Category Archives: economics

by | 15 August 2010 · 12:05 pm

China’s Chopstick Threat

Today’s LA Times contains an op-ed calling attention to the forests being consumed by China’s enormous output of disposable chopsticks, which I suspect have nevertheless played a significant role in reducing the spread of communicable diseases (as have disposable hypodermic needles, which constitute another sometimes nasty environmental threat). China’s government is now trying to discourage their use.

The disposable chopstick, made largely from birch and poplar (and, less so, from bamboo, because of its higher cost) begins to look deeply menacing — an environmental disaster not to be taken lightly. Begin with China’s 1.3 billion people. In one year, they go through roughly 45 billion pairs of the throwaway utensils; that averages out to nearly 130 million pairs of chopsticks a day. (The export market accounts for 18 billion pairs annually.)…

Calls to abandon the use-and-toss type began more than 10 years ago and have since persisted unabated. By 2006, the activism had become more strenuous: Citizens launched a BYOC (Bring Your Own Chopsticks) movement, which continues to gather momentum….

Yet, more than 10 years later, the targeted disposable remains with us. Why?

First, while we in the West don’t give much thought to a chopstick “industry,” in China, where 100,000 people in more than 300 plants are employed in the manufacture of the wooden utensils, it’s most definitely a flourishing enterprise. And just as jobs trump environmental issues in the West (think the coal, oil and logging industries), the argument that 100,000 jobs are at stake is a refrain that carries considerable weight. As Lian Guang, president of the Wooden Chopsticks Trade Assn., told the China Daily in 2009, “The chopstick industry is making a great contribution by creating jobs for poor people in the forestry regions,” adding that melamine-resin chopsticks are hardly a sanitary substitute with their “high formaldehyde content.” His mention of melamine resin is an effective touch, I admit.

Then there are the restaurants. The alternative to wooden disposables is sterilizing the tableware (plastic, metal or durable wood chopsticks) after each use. But the cost differential is significant: Disposables run about a penny apiece, while sterilization ranges from 15 to 70 cents. Restaurants, especially the low-end ones, worry about passing the costs on to customers. And the worry would seem to be warranted: Consumer advocacy groups from 21 Chinese cities published an open letter in March arguing that the costs of sterilization should not be passed on to consumers as the food safety law obligates restaurants to provide free, clean and safe tableware.

Are paper shopping bags a threat to North American forests?

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by | 19 June 2010 · 6:19 pm

U.S. Economic Recovery Prospects, 1934

From The Forgotten Man: A New History of the Great Depression, by Amity Shlaes (HarperCollins, 2007), Kindle Loc. 3321-3353:

Lillienthal and the TVA’s engineer, Llewellyn Evans, sailed to Britain to study something new that the United States might copy: what the Britons called their “grid,” which used power from both private and public companies. “The problem of linking public and private companies is similar to that of the Tennessee Valley,” Lilienthal told a reporter in New York at the Hotel Roosevelt before he sailed. In fact the UK grid owed some of its efficiencies to Sam Insull [a Chicago entrepreneur then facing prosecution by the FDR administration, but later found not guilty on all counts], who had advised Westminster repeatedly. The British press saw irony in the fact that Lilienthal of the TVA wanted to have a look at it. Lilienthal, the Electrical Review chuckled, said he was looking for a man of “seasoned specialized judgment, such as [Mr. Lilienthal] regards as essential for determining future policy in the States, but circumstances have deprived the American people of his experience and that of his associates.”  

THE BRITISH WERE ON TO something. Another reality was becoming clear that summer of 1934: the drama of the prosecutions and the spring cleanups was hiding something. While the Norris Dam and other New Deal projects might be ahead of schedule, the economy was not, at least not in the sense of being where it had been before. The American Federation of Labor had reported in late spring that 780,000 workers who had been reemployed by the National Recovery Administration in the autumn had been unemployed again by the spring of 1934. William Green, the AFL’s leader, began fighting with Richberg at the NRA over employment numbers: the AFL wanted industry, not relief agencies, to solve the economic problem. The job had to be done, and it had to be partly Richberg’s, since, challenged Green, “We cannot indefinitely support one-sixth of our population on money borrowed against future taxes.” There were still nearly eleven million unemployed. And the Dow was heading in the wrong direction; it would spend the summer below the 100 mark of the preceding winter. Looking up, the New Dealers were taken aback. “The Depression was refusing to disappear,” Tugwell later wrote of the whole period.

Roosevelt now regrouped. Midterm elections were that November. The prosecutions had originally been about punishing financiers for the crash. If Insull’s debentures had lost all their value, then Insull must be guilty. But now the prosecutions and investigations should also be about justifying the New Deal, economically and morally. The Fireside Chats would help. Roosevelt and others had noticed that the medium of radio really did seem to create a new reality, separate from the reality of old politics. If voters focused on the voice and the message, and not the tardy recovery, that might carry the Democrats forward.

It was a hope that the administration concentrated on—for even as government lawyers prosecuted, they were also finding themselves on the legal defensive. The National Recovery Administration, for instance, was under fire in Congress, and from business, as a bureaucracy out of control. A report submitted to the fifty-seventh annual meeting of the American Bar Association noted that by June 25 of 1934, some 485 codes and 95 supplements had been approved by the president and 242 more by the Administrator for Industrial Recovery. In the period of a year, 10,000 pages of law had been created, a figure that one had to compare with the mere 2,735 pages that constituted federal statute law. In twelve months, the NRA had generated more paper than the entire legislative output of the federal government since 1789.

To survive, Richberg and the Justice Department warned—accurately—that the NRA must pass review by the Supreme Court, and soon. In any case, the law required renewal by Congress in 1935. Its constitutionality was a big question: could such a large program really be legal under the Constitution’s commerce clause? Marking Constitution Day in September, the New York Times commented that in regard to such legislation, “the winds of controversy over this issue are already rising.” With the election coming up, the New Deal had to score victories in national politics; if it couldn’t win a genuine return to prosperity, then it might succeed with the negative victories of bringing down the villains.

