Belmont Club

The Case of the Missing Catastrophe

Last week the world was scheduled to burn. Pundits were predicting that recognizing Jerusalem as capital of Israel would unleash a torrent of blood in the Middle East, if not around the world. The White House decision was criticized on many grounds not in the least as being a violation of international law.

But as Ralph Peters noted, a strange thing happened.  By and large the streets stayed calm.  “Instead, the largest demonstration anywhere this weekend was the funeral procession for Johnny Hallyday, the ‘French Elvis.’ ” Peters thinks non-rage occurred because the assumptions underlying the predictions had changed and the Arab Street had too much recent pain and suffering to want more.

Once upon a time, the Palestinians were the only game at the propaganda casino, a marvelous tool for Arab leaders to divert attention from domestic failures. Then came al Qaeda. And Iraq. Iranian empire-building. The Arab Spring. The oil price collapse and the rise of ISIS, with its butcher-shop caliphate. The civil war in Syria, with half a million dead. And, not least, the region-wide confrontation between decaying Sunni power and rising Shia might.

In place of the Days of Rage, a kind of Victory over ISIS event was quietly observed. Iraq declared victory over the Islamic State. Putin began pulling Russian forces out of Syria.  Even Muqtada al-Sadr “urged his fighters to hand state-issued weapons back to the government.” The changes were underlined by Saudi Arabia’s reopening of movie theaters in the Kingdom after a 35 year ban. The region, after a decade of conflict, was weary of war.

Still the world could burst into flames next week if opinion writers are correct in predicting the effect of the Republican tax bill, which like some giant asteroid from outer space, is forecast to come crashing down on governance and “could reshape major areas of American life, from education to health care”.  The New York Times warned that:

elements in both the House and Senate bills could constrain the ability of states and local governments to levy their own taxes, pressuring them to limit spending on health care, education, public transportation and social services. In their longstanding battle to shrink government, Republicans have found in the tax bill a vehicle to broaden the fight beyond Washington.

Salon termed it no less than “a poison pill that kills the New Deal” which would return the nation to the days of Herbert Hoover.  As a final objection an American law to cut taxes would, like the Jerusalem recognition, be in violation of international law.

Europe’s five largest economies on Monday warned the U.S. its planned corporate tax reform could breach world trade rules and violate double-taxation treaties the U.S. has signed….“It is important that the U.S. government’s rights over domestic tax policy be exercised in a way that adheres with international obligations to which it has signed up,” the ministers wrote in the letter.

The most strident objections to the Jerusalem decision and tax bill weren’t because of the specific arguments against them so much as their delegimizing effect on global governance.  Both actions (as well as the earlier repudiation of the Paris Climate Agreement and the threatened ditching of the Iran nuclear deal) thumbed their noses at the global order. They were an assault on its entire structure. Worst of all they struck at the money.  If lower taxes in the US forced Europe to follow suit, who knewe what government programs would be put at risk? Whole decades of “gains” teetered in the balance.

Yet the failure of The Days of Rage to materialize was disturbing for another reason.  It suggested something was wrong with the conventional wisdom model. A GOP tax bill which regressed the world to the age of Herbert Hoover would, however unfortunate the effect, still be a justification of the model.  But a period of prolonged prosperity and growth would be an outright repudiation of establishment thinking. It would suggest, not that the world had stopped having problems, but that none of the establishment solutions were of any use in understanding them.

For most such a conclusion would be sacrilege and the validity of the current model still remains beyond question. For example Wayne Visser, a professor at Antwerp Management School argues today’s problems stem from infidelity to the ideal of ever closer integration.  “Greater integration in nature and society is a fundamental principle of evolution,” he writes. We have failed the model; the model didn’t fail us.

An alternative view is that current institutions are being swamped by complexity precisely because of their insistence on centralization.  The model is failing because it is too global.  Google’s Mark Miller extends economist Ludwig Lachmann‘s idea of institutions as mechanisms for resolving “intertemporal coordination in a world of heterogeneous expectations” to explain why.  Invoking the computer science concepts of abstraction and modularity Miller argues contrary to Visser that programmers deal with complexity by dividing tasks up and hiding information.

