Taking on Adam Smith (and Karl Marx)

April 21,2014

Taking on Adam Smith (and Karl Marx)

PARIS — Thomas Piketty turned 18 in 1989, when the Berlin Wall fell, so he was spared the tortured, decades-long French intellectual debate about the virtues and vices of communism. Even more telling, he remembers, was a trip he took with a close friend to Romania in early 1990, after the collapse of the Soviet empire.

piketty-“This sort of vaccinated me for life against lazy, anticapitalist rhetoric, because when you see these empty shops, you see these people queuing for nothing in the street,” he said, “it became clear to me that we need private property and market institutions, not just for economic efficiency but for personal freedom.”

But his disenchantment with communism doesn’t mean that Mr. Piketty (left) has turned his back on the intellectual heritage of Karl Marx, who sought to explain the “iron laws” of capitalism. Like Marx, he is fiercely critical of the economic and social inequalities that untrammeled capitalism produces — and, he concludes, will continue to worsen. “I belong to a generation that never had any temptation with the Communist Party; I was too young for that,” Mr. Piketty said, in a long interview in his small, airless office here at the Paris School of Economics. “So it’s easier in a way to reopen these big issues about capitalism and inequality with a fresh eye, lbecause I was too young for that fight. I don’t have to justify myself as being pro-communist or pro-capitalist.”

In his new book “Capital in the Twenty-First Century” (Harvard University Press), Mr. Piketty, 42, has written a blockbuster, at least in the world of economics. His book punctures earlier assumptions about the benevolence of advanced capitalism and forecasts sharply increasing inequality of wealth in industrialized countries, with deep and deleterious impact on democratic values of justice and fairness.

Branko Milanovic, a former economist at the World Bank, called it “one of the watershed books in economic thinking.” Paul Krugman, winner of the Nobel in economic science and a columnist for The New York Times, wrote that it “will be the most important economics book of the year — and maybe of the decade.” Remarkably for a book on such a weighty topic, it has already entered The New York Times’s best-seller list.

“Capital in the Twenty-First Century,” with its title echoing Marx’s “Das Kapital,” is meant to be a return to the kind of economic history, of political economy, written by predecessors like Marx and Adam Smith. It is nothing less than a broad effort to understand Western societies and the economic rules that underpin them. And in the process, by debunking the idea that “wealth raises all boats,” Mr. Piketty has thrown down a challenge to democratic governments to deal with an increasing gap between the rich and the poor — the very theme of inequality that recently moved both Pope Francis and President Obama to warn of its consequences.

Mr. Piketty — pronounced pee-ket-ee — grew up in a political home, with left-wing parents who were part of the 1968 demonstrations that turned traditional France upside down. Later, they went off to the Aude, deep in southern France, to raise goats. His parents are not a topic he wants to discuss. More relevant and important, he said, are his generation’s “founding experiences”: the collapse of Communism, the economic degradation of Eastern Europe and the first Gulf War, in 1991.

Those events motivated him to try to understand a world where economic ideas had such bad consequences. As for the Gulf War, it showed him that “governments can do a lot in terms of redistribution of wealth when they want.” The rapid intervention to force Saddam Hussein to unhand Kuwait and its oil was a remarkable show of concerted political will, Mr. Piketty said. “If we are able to send one million troops to Kuwait in a few months to return the oil, presumably we can do something about tax havens.”

Would he want to send troops to Guernsey, the lightly populated tax haven in the English Channel? Mr. Piketty, soft-spoken, barely laughed. “We don’t even have to do that — just simple basic trade policy, trade sanctions, would do the trick right away,” he said.

A top student, Mr. Piketty took a conventional path toward the French elite, being admitted to the rarefied École Normale Supérieure at 18. His doctoral dissertation on the theory of redistribution of wealth, completed at 22, won prizes. He then decamped to teach economics at the Massachusetts Institute of Technology before returning two years later to France, disappointed with the study of economics in America.

“My Ph.D. is mostly about pure economic theory because that was the easiest thing to do, and I was hired at M.I.T. as a young assistant professor doing economic theory,” he said. “I was young and successful at doing this, so it was an easy way. But very quickly I realized that there was little serious effort at collecting historical data on income and wealth, so that’s what I started doing.”

Academic economics is so focused on getting the econometrics and the statistical interpolation technique correct, he said, “you don’t really think, you don’t dare to ask the big questions.” American economists too often narrow the questions they examine to those they can answer, “but sometimes the questions are not that interesting,” he said. “Trying to write a real book that could speak to everyone meant I could not choose my questions. I had to take the important issues in a frontal manner — I could not escape.”

He hated the insularity of the economics department. So he decided to write large, a book he considers as much history as economics, and one that is constructed to lead the general reader by the hand.

He is also not afraid of literature, finding inspiration in the descriptions of society in the realist novels of Jane Austen and Balzac. Wealth was best achieved in these stories through a clever marriage; everyone knew that inherited land and capital was the only way to live well, since labor alone would not produce sufficient income. He wondered how that assumption had changed.

As he extended his work on France to the United States in collaboration with Emmanuel Saez, a professor of economics at the University of California, Berkeley, he saw that the patterns of the early 20th century — “the top 10 percent of the distribution was full of rental income, dividend income, interest income” — seemed less prevalent from the 1970s through the early 1990s.

“It took me a long time to realize that in effect we were returning slowly in the direction of the previous equilibrium, and that we were part of a long transitory process,” he said. When he started working on the issue in the late 1990s, “there was no way this could be understood so clearly — having 20 additional years of data makes a big difference to understanding the postwar period.”

His findings, aided by the power of modern computers, are based on centuries of statistics on wealth accumulation and economic growth in advanced industrial countries. They are also rather simply stated: The rate of growth of income from capital is several times larger than the rate of economic growth, meaning a comparatively shrinking share going to income earned from wages, which rarely increase faster than overall economic activity. Inequality surges when population and the economy grow slowly.

The reason that postwar economies looked different — that inequality fell — was historical catastrophe. World War I, the Depression and World War II destroyed huge accumulations of private capital, especially in Europe. What the French call “les trentes glorieuses” — the roughly 30 postwar years of rapid economic growth and shrinking inequality — were a rebound. The American curve, of course, is less sharp, given that the fighting was elsewhere.

A higher than normal rate of population and economic growth helped reduce inequality, along with higher taxes on the wealthy. But the professional and political assumption of the 1950s and 1960s, that inequality would stabilize and diminish on its own, proved to be an illusion. We are now back to a traditional pattern of returns on capital of 4 percent to 5 percent a year and rates of economic growth of around 1.5 percent a year.

So inequality has been quickly gathering pace, aided to some degree by the Reagan and Thatcher doctrines of tax cuts for the wealthy. “Trickle-down economics could have been true,” Mr. Piketty said simply. “It just happened to be wrong.”

His work is a challenge both to Marxism and laissez-faire economics, which “both count on pure economic forces for harmony or justice to prevail,” he said. While Marx presumed that the rate of return on capital, because of the system’s contradictions, would fall close to zero, bringing collapse and revolution, Mr. Piketty is saying the opposite. “The rate of return to capital can be bigger than the growth rate forever — this is actually what we’ve had for most of human history, and there are good reasons to believe we will have it in the future.”

n 2012 the top 1 percent of American households collected 22.5 percent of the nation’s income, the highest total since 1928. The richest 10 percent of Americans now take a larger slice of the pie than in 1913, at the close of the Gilded Age, owning more than 70 percent of the nation’s wealth. And half of that is owned by the top 1 percent.

Mr. Piketty, father of three daughters — 11, 13 and 16 — is no revolutionary. He is a member of no political party, and says he never served as an economic adviser to any politician. He calls himself a pragmatist, who simply follows the data.

But he accepts that his work is essentially political, and he is highly critical of the huge management salaries now in vogue, saying that “the idea that you need people making 10 million in compensation to work is pure ideology.”

Inequality by itself is acceptable, he says, to the extent it spurs individual initiative and wealth-generation that, with the aid of progressive taxation and other measures, helps makes everyone in society better off. “I have no problem with inequality as long as it is in the common interest,” he said.

But like the Columbia University economist Joseph E. Stiglitz (right), he argues that J Stiglitzextreme inequality “threatens our democratic institutions.” Democracy is not just one citizen, one vote, but a promise of equal opportunity.

“It’s very difficult to make a democratic system work when you have such extreme inequality” in income, he said, “and such extreme inequality in terms of political influence and the production of knowledge and information. One of the big lessons of the 20th century is that we don’t need 19th-century inequality to grow.” But that’s just where the capitalist world is heading again, he concludes.

Mr. Saez, his collaborator, said that “Thomas combines great perfectionism with great impatience — he both wants to do things well and do things fast.” He added that Mr. Piketty has “incredible intuition for economics.”

The last part of the book presents Mr. Piketty’s policy ideas. He favors a progressive global tax on real wealth (minus debt), with the proceeds not handed to inefficient governments but redistributed to those with less capital. “We just want a way to share the tax burden that is fair and practical,” he said.

Net wealth is a better indicator of ability to pay than income alone, he said. “All I’m proposing is to reduce the property tax on half or three-quarters of the population who have very little wealth,” he said.

Published a year ago in French, the book is not without critics, especially of Mr. Piketty’s policy prescriptions, which have been called politically naïve. Others point out that some of the increase in capital is because of aging populations and postwar pension plans, which are not necessarily inherited.

More criticism is sure to come, and Mr. Piketty says he welcomes it. “I’m certainly looking forward to the debate.”

READ onhttp://www.nytimes.com/2014/04/20/business/international/taking-on-adam-smith-and-karl-marx.html?ref=books

Penang to give Karpal official send-off

The Penang government will provide veteran lawmaker Karpal Singh an official send off.
The Penang government will provide veteran lawmaker Karpal Singh an official send off.

April 17, 2014

A Tribute to The Tiger of Jelutong:

Legacy of the ‘Tiger of Jelutong’ will endure

by Aimee Gulliver @www.malaysiakini.com

  • Cowards die many times before their deaths;
    The valiant never taste of death but once.
    Of all the wonders that I yet have heard,
    It seems to me most strange that men should fear;
    Seeing that death, a necessary end,
    Will come when it will come.

    • Julius Caesar Act II, scene 2, line 33.

Karpal Singh’s story may have come to an abrupt end this morning, but the author of his biography says the legacy of the ‘Tiger of Jelutong’ will endure in Malaysia, where he was a warrior in the fight for equality and justice.


New Zealand journalist Tim Donoghue first met Karpal in Penang in 1987 and spent nearly 30 years researching the biography he wrote on the fearless lawyer and advocate, titled “Karpal Singh – Tiger of Jelutong”, which was published in 2013.

“I’ve done a few things in journalism, but I’m particularly proud of that because this man was the ultimate scrapper, but he had a sense of humour,” Donoghue said.

“The things he had to deal with, the life and death issues that he had to deal with, he smiled his way through them all, and he helped a lot of people out along the way. There was always that great twinkle in his eyes, and you just knew that no matter what anyone was ever going to throw at that guy, he was never going to kow-tow to any man.”

Karpal and his aide Michael Cornelius Selvam Vellu, 39, were killed in a road accident about 1.10 this morning near Kampar in Perak. The former DAP chairperson’s sudden departure has shocked the nation, and elicated a flood of eulogies from both sides of the political divide.

His death comes as the 74-year-old was gearing up to appeal his recent conviction for sedition that was cross-appealed by the government, which is seeking have the wheelchair-bound politician jailed.


“I don’t think the legal system has brought any great credit upon itself by convicting this man of sedition.“I think that is something that those in the ruling political and legal establishment of Malaysia do need to think about.”, Donoghue said.

The government’s persecution of the man who stood up and fought for human rights in Malaysia had made a martyr out of him, Donoghue said.

“Now that Karpal has gone to his death under threat of imprisonment for this sedition charge, I think he will be a great rallying point come the next election – there will be a huge groundswell of support among the opposition parties in the country.”

A long line of challenges

Karpal’s conviction for sedition was just the latest in a long line of challenges for the “Sikh warrior in legal attire”. “Back when he was 65, after the car accident, most people said he was gone. Even his best friends, with the best intentions in the world, were saying it would have been a far more merciful end if he had died at that time.”

“But the Tiger of Jelutong had a message for those who doubted him.

“He suffered a huge amount of pain as a result of that accident, but he vowed, with the help of his family, to get back out there into the realm of both politics and the law in Malaysia and to keep challenging those in power.”

“Karpal continued his work, and some of his most notable achievements came in the years following his debilitating accident”, Donoghue said.

“After his car accident, his life was totally shattered. But I do think he did his best work, both in the law and in politics, in the seven or eight years that he had after his accident. He did some amazing things in his life. “He would say to me, ‘retirement is not a word in my dictionary’. And the reason I think he hung on was as a result of the pain he suffered because of that accident.”

Donoghue said the manner of Karpal’s death could be considered a merciful release in some ways, but his family would not agree.

Backed by family, every step of the way

“Every step of the way they backed him, they fought with him, and they lifted and laid him. They fought to keep him going.” It was with the support of his family, and his devoted assistant Michael Cornelius Selvam Vellu, 39, who was also killed in this morning’s accident, that Karpal was able to continue his work after the 2005 accident.

“Michael gave his life for this man. He worked around the clock, 24 hours a day, just to support Karpal, and the whole family is very, very, grateful for the job he has done.

“Everything Karpal has done in the last few years has been with the support of (his wife) Gurmit Kaur and Michael. They’ve kept him going, really.”

When he came to Malaysia to launch Karpal’s biography in 2013, Donoghue said he could tell Karpal was extremely proud of what he had achieved in his life.

“Basically, his legacy is one of uncompromising challenge to human rights on a number of fronts throughout his 40-plus years in legal practice.

“I suppose what endeared him to me was he challenged, he challenged, he challenged – and he did it in such a way that everybody enjoyed the trip.”

Although he was an eminently patient man, Donoghue said, Karpal would occasionally get frustrated with him, and ask when the book would be completed.

“I would tell him we would finish when he gave me an ending. We had the final ending this morning, and I think Karpal Singh will go down as one of the great warriors of the Malaysian legal and political fraternities.”

“He was a man who, as long as he had breath going into his lungs, was always going to fight. And in the wake of this man’s life, the fight will go on in Malaysia.”

AIMEE GULLIVER is a New Zealand journalist interning with Malaysiakini for six weeks, courtesy of the Asia New Zealand Foundation.

Fund Scandal Looms in Malaysia

February 27, 2014

Fund Scandal Looms in Malaysia

Mysterious sovereign wealth fund may be billions in debt

NAJIB_RAZAK_091213_TMINAJJUA_05_540_360_100Political insiders in Malaysia say Prime Minister Najib Tun Razak could be facing a fresh political crisis due to the murky dealings of a sovereign fund established five years ago to drive investment in strategic domestic industries.

A widening circle of critics, fed in part by exhaustive reporting on independent news sites such as Malaysiakini, say the fund may have run up as much as RM40 billion (US$12.18 billion) in debt and has few assets to show for it beyond what are described as overpriced acquisitions of independent power producers in Malaysia.

On February 18, Opposition MP Tony Pua of the Democratic Action Party announced on the floor of Parliament that the fund, 1Malaysia Development Bhd, known as 1MDB, had yet to file accounts for the financial year ended March 2013 and that KPMG, the independent auditor, had suddenly resigned. Deloitte Malaysia has since taken over the accounts.

In 2012, 1MDB made a US$1.75 billion private bond placement, one of the biggest private US dollar bond placements on record from Asia, through Goldman Sachs, to acquire a portfolio of power assets. Other bond placements also have been made. According to US laws, failure to file financial accounts is a violation of the law, which should be raising concerns among the bondholders.

 ‘Bold and Daring’
A United Malays National Organization operative told Asia Sentinel a major scandal is lurking in the fund, which is wholly owned by the country’s Ministry of Finance, although no clear evidence has emerged of the exact nature of the scandal.  

Former Prime Minister Mahathir Mohamad and former Finance Minister Daim Zainuddin, both of whom have soured on Najib, are said to be questioning the operation of the fund. There has been a rising tide of gossip about the fund’s political connections, particularly to Najib’s wife, Rosmah Mansor, and a close friend, Low Taek Jho, who was active in founding the fund. 

Jho Low, as he is known, has become a New York social figure, seen out with Paris Hilton and pouring Cristal champagne for a succession of showgirls.  He and Rosmah’s son by her first marriage, Riza Aziz, produced The Wolf of Wall Street, a major box office success that has been nominated for a Best Picture Oscar. Ironically, the film can’t be shown in Malaysia because of its excess profanity.

