Basic Truth 8), advanced nations now find that they cannot borrow more, either at a personal or a national level.  

These fiscal burdens will only increase as populations get older in advanced
countries.  The number of people of working age available to support each pensioner is dwindling, so either the shoulders of each worker will have to support more burden, or pensioners will need to receive less state assistance. Interestingly, China has a similar problem, whereas India remains in fairly good shape for the rest of the century (see my reproduced chart below).
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Essentially, the forces could have pulled us out of the deflationary trap, such as Keynesian fiscal deficits, or monetarist QE are either unavailable or ineffective (Basic Truths 3-5). Rising energy prices and food and water shortages lower real standards of living.  Wage rises are unlikely to rescue people in advanced countries because globalisation is unleashing cheap labour onto the markets (Basic Truth 7).  And commodities and real estate are still overvalued and have further to fall, hence eroding personal wealth and balance sheets (Basic Truth 2).  A similar argument is also put forward for stock markets, although they have risen since the book was written.  Query however how much further they can go unless you believe predicted earnings growth (the “E” in P/E) will actually transpire. Assets will eventually have to be re-priced at fair value removes the effect of decades of leverage. Fiat money systems have been largely to blame for this.

I would broadly agree with the above analysis, with two exceptions.  Advanced economies have one huge “balance-sheet” item which is mostly ignored by economists’ appraisals. That is the Rule of Law.  Western legal systems have evolved over many centuries to the point where comprehensive property and legal rights exist with confidence. They are far from perfect (as this previous blog post of mine illustrates), but they do provide a basic foundation for widespread economic and social activity. This gives these  countries safe-haven status and will make them a favoured FDI destination.  
 
Which brings me on to why I think this book is of practical relevance.  If (as I do) you agree broadly with the conclusions, then it can also inform an appropriate  investment thesis.  There are many  possible investment conclusions one can draw. Here are  mine:

1. We are no longer in a period where financial engineering and in particular leveraged finance are the primary source of investment returns. Where bonds are low yielding and equities are volatile, don’t be afraid of unlevered equity-only investments in high-quality projects. Be happy with a yield of 4-6%.  You always have an option to raise debt in the future to leverage your returns. So what counts as a “high quality project”? Depends on many factors including time horizon and liquidity preference, but an example could be commercial real estate with high quality long-term tenants such as governments or highly rated corporates.


2. Infrastructure projects, particularly in the food and water sectors.  But pick countries where the off-taker is likely to pay up for duration of the project. For example renewable energy projects in southern Europe came a cropper, because many relied on government subsidies for the duration of the project, and these subsidies were pulled when deficits needed to be cut. So, a good test would be “does the government or other off-taker really  need the relevant infrastructure to be operational for its whole life ?”.  Less important in advanced countries, where contracts tend by and large to be honoured.

3. And this leads us nicely to geographical considerations. Falling living standards in advanced economies does not translate into  “don’t invest there”. Remember that big asset: the Rule of Law.  And following Skene’s thesis, with banks pulling out of corporate  lending, the opportunities for cash investors could be interesting. SMEs, perhaps listed on the smaller stock markets, may have a high amount of leverage on the books, find it hard to access primary equity capital, but have fundamentally strong operational cashflows. The opportunity for a cash buyer would be to take the company private, take the debt of the books and hopefully increase the efficiency and scale of the business with expansion capital. Exit by re-floating.  Many such opportunities abound, particularly in Europe. Private Equity investing will mean what it used to, ie, taking over companies and managing or operating them better.

4. In terms of emerging economies, BRICs have been in and out of vogue over the past ten years. Continuing with the theme of fiscal strength driving economic strength, I would be looking at countries which growing populations from an already large based, strong fiscal positions and are capable of being a “self-sustained eco-system”, and some semblance of an industrial base. Within advanced economies, Australia looks interesting.  The Gulf countries, (including, in the future, Iraq) are natural-resource backed economies with existing infrastructure and very little need to access international debt markets. There are some other examples in Africa, Latin America and Central Europe. A good starting point is the projected Debt/GDP ratios, which can be
found here.

I shall be developing these themes in future posts, but I would be very happy to engage in discussion, either via the comments section here, via email in private or through the various social media, Twitter and LinkedIn. 

