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March 31, 2014

Better Policies Explain Why Poland Prospers More than Ukraine



RushchyshynYaroslavUkraineEntrepreneur2014-03-30.jpg "Yaroslav Rushchyshyn, a garment manufacturer, wants to end penalties when his company reports a financial loss." Source of caption and photo: online version of the NYT article quoted and cited below.


(p. B1) LVIV, Ukraine -- Every kind of business in this restless pro-European stronghold near the border with Poland has an idea about how to make Ukraine like its more prosperous neighbor.

For Yaroslav Rushchyshyn, founder of a garment manufacturer, it is abolishing bizarre regulations that have had inspectors threatening fines for his handling of fabric remnants and for reporting financial losses.

For Andrew Pavliv, who runs a technology company, it is modernizing a rigid education system to help nurture entrepreneurs.

For Natalia Smutok, an executive at a company that makes color charts for paint and cosmetics, it meant starting an antibribery campaign, even though she is 36 weeks pregnant.


. . .


(p. B10) Victor Halchynsky, a former journalist who is now a spokesman for the Ukrainian unit of a Polish bank, said the divergence of the two countries was a source of frustration.

"It's painful because we know it's only happened because of policy," he said, adding that while both countries had started the reform process, Poland "finished it."

Ukraine has been held back by a number of policies. Steep energy subsidies have kept consumption high and left the country dependent on Russian gas, draining state coffers. Mr. Pavliv said the state university system, which he called "pure, pure Soviet," was too inflexible to set up a training program for project managers, or to allow executives without specific certifications to teach courses. An agriculture industry once a Soviet breadbasket has been hurt by antiquated rules, including restrictions on land sales. Aggressive tax police have been used to shake down businesses.



For the full story, see:

DANNY HAKIM. "A Blueprint for Ukraine." The New York Times (Fri., MARCH 14, 2014): B1 & B10.

(Note: ellipsis added.)

(Note: the online version of the story has the date MARCH 13, 2014.)



PavlivAndrewTechEntrepreneur2014-03-30.jpg "Andrew Pavliv, who runs a technology company, wants to help turn Lviv into a little Ukrainian Silicon Valley." Source of caption and photo: online version of the NYT article quoted and cited above.






August 15, 2013

Global Warming Allows Russians to Build Liquefied Natural Gas Plant in Arctic



NovatekArcticLiquefiedNaturalGasPlant2013-08-04.jpg "A rendering of Novatek's proposed $20 billion liquefied natural gas plant on Russia's Arctic coast, scheduled to be done by 2016." Source of caption and photo: online version of the NYT article quoted and cited below.


(p. B1) YURKHAROVSKOYE GAS FIELD, Russia -- The polar ice cap is melting, and if executives at the Russian energy company Novatek feel guilty about profiting from that, they do not let it be known in public.

From this windswept shore on the Arctic Ocean, where Novatek owns enormous natural gas deposits, a stretch of thousands of miles of ice-free water leads to China. The company intends to ship the gas directly there.


. . .


Novatek, in partnership with the French energy company Total and the China National Petroleum Corporation, is building a $20 billion liquefied natural gas plant on the central Arctic coast of Russia. It is one of the first major energy projects to take advantage of the summer thawing of the Arctic caused by global warming.

The plant, called Yamal LNG, would send gas to Asia along the sea lanes known as the Northeast Passage, which opened for regular international shipping only four years ago.



For the full story, see:

ANDREW E. KRAMER. "Polar Thaw Opens Shortcut for Russian Natural Gas." The New York Times (Thurs., July 25, 2013): B1 & B6.

(Note: ellipsis added.)

(Note: the online version of the interview has the date July 24, 2013, and has the title "Polar Thaw Opens Shortcut for Russian Natural Gas.")






June 16, 2013

Behind the Iron Curtain, Those Who Opposed "Were to Be Destroyed by "Cutting Them Off Like Slices of Salami""



Iron-CurtainBK2013-05-13.jpg
















Source of book image: http://www.opednews.com/populum/uploaded/iron-curtain-20882-20130113-95.jpg



(p. 16) That Soviet tanks carried Moscow-trained agents into Poland, Hungary, Romania, Bulgaria, Czechoslovakia and East Germany was known in the West at the time and has been well documented since. When those agents set out to produce not only a friendly sphere of Soviet influence but also a cordon of dictatorships reliably responsive to Russian orders, Winston Churchill was moved to warn, just days after the Nazis' surrender in 1945, that an Iron Curtain was being drawn through the heart of Europe. (He coined the metaphor in a message to President Truman a full year before he used it in public in Fulton, Mo.) And Matyas Rakosi, the "little Stalin" of Hungary, was well known for another apt metaphor, describing how the region's political, economic, cultural and social oppositions were to be destroyed by "cutting them off like slices of salami."

Applebaum tracks the salami slicing as typically practiced in Poland, Hungary and Germany, and serves up not only the beef but also the fat, vinegar and garlic in exhausting detail. She shows how the knives were sharpened before the war's end in Soviet training camps for East European Communists, so that trusted agents could create and control secret police forces in each of the "liberated" nations. She shows how reliable operatives then took charge of all radio broadcasting, the era's most powerful mass medium. And she demonstrates how the Soviet stooges could then, with surprising speed, harass, persecute and finally ban all independent institutions, from youth groups and welfare agencies to schools, churches and rival political parties.

Along the way, millions of Germans, Poles, Ukrainians and Hungarians were ruthlessly driven from their historic homes to satisfy Soviet territorial ambitions. Millions more were deemed opponents and beaten, imprisoned or hauled off to hard labor in Siberia. In Stalin's paranoid sphere, not even total control of economic and cultural life was sufficient. To complete the terror, he purged even the Communist leaders of each satellite regime, accusing them of treason and parading them as they made humiliating confessions.

It is good to be reminded of these sordid events, now that more archives are accessible and some witnesses remain alive to recall the horror.



For the full review, see:

MAX FRANKEL. "Stalin's Shadow." The New York Times (Sun., November 25, 2012): 16.

(Note: the online version of the review has the date November 21, 2012.)


The book under review, is:

Applebaum, Anne. Iron Curtain: The Crushing of Eastern Europe, 1944-1956. New York: Doubleday, 2012.






August 20, 2012

Catherine the Great as Benevolent Despot



CatherineTheGreatBK2012-08-18.jpg















Source of book image: http://online.wsj.com/article/SB10001424052970204644504576653083743832432.html?KEYWORDS=Catherine+Great



(p. C3) Bereft of husband and child, a lonely Catherine began to read the histories, philosophy and literature of Greece and Rome and of the Enlightenment. Montesquieu's "The Spirit of Laws," which analyzed the strengths and weaknesses of despotic rule, had a powerful impact on her. She was particularly interested in his thesis that the conduct of a specific despot could partially redeem that form of rule. Thereafter, she attributed to herself a "republican soul" of the kind advocated by Montesquieu.

Voltaire, the venerated patriarch of the Enlightenment, had concluded that a despotic government might well be the best possible form of government--if it were reasonable. But to be reasonable, he said, it must be enlightened; if enlightened, it could be both efficient and benevolent. Soon after ascending to the throne, Catherine began a correspondence with Voltaire that eventually extended to hundreds of letters over more than 20 years.


. . .


Near the end of her reign Catherine was asked how she understood the "blind obedience with which her orders were obeyed." Catherine smiled and answered, "It is not as easy as you think.... I examine the circumstances, I take advice, I consult the enlightened part of the people, and so in this way I find out what sort of effect my laws will have. And when I am already convinced in advance of good approval, then I issue my orders and have the pleasure of observing what you call blind obedience."

Catherine died in 1796, when George Washington was finishing his second term in office. Since then, the temptations of absolute power have remained great; despots have continued to appear, afflicting people everywhere. We have learned, at enormous cost, the difficulty of combining despotism with benevolence. Few rulers have even tried. Catherine tried.



