Pro Commerce

Across state lines

There is an interesting video on my Facebook by Dick Morris a former campaign manager on national campaigns.  I’ve put it here but I don’t think you need to see it to get the point.

Morris points out that the brilliant D.J.Trump has ended Obamacare already so a Congressional action is just superfluous. Just show boating.

Trump signed an executive order telling the IRS not to collect penalties on people who don’t have Obamacare.  The Supreme Court has already said this ‘tax’ could only be levied on tax refunds. Now it is gone.  No healthcare compulsion.

Secondly, Trump publicly ordered the Health and Human Services Department to accept as health insurance all policies regardless of coverage.  No more Obamacare.

Now Americans can get any insurance they want, even one just for mental health, or not get insurance at all.

When will this become obvious?  When will it be covered in the drive-by-media?

For a few weeks I have been complaining that the important problem remains that insurance companies must tailor policies to suit each state since many states have insurance regulators.  I know, having testified as an expert witness before the California Insurance Commission.  This inflates health insurance pricing.

As I thought about it, this is not an executive nor a legislative issue.  The Constitutional basis is  Article 1, Section 8, Clause 3 that gives Congress the power “to regulate commerce with foreign nations, and among the several states, and with the Indian tribes.”

This clause has been interpreted for 180 years very literally and insurance is erroneously treated as an internal state matter because it is sold in local jurisdictions.  This is wrong.  The insurance covers the policy holder everywhere in the U.S. and the corporation is national.  

But that can’t be straightened out now.  The Supreme Court needs to do it.

 

Tasting test

In the days when I was a banker and head of marketing research I spent time with my outside survey research firms.  One of them had a beer client.  A standard taste test for beer was to start the test subjects off with their favorite beer.  The subjects would then be given a subsequent series of different beers.  All double blind with no visible evidence of what the beer was.  Dark beers and light beers were all in dark bottles.

The results were always that the ability to distinguish beers stopped after the second beer usually after the first.  For the third beer nobody could tell their own favorite light Coors from Guinness Stout.

So I wondered if the same was true for tasting food.  Most people have a cocktail or a few glasses of wine before an expensive dinner.  Could people tell an elegant chef prepared plate from a Wendy’s?

So I got a dozen friends to come to my house for a taste testing evening.  The wine drinkers got a glass of either high alcohol content wine and the test group got low alcohol content.  The same with the beer drinkers.

The tasting was applied to three dishes.  Double blind with three tastes in each segment.  One was cold mashed potatoes, with mashed cauliflower and mashed plantain all next to each other labeled A,B,C on the same plate.  The next dish had three levels of chocolate from high milk content to low milk.  I forget what third test was.

I never got the test done.  Everyone kept drinking their wine and beer having such a good time they never came to the testing table.

My conclusion is that alcohol before a meal is what determines that it is a fancy meal.  The taste doesn’t matter.  

I still ask my friends during dinner, after wine or cocktails, " What do you think that ingredient is"?   No one, except the late Sarah Seiter, has ever guessed right.

Taste

I had a spectacular meal on Sunday evening.  It was at Cotogna in San Francisco.  The second time I have gone.  I will go often.  Maybe once a month, it is so good.

After the French Laundry opened in 1994 I went every two months for Saturday lunch for five years.  I could only get reservations 60 days from the date of the visit. One year I went for the Christmas truffle lunch. Unforgettable. The French Laundry is 65 miles from my house.  I took dozens of friends with me, over the years.

I started going because the French Laundry was the only restaurant in America with food comparable to what I regularly get in Tokyo.  I stopped going when the meal price for lunch (no wine) went over $130.

The ‘no wine’ is important.  It is the subject of tomorrow’s blog. I am not a prude.  I drink a good whiskey with dessert. At Cotogna it was Noah’s Mill American whiskey.

Invisible

I have sent out a monograph I have written to my son and several close friends.  The monograph is, metaphorically, the top floor of the building I have been constructing about the the structure of modern commerce.

You will get to read it soon.

My son points out a key problem in explaining modern commerce: it is invisible.

I am considering the following paragraphs to deal with the invisible nature of the lives we lead, heedless of invisibility.

The most fundamental factor in our life is invisible; the oxygen in our air.  We can't see the sound we use to communicate nor the temperature of the air we are immersed in.

Standing in a kitchen we can’t see the temperature of the water coming out of the faucet, nor can we see that the water is safe to drink.  The water leaves our kitchen through pipes and a vast underground network of invisible tunnels.  We cook on a stove that gets electricity invisibly through dormant copper wires or pipes carrying methane that appear to be empty.  Or we use the invisible electric waves that are contained in our microwave oven.  We have a digital clock on the oven that keeps us in sync with friends, family and strangers in our daily activities along with the smartphone in our purse or pocket that relies on a clutter of radio waves travelling around and through us.

Our modern kitchen has a refrigerator driven by invisible exotic gases.  It keeps the air inside cool enough to suppress the growth of invisible microbes, parasites and micro fauna that is eating our food.  Food that includes fruit and vegetables that came from Chile a few days ago and a piece of tuna that was part of a fish caught near Ireland, sold in a Tokyo market and flown in two days ago.

We are standing in the world of modern commerce which is global, involving billions of people working together and it is invisible to us. The origins and growth of modern commerce are invisible too.

Do those four paragraphs help as the introduction to a monograph on modern commerce?

The average age of American death has declined

A recent paper by Anne Case and Angus Deaton, two professors from Princeton, report on finding a startling rise in death and morbidity among among men and women in mid-life.  This is associated with the overall decline in American lifespan.

They put all the causes, liver damage, opioid deaths and suicide into one category: despair.

The change is dramatic.  The average age of death in the U.S. had been rising steadily for over a century.  It stopped rising around 1999.  It has declined since then.  If mortality had remained where it was in 1999 7,000 fewer people would have died in 2015.  Had it kept rising at the previous rate nearly 50,000 fewer people would have died in 2015.  

I respect the study.  It is good data.  I have serious doubts about the analysis which puts a great deal of blame on alcohol and street drugs because the death rate most affects Americans who didn’t go to college.  It is also reflected in morbidity data.  But everyone is affected in America, to some extent.

I personally favor the professor’s explanation because it coincides with my own observation that the Democrat control of Congress starting in 2006 and the rise of Obama have been disheartening for real America and has led to an absolute decline in new businesses and a rise in business failures.

However, I think we will find other factors in play when the data is studied more closely.   

It appears to me the rise in middle age mortality and morbidity may be due to a drop in the younger age group from 17 to 35.  The younger age group is the beneficiary of the decline in automobile deaths of about 8,000 fewer auto deaths a year since 1999.

I suspect the rise in the mid-life mortality may be due primarily to the influx of millions of Latin Americans.  Latin Americans bring with them a much higher mortality rate (a lower age of average death) than the rest of the American population and the Latin American rate of college attendance is much lower too.

I’m willing to go along with an explanation  that  combinations illegal aliens in the country and a despair arising from the end of the joyous hippie era.

Reversal of longstanding and reliable data like mortality is significant and will certainly generate more study.  There are one hell of a lot of actuaries running around.

Street phones

It is hard to make out what is happening in this photo.

A homeless man has broken open a street sign for access to a plug and plugged in his cell phone.

It reminds me that in the 1980s when I had built a park for street people and was trying to find ways to make their lives more comfortable, I set up a system of telephone message banks.  It was simple. The street person could establish a message bank over the phone.  We had ubiquitous public phones back then.  Then the street person could give the phone number to anyone who needed to call him back and that person could leave a message.

