David Warsh: A smelly red herring in Trump-Russia saga

Herrings "kippered" by smoking, salting and artificially dyeing until made reddish-brown, i.e., a "red herring". Before refrigeration kipper was known for being strongly pungent. In 1807, William Cobbett wrote how he used a kipper to lay a false trail, while training hunting dogs—a story that was probably the origin of the idiom.

Grand Kremlin Palace, in Moscow, commissioned 1838 by Czar Nicholas I, constructed 1839–1849, and today the official residence of the president of Russia

SOMERVILLE, Mass.

A red herring, says Wikipedia, is something that misleads or distracts from a relevant and important question. A colorful 19th Century English journalist, William Cobbett, is said to have popularized he term, telling a story of having used strong-smelling smoked fish to divert and distract hounds from chasing a rabbit.

The important questions long have had to do to do with the extent of Trump’s relations with powerful figures in Russian before his election as president; and with whether the FBI did a competent job of investigating those charges.

The herring in this case is the Durham investigation of various forms of 2016 campaign mischief, including (but not limited to) the so-called “Steele Dossier’’. The inquiry into Trump’s Russia connections was furthered (but not started) by persons associated with Hillary Clinton’s campaign. {Editor’s note: The political investigations of Trump’s ties with Russia started with anti-Trump Republicans.}

Trump’s claims that his 2020 defeat were the result of voter fraud have been authoritatively rejected. What, then, of his earlier fabrication? It has to so with the beginnings of his administration, not its end. The proposition that Clinton campaign dirty tricks triggered a tainted FBI investigation and hamstrung what otherwise might have been promising presidential beginning has been promoted for five years by Trump himself. The Mueller Report on Russian interference in the 2016 election was a “hoax,” a “witch-hunt’’ and a “deep-state conspiracy,” he has claimed.

Today, Trump’s charges are being kept on life-support in the mainstream press by a handful of columnists, most of them connected, one way or another, with the editorial page of The Wall Street Journal.  Most prominent among them are Holman Jenkins, Kimberly Strassel and Bret Stephens, now writing for The New York Times.

Durham, a career government prosecutor with a strong record as a special investigator of government misconduct (the Whitey Bulger case, post 9/11 CIA torture) was named by Trump to be U.S. attorney for Connecticut in early 2018.  A year later, Atty. Gen. William Barr assigned him to investigate the president’s claims that suspicions about his relations with Russia had been inspired by Democratic Party dirty tricks, fanned by left-wing media, and pursued by a complicit FBI. Last autumn, Barr named Durham a special prosecutor, to ensure that his term wouldn’t end with the Biden administration.

There is no argument that Durham has asked some penetrating questions.  The “Steele Dossier,” with its unsubstantiated salacious claims, is now shredded, thanks mostly to the slovenly methods of the man who compiled it, former British intelligence agent Christopher Steele.   Durham’s quest to discover the sources of information supplied to the FBI is continuing. The latest news of it was supplied last week, as usual, by Devlin Barrett, of The Washington Post. (Warning: it is an intricate matter.)

What Durham has not begun to demonstrate is that, as a duly-elected president, Donald Trump should have been above suspicion as he came into office.  There was his long history of real estate and other business dealings with Russians. There was the appointment of lobbyist Paul Manafort as campaign chairman in June 2016;  the secret beginning on July 31 of an FBI investigation of links between Russian officials and various Trump associates, dubbed Crossfire Hurricane; Manafort’s forced resignation in August; the appointment of  former Defense Intelligence Agency Director  Michael Flynn as National Security adviser and his forced resignation after 22 days; Trump’s demand for “loyalty” from FBI Director James Comey at a private dinner a week after his inauguration, and Comey’s abrupt dismissal four months later (which triggered Robert Mueller’s appointment as special counsel to the Justice Department): none of this has been shown to do Hillary Clinton’s campaign machinations.

The Steele Dossier did indeed embarrass the media to a limited extent – Mother Jones and Buzzfeed in particular – but it was President Trump’s own behavior, not dirty tricks, that disrupted his first months in office.  Those columnists who exaggerate the significance of campaign tricks are good journalists.  So why keep rattling on?

In the background is the 30-year obsession of the WSJ editorial page with Bill and Hillary Clinton. WSJ ed page coverage of the story of John Durham’s investigation reminds me of Blood and Ruins, The Last Imperial War 1931-1945 (forthcoming next April in the US), in which Oxford historian Richard Overy argues that World War II really began,  not in 1939 or 1941, but with the Japanese invasion of Manchuria in 1931. Keep sniffing around if you like, but what you smell is smoked herring.

David Warsh, a veteran columnist and an economic historian, is proprietor of Somerville-based economicprincipals.com, where this essay originated.

© 2021 DAVID WARSH

David Warsh: Perhaps we're in the Third Reconstruction

Former slaves voting in New Orleans in 1867. After Reconstruction ended, in 1977, most Black people in much of the South lost the right to vote and didn’t regain it until the 1960s.

SOMERVILLE, Mass.

“Reconstruction” (1865–1877), as high school students encounter it, is the period of a dozen years following the American Civil War. Emancipation and abolition were carried through; attempts were made to redress the inequities of slavery; and problems were resolved involving the full re-admission to the Union of the 11 states that had seceded.

The latter measures were more successful than the former, but the process had a beginning and an end. After the back-room deals that followed the disputed election of 1876, the political system settled in a new equilibrium.

I’ve become intrigued by the possibility that one reconstruction wasn’t enough.  Perhaps the American republic must periodically renegotiate the terms of the agreement that its founders reached in the summer of 1787 – the so-called “miracle in Philadelphia,” in which the Constitution of the United States was agreed upon, with all its striking imperfections.

Is it possible that we are now embroiled in a third such reconstruction?

The drama of Reconstruction is well documented and thoroughly understood. It started with Lincoln’s Gettysburg Address, continued with his Second Inaugural address, the surrender of the Confederate Army at Appomattox Courthouse; emerged from the political battles Andrew Johnson’s administration and the two terms of President  U.S. Grant; and climaxed with the passage of the Thirteenth, Fourteenth and Fifteenth Amendments to the Constitution – the “Reconstruction Amendments.” It ended with the disputed election of 1876, when Southern senators supported the election of Rutherford B. Hayes, a Republican, in exchange for a promise to formally end Reconstruction and Federal occupation he following year.

The shameful truce that followed came to be known as the Jim Crow era. It last 75 years. The subjugation of African-Americans and depredations of the Ku Klux Klan were eclipsed by the maudlin drama of reconciliation among of white veterans – a story brilliantly related in Race and Reunion: The Civil War in American Memory, by David Blight, of Yale University.  For an up-to-date account, see The Second Founding: How the Civil War and Reconstruction Remade the Constitution, by Eric Foner, of Columbia University.

The second reconstruction, if that is what it was, was presaged in 1942 by Swedish economist Gunnar Myrdal’s book, An American Dilemma: The Negro Problem and American Democracy, commissioned by the Carnegie Corporation. The political movement commenced in 1948 with the desegregation of the U.S. armed forces. The civil rights movement lasted from Rosa Parks’s arrest, in 1955, through the March on Washington, in 1963, at which Martin Luther King Jr. made delivered his “I Have a Dream” speech, and culminated in the passage of the 1965 Voting Rights Act.  Repression was far less violent than on the way to the Jim Crow era. There were murders in the civil rights era, but mostly they made newspaper front pages.

And while the second reconstruction entered on race, many other barriers were breached in those rears as well: ethnicity, gender and sexual preference. In Roe v Wade the Supreme Court established a constitutional right to abortion a decade after the invention of the Pill made pregnancy a fundamentally deliberate decision.

How do reconstructions end?  In the aftermath of decisive elections, it would seem  – in the case of the second reconstruction, with the 1968 election of Richard Nixon, based on a Southern strategy devised originally by Barry Goldwater. Nixon was in many ways the last in a line of liberal presidents who followed Franklin Roosevelt. He had promised to “end the {Vietnam} war” the war and he did.  An armistice of sorts – Norman Lear’s All in the Family television sit-com – preceded his Watergate-inspired resignation. Peace lasted until the election of President Barack Obama.

So what can be said about this third reconstruction, if that is what it is?  Certainly it is still more diffuse – not just Black Lives Matter, but #MeToo, transgender rights, immigration policy and climate change, all of it aggravated by the election of Donald Trump.  This latest reconstruction is often described as a culture war, by those who have never seen an armed conflict.  How might this episode end? In the usual way, with a decisive election. Armistice may takes longer to achieve.

For a slightly different view of the history, see Bret Stephens’s Why Wokeness Will Fail. We journalists are free to voice opinions, but we must ultimately leave these questions to political leaders, legal scholars, philosophers, historians and the passage of time. I was heartened, though, at the thought expressed by economic philosopher John Roemer, of Yale University, who knows much more than I do about these matters, when he wrote the other day to say “I think the formulation of the first, second, third…. Reconstructions is incisive. It reminds me of the way we measure the lifetime of a radioactive mineral. We celebrate its half-life, three-quarters life, etc….. but the radioactivity never completely disappears.  Racism, like radioactivity, dissipates over time but never vanishes.”

 David Warsh is a veteran columnist and an economic historian He’s proprietor of Somerville-based economicprincipals.com, where this essay first ran.

David Warsh: Competing with expansionist China while managing internal threats to our democracy

SOMERVILLE, Mass.

I have, at least since 1989, been a believer that competition between the West and China is likely to dominate global history for the foreseeable future.  By that I mean at least the next hundred years or so.

I am a reluctant convert to the view that the contest has arrived at a new and more dangerous phase. The increasing belligerence of Chinese foreign policy in the last few years has overcome my doubts.

It was a quarter century ago that I read World Economic Primacy: 1500-1990, by Charles P. Kindleberger. I held no economic historian in higher regard than CPK, but I raised an eyebrow at his penultimate chapter, “Japan in the Queue?”  His last chapter, “The National Life Cycle,” made more sense to me, but even then wasn’t convinced that he had got the units of account or the time-scales right.