There is no Wikipedia link for this book.  The Google Books link for the book is
here.
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Trevanian – Shibumi (1979)

6/29/2012

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The ancient Game of Gō
My one liner: Comparable to (better than ??) Le Carré and Forsyth.  A Japanese philosophy-way of life, as practiced by a stateless assassin who is the hero of the book. And remarkably prescient about technology, terrorism, business and geo-politics.

Trevanian is one of the pseudonyms of Rodney William Whittaker, an author of several genres of fiction during the 1970s and 1980s.  Reading Shibumi over thirty years after it was first written was an interesting experience for the fact that it seems to foretell a number of events and technologies that nowadays have more fin-de-siėcle associations. 

The 1970s version of the Google Algorithm and Social Media all rolled into one is “Fat Boy”, a giant supercomputer run by the Mother Company (you need to read the novel to find out what that is): “Fat Boy contained a medley of information from all the computers in the Western World, together with a certain amount of satellite-stolen data from Eastern-bloc powers...It contained the most delicate information and the most mundane. If you lived in the industrialized West, Fat Boy had you...Programming facts into Fat Boy was the constant work of any army of mechanics and technicians, but getting useful information out of Him was a task for an artist, a person with training, touch and inspiration.”

On terrorism and geo-politics, the novel “pre-calls” 9/11, centering as it does around a plot by Islamic terrorists to down an airliner (Concorde, in this case). Some healthy torture by occupying forces. And there is a distinctly post-Cold War feel to the vested business interests, both Western and Arab, colluding to control the world’s oil supply, together with other forms of renewable energy, whilst unashamedly polluting the planet.  Torture and oh yes, the demise of Concorde as a commercially viable operation is perfectly forecast.

What is Shibumi ? The term is a Japanese word, often used in the context of gardens or architecture, to connote an understated beauty.  As applied to human qualities, it is harder to explain. I won’t be able to paraphrase, so I will quote the novel. Shibumi indicates a “great refinement underlying commonplace appearances...understanding rather than knowledge...modesty without pudency...in art...it is elegant simplicity, articulate brevity...in philosophy...it is spiritual tranquillity that is not passive; it is being without the angst of becoming...Authority without domination.” 

Nicholai Hel, the hero of the novel, resolves to strive for Shibumi at a very young age. For those familiar with Ayn Rand, there is something of the Howard Roark in Fountainhead about Hel’s austere individualism, about striving for excellence when all around him are pushing for mediocrity.

Hel was brought up in Shanghai in the 1930s. His biological father is of German and Hapsburg stock, and his mother is a Romanov Russian, Alexandra Ivanovna, who fled the revolution and became a Shanghai socialite, and who throws out the father as she has no intention of getting married.  Hel receives a classical multi-lingual artistocratic education, and his mother even allows him to become highly skilled in pure mathematics as she is told that, in the aristocratic tradition, it has no commercial value. Hel complements this by escaping during the night and hanging out with Chinese street-kids.

The Japanese invade Shanghai, and one General Takashi is billeted to take over the mansion in which Ivanovna is staying.  He agrees to let her stay on, and after her sudden death, he becomes the father figure to Hel.  Primarily he trains Hel in the Japanese game of Gō (“What Gō is to philosophers and warriors, chess is to accountants and merchants”). Indeed when the Second World War breaks out, Takashi sends Hel (now Nikko, not Nicholai, because of the Japanese difficulty with the ‘l’) to Japan to train in Gō with Takashi’s close friend and Seventh Dan Gō player and teacher Otake-San. Through Gō, Hel learns strategy, tactics, and the art and science of combat. 

And we also get an early sense in the young Hel, of what will drive and define the older Hel: “ the egoism of a young man brought up in the knowledge that he was the last and most rarefied of a line of selective breeding that had its sources before tinkers became Henry Fords, before coin changers became Rothschilds, before merchants became Medici.”  And what more vivid personification of the parasitic “merchant” class than the Anglo-Saxon West, and in particular the United States of America ?  The country which also flattened Hiroshima, where the love of his life was living at the time.

Post-war Japan is brought to life through the eyes of Hel, the principal occupying forces being America and Russia.  Japanese finesse, culture, art and history is rapidly Americanised, and much of its former subtleties are sacrificed.  The Russians are not much better, and it is clear that the post-war years were essentially a dirty carve-up between the West and the Soviet Bloc.  Hel is stateless, and has no papers.  Although he manages to get some fake ones for a while, and works as a code breaker for the Americans.  But eventually US-Soviet politics intervenes, and a chain of events sees him tortured and kept in solitary confinement for three years, for no particular good reason.