Low reportedly was behind Wynton Group, which showed an interest in bidding for the famed Claridge’s, Berkeley and Connaught hotels in London. According to a Malaysian website, in a court document filed in Ireland, Low made the approach in 2010.  According to the court filing, Low was said to have had the backing of an unnamed Malaysian “sovereign wealth fund,” which was not named. Low has acknowledged having friends in Khazanah Nasional Bhd, another Malaysian sovereign wealth fund. The 1MDB fund wasn’t mentioned

Little is known of 1MDB’s operations. As Asia Sentinel reported at the time, it raised hackles when it started in April 2009 as a fund arranged by Jho Low and started by the Terengganu state government, which borrowed RM10 billion (US$2.87 billion at 2009 rates). Critics questioned why an oil-rich state with revenues of RM5-7 billion a year would have to borrow money to start a sovereign fund rather than using windfall revenues from oil and other commodity bonanzas.

The Terengganu fund morphed into 1MBD under the Ministry of Finance in September 2009 to “focus on strategic development projects in the areas of energy, real estate, tourism and agribusiness.” The fund’s website quotes Najib saying its mission is to “be bold and daring… to break new ground and do things differently.”

1MDB soon acquired a strategic partner in an obscure Saudi firm, PetroSaudi International, headed by Tarek Essam Ahmad Obaid, a member of the vast Saudi royal family. Reports indicated that PetroSaudi had signed a memorandum of understanding with Ghana National Petroleum Corp. although the MOU has apparently not resulted in a major project.  

According to a statement by Azmi Khalid, then chairman of the Parliament’s Public Accounts Committee, 1MDB loaned PetroSaudi about US$1billion, leading to additional questions over why a government fund set up to explore investment in Malaysia was loaning money to a joint venture in Africa. PetroSaudi, despite rumored ties to the Saudi royalty, was unable to come up with its own cash in the joint venture but got 1MDB to accept a potential oil site in Turkmenistan. Subsequently, the loans to PetroSaudi climbed to US$1.7 billion.

Debt and not much else
An exhaustive probe of the sovereign fund by writers Ho Kay Tat and Afiq Isa for the Malaysian publication The Edge, found that about all 1MDB has to show so far “is a multi-billion ringgit debt portfolio, the bulk of which was used to buy several independent power producers at hefty price tags.” 

Its main asset is a 48-hectare chunk of land passed to the fund by the government when the Malaysian Air Force closed its base at Sungai Besi, near downtown Kuala Lumpur’s Golden Triangle. It is a near-priceless plot that 1MBD is to develop as a financial center called the Tun Razak Exchange, named for Najib’s late father. That work hasn’t started yet.

Through a series of complicated financial engineering moves in 2012, the loan to PetroSaudi was prematurely terminated and redeemed, according to Tony Pua’s presentation on the floor of Parliament.

“However,” Pua said, “the repayment of US$2.32 billion (RM7.93b) was made in a perplexing manner in a “segregated investment portfolio” based in the Cayman Islands. To date no one has been able to verify with any certainty who the investment portfolio manager is, the fund’s performance or for that matter, if the money actually exists.”

The “investment” in the Cayman Islands, Pua said, “raises highly suspicious questions as 1MDB is desperately trying to raise funds through new bond issuance in Malaysia to fund its aggressive acquisitions of independent power producers as well as its mega-projects in Bandar Malaysia and Tun Razak Exchange. In fact, 1MDB is already laden with an estimated more than RM40 billion in debt, and hence such investments is a luxury that 1MDB does not have.”

KPMG, in 1MDB’s first financial statement in 2010, raised an “emphasis of matter” over a US$1 billion investment in the PetroSaudi joint venture, which was subsequently converted into a US$1.2 billion (RM3.95b) loan within a period of less than six months. The “emphasis of matter” was removed in subsequent financial accounts as the joint venture was servicing the loan with interest payments, it was also highlighted that 1MDB extended an additional US$700 million (RM2.3b) in loans to the JV, despite receiving less than US$200 million in interest between 2011 and 2012.

To date,  no one has been able to verify with any certainty who the investment portfolio manager is, the fund’s performance or for that matter, if the money actually exists, Pua said.

Book Review on South China Sea

February 12, 2014

Book Review on South China Sea

Jacket image for Solving Disputes for Regional Cooperation and Development in the South China Sea – Chandos Publishing

Wu Shicun, Solving Disputes for Regional Cooperation and Development in the South China Sea: A Chinese perspective [Hardcover], 1st Edition, Chandos Asian Studies Series, Chandos Publishing,Oxford,2013,ISBN 978-1-84334-685-2.

Reviewed by BA Hamzah.

Writing a book on the complex subject of the South China Sea is a challenge. A bigger challenge is to attempt to address all the issues, which border geo-politics, law, economics and history under two hundred pages.

However, to his credit, the author has succeeded to present China’s official views of the disputes over the overlapping maritime claims in the South China. Where he fails to provide a balanced view on contemporary issues, he makes it up by a thorough treatment of the historical events that led to the present conflict, albeit from the Chinese perspective.

For the non –mandarin speaking researchers, getting an official Chinese position on the conflict in the South China Sea is always a guessing work. Dr Wu Shicun’s book fills in the much-needed void.

The title of the book is a bit misleading. The book focuses on the overlapping claims in the Spratly although the title says, “Resolving Disputes for Regional co-operation and Development in the South China Sea.” While no one should judge the book by its cover, the message is clear: that China wishes to resolve the overlapping claims via some forms of regional cooperation. There is a slight change in the nuances. In the past, China was rather reluctant to enter into any kind of Joint Development Projects. Recent events seem to suggest a policy change, a new appetite to reduce tensions in the Spratlys.

By training, the author is an historian. He has contributed significantly to the body of knowledge on the South China Sea. His current position as President of the National Institute of South China Sea Studies (NISCSS) gives him a rare insight into the thinking of policy planners at Beijing. The author’s special relationship with policy makers at Beijing makes this book a valuable contribution to the literature on China’s official position on the South China Sea.

Like all books, it is impossible to do justice to the subject matter, especially when the writer wishes to fill a wide canvass as he has attempted. In covering too wide a ground, the author inevitably misses some important details. For example, he gives only a glimpse examination on the Philippines’ decision in January 2013 to refer China to the United Nations Arbitration Tribunal.

Although China has refused to participate in the Arbitration process, the author should have, in my view, examined in some details the law and facts of the case from China’s vantage. A sneak preview of how China will deal with the issue should the Tribunal find the case, in absentia, against China. Leaving the matter hanging would invite all kinds of innuendoes.

The author has defended China’s “indisputable sovereignty over the entire South China Sea”. He claims that China’s position results from discovery, presence and history. In his view, China has demonstrated historic right over the South China Sea. He forgets to remind readers that in customary international law, mere discovery of a territory, gives the discoverer only an “inchoate title”. That is to say, it has only a temporary right to make an effective occupation. If, within a reasonable time, the area is not occupied, it is subject to appropriation.

The author has asserted that China has “exercised successive administration” (p50) over the features in the South China Sea since the Han dynasty (206 BC-9 AD). While the assertion could be historically correct, modern international law puts greater weight on an interrupted, peaceful and continuous display of state authority to satisfy the legal requirement of effective jurisdiction.

China has not been able to demonstrate that it has exercised continuous and effective display of state authority on all the features it claims in the South China Sea. For example, Great Britain and France occupied some major features in the South China Sea, when China was weak. Japan occupied the major features in the Spratlys during WW 11 including the Paracels, Pratas and Itu Aba.

The author has ignored another occupation. In 1878, for example, Great Britain occupied Amboyna Cay (presently occupied by Vietnam and claimed by Malaysia, Taiwan and the Philippines). The British gave permission to the Central Borneo Company Limited to extract phosphates (guano) and to fly the Union Jack on the island.

Intriguingly, the author acknowledges that between the 1930s and 1950s the ownership of the features in the South China Sea were claimed by “France, Japan and occasionally by a private Filipino (p 4). However, he fails to impute any legal result that accrues from such occupation. By dismissing these claims, the author is at odd with state practice with respect to the means of acquiring of territories under modern international law.

The book deals at great length with China’s controversial nine-dash line map. The author refers to this map as the “U-shaped line”. The Nationalist Government of China (under General Chiang Kai- shek), first published the nine-dash line map (originally eleven dash-lines) in 1947. This controversial map was given a semi-official status in May 2009, when it was appended to China’s Note Verbale to the United Nations Secretary General. The Note Verbale was China’s diplomatic response to a joint submission by Malaysia and Vietnam on their extended continental shelf to the UN Commission on the Limits of Continental Shelf (UNCLCS) in May 2009.

The author cited four different interpretations of the controversial “U -shaped line”. In his view, Judge Gao Zhiguo’s explanation of the line as being “synonymous with a claim of sovereignty over the island groups…” including claim to historical right of fishing, navigation, and other marine activities is more acceptable to the “international audience”. The author warns that the debate over the U-Shaped line will continue, “If China remains silent and keeps its claim ambiguous.”

China policy makers should heed this advice.

The map that shows “the U-shaped line” is one of many maps that China could use to defend its title, according to the author. The author has also cited many ancient Chinese maps that incorporated the South China Sea as China’s territory. The legal status of these ancient maps under temporal international law is questionable and uncertain at best. While official maps often play pivotal role in international boundary disputes, the international courts have tended in the past to give little evidentiary value to ancient maps, especially those bereft of coordinates. For example, in the Burkina Faso/Republic of Mali Case (ICJ Reports, 1986) the Court finds that “the IGN map is not an official document” and the Court observes that, in general, “whether in frontier limitations or in international territorial conflicts, maps merely constitute information which varies in accuracy from case to case.” (italics added).

The author argues that the ambiguity of the United Nations Convention on the Law of the Sea (1982) has led to different interpretations of its provisions. This ambiguity has made it difficult to put the conflicting territorial claims in its proper perspective. According to the author, the failure of UNCLOS to give recognition to the concepts of “historic rights” and “historic waters” under international law has not done justice to China’s claim.

The author also discusses in some details the bases of claims by Vietnam, Malaysia, the Philippines and Brunei to the features in the Spratly. Dismissing all these claims as illegal, the author offers joint development as a way out. In his view, for the JDA to take off, it has to be premised  on four principles:[1]

·     The ocean should be used only for peaceful purposes;

·    Incremental approach. Regional cooperation should commence with the less sensitive topics like marine environmental protection;

·    All inclusive approach. The projects must benefit all the stakeholders;

·Preservation of marine environment. The author has suggested that the exploitation of living and non-living resources in the South China Sea should not damage the marine environment.

Based on the above principles, the author has outlined the general areas for co- operation. They include:

·         Joint development for oil and gas. He cited the Joint Marine Seismic Undertaking (JMSU) case (2004-2008) between the National Oil Companies of China, the Philippines and (later) Vietnam.

·         Joint management and conservation of fishery resources. He cited the China -Vietnam Agreement on Fishery Cooperation in the Biebu Gulf (2004) as an example.

·         Navigational Safety and Search and Rescue activities;

·         Combating international maritime crimes, and

·         Marine scientific research and marine environmental protection.

Interestingly, throughout the book, the author makes no mention of the claim by Taiwan. Although Taiwan claims the same area, as China’s and the bases of claims are similar, it deserves a fair treatment. After all, it has effectively occupied two large features in the South China Sea-the Pratas and Itu Aba.

The author’s discussion on Malaysia’s claim requires updating. Malaysia has relied on the 1958 Geneva Convention on the Continental Shelf to claim certain features in the Spratlys (known as Gugusan Terumbu Semarang since 2006). The area and the features claimed by Malaysia are contained in the 1979 Map on the Continental Shelf of Malaysia.

In 1978, Malaysia sent a team of officers from the National Mapping Directorate, the Royal Malaysian Navy and Army Engineers from the Line of Communication Unit to survey the area. The team found no trace of occupation of the features, except on Amboyna Cay. There, the team found a concrete structure with Vietnamese markings. However, at the material time, there were no Vietnamese soldiers or civilians on the island.

Soon after the Malaysian survey team returned to their home base, the Vietnamese troops went back to reclaim Amboyna Cay. Similarly, the Philippines, which also claim Amboyna Cay (Pulau Kechil Amboyna), made hasty return to Commodore Reef (Terumbu Laksamana) soon after the Malaysian survey team left the Reef in 1978. The Philippines still maintains a military outpost on Commodore Reef.

The Malaysian Government published the 1979 map only after the survey team has physically established that the features were located on its continental Shelf as defined under the 1958 Geneva Convention on the Continental Shelf. To suggest otherwise is quite inaccurate.

The author also examines China’s trade-based ancient tributary political patronage system (with a strong China at its apex), which in his words, became “the dominant international order in ancient East Asia”. Although the author does not draw any implication from this tributary system in the book, the message that a strong China had kept peace and order in the region in the past is quite instructive. Is a strong China trying to replicate the trade-based political patronage system in the current multi-polar international structure is not quite clear? However, this point is worth noting as the countries in the region continue to engage China. 

In conclusion, it becomes obvious that China is desperate to reduce the tension in the South China Sea. Yet by continuing to insist that the entire South China Sea as its own sea and that it has indisputable sovereignty over the features within the nine-dash line map, gives little space and hope for other claimant parties to advance their claims. Compounding the jurisdictional problem in the contested- South China Sea, apart from China’s hard-line position, is the role of third parties, which China considers as unfriendly to its interest. Beijing views the presence of USA, Japan and India, who have no territorial claims in the South China Sea, as unhelpful.

China’ offer to consider joint development projects, with the claimant parties, as defined by China is an attempt to rebuild confidence. However, until such promises are met, they must be viewed with some circumspect. In my view, China is unlikely to negotiate its sovereignty claim. Nonetheless, it is prepared to co-exist by acknowledging the present status quo only if the claimant state makes no effort to undermine or belittle its claim. Taking China for arbitration over the territories in the South China Sea as the Philippines has done, for example, goes again the current modus operandi of China as a rising power. Similarly, China finds it odd why some claimant states have allied with the third parties, external to the region, against it.

Under the current geo-political circumstances, the challenge to China is to demonstrate to the region that it is a benign power with the capacity to keep peace in the Spratlys and the region beyond.

[1] Chinese Premier Li Keqiang said at the 8th East Asia Summit at Brunei (8-9 October 2013), “China and ASEAN [the Association of Southeast Asian Nations] have agreed that the disputes in the South China Sea should be resolved peacefully through consultations and negotiations between countries directly concerned.” Still, until a peaceful agreement is met, these are just words.


Duty: Memoirs of a Secretary at War by Robert M Gates

February 5, 2014


Duty: Memoirs of a Secretary at War by Robert M Gates – Review

by Dan Roberts, The Observer, 2 February, 2014

Republican Robert M Gates’s account of his years in the Bush and Obama administrations is sometimes catty yet full of insights

Obama and GatesIn a town blighted by partisan rancour, Robert Gates’s memoir of his time as secretary of defence under both George W Bush and Barack Obama has largely been read as a political morality play: a sober warning of what goes wrong when you mix tribes.

Despite a reputation as someone able to rise above party squabbles, the elder statesman once nicknamed Yoda by White House staff has ended up embarrassing a trusting Democratic Administration with a surprisingly un-Jedi-like account of his time as a Republican behind enemy lines.

However, there is more to this book than catty, if entertaining, swipes at Washington’s great and good; readers outside the beltway will come away from reading Duty with a more meaningful insight into the world’s military capital. Indeed, for anyone trying to understand how America’s most liberal president in decades could allow drone assassinations, Guántanamo Bay and NSA surveillance to continue largely unchecked during his time in office, this memoir has a very different moral to that seized upon by DC’s self-obsessed pundits. Though not a dominant driver of such controversial policies, Gates reveals himself as an emblem of the continuity that sustains this increasingly militarised country regardless of who is in the Oval Office.

Since joining the CIA in 1968, Gates served six other presidents before he was put in charge of the Pentagon’s 3 million employees and $700bn budget by Bush the younger at the recommendation of his father. And although there is more warmth to the book’s early chapters chronicling the last days of that dynasty’s reign in office, this consummate company man makes clear that Obama’s decision to reassure security hawks by retaining him was a lot less of a shock to the system than everyone assumed at the time.

“Although Obama, to my mind, is a liberal Democrat and I consider myself a moderately conservative Republican, for the first two years, on national security matters we largely saw eye to eye… as loath as partisans on both sides were (and are) to admit it,” writes Gates.

“I’m no peacenik,” he fondly quotes Obama telling him. “My staying in place would show foreigners that US resolve would be undiminished.”

The book’s much-publicised attacks on Obama’s senior advisers do reveal some differences of style between the two administrations. Vice-president Joe Biden incurs the most wrath for opposing the military’s proposed troop surge in Afghanistan. “I think he has been wrong on nearly every major foreign policy and national security issue over the past four decades,” says Gates.

Former chief of staff Rahm Emanuel and current UN ambassador Samantha Power come under fire, too, blamed for opening up a “poisonous” “chasm” between the White House and the Pentagon over everything from gay rights in the military to intervention in Syria. And Obama is politely criticised for adding to the mistrust by failing to act like he really enjoyed continuing to pour troops into America’s disastrous foreign wars. “As I sat there, I thought: the president doesn’t trust his commander, can’t stand Karzai, doesn’t believe in his own strategy and doesn’t consider the war to be his,” recalls Gates of one planning meeting.