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by | 3 June 2010 · 8:50 pm

American Travelers in the USSR, 1927

From The Forgotten Man: A New History of the Great Depression, by Amity Shlaes (HarperCollins, 2007), Kindle Loc. 1196-1250:

TO MAKE LANDFALL IN EUROPE was a relief for the travelers. Here at least the economic facts did not contradict their reform concepts so profoundly. There were some bumps along the road. In Warsaw they felt a jolt when their guide, Albert Coyle, acknowledged that he had misplaced the trip funds. In Dortmund, Tugwell got bored and skipped a meeting with trade union people at a steel plant to go to an art gallery. But from the time they met Soviet trade union leaders at the Polish-Soviet border, the travelers felt their spirits rise. This would indeed prove the junket of all junkets. It didn’t hurt that their hosts gave them first-class treatment—free transportation, cheap or free hotel service, and so on. And there were to be meetings with leaders—Mikhail Ivanovich Kalinin, the Russian prime minister, Leon Trotsky, already out of the Kremlin’s inner circle but not yet exiled, and others of high rank. For the travelers, who were at best respectable but not themselves of national rank at home, these introductions in and of themselves made for a high. There is nothing headier than finding one is more recognized abroad than at home. And that was not all: rumor had it there would be meetings at the highest level, perhaps even with Stalin himself.

The travelers’ enthusiasm was only strengthened by what they saw in the first few days. The failures of the economy were not all visible. Indeed, if one squinted, things looked almost reasonable in Soviet Russia. Lenin, before dying, had instituted his New Economic Policy (NEP), which allowed the survival of small artisans. The economy had finally begun to regain pre–World War I levels. The brutal collectivization of agriculture and the famines of the 1930s were still to come. The Soviets for their part tried to burnish their own reputation with unfavorable references to America. Everywhere the travelers went, Brophy would later note, they heard about Sacco and Vanzetti, who had been executed while the travelers were in Russia, just as predicted. For days after the execution, the towns the travelers arrived in were draped with banners hung in honor of Sacco and Vanzetti, “victims of ‘American capitalism.’” To the travelers it seemed that Russia understood what the land of Babbitt did not.

Roger Baldwin, who had corresponded with Vanzetti until his death, was deeply impressed with what he saw. Baldwin understood that Stalin’s Russia had a dark side. He didn’t enjoy his time in what he called this “irritating place.” But Russia still seemed somehow farther along than the narrow Massachusetts that could put the anarchist pair to death. Baldwin gave Leo Tolstoy’s son letters he had received from Vanzetti so that Tolstoy might post them for Russians to see at a state bank. As he wrote of Russia, Baldwin’s own conclusions were hopeful. “Everybody is poor together,” he wrote to his mother. “There is much discontent, much regulation of life, but not much terrorism or repression except of the old upper classes.”

For the high-spirited Tugwell, part of the trip was about having a good time. Half a century later, Stuart Chase would write Tugwell, asking whether he recalled when “you, Bart Brebner and I were the ‘Three Musketeers’ in Moscow in 1927.” At one point the group split up, and Tugwell traveled down the Volga on a barge, insisting that his interpreter and captain teach him a folksong about a Russian Robin Hood, “Stenka Rasin.” In exchange Tugwell taught the Russians “Beulah Land.” He rode in private railway cars—“ancient but gaudy” first-class wagons-lits from the days of the Romanovs—through Cossack country. Tugwell kept notes; he dined out. He wondered, as he always did when he was abroad, whether his life was on the correct path: after another preceding period overseas he had taken leave from academia for a year to farm beside his father before deciding the move was a mistake. The more earnest Douglas, himself considerably distracted by his own dying marriage, at one point reproached Tugwell for his lack of gravity.

But when it came to their work, Tugwell, like the other travelers, was serious enough. Committed to researching agriculture reform, he fought off offers to see factories and demanded visits to farms instead. He noted, first of all, that while conditions were still terrible within the Soviet Union, they were probably improving: “The manor houses are gone; only the drab villages remain,” he wrote, concluding that “here is a bit more to eat of a little better quality. There is a radio in the village hall. There is more wood for warmth,” he would later write. New England might be slowly dying; the Soviet Union to his mind represented “a stirring of new life hardly yet come to birth.” He loved the idea of economics being made subservient, itself like a serf, to the good of the rural village: “with us, prices are a result; in Russia they are agents of social purpose.” Tugwell insisted on more visits and was duly granted them.

Tugwell found himself admiring the active role of the Soviet government toward farming. He liked the idea of the agronom, the farm manager or bureaucrat, who oversaw a set of farms or a region. The Russian farmer, he noted, “suffers from price-disadvantage, it is true; but so also do farmers all over the world.” Tugwell pointed out a difference from the United States: in Russia, the farmer’s challenges were the subject of genuine government controversy. “There is a disposition to do something about it. Can this be said of the U.S. government?”

Most of all, however, it was the villages that impressed Tugwell. Many had not yet been collectivized, but they were still relatively cooperative compared to rigidly fenced New England. This cooperation he perceived to be natural, indeed, inevitable—“cooperation is forced in the nature of things.” In his own childhood, there had been similar cooperation. He remembered traveling over New York’s Ellery hills to a friend’s house with his father, only to find the family not at home. The pair had fixed a meal from what they found in the buttery nonetheless, a fact which did not bother their hosts, when they returned, in the slightest. That was the way things were, in the old agricultural community. Under the czars, Tugwell noted, village farmers too had shared—“Russia was communal in this sense long before it was persuaded to Communism in the Marxian sense.”