For the full commentary, see:

ROBERT K. MASSIE. "Catherine the Great's Lessons for Despots; Russia's erudite empress tried to redeem absolute rule; her failures highlight dangers still present today." The Wall Street Journal (Sat., November 12, 2011): C3.

(Note: ellipsis added.)


For Massie's full biography of Catherine the Great, see:

Massie, Robert K. Catherine the Great: Portrait of a Woman. New York: Random House, 2011.






April 24, 2012

Campion Plant Sprouts from 32,000 Year-Old Seed



PlantGeneratedFromOldSeed2012-04-04.jpg

















"OLD DNA; A plant has been generated from the fruit of the narrow-leafed campion. It is the oldest plant by far to be grown from ancient tissue." Source of caption and photo: online version of the NYT article quoted and cited below.




(p. D1) Living plants have been generated from the fruit of a little arctic flower, the narrow-leafed campion, that died 32,000 years ago, a team of Russian scientists reports. The fruit was stored by an arctic ground squirrel in its burrow on the tundra of northeastern Siberia and lay permanently frozen until excavated by scientists a few years ago.

This would be the oldest plant by far that has ever been grown from ancient tissue. The present record is held by a date palm grown from a seed some 2,000 years old that was recovered from the ancient fortress of Masada in Israel.

Seeds and certain cells can last a long term under the right conditions, but many claims of extreme longevity have failed on closer examination, and biologists are likely to greet this claim, too, with reserve until it can be independently confirmed. Tales of wheat grown from seeds in the tombs of the pharaohs have long been discredited. Lupines were germinated from seeds in a 10,000-year-old lemming burrow found by a gold miner in the Yukon. But the seeds, later dated by the radiocarbon method, turned out to be modern contaminants.


. . .


The new report is by a team led by Svetlana Yashina and David Gilichinsky of the Russian Academy of Sciences research center at Pushchino, near Moscow, and appears in Tuesday's issue of The Proceedings of the National Academy of Sciences of the United States of America.

"This is an amazing breakthrough," said Grant Zazula of the Yukon Paleontology Program at Whitehorse in Yukon Territory, Canada. "I have no (p. D4) doubt in my mind that this is a legitimate claim." It was Dr. Zazula who showed that the apparently ancient lupine seeds found by the Yukon gold miner were in fact modern.



For the full story, see:

NICHOLAS WADE. "Dead for 32,000 Years, an Arctic Plant Is Revived." The New York Times (Tues., February 21, 2012): D1 & D4.

(Note: ellipsis added.)

(Note: the online version of the review is dated February 20, 2012.)





March 8, 2011

Russia Boldly Seeks Oil in Arctic



RussianArcticOilPlatform2011-02-27.jpg"The Prirazlomnaya oil platform was brought to the Arctic seaport of Murmansk, 906 miles north of Moscow, to be adjusted." Source of caption and photo: online version of the NYT article quoted and cited below.


(p. B1) MOSCOW -- The Arctic Ocean is a forbidding place for oil drillers. But that is not stopping Russia from jumping in -- or Western oil companies from eagerly following.

Russia, where onshore oil reserves are slowly dwindling, last month signed an Arctic exploration deal with the British petroleum giant BP, whose offshore drilling prospects in the United States were dimmed by the Gulf of Mexico disaster last year. Other Western oil companies, recognizing Moscow's openness to new ocean drilling, are now having similar discussions with Russia.



For the full story, see:

ANDREW E. KRAMER and CLIFFORD KRAUSS. "Russia Embraces Arctic Drilling." The New York Times (Weds., February 16, 2011): B1-B2.

(Note: the online version of the article was dated February 15, 2011 and had the title "Russia Embraces Offshore Arctic Drilling.")




ArcticOilAndGasMap2011-02-27.jpg
















Source of map: online version of the NYT article quoted and cited above.







July 16, 2010

Statue of Mass Murderer Finally Removed from Gori's Central Square



StalinStatueRemoved2010-06-29.jpg "Georgian authorities, seeking to purge their country of Soviet monuments, on Friday removed a statue of Stalin from the central square of Gori, Stalin's birthplace. It had stood there for 48 years." Source of caption and photo: online version of the NYT article quoted and cited below.



(p. A4) GORI, Georgia -- In the predawn darkness on Friday, Georgian authorities carried out a clandestine operation in Gori's central square. Wrapping thick cables around Stalin's neck and under one of his armpits, they hoisted him off the pedestal where he has stood for 48 years and set him nose-first on the back of a flatbed truck.


. . .


On Friday, the culture minister, Nikolos Rurua, dismissed reports that the removal was intentionally kept quiet, pointing out that several camera crews were present. He said the vast majority of Georgians shared his view of Stalin as "a mass murderer and a political criminal."


. . .


Last summer vandals painted the statue's base with the phrases "Get off your pedestal!" and "Your place is in the museum!"

Mikheil Jeriashvili, a 19-year-old medical student, said that he was delighted at the news and that he would be happier if the authorities "removed this statue completely, or burned it or something."

"I would prefer if he had been born in another town altogether," he said.




For the full story, see:

SARAH MARCUS and ELLEN BARRY. "Georgia Knocks Stalin Off His Pedestal." The New York Times (Sat., June 26, 2010): A4.

(Note: the online version of the article is dated June 25, 2010.)

(Note: ellipses added.)





June 27, 2010

Government Financing Is Not Best Method to Finance Creativity



(p. B4) Government financing is not the best method to prod companies to be creative, said Edmund S. Phelps Jr., a professor of economics at Columbia University who won the Nobel Prize in 2006. But he said it could work.

He spoke at the forum about dwindling innovation in the United States economy. China, India and Brazil are catching up with innovative output, he said, but not Russia.

A high-technology start-up, he said, inherently runs more risk if it can present its product to only one potential buyer -- the government -- rather than to a range of customers, some of whom may want the product, he said.

"If Russian politicians see that their own prosperity, and that of their people, lies in a more arms-length relationship between the government and business, that would open a lot of possibilities," he said.



For the full story, see:

ANDREW E. KRAMER. "Russia Plans to Promote Technology Innovations." The Wall Street Journal (Mon., February 4, 2010): B4.





May 27, 2010

In Whom Can You Trust?



MedvedevKlausObamaToast2010-05-18.jpg"Russian President Medvedev, left, Czech Republic President Klaus, center, and U.S. President Obama, right, toast the treaty's signing on Thursday." Source of caption and photo: online version of the WSJ article cited below.


In the photo above, which of these three men would you want to sip champagne with? (Hint: the libertarian is in the middle.)


The photo accompanies this article:

JONATHAN WEISMAN. "Russia Sets Limits on Iran Sanctions." The Wall Street Journal (Friday, APRIL 9, 2010): A8.

(Note: the online version of the article had the title "U.S., Russia Focus on Iran Sanctions.")





March 27, 2010

An "Entrepreneur's Visa" to Let the Future Sergey Brin In



(p. A19) . . . , there is one way to create a lot more jobs without spending federal money. Let's import them. More precisely, let's import the people who create them: entrepreneurs.

A bipartisan bill that would begin to do just that was introduced on Feb. 24 by Sens. John Kerry (D., Mass.) and Richard Lugar (R., Ind.). Their "Startup Visa Act" would create a new, two-year visa for immigrant entrepreneurs whose firms attract at least $250,000 in financing from American angel investors or venture capital firms.


. . .


Here's a way to improve on the Kerry-Lugar plan. Create a true "job creator's visa," one tied directly and only to job creation by new immigrant entrepreneurs. The visa could be a temporary one for immigrants already here on another visa who establish a business. It could then be extended if the firm hires at least one American non-family resident. The visa should become permanent once the enterprise crosses a certain job threshold (such as five or 10 workers). But it would not be tied to financing.


. . .