History may ultimately judge Obama’s reticence more favourably than the military’s reluctance to admit defeat, but the brass nonetheless succeeded in persuading the president of the need for the troop surge. Gates also convinced Obama to retain another Bush-era spook, current director of national intelligence, James Clapper, who infamously went on to lie to Congress over the extent of NSA mass surveillance on Americans.

The detailed fights to protect defence spending and clear disdain for civilian politicians makeRGates Book-Duty clear that the Pentagon remained in safe hands throughout Gates’s four-and-a-half years in office. But Duty is not the memoir of a neocon warmonger. Gates writes intelligently and candidly of the anxieties of sending men to die and makes clear he largely disliked his “deployment to the Washington combat zone”.

Some sections detailing military deployment negotiations will prove as dry as Afghan dust to anyone not wearing green, but overall the book is a rewarding read and a rare insight into the ongoing capture of the Obama administration by Washington’s security establishment.


BOOK REVIEW: Student Activism in Malaysia

January 17, 2014

BOOK REVIEW: Student Activism in Malaysia


Meredith L. Weiss, Student Activism in Malaysia. Crucible, Mirror, Sideshow.

Ithaca and Singapore: Cornell Southeast Asia Program Publications and NUS Press, 2011.  Pp. vi, 302; list of acronyms, figure, index.

Reviewed by Leon Comber.


This is a fascinating book, which provides a detailed account of student activism in Malaysia, with its rise and demise, from the early twentieth century to more recent times. Beyond that, it provides a considerable amount of information about the development of Malayan and Malaysian politics and, to a lesser extent, Singapore politics too.  However, it is not easy reading, as the publisher has used a small, rather eye-straining typeface and as it is packed with facts which are well documented from the extensive and impressive research that the author has carried out into English and Malay sources.

The author points to the heyday of the university protest movement being between 1967 and 1974, and based on the reviewer’s own knowledge of those times, this is probably correct.

It is interesting to see, too, reference to the earlier February 1948 “Conference of Youth and Students of South-east Asia Fighting for Freedom and Independence” which was held in Calcutta and sponsored by the communist-controlled World Federation of Democratic Youth and the International Union of Students (p. 37), as the influence that this conference may have had on student unrest in Chinese-medium schools in Malaya is often overlooked.  It is perhaps worthy of further research by the author (especially in the Malayan Chinese-language press) in view of the important role that students played in the political upheaval then taking place inMalaya. It may well have been the reason that the Malayan Special Branch rather simplistically categorized in those days all student unrest as “communist” inspired.

Student politics were a cause of concern, too, to the authorities in the University of Malaya when it was located in Singapore in those early days, and in this connection the author mentions James Puthucheary and William Kuok Hock Ling (who used the communist alias of Peng Cheng), both well known student activists. Though the author does not refer to it, William Kuok—who went underground with the Communist Party of Malaya at the start of the Malayan Emergency in June 1948, edited a stenciled CPM English-language newssheet from the jungle, and was eventually killed by the security forces in an attack on a communist jungle camp in north Malaya—came from a well known and respected business family in Johor Bahru. His brother, Robert Kuok, is reputed to be the richest Chinese in Southeast Asia today.

It would be interesting if the author could elaborate further on the alleged penetration by intelligence agencies of the Malayan and Singapore student activist movement, especially as in 1974, S. Rajaratnam, Singapore’s foreign minister at the time, referred to CIA and KGB activity, and also on the increased interest being shown by the Singapore Police Special Branch into student affairs (p. 179).

The author refers to the turning point of Malaysian student activism having taken place in the 1970s, when the Malaysian government followed a policy of constraint and repression resulting from changes in Malaysia’s political regime and political culture. While this may well be correct, there are, too, other factors that should be taken into account.  These include the tragic 13 May 1969 racial riots in Malaysia, which led to the introduction of the government’s New Economic Policy (NEP).  The NEP attempted inter alia to adjust the racial balance of students entering universities. Prior to 1969 Chinese students accounted for approximately 70 per cent of the Malaysian undergraduate population, with a Malay student intake of approximately 30 per cent. But by the time the NEP began to take effect in the mid-1970s, the proportion had nearly reversed.

Consequently, the university population became noticeably divided along racial and religious lines as each ethnic group had its own historical differences along lines of language, culture, religion, and geographical backgrounds. An increasing number of Malay students came from the more underprivileged sector of the population and were not inclined to take part in student political activities. They were more interested in studying, especially if they were on government scholarships, rather than participating in student politics. All of these factors would have had a depressing effect on the emergence of any strong student movement.

But to sum up, Dr Weiss’s book provides an excellent study of student activism in Malaysia and it will undoubtedly become one of the standard reference sources for this subject.

Leon Comber is Visiting Senior Research Fellow at the Institute of Southeast Asian Studies, Singapore.  A Malaysian citizen, he fought in Burma as an officer in the Indian Army during the Second World War, commanded the Special Branch of the Malayan Police in Johor during the Emergency, served on the staff of Singapore’s first Chief Minister David Marshall, was director of Hong Kong University Press, and has written or edited two dozen books.

Roth Unbound: A Guardian Book Review

January 17, 2014

Roth Unbound: A Writer and His Books by Claudia Roth Pierpont – Review

Who inspired Philip Roth’s characters? This new study claims to reveal many secrets.
The Guardian, Friday 17 January 2014 09.00 GMT
Philip RothPhilip Roth

Philip Roth, at age 40, published the essay “‘I Always Wanted You to Admire My Fasting’ or, Looking at Kafka”, which appropriates its title from the short story “A Hunger Artist”, and fantasises that the genius of Prague didn’t die at age 40, but instead was cured of tuberculosis, and lived on to witness the Nazi regime. His response was to give up literature and flee to America, where he took a job teaching in a shabby Hebrew school in Newark, New Jersey.

Among his students was a young “Philip Roth”, who nicknamed this strange, halitotic hermit “Dr Kishka”, Yiddish for “guts”. The Ghost Writer, published six years after this piece in 1979, is the first of Roth’s novels narrated by his alter ego Nathan Zuckerman. In it, Zuckerman imagines that Anne Frank survived Bergen-Belsen only to have to hide from the celebrity of her diary in a clapboard farmhouse in the Berkshires, where she changed her name to Amy Bellette and served as an amanuensis to a famous Jewish-American novelist. Roth’s Kafka spends his post-literary existence drilling children in the alef bet; Roth’s Frank spends hers imparting to the work of her employer and lover the authenticating imprimaturs of Holocaust trauma and European Kultur.

Kafka, in his lifetime, published two books; Frank, in hers, published none; Roth debuted with Goodbye, Columbus in 1959 and announced his retirement 25 novels later with Nemesis in 2010. According to Claudia Roth Pierpont, he has been enjoying his dotage “discussing books and politics and a thousand other things”, entertaining her with “memories, observations, opinions, thoughts, second thoughts, jokes, stories, even songs”.

Pierpont assures us that though she is not related to Roth, she has produced this study of his fiction with his collaboration. It is no surprise that her book is a useful resource for plot summary, then, but it is shocking that the new secrets it claims to offer are only shopworn trivia that even my parents – not academics, just Jews from Jersey – already know: the stock in trade of Saturday synagogue book clubs, and the Sunday New York Times. In The Ghost Writer, the novelist EI Lonoff, who shelters the ostensible Anne Frank, was based on Bernard Malamud; the novelist Felix Abravanel, who is too egotistical to adopt Zuckerman as a literary son and so dispatches him to Lonoff, was based on Saul Bellow – neither were grateful, but both were flattered, I’m sure.

Pierpont mentions that a Zuckerman first appeared in My Life As a Man, as a character in two stories by Peter Tarnopol, another Rothian double, who happens to share a psychiatrist, Dr Spielvogel, with Alexander Portnoy.

Yet another Roth redux, the public radio intellectual and lit professor David Kepesh, changes into a six-foot-tall, 155-pound breast in The Breast; in The Professor of Desire he ventures to Prague and hallucinates a whore who, for $10, will narrate the sex acts she performed on Kafka, and for another $5 will let Kepesh inspect her octogenarian vagina himself. Pierpont tags these books as reactions to The Metamorphosis, but also to Roth’s sojourns behind the iron curtain, which themselves were merely bids to escape his reputation after the release of Portnoy’s Complaint, that classic of filial suffering and fervent wanking: Roth’s “Portnoy readers – even the ones who loved the book, or maybe especially those – viewed him as ‘a walking prick’. When they came up to him in the street, that’s what they saw, it seemed to him, that’s whom they were congratulating.”

Roth--BookThe problem with this is not how one congratulates a prick – by wanking it, perhaps – but rather the quotation marks: it is not clear, when it comes to “a walking prick”, who exactly is talking. This vagary plagues every page of Roth Unbound, regardless of attributive punctuation, to the point where Pierpont’s criticism references Roth’s “non-fiction books” as if they were gospels, and assimilates their opinions too. These supposedly impeachable sources are The Facts, which purports to be an autobiography discussed in letters between Zuckerman and Roth; and Patrimony, a memoir of Roth’s father’s death, written in the midst of his decline.

Then there are the miscellanies: Shop-Talk, and Reading Myself and Others. The former collects conversations Roth conducted with the likes of Primo Levi and Milan Kundera, in which he proposes interpretations of their works and they, of course, agree. The latter is a Maileresque orgy of vanity featuring interviews of Roth by George Plimpton and Joyce Carol Oates; an essay about writing Portnoy, in which Roth excerpts a speech he delivered to an Anti-Defamation League symposium; an essay on the novelist-critic divide, the bulk of which is given over to a letter Roth wrote but never posted to critic Diana Trilling, dissenting from her review of Portnoy; a self-interview Roth did for Partisan Review that refers to an essay he wrote about himself for Commentary; not to forget his own review of a Broadway play adapted from his earliest stories.

Now that Roth’s retirement has given him the opportunity to pursue his legacy full-time, it is telling that he hasn’t proceeded in the manner of Henry James, who dedicated his final stretch to assembling his corpus into the New York Edition, rephrasing whole sentences, if not just rearranging the commas he had strewn them with half a century previously. It is as if Roth doesn’t think it makes much difference that Our Gang, his humourless Nixon pastiche, and The Great American Novel, his fussy and precious baseball picaresque, are still available as they were written. Or maybe, after more than four decades in analysis, he has resigned himself to their flaws, or even thinks they are perfect and deserve to be shelved alongside his best: The Counterlife, Operation Shylock, Sabbath’s Theater and American Pastoral.

But then Roth’s tendency has never been to withhold, rather to explain, or revise by explanation, and it is ironic that the same technique that unifies his oeuvre has the opposite effect on its criticism: to Pierpont, Letting Go is about the influence of James, Thomas Wolfe, the stultifying 50s, and “not letting go”; When She Was Good is about the influence of Sherwood Anderson, Dreiser, the stultifying 50s, and Roth’s first wife Margaret Martinson, who faked a pregnancy, faked an abortion, took Roth’s money in a divorce and promptly killed herself (though Pierpont insists that her fullest character portrayal is as Maureen Tarnopol in My Life as a Man).

Roth’s second wife Claire Bloom is Eve in I Married a Communist and, wait for it, Claire in Deception; while the female actor in Zuckerman Unbound is a monster made of Bloom, Edna O’Brien, and Jackie O, whom Roth once dated (kissing her was like “kissing a billboard”). Establishing biographical correspondences is a pleasant way to wait out the clock, but it will never pass for serious criticism. Still, with each of Pierpont’s chapters centred on a certain book, pure fun salaciousness just isn’t feasible. The result is that Roth’s life between publications is mostly ignored, and the most obvious lacuna is the fact that in 2012 Roth authorised an official biography, to be written by Blake Bailey, whose prior subjects – John Cheever and Richard Yates – had been too dead to refuse the honour, or meddle.

This suggests that Roth Unbound might be even more than its breathless publicity promises; indeed, it might be Roth’s most virtuoso stunt. Imagine Roth approaching his 80th birthday laden with awards and honorary degrees, globally translated, universally read, his talent having triumphed over every adversity: mental breakdown, heart ailment, rabbinic orthodoxy, feminism. As an artist who has always thrived on transgression, he must have discerned his mortality in the sense that there was no opposition left for him to outlast. Once again, he would have to invent one, a persecution not romantic or erotic this time, but ultimate enough to flirt with the posthumous, and so he granted access to a biographer, and pretended to retire.

Predictably, the oppressive prospect of having a stranger narrate his life invigorated Roth, and had him reasserting the pre-eminence of his work, by ghostwriting a study of it. The slackness of the prose, then, must be attributed not to Roth’s senescence, but to the demands of writing under an assumed identity. Unable to bear not receiving credit for this feat, and for having concluded his career in the voice of a sympathetic female, Roth chose a pseudonym – “Claudia Roth Pierpont” – just foolish enough to betray the truth. Roth, it seems, is back, and once again he is begging to be punished.

BOOK REVIEW: Floating on a Malayan Breeze

January 14, 2014

BOOK REVIEW:Floating on a Malayan Breeze

Sudhir Thomas Vadaketh,Floating on a Malayan Breeze: Travels in Malaysia and Singapore

Hong Kong and Singapore: Hong Kong University Press and NUS Press, 2012.  Pp. viii, 282; map, photographs, notes, index.

Reviewed by Elvin Ong

Ever since Singapore’s split from Malaysia in 1965, the government of each country has been bent on directing its trajectory away from that of the other.  This tendency perhaps peaked during the governments of the two countries’ most renowned authoritarian leaders, Lee Kuan Yew and Mahathir Mohamad. Singapore was always going to be what Malaysia was not. Malaysia was always going to go its own way, irrespective of what Singapore did. So dominant are the two opposing caricatures that have emerged – one clean, one dirty; one efficient, one corrupt; one carefree, one perpetually stressed – that we very often forget that Singapore and Malaysia have a shared past in British Malaya and that they have always been dependent on each other, at least in the economic realm.

Floating Breeze

In an attempt to correct this view, Sudhir Thomas Vadaketh, the Singaporean-born son of a Malaysian-born father, declares early in that the book is his attempt to provide what has been a missing “bottom-up perspective in national discourse” by writing about the two countries “as seen from the ground” (p. vi). On the one hand, he relates encounters with random personalities from Singapore, with people met during his month-long biking expedition around Peninsular Malaysia in 2004, and with various interesting individuals whom he interviewed on the ground during the campaign for the watershed 2008 Malaysian elections. On the other, he shares pieces of personal insight about the socio-political development of the two countries in the past decade. The resulting book is part travelogue and part socio-political commentary, a somewhat frustrating combination that is enjoyable, but that also raises more questions than it answers.

Sudhir’s vivid descriptions of his interviews and of the challenges encountered during his travels in Malaysia often set the stage for his larger points. Throughout the book, we are drawn into his conversations with various “big” and “small” personalities across the political spectrum in Malaysia. Some “big” personalities include Steven Gan, co-founder of the Web-site Malaysiakini and Nurul Izzah, the incumbent member of parliament for Lembah Pantai – better known, perhaps, as the daughter of Anwar Ibrahim, the leader of the political opposition to Malaysia’s Barisan Nasional government.

The interviews with such “big” individuals are useful to the extent that they provide a sliver of insight into these individuals’ backgrounds and their motivations for driving socio-political change in Malaysia today. But as Sudhir demonstrates, “small” characters often have important, sometimes much more important, stories to tell.

Betty owns a nondescript souvenir shop just across the border from Malaysia in Betong, Thailand. She was a former guerrilla soldier with the Communist Party of Malaya (CPM), which fought against the British, Japanese and newly-independent Malayan and Malaysian governments for a Communist Malaya. She is uniquely positioned to help Sudhir excavate a broader point about the CPM’s forgotten role in Malaya’s independence movement. Mr Liew is a Chinese businessman and eager supporter of the Parti Islam Se-Malaysia (PAS) in Kota Bharu, Kelantan. He punctures the stereotype that PAS is an extremist Malay political party that does not know how to “do” development. In a sense, these colourful “small” characters like Betty and Mr Liew are the gatekeepers for forgotten or interesting stories. They give life to staid political-science theories and dull academic writing.

Yet, for all the fascinating interviews and insights that Sudhir’s encounters with such people provide, it is difficult to make sense of them in a coherent manner, except in the context of Sudhir’s personal interpretation and commentary. Although he tries his best to make many good points about many salient topics, this is also where the book hits some serious snags.

First, and even if we set aside the dire lack of a common thread running through his book (a lack due to its being written, in part, on the basis of random encounters during a bicycle expedition), Sudhir dithers between perpetuating stereotypes about Singapore and Malaysia and countering those stereotypes.