Apparently street people didn’t have much need for a message service.  It was never used.

Maybe contemporary street people need a phone for outgoing calls since we no longer have public telephones.

On the subject of street people I have been asking this question lately: which number is greater, the number of street people in the U.S. or the number of people in State and Federal prisons?

The two numbers are about the same.

Economics and business

Economics traces its history back to Adam Smith in the late 1700s.  Business as an academic study can’t trace its history back at all.  The first schools of business began appearing in the late 1800s.  No two alike.

I was a graduate student in economics and left when it became clear that the faculty of U.C. Berkeley was all pro-Fidel Castro in the early 1960s. I learned enough of economics to get a Ph.D.but never stood for one.   I’ve taught business and management for nearly a decade in many business schools.  I’ve published one of the best selling books in English on Marketing.  

So how is economics related to business?

The same way science is related to technology.  An incidental relationship.   Engineers don’t need to learn much science and vice versa.  The same is true of economics and business.  Engineers discover most of what is relevant to them through experimentation.  The electron microscope and PCR system were invented by engineers as was superconductivity at higher temperatures than absolute zero.

In economics there are many theories based on well developed primary concepts.  Supply and demand intersect at a point that determines the market price in economics.  When you rent an apartment you look at half a dozen and get an idea of what a one bedroom that allows pets rents for in different neighborhoods.  Each apartment you look at has a different price and different elements of design, lease and living conditions.  There is no 'point' intersection of supply and demand.  At best, the price is a range of 20% around an average.

Business is pragmatic with few or no theories.  It is built upon observation and history.  One adage is that restaurants do better on corners.  That is nothing more than an adage.  It is one of the more reliable ones in business.  I have a dozen adages to pass along: here's one always open a restaurant with a large crowd for the first month.  It is still merely an adage.

Economics and science are based on theories which in turn are based on observation.  Some modern economics of the Gary Becker variety are based on a great deal of observation but most isn't.  Business, like engineering, is based almost exclusively on experience.  Mostly failed experience with occasional success over decades and centuries.

Tasty and safe

The photo on the right is a line, on a weekend mid-day, of people waiting to get into Zazie’s restaurant.  Zazies’ is very popular.  It has everything; petite tables with French decor and the scene where all the techies and foodies want to be seen.

What I love is that the line on the left end is in front of Bambino’s.  Bambino’s rarely has a line.

Bambino’s is a hidden epicurean jewel.  It would be one of the few three-star-Michelins in San Francisco if the Michelin people ever found it.  I’ve never given the secret away and nobody else seems to.  The restaurant is already very profitable because half the volume is in delivery, three meals a day, in a rich neighborhood. The kitchen couldn't handle any more business.

The chef, of nearly twenty years, is Joel Scherbak.  A genius who creates a regular stream of new and exciting salads.  Who else does that?  The menu is constantly changing as Joel applies his genius to new dishes, always saving the neighborhood favorites.

The irony.  The hottest place is two doors from the most extraordinary place.

The late George Leonard often made the point that our society has made itself subservient to a combination of courts, engineers and insurance companies.  If anyone gets killed or badly hurt in an accident, the family goes to court to sue the highway builder or the owner of the children’s playground.  An engineer appears in the court hearing to prove that a safer way of designing the ‘killer object’ was possible.  The insurance company then pays the claim and makes sure that all similar situations in the country are make ‘safe’.  

On the right is the ruins of Sutro Baths on the Western end of San Francisco.  It is in the Golden Gate National Recreation Area.  In the photo you can see the Western most wall of the baths.  It is about 15 inches wide and everyone, especially children love to walk on it.  The fall on one side is obviously murky water, the other side is a rocky beach.  

This wall has been here for 55 years.  Let us hope no ‘sensible’ person ever notices it.  More 'slightly dangerous fun', is always disappearing.

Art and anti-art

Politics can be fun, sometimes.

The City government of San Francisco was cutting the budget a few years ago to make more room for union pension payments.  The cost of maintaining trees on public sidewalks stood out as a visible target.  About $30 million in salaries to trim and care for street trees, became the target.  So the City passed a law that all trees on the sidewalks were to be cared for by the property owners nearest the sidewalks.

The City then proceeded to mark with white paint spots and lines all sidewalks that were cracked because of the tree roots. The bureaucrats then sent notices to the property owners to fix the sidewalks and maintain the trees.  

One close friend who was long since retired and in her 90s got the notices from the City and found she had to pay $15,000 for a new sidewalk. She was pissed.  There were thousands like her.  After about 5 years of this abuse of citizens, the citizens put a measure on the ballot to make the city responsible for all sidewalk trees.  It passed overwhelmingly.

The photo on the right is a piece of art  making fun of the former City white spots, gone wild.  Art as protest.

The second photo is a rock outside a Japanese restaurant.  When it was first put there, a few months ago, it was a  beautiful addition to the neighborhood. .Then dogs and street people began peeing on it and the bottom had to be painted to facilitate cleaning.  

Most recently it has been tagged on the unpainted top part.

I consider ‘tagging’ to be anti-art  It is designed to make the object it is on ugly.  Like new buses and new subway cars.  Taggers are the people who want the world to be ugly.  I know it is hard to believe that there are such people but it is hard to believe that we have over 1.5 million people in prison for killing, robbing and raping their fellow humans.

There are people called graffitists who paint images on public places.  Some are good, some aren’t.  I don’t put them in the same category as ‘taggers’.  Taggers are like dog owners who seem internally content to leave their dog’s poop where the dog left it.  

Nations becoming part of modern commerce

This is a weird blog. I have put together my view of the wealth of nations.  I am going on a per capita basis.  I have also visited most of the countries listed.  I leave China off the list of the wealthiest because China may be a big producer and consumer but there are a billion Chinese who are barely part of the modern nation by any definition and barely speak a common language. 

First is the U.S. with the wealthiest people on the planet and the most productive industrial engine.  It is symbiotically connected to Canada which is an extractive state much like Arizona or Montana (oil, gas, mining).

Second is Japan with spectacular wealth, hard working people and a high level of artistic and technological genius.  Japan is closely related commercially to countries it formerly occupied such as Taiwan and South Korea.

Third is Germany with many symbiotically related nations including the successful Dutch, French and Scandinavian countries; as well as other neighbors.

Fourth is Israel, today’s most productive country if one counts the over 5% of Israeli’s who live outside the country.  Israeli run companies are the fourth largest number of companies on the world’s major stock exchanges and the number keeps growing.

Fifth is Britain with strong connections to Canada, Australia and New Zealand.

These five countries and their associated commercial  alliances provide most of the wealth generation for the planet.  

What is interesting from a meritocracy, diversity, openness perspective is that they are all similar.  The U.S. and Israel are the most outstanding on the basis of meritocracy and diversity.   Israel still has a lingering founders’ establishment but it is rapidly disappearing.

Japan does the best in openness. It also has the longest history of meritocracy because the hereditary elite have always adopted the most meritorious citizens into the elite strata.

Germany has a unique form of meritocracy where the educational system has a history of sorting citizens into special school tracks that emphasize their talents.

England is riding on its history as the first nation with a modern commercial base.  Sort of a senior citizen in the world of commerce.

A highly speculative and personal blog.  I just wanted to write about these issues.

Poverty

One of the standard complaints about modern commerce is that it creates large differences in the living conditions of the ‘haves and have not's.  Between the successful middle class nearly everywhere and the persistent poor found in  almost all prosperous nations.

