Field Reports: September 2014

U.S.A. All The Way

While the title sounds jingoistic, this chapter continues the discussion of world history. It continues to address China's economic prowess, touches on the relationship with Wal-Mart, and then delves into the African origins of Western Civilization. The current civilian uprisings against the ruling Oligarchy took hold in Egypt. Western Civilization as we know it began some 6,500 years ago in African Egypt. That is where this discussion really begins.

It is in this chapter where race relations in the U.S.A. is brought up. It discusses how the general population views the issue of race in the nation as of 2007. To say anymore would be to give it all away. It is best you read it for yourself.

Cliff Potts
September 29, 2014

U.S.A.

All The Way

It bears repeating that

China

today is playing the U.S. game. While it is a Communist Nation, and over 2000 years old, it is doing what it can to become a player in the world market. It is learning our language and fixing their economy to proven technologies so it can sell what it produces to Wal-Mart. Wal-Mart imports more Chinese goods than all of Western Europe combined. If an extended recession savagely diminishes Wal-Mart’s ability to move Chinese products, then China will falter if it does not have its own developed middle class to sustain economic progress. Does it really come down to the activity of one retail outlet? Unfortunately, yes, it does. That is exactly how big Wal-Mart is in the world today. By the same token, if China falters then Wal-Mart will be hard pressed to pressed to keep its shelves filled.

The only real threat to the global economy is China collapsing in on itself in some form of Social Darwinism meltdown. As a general rule, 10% of a given nation’s population, in a free market economy, has to be middle class in order to have a stable economy, a stable social structure, and a vested interest in supporting the economy and the ruling class or party. Middle class is literally half way between the wealthy 1% of the population, and abject poverty. Both extremes exist, and the middle class is a bulwark to support the status-quo. The middle class in China numbers between 90 million and 130 million people (roughly one-third to one-half of the U.S. population in comparison).

This, of course, brings up back to Wal-Mart. Wal-Mart is viable only so long as it represents a substantial saving to the working-class population so that they can perceive themselves as being truly imbedded in the middle class population. This is no longer happening. Wal-Mart prices are steadily increasing and consuming more and more of the working-class’ already diminished “disposable income”. In a truly interesting social pheromone, many of the Wal-Mart employees, who are themselves at the low end of the economic food chain, spend half their earnings at Wal-Mart. The firm gives them a generous 10% discount. That of course just about covers the sales-tax.

Wal-Mart is, of course, passing on the cost of fuel to the consumer. This would make sense, traditionally, and historically if a retail firm makes it money on volume of sales not on the mark-up of the individual item. It is not unusual for a super-market to have a 2% to 3% mark up. That is not the case with Wal-Mart. Wal-Mart’s markup is in the range of 30% to 50%; the higher percentage used on the inexpensive goods coming out of China. At the same time, they are squeezing out their traditional consumer base and are trying to attract people who would be far more comfortable shopping at Neiman Marcus.

This new marketing strategy may be cultural suicide for Wal-Mart. They may pick up some up-scale customers. Those customers may shop at Wal-Mart as a novelty experience, However, after a few encounters with Wal-Mart’s typical “associates” these new customers may find the prices of little relevance as a trade off to better customer service. The up-scale customer is not as price dependent as the working-class or middle class shopper. The lower middle class worker is stuck with lower quality items because higher quality is outside their price range. Unlike her middle class or working class counterpart, however, the up-scale shopper will quickly find another place to shop once the Wal-Mart novelty is over. Where Wal-Mart will go from there is anyone’s guess. More than likely they will kick off some campaign to bring back the lower income consumer and begin the cycle again.

We have pretty much defined how the United States arrived at the position of domination in the globe. Succinctly, it managed to be the last one standing when the Second World War ended. This was done by beating the Japanese into submission, and supplying support to England, Russia, and eventually France to defeat the Nazi war machine. A summation of the events in World War Two could be written as: The U.S. supplied men and weapons to the English and French, to open up a long western front which became the flat of the anvil upon which the Soviets pounded the Nazi Reich. This was the plan. It reduced losses for the United States, England, and France because the Soviet Union wanted to take revenge upon the Germans.

This is not to say the U.S. did not take heavy losses in World War Two. The U.S. lost some 407,300 military personal and 11,200 civilians (0.32% of the population as counted in 1939). The United Kingdom lost 382,600 military personal and 67,800 civilians (0.94% of the population). France lost 212,000 military personal, 267,000 civilians, and 83,000 Jews in the Holocaust (1.35% of the population). The Soviet Union lost 10,700,000 military personnel, 11,800,000 civilians, and 1,000,000 Jews (13.39% of the population).[1]

According to The Encyclopedia Britannica:

There can be no real statistical measurement of the human and material cost of World War II. The money cost to governments involved has been estimated at more than $1,000,000,000,000 but this figure cannot represent the human misery, deprivation, and suffering, the dislocation of peoples and of economic life, or the sheer physical destruction of property that the war involved.[2]

With the exception of losses in the Pacific (specifically Pearl Harbor, Guam, and the Philippines) the U.S. remained virtually untouched. Within a few years following the war, the U.S. had switched from martial (war and war equipment) production, to a booming civilian economy of cars, refrigerators, homes, radios and eventually televisions. This same process took well over a decade for the Allies and over 46 years for the “Eastern Block” countries. With Europe, Asia, the Near East, Middle East, Far East, and Africa shattered or in turmoil, the U.S. stepped in to rebuild the globe. It did so in a typically Anglo-Saxon expression that continued as an extension of English policy.[3]

The idea that there is some kind of Anglo-Saxon racial superiority is a myth. It is, however, a myth which dies a hard death as heard in the last lines of Tony Blair’s resignation speech on May 10, 2007. Mr. Blair stated, “The British are special. The world knows it. In our innermost thoughts, we know it. This is the greatest nation on earth.” While there is nothing wrong with patriotism, this is the same kind of rhetoric for which the U.S. has been criticized during the current Bush administration.