As the book’s title suggests, Sudhir constantly “floats” between repeating official dominant ideologies and noting the various instances in which they require qualification, so much so that one cannot quite conclude what to make of the issue. For example, in the process of stressing the divergence between race-conscious Malaysia and race-neutral, meritocratic Singapore, Sudhir brings up so many qualifications to the idea of meritocracy in Singapore that one wonders if they negate the entire hegemony of meritocracy at all! He notes that senior management from India working in Singapore often hire their own kind, that he himself suffered from racial stereotyping when growing up, that the Singaporean Malay-Chinese taxi driver Ishak vows to retire in Thailand because he can no longer tolerate the racial stereotyping in Singapore, and that Malay Singaporeans still cannot serve in sensitive sectors in the Singapore Armed Forces. It appears that Singapore – both the government and the people – is as race-conscious as Malaysia after all

Second, Sudhir often ruminates on a wide variety of important social issues in the two countries – media control and censorship, the nascent development of civil society, the influx of immigrants, the growing income gap, bumiputera affirmative-action policies, religiosity, family planning and urban stress – without actually coming to any definitive conclusion about what indeed should be the way forward. This deficiency is most clearly exposed in two chapters discussing the gradual decline of the United Malays National Organisation in Malaysia and the People’s Action Party in Singapore. After much discussion of race-based politics in the former party and the iron cage of group-think in the latter, Sudhir concludes with a meek “It will be interesting to see how long they last” (p. 92).  While some students or casual readers may find this conclusion satisfying, serious academics will find such a concluding line entirely frustrating. Where is the comparative theory on authoritarian regimes?

Third and finally, while as a fellow Singaporean I strongly concur and empathize with Sudhir’s description of recent trends in Singapore society, I cannot help having the nagging feeling that both of us are trapped with the same stereotypical worldview and narrative of what Singapore is, with both of us having good university educations and mixing in similar circles. (Full, though late, disclosure: I met very briefly with Sudhir at the videotaping of a debate about Lee Hsien Loong and was an intern in the Civil Service College under Donald Low, one of his few Singaporean interviewees.)

What would be the worldview of the young Singaporean McDonald’s deliveryman? Or the elderly cashier at NTUC FairPrice supermarket? Or the uncle sipping his potent brew of Guiness or Heineken and ice cubes at the local coffee shop? Or the multitude of people who queue up in the wee hours of the morning for a chance to buy a “Hello Kitty” toy from, again, McDonald’s?

There is a reason that Jack Neo, arguably Singapore’s most successful movie director as measured in box office receipts, consistently makes movies that break record after record at the cinemas, even though many educated intellectuals find his movies generally crass and distasteful. Perhaps Jack Neo understands the Singaporean psyche better than we do? Are we already victims of the growing inequality that we constantly deride?

Floating on a Malayan Breeze serves as a good introductory text for readers unfamiliar with Singapore and Malaysia, or for students and the general public who have for far too long been fed state-endorsed narratives of the history and social development of their respective countries. The book’s vivid and somewhat witty writing brings many of its interviews to life, and, before long, the reader will find an unconscious smile creeping across his or her own face as he or she ponders what is unfolding between Sudhir and the interviewee. But this book is no serious academic research. Random sampling does not necessarily result in a representative sample. Anecdotal evidence is not robust evidence. Scholars who already know both countries well may be able to glean some nuggets of interesting insights, but they are unlikely to advance their knowledge of the two countries in any serious way.

Elvin Ong is an incoming doctoral student in political science at Emory University with an interest in the varied performances of politics in Southeast Asia.–http://newmandala.net/

Lee Kuan Yew, One Man’s View of the World

December 28, 2013

BOOK Review: Lee Kuan Yew, One Man’s View of the World

Singapore: Straits Times Press Holdings, 2013. Pp. 352, photographs, index.

Reviewed by Nina Ong (12-13-13)


In March 2007, when the Australian National University conferred an honorary degree on Lee Kuan Yew, protestors gathered with placards that implied that ANU was wrong to honour a leader whom many considered a “dictator” for his repressive measures to rein in the Singapore media and opposition. The New Mandala blog archive includes a number of insightful posts on the issue. Lee Kuan Yew’s reputation in the eyes of “Western publications” is not helped by his fiercely protective attitude towards his own legacy, which has resulted in him winning lawsuits in Singapore courts for alleged defamation in articles published in The Far Eastern Economic Review and The International Herald Tribune.

Nevertheless, Lee’s admirers continue to wax lyrical about him, viewing him as a “grand master” who, despite his small stage (my own native country, Singapore), has managed to impress world leaders and influence the policies of even a major power like China. A case in point would be Deng Xiaoping’s economic reforms, which, Lee implies in this book, One Man’s View of the World, was in part inspired by Deng’s exposure to Singapore’s economic success during his 1978 visit to the city-state. In fact, the book is peppered with anecdotes of Lee’s encounters with world leaders and his opinions of them. Of former PRC president Hu Jintao, he writes, for example, “Behind the benign, avuncular appearance, I think there is iron in the man.” (p. 32).

It all leaves the reader with little doubt that Lee wrote One Man’s View of the World for people who regard him as a visionary leader whose analyses of international politics and perceptions of world leaders are to be taken seriously. The more critical reader, however, will hardly find comments like the one on Hu perceptive. The same might be said of a great number of politicians, including Hu’s predecessor Jiang Zemin or even the American Vice President Joe Biden.

At the same time, if we can look beyond the sweeping views that one reviewer from Singapore calls “more entertaining than alarming or illuminating”, it is possible to gain fresh insight from One Man’s View of the World. How much readers gain from the book will depend on how they choose to read it. Like all autobiographical narratives, One Man’s View of the World tells us more about the man who wrote it than about the world that he observed.

Although not strictly an attempt to glorify the achievements of the man – a purpose better served by the pictorial book Lee Kuan Yew – A Life in Pictures,  from the same publisher – One Man’s View of the World seems to be a publication whose timing betrays the intention further to justify the People’s Action Party’s response to the challenges that Singapore faces by emphasizing similar challenges faced by other countries. For example, it would be difficult for those familiar with politics in Singapore not to notice the parallels between the country’s struggle with low fertility rates and the matter of Japan’s ageing population, which is the focus of the book’s section on that country.

Either Lee or his editors chose to title that section “Japan – Strolling into mediocrity”. Lee’s warning for Japan echoes his warning for Singapore. Of the former he writes, “Unless decisive action is taken very soon to resolve the population problem, no change in politics or economics could restore this nation to even a pale shadow of its post-war dynamism” (p. 129). Of Singapore, he asks rhetorically, “Is there a country in this world that prospers on a declining population?”, and then adds, “If I had to identify one issue that threatens Singapore the most, it would be this one” (p. 222).

Despite the fact that geopolitical issues in East Asia might be of greater concern than demography, especially to an international audience, these issues are only addressed in the last four pages of the discussion of Japan, and in a “Question and Answer” format.* Lee’s “answers” are brief compared to his treatise on Japan’s population problems.

One Man’s View of the World is unlikely to satisfy Lee’s critics because it lacks (again) absolutely any attempt to engage with their criticisms of him. Those who have read Lee Kuan Yew: Hard Truths to Keep Singapore Going (also from the same publisher), a thick volume on the economic realities to which Singapore must face up to survive as a country, will find the persona that Lee has created for himself in One Man’s View of the World familiar.

Lee continues to style himself as the dispenser of “hard truths” – a pragmatic politician who is brutally frank and has no regrets about his past actions. Examples of this stance include his continued unapologetic embrace of the idea that a person’s capabilities are largely determined by his or her genes: “[India’s] caste system freezes the genetic pool within each caste” (p. 149). Or his revealing non-reply to a reporter’s question about the effects of privileges for Malaysia’s bumiputeras: “Where do you think the talent pool is?” (p. 170). Or his dismissal of the view that his “Stop at Two” policy might have contributed to the long-term low fertility rate in Singapore as an “absurd suggestion” (p. 218).

Previously criticized for being secretive about his family life, Lee (or perhaps his editors) now seeks to disarm critics by providing shockingly honest details, even when this does not seem terribly appropriate. The caption at the bottom of a page with a photograph of his family at the wedding of his eldest son, Singapore’s current Prime Minister Lee Hsien Loong, to Ho Ching – no doubt a happy occasion – says little about the bride. Instead, it is revealed that the “flower girl is Loong’s daughter Xiuqi, whose mother Wong Ming Yang died of a heart attack in 1982 at the age of 31”. It is as if Lee is saying, “There, everything’s accounted for.” Judging from the responses to his book in Singapore, both on-line and off-line, it appears that he has mastered, in writing, the art of being frank to the point of political incorrectness, while deftly deflecting further discussion of thorny topics.

Nevertheless, his critics in Singapore should still read this book, not least because the book will provide them with an understanding of Lee’s perception of Singapore’s place in the global economy, which is crucial for anyone who seeks to offer a sound critique of Lee’s policies in Singapore, many of which are being continued by the current PAP government under his son, Lee Hsien Loong.

Younger Singaporeans, too, should read One Man’s View of the World, as should those interested in Singapore’s position on foreign policy issues. For the book does offer a broad perspective on world politics and quite successfully places Singapore in the context of an increasingly interdependent network of nation-states. Its succinct summaries of episodes in recent and not so recent history, such as Thaksin Chinnawat’s rise to power in Thailand or the Israeli-Palestinian conflict, provide enough background information for readers unfamiliar with the regions discussed in the book. However, a lack of in-depth analysis of the multiple historical factors that shaped the regions discussed also characterizes the book. For instance, on the topic of the Israeli-Palestinian conflict, British ambiguity in the 1917 Balfour Declaration is not addressed with Lee stating that the British “supported the settlement of Jews in Palestine with the view of eventually allowing them to form a Jewish state” and that the Balfour Declaration “formally set out this position” (p. 249). Yet it is relatively well known (indeed, it is in the ‘A’ levels History syllabus currently taught in Singapore’s schools) that the declaration, which Lee quoted, never mentions a “state” but a “national home” for the Jews.

Thus, those with a serious interest in learning more about international politics should still refer to other sources to supplement their knowledge. Readers who are wondering why regions such as Latin America and Africa are omitted from the book might want to flip to page 308. In his reply to a journalist’s question on his regular reading, Lee says, “I follow closely on the Internet news on Singapore, the region, China, Japan, Korea, America, India and Europe. The Middle East – occasionally, Latin America – almost zero, because it is not relevant to us. Too far away.” Readers invested in the growing trade links between Latin America and Singapore need not be alarmed, however, because Lee is no longer in charge of the government. He is very much a retired political leader speaking from his past experiences.

On a more personal note, when thinking of Lee Kuan Yew, as a Singaporean, I remember two moments. As a primary school student in 1990, I watched on television the National Day Parade and teared when Lee sang the National Anthem at the parade for the last time as Prime Minister after three decades in power. To a primary school student, that seemed like forever. Even at the age of nine, I had learnt at school and at home that Lee was an extraordinary man and that his stepping down from power could be a turning point for my country, for better or for worse. The second moment was when there was a palpable sigh of relief in Singapore, and the National Stadium erupted in the loudest cheers for a PAP leader since the General Elections of 2011, when Lee, frail but still walking on his own, appeared at NDP 2012, thus squashing rumours on the Internet of his passing.

Judged against a modern critical yardstick, One Man’s View of the World may fall short. It reveals Lee Kuan Yew as a man who remains steadfast in his convictions, despite the fact that those convictions are influenced by ideas that many readers now may regard as archaic. For readers interested in international politics, there will be points of disagreement on controversial issues regarding Asia, America and Europe. But, for historians interested in Singapore history, the book does offer rich insights into the man, insights that will gain value through study of the cultural milieu of his formative years.

Despite his prominence as a political leader, there is an unnatural dearth of academic writings on Lee Kuan Yew. One Man’s View of the World will certainly provide a rich source of information for future generations of scholars interested in analysing his leadership.

“Nina Ong” is the pseudonym of a graduate of the National University of Singapore who lives in her native country’s Bukit Merah neighbourhood. 


* We are told in a blurb that the Q&A sections of the book are “gleaned from conversations he [Lee} had with journalists from The Straits Times”. According to The Straits Times, the team of journalists and editors who helped to produce the book were also working together with Mr Shashi Jayakumar, the son of Singapore’s former Senior Minister, S. Jayakumar.


Uncertainty as the Secret of Happiness

December 29, 2013

Food for Thought ahead of 2014. Negativity is the antidote to positiveFacebook-K and D thinking. So rediscover the power of negative thinking and may you find Happiness and Success, says Mr. Burkeman. For me the key to happiness is to be one’s authentic self. I have always looked at the positive side of life. Accentuate the positive, eliminate the negative. That is the dictum for me. Good luck, Mr. Burkeman.–Din Merican

Against Positive Thinking: Uncertainty as the Secret of Happiness

by Maria Popova

Exploring the “negative path” to well-being.

Having studied under Positive Psychology pioneer Dr. Martin Seligman, and having read a great deal on the art-science of happiness and the role of optimism in well-being, I was at first incredulous of a book with the no doubt intentionally semi-scandalous title of The Antidote: Happiness for People Who Can’t Stand Positive Thinking (public library). But, as it often turns out, author Oliver Burkeman argues for a much more sensible proposition — namely, that we’ve created a culture crippled by the fear of failure, and that the most important thing we can do to enhance our psychoemotional wellbeing is to embrace uncertainty.

Besides, the book has a lovely animated trailer — always a win

Burkeman writes in The Guardian:

[Research] points to an alternative approach [to happiness]: a ‘negative path’ to happiness that entails taking a radically different stance towards those things most of us spend our lives trying hard to avoid. This involves learning to enjoy uncertainty, embracing insecurity and becoming familiar with failure. In order to be truly happy, it turns out, we might actually need to be willing to experience more negative emotions – or, at the very least, to stop running quite so hard from them.

The American edition (once again with an uglified, dumbed down, and contrived cover design) won’t be out until November, but you can snag a British edition here, or hunt it down at your favorite public library.


Western Education is not bereft of Ethical and Moral Values

December 11, 2013

Western Education is NOT bereft of Ethical and Moral Values

By Terence Netto@http://www.malaysiakini.com

COMMENT: In a much-awaited speech on the reform of higher education 220px-Anwar_Ibrahim-editedin Muslim societies, Anwar Ibrahim disagreed with the popular notion among Muslims that Western education is devoid of an ethical and moral dimension.

Anwar said this notion, widely disseminated in Islamic intellectual circles, has been a hindrance to the development of Muslims, particularly in the scientific and technical spheres.

“… [T]here is a general perception among the discourse of many Muslim scholars that Western education and philosophy is secular and bereft of an ethical and moral dimension. To my mind, this is unfounded,” declared Anwar in a keynote address to a symposium organised by the International Institute of Islamic Thought (IIIT) in Washington DC on Monday.

Malaysia’s parliamentary opposition leader, highly regarded abroad than at home for his intellection, observed that the misperception of Western education as ethically vacant was also shared by intellectuals in the West.

He said seminal Western thinkers like John Locke and Adam Smith were concerned to base their philosophies on a moral core, but that Smith, in particular, “the icon of ‘capitalism’, has been seriously misread”. Anwar argued that the “moral sentiments” that were an integral part of Smith’s economic propositions were “not at loggerheads with Islamic percepts”.

He likened Smith’s concern for morality in economics with Islamic thinker Ismail Faruqi’s conception of a good economy as the expression of Islam’s spirituality.

FaruqiTo Faruqi, “the economy of the ummah and its good health are the essence of Islam, just as Islam’s spirituality is inexistent without just economic action.”

Anwar held that the Islamic percept ‘inna al din al mu’amalah’ (religion is indeed Man’s treatment of his fellows) made it imperative for Man to “order human life so as to make it actualise the pattern intended for it by its Creator”.

He said Muslim societies would not be productive if it they do not “emerge from the exercise of finding fault” with Western systems. Quoting from a host of Islamic philosophers ranging from the 11th century’s Al Ghazali to the 20th century’s Naguib Al-Attas, Anwar made the point that education in Muslim societies must “proceed on the basis of rationality”.

He defined rationalism the way Faruqi conceived it as not “the priority of reason over revelation but the rejection of any ultimate contradiction between them”.

Anwar acknowledged that the rationalist strain in the interpretive process (ijtihad) left its exponents vulnerable to the charge of espousing secular thinking.

The pursuit of Knowledge

From the time of Muhammad Abduh, the 19th century Egyptian thinkerMuhammad Abduh famed for pushing for the modernisation of Islamic education, Anwar said that Islamic modernists had to combat the suspicion of attempting to “introduce secularism through the back door of ijtihad” but that this allegation was misconceived.

“On the contrary, what Abduh did was to subject the moral and epistemological premises of secular modernity to scrutiny and he came to the conclusion that Islam’s modernity was both non-Western and non-secular,” said Anwar.

In his oration, Anwar did not explain how Islam’s modernity could be both non-Western and non-secular. Neither did he expatiate on “Islamisation of knowledge” which he said would immunise Muslims from the excesses of the liberalist mindset that would lead to the placing of reason above revelation.