The Damascene moment in my case came last week after I subscribed to Foreign Affairs, an influential six-times-a-year journal of opinion published by the Council on Foreign Relations. Out of the corner of my eye, I had been following a behind-the-scenes controversy, engendered by an article in the magazine about what successive Republican and Democratic administrations thought they were doing as they engaged with China, starting with the surprise “opening” engineered by Richard Nixon and Henry Kissinger in 1971. I subscribed to Foreign Affairs to see what I had been missing.

In 2018, in “The China Reckoning,’’ the piece that started the row, foreign- policy specialists Kurt Campbell and Ely Ratner had asserted that, for over fifty years, Washington had “put too much faith in its power to shape China’s trajectory.”  The stance had been previously identified mainly with then-President Donald Trump.  Both Campbell and Ely wound up in senior positions in the Biden administration, at the White House and the Pentagon.

In fact the proximate cause of my subscription was the most recent installment in this fracas. To read “The Inevitable Rivalry,’’ by John Mearsheimer, of the University of Chicago, an article in the November/December issue of the magazine, I had to pay the entry rate. His essay turned out to be a dud.

Had U.S. policymakers during the unipolar moment thought in terms of balance-of-power politics, they would have tried to slow Chinese growth and maximize the power gap between Beijing and Washington. But once China grew wealthy, a U.S.-Chinese cold war was inevitable. Engagement may have been the worst strategic blunder any country has made in recent history: there is no comparable example of a great power actively fostering the rise of a peer competitor. And it is now too late to do much about it.

Mearsheimer’s article completely failed to persuade me. Devotion to the religion he calls “realism” leads him to ignore two hundred years of Chinese history and the great foreign-policy lesson of the 20th Century: the disastrous realism of the 1919 Versailles Treaty that ended World War I and led to World War II, vs. the pragmatism of the Marshall Plan of 1947, which helped prevent World War III. There is no room for moral conduct is his version of realism. It is hardball all the way.

My new subscription led me to the archives, and soon to “Short of War,’’ by Kevin Rudd, which convinced me that China’s designs on Taiwan were likely to escalate, given President Xi Jinping’s intention to remain in power indefinitely. (Term limits were abolished on his behalf in 2018.)  By 2035 he will be 82, the age at which Mao Zedong died.  Mao had once mused that repossession of the breakaway island nation of Taiwan might take as long as a hundred years.

Beijing now intends to complete its military modernization program by 2027 (seven years ahead of the previous schedule), with the main goal of giving China a decisive edge in all conceivable scenarios for a conflict with the United States over Taiwan. A victory in such a conflict would allow President Xi to carry out a forced reunification with Taiwan before leaving power—an achievement that would put him on the same level within the CCP pantheon as Mao Zedong.

That led me in turn to “The World China Wants,’’ by Rana Mitter, a professor of Chinese politics and history at Oxford University. He notes that, at least since the global financial crisis of 2008, China’s leaders have increasingly presented their authoritarian style of governance as an end in and of itself, not a steppingstone to a liberal democratic system. That could change in time, she says.

To legitimize its approach, China often turns to history, invoking its premodern past, for example, or reinterpreting the events of World War II. China’s increasingly authoritarian direction under Xi offers only one possible future for the country. To understand where China could be headed, observers must pay attention to the major elements of Chinese power and the frameworks through which that power is both expressed and imagined.

The ultimate prize of my Foreign Affairs reading day was “The New Cold War,’’ a long and intricately reasoned article in the latest issue by Hal Brands, of Johns Hopkins University, and John Lewis Gaddis, of Yale University, about the lessons they had drawn from a hundred and fifty years of competition among great powers. I especially agreed with their conclusion:

As [George] Kennan pointed out in the most quoted article ever published in these pages, “Exhibitions of indecision, disunity and internal disintegration within this country” can “have an exhilarating effect” on external enemies. To defend its external interests, then, “the United States need only measure up to its own best traditions and prove itself worthy of preservation as a great nation.”

Easily said, not easily done, and therein lies the ultimate test for the United States in its contest with China: the patient management of internal threats to our democracy, as well as tolerance of the moral and geopolitical contradictions through which global diversity can most feasibly be defended. The study of history is the best compass we have in navigating this future—even if it turns out to be not what we’d expected and not in most respects what we’ve experienced before.

That sounded right to me. Worries exist in a hierarchy: leadership of the Federal Reserve Board; the U.S. presidential election in 2024; the stability of the international monetary system; arms races of various sorts; climate change. Subordinating all these to the China problem will take time.

David Warsh, a veteran columnist and an economic historian, is proprietor of Somerville-based economicprincipals.com, where this essay originated.

David Warsh: Trump keeps grifting; what next for Bloomberg?

Bloomberg’s headquarters tower on Lexington Avenue in Midtown Manhattan

SOMERVILLE, Mass.

Donald Trump is planning to start a social-media network to compete with Twitter and Facebook, which have kicked him off their platforms. Digital World Acquisition Co. (DWAC), a so-called blank-check company, or SPAC, plans to fund Truth Social, Trump’s venture, with the $290 million that the company has raised from institutional investors, merging itself out of existence in the process. DWAC shares closed Friday at $94, a ten-fold increase over their initial offering price a few days before, having traded as high as $175 during the day. Trump’s alternative to Twitter is scheduled to launch next month.

But Truth Social seems unlikely to succeed.

Whatever the case, investors in what by then will be listed as Trump Media & Technology Group will be able to continue trading with each other, after the DWAC evanesces.  The Wall Street Journal on Oct. 23 explained the road ahead.  Bloomberg Opinion columnist Matt Levine commented, “If you are in the business of raising money to fund a social media company that you haven’t built yet and perhaps never will, the SPAC format has a real appeal.” In other words, Trump Social is another example of pure Trump fleece.

Meanwhile, there is Bloomberg L.P., almost the polar opposite of what Trump intends.

By now the Bloomberg story is well known, thanks to Eleanor Randolph’s excellent 2019 biography: how the 38-year-old Salomon Brothers partner was first banished to the computer room, then squeezed out of the firm altogether after a merger, only to surface two years later, aided by MerrillLynch (which still owns 12 percent of the company), with a proprietary bond-price data base and a package of related computer analytics, a system he first called Market Master.

Bloomberg terminal-subscription growth (at $24,000 a year apiece!) was so explosive in the ‘80s that, by 1990, Bloomberg  was able to start a news service, hiring Matthew Winkler, the WSJ reporter who had covered his rise, as its first editor-in-chief.  Bundled with Bloomberg analytics, Bloomberg News grew by leaps and bounds as well, until it rivaled powerhouse Reuters, the world’s oldest and largest news agency. John Micklethwait, editor of The Economist, replaced Winkler and continued to build its staff, hiring newspaper veterans and various media stars, But Bloomberg News’s product remains almost entirely online, which limits its influence in some critical dimensions. I read it there; it is not the same as print.

True, there is Bloomberg Businessweek.  Bloomberg bought the time-honored title from McGraw-Hill in 2009, at a fire-sale price, inserted his name, and gave it a complete makeover. The magazine arrives via postal mail, one day or another each week, and often many more days go by before I open its cover. When I do, I am always impressed by its contents, especially the decent, moderate Republican tone of its editorials, in sharp contrast to the over-the-top WSJ editorial page. But there is something about the weekly magazine format that no longer works, at least for those lacking leisure.  The Economist fares only a little bit better at my breakfast table.

Bloomberg, 79, was elected three time mayor of New York City.  He ran unsuccessfully for president in 2020.  It is well-documented that he has long hoped to buy a newspaper – either the WSJ or the NYT.  I’d like to know something about Donald Graham’s discussions with Bloomberg before Graham decided to sell The Washington Post to Amazon billionaire Jeff Bezos at a bargain price. My hunch is that Bezos’s four children loomed large in his thinking (Graham was a third-generation steward of what after 75 years had become a family paper.)

Today Bloomberg is worth $60 billion. So why doesn’t he start a print newspaper?  Name it for something other than himself. Model it, loosely, on the Financial Times. Print it at first in a dozen US cities, where dense home-delivery audiences exist. He is still young enough to enjoy presiding over an influential print paper for a dozen years or more. He already employs most of a first-rate staff. Moreover, he has two daughters, Georgina and Emma, living interesting lives, waiting in the wings.

David Warsh, a veteran columnist and an economic historian, is proprietor of Somerville-based economicsprincipals.com, where this column originated.          

David Warsh: Pinning things down using history

SOMERVILLE, Mass.

In Natural Experiments of History, a collection of essays published a decade ago, editors Jared Diamond and James Robinson wrote, “The controlled and replicated  laboratory experiment, in which the experimenter directly manipulates variables,  is often considered the hallmark of the scientific method” – virtually the only approach employed in physics, chemistry, molecular biology.

Yet in fields considered scientific that are concerned with the past – evolutionary biology, paleontology, historical geology, epidemiology, astrophysics – manipulative experiments are not possible. Other paths to knowledge are therefore required, they explained, methods of “observing, describing, and explaining the real world, and of setting the individual explanations within a larger framework “– of “doing science,” in other words.

Studying “natural experiments” is one useful alternative, they continued – finding systems that are similar in many ways but which differ significantly with respect to factors whose influence can be compared quantitatively, aided by statistical analysis.

Thus this year’s Nobel Prize in Economic Sciences recognizes Joshua Angrist, 61, of the Massachusetts Institute of Technology; David Card, 64, of the University of California, Berkeley; and Guido Imbens, 58, of Stanford University, “for having shown that natural experiments can answer central questions for society.”

Angrist, burst on the scene in in 1990, when “Lifetime Earnings and the Vietnam Era Draft Lottery: Evidence from Social Security administrative records” appeared in the American Economic Review. The luck of the draw had, for a time, determined who would be drafted during America’s Vietnam War, but in the early 1980s, long after their wartime service was ended, the earnings of white veterans were about 15 percent less than the earnings of comparable nonveterans, Angrist showed.