There is no discussion on U.S. domination which does not include race relations. Race relations in the U.S. have never been amicable. The discussion on the Anglo-Saxon domination is in no way to be misconstrued as an endorsement of European racial superiority. The recent Anglo-Saxon cultural, economic and political domination of the globe is simply historic fact. Over the past 6000 years of human history, there have been many different ruling cultures and expressions.

At the dawn of Western history, the known world was ruled by the Egyptians. They ruled the west far longer than the Anglo-Saxon line has ruled in recent history. Racism, according to a BBC report broadcast in the early days of the current decade, goes back to the enlightened Greeks who gave us the ideals of self-determination and the republic form of government. Others argue that it first appeared in Spain between 722, and 1492. In some ways it is a relatively new idea. In other ways it is simply a form of tribal based discrimination. It can be said that India’s cast system has its roots in such tribalism. Even there, however, some argue that racism has its roots in socioeconomic distinctions. According to Wikipedia’s article on caste, the word is derived from the Roman casta meaning which can mean lineage or race. While the racist root of the Indian system of institutional discrimination is well known, it is ignored for the sake of economic opportunity and corporations ignore this.

The United States as a constitutional democratic republic has existed for 220 years. That is just over one tenth of the span from the year zero to today. Political, cultural, and racial equality is a relatively new dynamic to the nation’s landscape. Some members of minorities in the U.S. have successfully taken advantage of opportunities made available since 1964. Yet, others still suffer the stigma, and have grievous resentment of the sting of past racial oppression. Many minorities still cry in outrage for unwise racial innuendos.

Racial equality is so new that there is a fear that this fragile equity will be swept aside as quickly as it was brought in. Some fear it is already happening. After 100 years of struggle against racial oppression (1865 to 1965) the gains are still new, and the details and social expression of equity are still malleable. Any loss of status (perceived or real) could begin the decay of gains of the last 43 years. Moreover, minorities in the United States are still disproportionately impoverished as a percentage of the population. There is no doubt that there is still a lot of room for improvement in the United States when it comes to full equality and racial acceptance. But, improvements are being made.

In the science of criminology there is a theory known as labeling theory. It is used to explain why a mischievous child can grow up to be a hardened criminal. The constant reinforcement of the child being told he is “bad,” “stupid” or “lazy” will result in the child taking on those traits as he enters young adulthood. This is the very reason why it is now socially unacceptable to use negative racial slurs. However, in society at large, labeling theory still plays out with negative effect. Every time a challenge is made that the predominant culture is acting in a discriminatory manner, the charge gets less and less sympathy.

If a person is chronically accused of being a racist, or is striving to keep racism in check, they will get to the point that they become immune to the reprimand. They will respond to the accuser with personal apathy if not animosity. They will come to accept the label and ignore any social stigma attached to the label. Once that occurs the accused loses all ability to exert any type of control to correct the offensive behavior.

Much of this immunity, or hostility, comes from the frame of reference. Anyone who began school, or was born, after 1965 has no knowledge of institutional racism in the United States. They never saw lynchings. They never saw “Whites Only” signs, or the “Colored Entrance” off the back alley. They know nothing about school segregation. They never saw the midnight raids by the men in white sheets. The only men in white sheets these people know are the pictures of terrorists from the Middle East.

At best, segregation and discrimination was something that was committed by their parents or grand-parents. To them, racism is just another form of political grappling, and in their collective, political cynicism they are sure that someone is making money from the hustle. Are they wrong in that opinion? These young men and women who are now addressing their own relative poverty and diminished economic opportunity have little concern for the plight of others who are, due to the legacy of state sanctioned institutional racism, still further down the economic scale than they are. It is even harder to come to grips with the social inequity due to race when they see, and hear, through the media, minorities who are better off than they are. Those minorities may be exceptional people, or they may be gifted tokens of the American Dream, but the majority uses them as examples of the successes of the racial equalization in the nation.

The history of rampant racism in the U.S. is fading to a form of dark mythology for younger Americans. Since racism is outlawed, and no longer state sponsored, they see it as a social issue of some isolated sub-cultures. The constant accusations of racism fall on deaf ears in the rising generation; they have no clue of what they are being accused of except as some kind of slur.

The further the generations get from the era of institutional racism and institutional oppression, the less effect the criticism will have on them. It is simply not real to the majority of the Anglo-Saxon citizens. It does not exist. The only thing that exists to the Anglo-Saxon majority is socioeconomic class. All issues revolve around economic resources and liquid assets. This is the real world for the Anglo-Saxon. The only focus is on acquiring and securing economic resources. There is no other issue. It all comes down to compete, win, or die. This is the U.S.A. today.

[1] World War II casualties. (2007, May 10). In Wikipedia, The Free Encyclopedia. Retrieved 13:04, May 10, 2007, from http://en.wikipedia.org/w/index.php?title=World_War_II_casualties&oldid=129797070

[2] "World War II." Encyclopedia Britannica. 2007. Encyclopedia Britannica Online. 10 May 2007<http://www.britannica.com/eb/article-53609>

[3] The final blow came in 1639 when the Dutch (also Saxon in origin and under Calvinist influence by this time) broke the Spanish at Battle of the Downs. The Anglo-Saxon domination was handed to the United States of America in 1945. The U.S. literally was the “last man standing.”

When Worlds Collide

China has survived the global contagion of 2008. That is no surprise to anyone. As it was written in 2007, "Today’s

China

, Communist though it may be, is playing the U.S. game. They have even modified their ideals to match the capitalist system." This discussion is about how the world comes to this point in history.