Tugwell believed that what remained of private arrangements also needed to be ended; it was time for “abandoning the old one-man, one-plow method.” After all, in a big communal field “a tractor can go as far and fast as it is capable of doing without the bother of fence corner turnings. Socially, the village has great advantages if it is not too closely built or too big.” Further rationalization might work if only the stubborn peasant would cooperate. And even though he disliked the Soviet dictatorship from the start, he was struck by the authority of Russian propaganda and its enormous success. Always, the Russians they met up with “told us what our country was like.” This simultaneously horrified the progressive in Tugwell and pleased the efficiency expert in him: “I knew from then on how determined dictators come to manage a people.”

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by | 29 May 2010 · 9:50 pm

Revisiting the 1920s & 1930s

From The Forgotten Man: A New History of the Great Depression, by Amity Shlaes (HarperCollins, 2007), Kindle Loc. 145-88:

It is time to revisit the late 1920s and the 1930s. Then we see that neither the standard history nor the standard rebuttal entirely captures the realities of the period. The first reality was that the 1920s was a great decade of true economic gains, a period whose strong positive aspects have been obscured by the troubles that followed. Those who placed their faith in laissez-faire in that decade were not all godless. Indeed religious piety moved some, including President Calvin Coolidge, to hold back, to pause before intervening in private lives.

The fact that the stock market rose high at the end of the decade does not mean that all the growth of the preceding ten years was an illusion. American capitalism did not break in 1929. The crash did not cause the Depression. It was a necessary correction of a too-high stock market, but not a necessary disaster. The market players at the time of the crash were not villains, though some of them—Albert Wiggin of Chase, who shorted his own bank’s stock—behaved reprehensibly. There was indeed an annihilating event that followed the crash, one that Hoover never understood and Roosevelt understood incompletely: deflation.

Hoover’s priggish temperament, as much as any philosophy he held, caused him to both misjudge the crash and fail in his reaction to it. And his preference for Germany as a negotiating partner over Soviet Russia later blinded him to the dangers of Nazism. Roosevelt by contrast had a wonderful temperament, and could get along, when he felt like it, with even his worst opponent. His calls for courage, his Fireside Chats, all were intensely important. “The only thing we have to fear is fear itself”—in the darkness, Roosevelt’s voice seemed to shine. He allowed Cordell Hull to write trade treaties that in the end would benefit the U.S. economy enormously. Roosevelt’s dislike of Germany, which dated from childhood, helped him to understand the threat of Hitler—and, eventually, that the United States must come to Europe’s side.

Still, Hoover and Roosevelt were alike in several regards. Both preferred to control events and people. Both underestimated the strength of the American economy. Both doubted its ability to right itself in a storm. Hoover mistrusted the stock market. Roosevelt mistrusted it more. Roosevelt offered rhetorical optimism, but pessimism underlay his policies. Though Americans associated Roosevelt with bounty, his insistent emphasis on sharing—rationing, almost—betrayed a conviction that the country had entered a permanent era of scarcity. Both presidents overestimated the value of government planning. Hoover, the Quaker, favored the community over the individual. Roosevelt, the Episcopalian, found laissez-faire economics immoral and disturbingly un-Christian.

And both men doctored the economy habitually. Hoover was a constitutionalist and took pains to intervene within the rules—but his interventions were substantial. Roosevelt cared little for constitutional niceties and believed they blocked progress. His remedies were on a greater scale and often inspired by socialist or fascist models abroad. A number of New Dealers, Tugwell included, had been profoundly shaped by Mussolini’s Italy and, especially, Soviet Russia. That influence was not parenthetical. The hoarse-voiced opponents of the New Deal liked to focus on the connections between these men, the Communist Party, and authorities in Soviet Russia. And several important New Dealers did indeed have those connections, most notably Lauchlin Currie, Roosevelt’s economics adviser in later years, and Harry Dexter White, at the Treasury. White’s plan for the pastoralization of Germany takes on a new light when we know this. Lee Pressman and Alger Hiss duped colleagues in government repeatedly.

But few New Dealers were spies or even communists. The emphasis on that question is in any case misplaced. Overall, the problem of the New Dealers on the left was not their relationship with Moscow or the Communist Party in the United States, if indeed they had one. Senator McCarthy was wrong. The problem was their naïveté about the economic value of Soviet-style or European-style collectivism—and the fact that they forced such collectivism upon their own country. Fear of being labeled a red-baiter has too long prevented historians from looking into the Soviet influence upon American domestic policy in the 1930s.

What then caused the Depression? Part of the trouble was indeed the crash. There were monetary and credit challenges at the young Federal Reserve, and certainly at the banks. Deflation, not inflation, was a big problem, both early on and also later, in the mid-1930s. The loss of international trade played an enormous role—just as both Hoover and Roosevelt said at different points. If the United States had not raised tariffs at the beginning of the decade and Europe had not collapsed in the 1930s, the United States would have had a trading partner to help sustain it. Part of the problem was the challenge of the transition to industrialization from agriculture. Part was freakish weather: floods and the uncanny Dust Bowl seemed to validate the sense of apocalypse. With money and the weather breaking down, men and women in America felt extraordinarily helpless. They were willing to suspend disbelief.

But the deepest problem was the intervention, the lack of faith in the marketplace. Government management of the late 1920s and 1930s hurt the economy. Both Hoover and Roosevelt misstepped in a number of ways. Hoover ordered wages up when they wanted to go down. He allowed a disastrous tariff, Smoot-Hawley, to become law when he should have had the sense to block it. He raised taxes when neither citizens individually nor the economy as a whole could afford the change. After 1932, New Zealand, Japan, Greece, Romania, Chile, Denmark, Finland, and Sweden began seeing industrial production levels rise again—but not the United States.

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by | 20 May 2010 · 6:23 pm

Three Past Outbreaks of Major Violence in Thailand

Hong Kong-based security consultant G. M. Greenwood offers some historical perspective on Thailand’s current turmoils in an article in the Asia Sentinel (19 May 2010) under the discouraging headline, Reconciliation or Retribution in Thailand: The odds are on retribution.