About the same time, Card had a similar idea, studying the impact on the Miami labor market of the massive Mariel boatlift out of Cuba, but his paper appeared in the less prestigious Industrial and Labor Relations Review.  Card then partnered with his colleague, Alan Krueger, to search for more natural experiments in labor markets.  Their most important contribution, a careful study of differential responses in nearby eastern Pennsylvania to a minimum-wage increase in New Jersey, appeared as was Myth and Measurement: The New Economics of the Minimum Wage (Princeton, 1994). Angrist and Imbens, meanwhile, mainly explored methodological questions.

Given the rule that no more than three persons can share a given Nobel prize, and the lesser likelihood that separate prizes might be given in two different years, Krueger’s tragic suicide, in 2019, rendered it possible to cite, in a single award, Card, for empirical work, and Angrist and Imbens, for methodological contributions.

Princeton economist Orley Ashenfelter, who, with his mentor Richard Quandt, also of Princeton, more or less started it all, told National Public Radio’s Planet Money that “It’s a nice thing because the Nobel committee has been fixated on economic theory for so long, and now this is the second prize awarded for how economic analysis is now primarily done. Most economic analysis nowadays is applied and empirical.” [Work on randomized clinical trials was recognized in 2019.]

In 2010 Angrist and Jörn-Staffen Pischke described the movement as “the credibility revolution.” And in the The Age of the Applied Economist: the Transformation of Economics since the 1970s. (Duke, 2017), Matthew Panhans and John Singleton wrote that “[T]he missionary’s Bible today is less Mas-Colell et al and more Mostly Harmless Econometrics: An Empiricist’s Companion (Angrist and Pischke, Princeton, 2011)

Maybe so.  Still, many of those “larger frameworks” must lie somewhere ahead.

“History,’’ by Frederick Dielman (1896)

That Dale Jorgenson, of Harvard University, would be recognized with a Nobel Prize was an all but foregone conclusion as recently as twenty years ago. Harvard University had hired him away from the University of California at Berkeley in 1969, along Zvi Griliches, from the University of Chicago,  and Kenneth Arrow, from Stanford University (the year before). Arrow had received the Clark Medal in 1957, Griliches in 1965; Jorgenson was named in 1971. “[H]e is preeminently a master of the territory between economics and statistics, where both have to be applied in the study of concrete problems.” said the citation. With John Hicks, Arrow received the Nobel Prize the next year.

For the next thirty years, all three men brought imagination to bear on one problem after another. Griliches was named a Distinguished Fellow of the American Economic Association in 1994; he died in 1999. Jorgenson, named a Distinguished Fellow in 2001, began an ambitious new project  in 2010 to continuously update measures of output and inputs of capital, labor, energy, materials and services for individual industries. Arrow returned to Stanford in 1979 and died in 2017.

Call Jorgenson’s contributions to growth accounting “normal science” if you like – mopping up, making sure, improving the measures introduced by Simon Kuznets, Ricard Stone, and Angus Deaton.  It didn’t seem so at the time. The moving finger writes, and having writ, moves on.

                                                                xxx

Where are the women in economics, asked Tim Harford, economics columnist of the Financial Times the other day. They are everywhere, still small in numbers, especially at senior level, but their participation is steadily growing. AEA presidents include Alice Rivlin (1986); Anne Krueger (1996); Claudia Goldin (2013); Janet Yellen (2020); Christina Romer (2022), and Susan Athey, president elect (2023).  Clark medals have been awarded to Athey (2007), Esther Duflo (2010), Amy Finkelstein (2012), Emi Nakamura (2019), and Melissa Dell (2020).

Not to mention that Yellen, having chaired the Federal Reserve Board for four years, today is secretary of the Treasury; that Fed governor Lael Brainerd is widely considered an eventual chair; that Cecilia Elena Rouse chairs of the Council of Economic Advisers; that Christine Lagarde is president of European Central Bank; and that Kristalina Georgieva is managing director of the International Monetary Fund, for a while longer, at least.

The latest woman to enter these upper ranks is Eva Mörk, a professor of economics at Uppsala University, apparently the first female to join the Committee of the Royal Swedish Academy of Sciences that recommends the Economics Sciences Prize, the last barrier to fall in an otherwise egalitarian institution. She stepped out from behind the table in Stockholm last week to deliver a strong TED-style talk (at minutes 5:30-18:30 in the recording) about the whys and wherefores of the award, and gave an interesting interview afterwards.

David Warsh, a veteran columnist and an economic historian, is proprietor of Somerville-based economicprincipals.com, where this column originated.

David Warsh: Goldin's marriage manual for the next generation

SOMERVILLE, Mass.

For many people, the COVID-19 pandemic has been an eighteen-month interruption. Survive it, and get back to work. For those born after 1979, it may prove to have been a new beginning. Women and men born in the 21st Century may have found themselves beginning their lives together in the midst of yet another historic turning point.

That’s the argument  that Claudia Goldin advances in Career and Family: Women’s Century-long Journey toward Equity (Princeton, 2021). As a reader who has been engaged as a practitioner in both career and family for many years, I aver that this is no ordinary book. What does greedy work have to do with it?  And why is the work “greedy,” instead of “demanding” or “important?” Good question, but that is getting ahead of the story.

Goldin, a distinguished historian of the role of women in the American economy, begins her account in 1963, when Betty Friedan wrote a book about college-educated women who were frustrated as stay-at-home moms.  Their problem, Friedan wrote, “has no name.” The Feminine Mystique caught the beginnings of a second wave of feminism that continues with puissant force today.  Meanwhile, Goldin continues, a new “problem with no name” has arisen:

 Now, more than ever, couples of all stripes are struggling to balance employment and family, their work lives and home lives.  As a nation, we are collectively waking up to the importance of caregiving, to its value, for the present and future generations. We are starting to fully realize its cost in terms of lost income,  flattened careers, and trade-offs between couples (heterosexual and same sex), as well as the particularly strenuous demands on single mothers and fathers.  These realizations predated the pandemic but have been brought into sharp focus by it.

A University of  Chicago-trained economist; the first woman tenured by Harvard’s economics department; author of five  important books, including, with her partner, Harvard labor economist Lawrence Katz, The Race between Education and Technology (Harvard Belknap, 2010); recipient of an impressive garland of honors, among them the Nemmers award in economics; a former president of the American Economic Association:  Goldin has written a chatty, readable sequel to Friedan, destined  itself to become a paperback best-seller – all the more persuasive because it is rooted in the work of hundreds of other labor economists and economic historians over the years.  Granted, Goldin is expert in the history of gender only in the United States; other nations will compile stories of their own.  .

To begin with, Goldin distinguishes among the experiences of five roughly-defined generations of college-educated American women since the beginning of the twentieth century.  Each cohort merits a chapter. The experiences of gay women were especially hard to pin down over the years, given changing norms.

In “Passing the Baton,” Goldin characterizes the first group, women born between 1878-97, as having had to choose between raising families and pursuing careers.  Even the briefest biographies of the lives culled from Notable American Women make interesting reading: Jeannette Rankin, Helen Keller, Margaret Sanger, Katharine McCormick, Pearl Buck, Katharine White, Sadie Alexander, Frances Perkins. But most of that first generation of college women never became more prominent than as presidents of the League of Women Voters or the Garden Club.  They were mothers and grandmothers the rest of their lives.

In “A Fork in the Road,” her account of the generation born between 1898 and 1923,  Goldin dwells on 75-year-old Margaret Reid, whom she frequently passed at the library as a graduate student at Chicago, where Reid had earned a Ph.D. in in economics  in 1934. (They never spoke; Goldin, a student of Robert Fogel, was working on slavery then.)  Otherwise, this second generation was dominated by a pattern of jobs, then family. The notable of this generation tend to be actresses – Katharine Hepburn, Bette Davis, Rosalind Russell, Barbara Stanwyck – sometimes playing roles modeled on real-world careers, as when Hepburn played a world-roving journalist resembling Dorothy Thompson in Woman of the Year.  

In “The Bridge Group,” Goldin discusses the generation born between 1924-1943, who raised families first and then found jobs – or didn’t find jobs. She begins by describing what it was like to read Mary McCarthy’s novel, The Group (in a paper-bag cover), as a 17-year-old commuting from home in East Queens to a summer job in Greenwich Village.  It was a glimpse of her parents’ lives – the dark cloud of the Great Depression that hung over w US in the Thirties, the hiring bars and marriage bar that turned college-educated women out of the work-force at the first hint of second income.

“The Crossroads with Betty Friedan” is about the Fifties and the television shows, such as I Love Lucy, The Honeymooners, Leave It to Beaver and Father Knows Best that, amid other provocations, led Betty Friedan to famously ask, “Is that all there is?” Between the college graduation class of 1957 and the class of 1961, Goldin finds, in an enormous survey by the Women’s Bureau of the U.S. Labor Department, an inflection point.  The winds shift, the mood changes. Women in small numbers begin to return to careers after their children are grown:  Jeane Kirkpatrick, Erma Bombeck, Phyllis Schafly, Janet Napolitano and Goldin’s own mother, who became a successful elementary school principal. Friedan had been right, looking backwards, Goldin concludes, but wrong about what was about to happen.

In “The Quiet Revolution,” members of the generation born between 1944-1957 set out to pursue careers and then, perhaps, form families. The going is hard but they keep at it.  The scene is set with a gag from the Mary Tyler Moore Show in 1972.  Mary is leaving her childhood home with her father, on her way to her job as a television news reporter.  He mother calls out, “Remember to take your pill, dear.” Father and daughter both reply, “I will.”  Father scowls an embarrassed double-take. The show’s theme song concludes, “You’re going to make it after all.” The far-reaching consequences of the advent of dependable birth control for women’s new choices are thoroughly explored.  This is, after all, Goldin’s own generation.