Cliff Potts
September 27, 2014

When Worlds Collide

In the days of the Nixon White House, in the attempt to unravel the Watergate scandal, a phrase emerged as a national idiom: “Follow the money!” It means that to find who is involved in some activity one needs only to find out who paid what to whom. This detective work has successfully led to more than one conviction.

Even before Watergate, tracking the accounting trail led, eventually, to the only crime ever hung on the notorious Alphonse Gabriel Capone (or Al "Scarface" Capone, as he was better known). His conviction? Tax evasion! The one time crime lord and reprehensible boss of Chicago’s underbelly went down hard because he did not give Uncle Sam a cut of his illegal action. Had Capone paid his taxes, when prohibition was finally repealed, the self described Used Furniture Dealer, the kingpin of the Chicago Outfit, would probably not have spent a day in Federal Prison. He died in prison on January 25, 1947 of complications due to third-stage neurosyphilis.[1]

Another maxim is equally valid: “Watch what they do.” When dealing with political situations where oral deception and rhetorical slight of hand are so common that it is assumed and overlooked, this axiom is even more important. When watching China and the European Union (or any country, for that matter), the rhetoric is far less important than the actions.

There has been discussion on the left that the globalization is a fancy word for Pax Americana Imperialism. For the sake of argument, within the discussion in this section, let us assume that the accusation has some validity. It will provide a platform from which to build a framework for events in the world today.

Empires are arrogant entities. Not only do they develop the colonies at the expense of the homeland, but they export to the colony the cultural distinction of the Mother Country. Further, they reward the colonies which best exemplify the culture of the Imperial Center. This is how Paul’s home city of Tarsus became a free Roman city before Paul was born. This is how much of the New World was given the fullness of the Hispanic heritage and culture from Spain. This is how Great Britain influenced the globe. Not discounting Dutch and French imperialism, for the past 400 years the Anglo-Saxon blood line has held the world in its grasp.

The domination of the British Empire was inherited by the United States following World War One when the United Kingdom, suffering from cultural fatigue, abdicated the Super Power position. The United States, as the only Western nation to survive virtually unscathed from World War Two, initially stood in opposition to Communism. Recently, according to critics and proponents alike, the United States has worked with great diligence to spread it form of democratic capitalism around the globe. Those who have bought into this economic expression (i.e. Russia, China, Vietnam, India, and the greater part of the European Union) are reaping the rewards for aligning with the U.S. economics. The Islamic world, which is violently resisting the presence of U.S. occupation forces, is suffering from that resistance.

To compare the Democratic Republic of the United States of America to any previous empire may seem distasteful. That is because the average citizen of the United States does not understand what has been inherited. We can refer to the U.S. as a Super Power, we can call her a Global Leader, but at the opening of the 21^st Century, the United States is an Imperial force. It is well past time for the citizens of the U.S. to accept what has been formed and act responsibly.

The U.S. has softened the hard edges with the adoption of the 13^th Amendment to the Constitution of the United States in 1865, the 14^th Amendment in 1866, and the 15^th Amendment in 1870. It further softened its hard political edges in 1920 with the passage of the 19^th Amendment allowing woman to vote in national elections, eradicating the Poll Taxes in 1964 under the 24^th Amendment, and the passage of the Civil Rights Act of 1964.

Of the Asian countries, the only one who seems to be attempting to export their culture is Japan. From the 1960s through the 1980s, Japan experienced phenomenal economic (10% in the 1960s, 5% in the 1970s, and 4% in the 1980s) growth to the point that it was addressing the U.S. on equal terms.[2] One of the best works to illustrate this point is the Japanese best seller The Japan That Can Say No.

This work detailed how Japan was culturally and economically independent of the United States. It set the tone for much of the rhetoric of the late 1980s until the “Peace Dividend” recession under George H.W. Bush slowed the U.S. buying spree in Japan and subsequently burst the Japanese housing bubble.

Through much of the 1990s, Japan made few statements. Lately, with the manufacturing power of China behind them, Japan is attempting to establish, a cultural foothold in the United States, using anime in television, books, and internet. Anything Asian is mystically better than anything western in the popular young U.S. mindset. The distinction between China and Japan is entirely lost in the current, popular world view.

Google’s Youtube.com is full of Japanese animation free to whoever can find it. Japanese animation began in the 1980s as an export with the full support of the Japanese Government. Japan, in spite of the trappings of democracy is still a nationalistic empire. While their cartoons are entertaining the youth today, they have yet to come to terms with any admission of any wrong doing in Asia during World War Two. This has been noted by China, both North and South Korea, and Singapore.

India, whose recorded history predates Egypt’s Old Kingdom, with its fist known settlement dating to around 7000 B.C.E., has not made any attempts to export their culture. They have a strong media presence through the Hindu film industry, but this is predominately for internal consumption. It could be that the West has already absorbed much of the Indian culture through Great Britain’s occupation of India dating back to 1856. It could be that India, like ancient China, with a long proud culture views Western culture as barbaric.

Kashmir is the region in the northwestern Indian subcontinent. It is bounded to the northeast by the Uygur Autonomous Region of Xinjiang and to the east by the Tibet Autonomous Region (both parts of China), to the south by the Indian states of Himachal Pradesh and Punjab, to the west by Pakistan, and to the northwest by Afghanistan. The region, with a total area of 85,806 square miles (222,236 square km), has been the subject of dispute between India and Pakistan since the partition of the Indian subcontinent in 1947. The northern and western portions are administered by Pakistan and comprise three areas: Azad Kashmir, Gilgit, and Baltistan, the last two being part of a territory called the Northern Areas. The southern and southeastern portions constitute the Indian state of Jammu and Kashmir. The Indian- and Pakistani-administered portions are divided by a “line of control” agreed upon in 1972. In addition, China became active in the eastern area of Kashmir in the 1950s and since 1962 has controlled the northeastern part of Ladakh (the easternmost portion of the region).[3]

As much of the power shift discussion revolves around China. China has an established culture which dates to before the first century C.E. The Shang dynasty, the second dynasty in Chinese history, dates from around 1700 B.C.E. China discovered gunpowder in 142 C.E. during the time of the Roman Empire in the West. China was making paper around 150 C.E. The compass was developed in China between 1040 and 1044 C.E. The world’s first known moveable type was invented in China around 1040 C.E. One has to wonder what the world would be like today had Rome and China engaged in free-trade. How a Rome equipped with cannon and rockets would fare against invading barbarians? Buddha, the enlightened one, came out of India around 138 B.C.E. China, for all her civilization and glory, was “discovered” by Marco Polo.