He seemed surer, though, of his thesis that current approaches to the Islamisation of knowledge in Muslim societies tended to place a preponderance of focus on the social sciences, whereas he said it was in the technological and scientific disciplines that Muslims were lagging behind non-Muslim communities and where the quest for knowledge, therefore, needed greater emphasis.

Anwar reminded that the ‘Bayt-a-Hikmahof’ (Golden Age of Islam) gave birth to not only philosophers but also to eminent scientists. He attributed this to the holistic pursuit of knowledge that he credited to the Quranic injunction on the use of the intellectual faculty.

He said the “Quran enjoins the use of reason as provided by the senses, and the truth grounded on revelation”. He concurred with Faruqi that Islam was ‘the religion of world-affirmation par excellence’.”

Book Review: ‘To the Letter,’ by Simon Garfield

December 1, 2013


Kind Regards

‘To the Letter,’ by Simon Garfield

by Carmela Ciuraru (11-29-13)

Once there were letters: handwritten, typewritten, carefully crafted, dashed off, profound or mundane, tinged with expectancy. Correspondence required waiting. “I need you more and more, and the great world grows wider, and dear ones fewer and fewer, every day that you stay away,” Emily Dickinson wrote to her future sister-in-law, Susan Gilbert, in 1852. Were they alive today, would Dickinson and Gilbert merely G-chat?

on the map simon garfieldSimon Garfield (above) might think so. His latest book, “To the Letter,” is a nostalgic and fretful look at the “lost art” of letter writing. “A world without letters would surely be a world without oxygen,” he declares, noting that his book confronts this possibility. It’s tempting to laugh nervously and say, “Why so ominous?” But then again, OMG, maybe he’s got a point. A certain artfulness has surely been lost as emoticons and Snapchats take over as modes of expression.

For the most part, Garfield — a British journalist whose previous books include studies of fonts and mapmaking — steers clear of contrasting the virtues of pen and paper with the sins of email and text messages. But sometimes he can’t help himself. He writes, for instance, that emails are “a poke,” and letters “a caress.” A strange analogy, to be sure, and anyone who has agonized over a lengthy, emotional email to a friend, lover or family member might disagree.

He also claims that the last letter “will appear in our lifetime,” and that we will not notice the passing of this final missive until it’s too late — “like the last hair to whiten, or the last lovemaking.” Such weird rhetorical turns are, thankfully, few and far between.

‘To the Letter,’ by Simon GarfieldGarfield’s book is stuffed with marvelous anecdotes, fascinating historical tidbits and excerpts from epistolary masters both ancient (Cicero, Seneca) and modern (Woolf, Hemingway). By the late 19th century, the “letter-writing manual” had itself become a thriving literary genre. Lewis Carroll contributed some prescriptive advice in the booklet “Eight or Nine Wise Words About Letter-Writing”: “If your correspondent makes a severe remark, either ignore it or soften your response; if your friend is friendly, make your reply ever friendlier.”

It’s wonderful to learn about the iPads of ancient Rome — thin wooden writing tablets sliced from alder, birch and oak — and to stumble on this delightful closing phrase of a letter dating to the third century A.D.: “Remember my pigeons.” Or to encounter an exasperated Erasmus, chiding his brother for not having written back: “I believe it would be easier to get blood from a stone than coax a letter out of you!”

The letters of Marcus Aurelius reveal not a would-be Roman emperor but a lovesick youth pining for his teacher. “I am dying so for love of you,” Aurelius writes, to which his tutor replies, “You have made me dazed and thunder­struck by your burning love.”

Throughout, Garfield uncovers start­ling examples of lust (“I think of your breasts more than is good for me,” a British soldier writes to his sweetheart), intimacy and suffering. Some of the most poignant letters expose the private anguish of writers and poets. The correspondence between Leonard Woolf and Vita Sackville-­West, in the aftermath of Virginia Woolf’s suicide, is devastating for what cannot be expressed.

Despite Garfield’s alarmist stance, it seems premature to assume that letters will go the way of the woolly mammoth. After all, the death knell has been sounded since at least the invention of the telephone. In any case, his epistolary ardor proves infectious, as he reminds us of the pleasures of composing letters without password protection or “send” buttons, those secured in dusty bureaus rather than “in the cloud.”

One of the letter’s strongest defenses comes from Katherine Mansfield, who in a tender note to a friend conveys beautifully, and succinctly, what the form at its best can achieve. “This is not a letter,” she writes, “but my arms around you for a brief moment.”

Carmela Ciuraru is the author of “Nom de Plume: A (Secret) History of Pseudonyms.”

The Economics of John Kenneth Galbraith

November 29, 2013

kevin-kim-s-glog-john-kenneth-galbraith--sourceJohn Kenneth Galbraith

stephen_dunn1I am halfway through Steven P. Dunn’s book, The Economics of John Kenneth Galbraith: Introduction, Persuasion and Rehabilitation (Cambridge; Cambridge University Press, 2011). It is an excellent book on this much maligned economist, whose books like The Industrial State, The Affluent Society, American Capitalism:The Concept of Countervaling Power, The Great Crash, 1929, Economics and The Public Purpose, among others, are classics.

I recommend Dunn’s book to those who seek to understand Economics as a social science and JKG’s criticism of  “imitative science” (economics is not physics!). And here is why.–Din Merican

The Economics of John Kenneth Galbraith

Cambridge University Press

9780521518765 – The Economics of John Kenneth Galbraith – Introduction, Persuasion, and Rehabilitation – By Stephen P. Dunn


Though economic analysis and general reasoning are of wide application … every change in social conditions is likely to require a new development of economic doctrines.

Alfred Marshall (1920: 37)

If there were justice in the world, John Kenneth Galbraith would rank as the twentieth century’s most influential American economist. He has published several books that are among the best analyses of modern US history, played a key role in midcentury policymaking, and advised more presidents and senators than would seem possible in three lifetimes. Yet today, Galbraith’s influence on economics is small, and his influence on US politics is receding by the year.

J. Bradford DeLong (2005: 126)

Stephen P. Dunn on JKGIn the tributes and obituaries that followed John Kenneth (Ken) Galbraith’s death on April 29, 2006, much was made of his long and varied career, as well as his closeness to power. John Kenneth Galbraith was a distinguished Harvard economist, an accomplished diplomat, a political activist, a confidant and adviser to presidents, a memoirist and novelist, and one of the best-selling economic writers of his time. The conventional reflection noted his colorful life, celebrated his mordant wit and prose, yet generally castigated his theorizing as being obsolete. This is a major travesty. Galbraith was one of the leading progressive intellectuals of the post-World War II period who, though part of the establishment, was happy to point out its self-serving interests and convenient myths.1 But he was more than just a gadfly. He was an original theorist whose contributions are now so widely assimilated that their lasting force is easily overlooked.

Indeed, in the days and months that followed his death, and for a long time before, little serious reflection has been given to Galbraith’s enduring contributions to economic theorizing. Nobel prize-winner Paul Krugman’s (1994: 13–14) comments in Peddling Prosperity perhaps capture the standard mainstream assessment of Galbraith:

Although Galbraith is a Harvard economics professor … he has never been taken seriously by his academic colleagues, who regard him as more of a “media personality”. The contrast between public and professional perception became particularly acute in 1967, when Galbraith made a grand statement of his ideas about economics in The New Industrial State, a book that he hoped would come to be regarded as being in the same league as John Maynard Keynes’s General Theory or even Adam Smith’s Wealth of Nations. The book was rapturously reviewed in the popular press, but it met with indifference from the academics. Galbraith’s book wasn’t what they considered real economic theory. Not incidentally, the academics were right in believing that The New Industrial State could be safely ignored.

What is remarkable about such comments, however, is that Paul Krugman2Krugman himself seems to be evolving into a Galbraithian. Over the last twenty years, Krugman has increasingly moved into the space once occupied by Galbraith.2 In Peddling Prosperity, for example, Krugman (1994) attacked “supply siders” and “strategic traders.” In The Return of Depression Economics, Krugman (2008c) heralded the return of Keynesianism. In The Conscience of a Liberal, Krugman (2007) argued that “movement conservatism” has defended and driven inequality, exploiting cultural and racial divisions to its advantage. And throughout he has attacked the misleading fictions promulgated by textbook economics.

This is a conscience that Galbraith would have applauded. Over the course of his major trilogy – The Affluent Society (1958a), The New Industrial State (1967a), and Economics and the Public Purpose (1973a) – Galbraith developed a system of thought that attempted to shed light on many contemporary concerns such as: the overproduction of private goods and the underproduction of public goods; the increasingly superfluous nature of much technical innovation directed at socially irrelevant commodities; the failure of economic growth to ameliorate enduring social problems; the uneven distribution of government expenditure, reflected in excessive spending on the military and other forms of social infrastructure, e.g. roads, to the relative neglect of others, e.g. parks, cultural activities, environmental protection, mass transit, and public housing, which are all public goods whose very legitimacy is hotly disputed; the increasingly skewed income distribution between different sectors and personnel; the enduring distinction between the high-wage and low-wage industries; the unresponsiveness of the modern corporation, governments and international institutions to public pressure and opinion; the problems of economy-wide coordination; and the continuing fear of inflation as opposed to deflation. Many of these concerns remain pressing today.

Indeed Krugman’s discussion of contemporary issues in his New York Times column increasingly echoes Galbraith’s analysis of the new industrial state (Duhs, 2008). Krugman’s analysis of contemporary events is increasingly Galbraithian in orientation, concentrating on the major anxieties of our time. Krugman, like Galbraith before him, increasingly focuses on the divergence between the interests of the conservative and corporate elite and the wider public interest in his analysis of: the soaring wealth of the rich and rise of inequality; the bias of the tax system toward the affluent; the rise in obesity and the role of the large food corporation in promoting the consumption of high-fat, energy-dense foods; the need for the good society to deliver a universal health insurance model; the manipulation by oil and automobile companies of governments and popular opinion, obfuscating understanding and limiting global response to the threat of climate change; Enron and their fabrication of the 2001 Californian energy crisis; Iraq, Halliburton, and the cozy relationship between the military industrial complex; the obsession with increased growth at the expense of happiness; and the cronyism of the Bush administration. All are anxieties similar to ones that Galbraith analyzed. What is more all can be explained by Galbraith’s theoretical framework.

Stigler, Friedman and JGKStigler, Friedman and JKG

Nevertheless, in the conventional wisdom, the assessment continues to be that Galbraith’s analysis, as exemplified by The New Industrial State, has not come to pass. It was either wrong in its time (Solow, 1967; Gordon, 1968, 1969; Demsetz, 1974; Friedman, 1977) or it is wrong for our times (Krugman, 1994, 2008c; McCloskey, 2007). Either way, The New Industrial State has been eclipsed and Galbraith must therefore be unceremoniously consigned to the dustbin of history.

A journey through economic time

The standard view is that Galbraith painted a picture of an autonomous bureaucracy that manipulated consumers and society, unfettered by either competition or shareholders. This view has since been eclipsed by the return of the market. Paul Krugman, for example, has suggested that the academics who rejected The New Industrial State were right, arguing that:

History has not treated the book kindly. Galbraith began it in self-conscious imitation of Adam Smith’s memorable description of a pin factory, with an account of the 1964 launch of the Ford Mustang. Starting from that example, he argued that technology was pushing us inevitably into an age of ever greater dominance by giant corporations. These corporations would be able, through market research and advertising, to predict and indeed control demand for their products; they would be run by technocratic managers who would be increasingly independent of the stockholders who nominally owned the companies. And like the automobile companies, they would be virtually immune to the vagaries of market forces.

Need it be pointed out that none of this was remotely on target? The role of giant corporations in the US Economy has been shrinking, not rising, for the past two decades, with the great bulk of the job growth among smaller firms. Many of our biggest companies – from Sears to IBM – have been spectacularly unable to get consumers to buy their wares. Those supposedly autonomous managers, far from being able to ignore stockholders, now live in terror of buyouts from investors willing to promise stockholders a higher return. And nobody, least of all the auto companies, has been insulated from the market. (Krugman, 1994: 13)3

Galbraith’s economist son, James Galbraith (right) (2008a: 115),james-galbraith2 also appears to agree with this assessment: “When my father published The New Industrial State in 1967, the great industrial enterprise seemed a stable, even permanent, and largely self-stabilizing element of the postwar American scene … But the system of large organizations as my father described it was far less stable than it seemed. Already in the 1970s, it began to suffer the intrusion, on its home markets, of a competing system: the rising industrial colossus of Japan.” In one sense both Krugman and James Galbraith are right. The unchanging dominance of the large firm projected in The New Industrial State does appear to have been challenged by the information revolution and the emergence of new large and growing firms such as Wal-Mart, Samsung, Toyota, Honda, Nissan, Sony, Google, Vodafone, Apple, and Microsoft, to name but a few.4

This assessment also appears to have been accepted by Galbraith himself. In the fourth edition of The New Industrial State, he conceded that he “did not see the development of the foreign, most notably the Japanese, competition to which [the corporation] would be subject … No one can doubt that in our older industries this competition has substantially impaired the certainty and effectiveness of the planning process” (Galbraith, 1967a: xxxi–xxxii). Similarly, in an important symposium in the American Economic Review on “The New Industrial State after twenty years,” Galbraith (1988: 375) remarked that: “There have also been some important microeconomic developments that I did not foresee. In 1967, my view was, in some measure, of a closed American-dominated corporate structure extending its reach internationally by way of American multinational or transnational enterprises. I did not foresee the invasive thrust into this structure by Japan and other countries. This, to put it mildly, has introduced a new element, substantially beyond the influence and control of the firms of the corporate or planning system.”

This seems to suggest that Galbraith must be appraised in his time and that his analysis is irrelevant for our times. Indeed James Galbraith argues that his father’s analysis represents an analysis of the postwar world of that time and should be considered on those terms:

my father’s vision of an economy dominated by large national corporations as of 1967 was not an error. The mid-century was as he said it was. Nor was it a glance at an interlude between two eras when free markets actually prevailed. It was instead the portrait of a way-station, a stage in the evolution of the world business system. The postwar dominance of the large American industrial corporation counterbalanced by government and organized labor was a fact … It was simply not a permanent fact … What some interpreted as showing up the failings of a book is more fairly seen as a process of fundamental change, of evolution and of decay, and especially the redistribution of the power in the industrial system itself. (James Galbraith, 2008a: 117)5

The facts, however, are not as clear-cut as Krugman and others would lead us to believe. Technology, the coping stone of The New Industrial State, is even more important today than in the midcentury. It is one of the decisive factors in national success. This is why another famous Harvard professor, Michael Porter (1990: 638), acknowledges that: “The quality of human resources must be steadily rising if a nation’s economy is to upgrade.” And it is clear that the large firms that are largely responsible for the research and development that drives technological development no longer dominate national economies, but instead now straddle the global economy (Porter, 1990; James Galbraith, 1998).

JGK and KittyJohn Kenneth Galbraith and Kitty

General Electric, BP, Toyota, Shell, Exxon Mobil, Ford, Volkswagen, Chevron, Siemens, Nestlé, BMW, IBM, Pfizer, Johnson & Johnson, and Proctor and Gamble continue to dominate the world stage. Large firms that continue to dominate the motor, oil, food, pharmaceutical, electrical, and telecommunications industries, controlling major flows in trade and production – something we discuss below in chapters 7, 8, and 11 below. Similarly those industries that have delivered strong economic performance and investment over time – the computer, chemical, aircraft, missile, pharmaceutical, photo, and electronics industries – are also the most technologically advanced and invariably supported by state spending (James Galbraith, 1998: 117–32). Of course the wider financial turbulence of the world economy makes the position of large firms more precarious. But there is no doubt that the dominance of large firms continues to characterize modern economies. This at least deserves further reflection.

As we shall see, the emergence of what is referred to as “global competition,” can also be reinterpreted through the lens of American Capitalism, The New Industrial State, and Economics and the Public Purpose. Although many commentators and economists argue that the massive increase in global merger and acquisition activity reaffirms the ascendancy of the market, it also exemplifies the changed nature and dynamics of competition in modern economy that Galbraith identified. Competition in the modern economy has been transformed from price competition into other forms of competition such as advertising, mergers and acquisitions, product innovation, as well as the development of new sources of countervailing power. For Galbraith the competition which characterizes the modern economy is markedly distinct from the “perfect” competition depicted and predicted by the conventional wisdom.

Galbraith’s analysis of the firms’ focus on growth more than ever characterizes the competitive process and the modern economy, as exemplified by the exponential rise in the numbers of mergers and acquisitions (see chapters 7, 8, and 11 below). And much of the talk of global competition also reflects the emergence of new corporate sources of countervailing power. Much of global competition has been driven by the consolidation of the “buy-side” of various global markets, as exemplified by the rise and rise of the retail power of Wal-Mart (see Reich, 2009). This reflects Galbraith’s (1952a: 119) thesis in American Capitalism that “in the typical modern market of a few sellers, the active restraint is provided not by competitors but from the other side of the market by strong buyers.”