“Assisting the Revolution,” about the generation born between1958-78, is introduced by a recitation of the various roles played by Saturday Night Live star Tina Fey – comedian, actor, writer.  Group Five had an easier time of it. They were admitted in increasing numbers to professional and graduate schools. They achieved parity with men in colleges and surpassed them in numbers.  They threw themselves into careers. “But they had learned from their  Group Four older sisters that the path to career must leave room for family, as deferral could lead to no children,” Golden writes. So they married more carefully and earlier, chose softer career paths, or froze their eggs.  Life had become more complicated.

In her final chapters – “Mind the Gap,” “The Lawyer and the Pharmacist” and “On Call” – Goldin tackles the knotty problem.  The gender earnings gap has persisted over fifty years, despite the enormous changes that have taken place.  She explores the many different possible explanations, before concluding that the difference stems from the need in two-career families for flexibility – and the decision, most often by women, to be on-call, ready to leave the office for home.  Children get sick, pipes break, school close for vacation, the baby-sitter leaves town.

The good news is that the terms of relationships are negotiable, not between equity-seeking partners, but with their employers as well. The offer of parental leave for fathers is only the most obvious example. Professional firms in many industries are addicted to the charrette – a furious round of last-minute collaborative work or competition to meet a deadline. Such customs can be given a name and reduced.  Firms need to make a profit, it is true, but the name of the beast, the eighty-hour week, is “greedy work.”

It is up the members of the sixth group, their spouses and employers, to further work out the terms of this deal.  The most intimate discussions in the way ahear will occur within and among families. Then come board rooms, labor negotiations, mass media, social media, and politics.  Even in its hardcover edition, Career and Family is a bargain. I am going home to start to assemble another photograph album – grandparents, parents, sibs, girlfriends, wife, children, and grandchildren – this one to be an annotated family album.

David Warsh, a veteran columnist and an economic historian, is proprietor of Somerville-based economicprincipals.com, where this essay first ran.

A "Wife Wanted" ad in an 1801 newspaper
"N.B." means "note well".

David Warsh: The exciting lives of former newspapermen

— Photo by Knowtex

SOMERVILLE, Mass.

After the Internet laid waste to old monopolies on printing presses and broadcast towers, new opportunities arose for inhabitants of newsrooms. That much I knew from personal experience. With it in mind, I have been reading Spooked: The Trump Dossier, Black Cube, and the Rise of Private Spies (Harper, 2021), by Barry Meier, a former reporter for The New York Times and The Wall Street Journal. Meier also wrote Pain Killer: A “Wonder” Drug’s Story of Addiction and Death (Rodale, 2003), the first book to dig in to the story of the Sackler family, before Empire of Pain: The Secret History of the Sackler Dynasty (Doubleday, 2021), by New Yorker writer Patrick Radden Keefe, eclipsed it earlier this year.  In other words, Meier knows his way around. So does Lincoln Millstein, proprietor of The Quietside Journal, a hyperlocal Web site covering three small towns on the southwest side of Mt. Desert Island, in Downeast Maine.

Meier’s book is essentially a story about Glenn Simpson, a colorful star investigative reporter for the WSJ who quit in 2009 to establish Fusion GPS, a private investigative firm for hire.  It was Fusion GPS that, while working first for Republican candidates in early 2016, then for Hillary Clinton’s presidential campaign, hired former MI6 agent Christopher Steele to investigate Donald Trump’s activities in Russia.

Meier, a careful reporter and vivid writer, doesn’t think much of Simpson, still less of Steele, but I found the book frustrating: there were too many stories about bad behavior in the far-flung private intelligence industry, too loosely stitched together, to make possible a satisfying conclusion about the circumstances in which the Steele dossier surfaced, other than information, proven or not, once assembled and packaged, wants to be free. William Cohan’s NYT review of Spooked was helpful: “[W]e are left, in the end, with a gun that doesn’t really go off.”

Meier did include in his book (and repeat in a NYT op-ed) a telling vignette about  Fusion GPS co-founder Peter Fritsch, another former WSJ staffer who in his 15-year career at the paper had served as bureau chief in several cities around the world. At one point, Fritsch phones WSJ reporter John Carreyrou, ostensibly seeking guidance on the reputation of a whistleblower at a medical firm – without revealing that Fusion GPS had begun working for Elizabeth Holmes, of whose blood-testing start-up, Theranos, Carreyrou had begun an investigation.

Fritsch’s further efforts to undermine Carreyrou’s investigation failed. Simpson and Fritch tell their story of the Steele dossier in Crime in Progress (2019, Random House.) I’d like to someday read more personal accounts of their experiences in the private spy trade, I thought, as I put Spooked and Crime in Progress back on the shelf  Given the authors’ new occupations, it doesn’t seem likely those accounts will be written.

By then, Meier’s story had got me thinking about Carreyrou himself. His brilliant reporting for the WSJ, and his 2018 best-seller, Bad Blood: Secrets and Lies in a Silicon Valley Startup (Knopf, 2018, led to Elizabeth Holmes’s trial on criminal charges that began last month in San Jose. Thanks to Twitter, I found, within an hour of its appearance, this interview with Carreyrou, now covering the trial online as an independent journalist.

My head spun at the thought of the leg-push and tradecraft required to practice journalism at these high altitudes. The changes wrought by the advent of the Web and social media have fundamentally expanded the business beyond the days when newspapers and broadcast news were the primary producers of news. In 1972, when I went to work for the WSJ, for example, the entire paper ordinarily contained only four bylines a day.

So I turned with some relief to The Quietside Journal, the Web site where retired Hearst executive Lincoln Millstein covers events in three small towns on Mt. Desert Island, Maine, for some 17,000 weekly readers. In an illuminating story about his enterprise, Millstein told Rick Edmonds, of the Poynter Institute, that he works six days a week, again employing pretty much the same skills he acquired when he covered Middletown, Conn., for The Hartford Courant forty years ago. (Millstein put the Economic Principals column in business in 1984, not long after he arrived as deputy business editor at The Boston Globe).

My case is different. Like many newspaper journalists in the 1980s,  I worked four or five days a week at my day job and spent vacations and weekends writing books. I quit the day job in 2002, but kept the column and finished the book. (It was published in 2006 as Knowledge and the Wealth of Nations: A Story of Economic Discovery).  
Economic Principals subscribers have kept the office open ever since; I gradually found another book to write; and so it has worked out pretty well. The ratio of time spent is reversed: four days a week for the book, two days for the column, producing, as best I can judge, something worth reading on Sunday morning. Eight paragraphs, sometimes more, occasionally fewer: It’s a living, an opportunity to keep after the story, still, as we used to say, the sport of kings.

David Warsh, a veteran columnist and an economic historian, is proprietor of Somerville-based economicprincipals.com, where this essay first ran.

David Warsh: Looking at a ‘three-pronged approach’ to global warming

Average surface air temperatures from 2011 to 2020 compared to the 1951-1980 average

SOMERVILLE, Mass.

The most memorable theater scene I’ve ever witnessed was performed one summer evening long ago in a courtyard at the University of Chicago. The play was Luigi Pirandello’s Six Characters in Search of an Author, a complicated work from the 1920s about the relationship between authors, the stories they tell, and the audiences they seek.

At one point, a company of actors, having been interrupted in their rehearsal by a family of six seeking a playwright to tell their story, are bickering furiously with their interrupters when, at the opposite end of courtyard, two key members of the family had slipped away, to be suddenly illuminated by a spotlight as they stood beneath a tree to make a telling point: their story was as important as the play – maybe more. The act ended and the lights came up for intermission.

That was the technique known as up-staging with a vengeance, an abrupt diversion of attention from one focal point to another.

I remembered the experience after reading Three Prongs for Prudent Climate Policy, by Joseph Aldy and Richard Zeckhauser, both of the Harvard Kennedy School, a sharply critical appraisal of the prevailing consensus on the prospects for controlling climate change. Delivered originally as Zeckhauser’s keynote address to the Southern Economic Association in 2019, you can read it here for free at Resources for the Future.  Its thirty pages are not easy reading, but they are formidably clear-headed, and I doubt that you can find a better roundup of the situation that the leaders are discussing blah-blah-blah next month at the U.N.’s Climate Change Conference in Glasgow.

The possibility of greenhouse warming was broached 125 years ago by the Swedish physical chemist Svante Arrhenius. The specific effect was discovered by Roger Revelle in 1957, and the growing problem brought into sharp focus in the U.S. by climate scientist James Hansen in Senate testimony in 1988.  It has taken thirty years to reach a broad global consensus about the first of Aldy and Zeckhauser’s three prongs.

“For three decades, advocates for climate change policy have simultaneously emphasized the urgency of taking ambitious actions to mitigate greenhouse gas (GHG) emissions and provided false reassurances of the feasibility of doing so. The policy prescription has relied almost exclusively on a single approach: reduce emissions of carbon dioxide (CO₂) and other GHGs. Since 1990, global CO₂ emissions have increased 60 percent, atmospheric CO₂ concentrations have raced past 400 parts per million, and temperatures increased at an accelerating rate. The one-prong strategy has not worked.’’

A second prong, adaptation, has been added in to most menus in recent years: everything from design changes (moving electric installations to roofs instead of basements) to seawalls, marsh expansions, and resettlement of populations. Adaptations are expensive.  A six-mile long sea barrier with storm surge gates might protect New York City from climate change, but would take 25 years to build.

A third prong of climate policy ordinarily receives little attention. This is amelioration, or “the ‘G’-word,” as the chair of British Royal Society report dubbed it in 2009, meaning the broad topic of geo-engineering. For a dozen years, it was thought possible that fertilizing the southern oceans might grow more plankton, absorb more atmospheric carbon, and feed more fish. Experiments were not encouraging.   The technique considered most promising today is solar-radiation management, meaning creating atmospheric sun-screens for the planet.  The third prong is by far the last expensive of the three.  It is also the most alarming.

