Unions, Civil Rights, and Walter Reuther

Walter ReutherOn this day in 1566, the great English actor Edward Alleyn was born. He was considered the greatest actor of his time, but unlike Richard Burbage, he had little association with Shakespeare. Christopher Marlowe wrote plays specifically for him: Faustus, Tamburlaine, and The Jew of Malta—all of them big characters for a very big actor. Just like Shakespeare, as soon as he had the money, he retired. For these people, the theater apparently had little romance. In fact, from what we know of Marlowe, even in his 20s, he was only writing plays for the money. I suspect that for any of the writers, if they’d had their druthers, they’d have been publishing books of poems. Alleyn went on to be a successful businessman and then a philanthropist, founding Dulwich College and Alleyn’s School.

The Baroque composer Johann Pachelbel was born in 1653. He wrote a whole lot of stuff. And he was quite good. But now, he is best known for one thing: Canon in D Major or as it is now know, “Pachelbel’s Canon.” It is not that it is that great a piece, although it is great. It is just that in 1970, the Jean-Francois Paillard Chamber Orchestra performed their own version with a very compelling pizzicato cello bass that people just went mad for. But here is an equally beautiful, but very different, version done with the original music with period instruments by Voices of Music:

German composer Engelbert Humperdinck was born in 1854. Tarzan writer Edgar Rice Burroughs was born in 1875. The scientist (he crosses boundries) Francis William Aston was born in 1877. He proved the whole number rule—that all the elements are a whole number multiple of the mass of the hydrogen atom. Othmar Schoeck was born in 1886. He was known as a composer of art songs, but here is his very compelling Cello Concerto:

The great actor Richard Farnsworth was born in 1920. Speaking of airplane crashes, boxer Rocky Marciano was born in 1923. The great jazz musician Art Pepper was born in 1925. The United States government in its infinite wisdom kept Pepper in prison for many years of his life because of the drugs that he was addicted to. Here he is doing “You’d Be So Nice to Come Home To” from his great album Art Pepper Meets the Rhythm Section:

Comedian Lily Tomlin is 74 today. And singer Gloria Estefan is 56.

The day, however, belongs to the labor leader Walter Reuther who was born on this day in 1907. He had what I think was a very common political arc for people of his time. He started as a socialist (even a communist) but after the New Deal came in, he became a liberal. Conservatives tend to vilify FDR for bringing socialism to America. That isn’t true, of course, and that thought is typical of the conservative “all or nothing” mentality. If they thought about it for a moment, they would realize that what FDR did was save capitalism from revolution. People like Reuther thought they wanted socialism, but all they really wanted was a more fair and equitable political and economic system. Is a safety net to avoid the worst excesses of capitalism so much to ask?!

Reuther turned the United Automobile Workers (UAW) into a major force in the United States. He also integrated it with the Democratic Party—where he was a major figure until his death. He was also a prominent supporter of the civil rights movement. He was on stage with Martin Luther King Jr during his “I Have a Dream” speech at the March on Washington for Freedom and Jobs. He also took part in the Selma to Montgomery March. Unfortunately, he died in a plane crash with his wife and other at the age of 62.

Happy birthday Walter Reuther!

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Government Money Pushes Innovation

Encouraging Business InvestmentFor the past several months, I’ve been working with a remarkable young man on yet another high tech start-up. In general, I avoid such projects like the plague. But I’ve worked with this guy before and he has two things you rarely see in high tech: the ability to actually get things done and a total lack of bullshit. In the past two months, we’ve made great progress and have a very basic working prototype. And surprisingly, we have some interest from private donors. But in the longer term, we may need to go to the government to really flush the whole thing out. Because the fact is that it is very hard to get much in the way of funding for an endeavor before it is a business. And even then, funders want to see a product on the horizon.

Given what we are doing, we might be able to move this project to a full business simply with private funding. But the two of us met and learned most of the fundamentals of this project at a company that was fully backed by the US Air Force and NASA. What’s more, the project uses two technologies that were fully funded by the government: GPS and internet. (The coolest parts of the project have little to do with that, but alas, I am not able to discuss it yet.) The conservative take on all of this is, “Sure, the government is necessary to help with infrastructure like that, but it is you rugged individuals working in your garages who make it all happen!” I appreciate the compliment. And my young friend really is a brilliant visionary. But we wouldn’t be able to do any of this if we were born in the slums of Bangladesh.