Google was founded by Sergey Brin, a Russian immigrant, and American Larry Page by borrowing funds from their own credit cards. Why on earth would we want to create an entrepreneurs' visa that couldn't let in the future Sergey Brin?



For the full commentary, see:

ROBERT E. LITAN. "Visas for the Next Sergey Brin; To create more jobs, let's import more employers." The Wall Street Journal (Mon., MARCH 8, 2010): A19.

(Note: ellipses added.)

(Note: the online version of the article is dated MARCH 7, 2010.)





March 19, 2010

"A Regime that Survived through Myth and Fear"



(p. 4) It's an old Soviet joke.

Three Russians are in the gulag. The first one says, "What are you in for?"

The second one replies, "I called Zbarsky a revolutionary."

"That's funny," the first one says. "I called Zbarsky a counterrevolutionary."

"That's funny," the third one says. "I'm Zbarsky."

Vern Thiessen's new play, "Lenin's Embalmers," which starts on Wednesday at the Ensemble Studio Theater in Clinton, opens with the ghost of Lenin telling this joke as a parable of the mordant doom pervading the Communist state he created.

In real life the joke wasn't specifically about Zbarsky. You could insert any of Stalin's thousands of lackeys turned victims. Certainly Zbarsky would do. Boris Zbarsky was a real person, one of the two biochemists who, after Lenin died in 1924, were ordered by the Kremlin to devise a way of preserving his body forever.

He and his colleague, Vladimir Vorobiev -- the play's main characters -- succeeded spectacularly, won fortune and power, then fell from grace into the terror, like many others who served a regime that survived through myth and fear.


. . .


The new work, written as a stylized dark comedy, takes only a few liberties with history. It has Zbarsky and Vorobiev arrested after they're tricked into betraying each other. In fact Mr. Vorobiev died in a hospital, under mysterious circumstances, in 1937. Mr. Zbarsky was arrested in 1952; he was freed two years later, after Stalin's death, and died of a seizure soon after. Still, betrayals and trumped-up confessions were common in the era.




For the full review, see:

FRED KAPLAN. "He's Had Work: Preserving the Face of a Revolution." The New York Times, Arts&Leisure Section (Sun., February 28, 2010): 4.

(Note: ellipsis added.)

(Note: the online version of the article is dated February 23 (sic), 2010.)





October 7, 2009

Global Warming Creates Benefit of Arctic Shipping Shortcut



GermanShipArtcticPassage.jpg "A German ship, following a Russian icebreaker, is about to complete a shipment from Asia to Europe via Arctic waters." Source of caption and photo: online version of the NYT article quoted and cited below.



(p. A1) MOSCOW -- For hundreds of years, mariners have dreamed of an Arctic shortcut that would allow them to speed trade between Asia and the West. Two German ships are poised to complete that transit for the first time, aided by the retreat of Arctic ice that scientists have linked to global warming.

The ships started their voyage in South Korea in late July and will begin the last leg of the trip this week, leaving a Siberian port for Rotterdam in the Netherlands carrying 3,500 tons of construction materials.

Russian ships have long moved goods along the country's sprawling Arctic coastline. And two tankers, one Finnish and the other Latvian, hauled fuel between Russian ports using the route, which is variously called the Northern Sea Route or the Northeast Passage.

But the Russians hope that the transit of the German ships will inaugurate the passage as a reliable shipping route, and that the combination of the melting ice and the economic benefits of the shortcut -- it is thousands of miles shorter than various southerly routes -- will eventually make the Arctic passage a summer competitor with the Suez Canal.

"It is global warming that enables us to think about using that route," Verena Beckhusen, a spokeswoman for the shipping company, the Beluga Group of Bremen, Germany, said in a telephone interview.



For the full story, see:

ANDREW E. KRAMER and ANDREW C. REVKIN. "Arctic Shortcut Beckons Shippers as Ice Thaws." The New York Times (Fri., September 10, 2009): A1 & A3.




NortheastPassageMap2009-09-26.jpg "A Shortcut Across the Top of the World." Source of caption and map: online version of the NYT article quoted and cited above.





January 30, 2009

"Atlas Shrugged is a Celebration of the Entrepreneur"


RandAynStamp.jpg








"The art for a 1999 postage stamp." Source of image: online version of the WSJ article quoted and cited below.


(p. W11) Many of us who know Rand's work have noticed that with each passing week, and with each successive bailout plan and economic-stimulus scheme out of Washington, our current politicians are committing the very acts of economic lunacy that "Atlas Shrugged" parodied in 1957, when this 1,000-page novel was first published and became an instant hit.

Rand, who had come to America from Soviet Russia with striking insights into totalitarianism and the destructiveness of socialism, was already a celebrity. The left, naturally, hated her. But as recently as 1991, a survey by the Library of Congress and the Book of the Month Club found that readers rated "Atlas" as the second-most influential book in their lives, behind only the Bible.

For the uninitiated, the moral of the story is simply this: Politicians invariably respond to crises -- that in most cases they themselves created -- by spawning new government programs, laws and regulations. These, in turn, generate more havoc and poverty, which inspires the politicians to create more programs . . . and the downward spiral repeats itself until the productive sectors of the economy collapse under the collective weight of taxes and other burdens imposed in the name of fairness, equality and do-goodism.

. . .

Ultimately, "Atlas Shrugged" is a celebration of the entrepreneur, the risk taker and the cultivator of wealth through human intellect. Critics dismissed the novel as simple-minded, and even some of Rand's political admirers complained that she lacked compassion. Yet one pertinent warning resounds throughout the book: When profits and wealth and creativity are denigrated in society, they start to disappear -- leaving everyone the poorer.



For the full commentary, see:

STEPHEN MOORE. "DE GUSTIBUS; 'Atlas Shrugged': From Fiction to Fact in 52 Years." Wall Street Journal (Fri., JANUARY 9, 2009): W11.

(Note: ellipses added.)




December 11, 2008

"The Authorities Were Shocked" at Private Airport Success



DomodedovoAirportMoscow.jpg "Investors renovated a terminal at Domodedovo and oversaw construction of a train line to Moscow." Source of caption and photo: online version of the WSJ article quoted and cited below.


(p. B9) MOSCOW -- A heated battle for passengers between the Russian capital's main airports offers an unlikely model of competition for the aviation industry.

In most cities, airports are monopolies. Even in cities that have more than one, including New York, Paris and Tokyo, airports are usually owned by the same operator. That means airlines can rarely make the kind of choices passengers take for granted, such as choosing an airport for its efficiency, shopping or lounges.

Not so in Moscow, where two international airports, Domodedovo and Sheremetyevo, owned by rival organizations, battle for business. The result is lower fees, better service and fast-improving facilities all around.

Domodedovo Airport, for example, recently convinced several top airlines to make it their Russian base, thanks to a major modernization that added more than 20 new restaurants, jewelry boutiques and a shop where passengers can rent DVDs to watch in booths.

Sheremetyevo Airport responded by building a fast rail link to Moscow, complete with a Starbucks at the airport station.

Moscow's airport rivalry highlights a paradox of the global aviation industry: Airlines compete fiercely with each other for customers, but they face many monopolist suppliers, such as air-traffic control systems, fuel distributors and airports. Resulting costs and poor services get passed on to travelers.


. . .


During Russia's privatization drive of the 1990s, local investors bought Domodedovo, which was previously Moscow's airport serving Soviet Central Asia. The investors, grouped into an upstart charter-airline operator, East Line Group, renovated a terminal at Domodedovo and oversaw construction of a train line to Moscow.

East Line charged airlines landing and operating fees that undercut Sheremetyevo by around 30%. For passengers, Domodedovo's rail link guaranteed a 40-minute trip to downtown Moscow. Private Russian carriers, largely frozen out of Aeroflot's base at Sheremetyevo, expanded quickly at the spacious Domodedovo.

East Line's big break came in 2003, when British Airways announced it would switch from Sheremetyevo to Domodedovo.