Ever since “the year without a summer” of 1816, it has been known that volcanic eruptions, spewing sulfur particles into the atmosphere, produce worldwide net cooling effects. Climate scientists now believe that airplanes could achieve the same effect by spraying chemical aerosols  at high altitudes into the atmosphere.  The trouble is that very little is known with any certainty about the feasibility of such measures, much less their ecological effects on life below.

Many environmentalists fear that the very act of public discussion of solar- radiation management will further bad behavior – create “moral hazard” in the language of economists. Glib talk by enthusiasts of economic growth about cheap and easy redress of climate problems will diminish the imperative to reduce emissions of greenhouse governance, some say. Others think that sulfur in the air above would accelerate acidification in the oceans below. Still others doubt that global governance could be achieved, since such measures would not offset climate change equally in all regions, Rogue nations might undertake projects that they hoped would have purely local effects.

Aldy and Zeckhauser argue that bad behavior may in fact be flowing in the opposite direction.  Climate change is an emotional issue; circumspection with respect to solar-radiation management is the usual stance; opposition to research is often fierce. As a result, very little has been performed. One of the first outdoor experiments – a dry run – was shut down earlier this year.

In his 2018 Nobel lecture, William Nordhaus, of Yale University, saw the problem somewhat differently.

“To me, geo-engineering resembles what doctors call ‘salvage therapy’– a potentially dangerous treatment to be used when all else fails. Doctors prescribe salvage therapy for people who are very ill and when less dangerous treatments are not available. No responsible doctor would prescribe salvage therapy for a patient who has just been diagnosed with the early stage of a treatable illness. Similarly, no responsible country should undertake geo-engineering as the first line of defense against global warming.’’

After a while, it seemed to me that the debate over global warming does indeed bear more than a little resemblance to what goes on in Pirandello’s play. Three possible policy avenues exist. The first is talked about constantly: the second enters the conversation more frequently than before. The third is all but excluded from mainstream discussion.

It’s not so much about what stage of a treatable illness you think we’re in.  Public opinion around the world will determine that, as time goes by. It’s about whether the question of desperate measures should be systematically explored at all.  The three-pronged approach is a policy in search of an author.

David Warsh, a veteran columnist and an economic historian, is proprietor of Somerville-based economicprincipals.com, where this essay first appeared.

David Warsh: Prepare for multigenerational contest between China and the West

China’s national emblem

SOMERVILLE, Mass.

China is building missile silos in the Gobi Desert. The U.S. has agreed to provide nuclear-submarine technology to Australia, enraging the French, who are building a dozen diesel subs that they had expected to sell to the Aussies. Xi Jinping last week rejected Joe Biden’s suggestion that the two arrange a face-to-face meeting to discuss their differences.  Clearly, the U.S. “pivot” to the Pacific is well underway.  Taiwan is the new hotspot, not to mention the Philippines and Japan.

The competition between China and the West is a contest, not a cold war.  Financial Times columnist Philip Stephens was the first in the circle of those whom I read to make this point.  “The Soviet Union presented at once a systemic and an existential threat to the West,” he wrote. “China undoubtedly wants to establish itself as the world’s pre-eminent power, but it is not trying to convert democracies to communism….”  The U.S. is not trying to “contain” China so much as to constrain its actions.  He continued,

Beijing and Moscow want a return to a nineteenth century global order where great powers rule over their own distinct spheres of influence.  If the habits and the institutions created since 1945 mean anything, it has been the replacement of that arrangement with the international rule of law.

I’m not quite sure what Stephens means by “the international rule of law.”  The constantly changing Western traditions of freedom of action and thought? Is it true, as George Kennan told Congress in 1972, that the Chinese language contains no word for freedom? Is it possible that Chinese painters produced no nudes before the 20th Century?

The co-evolution of cultures between China and the West has been underway for 4,000 years, proceeding at a lethargic pace for most of that time. While the process has recently assumed a breakneck pace, it can be expected to continue for many, many generations before the first hints of consensus develop about a direction of change.

A hundred years?  Three hundred? Who knows? Already there is conflict. There may eventually be blood, at least in some corners of the Earth. But the world has changed so much since 1945 that “cold war” is no longer a useful apposition. The existential threat today is climate change.

China’s cultural heritage is not going to fade away, as did Marxist-Leninism. The script of that drama, written in Europe in the 19th Century, has lost much of its punch. Vladimir Putin has embraced the Russian Orthodox Church as a source of moral authority.  Xi Jinping has evoked the egalitarian idealism of Mao Zedong in cracking down on China’s high-tech groups and rock stars, and strictly limiting the time its children are allowed to play video games.

But what is the Western tradition of “rule of law” that presumes to become truly international, eventually? Expect an answer some other day. Meanwhile, I’m cooking pancakes for my Somerville grandchildren.

David Warsh, a veteran columnist and an economic historian, is proprietor of Somerville-based economicprincipals.com, where this essay first appeared.

Resurgent feminist art

“People Have Anxiety about Ambiguity” (collage), by Liza Basso, in the group show “Re Sisters: Speaking Up; Speaking Out ,’’ at Brickbottom Artists Association, Somerville, Mass., Sept. 9-Oct 10.

The gallery says:

“The current political climate has put women’s rights and civil rights at risk. This exhibition is meant to bring attention to the recent resurgence in feminist art and its connection to activism and politics, as women face rollbacks in reproductive rights, the disproportionate effects of Covid 19, and a year that saw more women elected to political office than ever before. Through collections that delve into histories that are political, personal, and shared, ReSisters explores the experiences of women in a post-trump era.’’

David Warsh: Time to read ‘Three Days at Camp David’

The main lodge at Camp David

SOMERVILLE, Mass.

The heart-wrenching pandemonium in Kabul coincided with the seeming tranquility of the annual central banking symposium at Jackson Hole, Wyoming. For the second year in a row, central bankers stayed home, amid fears of the resurgent coronavirus. Newspapers ran file photos of Fed officials strolling beside Jackson Lake.

Market participants are preoccupied with timing of the taper, the Fed’s plan to reduce its current high level of asset purchases. That is not beside the point, but neither is it the most important decision facing the Biden administration with respect to the conduct of economic policy. Whom to nominate to head the Federal Reserve Board for the next four years? For a glimpse of the background to that question, a good place to start is a paper from a a Bank of England workshop earlier in the summer

Central Bank Digital Currency in Historical Perspective: Another Crossroads in Monetary History, by Michael Bordo, of Rutgers University and the Hoover Institution, brings to mind the timeless advice of Yogi Berra:  when you come to a crossroad, take it.

Bordo briefly surveys the history of money and banking. Gold, silver and copper coinage (and paper money in China) can be traced back over two millennia, he notes, but three key transformations can be identified in the five hundred years since Neapolitan banks began experimenting with paper money.

First, fiduciary money took hold in the 18th Century, paper notes issued by banks and ostensibly convertible into precious metal (specie) held in reserve by the banks. Fractional banking emerged, meaning that banks kept only as much specie in the till as they considered necessary to meet the ordinary ebb and flow of demands for redemption, leaving them vulnerable to periodic panics or “runs.”  Occasional experiments with fiat money, issued by governments to pay for wars, but irredeemable for specie, generally proved spectacularly unsuccessful, Bordo says (American Continentals, French assignats).

Second, the checkered history of competing banks and their volatile currencies, led, over the course of a century, to bank supervision and monopolies on  national currencies, overseen by central banks and national treasuries.

Third, over the course of the 17th to the 20th centuries, central banks evolved to take on additional responsibilities:  marketing government debt; establishing payment systems; pursuing financial stability (and serving as lenders of last resort when necessary to halt panics); and maintaining a stable value of money. For a time, the gold standard made this last task relatively simple: to preserve the purchasing power of money, maintain a fixed price of gold. But as gold convertibly became ever-harder to manage, nations retreated from their fiduciary monetary systems in fits and starts. In 1971, they abandoned them altogether in favor of fiat money. It took about 20 years to devise central banking techniques with which to seek maintain stable purchasing power.

As it happens, the decision-making at the last fork in the road of the international currency and monetary system is laid out with great clarity and charm in a new book by Jeffrey Garten, Three Days at Camp David: How a Secret Meeting in 1971 Transformed the Global Economy (2021, Harper) Garten spent a decade in government before moving to Wall Street.  In 2006 he returned to strategic consulting in Washington, after about 20 years at Yale’s School of Management, ten of them as dean.

The special advantage of his book is how Garten brings to life  the six major players at the Camp David meeting, Aug. 13-15, 1971 – Richard Nixon, John Connally, Paul Volcker, Arthur Burns, George Shultz, Peter Peterson and two supporting actors, Paul McCracken an Henry Kissinger – and explores their stated aims and private motives.  The decision they took was momentous:  to unilaterally quit the Bretton Woods system, to go off the gold standard, once and for all. It was a transition the United States had to make, Garten argues, and in this sense bears a resemblance to Afghanistan and the present day:

A bridge from the first quarter-century following [World War II] –where the focus was on rebuilding national economies that had been destroyed and on re-establishing a functional world economic system – to a new emvironment where power and responsibility  among the allies had to be readjusted . with the burden on the United States being more equitably  shared and with the need for multilateral cooperation to replace Washington’s unilateral dictates.

What about Nixon’s re-election campaign in 1972?  Of course that had something to do with it; politics always has something to do with policy, Garten says. But one way or another, something had to be done to relieve pressure on the dollar. “The gold just wasn’t there” to continue, writes Garten.

The trouble is, as with all history, that was fifty years ago.  What’s going on now?

Read, if you dare, the second half of Michael Bordo’s paper, for a concise summary of the money and banking issues we face. Their unfamiliarity is forbidding; their intricacy is great.  The advantages of a digital system may be manifest. “Just as the history of multiple competing currencies led to central bank provision of currency,” Bordo writes, “ the present day rise of cryptocurrencies and stable coins suggests the outcome may also be a process of consolidation towards a central bank digital currency.”

