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Saturday, January 26, 2013

Affluence and Democracy in China

According to the Financial Times, there “is no great clamour in China for western democracy.” The assumption in the West that prosperity in China inevitably results in democracy may unduly privilege Western political values in a foreign land. The Times suggests that prosperity can be the source of rising pressure for political change rather than an antidote to it. In other words, the power shift between the state and individual that is unleashed by rising incomes does not necessary privilege the individual. Time and again, China’s leaders have refused to shift power to the individual at the expense of the state. This is problematic because citizens joining the rising middle class tend to demand more transparency in government and rule of law instead of corruption and cronyism. The continued hegemony of the state allows, however, for the perpetuation of the latter because government officials run the state.
The relationship between economic development and political democracy is more complex than is typically presumed in the West. Put another way, the rest of the world is not made in the West’s image. It is as though a Westerner could hardly imagine a lack of clamoring for democracy in China even among the affluent. It is very possible that the Chinese newly rich would want a breed of change that does not reflect Western democracy. The question is perhaps whether the government officials in power would permit even such a change.
Rather than a change of system, rising incomes may fuel a power struggle between different power-centers—one being the old and the other(s) being the new. This sort of thing happened in the Salem witch trials in seventeenth-century New England, as newly-propertied woman were literally removed by established landed gentry. The religious subterfuge belied the more earthly battle between old and new centers of power based at least in part on economic change.
Similarly, contending centers of power may be the real dynamic in China. Not even a major upheaval would necessarily usher in democracy, given the lack of democratic values in Chinese culture historically (with the exception of the two republics attempted at the end of the Qing dynasty in the early twentieth century). Yet it is possible that revolution could provide the impetus for an attempt to give a republic another try—the experiment having been attempted twice already. The spread of democracy, or at least the appearance of it, could challenge Chinese culture to finally relent. However, even in such a case, the result would undoubtedly be infused with distinctive Chinese elements. Far more predictable is the probably contention of new and old centers of power clothed in Chinese garments.


Philip Stephens, “Political Cracks Imperil China’s Power,” The Financial Times, January 24, 2013.

Structural Reform and Sustenance in the E.U.

Speaking at the World Economic Forum in Davos, Switzerland on January 25, 2013, Mario Draghi, president of the European Central Bank, said the bank’s program to buy the bonds of heavily indebted E.U. states had been “very helpful” in reducing the perception that the euro was on the verge of collapse. He also pointed to the structural reforms enacted by European leaders as “now bearing fruit.” He urged the state governments of the heavily-indebted states to continue to implement structural reforms so those states could take advantage of the ECB’s low interest rates and easy credit to banks. That is to say, the strategy was to use monetary policy as leverage for long-term-oriented fiscal policy. Political risk analysts listening to the central bank official likely came away with a more optimistic stance on the European economy.
Even though the progress achieved already on the debt crisis provides “light at the end of the tunnel,” the matter of structural reforms at the state level could prove to be more uncertain, given the political element. Chancellor Angela Merkel of the state of Germany warned against the impulse to reduce the pace of structural reform in the face of economic stagnation in the heavily indebted states. She pointed to the record unemployment numbers announced in Spain just the day before as fodder for the anti-austerity crowd there. On the political side, she observed, “experience tells us that often pressure is required to enable structural reform.” The obstacles could come from entrenched political officials or bureaucrats at the state level, as well as from the poor whose very sustenance can be put at risk by the austerity in structural reforms. I contend that whereas the former source ought to be combatted, even the austerity advocates ought to see to it that the poorest of the poor do not slide through the cracks.
In other words, survival in the short run should not be sacrificed for long-term structural reform. In fact, making a qualitative (i.e., difference in kind) distinction between government programs that keep people alive on a daily basis and all the other budget items could actually permit more budget cutting because so much would be found to be subject to cuts without risking lives. To be sure, unemployment caused by a cancelled defense contract could put people in danger of losing their house or going without food. However, such individuals would be covered by the continuance of the programs providing sustenance. Therefore, having an indirect effect on sustenance does not render a particular budget item itself in the category of vital programs.  Buffering sustenance programs from the massive cuts everywhere else would significantly reduce the vehemence of the protests and soothe the path of structural reform by isolating the entrenched officials and bureaucrats as the only primary obstructionists.
In short, long-term fiscal reform need not be at the expense of people eating and having shelter as well as medical care. Based on the firm foundation of human rights, programs primarily geared to sustenance can be isolated and protected such that the structural reform can be implemented more smoothly. Put another way, the European leaders have been making their task much more difficult than necessary.