China was not as isolated as was once taught. Marco Polo was dispatched to serve as ambassador to the Grand Khan Kublai in 1264, after the Mongol Army sacked Soldaia and took control of it in 1239. Soldaia, sitting on the North Shore of the Black Sea, is called Sudak today. However, the East-West exchange began in earnest at the behest of the Khan. China, at that time, was roughly the size of the U.S., and they considered themselves the “giver of culture,” or “the seat of culture.” Their confidence in their superiority was confidently expressed. If anyone wanted to be truly civilized, that person could immerse themselves in the Chinese way. This, of course got them into difficulties when the British took over. This resulted in the Opium Wars in 1834, and 1856, and the Boxer Rebellion in 1899.

With the exception of Korea and Vietnam, Tibet, and recently Kashmir China has not been inclined to mobilize their vast population in an effort to engage in regional domination let alone global domination. The four nations mentioned above are within the sphere of influence of China.

It was the Japanese whose invasion and occupation of mainland China finally dislodged Imperial Great Britain. The Chinese republic established in 1912 was hard pressed to deal with the Japanese aggression in 1937 even with the help of the United States and Great Britain. An aggressive China, as seen during the Korean Conflict, could have mobilized the manpower needed to invest one million men to invade Japan. However, China did not have the industrial base to launch any significant attack against Japan.

The Chinese cultural propensity towards tolerance is also noticeable concerning the state of Taiwan. Taiwan belongs to China, yet the government of China in Beijing has allowed Taiwan a certain reluctant independence since Generalissimo Chiang Kai-shek fled Mao Zedong in 1949. The Chinese intervention in the Korean Conflict was only due to U.N. forces sitting on the Chinese-Korean border. The Chinese considered this intolerable and a precursor to a larger war with the U.S and the West.

Korea, being an exception and not the rule, one has to think that China will not willingly engage in an attempted global coup. It does not seem, based on 2000 years of history, to be their style. They might become more imperialistic should some stimulus force a change, but it is hard to envision what that would be. China has not acted aggressively even when invaded. They did fight the Japanese to a standstill, but did not prosecute the war following the Japanese retreat. Since 1978, when they privatized farms, to the present day, their economy has been steadily strengthening. China managed to survive the 1997 Asian Financial Crisis without much of an internal crisis.

Today’s China, Communist though it may be, is playing the U.S. game. They have even modified their ideals to match the capitalist system.

Chinese paramount leader Deng Xiaoping on June 30, 1984 said:

"What is socialism and what is Marxism? We were not quite clear about this in the past. Marxism attaches utmost importance to developing the productive forces. We have said that socialism is the primary stage of communism and that at the advanced stage the principle of from each according to his ability and to each according to his needs will be applied. This calls for highly developed productive forces and an overwhelming abundance of material wealth. Therefore, the fundamental task for the socialist stage is to develop the productive forces. The superiority of the socialist system is demonstrated, in the final analysis, by faster and greater development of those forces than under the capitalist system. As they develop, the people's material and cultural life will constantly improve. One of our shortcomings after the founding of the People's Republic was that we didn't pay enough attention to developing the productive forces. Socialism means eliminating poverty. Pauperism is not socialism, still less communism."[4]

The Chinese are learning English; they are not asking us to learn Mandarin. They are tying their development to our technologies, not surpassing and replacing them. They are doing all they can to accommodate our culture within their nation. They are playing the good host.

Much of the talk in academia, politics, and “on the street” concerns a shift in global domination from the U.S. to Asia or to the E.U. However, based on current cultural flow, it does not look like that is happening. As romantic a notion as the global power shift heading back to the European Union may be, the E,U is not positioning itself to take on global political domination. The failure of to ratify the single European Union Constitution, and the painfully slow and cautious addition of new countries into the EU, one might suspect they are resisting their own unification. Whatever else one can say, they are indeed being very careful about the process. Right now, they are quietly growing, telling us we are full of ourselves, and doing everything they can to take over the World Bank, thus taking control of the globalization process. Follow the money, right?

[1] This is important in our discussion only because the charge of Tax Evasion was the fourth charge of the Articles of Impeachment of Richard M. Nixon. Verifying that following the money trail is legitimate when trying to follow a given set of activities.

[2] Economy of Japan. (2007, May 5). In Wikipedia, The Free Encyclopedia. Retrieved 17:28, May 7, 2007, from http://en.wikipedia.org/w/index.php?title=Economy_of_Japan&oldid=128455805

[3] Kashmir. (2007). In Encyclopedia Britannica. Retrieved May 7, 2007, from Encyclopedia Britannica Online

[4] Economy of the People's Republic of China. (2007, May 7). In Wikipedia, The Free Encyclopedia. Retrieved 21:03, May 7, 2007, from http://en.wikipedia.org/w/index.php?title=Economy_of_the_People%27s_Republic_of_China&oldid=128841461

Asian Influence

In the '00s, many observers (professional and amateur) wrung their hands over the threat of an economically rising China. Quite a few people proclaimed that China owned the U.S.A. Asian Influence was written to explore the issue of China as an economic superpower.

It begins with a discussion about Japan in the 1990. There too is a warning that was no headed before 2007.