What is more, although we have undoubtedly witnessed a rise in the number of small firms over the 1980s and 1990s, this should not be interpreted uncritically as reflecting the increased intensity of global competition. The outsourcing of production, which has reinforced the dominance and position of the large firms that span the global economy, has driven much of this trend. As I highlight below, one of the implications of Galbraith’s approach to the firm is that it encompasses subcontracting and market relationships, as well as internal operations that are more clearly under the control of the large corporation (Cowling and Sugden, 1998a, 1998b, 1999; Dunn, 2001a, 2001c, 2008a). Consistent with Galbraith’s (1973a) bimodal view of the modern economy, the planning system continues to dominate and exploit the market system, at home and abroad (see chapters 5, 7 and 8 below).

This means that focusing on the traditional boundaries of the firm, relying on conventional measures of concentration, results in an under-appreciation of the power and influence of the modern technostructure. By narrowly focusing on the rise in the number of small firms, we overlook the actual increase in scope of the large firm’s influence and power. We underestimate both the extent of its control of production and the subsequent degree of concentration and influence of the multinational enterprise (Cowling and Sugden, 1998b; Cowling, Yusof, and Vernon, 2000; Cowling and Tomlinson, 2005; Granovetter, 1998; Klein, 1999). As Reich (2009: 216) remarks, this “is especially true under supercapitalism, when companies are quickly morphing into global supply chains.” Domestic and overseas outsourcing, which in the conventional wisdom is interpreted as a response to global competition, that is reducing the scope and influence of the firm, can instead be viewed as consolidating the power of the technostructure. The subcontracting relationships of the large, brand-managing firm consolidate its global power and reach (cf. Klein, 1999).

Similarly the rise of Japanese and Asian competition, of the rise of Toyota, Honda, Nissan, Mitsui, Mitsubishi, Sony, and Hitachi, can be also viewed as consistent with Galbraith’s (1967a) thesis in The New Industrial State, even if this was something that he did not himself recognize.6 Cowling and Tomlinson (2000), for example, note that the entrance of large Japanese firms onto the Global Stage reflected their productive and technological virtuosity, as well as the state support provided to them by the Ministry of International Trade and Industry (MITI).7 The modern Japanese corporation led to the emergence of a new affluent Japanese society which, towards the end of the postwar period, was approaching saturation point for its products in its domestic economy. It therefore required new outlets to buy its products (cf. Galbraith, 1973a: 180–91). As Cowling and Tomlinson (2000: F367) record: “Initially, surplus production could be satisfied through exporting to Western markets, a policy that resulted in consistently large trade surpluses. However, the threat of retaliatory trade barriers, especially from the United-States, threatened future export growth and, in response, the larger Japanese firms considered the transnational option.”8 This is consistent with Galbraith’s (1973a) analysis of the transnational firm, considered in Economics and the Public Purpose – something we explore in chapter 8 below. What is more, it is important to note that such a Galbraithian analysis of the emergence of Japanese competition does not rest on the view that Japanese capitalism was a new and superior brand, but rather argues that it reflects the dynamics of the modern firm predicted by the New Industrial State.9

The large firms that characterize the planning sector of the economy also continue to spend vast sums on advertising and lobbying, which has become increasingly sophisticated and targeted at eliciting the required consumer and legislative response (Packard, 1957; Gunter and Furnham, 1992; Hawkins, Best, and Coney, 1998; Heath, 1995, 1996; Weinstein, 1994; Dawson, 2003). This process has never been perfect, nor is it determinate, as Galbraith himself acknowledged. But, notwithstanding such imprecision, there is now an increasing recognition that the tobacco, pharmaceutical, oil, automobile, and food industries seek to manipulate public policy and the consumer in a manner that is consistent with Galbraith’s hypothesis (Anderson and Dunn, 2006; David, 2006; Monbiot, 2000, 2006, 2007; Krugman, 2005a, 2005c; Sample, 2007; Stiglitz, 2006; Klein, 1999; Glantz et al. 1996; Shamasunder and Bero, 2002; Moynihan, 2003a; Moynihan et al., 2002; Angell, 2004; Avorn, 2004; Goozner, 2004; Greider, 2003; Abramson, 2004; Moynihan and Cassells, 2005; Petersen, 2008; Lang and Heasman, 2004; Patel, 2008; Mayo and Nairn, 2009). Similarly there have been renewed attempts at testing Galbraith’s thesis. Lamdin (2008), for example, presents an important econometric analysis that shows that, consistent with the Galbraithian thesis, advertising and credit both have economically and statistically significant positive influences on consumption. I explore these issues below in chapters 7, 8, 9, and 11.

galbraith1and Medal of FreedomJKG and Medal of Freedom

Finally it is far from clear that the modern firm is now effectively policed by investors and stockholders alike (Stiglitz, 2003; Bebchuk and Fried, 2004). The widely acknowledged explosion in chief executives pay – something we examine below – raises urgent questions regarding the ability of financial markets and their associated institutions to provide effective governance and oversight of the modern firm – be they banks, energy companies, or large motor companies. This is part of what Galbraith (2004: 27) referred to as “innocent” fraud:

This fraud has accepted ceremonial aspects: one is a board of directors selected by management, fully subordinate to management but heard as the voice of the shareholders. It includes men and the necessary presence of one or two women who need only a passing knowledge of the enterprise; with rare exceptions, they are reliably acquiescent. Given a fee and some food, the directors are routinely informed by management on what has been decided or is already known. Approval is assumed, including for management compensation – compensation set by management for itself. This, not surprisingly, can be munificent … Legal self-enrichment in the millions of dollars is a common feature of modern corporate government. This is not surprising; managers set their own compensation.

What is more, the accepted practice of linking CEO pay to stock market valuations as opposed to underlying corporate cash flow – to the strength of the underlying business – can drive more serious failures in corporate governance (Bebchuk and Fried, 2004). Stock prices, which are driven by sentiment, convention, and “irrational exuberance,” can be inflated and manipulated by “serious” fraud (Forelle and Bandler, 2006). The collapse of Enron and the wrongdoing of WorldCom, Qwest, Tyco, and Xerox provide prima facie evidence of the inability of modern financial systems to police effectively large and complex corporations. As James Galbraith (2008a: 124) highlights:

What they exposed was the complete incapacity of the financial markets to oversee from the outside the inner workings of a complex financial structure. In every case – Enron, Tyco, WorldCom, and the others – financial market pressures encouraged fraud … Each such collapse was initially rewarded, not punished, by the financial markets. In no case did the financial markets detect the fraud. Quite to the contrary, the markets converted the fraudulent enterprise into a performance standard by which other corporations in the same field were to be judged. Nor did any large accounting or auditing firm blow the whistle; again to the contrary, all the major frauds had their books cleared by reputable accountants. Nor did the ratings agencies, then or later, intervene.

Such “serious” frauds raise important questions about shareholders’ ability to prevent managers in “their” corporation from pursuing dubious and illegal strategies. And although recent moves have been taken to improve accounting honesty, increase surveillance and strengthen regulation, the recent sub-prime meltdown and global economic crisis point to the continuing difficulties in effectively policing the modern corporation.10 The technostructure of the financial services industry appears to have run amok with little effective oversight from boards, banks, regulators, or governments alike. Such considerations reinforce Galbraith’s insight that the complexities of modern technologies and firms make it extremely difficult to monitor the activities of the modern army of managers, technical specialists, lawyers, accountants, public relations professionals, and marketing managers, as long as an acceptable level of earnings is posted and projected to the wider financial community (cf. Williamson, 2008).11 Modern management is not insulated from the wider financial system. But it not effectively policed by it either. This much is clear. And it must be acknowledged as such.12

© Cambridge University Press

Kennedy, the Elusive President

November 24, 2013

Kennedy, the Elusive President

by Jill Abramson* (10-22-13)

*Jill Abramson is the executive editor of The Times.

…John F. Kennedy remains all but impossible to pin down. One reason is that his martyrdom — for a generation of Americans still the most traumatic public event of their lives, 9/11 notwithstanding — has obscured much about the man and his accomplishments.

JFKThe 35th President of USA

Was Kennedy a great president, as many continue to think? Or was he a reckless and charming lightweight or, worse still, the first of our celebrities-in-chief? To what extent do his numerous personal failings, barely reported during his lifetime but amply documented since, overshadow or undermine his policy achievements? And what of those achievements — in civil rights and poverty, to name two issues his administration embraced. Weren’t the breakthroughs actually the doing of his successor, Lyndon B. Johnson?

Even the basic facts of Kennedy’s death are still subject to heated argument. The historical consensus seems to have settled on Lee Harvey Oswald as the lone assassin, but conspiracy speculation abounds — involving Johnson, the C.I.A., the mob, Fidel Castro or a baroque combination of all of them. Many of the theories have been circulating for decades and have now found new life on the Internet, in Web sites febrile with unfiltered and at times unhinged musings.

Of course the Kennedy fixation is hardly limited to the digital world. An estimated 40,000 books about him have been published since his death, and this anniversary year has loosed another vast outpouring. Yet to explore the enormous literature is to be struck not by what’s there but by what’s missing. Readers can choose from many books but surprisingly few good ones, and not one really outstanding one.

It is a curious state of affairs, and some of the nation’s leading historians wonder about it. “There is such fascination in the country about the anniversary, but there is no great book about Kennedy,” Robert Caro lamented when I spoke to him not long ago. The situation is all the stranger, he added, since Kennedy’s life and death form “one of the great American stories.” Caro should know. His epic life of Johnson (four volumes and counting) brilliantly captures parts of the Kennedy saga, especially the assassination in Dallas, revisited in the latest installment, “The Passage of Power.”

Robert Dallek, the author of “An Unfinished Life,” probably the best single-volume Kennedy biography, suggests that the cultish atmosphere surrounding, and perhaps smothering, the actual man may be the reason for the deficit of good writing about him. “The mass audience has turned Kennedy into a celebrity, so historians are not really impressed by him,” Dallek told me.

“Historians see him more as a celebrity who didn’t accomplish very much.” Dallek also pointed to a second inhibiting factor, the commercial pressure authors feel to come up with sensational new material. His own book, as it happens, included a good deal of fresh information on Kennedy’s severe health problems and their cover-up by those closest to him. And yet Dallek is careful not to let these revelations overwhelm the larger story.

Dallek is also good on the fairy-tale aspects of the Kennedy family history, and he closely examines the workings of the Kennedy White House. So enthralled was he by this last topic that he has written a follow-up, “Camelot’s Court,” which profiles members of Kennedy’s famous brain trust and is being released for the 50th anniversary. This time, however, it is Dallek who doesn’t offer much fresh material.

This in turn raises another question: How much is left to say about Kennedy’s presidency? The signature legislative accomplishments he and his advisers envisioned were not enacted until after his death. Then there is the Vietnam conundrum. Some maintain that Kennedy would not have escalated the war as Johnson did. But the belief that he would have limited the American presence in Vietnam is rooted as much in the romance of “what might have been” as in the documented record.

Indeed, a dolorous mood of “what might have been” hangs over a good deal of writing about Kennedy. Arriving in time for November. 22 is the loathsomely titled “If Kennedy Lived. The First and Second Terms of President John F. Kennedy: An Alternate History,” by the television commentator Jeff Greenfield, who imagines a completed first Kennedy term and then a second. This isn’t new territory for Greenfield, who worked for Kennedy’s brother Robert and is the author of a previous book of presidential “what ifs” called “Then Everything Changed.” (Dallek’s “Camelot’s Court” and Greenfield’s “If Kennedy Lived” are reviewed here.)

Thurston Clarke, the author of two previous and quite serviceable books on the Kennedys, also dwells on fanciful “what might have beens” in “JFK’s Last Hundred Days,” suggesting that the death of the presidential couple’s last child, Patrick, brought the grieving parents closer together and may have signaled the end of Kennedy’s compulsive womanizing.

What’s more, Clarke makes a giant (and dubious) leap about Kennedy as leader, arguing that in the final 100 days he was becoming a great president. One example, according to Clarke, was his persuading the conservative Republicans Charles Halleck, the House minority leader, and Everett Dirksen, the Senate minority leader, to support a civil rights bill. Once re-elected, Kennedy would have pushed the bill through Congress.

Kennedy as Arthurian hero is also a feature of what has been called “pundit lit” by the historian and journalist David Greenberg. The purpose of this genre (books by writers who themselves are famous) is, in Greenberg’s words, “to extend their authors’ brands — to make money, to be sure, and to express some set of ideas, however vague, but mainly to keep their celebrity creators in the media spotlight.”

The champion in this growing field is Bill O’Reilly, who has milked the Kennedy assassination with unique efficiency. O’Reilly’s latest contribution, “Kennedy’s Last Days,” is an illustrated recycling, for children, of his mega-best seller “Killing Kennedy.” This new version, it must be said, distinctly improves on the original, whose choppy sentences, many written in the present tense, lose nothing when recast for younger readers. “He is on a collision course with evil,” O’Reilly declares.

No less elevated is his discussion of Kennedy’s decision to visit Dallas despite warnings of roiling violence, including the physical assault on his United Nations ambassador, Adlai Stevenson, who had given a speech in the city in October 1963. “J.F.K. has decided to visit Big D,” O’Reilly writes. “There is no backing down.” Happily, the wooden prose is offset by the many illustrations. My favorite is a spread on the first family’s pets, including puppies and a pony.

Bad books by celebrity authors shouldn’t surprise us, even when the subject is an American president. The true mystery in Kennedy’s case is why, 50 years after his death, highly accomplished writers seem unable to fix him on the page.

For some, the trouble has been idolatry. Arthur Schlesinger Jr., who wrote three magisterial volumes on Franklin Roosevelt and the New Deal, attempted a similar history in “A Thousand Days: John F. Kennedy in the White House.” Published in 1965, it has the virtues of immediacy, since Schlesinger, Kennedy’s Harvard contemporary, had been on the White House staff, brought in as court historian. He witnessed many of the events he describes. But in his admiration for Kennedy, he became a chief architect of the Camelot myth and so failed, in the end, to give a persuasive account of the actual presidency.

In 1993, the political journalist Richard Reeves did better. “President Kennedy: Profile of Power” is a minutely detailed chronicle of the Kennedy White House. As a primer on Kennedy’s decision-making, like his handling of the Bay of Pigs invasion and the Cuban missile crisis, the book is fascinating.

What’s missing is a picture of Kennedy’s personal life, though Reeves includes a passing mention of Marilyn Monroe being sewn into the $5,000 flesh-colored, skintight dress she wore to celebrate the president’s birthday at Madison Square Garden in 1962. (This is the place to note that Reeves edited “The Kennedy Years,” The New York Times’s own addition to the ever-­expanding Kennedy cosmos, and I wrote the foreword.)

Balancing out, or warring with, the Kennedy claque are the Kennedy haters, like Seymour M. Hersh and Garry Wills. In “The Dark Side of Camelot,” Hersh wildly posits connections between the Kennedys and the mob, while Wills, though he offers any number of brilliant insights into Kennedy and his circle of courtiers, fixates on the Kennedy brothers’ (and father’s) sexual escapades in “The Kennedy Imprisonment.”

The sum total of this oddly polarized literature is a kind of void. Other presidents, good and bad, have been served well by biographers and historians. We have first-rate books on Jefferson, on Lincoln, on Wilson, on both Roosevelts. Even unloved presidents have received major books: Johnson (Caro) and Richard Nixon (Wills, among others). Kennedy, the odd man out, still seeks his true biographer.

Why is this the case? One reason is that even during his lifetime, Kennedy defeated or outwitted the most powerfully analytic and intuitive minds.

In 1960, Esquire magazine commissioned Norman Mailer’s first major piece of political journalism, asking him to report on the Democratic National Convention in Los Angeles that nominated Kennedy. Mailer’s long virtuoso article, “Superman Comes to the Supermarket,” came as close as any book or essay ever has to capturing Kennedy’s essence, though that essence, Mailer candidly acknowledged, was enigmatic.

Here was a 43-year-old man whose irony and grace were keyed to the national temper in 1960. Kennedy’s presence, youthful and light, was at once soothing and disruptive, with a touch of brusqueness. He carried himself “with a cool grace which seemed indifferent to applause, his manner somehow similar to the poise of a fine boxer, quick with his hands, neat in his timing, and two feet away from his corner when the bell ended the round.” Finally, however, “there was an elusive detachment to everything he did. One did not have the feeling of a man present in the room with all his weight and all his mind.”

Mailer himself doesn’t know “whether to value this elusiveness, or to beware of it. One could be witnessing the fortitude of a superior sensitivity or the detachment of a man who was not quite real to himself.”

And yet Kennedy’s unreality, in Mailer’s view, may have answered the particular craving of a particular historical moment. “It was a hero America needed, a hero central to his time, a man whose personality might suggest contradiction and mysteries which could reach into the alienated circuits of the underground, because only a hero can capture the secret imagination of a people, and so be good for the vitality of his nation.” Those words seemed to prophesy the Kennedy mystique that was to come, reinforced by the whisker-thin victory over Nixon in the general election, by the romantic excitements of Camelot and then by the horror of Dallas.