Fast forward to the late seventies, and Hel has a new nemesis. 

By this time he has carved out a successful career as a highly paid assassin and is now in retirement at his castle deep in Basque Country.  He tends to his garden and his concubine Hana (the “Dominique Francon” to Hel’s “Roark”).  He has become an expert caver and spends his days exploring the deepest caverns with his close and hearty friend Beñat Le Cagot.

He is popular in the area, and is well-protected. It is surely impossible for anyone to get near his castle without everyone in every neighbouring village knowing.

The attraction of this novel is that you feel Hel to be the hero, despite his occupation.  We are the product of our upbringing, and our circumstances, and it makes you realise that it is possible to forgive someone, or understand someone, if society has totally cut them out. A blond-haired man of aristocratic birth who completely absorbs Eastern philosophy.

“Your scorn for mediocrity blinds you to its vast primitive power.  You stand in the glare of your own brilliance, unable to see into the dim corners of the room, to dilate your eyes and see the potential dangers of the mass, the wad of humanity...You cannot quite believe that lesser men, in whatever numbers, can really defeat you. But we are in the age of the mediocre man. He is dull, colourless, boring – but inevitably victorious...The roar of the plodders is inarticulate, but deafening.  They have no brain, but they have a thousand arms to grasp and clutch at you, drag you down.”

Back to the nemesis. Well, without revealing too much, you can imagine that Fat Boy has something to do with it.  In addition, there is a debt of honour Hel owes to an old Jewish friend of his, Asa Stern, that he must repay to Stern’s niece, Hannah.  But those darned energy big business interests have other ideas.  The denouement takes us to London, and an English country house, and then back to the Basque territory so familiar to Hel for the final showdowns. 

Overall, lots to learn from this book, not least, in the tradition of Shibumi, an appetite to explore more, and get a deeper understanding of the practice of self-improvement.  Namely, how in our real lives can we strive to attain the equilibrium of “casual elegance” ?  For that I would recommend you read “The Shibumi Strategy” by Matthew E. May, also reviewed on this blog page, here.

The Wikipedia link to Shibumi by Trevenian is here.
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H. Woody Brock – American Gridlock (2012)

4/7/2012

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What does this have in common with a classical economic theory of general equilibrium ? Read on...
My one liner: Subtitled "Why the Right and Left are Both Wrong - Commonsense 101 Solutions to the Economic Crises." Although it has some flaws, this book is a rarity in the post-financial crisis literature, as it heavily emphasises first principles rather than over-analysing with macro data. Highly accessible to the layman.

The Oprah Winfrey Book Club Lottery: 

“Suppose you and I are both accomplished writers of exactly the same age and reputation. We have both sold about the same number of books, yet we both only make $75,000 per year because we write “serious” books.  Now, suppose a random event occurs: Oprah Winfrey opens up her book club. We both now face an equal chance that she might notice one of our next two books when they are published, read the book, and recommend it strongly to her audience.  If I am the lucky one, then my income will soar from $75,000 to $5,000,000, and likewise for you if you are the lucky one.”  

Well, let’s just do a deal.  Let’s just enter into a contract whereby we agree to split the earnings 50/50, whoever gets the book deal. That way we both lock in a profit of $2,500,000. Pure free market economics right ? 
 
At the end of this review, you can find how the author H. Woody Brock, (Harvard then Princeton PhD, uses this example to show us why progressive income taxes are
fair.
 
Elsewhere, the part I like most in this book is the analysis entitled “Must there be a Lost Decade ?”, largely I suppose because it is the part that has most relevance internationally in terms of ameliorating fiscal deficits. Brock demonstrates how we can have our cake and eat it, by increasing GDP growth and at the same time reduce long term fiscal deficits, hence preventing a Lost Decade 2010-2020. The answer lies in ensuring Government Spending is redirected towards “productive spending” on profitable investments (human capital and infrastructure). A new Marshall Plan.  
 
Under conventional thinking it is most unlikely that these two goals can be achieved.  First principles tell us:
 
Government Deficit = Net Private Savings + Net Foreign Capital Inflows. 
 