Thailand has experienced three major violent political upheavals in the 35 or so years before the present crisis began. All can be linked, and while each offers a differing insight into how the state has responded to being challenge, context makes them unreliable indicators of the country’s direction in the coming days and weeks.

  • On 13 October 1973, months of anti-government protests against the armed forces’ dominant role in government culminated in a huge demonstration in Bangkok. The following day troops attacked the protestors, killing at least 75 people and wounding hundreds of others. King Bhumibol directly intervened, superficial order was restored and the three politicians seen as largely responsible went into exile overseas.
  • On 5 October 1976, leftist students at Bangkok’s Thammasat University protesting against the killing of two students by rightists a few weeks earlier were attacked by well-organised militia personnel. The official death toll among the students, many of them the children of the elite, was 45 but hundreds more were widely believed to have subsequently murdered. Many fled into the bemused arms of the then revolutionary Communist Party of Thailand, whose fighting strength was drawn from the same northern rural communities that remain the hinterland of today’s reds. The subsequent anti-communist campaign by the Thai military was accompanied by a wave of extrajudicial killings that have been largely forgotten outside these communities.
  • Between 17 and 20 May 1992, at least 44 people were killed and hundreds injured when troops fired at demonstrators protesting against efforts to make a prime minister of a military leader who had seized power in a coup the previous year. In addition to acknowledged casualties, many of them drawn from the higher social classes, at least 100 people were presumed killed by the security forces after the immediate unrest. When containers were found on the seabed off the Sattahip naval base at the head of the Gulf of Thailand in 2009, there was widespread speculation that they might contain the remains of the missing of ‘Black May.’ The fact that they did not has not diminished the belief that the state is capable of killing its opponents.

These precedents, rather than vague talk of compromise and national unity, are likely to guide the actions of the Red Shirt activists and their countless thousands of supporters across the country as they prepare for the aftermath of the loss of their key redoubts in Bangkok. For them, any outcome to the crisis that erodes their present strength will be resisted.

The problem for Abhisit and his allies is as much cultural as political. While democratic institutions are developing roots across the region, the concept of ‘loyal opposition’ is still regarded as an oxymoron by many local politicians. It is within this context that an overly soft line against the Red Shirts will be interpreted by UDD activists, Abhisit’s opponents within government, the military and pro-establishment People’s Alliance for Democracy (PAD) Yellow Shirts as a sign of weakness rather than a display of pragmatism.

Nevertheless, an effort is likely to be made to re-emphasise the narrative that distinguishes the Red Shirt leadership from the ‘misguided misled.’ In this model, the red rank-and-file would be allowed – even helped – to return to their communities, accompanied by a chorus extolling their virtues as loyal but unwitting dupes of toppled Prime Minister Thaksin Shinawatra and his clique.

via RealClearWorld

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by | 12 April 2010 · 5:13 pm

“Indische” Indos and Theosophists in the Dutch East Indies

From: Being “Dutch” in the Indies: A History of Creolisation and Empire, 1500–1920, by Ulbe Bosma and Remco Raben, tr. by Wendie Shaffer (National U. Singapore Press, 2008), pp. 293-297:

The 20th century arrived in the Dutch East Indies accompanied by a chorus bewailing the growing number of children who had concubines as mothers. The prevailing tone was that many of these children did not merit the status of European. A commonly heard anecdote was that of the down-and-out soldier who, in exchange for a bottle of Dutch gin, acknowledged that he was the legitimate father of a child who had not a drop of Dutch blood. The newspaper Java-Bode reported the growing number of “degenerate Indos and complete hybrids” who were in fact natives but were entitled to call themselves European: “Without a doubt, such people must feel deeply dissatisfied with their lot.” These gloomy musings were, however, seldom based on more than anecdotal accounts and were certainly not founded upon systematic research. It was nothing new to hear of “immoral” goings-on in the army barracks, while concubinage and large families of pauperised (Indo-)Europeans were a familiar phenomenon. What was new were the growing complaints about the situation and the sombreness of their tone. Such attitudes became widespread at the end of the 19th century, when interest grew in matters such as genetic inheritance, Malthusian ideas about population control and the theme of ennobling the lower classes.

The fin de siècle Zeitgeist encouraged the notion of a moral decline of European society in the Indies. Colonial policy in the Indies had always tried to draw a clear distinction between European society and the natives. Until the close of the 19th century the emphasis had continually lain on reclaiming the stray sheep of the European flock and returning them to the fold of European culture and values. Bur now the idea arose that it might be better for them to remain in their native environment. This notion, born largely out of discussions on inheritance, race and degeneration, now buzzed on every side. The Java-Bode, which represented the conservative opinions of the more wealthy Batavian civil servants, used the word “hybrid” to highlight the problematic aspects of racial mixing. Understandably, this newspaper did not dispute the fact that there were large numbers of decent Indo-European families bringing up their children in a correct and seemly manner. But once the journalists got the bit between their teeth, they became carried away by polemics regarding degeneracy and childhood neglect. It only needed a tiny slip of the pen before they were fulminating about the stereotypical Indische family where the eternal ne’er-do-wells lazed around and never lifted a finger, convinced as they were from birth that to do manual work would debase them forever.