Fifty years later we are still sifting through the facts of the assassination. The Warren Commission concluded in 1964 that Kennedy had been killed by a lone gunman, Lee Harvey Oswald. Edward Jay Epstein and Mark Lane were among the first writers to challenge that finding, and their skepticism loosed a tide of investigations. The 50th anniversary has washed in some new ones. Among the more ambitious is “A Cruel and Shocking Act: The Secret History of the Kennedy Assassination,” a work of more than 500 pages. Its author, Philip Shenon, a former New York Times reporter, uncovered a new lead, in the person of a heretofore overlooked woman who may have had suspicious ties to the assassin. But when Shenon finds the woman, now in her 70s, in Mexico, she denies having had a relationship with Oswald, and Shenon’s encounters with her prove more mysterious than illuminating.

Kennedy’s murder was bound to attract novelists, and some have approached the subject inventively, if with strange results. Stephen King’s “11/22/63,” a best seller published in 2011, takes the form of a time-travel romp involving a high school English teacher who finds romance in Texas while keeping tabs on Oswald. At more than 800 pages, the novel demands a commitment that exceeds its entertainment value.

I rather like Mailer’s “Oswald’s Tale,” published in 1995. It is, like his earlier masterpiece “The Executioner’s Song,” a work of “faction,” which is Mailer’s term for his hybrid of documented fact and novelistic elaboration. Mailer and his colleague, Lawrence Schiller, spent six months in Russia examining Oswald’s K.G.B. files, and the huge quasi novel that came out of it contains a good deal of engrossing material about Oswald and his Russian wife, Marina, as well as the odd assortment of people the couple mixed with in Texas. Mailer’s narrative skills are prodigious, but in the end he has little to tell us that wasn’t already uncovered by Priscilla Johnson McMillan in “Marina and Lee,” her nonfiction portrait of the troubled couple from 1977. (Mailer properly credits McMillan’s book.)

Most critics seem to think the outstanding example of Kennedy assassination fiction is “Libra,” Don DeLillo’s postmodern novel, published in 1988. The narrative is indeed taut and bracing. But the challenge DeLillo set for himself, to provide readers with “a way of thinking about the assassination without being constrained by half-facts or overwhelmed by possibilities, by the tide of speculation that widens with the years,” exceeds even his lavish gifts.

It is telling that DeLillo reverts to the shadowy realm of “half-facts.” Their persistence raises the question of just how many secrets remain, not only about Kennedy’s death but also about his life. And if there are secrets, who is guarding them, and why?

One clue has been furnished by the historian Nigel Hamilton, whose book “JFK: Reckless Youth,” published in 1992, was the first in a planned multivolume biography that promised to be a valuable addition to the current literature. (He has since dropped the project.) While the book was gossipy, especially on the subject of the young Kennedy’s sexual adventures, Hamilton also provided a vivid and lively account of Kennedy’s successful 1946 campaign for Congress. But when Hamilton began work on the next volumes, he said he came under a sustained barrage by Kennedy loyalists. “The family leaned upon well-known historians such as Arthur Schlesinger Jr. and Doris Goodwin to write protest letters to the press,” Hamilton wrote in 2011 in The Huffington Post. “I was warned that no Kennedy-era official or friend would be ‘allowed’ to speak to me for my proposed sequel.”

Kennedy may have enjoyed the company of writers, but the long history of secrecy and mythmaking has surely contributed to the paucity of good books. The Kennedys — especially Jackie and Bobby — were notoriously hard on authors whose books they didn’t like. And they enlisted Schlesinger, Theodore Sorensen and other intimates to act as a kind of history police, not only withholding primary materials but also bullying writers.

A prominent historian recently told me he was once warned by Schlesinger, with whom he had been friendly, that because he had invited Hamilton to a meeting of the American Historical Association he might himself be banished from the organization. In recent years, the protective seal seems to have loosened. The Kennedy family, including Edward Kennedy and his sister Jean Kennedy Smith, gave unfettered access to their father’s papers to David Nasaw, the author of “The Patriarch,” a well-received biography of Joseph P. Kennedy that appeared last year.

Caroline Kennedy has been even more open to the claims of history. She herself was involved in the publication of two books and the release of accompanying tapes. One of them, “Jacqueline Kennedy: Historic Conversations on Life With John F. Kennedy,” contains the transcripts of the first lady’s interviews about her husband with Schlesinger, conducted in 1964 but kept secret until 2011. They are revealing and mesmerizing. The other, “Listening In,” offers White House conversations captured in a secretly installed taping system in the Oval Office.

Since Kennedy controlled the device, these conversations are more guarded, but the book includes at least one memorable moment, when the president hilariously loses his temper over unflattering press about the $5,000 cost of Mrs. Kennedy’s hospital maternity suite — “Are they crazy up there? Now you know what that’s gonna do? Any congressman is going to get up and say, ‘Christ, if they can throw $5,000 away on this, let’s cut ’em another billion dollars.’ You just sank the Air Force budget!”

Jack and JackieThe most disturbing case of the family’s attempts to control history came early on, and it involved William Manchester, the historian chosen by the Kennedys a few weeks after the assassination to write the authorized account, “The Death of a President.” Manchester was selected because of a previous, and fawning, book he had written about Kennedy, “Portrait of a President.” (In a bizarre twist, this was one of the books Lee Harvey Oswald checked out of a New Orleans public library just months before the assassination.)

Manchester was given sole access to almost all the president’s men as well as to his widow and virtually every principal figure. (Lyndon Johnson submitted answers in writing through his staff.) It seemed the ideal arrangement — until Manchester presented a manuscript to the Kennedys.

In a gripping piece from his 1976 collection of essays, “Controversy,” Manchester described what happened next. First there were the many insertions and deletions made by various Kennedy minions, who applied so much pressure that Manchester became a nervous wreck. An especially low point came when Robert Kennedy hunted Manchester down in a New York hotel room and banged on the door, demanding to be let in to argue for still more changes.

Next, Jackie Kennedy, who had not bothered to read the manuscript, accepted the view of her factotums that many of its details, like the fact that she carried cigarettes in her purse, were too personal. Further angered by the $665,000 Manchester had received from Look magazine for serial rights, Mrs. Kennedy went to court to enjoin the author from publishing the book. Eventually, she settled out of court and finally read “The Death of a President” when it was published in 1967. She deemed it “fascinating.”

Nevertheless, the Kennedy family, which controlled publication rights to “The Death of a President,” allowed it to go out of print, and for a number of years copies could be found only online or at rummage sales. The good news, maybe the best, of the 50th anniversary is that Little, Brown has now reissued paperback and e-book editions.

It’s good news because, remarkably, and against all odds, Manchester (who died in 2004) wrote an extraordinary book. There are obvious defects. Predictably, he blares the trumpets of Camelot, and he has a weakness for melodrama. It’s hard to believe, even at the time of Kennedy’s murder, that to the world it was “as though the Axis powers had surrendered and Adolf Hitler and Franklin Roosevelt had died in the hours between noon and midafternoon in Washington of a single day in 1945.” But these excesses don’t really matter, thanks to Manchester’s vivid reporting, masterly narrative and authentically poetic touches.

It is in small, quiet scenes that Manchester’s chronicle accumulates its greatest force. When it is time for Dave Powers, the slain president’s aide and sidekick, to pick out the clothes Kennedy will wear to his grave, he selects from eight suits and four pairs of shoes brought out by Kennedy’s valet, George Thomas. Powers settles on a blue-gray suit, black shoes and “a blue tie with a slight pattern of light dots.”

An embroidered “JFK” on the white silk shirt is hidden from view. The valet remembered that Kennedy’s “dislike of flamboyant monograms had extended to handkerchiefs,” Manchester writes. The president “had carefully folded them so that the initials would not show, and Thomas did it for him now, slipping the handkerchief into his coat pocket.”

Of all that has been written and that will be read on this 50th anniversary, it is the last paragraphs of “The Death of a President” that deserve to stand out from everything else. Manchester describes viewing the bloodstained pink suit Jackie Kennedy wore on November. 22, 1963, which had since been stowed in a Georgetown attic:

Unknown to her, the clothes Mrs. Kennedy wore into the bright midday glare of Dallas lie in an attic not far from 3017 N Street. In Bethesda that night those closest to her had vowed that from the moment she shed them she should never see them again. She hasn’t. Yet they are still there, in one of two long brown paper cartons thrust between roof rafters. The first is marked “September 12, 1953,” the date of her marriage; it contains her wedding gown. The block-printed label on the other is “Worn by Jackie, November 22, 1963.”

Inside, neatly arranged, are the pink wool suit, the black shift, the low-heeled shoes and, wrapped in a white towel, the stockings. Were the box to be opened by an intruder from some land so remote that the name, the date and photographs of the ensemble had not been published and republished until they had been graven upon his memory, he might conclude that these were merely stylish garments which had passed out of fashion and which, because they were associated with some pleasant occasion, had not been discarded.

If the trespasser looked closer, however, he would be momentarily baffled. The memento of a happy time would be cleaned before storing. Obviously this costume has not been. There are ugly splotches along the front and hem of the skirt. The handbag’s leather and the inside of each shoe are caked dark red. And the stockings are quite odd.

Once the same substance streaked them in mad scribbly patterns, but time and the sheerness of the fabric have altered it. The rusty clots have flaked off; they lie in tiny brittle grains on the nap of the towel. Examining them closely, the intruder would see his error. This clothing, he would perceive, had not been kept out of sentiment. He would realize that it had been worn by a slender young woman who had met with some dreadful accident. He might ponder whether she had survived. He might even wonder who had been to blame.

Unfortunately, the tapes of Manchester’s two five-hour interviews with Jackie Kennedy, who seems to have regretted her frankness, remain under seal at the Kennedy Library until 2067. This is a final sadness for a reader sifting through these many books. Taken together, they tell us all too little about this president, now gone 50 years, who remains as elusive in death as he was in life.


A version of this article appears in print on October 27, 2013, on page BR1 of the Sunday Book Review with the headline: The Elusive President.


The State of Israel

November 23, 2013

NY TIMES: Sunday Book Review

The State of Israel
‘My Promised Land’ by Ari Shavit

by Leon Wieseltier (November 21, 2013)

Too much of the discourse on Israel is a doubting discourse. I do not mean that it is too critical: Sometimes it is, sometimes it isn’t. I mean that the state is too often judged for its viability or its validity, as if some fundamental acceptance of its reality is pending upon the resolution of its many problems with itself and with others.

'My Promised Land' by Ari ShavitAbout the severity of those problems there is no question, and some of them broach primary issues of politics and morality; but Israel’s problems are too often combined and promoted into a Problem, which has the effect of emptying the Jewish state of its actuality and consigning it to a historical provisionality, a permanent condition of controversy, from which it can be released only by furnishing various justifications and explanations.

In its early years Israel liked to think of itself as an experiment in the realization of various ideals and hopes, but really all societies, including Arab ones, are, in the matter of justice, experiments; and existence itself must never be regarded as an experiment, as if anybody has the authority to declare that the experiment has failed, and to try and do something about it. Israel is not a proposition, it is a country.

Its facticity is one of the great accomplishments of the Jews’ history and one of the great accomplishments of liberalism’s and socialism’s and nationalism’s histories, and it is not complacent or apologetic to say so. The problems are not going away. I cannot say the same about the sense of greatness.

It is one of the achievements of Ari Shavit’s important and powerful book to recover the feeling of Israel’s facticity and to revel in it, to restore the grandeur of the simple fact in full view of the complicated facts. “My Promised Land” startles in many ways, not least in its relative lack of interest in providing its readers with a handy politics.

Shavit, a columnist who serves on the editorial board of Haaretz, has an undoctrinaire mind. He comes not to praise or to blame, though along the way he does both, with erudition and with eloquence; he comes instead to observe and to reflect.

This is the least tendentious book about Israel I have ever read. It is a Zionist book unblinkered by Zionism. It is about the entirety of the Israeli experience. Shavit is immersed in all of the history of his country. While some of it offends him, none of it is alien to him. His extraordinary chapter on the charismatic and corrupt Aryeh Deri, and the rise of Sephardic religious politics in Israel, richly illustrates the reach of his understanding.

Nowhere is Shavit a stranger in his own land. The naturalness of his identity, the ease with which he travels among his own people, has the paradoxical effect of freeing him for a genuine confrontation with the contradictions and the crimes he discovers.

His straightforward honesty is itself evidence of the “normalization” to which the founders of Zionism aspired for the Jews in their homeland; but it nicely confounds their expectation that normality would bring only contentment. Anxiety, skepticism, fear and horror are also elements of a normal life.

Shavit begins Israel’s story at the beginning: with Zionism and its utopian projects of the late 19th and early 20th centuries. It has been a long time since I encountered a secular observer of Israeli society who is still so enchanted by the land and still so moved by the original visions of what could be established on it.

“Zionism’s mission,” as Shavit correctly describes it, was to rescue the Jews from destruction in exile; and he has too much dignity to entertain second thoughts about the appetite for life. “The need was real,” he writes. “The vision was impressive — ambitious but not mad. And the persistence was unique: For over a century, Zionism displayed extraordinary determination, imagination and innovation.” There is something almost wicked about such a full-throated love of country in a journalist so sophisticated — and about such a full-throated love of Israel.

But this is not a hollow or mendacious patriotism. There is love in “My Promised Land,” but there is no propaganda. Shavit knows how to express solidarity and criticism simultaneously. He proposes that Zionism was historically miraculous and he proposes that Zionism was historically culpable. “From the beginning, Zionism skated on thin ice”: There was another people living in the same land. “The miracle is based on denial,” he bluntly remarks. “Bulldozers razed Palestinian villages, warrants confiscated Palestinian land, laws revoked Palestinians’ citizenship and annulled their homeland.”

israelShavit’s narrative of the massacre and expulsion of the Arabs of Lydda by Israeli forces in the war of 1948 is a sickening tour de force, even if it is not, in his view, all one needs to know about the war or the country. “The choice is stark,” he unflinchingly declares: “Either reject Zionism because of Lydda, or accept Zionism along with Lydda.”

Shavit makes his choice. He does not reject Zionism, though he does not make excuses either. He condemns the perpetrators of the crimes, but he does not condemn the war for survival and self-­determination in which the crimes were committed: “If need be, I’ll stand by the damned. Because I know that if it wasn’t for them, the state of Israel would not have been born. . . . They did the dirty, filthy work that enables my people, myself, my daughter and my sons to live.” Is this shocking? Only to the innocent. The appeal to “tragedy” can be easily abused, but Shavit does not abuse it. He refuses to look past what he calls “the baser instincts of the Jewish national movement,” and there is no duplicity, no self-­forgiveness, in his honesty. “My Promised Land” abounds in anguish, and it has the unrelenting tone of a genuine reckoning.

Yet Shavit insists upon a high degree of moral complication. Even if “denial was a life-or-death imperative” in dire or inflamed circumstances — which nation-­state or national movement will cast the first stone? — denial must be brought to an end and the whole nasty tangle must be exposed. But the morally compromised nature of power must not confer moral glamour upon powerlessness. The problem of means and ends will not be solved by suicide. This is all very tricky.

The fact that liberty and sovereignty are often won with violence cannot justify anything that any state or any movement might do in the name of liberty and sovereignty. But surely there is also no justice in dying with clean hands instead of living with dirty hands. Palestinians should be able to understand this. Israelis should be able to understand this about Palestinians.

The author of “My Promised Land” is a dreamer with an addiction to reality. He holds out for affirmation without illusion. Shavit’s book is an extended test of his own capacity to maintain his principles in full view of the brutality that surrounds them. “For as long as I can remember, I remember fear,” his book begins. And a few pages later: “For as long as I can remember, I remember occupation.” I admire him for never desisting from this duality of “existential fear” and “moral outrage.”

No satisfactory account of the Israeli situation can be given without this double-mindedness, not least because the present-day debate about Israel consists largely of an argument between those who wish to ignore one of the terms and those who wish to ignore the other.

If the Palestinians cannot be adequately and respectfully grasped when they are regarded solely from the standpoint of the Israelis, the same is true of the Israelis when they are regarded solely from the standpoint of the Palestinians. I do not wish to leave the impression that “My Promised Land” is another book about Israel and the Palestinians. It holds much more.

Shavit treats the full plenitude of his country, its history, its culture, its religion, its politics. (I wish he had told more about its language: The creation of modern Hebrew is an even greater astonishment than the creation of modern Israel.)

In such a debate Shavit is splendidly unobliging — as, for example, in this comment about the Israeli-Palestinian peace process: “If Israel does not retreat from the West Bank, it will be politically and morally doomed, but if it does retreat, it might face an Iranian-backed and Islamic Brotherhood-inspired West Bank regime whose missiles could endanger Israel’s security.” It is a formulation that will be unhelpful for activists and diplomats and editorialists, but all of it is true.