But the choices that central bankers and their constituencies must make are thorny.  Wholesale or retail? Tokens or distributed ledger accounts? Lodged in central banks or private institutions? Considerable work is underway, Bordo says, at the Bank of England, Sweden’s Riksbank, the Bank of Canada, the Bank for International Settlements, and the International Monetary Fund, but whatever research the Fed has undertaken, “not much of it has seen the light of day.”

Who best to help shepherd this new world into existence?  The choice for the U.S. seems to be between reappointing Fed Chairman Jerome Powell, 68, to a second term, beginning in February, or nominating a Fed governor Lael Brainard, 59, to replace him.  President Biden is reeling at the moment. I am no expert, but my hunch is that preferring Brainard to Powell is the better option overall, for both practical and political ends. After all, what infrastructure is more fundamental to a nation’s well-being than its place in the global system of money and banking?

David Warsh, a veteran columnist and an economic historian, is proprietor of Somerville-based economicprincipals.com, where this column first ran.

Language structures

“Figures of Speech” ((detail), etching and letterpress), by Somerville, Mass.-based Sarah Hulsey, in her show “Lexical Geometry,’’ at Bromfield Gallery, Boston, Sept. 29-Oct. 31.

The gallery says:

“Sarah Hulsey's work portrays the patterns and structures that comprise our universal instinct for language. In this body of work, she uses schematic forms and letterpress text to explore connections across the lexicon.’’

David Warsh: Of The Globe, John Kerry, Vietnam and my column

An advertisement for The Boston Globe from 1896.

SOMERVILLE, Mass.

It has taken six months, but with this edition, Economic Principals finally makes good on its previously announced intention to move to Substack publishing.  What took so long? I can’t blame the pandemic. Better to say it’s complicated. (Substack is an online platform that provides publishing, payment, analytics and design infrastructure to support subscription newsletters.)

EP originated in 1983 as columns in the business section of The Boston Sunday Globe. It appeared there for 18 years, winning a Loeb award in the process. (I had won another Loeb a few years before, at Forbes.) The logic of EP was simple: It zeroed in on economics because Boston was the world capital of the discipline; it emphasized personalities because otherwise the subject was intrinsically dry (hence the punning name).  A Tuesday column was soon added, dwelling more on politics, because economic and politics were essentially inseparable in my view.

The New York Times Co. bought The Globe in 1993, for $1.13 billion, took control of it in 1999 after a standstill agreement expired, and, in July 2001, installed a new editor, Martin Baron.  On his second morning on the job, Baron instructed the business editor, Peter Mancusi, that EP was no longer permitted to write about politics. I didn’t understand, but tried to comply. I failed to meet expectations, and in January, Baron killed the column. It was clearly within his rights. Metro columnist Mike Barnicle had been cancelled, publisher Benjamin Taylor had been replaced, and editor Matthew Storin, privately maligned for having knuckled under too often to the Boston archdiocese of the Roman Catholic Church, retired. I was small potatoes, but there was something about The  Globe’s culture that the NYT Co. didn’t like.  I quit the paper and six weeks later moved the column online.

After experimenting with various approaches for a couple of years, I settled on a business model that resembled public radio in the United States – a relative handful of civic-minded subscribers supporting a service otherwise available for free to anyone interested.  An annual $50 subscription brought an early (bulldog) edition of the weekly via email on Saturday night.  Late Sunday afternoon, the column went up on the Web, where it (and its archive) have been ever since, available to all comers for free.

Only slowly did it occur to me that perhaps I had been obtuse about those “no politics” instructions.  In October 1996, five years before they were given, I had raised caustic questions about the encounter for which then U.S. Sen. John Kerry (D.-Mass.) had received a Silver Star in Vietnam 25 years before. Kerry was then running for re-election, I began to suspect that history had something to do with Baron ordering me to steer clear of politics in 2001.

                                                                      • ••

John Kerry had become well known in the early ‘70s as a decorated Navy war hero who had turned against the Vietnam War. I’d covered the war for two years, 1968-70, traveling widely, first as an enlisted correspondent for Pacific Stars and Stripes, then as a Saigon bureau stringer for Newsweek. I was critical of the premises the war was based on, but not as disparaging of its conduct as was Kerry. I first heard him talk in the autumn of 1970, a few months after he had unsuccessfully challenged the anti-war candidate Rev. Robert Drinan, then the dean of Boston College Law School, for the right to run against the hawkish Philip Philbin in the Democratic primary. Drinan won the nomination and the November election. He was re-elected four times.

As a Navy veteran, I was put off by what I took to be the vainglorious aspects of Kerry’s successive public statements and  candidacies, especially in the spring of 1971, when in testimony before the Senate Foreign Relation Committee, he repeated accusations he had made on Meet the Press that thousands of atrocities amounting to war crimes had been committed by U.S. forces in Vietnam. The next day he joined other members of the Vietnam Veterans against the War in throwing medals (but not his own) over a fence at the Pentagon.

In 1972, he tested the waters in three different congressional districts in Massachusetts before deciding to run in one, an election that he lost. He later gained electoral successes in the Bay State, winning the lieutenant governorship on the Michael Dukakis ticket in 1982, and a U.S. Senate seat in 1984, succeeding Paul Tsongas, who had resigned for health reasons. Kerry remained in the Senate until 2013, when he resigned to become secretary of state.  [Correction added]

Twenty-five years after his Senate testimony, as a columnist I more than once expressed enthusiasm for the possibility that a liberal Republican – venture capitalist Mitt Romney or Gov. Bill Weld – might defeat Kerry in the 1996 Senate election. (Weld had been a college classmate, though I had not known him.) This was hardly disinterested newspapering, but as a columnist, part of my job was to express opinions.

In the autumn of 1996, the recently re-elected Weld had challenged Kerry’s bid for a third term in the Senate, The campaign brought old memories to life. On Sunday Oct. 6, The Globe published long side-by-side profiles of the candidates, extensively reported by Charles Sennott.

The Kerry story began with an elaborate account of his experiences in Vietnam – the candidate’s first attempt. I believe, since 1971 to tell the story of his war. After Kerry boasted of his service during a debate 10 days later, I became curious about the relatively short time he had spent in Vietnam – four months. I began to research a column. Kerry’s campaign staff put me in touch with Tom Belodeau, a bow gunner on the patrol boat that Kerry had beached after a rocket was fired at it to begin the encounter for which he was recognized with a Silver Star.

Our conversation lasted half an hour. At one point, Belodeau confided, “You know, I shot that guy.” That evening I noticed that the bow gunner played no part in Kerry’s account of the encounter in a New Yorker article by James Carroll in October 1996 – an account that seemed to contradict the medal citation itself. That led me to notice the citation’s unusual language: “[A]n enemy soldier sprang from his position not 10 feet [from the boat] and fled. Without hesitation, Lieutenant (Junior Grade) Kerry leaped ashore, pursued the man behind a hootch and killed him, capturing a B-40 rocket launcher with a round in the chamber.” There are now multiple accounts of what happened that day. Only one of them, the citation, is official, and even it seems to exist in several versions. What is striking is that with the reference to the hootch, the anonymous author uncharacteristically seems to take pains to imply that nobody saw what happened.

The first column (“The War Hero”) ran Tues., Oct. 24. Around that time, a fellow former Swift Boat commander, Edward (Tedd) Ladd, phoned The Globe’s Sennott to offer further details and was immediately passed on to me. Belodeau, a Massachusetts native who was living in Michigan, wanted to avoid further inquiries, I was told. I asked the campaign for an interview with Kerry. His staff promised one, but day after day, failed to deliver. Friday evening arrived and I was left with the draft of column for Sunday Oct. 27 about the citation’s unusual phrase (“Behind the Hootch”). It included a question that eventually came to be seen among friends as an inside joke aimed at other Vietnam vets (including a dear friend who sat five feet away in the newsroom): Had Kerry himself committed a war crime, at least under the terms of his own sweeping indictments of 1971, by dispatching a wounded man behind a structure where what happened couldn’t be seen?

The joke fell flat. War crime? A bad choice of words! The headline?  Even worse. Due to the lack of the campaign’s promised response, the column was woolly and wholly devoid of significant new information. It certainly wasn’t the serious accusation that Kerry indignantly denied. Well before the Sunday paper appeared, Kerry’s staff apparently knew what it would say. They organized a Sunday press conference at the Boston Navy Yard, which was attended by various former crew members and the admiral who had presented his medal. There the candidate vigorously defended his conduct and attacked my coverage, especially the implicit wisecrack the second column contained.  I didn’t learn about the rally until late that afternoon, when a Globe reporter called me for comment.

I was widely condemned. Fair enough: this was politics, after all, not beanbag. (Caught in the middle, Globe editor Storin played fair throughout with both the campaign and me). The election, less than three weeks away, had been refocused. Kerry won by a wider margin than he might have otherwise. (Kerry’s own version of the events of that week can be found on pp. 223-225 of his autobiography.)

                                                                           • ••

Without knowing it, I had become, in effect, a charter member of the Swift Boat Veterans for Truth. That was the name of a political organization that surfaced in May 2004 to criticize Kerry, in television advertisements, on the Web, and in a book, Unfit for Command.  What I had discovered in 1996 was little more than what everyone learned in 2004 – that some of his fellow sailors disliked Kerry intensely. In conversations with many Swift Boat vets over the year or two after the columns, I learned that many bones of contention existed. But the book about the recent history of economics I was finishing and the online edition of EP that kept me in business were far more important. I was no longer a card-carrying member of a major news organization, so after leaving The Globe I gave the slowly developing Swift Boat story a good leaving alone. I spent the first half of 2004 at the American Academy in Berlin.