This is a serious confusion of two separate and independent factors.

Modern commerce rewards some disproportionately more than others.  The distribution of wealth and income is a steep curve with a tiny percent of any nation's people at the top and the majority at the bottom.  Much like the natural world where there are billions, maybe trillions of insects and only millions of  creatures larger than humans.  Where there are billions of dandelions and only millions of large trees.

But this observation leads to confusion.  What modern commerce creates is the divergent distribution of wealth and income, it is government that determines the number of any nation’s population that lives in poverty.    The best example is Singapore, an island like nation, with five and a half million citizens in a super-successful modern commercial world with no poverty. No poverty because the government decrees that there is to be ‘no poverty’.

Some Scandinavian countries have little measurable poverty and virtually no visible poverty while being successful modern commercial nations.

Poverty is the responsibility of government, not modern commerce which generates abundance but does not determine its final distribution.

Evolution of business

I have explained that the modern world is the by-product of modern commerce.  Not science, technology, medicine, economic growth, government, capital or religion…. It is only the by-product of  modern commerce.

I have shown that modern commerce is made up of three distinct types of business; trade, clientry and industry.  Only industry has created and been an integral part of modernity.

The distinct attributes of modernity and the sources of vigor for modern commerce are meritocracy, diversity and openness.  These developed in nations with institutions of law and finance that made trust pervasively available with their structural openness (courts and banks). That modernity was able to thrive in the world of aggressive colonial trade and the expansion of the American West where the meritocratic sons of fortune could escape their hereditary elite families.  Lastly, the mixture of institutions that favored openness among strangers (Free Masonry) that promoted meritocratic values and generated life in truly diverse urban communities were the fertilizer for the thriving of modern commerce.

All of this is new to most people.  It is also fairly obvious to most people when they reflect on it.

There is a less visible reason that modern commerce is a stunningly successful human creation which has brought us such extraordinary benefits in such a short time (two hundred years). That reason is that modern commerce is driven by evolution of the Darwinian type.

Darwinian evolution is composed of two elements: change in the existing conditions and selection of the desirable changes.  That is a perfect description of modern commerce. Business is constantly in flux and constantly moving in the direction that favors individual needs, tastes and desires.

Everything in modern commerce evolves.  The 1,000 square foot local food outlet in 1860 with barrels of goods and a proprietor has evolved into a vast chain of supermarkets with hundreds of thousands of square feet each, tens of thousands of packaged goods and hundreds of thousands of employees.  The airplane has evolved from a one person kite using a one cylinder gasoline engine with wing and tail controls to a 400 person behemoth that flies thousands of miles at hundreds of miles per hour in all weather as part of a global corporation transporting millions of strangers every month.

Businesses evolve.  They are born in the flux of market changes, sometimes infinitely small like a river changing its course.  They grow then they appeal to customers and they die when they become part of a bigger consumer driven corporation or they shut their door.  In the United States at the beginning of the 21st Century there were over half a million new businesses started and only one-third of them survived ten years. Evolution gives new life to the world of commerce and continually improves the lives of its beneficiaries.

Commerce in the modern world thrives on evolution and creates a wonderful variety of products, services and livelihoods.  Just as evolution creates a nearly infinite variety of species in the natural world from which we all enjoy the benefits and some distresses; it does the same in the modern commercial world.

Pro commerce history

There were many elements that went into the first successful trading nation.  Holland in the 1600’s was the first major global trading nation.  Trading posts had been developed on sea lanes by the Phoenicians, the Vikings, the Chinese, the Viennese and specifically in the North Sea region by the Frisians (the main source of the English language).  Bookkeeping, a vital element came from Milan.

Holland, focused on Amsterdam, in the 1600’s was the source of government bonds markets, international shipping insurance, the stock market and other open bidding markets and importantly salaried tax collectors (source of trustworthy tax collection).  The Dutch were a unique people on the planet.  They had created a representative democracy with elections of many offices; the Dutch Republic united the Netherlands with seven provinces.  It was founded in 1581.  

The Dutch were noted by all visitors in the 1600’s as the most egalitarian people on the planet.  They were also the most tolerant.  They had absorbed the Jewish exiles of the Spanish Inquisition of Spain and Portugal.  Amsterdam in the 1600’s was the center of technology, the center of the Enlightenment and the center of publishing in all of Europe.  (See Jonathan I Israel's, The Dutch Republic) 

The Dutch military conquered England in 1688 and transferred all the major financial institutions to England where the Dutch Head of State, William of Orange and his wife, became the King and Queen of England, William III and Mary.  With the English Parliament that welcomed them, they create the Bill of Rights of 1689 the major source of modern English law.

Holland was prosperous in the 1600’s as was its settlement in the American colonies, New Amsterdam later New York.  New York became the source of most American financial institutions and with the creation of the United States and the American Constitution it became a central financial force.  New York’s representative Alexander Hamilton played a major role in building modern financial ideas into the structure of the united 13 colonies.

England with a much larger population, with the Dutch financial tools, became the largest global trading nation from 1700 until 1945.

In the history of commerce these two giant international commonwealth’s, England and Holland, generated an entire future generation of entrepreneurs and giant trading businesses.  The Dutch and British colonies were gigantic new markets and training stations for homeland officials.  The colonies created entrepots were the second and third sons of the hereditary elites could find important positions of power.  The beginnings of meritocracy.  The colonial cities also provided great ‘diversity’ in the commercial meaning of that term.  Colonial networks were the origins of modern commerce.  Colonies created markets for Dutch, British and other local goods and the navies to transport them.

England is considered the original home of the Industrial Revolution as water power and steam power were introduced to accelerate wool, cotton and ceramic production lines. The revolution soon moved to the rapidly expanding United States in the 1850’s with the expansion of the West that allowed the meritocratic offspring of the Colonial States hereditary elites to open the vast new reaches of America along with the commercial settlements created by the soaring number of immigrants from the entire world.

Three other ingredients played a role in this historic development of industry.   

The original Free Mason Grand Lodge was founded in London about 1720 and spread around the world by the end of the 1700’s.  Free Masonary became the home of diverse men who could trust each other.  It became the backbone of trust and finance for the Industrial Revolution and its expansion in the 1800’s provided finance for the American frontier.  

The second was the application of the new technologies of animal husbandry and horticulture to farming in the mid-to-late 1700’s in England and Holland which increased production dramatically creating free labor to supply the emerging Industrial Revolution factories.

Third and last was the widespread publication of Adam Smith’s Wealth of Nations which helped leaders and thinkers understand the nature of the explosion of industrial production and trade that surrounded them.

The industrial revolution, in retrospect was the convergence of many small but critical elements to the three major elements I have identified.  Meritocracy had to emerge from within societies ruled by hereditary elites.  The Dutch and British colonial system made this possible.  In America, the vast Western expansion made this possible even more so.

The diversity necessary for commercial creativity and technological innovation was also a by-product of this international mingling of people and cultures in the many urban cities of the colonies.

Lastly, the emergence of safe spaces for open and tolerant men of diverse backgrounds and the institutions of modern commerce that they fostered  was essential.  Democracy was vital as were the Free Masons and similar institutions that the Dutch, English and Americans promoted.

Modern commerce needs openness.

A synonym for openness is honesty.  I have always preferred to talk in terms of openness because ‘honesty’ is the absence of deceit.   Openness is a condition where deceit can not even take root.  A small difference but I prefer the open environment to one that depends on ‘honest’ people being honest all the time.