This caricature was not something new. A hundred years earlier, at the beginning of the 19th century, newcomers to the East Indies had written with shocked amazement about the lack of parental care, about the frequent beatings that children received, and about how their mothers carried on their peddling trades and spent their time playing cards instead of looking after their children. Around 1900 such commentaries became imbued with pseudo-scientific arguments on the topic of racial inferiority. Articles and reviews with scientific pretensions were published claiming to substantiate the stereotypical pictures of Indo-Europeans as people who were underhand, easily suspicious and quickly roused to anger. The widely held opinion in British colonies that when European populations became mixed with a native race they dissolved into native society also crept insidiously into Dutch (Indies) publications. Some suggested that several generations of mixed marriage resulted in infertility — although such an opinion would appear to be firmly disproved by the many large and flourishing Indo-European families. However, a conservative newspaper like Java-Bode could not be shaken from its conviction that social improvement — with all its biological connotations of crop or cattle improvement — was the same thing as opposing mixed marriages. In the Netherlands, newspapers were quite unabashed in stating that pauperism was the result of racial mixing. The word volbloed (pure-blood) began to appear in advertisements for domestic staff and personnel. Cynical remarks were heard to the effect that the elite corps of the Binnenlands Bestuur [Dept. of the Interior], in Dutch keurkorps, was turning into a coloured corps, Dutch kleurkorps. In short, with the arrival of the 20th century, the colonial discourse became strongly racialised.

It is tempting to think — although inaccurately — that Darwinism, then a fashionable ideology, was responsible for this racist thinking. Social Darwinism was widely accepted in Europe, but in the Indies it was the Spencerian theory of evolution that predominated. Herbert Spencer saw human ability as the product of social evolution, and not of biological selection. It proved a difficult task, however, to distinguish between inherited propensities and the effects of upbringing. The journalist Paul Daum, for instance, was a fervent Spencerian, yet in his novel published in 1890, titled “Ups” en “downs” in het Indische leven (“Ups” and “Downs” of Indische Life) — which recounts the downfall of the aristocratic planters’ family the Hoflands — he invokes heredity as a major element in the family’s decline. In his journalistic writing, however, he pleaded the cause of education as the driving force behind social advancement and the best possible cure for the ills assailing the European community in the Indies. City gardens, public parks, theatrical performances and concerts were surely more attractive ways of passing the time than cockfighting, tandakken (Javanese dancing) or Javanese wayang puppet theatres. Cultural paternalism of this nature encountered little opposition; indeed, it was applauded by the newspaper De Telefoon, which wrote in this context of “the improvement of destitute Europeans”.

All the complaints about the effects of mixing and the negative influences of an Indische lifestyle might almost make one forget that ever-growing numbers of Europeans in the Indies were now speaking Dutch, reading the paper, and writing letters to the editor on touchy topics. It was a recent development, for until well into the 19th century — even in wealthy families in the Indies — the lingua franca was not necessarily Dutch, but Malay. This appears, for instance, from a complaint made in 1887 by the education inspector about the poor level of Dutch among students at the HBS School, which was intended for children from the better circles. It was only in the closing years of the 19th century that Dutch began to be more widely used among Europeans. It first became the standard language at work and then moved into informal areas. In contrast to the much-quoted opinion of the education inspectors that in 1900 the majority of Indies-born European children at elementary school had a very poor command of Dutch, we find that at that time already 40 per cent of Europeans used Dutch in their everyday affairs.

The early 20th century also witnessed an alternative wave against the assumption that “Indische” meant “inferior”. While the terms “hybridity” and “Indische” when used in the colonial context both had negative overtones, the cultural avant-garde in the Netherlands and elsewhere in the Western world embraced the exotic. The artistic style of Jugendstil (art nouveau) made use of exotic shapes and designs. The artist Jan Toorop, born in Java in 1858, who was greatly celebrated in the Netherlands, exploited heavy symbolism borrowed from Javanese art and even transported this into his painted posters advertising salad dressing. For the colonial newcomers, belief in animism was superstitious, possibly even dangerous, nonsense, but in the Netherlands it was all the fashion to hold séances and make contact with the spirits of the dead. What might be described as an organic way of thinking, most powerfully expressed through the eclectic and unrestrained images of Jugendstil, flourished among the elite of the Netherlands. The urge to reconcile opposites also reached the colonies and was to have an influential role in the rejection of conventional European tastes and values One manifestation was the growth of the Theosophical Society (founded in 1875) which acquired a considerable following in the first decades ot the 20th century. Before this, the Freemasons had been the chief instigators of dialogue between the various cultures and faiths in the colony. In about 1908 the Theosophists took over. In the Indies their champion was Dirk van Hinloopen Labberton, who taught Javanese at the training institute for the Binnenlands Bestuur in Batavia, the Willem III School. This eloquent, indeed loquacious, man was inspired by the great British Theosophist Annie Besant (1847–1938), who had left England for British India in 1893, declared the Indians to be her brothers and sisters, and become a tireless advocate of home rule for India. Theosophy also appealed to nationalist intellectuals in the East Indies, who applauded its approach of an Eastern counter-current against the materialism of the West.

Thus the world of the East Indies became aware of two contrasting, indeed opposing, voices. Since the rise of the Soeria Soemirat movement, the Indo-Europeans had spoken out as a separate group, although their plea was to be accepted as Europeans. In contrast, the notion ot an Indische domain as a space where European and Asian cultural influences were equally valid steadily gained ground. The politically tense period linked with the growth of nationalism served to reveal the tensions between the concept of “Indo-Europeans” — people who constituted a category of class and race within the wider group of “Europeans — and “Indische”, a term that could be applied to everything connected with the Dutch East Indies. On the one hand, the expression “Indo-European (or Indo) was used to apply to Europeans who had a part-Asian ancestry as opposed to pure-blood white. At the same time, the word Indische was used in contrast to Hollands (Netherlandish) but never to demarcate Europeans from Indonesian, Chinese or other population groups living in the East Indies. The “closed” character of the term “Indo-European” and its opposite, the boundless connotations of the word “Indische”, have dominated the political evolution of the Indies. During those years of budding nationalism the political pendulum swung continually between the struggle to establish a movement representing the more general Indische interests, and a Union of Indo-Europeans. Two Dutch words crystallised the differences: beweging (movement) stood for new and open, while bond (union) implied the formation of a group to defend one’s own interests. Everything born out of the Indische movement was to be absorbed almost unnoticed into Indonesian nationalism, while the notion of a union or brotherhood gained definitive form in 1919 in the Indo-Europeesch Verbond (IEV) — the Indo-European Union.