Davos: ECB’s Draghi Says ‘Real’ Economy Still Stagnant,” Deutsche Welle, January 25, 2013.


Friday, January 25, 2013

The 11-Inch Footlong at Subway

It is perhaps all too common for companies that franchise out stores to insist to complaining customers that the franchisee bears full responsibility for any dissatisfaction. That franchisees are bound to certain standards in a legal agreement with the company is apparently of no consequence. The refusal to take responsibility is perhaps all too common in the retail sector. It is more convenient to point to the other guy’s responsibility than to one’s own. In fact, this mentality may be said to characterize business culture today. The sordid condition can be seen in the knee-jerk avoidance company statements made on the heels of a customer-led controversy.
For example, Subway advertises its “foot-long subs” around the world. Even where the metric system is used, a foot is still twelve inches. In spite of this rather stubborn factoid, executives at Subway’s headquarters issued a statement that “footlong” is “not intended to be a measurement of length” after a customer posted a picture online of a Subway “footlong” measuring only eleven inches.

                                                               The picture that showed Subway's "footlong" as less than advertised.
I suspect that the corporation’s lawyers had something to do with the disavowal, for two customers were suing Subway on the matter at the time. Even so, to claim that “footlong” is not a measurement of length is prime facie false. Simply in making the claim, the executives reduced their company’s credibility substantially. To lie in order to evade one’s responsibility indicates a pathological company culture. To the extent that the culture of business itself values avoiding responsibility, the pathology receives some degree of camouflage.
In the case of Subway, a clue to the corporate mentality may be found in the manner in which the subs are produced. In particular, the meticulous way in which only so many slices or pieces of this or that are put on a sandwich may evince not only attention to cost-containment, but also a certain pettiness as regards what is given in exchange for what is paid. In other words, the same niggardly attitude that seeks to minimize responsibility may be behind the excessive attention to quantity. The controversy regarding the 11-inch sub may thus be at least in part a pent-up reaction to the pettiness in the preparation of the sandwiches. Put another way, the company’s culture, and therefore many of the senior managers, may be noxious to the general public, which has been rightly offended by the excessive selfishness in holding back as much as possible. The company’s ludicrous statement that “footlong” does not refer to length may simply reinforce explicitly for people who have patronized Subway what had hitherto only been sensed in a subtle way as a natural aversion to trying to minimize one’s part at the expense of the other.


Huffington Post, “Subway Pledges To Ensure Every ‘Footlong’ Is 12 Inches,” Reuters, January 25, 2013.