"The authorities were shocked that a major airline would leave the government airport," recalls Daniel Burkard, BA's former country manager for Russia.



For the full story, see:

DANIEL MICHAELS. "Moscow Points the Way With Airport Competition; While Most Nations Sport Monopolies, Rivalry Between Two Russian Gateways Ushers in Improvements for Carriers, Travelers." The Wall Street Journal (Mon., DECEMBER 1, 2008): B9.

(Note: ellipsis added.)


MoscowAirportTrafficGraph.gif
















Source of graph: online version of the WSJ article quoted and cited above.








November 5, 2008

Boris Yeltsin's "Laissez-Faire Populism"


YeltsinBK.jpg








Source of book image: online version of the NYT review quoted and cited below.


(p. E1) Yeltsin's grievance against the Communists began before he was born, in an all-too-common history of family heartbreak that Mr. Colton pieces together with a good deal of original reporting. The Yeltsins were dispossessed for the bourgeois crime of having built a farm, mill and blacksmithing business. Yeltsin's grandfather died a broken man. His father was charged with the catch-all crime of "anti-Soviet agitation and propaganda" for grousing at his job on a construction site, and sent to a forced-labor camp for three years.

When Yeltsin joined the Communist Party, it was not out of devotion to the professed ideals but because a party card was a requirement for promotion to chief engineer in the construction industry. And when he moved into the hierarchy, he was already a man who chafed at party orthodoxy. No radical, he "nibbled at the edges of what was admissible," Mr. Colton writes, pushing for market prices in the local farm bazaars, encouraging entrepreneurial initiative in the workplace, complaining that the top-down system smothered self-reliance.



For the full review, see:

BILL KELLER. "Books of The Times; The Making of Yeltsin, His Boldness and Flaws." The New York Times (Weds., May 7, 2008): E1.


(p. 222) For Yeltsin's contemporaries, deliverance from Marxist scripture and Soviet srtuctures took many forms. For him, it was an ease with the market and recoil against the overbearing state. Mikhail Fridman, who became one of Russia's first billionaires as a banker and oilman, makes the point well:

Yeltsin as an individual who had inner freedom . . . instinctively moved toward the market as the end. That is because . . . as my namesake Milton Friedman says, "Capitalism is freedom." . . . [Yeltsin thought] it was necessary to give people freedom and they would make out well. How exactly to do that he did not know. [But he did know] that it was necessary to free people from control: We were squeezing them dry. He thought that if we let them go they could move heaven and earth. . . . This is the level on which he thought about it. . . . He took a dim view of all these [Soviet] controls. [He felt that] the controllers had long since believed in nothing.

. . .

(p. 525) Stewart, working as a photojournalist, taped Yeltsin's remarks on August 24, 1990, in Dolinsk. She calls them "laissez-faire populism."



Source:

Colton, Timothy J. Yeltsin: A Life. New York: Basic Books, 2008.

(Note: ellipses and bracked words in Fridman (sic) quote were made by Colton; other ellipses were added by me.)

(Note: the quote from p. 525 is from endnote number 38.)




October 3, 2008

McCraw on Communist Versus Capitalist Imperialism


From McCraw's summary of an article entitled "The Function of Entrepreneurs and the Interest of the Worker" that Schumpeter published in 1927 in a labor magazine :

(p. 384) By the end of the war, every nation in Eastern Europe and most in Central Europe had fallen under the control of the Soviets. They stripped industrial machinery, works of art, gold, and other movable assets from many of those countries and shipped them all to Russia. The total amount stolen equaled in value the aid to Western Europe under the American-sponsored Marshall Plan, the largest foreign aid program in history.


Source:

McCraw, Thomas K. Prophet of Innovation: Joseph Schumpeter and Creative Destruction. Cambridge, Mass.: Belknap Press, 2007.




August 4, 2008

Aleksander Solzhenitsyn, Hero of Freedom, RIP


I heard last night that Aleksander Solzhenitsyn had died late that on that day, August 3, 2008.

Like all of us, he had his flaws. But he had strong moral courage in standing up against the enslavement of the masses by the communist tyranny of the USSR. For that he paid a huge price, partly in the form of the years of forced labor in the prison camps that he carefully documented in his massive The Gulag Archipelago. (I must admit that I never read The Gulag, although I believe my father, to his credit, read every page.)

I remember my mentor Ben Rogge reading The First Circle and highly recommending it to us. The book's title is based on Dante's Inferno which describes the nine circles of hell, where each successive circle assigns increasingly horrendous eternal punishments, for those guilty of increasingly terrible sins. In the first circle, good people born before Jesus, are allowed to pursue their interests much as they had on earth. Socrates, Plato and Aristotle, for instance, engage in eternal dialogue.

In Solzhenitsyn's version, Stalin allows a group of scientists to have better living conditions, and somewhat more freedom than ordinary Soviet citizens, so long as the scientists make progress on projects that enable Stalin to extend his power.

One of the revelations in the book is that those who imposed the tyranny, had motives that were not always evil. One bureaucratic candidate for villainy, for instance, did bad things, in order to protect his family. At the top there is Stalin, but he is portrayed as insane.

The point is one that Rogge often made---people are pretty much the same everywhere. What mainly explains the differences in different societies are different institutions that provide differing incentives and constraints.

It is a fitting tribute to Solzhenitsyn that the first unabridged English translation of The First Circle will soon be published.

I salute Solzhenitsyn for his insights, and even more, for his courage at standing up against an evil system.




January 10, 2008

Putin's Russia Portrays Stalin, Not as Monster, But as Strong Ruler

(p. 5)  STALIN has undergone a number of transformations of his historical image in Russia, interpretations that say as much about the country’s current leaders as about the dictator himself.

In the West, Stalin is remembered for the numbers of his victims, about 20 million, largely his own citizens, executed or allowed to die in famines or the gulag. They included a generation of peasant farmers in Ukraine, former Bolsheviks and other political figures who were purged in the show trials of the 1930s, Polish officers executed at Katyn Forest, and Russians who died in the slave labor economy. Stalin’s crimes have been tied to his personality, cruelty and paranoia as well as to the circumstances of Russian and Soviet history.

While not denying that Stalin committed the crimes, a new study guide in Russia for high school teachers views his cruelty through a particular, if familiar, lens. It portrays Stalin not as an extraordinary monster who came to power because of the unique evil of Communism, but as a strong ruler in a long line of autocrats going back to the czars. Russian history, in this view, at times demands tyranny to build a great nation.

The text reinforces this idea by comparing Stalin to Bismarck, who united Germany, and comparing Russia in the 1930s under the threat of Nazism to the United States after 9/11 in attitudes toward liberties.

The history guide — titled “A Modern History of Russia: 1945-2006” — was presented at a conference for high school teachers where President Vladimir V. Putin spoke; the author, Aleksandr Filippov, is a deputy director of a Kremlin-connected think tank.

 

For the full commentary, see:

ANDREW E. KRAMER.  "WORD FOR WORD | NEW RUSSIAN HISTORY; Yes, a Lot of People Died, but ..."  The New York Times , Week in Review section  (Sun., August 12, 2007):  5.

(Note:  ellipsis in title in original.)

 




December 7, 2007

Reducing Nickel Pollution is an Entrepreneurial "Business Opportunity" in Russia

 

     Vladimir Stratyev in front of a lake containing nickel dust from the nickel factory in the background.  Source of photo:  online version of the NYT article quoted and cited below. 

 

(p. A4)  NORILSK, Russia — A former Siberian gulag with a population of about 210,000, this decrepit city has some of the worst air quality in the world. It is surrounded by dead trees, as far as the eye can see, poisoned by acid rain.

But to Vladimir M. Stratyev, the eye-stinging haze is an unalloyed blessing, for Mr. Stratyev is, in effect, a miner of air pollution. For him the smog of Norilsk is a mother lode.