This final excerpt from this book touches on most of the major themes raised in this fascinating look at the history of the Dutch and their local allies in their East Indian colonies.

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by | 10 April 2010 · 8:28 am

Democratization vs. Secularization

From: Forces of Fortune: The Rise of the New Muslim Middle Class and What It Will Mean for Our World, by Vali Nasr (Free Press, 2009), Kindle Loc. 3149-85:

More and more Muslims, especially those in the rising middle class, are going around the mosque and mufti network to take advantage of such choices for engaging with Islam available not only on television and radio but also in cyberspace. It is now possible to get guidance from on-the-air or online clerics and Islamic sages. Fatwas—which are religious decrees that clerics issue to clarify ambiguities in religious practice or to call on Muslims to follow a specific course of action—are a phone call or an email away. Sites such as IslamOnline, eFatwa.com, MuftiSays.com, askimam.com or, for Shias, Sistani.org offer lively discussion groups about such hot-button issues as how Muslims should interpret shariah law, how they ought to behave in the workplace, and whether the jihadist’s call to arms has any religious validity. Such websites command an impressive number of visitors, and this popular engagement is generating a democratization of sorts in Islam comparable to the rise of a more populist, and pious, breed of Christianity in the United States spurred on by the advent of televangelism.

Many of the popular new breed of media-savvy preachers blend tradition with modernity in their style as well as the substance of their messages, wearing Western attire rather than traditional robes, and speaking to their audiences in the personable, folksy manner of so many popular American preachers, making use of anecdotes about life’s daily struggles. That recipe has proven enormously popular. The strong appeal of this blending of modernity and Islam does not mean, however, that there is strong support for reform of Islam itself. The core of the appeal is in reassuring the Muslim masses that a modern way of life—the pursuit of material success, watching television, going out to nightclubs, listening to pop music—is in no way in conflict with Islam. Muslims can enjoy the fruits of modernity, they say, and be good Islamic believers at the same time. They are not, for the most part, championing the kind of more thoroughgoing reform of the faith that many in the West have advocated.

We should not kid ourselves: There is very little in the way of liberalizing reform going on in the Muslim world today. If anything, the phenomenon of rising demand for Islam is disproportionately raising the stock of conservative voices, though there surely are leaders of movements for democracy—and for women’s rights—who are building followings, as we’ll explore shortly. But by and large, while there is a great deal of engagement with new ways of delivering the message of Islam, there is not much interest in changing the message itself. For the most part, changing Islamic law or compromising on Islam’s values and worldview is not in the cards.

The attacks of 9/11 convinced many Americans that the problem with the Muslim world is that it is “unenlightened,” meaning it is pre-Renaissance in its mind-set. To catch up with modernity, Muslims must subject Islam to substantial change—Vatican II at least if not the Reformation tout court. But Westerners who are pinning their hopes for better relations with the region on an Islamic Reformation are going to be let down, at least in the near term. The paradox that can be hard to grasp is that the aspirations of the rising middle class have, by contrast, fueled the embrace of traditionalism—the Islamic world’s version of old-time religion. The prospect of launching oneself, one’s children, and one’s society out into the competitive, globalized economy has increased rather than decreased interest in tradition—religious tradition very much included—because of the belief that enduring sources of standards and values are needed to help navigate the currents of change [and not just among Muslims—J. (emphasis added)]. In time, the embrace of tradition may give way to a broader and more vigorous movement for reform, but Western efforts to promote reformism are unlikely to be the impetus. Indeed, they may be even counterproductive, feeding fears that the West wants to subvert Islam.

Many Western observers do not want to hear this. They remain preoccupied with locating the right Islamic reformer, someone who can slingshot Islam onto the fast track toward Reformation and Enlightenment. Why is such a reformer, like Samuel Beckett’s Godot, not showing up? Is reform only a matter of time, or is the West wrong to assume that the Muslim world will follow the same historical trajectory that unfolded in the West when capitalism and the scientific revolution forced change on Christianity?

Those advocating a Protestant future for Islam dwell little on the facts that early-modern Christian reformers were hardly liberal or tolerant—and that the Reformation unleashed a century and a half of bloody and even cataclysmic warfare. The Reformation in all its manifestations across Europe enforced narrow puritanical views with great violence.

Stalin, Mao, Pol Pot, and a great many other secular “rationalists” also enforced narrow puritanical views with violence far greater than that of any religious leaders in history. Nor was the post-Reformation transition to secular nationalism—especially the racialist nationalism of the Third Reich and Imperial Japan—accomplished without great violence, not just in wars between nations but in warfare and ethnic cleansing within national boundaries. If religious intolerance is the problem, secularist intolerance of religion is not the solution.

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by | 18 March 2010 · 9:27 pm

Secularist Delusions in Revolutionary Iran

From: Forces of Fortune: The Rise of the New Muslim Middle Class and What It Will Mean for Our World, by Vali Nasr (Free Press, 2009), Kindle Loc. 2325-50, 2372-87:

The chasm between the Shah and his people had become glaringly obvious. What was less clear, but equally important, was a chasm between the communist and socialist visions for the country of the secular intellectual elite and the middle-class professionals and the hopes of the ardent lower-class followers of Khomeini. At least the chasm was misunderstood by the secularists. Among the secular agitators against the monarchy, clerics and their followers were widely regarded as harmless hangers-on to the great bandwagon of revolution. The secularists failed to perceive both Khomeini’s true intentions, and the surging momentum—and force in numbers—of the backing for him among the teeming urban and rural lower and working classes. The exploding numbers of urban factory workers had no infatuation with the ideologies that fascinated the middle class; Khomeini’s populist call for freeing Iran of dictatorship and spreading the oil wealth among the population is what appealed to them.