Thursday, January 24, 2013

Cameron Urges a Referendum Following Renegotiation

Leaders of other states reacted quickly to David Cameron’s announcement that if his party is re-elected to lead the House of Commons he would give his state’s residents a chance to vote yes or no on seceding from the European Union. Cameron said the referendum would also be contingent on him being able to renegotiate his state’s place in the Union. This renegotiation in particular prompted some particularly acute reactions from leaders of other “big states.” Behind these reactions was a sense that the British government was being too selfish.
                                                            David Cameron of Britain
German Foreign Minister Guido Westerwelle said Britain should not be allowed to “cherry pick” from among the E.U. competencies only those that the state likes. What then should we make of the opt-outs at the time—provisions in which states other than Britain benefitted? Surely one size does not fit all in such a diverse federal union (that goes for the U.S. as well). Westerwelle was saying that Cameron had abused the practice that was meant as an exception rather than the rule. Behind the “cherry pick” term is the implication that Cameron, and the British government in general, was being too selfish concerning its role in the E.U.
The president of the European Parliament, Martin Schulz, related the selfish approach of the British government to the detriment of the European Union. Specifically, he warned of “piecemeal legislation, disintegration and potentially the breakup of the union” if Britain was allowed to be bound only to the E.U. competencies that the party in power in the House of Commons likes. A player joining a baseball team would be very selfish in demanding that he will only bat because that’s the only part that is fun. There is no team, moreover, if no player is held to anything more than what he or she enjoys. In education, such selfishness manifests in students claiming that whatever they take should be interesting.
Carl Bildt, the Swedish foreign minister, also touched on the detriment to the whole from the selfishness of a part. He said that Cameron’s notion of a flexible arrangement for Britain would lead to there being “no Europe at all. Just a mess.” Paradoxically, the selfish person undercuts even his own interests. French foreign minister Laurent Fabius said that “Europe a la carte” would introduce dangerous risks for Britain itself. Of course, Cameron would likely refute this claim by pointing to his aim of retaining all the advantages of being a state in the E.U. without any of the disadvantages. So we are back to the selfishness.
Indeed, behind Cameron’s claim that a referendum in 2013 would not be “the right way forward” either for Britain or for the E.U. as a whole is his own political objective. He had been on record that Britain should not secede from the European Union. The chance of his preference being accepted by a majority of the voters in his state increases if the default “in” position is the outcome of the renegotiation because that outcome is presumably more in Britain’s interest than the earlier default in which the state was betwixt and between.
Cameron’s political assumption was that being on more solid ground, and letting the bailout sooth over the debt problems in the E.U., would make it easier for the electorate in his state to vote to stay in, under terms he will have negotiated. Were the interests of Britain and the E.U. really motivating the prime minister, he would have sought to relieve the uncertainty for both by going with a referendum sometime in the second quarter of 2013.
In short, the visceral reactions in other states to Cameron’s announcement manifest recognition of selfishness of one part at the expense of the whole. However, from the standpoint of the Euro-skeptics in Britain, the apparent selfishness is rather the alternative assumption that the E.U. is simply a series of multilateral treaties in which sovereign states pursue their respective interests. “What he wants, above all,” according to Deutsche Welle, “is a single market.” Therefore, he “wants to take powers back from Brussels” to return the E.U. to a network of sovereign states. Each state, being fundamentally sovereign, “should be able to negotiate its level of integration in the EU.” Such would be the case were the E.U. merely a bundle of multilateral international treaties, rather than a federal union of semi-sovereign states. Herein lies the real conflict of ideas within the E.U. Cameron’s strategy is selfish only from the assumption that the E.U. is something more than a network to which Britain happens to belong.
Ultimately the problem is the uneasy co-existence of the two contending conceptions of what the union is. The real question is whether the E.U. can long exist with both conceptions being represented by contending states. The negative reaction from leaders who hold the “modern federal” conception (i.e., dual sovereignty) suggests that ultimately Cameron’s conception of the E.U. is incompatible with the union’s continued viability. Put another way, the federal conception of dual sovereignty was in effect rejecting the earlier confederal (e.g., alliance) conception as fundamentally selfish. This condemnation would not make sense to the confederal crowd. The two conceptions are indeed quite far apart, which is ultimately why the European Union cannot remain viable housing them both.


EU Leaders Hit Out Over Cameron Referendum Pledge,” Deutche Welle, 23 January 2013.

Cameron Wants Another EU,” Deutsche Welle, 24 January 2013.