The smelters here produce one-fifth of all the world’s nickel, a key alloy of stainless steel, while emitting 1.9 million tons of sulfur dioxide a year, more than the entire country of France. They also spew out 10,800 tons of heavy metal particulates.

. . .

Spotting a business opportunity, factory officials have brought in a contractor, Poligon, to extract the metals from one of these deposits, known euphemistically as “technogenic sources of ore.”

Mr. Stratyev, the supervisor of a mining crew, uses a dredge and bulldozer to scoop up the black sludge, rich in nickel that once fell from the sky. He gathers it in mighty piles from a large pond that lies directly downwind from the smelters and returns it to the factory from which it came.

“They should put a monument up to us,” Mr. Stratyev said, standing in front of the dredge he just used to mine air pollution from the bottom of a pond. “We’re solving an ecological problem.”

. . .

The pollution mining began five years ago, according to Aleksandr I. Korolev, a deputy chief engineer at the factory. “It’s a year-round operation,” Mr. Korolev said of the work, which has accelerated recently because of high metals prices. “The pond does not freeze,” he said, because of the chemicals and the inflow of warm effluent from the factory.

 

For the full story, see: 

ANDREW E. KRAMER.  "NORILSK JOURNAL; For One Business, Polluted Clouds Have Silvery Linings."  The New York Times   (Thurs., July 12, 2007):  A4.

 

NorliskRussiaMap.jpg   Source of map:  online version of the NYT article cited above. 

 




November 12, 2007

Strong Global Support for Free Markets

 

FreeMarketsPositiveViewTable.gif   Source of table:  "World Publics Welcome Global Trade -- But Not Immigration." Pew Global Attitudes Project, a project of the PewResearchCenter. Released: 10.04.07 dowloaded from: http://pewglobal.org/reports/display.php?ReportID=258

 

(p. A10) WASHINGTON, Oct. 4 — Buoyed and battered by globalization, people around the world strongly view international trade as a good thing but harbor growing concerns about its side effects: threats to their cultures, damage to the environment and the challenges posed by immigration, a new survey indicates.

In the Pew Global Attitudes Project survey of people in 46 countries and the Palestinian territories, large majorities everywhere said that trade was a good thing. In countries like Argentina, which recently experienced trade-based growth, the attitude toward trade has become more positive.

But support for trade has decreased in recent years in advanced Western countries, including Germany, Britain, France and Italy — and most sharply in the United States. The number of Americans saying trade is good for the country has dropped by 19 percentage points since 2002, to 59 percent.

“G.D.P. growth hasn’t been as dramatic in these places as in Latin America or Eastern Europe,” said Andrew Kohut, president of the Pew Research Center, referring to gross domestic product, the total value of the goods and services produced in a country. “But worldwide, even though some people are rich and some are poor, support for the basic tenet of capitalism is pretty strong.”

 

For the full story, see: 

BRIAN KNOWLTON. "Globalization, According to the World, Is a Good Thing. Sort Of."  The New York Times   (Fri., October 5, 2007):  A10. 

 




June 5, 2007

Google Co-Founder Sergey Brin "Really Enjoyed the Montessori Method"

 

MOM-Web-Cover-2007-02.png MOM-Web-Brin-2007-02.png   Source for the image of the Moment issue cover, on left: http://www.momentmag.com/issue/index.html   Source for the image of the first page of the article, on right:  online version of the Moment article cited below.

 

Sergey, who turned six that summer, remembers what followed as simply “unsettling”—literally so. “We were in different places from day to day,” he says. The journey was a blur. First Vienna, where the family was met by representatives of HIAS, the Hebrew Immigrant Aid Society, which helped thousands of Eastern European Jews establish new lives in the free world. Then, on to the suburbs of Paris, where Michael’s “unofficial” Jewish Ph.D. advisor, Anatole Katok, had arranged a temporary research position for him at the Institut des Hautes Etudes Scientifiques. Katok, who had emigrated the year before with his family, looked after the Brins and paved the way for Michael to teach at Maryland.

When the family finally landed in America on October 25, they were met at New York’s Kennedy Airport by friends from Moscow. Sergey’s first memory of the United States was of sitting in the backseat of the car, amazed at all the giant automobiles on the highway as their hosts drove them home to Long Island.

The Brins found a house to rent in Maryland—a simple, cinder-block structure in a lower-middle-class neighborhood not far from the university campus. With a $2,000 loan from the Jewish community, they bought a 1973 Ford Maverick. And, at Katok’s suggestion, they enrolled Sergey in Paint Branch Montessori School in Adelphi, Maryland.

He struggled to adjust. Bright-eyed and bashful, with only a rudimentary knowledge of English, Sergey spoke with a heavy accent when he started school. “It was a difficult year for him, the first year,” recalls Genia. “We were constantly discussing the fact we had been told that children are like sponges, that they immediately grasp the language and have no problem, and that wasn’t the case.”

Patty Barshay, the school’s director, became a friend and mentor to Sergey and his parents. She invited them to a party at her house that first December (“a bunch of Jewish people with nothing to do on Christmas Day”) and wound up teaching Genia how to drive. Everywhere they turned, there was so much to take in. “I remember them inviting me over for dinner one day,” Barshay says, “and I asked Genia, ‘What kind of meat is this?’ She had no idea. They had never seen so much meat” as American supermarkets offer.

When I ask about her former pupil, Barshay lights up, obviously proud of Sergey’s achievements. “Sergey wasn’t a particularly outgoing child,” she says, “but he always had the self-confidence to pursue what he had his mind set on.”

He gravitated toward puzzles, maps and math games that taught multiplication. “I really enjoyed the Montessori method,” he tells me. “I could grow at my own pace.” He adds that the Montessori environment—which gives students the freedom to choose activities that suit their interests—helped foster his creativity.

“He was interested in everything,” Barshay says, but adds, “I never thought he was any brighter than anyone else.”

 

For the full story, see:

Mark Malseed.  "The Story of Sergey Brin; How the Moscow-born entrepreneur cofounded and changed the way the world searches."  Moment Magazine  (February 2007).

 




May 3, 2007

Reuniting the Victims of Communism

RussianSiblingsReunited.jpg   "Sergei and Pyotr Leontiev are reunited on the Russian TV show, 'Zhdi Menya.'"  Source of the caption and photo:  online version of the WSJ article cited below.

 

(p. A1)  MOSCOW -- In a television studio here, two old brothers hug and weep -- reunited on prime time 60 years after Stalin's terror tore them apart.

They are stars on "Zhdi Menya," or "Wait for Me," one of the most popular TV shows in Russia. With its mission to reunite loved ones, the program probes Russia's 20th-century history and the scars it left on the lives of ordinary people. It has become a must-watch for Russians still trying to make sense of their tortured past.

The brothers in this episode, Sergei and Pyotr Leontiev, were separated in 1941 when their mother was sent to a prison camp 1,800 miles east of Moscow. She took with her Sergei, then 2 months old, but left behind seven other children whom she never saw again. Meanwhile, Pyotr and his sisters left home, taking jobs at factories in nearby towns.

Since its launch in 1998, "Zhdi Menya" has brought together 30,000 people sundered by Stalin's purges, war and the collapse of the Soviet Union. That's earned it a unique, and cherished, place in popular culture.

"We reconstruct the real history of this country," says Igor Kvasha, the program's host. "Not the garbled version in the text books."

Yet the program is ostensibly unpolitical. A tear-jerking cross between Jerry Springer and the History Channel, it recounts the crimes of communism without apportioning blame. That makes it palatable to Russia's leaders, for whom Soviet-era might is still a political touchstone.

. . .

(p. A12)   This focus on the victims of the communist regime contrasts with most mainstream media, which these days tend to humanize Soviet-era leaders and gloss over their crimes. A TV drama, "Stalin.Live," has been panned by critics for portraying Stalin as a sympathetic old man.