Why would modern commerce need and promote openness?

The true underlying requirement for modern commerce is trust.  Openness is the way to create trust over a broad array of circumstances.  Commerce is carried out over vast distances and between untrusting people.  

The original form of trade appears to have been one tribe putting its goods on a river bank and another tribe putting its goods on the opposite river bank.  No trust was needed.  The buyers on each side of the river were allowed to return to their side when the trade was considered acceptable by both sides.

Currency was a way to make trade easier by exchanging a universal coin, gold, for the goods and services.  Little trust was needed.  Stories about drug gangs selling merchandise for money then keeping both the drugs and the money are common fare in the world of fiction.  Mostly fiction. Currency works fine,  for most transactions, in lieu of trust, but more complex transactions such as shipping require more.

This is why some tribes with strong internal trust were able to carry on trade over long distances for several millennium.  Phoenicians, Jews, Chinese families and the West African Fulani tribe became long distance intermediaries. A tribal member was present at each end of the transaction to verify the transaction.  

More complex transactions over time required legal documents and courts.  Both these elements required openness.  The lawyers had to follow established published legal standards and the court records had to be public as well.  The same became true of insurance contracts, stock exchanges and entire legal systems.  All of these institutions required openness to be the basis for trust in commercial transactions.

The early days of modern commerce were built on all these open institutions, bond markets, stock markets, legal systems, contracts and trade treaties. As corporations emerged in commerce in the 1850’s laws and public filings became the form of openness.  Today, openness in securities filings and banking transactions are vital for the survival and expansion of modern commerce.

It is hard for us to remember that every commercial institution plays a role in keeping the level of trust high for modern commerce.  Banks guarantee the safety of their checks, credit cards and bank accounts.  So does everyone else we give credit cards and checks to.   These businesses are subject to openness at some level of audit, government examination and reputation.

The most important role of openness is inside of businesses.  No one could run a business if they can’t fully trust every other person in the business, and expect openness about all management relations.  If a manager gives directions to a peer or subordinate who fails to carry out the directions or report back accurately, then that person is forced out of the business and/or are other people who fail to report the breach.  New people are not hired in the first place if the aura of deceptive behavior hangs over them.

Openness is a core value that is generated in modern commercial markets and is necessary inside modern commercial business.

I am the person who made international currency possible with the development of multi-bank issued credit cards that allow modern people to travel the world and buy and sell goods and services.  That whole system is based on the long history of interbank trust which in turn is built on interbank openness.  For the first few decades of bank credit cards, they all used an 'Interbank' symbol.

Trust is the core value of modern commerce that allows a tribes-woman in the back woods of Cameroon to sell her goods in Charleston South Carolina.  Trust is based on a vast series of institutions that rely on openness.

Values of modern commerce: diversity

One of the values that makes the modern commercial world possible is ‘diversity’.  

Unfortunately, many who might otherwise love modern commerce, have the wrong idea about ‘diversity’ as it applies to commerce.  Diversity in this context does not mean gender difference, melanin difference or difference in income level or ethnicity.  

A group of five people who are on the board of a Sacramento Seed supply company can include an elderly rich lesbian woman, two black academics one of whom is gay, a Taiwanese mother of two and a Filipino male nurse and they will have no diversity of worldviews.  They can all be Marxist or all hardline anti-sugar foodies.  Their diversity of gender, melanin or ethnicity is not the kind of diversity that ‘diversity’ in modern commerce is about.

Real diversity is about different worldviews and different life experiences.  A group of 5 white men with one a former Navy fighter pilot, a Buddhist monk, an aeronautic engineer, a young graphic designer and a Public Relations expert from Washington DC could be a much more diverse group that would be appropriate for a modern commercial management team.

What is wanted in a modern commercial society is ‘diversity’ of experiences and worldviews in order to get real vitality in decision making about technology, marketing and management.

Real commercial grade diversity generates creativity and originality.  That is why all modern commerce evolved first in big coastal cities where genuine diversity exists: Amsterdam, London, New York and Glasgow. 

I was asked by a planning agency in Japan in the early 1970’s what made the U.S. such a technical prodigy.  My answer was in a small phone directory I carried with me, the 1960 internal New Jersey Bell Lab directory.  I showed them a few pages of names.  This is the laboratory that invented the transistor, found the background radiation of the universe and had 6 winners of the physics Nobel prize.  The example of names were: Narain Gehani, William Shockley, John Bardeen, Arno Penzias, Steven Chu, Horst Stormer, Daniel Tsui, George Smith, Robert Wilson, Herbert Ives, Joseph Mauborgne, Russell Ohi, Mary Torrey and George Stibitz.  This list didn’t look like an ordinary American telephone directory.  These people were brought from all around the world to create a team of the top global minds.  True diversity of the modern commercial sort.

You won’t find a list of names like that in Mexico, South Korea, France or Poland.  You won’t find the kind of genuine commercial diversity like that in most of the world.  

That is the kind of diversity that allows a modern commercial company to be innovative in technology, marketing and management.

Values of modern commerce: merit

I did one blog demolishing all the wrong reasons people use to explain what created the modern world,  The only source of the modern world is modern commerce, beginning with the industrial revolution.  

I did another blog explaining the three main varieties of modern commerce, trade, clientry and industry.  Understanding these three categories is necessary to see the elements of business around us otherwise not knowing these categories, living with the absence of noticeable differences, obscures the nature of modern commerce.  Only the unique presence of ‘industrial business’, the category that aims to reduce costs, defines the modern commercial world.

There are four more steps to fully understand and appreciate why modern commerce is the source of the modern world. This blog is one of the four. This blog concerns the values that promote modern commerce and allow it to thrive. Meritocracy, diversity and openness are the three values and each gets a blog of its own,in this sequence.  Meritocracy is first.

The meaning of diversity is next.  The one after that attends of openness. 

The final blog covers the history of modern commerce which I hope will offer a solid basis for understanding the sources of modernity.  History explains how the ‘industrial’ model evolved out of meritocracy, diversity and openness as these qualities entered society to coalesce into modern commerce.

You can’t see the role of meritocracy, diversity and openness as vital values of commerce merely by walking through a shopping mall.  Nor can you see it by working for a profit making business.  If you could, everyone would be a pro commerce advocate.

I only saw these three values working as a consultant, all over the world, with more than  two thousand businesses.

What is meritocracy?  And why does it matter so much to modern commerce?  According to the Merriam-Webster dictionary, the word ‘meritocracy’ was first used in 1958.  I believe that. It is a recent term and a recent concept.

A meritocratic society is one that values individual merit over all else.  The two most common forms of society that are not meritocratic are hereditary class societies and tribal societies.  In an hereditary class society all important functions are offered to fellow members of the hereditary class, usually in birth order.  In most of the world with an hereditary class society, such as England, France, Turkey, Spain, Brazil, the Philippines and hundreds more, valuable places in society go to the oldest son.  That would be the top management position in the company, the legislative seat held by the father, the partnership in the watch business or any other valuable position.  Sometimes the entire family receives the benefits of the hereditary family membership for entrance to the college, clubs and occupations of the father.

The other form of society that is not meritocratic is a tribal society.  In a tribal society all the benefits of the tribe accrue to other members of the particular tribe.  A tribal society can also have an hereditary family structure; and often does.  All of Arabia, Africa and South America are tribal societies.  In Jordan, the person chosen for a job or apprenticeships is always a member of the same tribe. In Jordan these tribes are: Abbas, Malik, Mustafa, Quraysh, Ghassan etc. Tribes have very extensive cousin relationships so all jobs go to ‘cousins’.  