Or, for the  non-equation-minded, a government deficit must be funded either by (1) the domestic private sector, or (2) by foreign capital.  That’s it. The late Wynne Godley of Cambridge University and the late Professor James Tobin of Yale were both proponents of this approach. So, if a government wants, say, to increase GDP growth by 2% (from the current 2% to 4%) and simultaneously reduce the government deficit by 7% (from an unsustainable 10% of GDP to a more sustainable 3%), then Net Private Savings must fall by 9%, as per the above equation.  Simple. 
 
Except that this is more or less impossible in current circumstances.  Households are overly indebted, business investment confidence is low, and unemployment is rising, so the chances of a boom in overall investment spending from the private sector are...b**ger-all.
 
But, the insight from Brock is to focus on what we mean exactly by Government Deficit”.  He engages in a Socratic Dialogue with President Obama, in order to propose a massive increase in Productive Spending.  
 
So, out of a $4 trillion budget, $1 trillion should be invested in investments which generate positive returns, and the remaining $3 trillion (matched by tax receipts of $3 trillion) on “unproductive” spending (defence, interest payments, administrative costs, social and medical care etc).  

Bond markets like this because this because the country is not running up
a structural deficit which must be serviced by future generations. 
 
What does  “productive”investment mean ? It means that an independent body would certify whether an investment is forecast to earn a positive return. It would take into account positive externalities, so that for example an interstate rail link would qualify because it generates employment opportunities in the areas which it services.  

Brock draws the analogy with private accounting, where investment expenditure is not expensed, but is capitalised on the balance sheet and only the amortised portion is expensed.  
 
There are a number of problems with Brock’s proposal. How you measure returns to take into account all those positive side effects ? Would, as proposed, international sovereign funds such as Norway or Abu Dhabi really come to the investment party, based on earning “social returns”? How do you prevent “Vested Interest Capture” of the Agency which is certifying new investments ? 
And the potential for trampling over private property rights would be
worrying.  
 
But, overall the proposal deserves serious consideration, (a) because it is of global relevance for those G20 countries (most of them) running enormous deficits and (b) because the reality is that those governments are going to spend the money anyway.
 
Brock’s book addresses four other Big Challenges facing the USA. Two of them are very US-centric, and in my opinion not addressed rigorously enough.  One is the Entitlements Crisis as exemplified by Medicare and Medicaid. Brock’s use of first principles is again to be admired, e.g. driving down the price of provision by shifting outwards the supply-curve of medical services (essentially, train more doctors and nurses).  Practical ? Hmm.  Of relevance to an international readership ? Limited.  And even worse on China-bashing.  Or, as Brock puts it: “The Need to Learn How to Bargain Effectively with Thugocracies”, in reference to China’s repeated outsmarting of the USA in
international policy matters.  Yes, but China is on a much much longer time-cycle of strategic decision-making, with which 4-5 year Western electoral cycles can never hope to compete.  Live with it. Democracy has some upsides too.  And global geo-politics is a bit more complex than USA v China, I’m
afraid. I'd suggest non-Americans skip these chapters.
 
Another issue which Brock addresses is “The Risk of Future Financial Market Meltdowns”.  On identifying the causes, his analysis is exceptional. Excess leverage in all sectors. An overreliance on classical economic theory over the last few decades had led decision-makers (public and private) to assume that there is no such thing as “excess” leverage, since investors will optimally leverage their positions in accordance with their own risk tolerances.  Mordecai Kurz of Stanford University has developed a theory of “Endogenous Risk” which shows that when some members of society indulge in leverage over and above what is optimal, this increases the volatility of the business cycle for the entire economy, hence making everybody worse off in terms of increased risk, for little or no gain as to how much society as a whole ends up with.  The policy prescriptions therefore, not surprisingly, reflect this.  
 
A “Leverage Czar” would be appointed to monitor leverage in different asset markets, with strict penalties for contravention.  I am very sceptical of the ability of a top-down agency to cope with this.  And he should address the question of what the effects would be today of a one-off deleveraging within Eurozone banks in order to bring their equity into line with US banks.  Brock is on surer ground in calling for bank break ups. In particular, the speculative parts of banks should not benefit from government guarantees.  And I would have liked to see something on the merits of counter-cyclical fiscal policy, as sending a strong signal to the market.
 