There’s another aspect of this. It is all great to talk about the government building infrastructure. And I’m all for that. But what is infrastructure? Fifty years ago, there was no GPS; there was no internet. One hundred years ago there was no interstate highway system. Two hundred years ago there was no transcontinental railroad. These are all things that conservatives at the time said were not necessary to invest in. There are lots of inventions that go into anything as complex as the Global Positioning System. So if we are going to cut off government funding for pure and applied research—which includes some pretty kooky sounding things—then we are mistakenly assuming we’ve reached the end of history.

What I think people miss is how technological innovation and the state interact. All the work is done by individuals. Some of those individuals work for the government at national labs and the National Institutes of Health. But most work for companies and colleges with government money. For example, 75% of the most innovative new drugs—that is, not yet another erectile dysfunction pill—are developed with NIH funding. The development of Google’s original algorithm got NSF funding. Apple got its start with a half million dollar small-business investment company grant.

Those interesting facts come from an excellent article by Mariana Mazzucato at Slate, It’s a Myth That Entrepreneurs Drive New Technology. The thesis of the article is that most high tech industries (including biotech) would be lost without the mother’s milk of government investment. In fact, the problem is very bad in the pharmaceutical industry:

The risk has been increasingly moved to the public sector while the private sector keeps the rewards. Indeed, one of the most perverse trends in recent years is that while the state has increased its funding of R&D and innovation, the private sector is apparently de-committing itself. In the name of “open innovation,” big pharma is closing down its R&D labs, relying more on small biotech companies and public funds to do the hard stuff. Is this a symbiotic public-private partnership or a parasitic one?

This gets to an important point that I think people miss about projects like the one that we are working on. They say, “Steve Jobs never would have created the Apple computer if he hadn’t known of all the money he could make!” That’s not really true. At least it isn’t with us. We are interested in it regardless of the ultimate reward because it is totally awesome and we are making something work that wasn’t clearly possible a year ago. We want to make money, of course. But just being paid a reasonable salary to do it would be great. The work is not in the least effected by how high our taxes will be ten years from now.

But there is a disconnect. Venture capitalists require a great deal of control and large part of future profits. In general, the government, which takes the biggest risks requires very little. What’s more, companies, after they get big off work that the government paid for, do their best to avoid even paying their taxes. Mazzucato has a good solution for that:

The repayment of some loans for students depends on income, so why not do this for companies? When Google’s future owners received a grant from the NSF, the contract should have said: If and when the beneficiaries of the grant make $X billion, a contribution will be made back to the NSF.

Other ways include giving the state bank or agency that invested a stake in the company. A good example is Finland, where the government-backed innovation fund SITRA retained equity when it invested in Nokia. There is also the possibility of keeping a share of the intellectual property rights, which are almost totally given away in the current system.

I am fine with all of this. I think that all people on this side of a project are. So now is when the government should ask to be cut in. Because liberal as I may be, afterwards, I will likely be able to justify why I don’t owe the government a damned thing.

Now about that half million dollar grant…

How About Negotiating Peace in Syria?

Ibrahim Al-MarashiI don’t feel that comfortable discussing war and that kind of thing. To me, it is obvious that our interventions normally do as much harm as good. What’s more, the reasons we go to war are rarely the reasons we claim. But other than these general guidelines, I am not plugged into what people in the field think about these matters. With Syria, I’ve become a little more familiar with what’s going on. And to my surprise, it is exactly the way things are in economics—a subject I do pay attention to.

In economics, there are a lot of things that we know. For example, businesses are not hiring and investing because there is a lack of demand for their products. There are very few business owners who claim that they aren’t investing because of “regulatory uncertainty.” And anecdotally, those who do claim this for a reason seem to be conservative ideologues who say it but don’t really act that way. (That is to say, if demand increased, they would not refuse to hire because they were afraid some new environmental regulation would be enacted next year.) In foreign policy, there are similar things that people know. It’s just that you aren’t going to hear it coming from politicians on the Sunday talk shows.

I thought about this after reading Ibrahim Al-Marashi’s excellent article in The Guardian, Syria Intervention: the US Should Heed the Lessons of the Iraq Weapons Dossier. Al-Marashi is an academic, so the only reason to listen to him is that he knows what he’s talking about. In this case, what he knows about is modern Iraqi history and that includes a lot about Syria.

Most of the article is about how the probability of success in Syria is low and the risks are high. He notes, “[A] surgical strike envisioned by the Obama administration will probably do little strategic damage to Damascus’s arsenal.” But the risks?