In China the tribes have names such as Wang, Li, Zhang, Liu, Chen, Xu etc .   A nice apartment  might become available in Shanghai but only a member of the Liu network will hear about it.

Some tribal societies use a little bit of merit in assigning valuable social assets.  At a trucking firm run by the Malik family the cousin who is best with numbers might get the accounting job in the firm’s office.  In the Kahn family dance school, the top teacher might occasionally be the best dancer. But the head of the school will be a Kahn.

In the very few meritocratic societies we have the rarest of strange behaviors.  When we have position to fill, say a nurse at a VA hospital or a line cook in a French restaurant, we actually interview many people for the job and ask everyone we know to send us the most competent referrals.  Then we pick the one who will fit into the business and do the best job.  That is meritocracy.  That is unheard of in most of the world and is largely irrelevant outside of modern industrial commerce.

Since merit is relevant to high levels of production, management and technology it becomes obvious that meritocracy is a keystone of industrial commerce in a modern commercial society.

‘Modern commerce’ is not a single entity

What are we talking about when we talk about ‘modern commerce’?

We can go to a national capital like Bamako in Mali and see many shops, a movie theater, a fancy modern hotel and a few bed and breakfasts, yet it doesn’t feel like a modern commercial city.  Why not?  

To answer that question we first need to examine what categories of business there are.  I find three categories of business and two other related forms.  I explain the first three here.

One form of commerce is ‘trade’.  Trade was the first and is the most enduring form of business.  The guy who sells cigarettes to prisoners in a prison is in trade. The native Illini  traders who took Lake Michigan shells to the Mississippian tribe, a thousand years ago, to exchange for pottery were in the trade category of business.  A product or service is exchanged for money, or a monetary equivalent.  The trader has a markup on the goods and services that allows him to buy or make replacements and have enough surplus to remain in the business.  A local flower shop or a local ice creamery are in trade.

The second category is ‘clientry’.  The object of clientry is to sell a good or service that generates a lifetime relationship with the client.  A clientric form of business would be a dentist, doctor, lawyer, designer, Japanese tea ceremony teacher, banker or investment counselor.  A few teachers, like Socrates and Pythagoras ran ancient clientric businesses.

The most recent category of business is ‘industry’.  While some ancient furniture makers used mass production techniques, the great innovations in industry came around 1800 when water power and steam power were added to the process.  The goal of industry is to reduce the price of the goods or services that are sold.  This reduction in costs are usually achieved by economies of scale, including expanding the market. And the application of technology.   Any chain business is in the category of industry whether it is the local insurance broker, the coffee shop, the Home Depot, the Nissan outlet or Delta Airlines.  

The presence of industry, particularly the head office of some industry,  is a sign of modern commerce.  

The other two forms related to business are ‘non-profits’ and a government owned business.  Non-profits are nothing more than a tax definition of a business that has an ostensible non-business social objective.   Non-profits can be trade, clientry or industry.  They don’t have an owner and their net surplus’s must be plowed back into the business.  Non-profits can be trade as in a local childrens clothing re-sale shop.  They can be clientric like the church run kindergarten that provides services for all the family members as they age.  Or industrial such as the Red Cross with offices everywhere.

Then there are government businesses like the Army PX which is a department store run by the Army, or the US Postal Service which is a semi-government owned shipping and delivery service.  These are weird entities; they can be internally subsidized.  They can be efficient or inefficient.  They just aren’t really businesses.  They are pseudo or imitation businesses.

Being able to recognize the variety of business categories is a first step in recognizing the elements of modern commerce.

If all business looks the same, then the nature of modern commerce is hard to discern. Understanding that trade is aimed at making each sale work, that clientry is aimed at a lifelong relationship and that industry is aimed at reducing costs helps to see what business is really about and that industry is new and novel.

In the first paragraph I mention Bamako, the capitol of Mali.  Bamako doesn’t feel like a modern commercial city because: nothing is manufactured there or created there and there are no company headquarters; as would be expected in a modern commercial center.

Pro commerce. Why not?

It is hard to understand why most educated people have no idea that modern life is 100% the construct of modern commerce originating in the 1800’s with the industrial revolution.

Many people see modernity as the by-product of science, technology, economic growth, medicine and/or government.  Some think it might have been caused by religion or capital.

Those are all completely wrong.  Simple examples can disprove all of the above false gods but it is understanding both the history of modern commerce and the nature of modern commerce that are needed to disabuse most readers of their false notions.

Let us take the simple examples first.

• Science.  The USSR for 75 years was just as competent in science as any part of the modern commercial world.  But anyone who went to the USSR in the 75 years, as I did in 1981, knows that it wasn’t part of the modern commercial world.  Ordinary people, and often even the most elite people, lacked clean drinking water, clean water for a bath or shower, heated living conditions, good transportation, outside of the two major cities, adequate food including vegetables and meats.  People in the USSR, with advanced science, did not have departments stores or grocery stores much less the ability to travel around their own country or start a business.
• Today Cuba, Venezuela and North Korea have most modern technology available to the elite members of their society, but not to 95% of the people.  High tech weapons are fully operational from tanks to automobiles, xray machines, lasers, radar and computers. Technology exists in nearly fully operational form but nothing there resembles modern commercial life.
• One of the richest per capita countries in the world is Saudia Arabia along with Brunei.  No one who visited these countries would doubt that they had bought all their building technologies and their transportation to appear to be a modern commercial nation.  They have GDP and capital but they lack even one shop that can manufacture a modern bicycle, a pack of cigarettes or a pencil.
• Medicine and associated sanitation ideas are found fully developed in Johannesburg, Kabul and New Delhi; but they have average population lifespans of  54 yrs,  47 yrs and  60 yrs.   Modern commerce does not come from medicine and sanitation but out-of-control population growth does.
• Lastly does religion bring modern commerce with it? Max Weber suggested that the ideas of Protestantism was the source of modern commerce.  That doesn’t explain the very modern commercial bootstrap nations of Japan, Taiwan and Singapore.  Japan has a religious base of Shinto and Buddhism, Taiwan is Daoist, Confucian and Buddhist while Singapore is equal parts Hindu, Confucian and Christian.
• Is government the source of modern commerce?  Of course we find stable and modern government everywhere from Communist East Germany to North Korea but rarely did it or does it generate a modern commercial world.

No, modern commerce is not explained by any of the standard ideas, not even close.  I have given a stark and dramatic proof that shows how each of the standard ideas of the source of our modern world is wrong.  Much more is needed to understand why the modern world is solely the by-product of modern commerce.

Behavior in Japan

I’m off to Tokyo in a month for my annual vacation in paradise. I still write my blog every day while in Japan.  It is a pleasure for me, like coffee and dessert.

Japan is a really different world.  We will have three guests this year, as is usually the case.   I make a point never to express my views on Japanese behavior.  After 45 years of annual visits to Japan, I am still in the learning mode.  Every year I learn something new.  Sometimes minor, like the way each individual has their own favorite place to view cherry blossoms or major like the way Japanese measured time before 1870. The day was based on the sun.  Time began at sunrise and stopped at sunset with high noon as the only stable element.  In Summer the amount of time from sunrise to noon was measured with long 'hours'.  In Winter the hours were very short.

My experiences in Japan have led me to take the Sapir-Whorf view of society.  A culture is a total and inclusive system.  That is certainly my experience in Japan.  So explaining anything to a visitor would be futile.