Finally, Brock addresses notions of Distributive Justice. This is useful as it reminds us that the discipline of Economics is essentially driven by Politics, whether we like it or not.  And whether you agree or not, Brock presents some compelling theory from the classical school (Leonid Hurwicz, Kenneth Arrow, Harvard) to demonstrate that redistribution through progressive taxes is indeed fair from a free-market perspective also. For the Economists, remember those theoretical “Arrow Securities” which allow you to hedge all risks in your life.  Now, recall the Oprah Winfrey example at the beginning.  Well, the  insurance contract we entered into would be an example of an “Arrow Security”.  But given that markets don’t operate fully efficiently to allow us to have enough information for these contracts, redistributive taxes do the job.  They re-transfer wealth back to less wealthy individuals, and therefore play the role of the payout of the insurance contracts.

Overall I like this book, despite some flaws. The reason being that it is always clear and consistent, and is accessible to the layman, as the complicated theory is, rightly, shoved into appendices.  And it is good at identifying much of what is wrong with today’s society. 

The absence of Socratic dialogues (à la Plato) in which people debate logically in order reach mutually beneficial conclusions rather than bandying around soundbites and tweeting (“The Dialogue of the Deaf”).  The overreliance on number crunching and data mining (“Students today believe that if they are equipped with a powerful database and the  appropriate spreadsheet program, the truth will reveal itself”).  And the mendacity of politicians (aided and abetted by a scandal-driven press) who are not subject to “irrationality scrutiny”when they introduce policies that are clearly against public benefit.

There is no Wikipedia link for this book.  The facebook link is here.
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Ian Morris - Why the West Rules…For Now (2010)

1/14/2012

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The Horsemen of the Apocalypse
Ian Morris: Why the West Rules...For Now (2010)

My one-liner:
Quite simply the best popular history book you will ever read.  Astounding survey of historical forces that have shaped today’s world.

At the top of the front cover of this book, there is the following quote from Niall Ferguson: “The nearest thing to a unified field theory of history we are ever likely to see”.  That is not far off the mark, and it would be impossible to do justice to the breathtaking breadth covered by this work in a short review.

There is much current debate the so-called catch-up of developing / emerging countries after several centuries of Western economic dominance.  The West’s relative decline, exacerbated by the financial crisis, is personified by the projected overtaking of the USA’s GDP by China some time in the next 10-40 years, depending on which research you read. And in the world of finance and investment, this translates into debates around upcoming fast economic growth in emerging markets being a driver for superior investment returns.  After a reading of Ian Morris’ book, that analysis seems less applicable as an appropriate framing for relative rise and decline.  Because it forces the reader to think in much longer time frames. And to ask himself some different questions.

The book is an astounding synthesis of biology, geography, geology and socio-economic history, that surveys the ascent of humanity from pre-historic times until today.  The style is both story and analysis.   From Monty Python’s Life of Brian to Voltaire’s Pangloss (“All is for the best in all possible worlds”) to Alexander Pope (of Newton: “Nature, and Nature’s laws lay hid by night, God said Let Newton be ! And all was Light !) to Albert Einstein (“I do not know how the Third World War will be fought, but I can tell you what they will use in the Fourth – rocks”), there is enough literary, poetic, scientific and cultural commentary to keep any self-styled polymath reader happy. 

Some central themes of the thesis. 

The frame of reference is the evolution, over the last 16 millenia, of Morris’ Social Development Index.  You can quibble, if you want, with the construction and the components (energy capture, organisation / urbanisation, war-making, and information technology), but what it serves to do is impose a consistent development measure across all time periods for the relative development of the West and East. 

Throughout pre-history and history the index has swung in favour of either East or West for many centuries at a time. Geography (“maps”) and human progress (“chaps”) variously define which region takes the lead.  Progress, is in Morris’ self-confessedly pithy theorem, “made by lazy, greedy, frightened people looking for easier, more profitable, and safer ways to do things.” The analysis thus looks to dismiss the notion that there is somehow a hard-wired ethnic or geographical lock-in of development capability for any one region. 

The first sustained decline in social development in both West and East, began around 100CE and there was another one around 1000CE, as both regions hit what Morris refers to as a “hard ceiling”.  Both periods were characterised, in Morris’ analysis by the prevalence, using the biblical analogy, of the “Five Horsemen of the Apocalypse”, namely climate change, famine, state failure, migration, and disease.  The West spent most of the period from 1400 to 1800 CE catching up with the East, ending a 1200-year year reign of Eastern supremacy, and crucially, resulting in both regions breaking through the previous 1000CE hard ceiling. The last two hundred years ? We know the story. An unprecedented, acceleration in development for both regions, but a clear advantage to the West (the opening of the Atlantic trade route, the industrial revolution, European military power etc, etc), with its roots in an ex-ante highly probable chain of history stretching back to the twelfth century .