"There's a lot of pseudo-historical stuff on TV these days," says Irina Petrovskaya, a television critic. "'Zhdi Menya' is different because it's totally authentic. That's why it's so popular."

Pyotr Leontiev wrote to the program in 2001 in search of his brother. He had spent years trying to trace him through official channels, but was rebuffed at every turn.

The Leontiev family had been devastated by war and terror. Their father, drafted in 1941, was declared missing in action in 1943. Their mother was arrested on charges of "speculation" -- neighbors informed on her for selling a few pounds of tobacco and she was packed off to the Gulag with Sergei, her youngest son, still a babe in arms. His siblings had only his cradle to remember him by.

Researchers at "Zhdi Menya" contacted police in Karaganda, Kazakhstan -- the site of the mother's prison camp -- and after trawling archives they found a Sergei Leontiev whose records matched Pyotr's description. Within weeks they had tracked down Sergei, a retired carpenter. After a childhood in orphanages in Karaganda, he'd spent most of his life, impoverished, in workers' barracks.

In the studio, Pyotr told his story: "The tragedy that befell our family wasn't unique." He described how his mother was wrenched from her children, how their last sight of her and baby Sergei was on a prison train bound for the steppes. "We never heard from them again." The children, raised by a 19-year-old sister, were lucky: Children of "enemies of the people" were often separated, their names changed, and sent to orphanages thousands of miles apart.

To the strains of Mozart's Requiem, Mr. Kvasha spoke to the audience: "It's hard to imagine how many stories there are like this. They didn't just take away people's husbands, wives and parents. They deliberately destroyed archives, concealed people's names. They took away their memory."

In a heart-rending moment, he led Pyotr Leontiev to his brother, who was sitting weeping in the audience. The two embraced.

Pyotr had mixed feelings about the encounter. The joy of seeing Sergei was clouded by the revelation that his mother had been worked to death in 1943. "It was very hard, a very sad day," says Pyotr.

The two men broke down and looked deeply into each other's eyes. "We survived," Pyotr said to his brother. "We survived."

 

For the full story, see: 

GUY CHAZAN  "Family Viewing: TV Show Reunites Russian Siblings; Sundered by Stalin, Long-Lost Brothers Embrace on Prime Time."  The Wall Street Journal  (By  March 9, 2007):  A1 & A12.

 

 KvashaIgor.gif   The actor who hosts "Zhdi Menya" ("Wait for Me").  Source of image:  online version of the WSJ article cited above.

 




April 21, 2007

Castro's Legacy of "Death, Tears and Blood"

Like thousands of other Cubans, I was arrested in the middle of the night. Fidel Castro's police raided my parents' home, stuck a machine gun in my face and took me away. It was 1960 and I was 22 years old.

The news that the Cuban dictator is gravely ill floods my mind with memories of my years spent in captivity. I believe that those of us who were political prisoners know his legacy better than anyone. For 22 years, I was an inmate in his vast prison system, mostly confined to an island gulag, for crimes I did not commit.

. . .

The legacy of Castro for Cuba will be much like that of Stalin in Russia, Pol Pot and Ieng Sari in Cambodia and Hitler in Germany. It will be the memories of the unknown numbers of victims, of concentration camps, torture, murder, exile, families torn apart, death, tears and blood. Castro will go down in history as one of the cruelest of all dictators -- a man who tormented his own people.

But his poisonous legacy will also include the double standard by foreign governments, intellectuals and journalists who fought ferociously against the unspeakable violations of human rights by right-wing dictatorships, yet applauded Castro. To this day many of these intellectuals serve as apologists and accomplices in the subjugation of the Cuban people. Rafael Correa, the recently inaugurated president of Ecuador, has declared that in Cuba there is no dictatorship. Evo Morales, president of Bolivia, considers Castro his mentor and has already shown that he is willing to silence his own critics at the point of a gun. Venezuela, once a democracy, is the new Cuba, replete with a growing population of political prisoners.

 

For the full commentary, see: 

ARMANDO VALLADARES.  "Castro's Gulag." The Wall Street Journal  (Mon., March 5, 2007):  A16.

 




September 28, 2006

A Tale of Two Churches: Russia Has an Entrepreneurial Tradition Too

 

Two old and exotic churches, St. Basil's in Moscow and Kizhi in the Russian north, survived the Soviet era and are invariably depicted in brochures and books to suggest the distinctiveness of Russian culture.  Both feature the tent roofs and onion domes that dominated the skyline of medieval Russia.  But each bears mute witness to a very different tradition:  one, imperial centralism; the other, entrepreneurial regionalism.  Both are embedded in Russia's history; the conflict between them may well determine Russia's destiny.

St. Basil's, looming over Red Square, is an enduring symbol of theatrical autocracy; the Kizhi church, of frontier inventiveness.  Authoritarian centralism has been growing recently under President Putin.  But he also is fond of Kizhi and brought its new priest with him on his last trip to New York.

. . .

Tolerance was implicit in the northern tradition of dvoeveria:  the simultaneous belief in both the old pagan spirits and the new Christian God.  Medieval petroglyphs of the Kizhi region freely intermixed symbols of both.  Peasants in the region were not enserfed.  The northern region lost much of its independent power when Moscow sacked and subdued Novgorod.

. . .

Many more people have seen St. Basil's on Red Square than Kizhi on an island in Lake Onega -- and most see Russian history in terms of autocratic power in Moscow rather than creativity amid adversity in the regions.  Kizhi is the supreme monument to this forgotten tradition that continued to unfold as the vast Russian domain spread north to the Arctic Ocean and across the Pacific to Alaska in the 17th and 18th centuries.

No one knows who was the architect of either monument.  But Russian popular folklore suggests that the creator of St. Basil's was forcefully either blinded or drowned to assure that it could never be duplicated.  In contrast, the creator of Kizhi is said to have simply thrown his ax into the lake and lived on peacefully as a holy man in the northern forests.

During that time, Moscow autocrats looked out from the closed front porch of St. Basil's to see the enemies of central power drawn and quartered publicly in Red Square.  By contrast, the Kizhi church was wider and open to the sky -- and where local people gathered to solve practical problems, facing a vista of lakes and forests.

Much of the renewed vitality in Russia today is coming from young people in the regions.  Their hopes for a more participatory and accountable political and economic future depend on the kind of open community that created Kizhi -- not the closed circles that cling to St. Basil's.

 

For the full commentary, see: 

JAMES H. BILLINGTON.  "MASTERPIECE; Two Churches, Two Russias; One born of authoritarian centralism, the other of entrepreneurial regionalism."  Wall Street Journal   (Sat., September 16, 2006):  P18.

 




July 5, 2006

Russians Try to Steal Rocker's Vacuum Tube Factory

Mike Matthews holding one of the vacuum tubes produced in the Russian factory he owns.  Source of photo:  online version of the NYT article cited below.

 

(p. C1)  SARATOV, Russia — Mike Matthews, a sound-effects designer and one-time promoter of Jimi Hendrix, bought an unusual Russian factory making vacuum tubes for guitar amplifiers.  Now he has encountered a problem increasingly common here: someone is trying to steal his company.

Sharp-elbowed personalities in Russia's business world are threatening this factory in a case that features accusations of bribery and dark hints of involvement by the agency that used to be the K.G.B.

Though similar to hundreds of such disputes across Russia, this one is resonating around the world, particularly in circles of musicians and fans of high-end audio equipment.

Russia is one of only three countries still making vacuum tubes for use in reproducing music, an aging technology that nonetheless "warms up" the sound of electronic music in audio equipment.

"It's rock 'n' roll versus the mob," Mr. Matthews, 64, said in a telephone interview from New York, where he manages his business distributing the Russian vacuum tubes.  "I will not give in to racketeers."