Monday, January 21, 2013

Inaugural Addresses: Transformational Leadership

According to a piece in the National Review, “George Washington might have had the right idea. Second inaugural addresses should be short and to the point. Of course, speaking only 135 words as Washington did in 1793 might be a little severe.” The challenge for second-termers, whether Barak Obama or the sixteen two-term presidents before him, is “how to make a second inaugural address sound fresh, meaningful and forward-looking. Almost all of Obama’s predecessors failed at this. Only Abraham Lincoln and Franklin D. Roosevelt made history with their addresses. One stirred a nation riven by civil war; the other inspired a country roiled by deep depression. All but forgotten are the 14 other addresses, their words unable to survive the test of time. Even those presidents famed for their past oratory fell short.” This is a particularly interesting observation—surviving the test of time being here the explicit criterion. Even a president whose silver tongue mesmerizes a people of his or her time may not proffer ideas that survive beyond being a cultural artifact of the president’s own time.
Another way of approaching this perspective is in remembering that a treatise becomes a classic only after it has gone beyond its own epoch because the ideas are not only cultural artifacts of the writer’s own world. Put another way, a scholar can never know whether his or her treatise will endure through the ages. The objective of a scholar can be said to commit ideas to writing that contain something more than the cultural artifacts that by definition are limited to their source-epoch. High public officials, whether of states or unions thereof, may proffer very sweet vocal wine and yet the taste goes out of fashion as soon as the culture changes.  In terms of inaugural addresses, the enduring message must place the consternation of the day in a bigger picture so as to assuage anxiety and angst. This is easier said than done.
According to the National Review, “(a) surprisingly bitter Thomas Jefferson could not match his great first inaugural; an unusually wordy Ronald Reagan could not live up to his ‘Great Communicator’ sobriquet; a decidedly humble Bill Clinton could not rise to the occasion. While most reelected presidents cannot resist the temptation to use their speeches to look back on the past four years, Lincoln had little choice but to look forward.” His genius was to do so by placing the past war in perspective, citing a higher purpose. His way forward was healing and reconciliation rather than retribution and vengeance. To make the United States truly united once again meant more than merely getting the confederate states back. The healing and reconciliation Lincoln sought had to have a solid foundation, or they would have been dismissed as mere rhetoric by an audience otherwise bent on retribution and profit-taking at the Southerners’ expense.
I’m not sure that being forward looking is requisite, however. The key could be the inclusion of ideas that put something major at the time of the address into perspective by drawing on higher principles. Ultimately, it is the latter that transcend particular times and cultures. Moreover, people thirst for the invocation of higher principles, as most of our quotidian lives are too operational or procedural for such connections. Connecting the dots to ideas that are relatively enduring—meaning and value transcending the contours of the daily discourse in the public square—turns out to be decisive in being able to teach ears yet unborn.  Put another way, meaning-making can transcend the speaker’s own time if the meaning incorporates more fundamental principles that those that are limited to the dominant ideology of one’s age.
The meaning-making can be static in providing meaning to the present, or dynamic in the sense that something major should change (i.e., forward-oriented). The invocation of fundamental principles suggests that the change being sought is transformative rather than merely regulatory or reforming. Transformational leadership can be defined as meaning-making that draws on values and principles whose vitality and validity extend beyond the leader’s own epoch and is oriented to fundamental change. The meaning provided is not applied merely to the status quo. That is, if a second-term president wants to continue to lead, he or she can make sense of the present in terms of values and principles that transcend the age. This is static leadership. The leadership can be transformational if the meaning also pertains to a transformed vision for the society, rather than merely making sense out of the present. The objective here is to move the society from the present to a desired condition in the future by invoking principles that have meaning in both conditions. Although the condition being sought is typically in the same epoch, the principles drawn on are more solid if they have validity and value in other epochs too, thus being more than cultural artifacts of the leader’s own age. I suspect that few second-term U.S. presidents have been transformational leaders after a few years into their presidencies. Put another way, even the presidents who sounded amazing may be found after the fact to have suffered from a want of ideas that have value even in the upcoming world not yet born. Whereas sweet candy today might give one a sugar-high, to survive the rigors of time better nourishment is necessary. In the context of inaugural addresses, the nourishment being sought is in the form of fundamental ideas whose value transcends the age and yet can explain the present and possibly an alternative in the age that is transformational in nature.
George E. Condon, Jr., “The Second-Term Inaugural Jinx,” National Journal, January 20, 2013.