Start with the language.  All words have a high level of ambiguity.  As a result writing a legal document or a law allows for a vast range of interpretation.  And it means the Japanese can be together for hours making puns.  Being part of a gathering making puns is one of the Japanese favorite entertainments.

The meaning of a sentence has a great deal to do with the context in which it is spoken.  The Japanese pay very close attention to the posture and movements of a person speaking because it bears directly on the meaning of what they are saying.

Japanese will do anything to avoid saying ‘no’ and they will be evasive as possible to avoid giving a negative answer.  The reason is that Japanese society values harmony almost above all other values.   That puts anger out of the question in nearly all situations.  In 45 years I have only seen one angry Japanese.  It was motorcyclist who almost got hit by a taxi.

All of this is relevant to me because I give business advice to my clients in Japan.  The advice has to be coherent to them.  Marketing is most effective along the lines of contact with fellow college friends and peers.  Especially when sports were a common experience.  People rarely make friends with strangers, so marketing has a different context.

Japanese value harmony so highly, there is little litigation.  I have never met a lawyer in Japan.  In San Francisco I meet them by the dozens every month.

 

Irradiated food

I was worried about some defrosted pork loin that had been in the refrigerator for over a week.  So I first put it in the microwave oven for about a minute before grilling it.  I assumed that any microbes in the interior would be killed by the temperature which could reach 160 degrees Fahrenheit in that time.  I don’t assume that microwave radiation would kill anything directly.

But that made me curious about irradiated food.  Since the mid 1950’s I had heard radiation proposed as a way to kill pathogens in food.  While the idea was popular in the 1950’s it was treated as poison from the 1960’s on.

I didn’t know the current status.  I always knew that levels of radiation that would kill pathogens would not make food radioactive or change the food molecules.  Turns out to be true.

Much of the world uses radiation from Cobalt 60 to irradiate food and America does too.  I couldn’t find out how prevalent it is.  Many national chain restaurants could have used it on raw veggies and avoided a lot of grief.  Like Chipotle’s.

I don’t expect to find a reliable source to tell me which foods are irradiated and how much food is irradiated.  I would love to buy more of it.

Today I will start looking for the label that I have shown in the upper right that is required on all American irradiated food.

Please, Alexa

So what happens if Alexa, Siri or Google Voice gives you bad advice?

It has happened with Wyse map guidance app which sent some Israeli’s on to the wrong road in the West Bank Palestinian territory.  They were put in danger among a group of barbarians but survived.

I personally think it is the same as when your doctor, tax preparing CPA, or contractor gives you wrong advice.  They are legally liable for the damages that occurred from following their advice.

We treat a whole group of people as reasonable authorities and we expect to be able to act on their advice with confidence.

I think that Alexa, Siri and Google Voice are part of a business that has the same level of authority as any business that purports to give advice, counselling or reliable information.

I see no legal protection for artificial intelligence that exempts it from legal liability for errors arising from its advice or counsel.

A particularly difficult problem arises when Alexa, Siri or Google Voice use Wikipedia which has many errors of fact and conjecture.  Wikipedia also has a Lefty bias in many categories of material.   Because Wikipedia is an acknowledged crowd created source and is sometimes changing its content, it would be hard to hold Wikipedia legally liable.

Alexa, Siri and Google Voice should probably announce that their source is Wikipedia when it is.  They need protection from that particular sinkhole.  That is also true for Snopes, a particularly unreliable Lefty online source of information.

All of this will be sorted out in courts over the next decade.  I think I see the direction of the law.

 

Secrets

There is a pattern emerging that warrants our attention. Especially for businesses.

First American military and diplomatic mail were published on Wikileaks, then National Security files were leaked to the British Guardian newspaper, next Democrat National Committee and John Podesta’s email (major Democrat operative) were published on Wikileaks and most recently the CIA clandestine cyber section’s files for 4 years are published.  The actual hacking tools are in the possession of Wikileaks but not published.  

Countless corporate files have been stolen and sold including very large data bases held by Sony Pictures and Yahoo.

This tells us two things:  

• With nearly all material created and stored in digital files which can be put on a thumb drive in astronomic volumes and
• can also be circulated to everywhere in the world via public fiber optic lines in moments

No secret flies or data at secret agencies or their operations can be kept secret for long.

This is particularly true in the United States where citizens are groomed to be defiant and being anti-American is regularly worn as a badge of honor.  This was exemplified by many Democrat mayors of American cities when protesters and homeless were encouraged to camp for months in vital public landscapes to object to market generated income distribution (‘Occupy Wall Street’).  

The same is true of anti-corporate ideology that is a core teaching at nearly every academic institution in the country and in every niche of the public and entertainment media.

America is also where an anti-American, racist, venal half black man was elected president in two elections.

Combine these new technologies with a pervasive corporate hostility and American self-hatred as a national value, the idea of any kind of secrets is long gone.

The current era

My friend, Stuart Silverstone has been working on Big History for about 30 years. Long before it became popular and got big funding.

Stuart asked me to make some trend suggestions for three of the most recent panels.  Here is what I wrote back to him about the major trends I've seen since 1980.

1980-2000

 

The most important trend has been the reduction of the Marxist model of government; the ideology that believes in using government power to remake the individual.  This 20 year period saw the end of the USSR and Mao's China. Replaced by more private corporations and greater freedom to individuals.  

 

It saw the emergence of a new socialist model in Singapore of an open commercial market and an authoritarian socialist government.

 

Marxism was replaced by a global religious belief in a human caused Global Warming with Armageddon consequences.   Global Warming Religion becomes core belief of the American Democrat Party and nearly all of Europe.

 

There was a dramatic reduction in American military spending and a signifcant decrease in the Russian and USSR nuclear stockpiles.

 

The emergence of peace talks between the Palestinian leaders and the Israel government. 

 

Development of PCR machines to study genes.

 

Formation of the Euro monetary zone and associated 'global community' ideology.

 

Pakistan, India and North Korea conducted nuclear weapons tests.

 

Use of Cardiac Cath Labs to treat heart problems introduced.  Started in the U.S. and expanded globally to all wealthy commercial countries.

 

Post menopause breast cancer successfully treated.

 

Hippie movement absorbed into general U.S. society by the end of the 1980's.

 

Peak American crime rate reached in 1991.  Due to a 20 year lag following abortion legalization in 1971.

 

 

2000 to present

 

Rapid expansion of the Islamic War against modernity.  Including 9/11, Iraqi and Afgani wars followed by 4 other Middle East Wars and terrorist bombings around the world.  Four wars: Libya, Mali, Yemen, and Syria.

 

Expansion of fracking for oil and gas, collapse of oil prices and American resurgence as world energy powerhouse. 

 

Expansionist military moves by China first in Senkaku Islands then in South China Sea.

 

Israel develops and uses first rocket defense systems.  Iron Dome downs nearly 1000 Gaza rockets and Arrow anti-ICBM system demonstrated.

 

European and American sponsored Israeli peace talks finally fail for the third time.

 

Global expansion of Internet and associated cyber-warfare. Internet becomes major media source for large number of citizens in 'developed world'.

 

Complete dominance of American academia with Left-wing fascism and martial action against all opposing political views.  

 

95% of media adopts unremitting anti-Republican anti-American position. 

 

Slow emergence of anti-media political movement.  Tea Party emerges in 2010, decline of Democrat officer holders begins in states and Congress (1,000 seats lost in six years).