Azar Salamat studied at Berkeley in the late 1960s, and there joined radical Iranian students agitating against the Shah. When she went back to Iran in the late 1970s she was determined to do Lenin’s work, spreading the gospel of communism, organizing the working class, and setting Iran on the path to a communist revolution. With comrades in tow she would visit factories on the outskirts of Tehran looking for the proverbial proletarian laborers to convert to the cause. Workers on their lunch break listened politely to the Marxist harangue, humoring the young idealists, but understood little about dialectical materialism or capitalist exploitation. Communism was an alien tongue; so “when we turned to leave,” remembers Salamat of one telling lunchtime encounter, “one of them called to us, waving his hand. ‘Bye bye,’ he said in English, grinning with amusement. Nothing seemed to express more clearly the foreignness of our contingent to those workers whom we thought our natural allies.”

It was as if years of thinking secular thoughts and following secular ideologies had blinded these secular activists to reality. They correctly perceived that their support for Khomeini was vital in building widespread support for a revolution. Leftist jargon did not percolate down into society very well, and the revolution needed the support of larger numbers—of the poor and traditional Iranians who looked to the clergy for moral and political leadership. But the secularists failed to appreciate the intensity of Khomeni’s mission to establish an Islamic state, or to think through what would be in store for them if and when the clergy took power.

Secular revolutionaries stayed deliberately silent on the issues of Islamic government and Islamic law, hejab and women’s rights, and engaged in little discussion of how individual liberties, economic aspirations, and democratic goals could be affected by clerical rule. This absence of serious discussion in speeches, rallies, meetings, manifestoes, media, and everyday conversations is astonishing on reflection. So strong were their opposition to the Shah and their trust in the clergy—their conviction that the only issue that mattered was ridding Iran of the Shah—that they forgot all about those other hard-earned cultural freedoms that were so vital to their lives and future. When they did finally wake up to the reality of the revolution, it was too late….

With the revolution triumphant throngs of class warriors banded together in revolutionary committees and militias, and backing Khomeini’s cause, came out of slums and working-class neighborhoods, bazaars, and poorer quarters of the city to claim their prize. They were quick learners. None knew what dialectics of history was about or what Marx had penned in his Das Kapital. Khomeini had taught them it was not necessary to convert to Marxism to be a revolutionary; it was more important to make the revolution Islamic.

The middle-class pro-communist and pro-democracy protestors were shocked by the numbers of Khomeini’s forces and their zeal, and they quickly came to understand they were outgunned. The clergy drew large crowds to demonstrations day after day, and even larger numbers to voting booths for a national referendum and constituent assembly elections that were to decide the fate of the revolution. The middle class cringed at the takeover unfolding, and efforts were made to better organize and resist. But leftist and pro-democracy rallies were disrupted by club-wielding thugs, who also stormed Tehran University to purge it of leftists. When in March tens of thousands of middle-class women poured into the streets to demand freedom of dress, vigilante thugs attacked them. Pro-democracy forces formed a new party, the National Democratic Front, and at first large crowds showed up at its rallies. But after only a few confrontations with Khomeini’s stone-throwing and club-wielding mobs, the Front melted away.

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by | 16 March 2010 · 7:44 pm

Downsides of Kemalism

From: Forces of Fortune: The Rise of the New Muslim Middle Class and What It Will Mean for Our World, by Vali Nasr (Free Press, 2009), Kindle Loc. 1902-23:

Looking back over the decades since Ataturk and Reza Shah ruled we can see that much in way of economic development and social change has been achieved in the Middle East. Kemalist presidents, kings, and generals unified countries, and built roads, modern school systems, and hospitals. But those authoritarian regimes also often lost their way, succumbing to the temptation of despotism, and in the process growing corrupt. The leviathans they created also stifled market forces and hindered true economic change.

Top-down modernization had its limits. States can do things faster and more efficiently than markets, but only to get things moving; they are notoriously bad at managing economies once they are out of the gate. Kemalist states did not know when and how to stop growing, and that was their undoing. Unchecked by parliaments and unaccountable to the people, the Kemalist states have lived up to the saying: “Power tends to corrupt, and absolute power corrupts absolutely.” Kemalism never had a problem garnering support in the West. Defenders of Kemalism, such as the historian Bernard Lewis, had hoped that by promoting secularism and modernity the state would serve as handmaiden of democracy, believing that modernity must come before democracy, especially given Islam’s strong hold on the structures of power, and the hearts and minds of the populace. Democracy would have to follow dictatorship.

But by the 1970s, Kemalism was running aground everywhere. The state remained imposing, but its modernizing edge was gone. The juggernaut of swift reform, secularism, and rapid change had ground to a halt. Accolades for the state and trust in its ability to transform society and economy had given place to widespread cynicism and doubt among the populace. In the Arab world modernizing states became platforms for the dynastic machinations of strongman presidents; their best-functioning institutions—impressive in their efficiency—became their dreaded mukhabarat, intelligence and security services.

One of Kemalism’s legacies is pent-up rage among the lower classes, to whom so few of the economic benefits flowed, and who greatly resented the assault on Islam. This pent-up rage has in time inflicted much travail on the region—as well as on the West. It was the driving force that tipped the balance of power toward fundamentalism in the Iranian Revolution, and it has been the fuel driving the support around the region for Islamic extremism. Crucial to Kemalism’s failure to generate more robust economic growth, and to distribute economic benefits more equitably, was the manner in which it bred a highly dependent, rather than entrepreneurial, middle class.