When the U.S. economy slid into the Peace Dividend[1] recession in the late 1980s and early 1990s, following the fall of the Soviet Union, Japan’s economy faltered. The Japanese asset price bubble burst in 1990.

It cannot be overstated that Wealth, Women and War pointed to the obviously teetering house of cards in the USA.

You can purchase a copy of Wealth, Women, and War, but I would not suggest that you do that unless you need a hard copy for some reason. WordTechs Press released it back to me in May 2014, and I am making it available in blog form. Occupy asked that knowledge be shared, and in solidarity with Occupy Wall Street that is what I am doing. The only thing I can ask of you now is that you pay attention; we are not out of the woods yet.

Cliff Potts

September 25, 2014

Asian Influence

Japan, with a booming economy, and granted a Most Favored Nation status with the U.S., attempted to establish production facilities in the United States in the 1980s. However, the Japanese culture was unfamiliar with the individualism of the U.S. citizens of the 1970s and 1980s. While any criticism of the Japanese or Japanese management style was met with cries of “White Racism” in the various trade journals, Japan’s own critique of the U.S. as being a “Mongrel Nation” slipped quietly from the front pages. This was due in large part to the efforts of Robert Angel, a paid lobbyist for the Japanese government. He coined the term “Japan Bashing” to discredit critics of the Japanese imperialistic approach to trade.

While Japan enjoyed wide open markets in the United States, Japanese markets were closed to a free-flow of goods from the U.S. This remains a running argument in academic journals, as Japan is sited as importing more goods per capita than the U.S. has imported from Japan. There may be some validity to this observation as Japan’s population is approximately half that of the U.S. today.

When the U.S. economy slid into the Peace Dividend[1] recession in the late 1980s and early 1990s, following the fall of the Soviet Union, Japan’s economy faltered. The Japanese asset price bubble burst in 1990.

This is another lesson concerning globalization. Any nation which produces goods specifically for consumption by another nation is liable to have its economy falter if the customer nation is no longer willing or able to consume the goods. Japan had done a poor job at developing its own consumer markets. While it did a phenomenal job of securing employment for its citizens, many of whom were still stunned by the abject poverty following World War Two, Japanese business could not be talked into spending the local economy back into prosperity. Even after the Japanese asset price bubble burst, Japanese citizens retained sufficient economic resources in liquid assets to recover from the economic slump. The same character traits, thrift and savings, which allowed them to recover after the war, stalled their economy during the 1990s. In today’s globalized economy, there is much talk about China’s rise to economic power. However, it is currently uncertain how well they are developing the internal market to consume their own goods and services. If China’s economic boom is fully dependent on the U.S., or a Western, economy then an economic slow down in the West will devastate China as it did Japan in 1990. As sited in Morris Berman’s Dark Ages America, China’s approach to internal economic development is an expression of Social Darwinism – a current trend in the Free-Trade policies even in the US. This does not bode well for the internal picture of the Chinese economy. It cannot be overemphasized that The People’s Republic of China is still a communist nation; effectively it is a national corporation where business are engaged in joint ventures with the government itself. While China may look good in the short term future, it is hard to predict what will occur over a longer period of time.

In A.M Sperber’s Murrow: His Life and Times, it is sited that Edward R. Murrow, the voice of CBS during World War Two, worked hard as a young man to persuade colleges to hire Jewish scientists and other intellectual dissidents from Nazi Germany before the war broke out. Mr. Gates may be attempting to rescue the best intellectual assets of the world before regional chaos hits, by requesting more H-1B visas from Congress. Under the H-1B Visa program, recipients do not have to apply for political asylum and don’t have to reveal the true nature of their move to U.S. protection. This also creates a pool of resources in the U.S. to pressure for change in the country of origin should that be needed. This, of course, is pure speculation, and as stated in the Wikipedia article on the H-1B visa, “Economist Milton Friedman has called the program a form of subsidy.”[2] It does displace technical and engineering expertise in the U.S. and will remain a sore spot in U.S. labor relations in the foreseeable future.

China is no where near as stable as we have been led to believe. According to reports which have trickled through the broadcast of the BBC via NPR, recent Chinese defectors have warned the West of the risk of investing in China. The best summary is that China is unstable; however, the details are skeletal at best.

China seems to heading toward some kind of economic crunch point not dissimilar to Japan’s crisis in 1990. Two factors which are known are the threat of overheating the economy, and oddly enough, for a nation of 1.3 Billion people, a labor shortage.[3] China’s population is growing old and a result of the zero population growth policies since 1979 (People's Republic of China's one-child policy), there is a shortage of young workers to fill slots at the entry levels of the economy.[4] There are serious issues concerning China’s handling of Chinese dissidents, as well, according to a report co-authored by former Canadian cabinet minister David Kilgour and prominent rights lawyer David Matas released in July of 2006 stating that, “Chinese political prisoners, particularly Falun Gong[5] adherents, are being 'harvested' for the lucrative sale of organs to foreign buyers”.[6]

There are unsubstantiated reports that the PRC (People’s Republic of China) has transferred military equipment to provincial riot police to quell uprisings in various regions within China. The Chinese communist government may not be acting with astute wisdom in this period of economic boom. While all these charges and observations may seem somewhat sensationalized, there is an economic reality that cannot be overlooked: An economic boom is usually followed by a bust. There is no general indication how the current Chinese political culture will address the inevitable bust when one occurs.

India is equally threatened. Bangalor, the hub of India’s technology and science based industries, is located on the Deccan Plateau in central India. It is venerable to aggression from a nuclear-armed Pakistan and a potentially unstable China. India has become one of the gathering points for western economic diversification. The net domestic product of Bangalor alone is estimated at 51.9 billion U.S. dollars.[7]

The economic viability of India may be its saving grace as far as China is concerned. China needs India as a gateway for further development. However, there is a highly volatile situation: Kashmir.