 

Successful emergence of new type opposition movements to 'global community ideology' in Britain and the U.S. in 2016 . 

 

In the U.S. government change towards a pro commerce stance with anti-government and anti-global warming policies. Begun with election in 2016.

 

Venezuela becomes the first modern, 21st Century, nation to face population starvation due to Marxism. 

 

Random selection of citizens is used in California to apportion political boundaries. 

 

Many new cancer treatments enter market.   Hep C. becomes first viral disease cured in the U.S. along with successful treatment of AIDs.

 

 

Future

 

Random selection of citizens is used as a tool in new form of democracy at every level of governance.

Global consumer market emerges on Internet.  Market of products and services expands geometrically.

Measures of modern commerce

Much of the material in this blog comes from the wonderful book by Matt Ridley; The Rational Optimist.

I go for metrics.  It is hard to compare living conditions around the world. An ordinary American in 1800 had a little salted beef or pork a few days a week, could only drink water in the form of boiled tea and ate mostly root veggies and hard bread.  But an ordinary Japanese had rice, fish and a great variety of foods along with clean water and a daily public hot bath.

What modern commerce has brought us over the past two centuries:

Modern commerce has lit up our world. The amount of artificial light for an hour of work has gone from 186 lumens from a tallow candle in 1800 (about a 20 watt incandescent bulb by current standards) to 8.4 million lumens today; or put the other way around.  One hours work these days provides 300 days of reading light in the modern commercial world.  And that is for incandescent light.  LEDs are 10 times as efficient.  They don’t smell like the candle, don’t flicker and can’t start a fire by accident.

We travel about 250 times as many miles per year as we did in 1800.  A stagecoach ride of 350 miles took 8 days and cost the average person a month’s wage.  Today it is less than an hour by airplane and costs 2 hours of the average person’s wage.  Or a day by car.  A rental car can be half an hours wage.

A half gallon of milk took nearly an hour of milking. The milk was warm, teets, hands and bucket were seldom clean. Today one needs to work about 5 minutes to pay for the same amount of cold, clean pasteurized milk.

Lifespan has increased because of sanitation which began improving in Massachusetts in 1845, medical technology and diet. All the direct products of modern commerce.  Sanitation and technology spread around the world by modern commerce. In 1800 males and females lived an average of 40 years but that was because of the high infant and child mortality. If the child survived to age 10 they lived to be 60 years old on average.  Today the lifespan at birth around the developed world is roughly 80 years.  For women, giving birth meant a 1 in 30 chance of death for each birth. Now it is less than 1 in 10,000 births.

Choice of livelihood is the most dramatic change brought by modern commerce. In terms of occupations in 1800 in the U.S. 80% of workers  were in farming.  Today that is under 1%.  The remaining 10% were in fishing, sailing and mining and 10% were teachers, ministers and domestic workers.  Take your pick.  Today those last 6 occupations are about 8% of the labor force. We have a vast white collar and professional class of workers and they do over a million different types of jobs.

In 1800 education was only for those who could afford tutors. Maybe ¼  of the population could read and write; College was for the top 1%.  

Medical treatment was in terms of humors and fluids. Bleeding was the most common therapy. The most common cause of death was tuberculosis, followed by fevers of typhus and pulmonary congestion.

Alcohol was the only anesthesia.  Dentistry consisted of pulling teeth and using wooden dentures.  

Common birth defects were clubfoot, cleft palate, scoliosis, bow legs and legs of different lengths.

It is hard to be sentimental about life in the past or about remote parts of today's world.

Modern commerce is the first major change, for the better, in human's living conditions in many millennia.

Poverty

Most critics of modern commerce point to something called ‘poverty’ as a problem with modern commerce.

As a consequence the word ‘poverty’ and its associated idea are somehow relevant to modern commerce.  But like the word ‘capitalism’ poverty is really a creation of the Marxist Left.  The Marxist Left proposes that some form of government can change human behavior sufficiently to eliminate poverty.  

Modern commerce has no spokespeople and even if it did, no one would claim that modern commerce has a connection to ‘poverty’ as thus defined.  Modern commerce is an evolutionary mechanism for using human skills to fill human needs and desires.  It does not proscribe any form of government nor does it advocate for any moral values (such as income equality) other than the ones that promote modern commerce itself (meritocracy, diversity and openness).

I personally know several things about American poverty.  One is my description of a grant my Point Foundation made to a very poor family of 7 to travel around the U.S. in their old station-wagon and breakdown in every town and report back the treatment they received.  They were treated like royalty, this Okie bunch, everywhere. Fed, clothed and housed.

I’ve worked for the State of California improving the care of adults who can’t care for themselves.  They are in private homes in groups of six with astoundingly kind and generous care, including dressing them and feeding them very well and entertaining them with field trips.  So ‘the poor’ must be people too competent to meet the 'adults needing care' definition.

I built a park for winos and other street people.  I knew many of them very personally.  These were street people who would be considered living in ‘poverty’.  But from reading what I wrote it is clearly a group of people who choose this form of life to avoid the hassles of mainstream living.

Lastly, the way to be a poor woman in America has been documented many times: get pregnant without having a loyal married father of the child.  Modern commerce does not have many ways to pay a low skilled woman with a child enough money for her skills for rent, food and other necessities.

Poverty is a problem not of modern commerce but of the government in which it resides.  Look at Singapore, a city with no poverty because the authoritarian government doesn’t allow it.  Singapore has a thriving modern commercial world but no poverty and the two are unrelated.

Rock

A recent nearby restaurant location has seen a rapid succession of new restaurants that fail fairly quickly.

This is a gay neighborhood and there are many restaurants.  A few at the high end succeed, very few.  There are a few that are good for a meal once every two weeks that do well for the many people who don’t cook for themselves.

This photo is of a large rock in front of a new Japanese expensive restaurant, in the high failure location.  Also high foot traffic and high vehicle traffic.

What struck me was how beautiful the rock was initially.  It was promptly peed on by dogs and probably homeless.  Since then to make it easier to clean, the bottom half has been painted.

Sadly, it was a beautiful rock.  The kind that the Japanese, Turks, Finns and Hungarians love.  But we Americans don’t love rocks.  It was a beautiful addition to our neighborhood.  It can’t survive long in our society; there are few locations private enough to avoid being covered with graffiti, or pee in this case.  A rock isn't meant to be painted over regularly and still be beautiful.

For me rocks are part of a brilliant and powerful esthetic.  That is what I have learned from over 45 years of regular visits to Japan.

Voegeli and coalitions

I read a fascinating article that I think my readers would like to know about. It is by William Voegeli, in the Claremont Review of Books, Jan. 31, 2017 “The Democratic Party’s Identity Crisis”.

It is not free but the reason it was so powerful can be seen in my understanding of what Voegeli says.

He is examining the future of the Democrat Party.  Unlike the standard demographic argument that more Latino immigrants will fill the Democrats with a permanent majority, Voegeli argues that the very nature of victim coalition building is self defeating.

There are three fundamental problems with a political strategy of building coalitions of victims.

The first and most serious problem is that there is no hope.  Whatever is promised to the victims to mitigate their anger and resentment can’t work.  If it could work it would move the voters out of the victim class into the overlord class and out of the Democrat Party.  Denigrating clusters of people as victims is self defeating because the victims depend on anger and revenge as motivations.  It is hard, if not impossible to build coalitions of angry people.  For example, creating the Black Lives Matter victim organization which focuses its hatred on police and whites will inherently alienate the minority police, their family and friends as well as the people they work with, other emergency personnel and the blacks who appreciate the need for police in their neighborhood.