Yet the hostile takeover under way here is not strictly mob-related.  It is a dispute peculiar to a country where property rights — whether for large oil companies, car dealerships or this midsize factory — seem always open to renegotiation.  It provides a view of the wobbly understanding of ownership that still prevails.

. . .

(p. C4)  If the tube factory dies, so will the future of a rock 'n' roll sound dating back half a century, the rich grumble of a guitar tube amplifier — think of Jimi Hendrix's version of "The Star-Spangled Banner" — that musicians say cannot be replicated with modern technology.

"It's nice and sweet and just pleasing sounding," Peter Stroud, the guitarist for Sheryl Crow, said in a telephone interview from Atlanta.  "It's a smooth, crunchy distortion that just sounds good.  It just feels good to play on a tube amp."

He added:  "It would be a catastrophe for the music industry if something happened to that plant."

 

For the full story, see: 

ANDREW E. KRAMER.  "From Russia, With Dread; American Faces a Truly Hostile Takeover Attempt at His Factory."  The New York Times   (Tuesday, May 16, 2006):  C1 & C4.

 

The transistor disrupted the vacuum tube, a case that would usually be described as an episode of creative destruction.  One secondary lesson from the story above is that there may be a previously unremarked symmetry to the process of disruption.  A disruptive technology typically appeals only to a niche in the market, while the incumbent technology dominates the mainstream.  But after the disruptive technology improves sufficiently to capture much of the mainstream market, maybe there often will remain a niche market that still prefers the older disruptive technology?

To use Danny DeVito's example in "Other People's Money," the car may have disrupted horse-and-buggies.  But for some nostalgic "jobs" the horse-and-buggy may still be the better product, so there will likely remain some demand for buggy whips.

To the extent that this phenomenon is significant, it might serve to ease the labor market transition when one technology leapfrogs another.

 

VacuumTubeBox.jpg A vacuum tube used in guitar amplifiers, that was produced in the factory that Mike Matthews owned.  Source of photo:  online version of the NYT article cited above.




June 8, 2006

Doha Tariff Cuts Would Save Global Economy About $100 Billion; France Objects

 

FoodExportsAndTariffs.gif  Source of graphic:  online version of the WSJ article cited below.

 

(p. A1)  The so-called Doha round of talks, which began in 2001, were designed to boost developing nations; among other things, they want lower barriers to their agricultural exports.  France has vowed to veto any deal that doesn't protect its farmers.  A pivotal missed deadline April 30 has led to predictions the talks could die by summer if countries including France don't change their stance.

The standoff shows how cultural and emotional factors can combine with politics to stifle free-trade goals that most economists believe would provide a net benefit to the world.  The tariff cuts envisioned by Doha would not only help developing countries sell their minerals and food products, but would also lower barriers to the industrialized world's exports of goods and services.  The World Bank calculates that Doha would boost the global economy by around $100 billion.

Overall, France itself likely would be a major economic gainer from a global (p. A10) deal.  Though it's the world's second-largest agriculture exporter after the U.S., farming accounts for just 2.5% of the French economy.  World-class manufacturing and service companies, such as car maker Renault SA and insurer AXA SA, are larger engines of the French economy.  France could gain more income than it would lose in opening its agricultural markets to budding farm superpowers like Brazil.

Even in agriculture, France can be a formidable competitor, notably in products such as wine and cheese.  Its brand is well-known the world over.  And its farms are increasingly home to capital-intensive agribusiness companies, not just small family producers.  Most of the $11.5 billion in European Union subsidies that France receives each year goes to the largest, most commercially viable farms.

WTO chief Pascal Lamy, a Frenchman, says he doesn't understand France's position.  "As an efficient farm producer, the strategy should be to reduce subsidies and prices, because others won't be able to compete with you," he said in a recent interview.

. . .

The French rural tradition, however, is changing.  Between 1993 and 2004, the number of arable farms fell by nearly a third.  Wide swaths of neglected land are now home to unsightly scrub, and the farms people see as they drive down France's immaculate highways are often parts of major business enterprises.  Oxfam says as much as 60% of subsidies went to the richest 15% of French farmers in 2004, the latest figures available.

Oxfam believes the EU's tariffs and farm subsidies, which total over €40 billion annually, are harmful to the world's poorest countries.  High customs duties keep products from poor nations out of the wealthy EU market.  At the same time, EU farmers overproduction is dumped cheaply abroad, driving down global prices and harming farmers in the developing world.

 

For the full story, see:

SCOTT MILLER.  "Food Fight; French Resistance To Trade Accord Has Cultural Roots; WTO Talks Promise Benefits But Farmers Retain Hold On the Nation's Stomach; 'Politicians Are Frightened'."  The Wall Street Journal  (Tues., May 16, 2006):  A1 & A10.

 




February 15, 2006

"Growing Recognition of Economic Costs" of Koyoto Protocol



Commentary on the Kyoto Protocol:

(p. 3) . . . the current stalemate is not just because of the inadequacies of the protocol. It is also a response to the world's ballooning energy appetite, which, largely because of economic growth in China, has exceeded almost everyone's expectations. And there are still no viable alternatives to fossil fuels, the main source of greenhouse gases.

Then, too, there is a growing recognition of the economic costs incurred by signing on to the Kyoto Protocol.

As Prime Minister Tony Blair of Britain, a proponent of emissions targets, said in a statement on Nov. 1: ''The blunt truth about the politics of climate change is that no country will want to sacrifice its economy in order to meet this challenge.''

This is as true, in different ways, in developed nations with high unemployment, like Germany and France, as it is in Russia, which said last week that it may have spot energy shortages this winter.

. . .

The only real answer at the moment is still far out on the horizon: nonpolluting energy sources. But the amount of money being devoted to research and develop such technologies, much less install them, is nowhere near the scale of the problem, many experts on energy technology said.

Enormous investments in basic research have to be made promptly, even with the knowledge that most of the research is likely to fail, if there is to be any chance of creating options for the world's vastly increased energy thirst in a few decades, said Richard G. Richels, an economist at the Electric Power Research Institute, a nonprofit center for energy and environment research.

''The train is not leaving the station, and it needs to leave the station,'' Mr. Richels said. ''If we don't have the technologies available at that time, it's going to be a mess.''



For the full commentary, see:

ANDREW C. REVKIN. "THE WORLD; On Climate Change, a Change of Thinking." The New York Times, Section 4 (Sun., December 4, 2005): 3.

(Note: ellipsis added.)





February 10, 2006

Solzhenitsyn Endures: The Return of "The First Circle"


    Source of book image:   Amazon.com.


I remember Ben Rogge recommending The First Circle, decades ago when it first appeared in English. It is a powerful, courageous, wise work, bearing many lessons. As you read the book, you keep hoping you can find someone to blame for the evil that is happening. But as Solzhenitsyn works his way up the bureaucracy, each bureaucrat has a plausible motive for his part in evil; one motive, for example, is the protection of the bureaucrat's family. Only when you reach Stalin, do you find someone who you can really despise. But he seems borderline crazy, so even he is not a totally satisfying villian.

The book can be seen as illustrating a point that Rogge often made: socialism is not bad because it is run by bad people; it is bad because it provides ordinary people incentives to do bad things. (These are not his words, but I believe they capture his point.)



Alexandr Solzhenitsyn. Source of image: online version of the NYT article quoted and cited below.


(p. A1) MOSCOW, Feb. 8 -- A grandfatherly figure, his bearded face wrinkled into a smile, peers down from billboards around town.

It is surprise enough that the man is Aleksandr I. Solzhenitsyn, the once-exiled writer, Nobel Prize winner and, of late, octogenarian scold. It is even more so that the billboards advertise his adaptation -- broadcast on state television, no less -- of one of his fiercely anti-Soviet novels, "The First Circle."

Solzhenitsyn has been called the conscience of the nation, but his reputation has risen and fallen as tumultuously as Russia itself since the collapse of the Soviet Union. "First Circle" has once again placed him on the national stage, reaching an audience that would have been inconceivable to him four decades ago, when he smuggled the book out of the Soviet Union.