As was summarized in Radicals, Religion, and Revelation, “Kashmir is an 80,000 square mile region sandwiched between Pakistan and India. A Hindu monarch annexed this Islamic state into India. The fifty-year fight over this disputed claim has been marked by the exchange of artillery shells between the two nations. The world will likely see the first use of nuclear weapons since World War II over this stretch of hilly land, each nation firing at the other’s most strategic target.”[8]

According to the article on Sino-Indian relations updated on April 30, 2007 in Wikipedia, “In November 2006, China and India had a verbal spat over claim of the north-east Indian state of Arunachal Pradesh. India claimed that China was occupying 38,000 square kilometers of its territory in Kashmir, while China claimed the whole of Arunachal Pradesh as its own.[9]

In a related article on Arunachal Pradesh, “The Chinese Ambassador to India, Sun Yuxi has publicly stated in India: "In our position, the whole of the state of Arunachal Pradesh is Chinese territory. And Tawang is only one of the places in it. We are claiming all of that. That is our position."[10] India's External Affairs Minister, Pranab Mukherjee, has countered that statement by saying that "Arunachal is an integral part of India."[11] India and China are currently engaged in talks to resolve the boundary question. Last year, both countries signed the "Political Parameters and Guiding Principles" document to peacefully resolve this issue.”[12]

These events pit India against both China and Pakistan. The current President of Pakistan is Pervez Musharraf. He is a moderate Muslim in a nation which has a strong radical Islamic population. He has survived two separate assassination attempts. Both attempts bore the signature tactics of the Islamic radicals: suicide bombers. If, and it may be a big “if”, the radical Islamic forces succeed in taking over Pakistan, they could inflict a serious blow to the economy of the United States by looking no further than central India. A conventional bombardment of Bangalor, let alone a nuclear strike, would seriously damage all western economies.

Under the ideal of globalization such threats are dismissed. History, however, shows what is good for business is not necessarily good for regional politics. In many respects, the destruction of World Trade Center towers in New York City did not do much to improve the prospects for peace through globalization. What the attack did achieve was to enhance the image of Al-Qaeda as a political force of liberation from Western Imperialism in Islamic lands, and created Osama bin Laden as a folk hero in Afghanistan, Iran, Palestine, Syria, Lebanon, Saudi Arabia, and Pakistan. Local politics are dismissed at the jeopardy of the corporation, even if the corporation’s headquarters is thousands of miles away from the instable region.

The business community declared that global war was not possible in the late 1800s and early 1900s because it would disrupt world trade. This was at the same time that Europe was engaged in an arms race. The same theme was being discussed before World War Two erupted. Once again, we hear this same argument. Today, it is called globalization. We hear that our business policies will prevail in bringing wayward nations into the global community. Commerce will pave the way to global harmony. This is being sung while Bill Gates tries to rescue the brain trust of India’s and China’s Information Technology fields, at the expense of the U.S. IT professionals, while the U.S. rattles the saber at Iran.

China Can Say No or The China That Can Say No: Political and Emotional Choices in the post Cold-War era (Pinyin: Zhongguo keyi shuo bu: Lengzhanhou shidai de zhengzhi yu qinggan jueze) is a 1996 Chinese non-fiction bestseller written and edited by Zhang Zangzang, Zhang Xiaobo, Song Qiang, Tang Zhengyu, Qiao Bian and Gu Qingsheng. It was published in China and strongly expresses Chinese nationalism. The book, which is modeled on The Japan That Can Say No, argues that many "fourth-generation" Chinese embraced Western values too strongly in the 1980s and disregarded their heritage and background. At least two of the authors participated in the Tiananmen Square protests of 1989. It specifically criticizes physicist Fang Lizhi and journalist Liu Binyan.

The book describes a disenchantment with the U.S. among the Chinese beginning in the 1990s, especially after the U.S. adopted a China containment strategy, rejected China's bid for the World Trade Organization, and worked against China's bid for the 2000 Summer Olympics. The authors criticize U.S. foreign policy and American individualism; they claim that China is used as a scapegoat for American problems.

The text also focuses on Japan, which is accused of being a client state of the U.S. and argues that Japan should not get a seat on the United Nations Security Council.[13]

[1] peace dividend, Definition: The reallocation of spending from military purposes to peacetime purposes, such as housing, education, and social projects. ("peace dividend." InvestorWords.Com. WebFinance, Inc, 2008. 7 Mar. 2008 http://www.investorwords.com/3644/peace_dividend.html).

[2] H-1B visa. (2008, June 17). In Wikipedia, The Free Encyclopedia. Retrieved 01:56, June 18, 2008, from http://en.wikipedia.org/w/index.php?title=H-1B_visa&oldid=219840555

[3] Economy of the People's Republic of China. (2007, April 29). In Wikipedia, The Free Encyclopedia. Retrieved 17:27, May 2, 2007, from http://en.wikipedia.org/w/index.php?title=Economy_of_the_People%27s_Republic_of_China&oldid=126921841

[4] Demography of the People's Republic of China. (2007, April 29). In Wikipedia, The Free Encyclopedia. Retrieved 17:27, May 2, 2007, from http://en.wikipedia.org/w/index.php?title=Demography_of_the_People%27s_Republic_of_China&oldid=126910697

[5] falun gong - a spiritual movement that began in China in the latter half of the 20th century and is based on Buddhist and Taoist teachings and practices ("falun gong." WordNet 3.0, Farlex clipart collection. 2003-2007. Princeton University, Clipart.com, Farlex Inc. 7 Mar. 2008 http://www.thefreedictionary.com/falun+gong)

[6] Human rights in the People's Republic of China. (2007, May 2). In Wikipedia, The Free Encyclopedia. Retrieved 17:22, May 2, 2007, from http://en.wikipedia.org/w/index.php?title=Human_rights_in_the_People%27s_Republic_of_China&oldid=127677276