Second, once in power the Party must continue to support the divisiveness and mutual hostility that created the victim groups in the first place.  It is not possible to govern effectively without unity and cooperation.  Which is why the Obama Democrat Party never accomplished anything positive and rent the social fabric every day while destroying the state and local Democrat Party at every level.  The Democrat support of the environmentalist meant attacking coal that lost the Party voters in West Virginia, Tennessee, Kentucky and Pennsylvania.  The same happened with blocking the Keystone pipeline and the Dakota Access pipeline.  That alienated many union construction workers, people in the oil industry and ultimately the blue collar workers in vital swing states like Michigan and Ohio.

Lastly, to quote Voegeli who notes the people who are the supposed overlords creating the misery of the victims are called deplorables “denigrating people until they vote for you lacks a certain strategic plausibility.”  

Put simply: creating a political process that divides people into victim classes creates misery for which government is not a useful repair tool.  The Democrat Party has no ideological future.

The current American obsession

In discussing the current techie paranoia about robots putting people out of work, I wrote that the hippies prove the opposite.

“20 hippies living together could live on the income from one of them working, and they did.  And plenty of them did and stayed home smoking pot the rest of the time.”

We may have some of that again.  At its peak in 1998, 67% of eligible workers were in the labor force.  That has dropped to the current 62%.  Compared to the past, 3 million more people of working age 25 to 54 are not working.  I think they are staying home smoking pot and playing computer games.

As I said in the same earlier blog:  “Hippies were Americans.  The truth is we used our free time to create a new world.  We created home-schooling, comics,  bakeries, organic farming, organic groceries, cheese, new sports (mountain bikes) and thousands (yes thousands) of new businesses including the home computer industry.”

Simply put: we live in an incredibly rich society and many people can chose not to work.  But because the American spirit is restless and always imagining a new and better world, we Americans create new desires, new industries and we are always pushing commerce ahead of us.

Americans, left to their own devices will always create new demands and new businesses.  That is very American and a driving source of global commerce.

Modern commerce 2

Where does the hatred of modern commerce come from?  This is a continuation of yesterday’s blog.  Modern commerce nearly came to the end a few months ago. Barely 65 million Americans from the Old West, saved it from a world of 7 billion who would destroy it.

I blame myself for the extent of this hatred of modern commerce.  This hatred comes right up to my front door and I find it in several of my children.  I should have written The Greatest Book in Human History. There actually is no book with that title.  But I didn’t write it.

That book is what I have been writing about in this blog for several decades and can now be boiled down to its essence.  

Modern commerce began in the first democracy, Holland where most of the commercial instruments were invented: bonds, equities, financial markets, salaried tax collectors, modern technology, the intellectual world of enlightenment.  Holland with its democracy and vast empire was the land of meritocracy.  Holland conquered England and transferred the roots of modern commerce to a larger country where the first great book on commerce was written by Adam Smith.  England helped provide the modern world with a larger market. England allowed for meritocracy to grow as the hereditary failures (second and third sons) moved out into the Empire and diversity found a stirrup to help in the empire of truly diverse people.  

When the English model moved to the American colonies and the colonies expanded West, meritocracy and diversity got the added value of human-to-human openness.  Modern commerce exploded over the landscape.

So where did this hatred of America and modern commerce come from?  It didn’t come from anywhere.  It is everywhere.  It is the base view of the entire world and the intellectual world.  Except for Adam Smith and the tiny group of America’s founding father’s, Hamilton and a few friends,  no one else has ever argued for and understood modern commerce.  There are no books about the genius of modern commerce and how we got it.  The entire world of books is either neutral on the subject or overwhelmingly anti-modernity and anti-modern commerce.

The genius’s who populated the governance of the British Empire and the wildly individualistic Americans who settled the West and created modern commerce were not intellectuals.  None of them ever figured out what modern commerce was about and how it came to be.  No one since then has succeeded in writing about it either.  

There has not been the necessary intellectual powerhouse available to every curious individual to help them understand the core issue of their life.  The nature of modern commerce the greatest creation of the human species has not found its spokesperson.  It is the absence of a powerful intellectual world supporting pro commerce that has allowed the weeds of anti-commerce to become the entire ivy-kudzu world that is trying to destroy commerce.  And nearly did.

Thank goodness for the American Old Westerners and British colonizers who didn’t need books or intellectual support.  These are the people who build our world without a blueprint, without academic guidance and with no theories of what to do.  The technology of modern commerce was  created with trial and error, pure pragmatism.   

To win the future world at this critical juncture we need ‘The Greatest Book in Human History’.  The true book on modern commerce,  Much like the intellectual world needed Darwin's Origin of the Species.

Modern commerce 1

The Wall Street Journal, a few days ago, had a review of Pankaj Mishra’s “Age of Anger: A History of the Present”.  I put a copy of the review here.

It is highly relevant to me.  A simple summary is: ”as the world became modern, those who were unable to enjoy its promises—of freedom, stability, and prosperity—were increasingly susceptible to demagogues. The many who came late to this new world—or were left, or pushed, behind—reacted in horrifyingly similar ways: with intense hatred of invented enemies, attempts to re-create an imaginary golden age, and self-empowerment through spectacular violence. It was from among the ranks of the disaffected that the militants of the nineteenth century arose—angry young men who became cultural nationalists in Germany, messianic revolutionaries in Russia, bellicose chauvinists in Italy, and anarchist terrorists internationally”

I have contended for a long time that modern commerce is very fragile.  That it exists in its fully flowering form in a few places: the United States, Israel and to some extent in Japan.  The rest of the world is being dragged kicking and screaming out of a tribal world that they don’t want to leave.  

I haven’t yet read Mishra’s book, but I will.  Based on the review I read he has understood the origins and fragile nature of modern commerce and identified the Lefty forces that are trying to destroy modern commerce.  

Modern commerce evolved in America because the great Western expansion allowed the meritocratic Americans to leave the hereditary elite on the East Coast and create a Western society based on meritocracy, diversity and openness.  The British Empire allowed for the same forces to act in the 19th Century.

America and Israel became the only remaining sources of modern commerce up until now.  The hostile Lefty forces, growing out of the French Revolution, nearly destroyed America and brought modern commerce to a near painful death until the election of Donald Trump by the Americans in the Old West in November 2016.  

By the slimist historical margin modern commerce survived.  The forces of media, academia, national government, wealthy people, finance, city governments and big business had successfully colluded to create their own security at the expense of the world of modern commerce.  The world of PC, safe spaces, trigger warning, single issue ideology, victimology, hatred of whites and hatred of male virtues had nearly destroyed meritocracy, true human diversity and openness.

The end was very near.  New businesses were not being created as fast as old business failed, new technologies were being condemned, the virtues of commerce were totally deprecated.  The U.S. president said ‘you didn’t build that business’ saying the government was the foundation and substrata of business.  The candidate, Clinton, who ran against Trump attacked the ‘unacceptable income distribution in the U.S.’ and the ‘need for white people to change who we are’.   She called all who disagreed with her racists, sexists, homophobes, Islamophobes, xenophobes and a basket of deplorables.

The end was neigh.  Commerce depends on people who value meritocracy, diversity and openness and they were almost defeated by a vast collusion against commerce that had crept into the American mainstream from Europe and the rest of the world that hates America and America’s modern commerce.

More tomorrow.