For the full article, see:

STEVEN LEE MYERS "Toast of the TV in Russian Eyes: It's Solzhenitsyn." The New York Times (Thurs., February 9, 2006): A1 & A3.



A scene from the Russian mini-series version of The First Circle. Source of image: online version of the NYT article quoted and cited above.




January 17, 2006

Ayn Rand Admirer Illarionov Pushed Russia Toward Free Market


Image source: WSJ article quoted and cited below.

Since the following interesting article, Andrei Illarionov has resigned. That's probably a bad sign for Russia, unless you argue that Illarionov can be more effective outside the government than inside it.

The article begins by quoting Al Breach, who is chief strategist at Brunswick UBS:

(p. A13) It's a one-party state, and if you're out, you're out," Mr. Breach says. "If he can help stop some of the bad things, it's worthwhile sticking around."

This year, however, things haven't gone his way, with state-owned oil and gas companies swallowing up independent oil producers, vastly expanding the state's presence in the economy. The result, says Mr. Illarionov, has been a fall in private investment in the oil industry and slowing oil-production growth--at a time when world crude prices are soaring. Meanwhile, state outfits have also bought stakes in private engineering companies and taken over the management of Russia's biggest car maker, AvtoVAZ.

It is all anathema to Mr. Illarionov, a St. Petersberg-trained economist and longtime admirer of Ayn Rand, the American writer who lauded unfettered capitalism. In the early 1990s he was an adviser to Yegor Gaidar, then- prime minister and architect of Russia's early market reforms. But he quit in 1994, criticizing the government for failing to curb inflation and for putting the brakes on overhaul (sic). He then became one of Russia's most respected independent analysts: He was the only prominent economist to call for a sharp devaluation of the ruble before the currency crashed in August 1998.

Mr. Putin hired him as an adviser in 2000, and he was a top (sic) force in drafting the liberal, modernizing agenda that the president pushed through in his first term. His ideology -- trimming state spending, slashing taxes, cutting red tape and deregulating Russia's gas, electricity and railway monopolies -- became official policy.

Mr. Illarionov was seen as one of the key drivers of crucial overhaul initiatives: a flat income-tax rate of 13%, a rainy-day Stabilization Fund for Russia's oil windfall, and the decision to dip into the fund to make early repayments on Russia's foreign debt.

But his reputation suffered in later years from a long, bruising fight over how to restructure the electricity industry, and a quixotic campaign against the Kyoto Protocol, both of which he largely lost. Russia ended up ratifying the climate-change pact last year.


For the full article, see:

GUY CHAZAN. "Putin Insider's Outsider Game; Adviser Illarionov Preaches Capitalism, but Who Is Listening?" THE WALL STREET JOURNAL (Fri., December 23, 2005): A13.

(Note: There are several differences (e.g., in the title, and in the reference to Ayn Rand) between the online version of this article, and the print version of this article.)




January 16, 2006

Do-Nothing Leaders Are Not Always Wrong



The source of the above image is:  http://www.edwardtufte.com/tufte/posters


Edward Tufte says that the graph/map above is the best graphic ever drawn.   His criterion is how much information is communicated per unit of ink.  (Sort of a signal to noise ratio?)

The tan line that starts thick on the left, and gets thinner toward the right, represents Napoleon's army as it enters and crosses Russia.  The width of the line is scaled to the remaining size of the army.   On the right hand side, the tan line ends in Moscow, where the army disasterously wintered.   The black line moving left shows the diminishing size of the army as Napoleon retreated.

When I was a student at Wabash College, I was a determined and vocal advocate of Ayn Rand's Atlas Shrugged.   My economics professor Ben Rogge, was not so enthused.  He thought there were better Russian novels to read, and on several occasions, suggested:  'Diamond, you should read War and Peace.'

I often did not take Rogge's advice quickly, but usually I took it eventually.  After leaving Wabash, I read War and Peace.   Parts of it, I found too much like a soap opera for my taste.  But I did find a part that resonated.

Part of Tolstoy's story is about the Russian general facing Napoleon, who would not fight, but who continued to retreat into the heart of Russia.  He was widely castigated as a do-nothing leader.   But as a result of the Russian general doing nothing, Napoleon ordered his army further and further into Russia.

It is very hard for leaders in government to do nothing.  They will be castigated.  But sometimes nothing is exactly the right thing for them to do.

Edward Tufte's wonderful book is:

Tufte, Edward R.   The Visual Display of Quantitative Information. 2nd ed.   Cheshire, CT:   Graphics Press, 2001.




December 13, 2005

Finland Building Europe's First New Nuclear Reactor in 15 Years



Petr Beckmann holding a copy of his The Health Hazards of NOT Going Nuclear. Golem Press, 1976. Beckmann died on August 3, 1993. Source of photo and Beckmann date of death: http://www.commentary.net/view/atearchive/s76a1928.htm


Not all those who are right, live to see their ideas vindicated. Thank you Petr Beckmann, for writing the truth, when the truth was not popular.


. . . when Finland, a country with a long memory of the Chernobyl disaster in 1986 and considerable environmental bona fides, chose to move ahead this year with the construction of the world's largest nuclear reactor, the nuclear industry portrayed it as a victory, one that would force the rest of Western Europe to take note.

But the decision to build the reactor, Olkiluoto 3, Europe's first in 15 years, was not taken quickly or lightly.

. . .

"There is an expectation that others will follow, both because of the way the decision was made and the boosting of confidence in being able to get through all the oppositional fear-mongering," said Ian Hore-Lacy, the director of public communications for the World Nuclear Association, an industry lobbying group.

The United States, which has not had a nuclear plant on order since 1978, is experiencing a groundswell of interest. Taking the first step in a long process, Constellation Energy, a Baltimore-based holding company, announced in late October that it would apply to the Nuclear Regulatory Commission for permission to construct and operate a pressurized water reactor like the kind being built in Finland, possibly in upstate New York or Maryland. The Finnish reactor, designed by Areva, the French state-controlled nuclear power group, is being built by Framatome ANP, a joint venture of Areva and Siemens, a Germany company.

In addition, President Bush signed into law an energy bill in August that offers billions of dollars in research and development funds and construction subsidies to companies willing to build new nuclear plants. Several utility companies have applied for early site permits, a preliminary step toward building reactors.

Worldwide, the resurgent interest in nuclear power is even more pronounced. Twenty-three reactors are under construction this year in 10 countries, most of them in Asia, which has aggressively pursued nuclear energy. India is building eight reactors. China and Taiwan are building a total of four reactors and are planning eight more. Russia is building four and South Korea is planning eight.

...

Nuclear energy's selling points were timely: it does not create emissions, unlike coal, oil and gas, and provides predictable electricity prices, a major bonus for Finnish industries, nuclear proponents said.

"The only viable alternative, if we want to maintain the structure of the economy, maintain our industries and meet our Kyoto targets, is nuclear," said Juha Rantanen, the chief executive officer of Outokumpu, one of the world's largest steel producers and one of Finland's biggest energy users. "We can't have a declining economy. We face huge challenges and an aging population. Something had to be done."

Environmentalists, however, argued that nuclear reactors could never be entirely safe. They are always radioactive, and their waste remains toxic for 100,000 years.

But the designers of Areva's pressurized water reactor, which is costing $3.5 billion to build, helped counter those arguments. In the event of a core meltdown, they said, the nuclear material would flow into a separate enclosure for cooling. They also said that the reactor is being built with enough concrete to withstand the impact of an airliner.

In the end, Finland's largest trade union supported the project, basically sealing the deal.

. . .




Read the full article at:

LIZETTE ALVAREZ. "Finland Rekindles Interest in Nuclear Power." The New York Times (Mon., December 12, 2005): A10.

(Note: ellipses added.)





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