[7] Economy of Bangalore. (2007, May 2). In Wikipedia, The Free Encyclopedia. Retrieved 17:46, May 2, 2007, from http://en.wikipedia.org/w/index.php?title=Economy_of_Bangalore&oldid=127587393

[8] Potts, Clifford A. Radicals, Religion, and Revelation. Dallas: WordTechs Press, 2008. p. 65

[9] Sino-Indian relations.” (2007, April 30). In Wikipedia, The Free Encyclopedia. Retrieved 17:56, May 2, 2007, from http://en.wikipedia.org/w/index.php?title=Sino-Indian_relations&oldid=127013002

[10] Arunachal Pradesh is our territory: Chinese envoy. (2006, November 14). Rediff India Abroad . Retrieved June 17, 2008, from http://www.rediff.com/news/2006/nov/14china.htm

[11] Singh, O. (2006, November 28). Arunachal integral part of India: Pranab in Parliament. Rediff India Abroad . Retrieved June 17, 2008, from http://www.rediff.com/news/2006/nov/28jintao.htm

[12] Arunachal Pradesh. (2007, April 29). In Wikipedia, The Free Encyclopedia. Retrieved 18:04, May 2, 2007, from http://en.wikipedia.org/w/index.php?title=Arunachal_Pradesh&oldid=126924899

[13] China Can Say No. (2007, April 12). In Wikipedia, The Free Encyclopedia. Retrieved 19:28, May 1, 2007, from http://en.wikipedia.org/w/index.php?title=China_Can_Say_No&oldid=122202767

Backbone

Most would argue that Economy of Scale (Bigger is Better) is the only viable economic model. That argument does no prove out in history. That philosophy lead to the firms which were "Too big to fail," and the socioeconomic blow-back (predicted in detail in Wealth, Women, and War) from TARP and the GM Bailout. We are still seeing the ramification from the bad behavior of Casino Capitalism. It is more appropriate to point out that the high risk financial games have not been brought under any kind of control. The Too-Big-To-Fail Firms as still allowed to play their games unabated, and with our approval -- like it or not, we are the government.

The Chicago Tribune reports, "The Treasury Department signed off on General Motors pay packages that broke a pledge to cap cash salaries at $500,000 in most cases at companies bailed out by the federal government" (Plungis, J. (2014, September 24). GM 2013 salaries exceeded U.S. bailout limit, watchdog says, [Electronic version]. Chicago Tribune). Haven't we learned anything since 2011, or are the global protest of hundreds of thousands around the world consider an anomaly by the experts in the think tanks?

Wealth, Women, and War was written in 2007. It was published in July 2008. A copy was sent to President Obama in March 2010. This is September 2014, and no one is listening. Henry Ford had the better idea! That idea is covered in this chapter.

Cliff Potts
September 25, 2014

Backbone

The wisest course of action for corporations today is to create opportunity for employment at the local level by supporting redundant but economically viable companies. To some degree that was Henry Ford’s approach 100 years ago. This is commonly referred to as Vertical Integration.[1] This was in conjunction with Welfare Capitalism,[2] driven by a philosophy that that humanity mattered. This gave Henry Ford a long term prosperity, and loyalty, which is unheard of in corporate halls today.

Ford created, or invested in, companies which supplied the parts to build Ford automobiles. Ford made spark plugs for his automobiles; he also produced spark plugs for other automobiles as well. He not only built cars, but he also built companies. In the distribution of his products he created franchises which allowed others to invest in his product line and become part of the Ford success. This process allowed workers and owners to become vested in his successes. General Motors followed the same course of action so effectively that it was eventually called before Congress in the 1950s to explain how it had manipulated the market against competing interest.

In the drive towards economy of scale and the elimination of redundancy, this humanistic approach has been lost. Or more to the point, it lost the appeal of being novel in the minds of the corporation. It was so successful that it became mundane. If it were applied today, Microsoft would be producing the Windows Operating System, but the remaining software products would be produced by separate but equally lucrative software firms owned in large part by the same investors who owned Microsoft. This would guarantee an abundance of employment opportunities while making substantial income for the owners.

Ford also made sure that the workers who were “good enough” based on the work they did were paid a substantially higher wage than other assembly workers. He literally doubled the wages of his line workers. This was in the unregulated free market of the early 1900s. Ford understood something else that that has been lost today: give people employment, give them good wages, and they will stay with their employer. He went from a 300% turnover in his plants to no turnover and was the last of the major manufactures in the U.S. to unionize.

Unionization was a social trend brought about by the marriage of socialist ideals and capitalism in response to managers who were abusing their authority. Industries had a propensity to promote abusive people to low level management positions. This is illustrated in Upton Sinclair’s fictional exposé The Jungle, and in Studs Terkel’s Hard Times: An Oral History of The Great Depression. The arbitrary and abusive nature of line managers at the time is often overlooked in a discussion on unionization. Human relations and quality of work life are seen as more esoteric and subjective, opposed to the numeric value attached to the job classification and performance.

In present time, the operation model in the days following merger mania has diminished employment opportunities, produced questionable products and services, created a wide gap in the income levels of individuals, removed any semblance of employment security, stagnated industries into monolithic cultures of form over function, and produced a dominant culture where fellow citizens are seen as pariahs in society if they lack the social contacts to become employed within the few remaining monopolies. This is why, today, Ford and G.M. are in financial straits, and Microsoft’s founder, Mr. Bill Gates, is begging Congress with, “Please, Sir(s), more ….”

This fixation on competition at the individual level has severely damaged the social contract at the local community level. It has damaged the market through a narrow focus of innovation, flooded the market with shoddy goods, virtually destroyed any positive philosophy associated with hard work, as sited by Kevin Phillips in American Theocracy, and diminished the security associated with the quality of life an individual can gain through the pursuit of higher education.