Encapsulation enables programmers to avoid conflicts … the code of each object still manipulates data, but the data it manipulates is now private to that object. … This discipline enables programmers to create systems in which a massive number of plans can make use of a massive number of resources without needing to resolve a massive  number of conflicting assumptions. Each object is responsible for performing a specialized job; the data required to perform the job is encapsulated within the object

Abstraction provides stable points of connection while accommodating a wide-range of change on either side of the abstraction boundary. … The abstract purpose is represented by an interface … multiple concrete providers can implement the same abstract service in different concrete ways.

Thus the gigantism of global solutions is vulnerable to incalculable cross-contamination.  If this sounds like an argument for a return to boundaries that’s because it is.  Miller’s idea of boundaries as enablers of complexity is a key motif of his writing on governance. “While economists worry about the hazards of hidden information, programmers extol the benefits of information hiding  Information hiding enables complex patterns of interaction.”  Miller quotes one of Lachmann’s prosaic 20th examples to illustrate the point.  We can know too much.

“Whether we post a letter, wait for a train, or draw a check … we may know next to nothing about the internal working order of these institutions. … We know very well that the Post Office works according to a general plan, but such knowledge as we have about it is usually quite irrelevant to the achievement of our purpose in posting a letter. Only a few aspects of this general plan, perhaps the times of collection and delivery of mail, need be of concern to us.”

The giant 20th century international bureaucracies could … just … deal with letters, trains and checks.   But they could not begin to cope with the massive trade, data and population shifts 21st century technologies have enabled.  One sign of this overload is the growing inability of conventional wisdom to make accurate predictions about the outcomes of policy choices.  In the end 20th century institutions invented stories to deal with complexity.  They created a truth boundary called the Narrative to handle it.

The result were Days of Rage that never happened and theaters openings which were never supposed to happen.  We may need abstraction boundaries in order to make governance tractable again.

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The Fleet at Flood Tide: America at Total War in the Pacific, 1944-1945, by James D. Hornfischer. From the historian who has been acclaimed as “doing for the Navy what popular historian Stephen Ambrose did for the Army,” here is an unprecedented account of the extraordinary World War II air, land, and sea campaign that brought the U.S. Navy to the apex of its strength and marked the rise of the United States as a global superpower.

The Storm Before the Storm: The Beginning of the End of the Roman Republic, Author Mike Duncan brings to life the bloody battles, political machinations, and human drama that set the stage for the fall of the Roman Republic. Chronicling the years 146-78 BC, he showed how, abandoning the ancient principles of their forbears, men like Marius, Sulla, and the Gracchi brothers set dangerous new precedents that would start the Republic on the road to destruction and provide a stark warning about what can happen to a civilization that has lost its way.

Grant, by Ron Chernow. This book is a grand synthesis of painstaking research and literary brilliance that makes sense of all sides of Grant’s life, explaining how this simple Midwesterner could at once be so ordinary and so extraordinary. Named one of the best books of the year.

Leonardo da Vinci, by Walter Isaacson. This biograpy of history’s most creative genius is based on thousands of pages from Leonardo’s astonishing notebooks and new discoveries about his life and work. Isaacson weaves a narrative that connects his art to his science and shows how Leonardo’s genius was based on skills we can improve in ourselves, such as passionate curiosity, careful observation, and an imagination so playful that it flirted with fantasy.

For a list of books most frequently purchased by readers, visit my homepage.

Did you know that you can purchase some of these books and pamphlets by Richard Fernandez and share them with your friends? They will receive a link in their email and it will automatically give them access to a Kindle reader on their smartphone, computer or even as a web-readable document.
The War of the Words, Understanding the crisis of the early 21st century in terms of information corruption in the financial, security and political spheres
Rebranding Christianity, or why the truth shall make you free
The Three Conjectures, reflections on terrorism and the nuclear age
Storming the Castle, why government should get small
No Way In at Amazon Kindle. Fiction. A flight into peril, flashbacks to underground action.
Storm Over the South China Sea, how China is restarting history in the Pacific
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