Whatever his venial sins, Kerry redeemed himself thoroughly, it seems to me, by declining to contest the result of the 2004 election, after the vote went against him by a narrow margin of 118,601 votes in Ohio. He served as secretary of state for four years in the Obama administration and was named special presidential envoy for climate change, a Cabinet-level position, by President Biden,

Baron organized The Globe’s Pulitzer Prize-winning Spotlight coverage of Catholic Church secrecy about sexual abuse by priests, and it turned into a world story and a Hollywood film. In 2013 he became editor of The Washington Post and steered a steady course as Amazon founder Jeff Bezos acquired the paper from the Graham family and Donald Trump won the presidency and then lost it. Baron retired in February. He is writing a book about those years.

But in 2003, John F. Kerry: The Complete Biography by the Boston Globe Reporters Who Know Him Best was published by PublicAffairs Books, a well-respected publishing house whose founder, Peter Osnos, had himself been a Vietnam correspondent for The Washington Post. Baron, The Globe’s editor, wrote in a preface, “We determined… that The Boston Globe should be the point of reference for anyone seeking to know John Kerry. No one should discover material about him that we hadn’t identified and vetted first.”

All three authors – Michael Kranish, Brian Mooney, Nina Easton – were skilled newspaper reporters. Their propensity to careful work appears on (nearly) every page. Mooney and Kranish I considered I knew well.  But the latter, who was assigned to cover Kerry’s early years, his upbringing, and his combat in Vietnam, never spoke to me in the course of his reporting.  The 1996 campaign episode in which I was involved is described in three paragraphs on page 322. The New Yorker profile by James Carroll that prompted my second column isn’t mentioned anywhere in the book; and where the Silver Star citation is quoted (page 104), the phrase that attracted my attention, “behind the hootch,” is replaced by an ellipsis. (An after-action report containing the phrase is quoted on page 102.)

Nor did Baron and I ever speak of the matter. What might he have known about it? He had been appointed night editor of The Times in 1997, last-minute assessor of news not yet fit to print; I don’t know whether he was already serving in that capacity in October 1996, when my Globe columns became part of the Senate election story. I do know he commissioned the project that became the Globe biography in December, 2001, a few weeks before terminating EP.

Kranish today is a national political investigative reporter for The Washington Post. Should I have asked him about his Globe reporting, which seems to me lacking in context? I think not. (I let him know this piece was coming; I hope that  eventually we’ll talk privately someday.) But my subject here is how The  Globe’s culture changed after NYT Co. acquired the paper, so I believe his incuriosity and that of his editor are facts that speak for themselves.

Baron’s claims of authority in his preface to The Complete Biography by the Boston Globe Reporters Who Know Him Best strike me as having been deliberately dishonest, a calculated attempt to forestall further scrutiny of Kerry’s time in Vietnam. In this Baron’s book failed. It is a far more careful and even-handed account than Tour of Duty: John Kerry and the Vietnam War (Morrow, 2004), historian Douglas Brinkley’s campaign biography. Mooney’s sections on Kerry’s years in Massachusetts politics are especially good. But as the sudden re-appearance of the Vietnam controversy in 2004 demonstrated, The Globe’s account left much on the table.

                                                                        • ••

I mention these events now for two reasons.  The first is that the Substack publishing platform has created a path that did not exist before to an audience – in this case several audiences – concerned with issues about which I have considerable expertise. The first EP readers were drawn from those who had followed the column in The Globe.  Some have fallen away; others have joined. A reliable 300 or so annual Bulldog subscriptions have kept EP afloat.

Today, with a thousand online columns and two books behind me – Knowledge and the Wealth of  Nations: A Story of Economic Discovery (Norton, 2006) and Because They Could: The Harvard Russia Scandal (and NATO Expansion) after Twenty-Five Years (CreateSpace, 2018) – and a third book on the way, my reputation as an economic journalist is better-established.

The issues I discuss here today have to do with aspirations to disinterested reporting and open-mindedness in the newspapers I read, and, in some cases, the failure to achieve those lofty goals. I have felt deeply for 25 years about the particular matters described here; I was occasionally tempted to pipe up about them. Until now, the reward of regaining my former life as a newsman by re-entering the discussion never seemed worth the price I expected to pay.

But the success of Substack says to writers like me, “Put up or shut up.” After the challenge it posed dawned in December, I perked up, then hesitated for several months before deciding to leave my comfortable backwater for a lively and growing ecosystem. Newsletter publishing now has certain features in common with the market for national  magazines that emerged in the U.S. in the second half of the 19th Century – a mezzanine tier of journalism in which authors  compete for readers’ attention. In this case, subscribers participate directly in deciding what will become news.

The other reason has to do with arguments recently spelled out with clarity and subtlety by Jonathan Rauch in The Constitution of Knowledge: A Defense of Truth (Brookings, 2021). Rauch gets the Swift Boat controversy mostly wrong, mixing up his own understanding of it with its interpretation by Donald Trump, but he is absolutely correct about the responsibility of the truth disciplines – science, law, history and journalism – to carefully sort out even the most complicated claims and counter-claims that endlessly strike sparks in the digital media.

Without the places where professionals like experts and editors and peer reviewers organize conversations and compare propositions and assess competence and provide accountability – everywhere from scientific journals to Wikipedia pages – there is no marketplace of ideas; there are only cults warring and splintering and individuals running around making noise.

EP exists mainly to cover economics. This edition has been an uncharacteristically long (re)introduction. My interest in these long-ago matters is strongly felt, but it is a distinctly secondary concern. I expect to return to these topics occasionally, on the order of once a month, until whatever I have left to say has been said: a matter of ten or twelve columns, I imagine, such as I might have written for the Taylor family’s Globe.

As a Stripes correspondent, I knew something about the American war in Vietnam in the late Sixties. As an experienced newspaperman who had been sidelined, I was alert to issues that developed as Kerry mounted his presidential campaign. And as an economic journalist, I became interested in policy-making during the first decade of the 21st Century, especially decisions leading up to the global financial crisis of 2008 and its aftermath. Comments on the weekly bulldogs are disabled.  Threads on the Substack site associated with each new column are for bulldog subscriber only. As best I can tell, that page has not begun working yet. I will pay close attention and play comments there by ear.

David Warsh, a veteran columnist and an economic historian, is proprietor of Somerville-based economicprincipals.com, where this essay originated.

David Warsh: Whatever happened to Decoration Day?

“The March of Time” (oil on canvas), Decoration Day {now called Memorial Day} in Boston, by Henry Sandham (1842-1910), a Canadian painter.

SOMERVILLE, Mass.

Decoration Day began on May 1, 1865, in Charleston, S.C., when an estimated 10,000 people, most of them former slaves, paraded to place flowers on the newly dug graves of 257 Union soldiers who had been buried without coffins behind the grandstand of a race course. They had been held in the infield without tents, as prisoners of war, while Union batteries pounded the city’s downtown during the closing days of the Civil War.

The evolution of Decoration Day over the next fifty years was one of the questions that led historian David W. Blight to write Race and Reunion: The Civil War in American Memory (Harvard, 2001). After Blight’s book appeared, it was quickly overshadowed by the events of 9/11.  Eric Foner conveyed its message most clearly in The New York Times Book Review – but only on page 28.  Today Race and Reunion is more relevant than ever. For a better idea of what the book is about than I can give you, read Foner’s review.

When I was a kid, May 30, Decoration Day was still ostensibly about remembering the Civil War, but the events of that May day in Charleston were no part of the story (though the POW camp at Andersonville, Ga., certainly had become part of the lore.). The names of veterans of various wars were read on the village green.  A bugler played taps. Decoration Day had been proclaimed a day of commemoration in 1868, when the commander of the Grand Army of the Republic ordered soldiers to visit their comrades’ graves. In 1890 it was declared a state holiday in New York.

And by the time that Woodrow Wilson, the first Southerner to be elected president since the Civil War, spoke at Gettysburg, on July 4, 1913, fifty years after the battle itself, the holiday had become national – but the experiences of black Americans had all but dropped out of the narrative. The hoopla was about the experiences of the Blue and the Gray, never mind that many blacks had served in the Union army.

Soon after the war had ended, another war had begun, a contest of ideas about how the meaning of the war was to be understood: the emancipation of the slaves vs. the reconciliation of the contending armies. The politics of Reconstruction – the attempted elevation of Blacks to full citizenship and constitutional equality – ended in defeat. In his book, Blight wrote, “The forces of reconciliation overwhelmed the emancipation vision in the national culture.” Decoration Day gradually became Memorial Day, just as Armistice Day in November became Veterans Day. Americans got what the novelist William Dean Howells said they inevitably wanted:  tragedies with a happy endings.

The age of segregation didn’t end until the Sixties. Black leaders such as Frederick Douglass and W.E. B. Du Bois had burnished the vision of emancipation. Educators, writers, and agitators articulated it and put it into practice. A second Reconstruction began in the years after World War II. In the 1960s the Civil Rights Movement reached a political peak.  A new equilibrium was achieved and lasted for a time.

So don’t fret about “Critical Race Theory.”  A broad-based Third Reconstruction has begun.  Blight was an early text, as was Derrick Bell’s Faces at the Bottom of a Well: The Permanence of Racism, which appeared in 1992. The tumult will continue for some time. Rising generations will take account of it. A new equilibrium will be attained. It will last for a time, before a Fourth Reconstruction begins.

In the meantime, the new holiday of Juneteenth is an appropriate successor to the original Decoration Day – a civic holiday of importance second only to the Fourth of July.

David Warsh, a veteran columnist and an economic historian, is proprietor of Somerville-based economicprincipals.com, where this column originated.

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David Warsh: Article seems to have prompted Biden to order probe into idea that engineered COVID leaked from lab

Did COVID-19 escape from this complex?

SOMERVILLE, Mass.

There are few better-known brands in public service journalism than the Bulletin of the Atomic Scientists.  Founded in 1945 by University of Chicago physicists who helped produce the atom bomb, the organization adopted its famous clock  logo two years later, with an original setting of seven minutes to midnight. Since then it has expanded the coverage of its monthly magazine and Web page to include climate change, biotech and other disruptive technologies.