When the children of today, grow up in households where they watch parents struggle at a frenzied pace just to maintain their socioeconomic status, and see them sink lower and lower on the economic ladder, these children are not inclined to believe the assurances of the establishment that security is gained through hard work and good citizenship. Moreover, the generation which watches success metered out for petty larceny and fraud at the primary economic level, is not inclined to follow the line of reasoning that education is a deciding factor in economic success. Thus far the proponents of education are losing the argument to the scam artist and contraband sales proponents.

It cannot be a surprise that the internet, giving opportunity for bombastic posturing through the anonymity of a screen name, also reflects the current culture’s trend towards social indifference, and the over all acceptance of behavior which leads towards classically immoral debasing sexist consumerism. Exhibitionism is still an economically viable trade. If a person debases herself for gain, then how can there be any true limit to the lows that one will go to become economically stable? Many people in the working class are aware of individuals who “made it” by, in part, trafficking drugs as well. All of this is because the old values are no longer reflected in the economic mainstream of the United States.

To the current business school graduate, the installation of redundant business looks wasteful. Admittedly, from the narrow view of the accounting ledger it may very well be. However, from the standpoint of survival through decentralization, and providing for the common good, creating jobs for people to find satisfaction in their own labor, it is a definite goal within any national agenda. That, of course, presupposes that the nation, and the interest of the nation, has any bearing on business. It is a goal that fosters stability and security, and if nothing else, these cannot be set aside for some idealistic approach to economic prosperity.

IBM’s initial success in the computer field followed Ford’s model to some degree. They contracted the manufacturing of sub-systems to outside firms. They did not exert control over the various sub-contractors (Microsoft being one of them) to prevent the sub-contractors from becoming direct competitors to the parent company. Open architecture, as it is commonly called, worked well for the expansion of the industry. And it worked well for the consumer. It paid off for Microsoft, but IBM who pioneered the Personal Computer for the office environment lost all advantage in the marketplace. It must be understood that this was not due to any intentional error, but by playing by the “rules of life” that existed in the 1980s. Today, Microsoft is the PC, and IBM is out of the PC business. The manufacture of goods is not a main component of wealth building in the world today. It is but one pathway to the capital acquisition necessary to engage in the high-end market of investment manipulation.

Within this discussion one cannot negate the effect of the market pressure towards open architecture. Open architecture is the trade description for the policy of allowing other firms to have access to the circuitry diagrams of the primary product in order to manufacture enhancements for the primary product. In this example, the product is the Personal Computer, or PC.

The TRS-80 Model One, was first introduced in 1977. Tandy Radio Shack should have been the primary player in the PC arena. They failed because they forgot that their primary customer was the electronics’ hobbyist. Beyond them, there was no market for the PC. Tandy decided, for reasons which still remain somewhat a mystery, to approach the PC with a closed architecture application. If the end user even unscrewed the case to see what was inside it voided the warranty. This decision was not widely supported by the narrow consumer community. These individuals had just paid about 22.7% of their median income and felt stifled in their technological exploration of the digital computer.

This opened the market for a small garage start-up project known as Apple. The Apple model was the model which IBM followed. Apple, as the product developed was no longer the domain of the hobbyist, and reverted to closed architecture to protect their development from cut-throat competition in 1984.

The real failing was that IBM underestimated the wild popularity of the own product. According to the February 2007 report published Purchasing.COM, “In the U.S., PC shipments grew just 1.2% to 61.1 million units because of market saturation.” That translates, in a saturated market, to something akin to a staggering $12,220 Million ($12.2 Billion in 2006 alone). The same article sites that, “Global unit shipments of PCs increased 9.5% to 239 million units in 2006.”[3] One cannot fault Microsoft for winning at the capitalist game based on “the rules of life” in the dominant cultural expression of the era. Microsoft obviously did not make the same mistake that IBM had made.

In a wider view of competitive business models, Ford did not lose control of its market until the 1970s, when the consumer demanded high quality fuel efficient automobiles. Ford responded with the Pinto, and GM responded with the Chevrolet Vega, but the apparent winner was the Honda Civic Coupe. Human response to stimuli does determine the fate of the corporation.

"The Japan That Can Say No" (Japanese title: no to ieru nihon) is a 1989 essay co-written by Sony chairman Akio Morita and politician Shintaro Ishihara in the climate of Japan's economic rise. It took a critical look at the United States business practices, and advocated for Japan to take a more independent stance on many things, from business to foreign affairs.[4]

[1] vertical integration, definition: Merger of firms at different stages of production and/or distribution in the same industry. When a firm acquires its input supplier it is called backward integration, when it acquires firms in its output distribution chain it is called forward integration. For example, a vertically integrated oil firm may end up owning oilfields, refineries, tankers, trucks, and gas (petrol) filling stations. Also called vertical merger. See also horizontal integration. ("Vertical Integration." BusinessDictionary.Com. WebFinance Inc, n.d. 7 Mar. 2008 <http://www.businessdictionary.com/definition/vertical-integration.html>).

[2] Brandes, Stuart. "Welfare Capitalism." Encyclopedia of Chicago. Chicago: Chicago Historical Society, 2005. Chicago Historical Society. 7 Mar. 2008 <http://www.encyclopedia.chicagohistory.org/pages/1332.html>.

[3] Staff (2007). PC shipments grew 9. 5% in 2006. Purchasing.Com. Retrieved June 17, 2008, from http://www.purchasing.com/article/CA6412276.html

[4] The Japan That Can Say No. (2007, April 8). In Wikipedia, The Free Encyclopedia. Retrieved 19:29, May 1, 2007, from http://en.wikipedia.org/w/index.php?title=The_Japan_That_Can_Say_No&oldid=121198746

U.S.A. All The Way

When Worlds Collide

Asian Influence

Backbone

Oh Boy, Palastine