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by | 6 March 2010 · 3:41 pm

Ahmadinejadonomics

From: Forces of Fortune: The Rise of the New Muslim Middle Class and What It Will Mean for Our World, by Vali Nasr (Free Press, 2009), Kindle Loc. 1345-1405 (reviewed here):

There is no question that Ahmadinejad has been the biggest individual beneficiary so far of the regime’s crackdown on reform. The fuel behind his electoral victories, and the reason for his appeal to the Supreme Leader, was his raging populist anger that the benefits of the economic reforms had not made their way down to the lower classes. During the 2005 campaign, he said little about the thorny nuclear issue and even less about religion and cultural freedoms. Instead he railed against corruption and the suspect wealth of clerics (including most famously Rafsanjani, who was running against him). Ahmadinejad vowed to halt privatization while protecting the consumer subsidies, price controls, and labor laws that were popular with those on the lower rungs of the socioeconomic ladder. Asked about his intentions regarding women’s rights, the aspiring candidate said: “People think a return to revolutionary values is only a matter of wearing the headscarf. The country’s true problem is employment and housing, not what to wear.”

When he became president, Ahmadinejad followed through with sound and fury in clamping down on the private sector. He shoved aside the normal economic-policy agencies and put monetary, budget, and fiscal matters under the president’s office. He then used that control to print money with no regard for the inflationary consequences. Iran’s money supply soon ballooned by a staggering 40 percent. His office also used its discretionary authority over planning and budgets to hand out contracts large and small to allies and favorites. A series of central bank governors resigned in protest—the last to go accused the president of mismanagement and plundering bank reserves.

To combat the growing problems Ahmadinejad proposed price controls as well as tightening the regulation of banking and credit markets. He even mused aloud about the benefits of abolishing interest (which despite all the talk of Islam’s ban on usury has remained the foundation of banking in the Islamic Republic), in the end settling for rates a good 10 and 15 points below the rate of inflation. Those who could withdrew their savings and bought real estate at home or abroad; those who could not saw their money dwindle amid Ahmadinejad’s flood of devalued currency. Salaried workers and pensioners suffered most. Ahmadinejad cared little if he was scaring businessmen into sending billions out of the country. At one point, he said that Iran’s economic problems would go away if a few people from the stock market could be stood up in front of a firing squad. The economic sanctions that his wild rhetoric helped to attract seemed to concern him even less. Capital investment, especially in manufacturing, dried up. Production fell, and by 2008 many factories were working at less than half their capacity. The money that was flowing into land speculation and property development was causing higher real-estate prices and construction costs—the latter dealing an especially heavy blow to a country that desperately needs to build up its basic infrastructure.

Ahmadinejad flaunted his lack of concern with economic planning and numbers; to him inflation and unemployment were alien concepts. He once told a reporter that he got his economic news from his neighborhood butcher (when that butcher too complained about inflation to a newspaper, Ahmadinejad closed the paper). Ahmadinejad’s game was raw populism. Why not bribe the poor for their support when there are so many more of them than there are of those wealthy Iranians who live in prosperous enclaves and depend on the private sector? He almost tripled government spending from $15 billion to $40 billion. Everywhere he traveled he promised public projects, and then decided to do more, to take wads of cash and checks to rallies and distribute them among well-wishers. Pensioners may have had a hard time making ends meet, businessmen may have faced a credit crunch, but all the poor needed to do to get a home loan was to write to the president’s office.

The steady rise in oil prices between 2005 and the third quarter of 2008 made this populist spending spree affordable. With dollars from oil sales flooding in, Ahmadinejad could afford to focus on currying favor with the voting masses while putting off hard economic decisions, and the Supreme Leader could afford to stand by and watch as Iran’s president shredded his country’s economy. Ahmadinejad used government contracts funded by the oil windfall to bolster his favorite businessmen and grease the Revolutionary Guards, whose support was essential to his political survival. The private sector changed shape, breaking down into the president’s preferred insiders (who got the contracts, cheap loans, and government support), and everyone else. The high oil prices made it seem, to the undiscerning at least, as if Iran could afford a political strategy masquerading as an economic policy.

When oil prices were peaking in 2007–08, Iran brought in $250 billion in petroleum income. Yet by the time prices fell off the table as a credit crunch cooled the global economy drastically in the second half of 2008, there was no more than $25 billion (some estimates run as low as $9 billion) of this left in the country’s cash reserves. Where did all that money go? Not to growth-promoting investments, but to populist causes near and dear to Ahmadinejad. As 2008 came to a close, Iranians found themselves staring into an economic abyss. The official rate of inflation was 27 percent (the real rate is almost certainly higher). Unemployment ran far into double digits too, possibly as high as 35 percent (the government admits to 20 percent). Merchants and salaried workers complained, and labor unions took to protesting for higher wages. The poor began complaining that their government handouts were not going far enough, and wanted more. The exceptionally cold winter of 2007–08 and a drought the following summer had caused first a fuel shortage and then an electricity deficit (Iran relies on rivers and dams for a good portion of its electric power). The depth of unhappiness manifested itself in September 2008, when merchants shut down bazaars across Iran for three days to protest a new sales tax. Growing government spending under Ahmadinejad had made the country dependent on oil prices in the $90 range (Iran claims its budget assumes $37) to stay in the black, and no one could say when prices that high would return.

Such a reversal in economic fortunes can be a powerful impetus for regime change. When a period of boom in Southeast Asia ended in the Asian financial crisis of 1997, many governments came under pressure. Anwar Ibrahim led a serious but unsuccessful challenge against Prime Minister Mahathir in Malaysis, and in next-door Indonesia, the Suharto dictatorship unraveled. The global crisis of 2008 and the massive drop in oil prices that it brought have buffeted Iran—which relies on oil for 80 percent of it government revenues—and could well have far-reaching political consequences beyond the summer of 2009 protests.

The last time Iran went through a boom-to-bust ride on the oil rollercoaster, there was a revolution. That will not likely happen again, but the downturn could end the current detour down the blind alley of populism and spark renewed interest in economic reform, privatization, and a viable private sector. Government spending (including subsidies that equal 25 percent of annual GDP) are a drag on the economy. Falling oil revenues and mounting government expenditure leave little room for complacency. The government will have to tighten its belt, shrink in size, and look to the private sector to create jobs, generate tax revenue, and grow the economy; and that will require private sector–friendly policies.

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