The surprising end to the book is less about whether China will now regain its superiority, although the projection is that it will, around 2103 at the latest, and we all kind of know that. With a further massive acceleration (from an index score of 900 to 4000) for both regions as new technologies and globalisation unlock development.  This “Singularity” is borrowed from futurist Ray Kurzweil. It is “a future period during which the pace of technological change will be so rapid, its impact so deep…that technology appears to be expanding at infinite speed.”

The more ominous question is whether the world will instead enter a period of “Nightfall” (last flirted with in the Younger Dryas ice age period around 10,800BC), using the title of the novel by Isaac Asimov.  Not only will the world hit another hard ceiling, but, like any crash after a big bubble, the next crash of humanity will be utterly destructive. Are the “Five Horsemen” amongst us again, as climate change threatens and the free transfer of technology increases the chance that devastating and dangerous technology can end up in the wrong hands ? Morris concludes that there will be no halfway house, no “silver medal”.  Only one of Singularity or Nightfall will prevail.

Here is the wikipedia link for the book.
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    Silash Ruparell

    Reviews of books that I read in my spare time.  Enjoy.

    Archives

    November 2015
     - Ferdinand von Schirach: Crime & Guilt (2012) 

    October 2015
    - Fritjof Capra and Pier Luigi Luisi: The Systems View of Life - A Unifying Vision (2014)

    September 2015
     - Danny King: School for Scumbags (2012)

    August 2015 
    - Erich Maria Remarque: Arch of Triumph (1945)

    July 2015
     - W. Somerset Maugham - The Painted Veil

    June 2015
     - John Julius Norwich: Byzantium, The Early Centuries (1988)

    May 2015
     - Anthony Price: Other Paths to Glory (1975)

    April 2015
    - Richard Davidson and Sharon Begley: The Emotional Life of Your Brain (2012)

    February 2015
    - Charles Neider (Ed): The Autobiography of Mark Twain

    January 2015
    - Paul Torday: The Girl on the Landing (2009)

    November 2014
    - David Eagleman: Sum - Forty Tales of the Afterlife (2009)

    August 2014
    - Simon Winchester: Bomb, Book and Compass: Joseph Needham and the Great Secrets of China (2008)

    May 2014
    - Steven Strange & Jack Zupko (Eds): Stoicism - Traditions and Tranformations (2004)

    March 2014
      - Michael Dibdin: Vendetta (1990)

    January 2014
     - Matt Sinclair (Ed): The Fall - Tales from the Apocalypse (2012)

    September 2013
     - Edward Jay Epstein: Have you ever tried to sell a Diamond ? (And other
    investigations of the diamond trade) (2011)


    August 2013
     - Lessons from Fiction Part 3: The role of institutions in alleviating the poverty trap 

    April 2013
    - Emile Zola: L’Assommoir (The Drinking Den) 1877, Translation by Robin Buss (2004)

    March 2013
    - Margaret Atwood:Oryx & Crake  (2003)

    February 2013
     - Paul Auster: Sunset Park (2010)

    January 2013
     - Ernest Hemingway: The Old Man and the Sea (1951)

    December 2012
     - Lessons from Fiction Part 2 - How Societies adapt to Disruptive Change

    November 2012
     - James Barr: A Line in the Sand (2011). And a nod to "Information is Beautiful"

    October 2012
     - Voltaire (1749 translation): Zadig or the Book of Fate (1747)

    September 2012
     - Leigh Skene: The Impoverishment of Nations (2009)

    August 2012
     - Steven Roger Fischer: A History of Language (1999)

    July 2012
     - John Dickson Carr: He Who Whispers (1946)

    June 2012
     - Matthew May: The Shibumi Strategy (2011)
     - Trevanian: Shibumi (1979)

    May 2012
     - Lessons from Fiction: Part 1 - A beginner's guide to convicting an innocent man

    April 2012
     - H. Woody Brock: American Gridlock (Why the Right and Left are Both Wrong, Commonsense 101 Solutions for the Economic Crises) (2012)
    March 2012
      - Jane Jensen: Dante's Equation (2003)
    February 2012
    - Amartya Sen: The Idea of Justice (2009)
    January 2012
    - Ian Morris: Why the West Rules...For Now (2010)

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