In 1981 Israel successfully bombed Iraq’s nuclear reactor. Nevertheless, this attack only convinced the Iraqi state, including its scientists, to continue with its nuclear program as a means of denying Israel a victory. After 1981 the program’s nuclear sites were placed in well-protected structures underground, and the Soviets taught the Iraqis how these structures could evade detection. It was not until after the 1991 Gulf war that the extent of Iraq’s nuclear program was known.

During the 1991 Gulf war aerial sorties were conducted against Iraq’s WMD sites over a span of six weeks. Yet UN weapons inspectors on the ground after the war still discovered both facilities and munitions that survived the air campaign.

Even the targeted assassinations of Iran’s nuclear scientists had unintended consequences. The number of engineering students in Iran who changed their specialty to nuclear engineering soared after these assassinations.

This is exactly what we should expect. In fact, it is economics: incentives matter. And indeed, the administration is trying to make an incentives case for war with Syria. Supposedly, a few days of bombing will hurt the Syrian government, but that is hardly clear. Al-Marashi notes, “If deterrence is Washington’s goal, Bashar al-Assad should have already learned the lesson that he does not enjoy the impunity that Saddam did. The military buildup and saber rattling communicated this fact, without an air strike occurring.” But more than that, if the United States really wants to help, there is a solution:

Russia and the US had discussed a political solution that would bring both sides of the Syrian conflict to a conference in Geneva to search for a negotiated solution to the conflict. But this was forgotten as the crisis escalated over the last couple of months. Perhaps by Washington choosing not to carry out a military strike, the Syrian government will be induced to negotiate.

But that won’t happen. At this point, I’m not at all clear on why the United States is hell bent on bombing Syria. We seem to want to do it because we’ve worked ourselves up into a froth about it. But clearly the best option is to stop the civil war. But that clearly isn’t even on the table for discussion—at least among those who have the power to do anything.

Sunday War Mongering

Joe LiebermanWon’t you look at that! Joe “War Is a Hell of a Lot of Fun!” Lieberman was on Fox News Sunday this morning. He is not happy that we aren’t bombing Syria right now. He told Chris Wallace, “I’m sure that our enemies are cheering now as a result of this decision because they realize it’s not clear the president will get authority, and our allies are worried.” Who exactly are these “enemies” of which he speaks? It must be Syria and that speaks volumes about what is going on with him and others who are so hot for an attack. They just want to attack Syria and the chemical weapons allegations are just an excuse. As for our allies, he can’t mean the UK. I guess he’s talking about the rebels, but they are at best a mixed bag.

Now this the man who spent the 1960s avoiding the draft. First it was as an undergraduate. Then it was as a law student. Then, by the time he graduated, he was married with a kid so he got a deferment for that! But since then, he really has never seen a war he doesn’t like. The man really should just have been a Republican. It’s not like he represented a conservative state; Connecticut went for Obama by over 17 percentage points. So he really believes what he says.

Meanwhile, someone who actually did go to war and who was vilified for it by the Republican chicken hawks, John Kerry is appearing on 5 talk shows this morning! Samuel Knight reported, “Kerry’s hypocrisy, thinly veiled by an over-eager swagger—including a refusal, on This Week to consider the possibility that the administration’s case for war will be rejected by Congress—is reminiscent of the dark days of 2002-2003.” But it likely doesn’t matter anyway. Kerry also said that Obama “has the right to do this no matter what Congress does.”

Let’s just think about that. Obama wants to bomb Syria because they allegedly broke international norms by using chemical weapons. Note: they broke norms and not laws because Syria never signed any chemical weapons treaty. But all of those involved in this push to war think that it is right for Obama to just bomb Syria. United States law doesn’t matter. And international law doesn’t matter. Apparently, laws are just for the little countries.

I’ve been amazed at how often I hear the argument that the United States has to bypass the United Nations because Russia and China are blocking our war plans. This is just amazing. The idea is that the United Nations is only a useful institution so long as it allows us to do whatever we want. Russia and China aren’t just countries that disagree with us; they are objectively wrong. This is madness and the American press—television especially—is allowing it to happen by not providing the broader context but just allowing Kerry and Lieberman and anyone other random person (As long as they are pro-war!) to pontificate on the matter.

Update (1 September 2013 10:07 am)

This from Glenn Greenwald:

There are few things more bizarre than watching people advocate that another country be bombed even while acknowledging that it will achieve no good outcomes other than safeguarding the “credibility” of those doing the bombing. Relatedly, it’s hard to imagine a more potent sign of a weak, declining empire than having one’s national “credibility” depend upon periodically bombing other countries.