Shavit chooses 16 dates in the annals of Zionism and Israel, from 1897 to 2013, and not the canonical dates, through which to tell the national story. He reports on ­places and people, he scours archives. In his hands the national story is also a personal story, not only because he traces the roles of family and friends at various turning points in the saga, but also because he is always checking and double-checking his own hold on his country’s realities.

Yet this is not, thankfully, a memoir; it is an inquiry enhanced by intimacy. Shavit explores his society with the thoroughness of a man who feels implicated in its fate, and he is unsparing about the fraying of the Israeli republic in recent years. “In less than 30 years,” he memorably observes, “Israel has experienced seven different internal revolts: the settlers’ revolt, the peace revolt, the liberal-judicial revolt, the Oriental revolt, the ultra-­Orthodox revolt, the hedonist-individualistic revolt and the Palestinian Israelis’ revolt.” He worries, perhaps a little excessively, that his country is coming apart: “This start-up nation must restart itself.”

There is certainly no extenuating the economic and socialIsraeli soldier inequalities he describes, or the utter derangement of the settlement policies in territories that Israel has an urgent and prudent interest in evacuating. But Shavit’s admonition that “the old discourse of duty and commitment was replaced by a new discourse of protest and hedonism,” his exhortation that “the immediate challenge is the challenge of regaining national potency,” is grimmer and more draconian than the spirited and capacious voice in which his book is otherwise written. And the rhetoric of “national potency” has unattractive associations. The turbulent and crackling place described in “My Promised Land” will not be healed by a rappel a l’ordre.

“What this nation has to offer,” Shavit concludes, “is not security or well-being or peace of mind. What it has to offer is the intensity of life on the edge.” The blessing of not being Luxembourg, then. It is a mixed blessing, to be sure — but what other kind of blessing is there? By the measure of the Jewish past, and by the measure of the Levantine present, mixed is quite a lot.

Leon Wieseltier is the literary editor of The New Republic.

A version of this review appears in print on November 24, 2013, on page BR1 of the Sunday Book Review with the headline: The State of Israel


Book Review: ‘The Firm’ by Duff McDonald

November 16, 2013


Book Review: ‘The Firm’ by Duff McDonald

McKinsey remains the gold standard of consulting. What does it do to earn those hefty fee

Sept. 6, 2013 4:10 p.m. ET

McKinsey-logo1Midway through “The Firm,” financial reporter Duff McDonald’s book about McKinsey & Co., the author recounts a hypothetical scenario once described to a new client by one of the consulting firm’s partners: “Let’s say a client asks us what time it is. . . . If you ask Booz Allen, their response will be ‘What time do you want it to be?’ If you ask A.D. Little . . . they will tell you ‘It’s 9:45:20, Greenwich Mean Time.’ But if you ask McKinsey, we will say ‘Why do you want to know? What decisions are you trying to make for which knowing the time would be helpful?’ “

Not a bad characterization of the way McKinsey thinks of itself and its approach to its work. The firm has been compared to the Jesuits and the U.S. Marines for its rigorous mind-set and disciplined work ethic. A ruthless “up or out” policy for new hires ensures that only those who do outstanding work survive; that’s one out of five.

There have been other books about this American icon, but “The Firm” is an up-to-date, full-blown history, told with wit and clarity, about a remarkable enterprise that has had a profound effect on the way businesses operate and has staffed corner offices and boardrooms around the world—but has also made its share of mistakes.

Mr. McDonald (right) nicely decodes the elusive mystique thatDuff McDonald McKinsey has so marketed over the years—the idea that it sees things in much better focus than its clients. Or, for that matter, its rivals. Some McKinsey partners have long sniffed that The Firm has no competition.

Not quite true. Boston Consulting Group and Bain & Co. have their own impressive accomplishments and distinctive toolboxes. Unlike McKinsey, Bain made inroads by representing only one client in an industry group, staying with that client right through the implementation of its proposals, and by making stock-price appreciation a top priority. Carving out its own niche, BCG focused on selling “products” like the “experience curve,” a way of demonstrating how economies of scale and innovation drive costs down over time. In the 1970s, both firms rattled McKinsey’s cage loudly. “BCG and Bain were the Apple to McKinsey’s Microsoft,” Mr. McDonald notes.

Whatever McKinsey is selling, it has certainly been able to get away with charging a teeth-chattering premium above what others do. In a 1989 competition with Booz Allen for a lucrative deal with a financial-services firm, Booz said it could take up to 4½ months to deliver its analysis, at a cost of about $675,000. McKinsey said it needed up to six months and would require $1.2 million. The low bidder didn’t win.

AT&T paid McKinsey $96 million for five years of hand-holding in the 1990s. Tanzania shelled out so much to McKinsey in the early 1970s to help plan its future that the fees became a line item in the country’s budget. Initially stunned by the proposal, Julius Nyerere, Tanzania’s president, eventually gave in: “If you offer peanuts, you get monkeys,” he said. Never mind that while McKinsey was cashing the checks, tyrant Nyerere was running the country into the ground.

But what exactly does McKinsey do to justify numbers like that? To oversimplify, it sends in a team of supersmart, driven young M.B.A.s to break down the stated problem—say, “we need to increase market share”—into key issues like product quality, sales practice and pricing. Then, after an intensive fact-gathering exercise, the team does its analysis, and constructs a list of actionable options, sometimes relying in part on what the firm has done for other clients with similar needs.

The proposed actions might be just what the client wanted to do to begin with—raise prices or cut costs—but McKinsey’s seal of approval, backed up by a heavily fact-based argument, gives management validation for whatever it wants to do: “de-layer” its management structure, lay off 10% of its workforce, close half its widget plants. To some McKinsey clients, that validation alone—helping to placate board members, shareholders and employees—is worth the hefty fee.

The FirmAnother key to McKinsey’s success: 85% of the firm’s roughly $7 billion in annual revenues comes from repeat customers, with whom it has what McKinsey calls “transformational relationships.” In the 1990s, American Express had so many McKinsey teams at work over an extended period that the consultants were listed in the Amex phone book. “God, we were sucking off that teat for so long,” one McKinseyite is quoted saying.

Mr. McDonald is generally more critical here than he was in “Last Man Standing,” his 2009 book that came perilously close to bestowing sainthood upon James Dimon—he of J.P. Morgan Chase and a man whose halo and wings had to be recently recalled after that unpleasantness about a $6 billion rounding error in trading losses.

The author walks us through many McKinsey achievements. General Electric, for instance, hired the firm in 1968 to study its strategic planning. The recommendation was to transform the conglomerate’s 360 departments into 50 “strategic business units” and make each of them focus “outwardly” on external market forces rather just fret about the cost of paper clips. There is a strong argument that the reorganization enabled future CEO Jack Welch to accomplish all that he did later. And McKinsey effectively launched the consolidation of the banking industry when it walked Wells Fargo through its acquisition of Crocker bank in 1986.

But Mr. McDonald doesn’t flinch from examining McKinsey’s missteps, including its bad advice to General Motors in the 1980s, when the auto maker was reeling from Japanese competition. Instead of dealing with things that could directly address the threat—increasing productivity, using fewer parts in each car, improving quality—McKinsey focused on structure. It reorganized GM into units by type of vehicle (large, small, trucks) instead of by brand. The result was a lot of people-shuffling. No bump in output, efficiency or profits, just more money down the drain—up to $2 million a month in McKinsey fees.

“The Firm” offers a good dissection of the collapse of McKinsey’s most notorious client, Enron, vaporized by the company’s CEO (and McKinsey alumnus) Jeffrey Skilling, now a guest of the U.S. government. McKinsey emerged largely unscathed from that disaster but took a reputational hit a few years later, in 2010, after one of its directors, Anil Kumar, pleaded guilty to securities fraud in the Raj Rajaratnam insider-trading scandal. Even worse, the firm’s former managing director, the respected Rajat Gupta, was convicted of leaking secrets to Rajaratnam as a Goldman Sachs director.

All that is well known, but readers may not be familiar with a major speed bump from the firm’s early days. In 1935, founder James O. “Mac” McKinsey, an accountant by training, landed Marshall Field & Co. as a client. The retailer was awash in red ink and faced a big loan payment. McKinsey’s solution was for the company to shed a wholesale business and some textile mills, then slash costs.

Marshall Field’s directors liked the plan so much that they persuaded Mac McKinsey to come over and wield the ax himself. What he failed to anticipate was the human cost—to the 1,200 laid-off workers and those remaining who were dismayed to realize that management, as Mark Twain might say, “don’t give a dead rat” about them as people. McKinsey himself received death threats, became depressed and, in a weakened state, succumbed to pneumonia in 1937.

Known thereafter as the “McKinsey Purge,” the bloodbath set the precedent for many more “downsizings” to come. Even now, news that “McKinsey is coming” provokes a flurry of fear and apprehension. And the managers who retain McKinsey know it. Condé Nast hired the firm in 2009 in part to send a message that it was serious about cost cutting.

The man who molded McKinsey into what it resembles today wasn’t Mac McKinsey but Marvin Bower, a lawyer by training who wanted to use the law-firm model to make consulting into a “practice,” not a business like selling used cars. Consultants were to put client interests ahead of the firm’s.

As head of the firm in the 1950s, Bower insisted on recruiting only the top graduates from Harvard Business School and wanted his hires to radiate confidence. No bow ties or argyle socks, please. One hapless young recruit who wore the latter triggered a “proper sock wear” memo to the staff.

Today, although the firm can certainly offer nimble, sector-specific advice to a client needing help on a highly focused project, there is still what Mr. McDonald refers to as the “intellectual masturbation” of the “typical McKinsey schmooze fest.” He quotes a McKinsey alumnus, now the head of a financial-services firm, who fumes when McKinsey partners ask, “How are you feeling about progress?” What he really wants is someone to tell him “how to knock five basis points” off his cost base.

Mr. McDonald raises some concerns about how McKinsey will fare going forward. He wonders whether the firm has become too commercial and strayed too far from Bower’s original value system. And whether it’s now so big that it’s hard to manage and can no longer maintain the quality of its consultants or its work. No longer the friendly local banker that Bower wanted the firm to be regarded as, it is now more like an international banking conglomerate.

Time will tell whether these worries are justified and what impact they may have on the firm’s fate. McKinsey has always engaged in its own navel-gazing. But maybe it should just hire itself full-time to find out what it should do.

—Mr. Pinkerton is a former managing editor of Forbes and a former deputy managing editor of The Wall Street Journal.


Philip Bobbitt’s ‘Garments of Court and Palace’

November 5, 2013

New Statesman

Philip Bobbitt’s ‘Garments of Court and Palace’

Philip BobbittOne expects a book by Philip Bobbitt (left) to be over 900 pages (“The Shield of Achilles,” 2002) or just under 700 pages (“Terror and Consent,” 2008). Then how can he diet himself down to a mere 200 or so pages of text on Machiavelli?

Bobbitt is a great systematizer in the Toynbee mold — “Shield” gave us six different state systems since 1500 (princely, kingly, territorial, imperial, national, ­market).

“Terror” focused on one condition (the market state), but that state is still in formation, so Bobbitt argued its case more (and more and more) extensively. Then how does he deal with Machiavelli so compactly in “The Garments of Court and Palace”? Very easily, as one can tell by the frequency of his self-citations in the new book. He just shows us how wonderfully Machiavelli agreed with Bobbitt’s longer works — as if Niccolò had read them half a millennium ago. Machiavelli is often viewed as surprisingly modern, but does that have to mean he must be surprisingly Bobbitt?

Machiavelli fits into Bobbitt’s scheme because he is the expounder of the Machiavellifirst of the six state systems in “The Shield of Achilles,” the princely one (Machiavelli even graced the form with its Bobbittian name).

Bobbitt believes that legal systems are changed by military strategies, often by military technology. So, in 1494, when Charles VIII brought bronze cannon into Italy, threatening fortress walls and smashing the governments that relied on them, Machiavelli had to propose new walls, along with new states to defend them.

This must mean that Machiavelli was interested in new technologies for war — though in fact he was not very interested in forts (he thought they were less vulnerable to siege than to inner rebellion). In the encyclopedic “Art of War,” he suggests an improved design for forts, but he is still concerned with inner rebellion (he forbids an inner keep where the residents can hole up and tells us starvation is more effectual than siege). Nor did he invest his time or energy in the technological innovations of Leonardo (their one collaboration, diverting a river, was an ancient concept, and it failed).

What Machiavelli was interested in was old systems, and especially old military systems — Roman ones, in fact. These were powerful not because they relied on new weapons but because they were based on virtù, an expression of their manly religion. Unlike Christianity, which makes people humble and otherworldly, Rome’s religion instilled a thirst for glory and freedom in this world. In Christianity “the ritual is more mincing (delicata) than grand, without fierce or manly (gagliarda) energy.” Roman “ritual was as grandly ceremonious, but it added the energy of a sacrifice deep in blood and fierceness, slaughtering hordes of animals. By being terrifying in this way, it made men just as terrifying.”

Bobbitt thinks that Machiavelli’s prince could be ruthless, like the Romans, because he invented that new thing, “the princely state,” which must be preserved for the benefit of all. Thus crimes done for the state are no crimes. They are, in fact, rather altruistic. The prince must “subordinate all other indicia of right behavior to the one parameter of serving the state.” Those murdered are rightly murdered for being enemies of the state — a convenient rule for the prince, who is the state. He sacrifices himself to himself.

Machiavelli is even made to endorse Bobbitt’s concept of the market state, on the rather broad ground that he was the “philosopher” of Bobbitt’s first state, so he would buy into the sixth one as “our sublime predecessor.” The new book is more vague than was “Terror and Consent” about the military obstetrics of the market state.

Philip Bobbitt’s ‘Garments of Court and Palace’Here Bobbitt just says it is “coming into being as a response to changes in the strategic context.” There he told us terrorism is at least the partial cause of the market state, which mirrors it. If Al Qaeda can operate freely across national entities, relying on modern communications, computer funding and ideological inventiveness, then we must do so too, calling on creative minds “free of many of the legal and political restraints that bind government officials.”

This means continual outsourcing of previously governmental acts, and omnidirectional deregulation. The right must stop regulating abortion and pornography, the left must stop regulating hate speech and, through affirmative action, hiring — such acts “promote national values in defiance of the market.” Terrorists are “entrepreneurial,” so our market state must be an entrepreneurial state. Terrorists use the media, so we must use them (the media, we are told, are nimbler than bureaucrats). If they use Visa to finance strikes, so should we. We can abandon our own state limits to engage in “state building” around the world to cope with the terrorist state.

Bobbitt says the market state has been in process of formation for a while. In “Shield” one of its prophets would seem to be Oliver North. The entrepreneurial Iran-contra (arms for hostages) transaction “anticipated the new market state,” and was “a natural market response to the problem of overregulation” (by overregulation he means the Boland Amendment against funding the contras in Nicaragua). Old nation-state rules should not hamper new market-state solutions. That is what Bobbitt says happened in the Iraq war. The open nation-state strategy was a quick decapitation of the Iraqi government. But since the war was with the mobile “virtual state” of terrorism, what was needed was a market state mirroring its tactics. (Blackwater and all the other private contractors were too hampered by the nation state, not yet acting as the market state.)

But the best entrepreneur of the new counterterrorist terrorism was Dick Cheney, with his “enhanced interrogations” of captured terrorists. Bobbitt says torture may not be used just to score a political point or secure a judicial conviction. But the new state has to have new rules. In former wars, captives were forced to surrender their arms. In the new wars they must be forced to surrender their information. “There cannot be a ban on the collection of strategic information — information from terrorist leaders and senior managers — by whatever means are absolutely necessary short of inflicting severe pain when that information is likely to preclude attacks.” That is just the legal guidance Cheney got from John Yoo, a deputy assistant attorney general in the Office of Legal Counsel. Neither Yoo nor Cheney thought waterboarding inflicted “severe pain.” The new prince, like Machiavelli’s old one, can commit crimes if they are in service to the state. The aim, after all, is to escape those “legal and political restraints that bind government officials.”

It has often been noticed that war makes adversaries end up resembling each other; but Bobbitt would have us start out resembling our foe. Terrorists, he says, are not just criminals. They have created a “virtual state,” and we have to create an entirely new kind of state to cope with it. This reminds me of the people who denounced democracy in the 1930s as too slow and stumbling to respond to the rise of dictators. Some would have had Roose­velt and Churchill create a new kind of state, baffling dictators with “good guy” dictatorships.

Not even Bobbitt thinks a new state was born of that crisis — his “nation state” runs unbroken from 1914 to 1990, and was able to survive World War II and the cold war. Only Al Qaeda and its ilk are enough to make us create an entirely new political order. Those who have seen the efficiency and lack of corruption in unregulated medicine and banks and Blackwater-type operations will have a little trouble hailing Machiavelli as a sponsor of the Higher Cheneyism.

Garry Wills, emeritus professor of history at Northwestern University, is the author, most recently, of “Why Priests? A Failed Tradition.”



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