In May, it published “The origin of COVID: Did people or nature open Pandora’s box at Wuhan?,” by veteran science journalist Nicholas Wade. Its appearance apparently prompted President Biden to ask U.S. intelligence agencies to reassess the possibility that a virus genetically engineered to become more dangerous had inadvertently escaped from a partly U.S.-funded laboratory in Wuhan, China, the Wuhan Institute of Virology.  So when the Bulletin last week produced publisher Rachel Bronson, editor-in-chief John Mecklin and Wade for a one-hour q&a podcast, I tuned in.

Wade, too, has a substantial reputation.  He served for many years as a staff writer and editor for Nature, Science and the science section of The New York Times.  He is the author of many books as well, including The Nobel Duel: Two Scientists’ Twenty-one Year Race to Win the World’s Most Coveted Research Prize (1980), Before the Dawn: Recovering the Lost History of Our Ancestors (2006), and The Faith Instinct (2009).

True, Wade took a bruising the last time out, with Troublesome Inheritance: Genes, Race, and Human History (2014), which argued that human races are a biological reality and that recent natural selection has led to genetic difference responsible for disparities in political and economic development around the world. Some 140 senior human-population geneticists around the world signed a letter to The New York Times Book Review complaining that Wade had misinterpreted their work. But the editors of the Bulletin of the Atomic Scientists would have taken that controversy into consideration.

The broadcast was what I expected. Publisher Bronson was proud of the magazine’s consistent attention to issues of lab safety; investigative journalist Wade, pugnacious and gracious by turns; editor-in-chief Mecklin, cautious and even-handed. When they were done, I re-read Wade’s article. I highly recommend it to anyone interested in the details. He is a most lucid writer.

What comes through is connection between the U.S. National Institutes of Health and the Wuhan lab, one of several, in which NIH was funding a dangerous but essentially precautionary vaccine-development enterprise known as “gain-of-function” research (see Wade’s piece for a lucid explanation). Experts have known since the beginning that the virus was not a bioweapon. The only question was how it got loose in the world.  What I find lacking in Wade’s account is context.

From the beginning, the Trump, administration sought a Chinese scapegoat to distract from the president’s failure to comprehend the emergency his government was facing. Wade complains that “The political agendas of governments and scientists” had generated “thick clouds of obfuscation that the mainstream media seem helpless to dispel.”

What he fails to recognize is the degree to which the obfuscation may have been deliberate, foam on the runway, designed to prevent an apocalyptic political explosion until vaccines were developed and the contagion contained. In the process, a few whoppers about the likelihood that the virus had evolved by itself in nature were devised by members of the world’s virology establishment. Wade’s generosity in his  acknowledgments at the end of his article make it clear there was ample reason to want to know more about the lab-leak explanation long before Biden commissioned a review.

Wade is a journalist of a very high order, but to me he seems tone-deaf to the overtones of his assertions.  I was reminded of a conversation that Emerson recorded in his journal in 1841.  “I told [William Lloyd] Garrison that I thought he must be a very young man, or his time hang very heavy on his hands, who can afford to think much, and talk much, about the foible of his neighbors, or ‘denounce’ and ‘play the son of thunder,’ as he called it.” Wade, in contrast, likes to quote Francis Bacon: “Truth is the daughter, not of authority, but time.”

But remember too that time, as the saying goes, is God’s way of keeping everything from happening at once. The news Friday that The New York Times has been recognized with the 2020 Pulitzer Prize for Public Service for its coverage of the pandemic was not surprising.  There are six months of developments yet to go in 2021, but my hunch is that, when preparations begin for the award next year, a leading nominee will be the Bulletin of the Atomic Scientists.

David Warsh, an economic historian and a veteran columnist, is proprietor of Somerville-based economicprincipals.com, where this column first appeared.

David Warsh: Economic complexity and price revolutions

— Graphic by Hiroki Sayama

SOMERVILLE, Mass.

I listened idly as two old friends hashed over the argument between Larry Summers and Biden administration officials about the inflationary potential of continuing low interest rates. This, I thought, was where I had come in. My mind drifted back to the book I published in 1984, The Idea of Economic Complexity.

Its premise was what I took to be the similarity between the “price revolution” of the 16th Century and that of the 20th. In the century and a half between 1500 and 1650, everyday prices across Europe had risen roughly six-fold, before settling on a new plateau.  Theory usually ascribed these otherwise baffling developments to the importation of New World treasure and improvement in mining techniques: too much money chasing too few goods.

In the fifty years after World War II, costs of living grew as much as five- or ten-fold, depending on how which costs were measured, before leveling off again. This time opinions were divided. “Keynesians” emphasized political pressures, “cost-push” factors in some instances, “demand-pull” episodes in others. “Monetarists” insisted central bankers’ increases in the quantity of money were to blame.

In The Idea of Economic Complexity, I suggested picking up the other end of the stick.  Perhaps changes in the world economy had been at the heart of both price explosions: the settlement of the New World, the development of the slave trade, and the rise of the middle class in the 16th and 17th centuries; democratization, urbanization, globalization and the growth of government in the 20th.

The book convinced few. I gradually became interested in what economists seem to understand pretty well already: prices and quantities, trade policy, economic history, social welfare.  In all the years since, I have made only one advance in speaking more clearly about what might be meant by “economic complexity.” Economic complexity is surely complexity of the division of labor.

At some point the acuity of Adam Smith’s dictum that the division of labor is limited by the extent of the market was borne in on me. There are other ways of maintaining the division of labor, chiefly taxes. Even in wartime, though, taxes, too, depend on the extent of the market.

How might the division of labor be described?  One promising beginning employs network theory. An alternative, suggested by Eric Beinhocker, in The Origin of Wealth: The Radical Remaking of Economics and What It Means to Business and Society (2007) sought to apply the mechanisms of biological evolution. In that case, cladistics and other systems of phylogenetic nomenclature are worth exploring.  For managers of a monetary system to efficiently control a global division of labor of evolving complexity, they must know something about complexity itself.

Economics has made great strides borrowing analytic techniques from pneumatics and celestial mechanics.  There is probably something to be learned from evolutionary biology as well. It was here, and to Peter Blume’s painting. “The Parade,’’ on the jacket of The Idea of Economic Complexity, that my mind wandered while my friends debated fiscal pressures.

Economic journalism has plenty of first-rate reporters at work in financial capitals around the world, but the Covid pandemic has been as hard on those of us who interested in taking stock of longer trends. Get ready for a spate of books – some of them probably quite good – about the significance of digital and crypto-currencies for money.  Complexity was a young man’s book. The next book here – the last – will be different altogether.

David Warsh, a veteran columnist and an economic historian, is proprietor of Somerville-based economicprincipals.com, where this columnist originated.      

David Warsh: Of shadowy commodities traders, ‘tropical gangsters’, deluded crowds

At the Chicago Board of Trade before the pandemic

SOMERVILLE, Mass.
Because my tastes are well-established, I sometime receive new books that otherwise might escape readers’ attention. Herewith some recent arrivals.

The World for Sale: Money, Power, and the Traders Who Barter the Earth’s Resources (Oxford), by Javier Blas and Jack Farchy. A pair of former Financial Times commodities reporters, both now working for Bloomberg News, Blas and Farchy explore the  shadowy world of billionaire commodity trading firms – Glencore, Trifigura, Vitol, Cargill, and the founders of the modern industry, Phillip Brothers and Marc Rich. Firms and individuals whose business is trading physical commodities – fossil fuels, agricultural commodities, metals and rare earths – enjoy a unique degree of privacy and autonomy, except from market forces. Blas and Farchy illuminate the goings-on in an otherwise almost unnoticed immense asset class ordinarily tucked away in the interior of newspapers’ financial pages.

The Culture and Development Manifesto (Oxford), by Robert Klitgaard.  Remember Tropical Gangsters: Development and Decadence in Deepest Africa?

The New York Times Book Review called Klitgaard’s tale of adventures during two-and-a-half years in Equatorial Guinea one of the six best nonfiction books of 1990.  The author is back, summing up various lessons learned during 30 more years advising nations, foundations, and universities on how to change (and not change) their ways. Why a manifesto? His determination, with the same good humor as before, to persuade economists and anthropologists to work together, the better to understand the context of the situations they seek to change.

The Day the Markets Roared: How a 1982 Forecast Sparked a Global Bull Market (Matt Holt Books), by Henry Kaufman. What was Reaganomics all about? Plenty of doubt remains.  There is, however, no doubt about the forecast that triggered its beginning. Salomon Brothers’ long-time  “Dr. Doom” recalls the circumstances surrounding the “fresh look” he offered of the future of interest rates on Aug. 17, 1982. In doing so, he reconstructs a lost world.  The Dow Jones Industrial Average soared an astonishing 38.81 points the next day – its greatest gain ever to that point.

The Delusions of Crowds: Why People Go Mad in Groups (Atlantic Monthly Press), by William J. Bernstein. A neurologist, author of The Birth of Plenty: How the Prosperity of the Modern World Was Created (McGraw-Hill, 2010), Bernstein tracks the spread of contagious narratives among susceptible groups over centuries, from the Mississippi Bubble and the 1847 British railway craze to the Biblical number mysticism of Millerite end-times in 19th Century New England and various end-time prophecies in the Mideast.  Such behavior is dictated by the Stone Age baggage we carry in our genes, says Bernstein.

Albert O. Hirschman: An Intellectual Biography (Columbia), by Michele Alacevich. It was never hard to understand the success of Worldly Philosopher: The Odyssey of Albert O. Hirschman, by Jeremy Adelman, a Princeton University professor and personal friend of the economist and his wife. Hirschman cut a dashing figure.  He fled Berlin for Paris in the ’30s, studied economics in London, fought with the Republicans in the Spanish Civil War, moved to New York, and returned to wartime France to lead refugees fleeing the Nazis over the Pyrenees, from Marseilles to Barcelona. As a historian, biographer Adelman was less attuned to Hirschman’s subsequent career as an economic theorist – of development, democracy, capitalism, and commitment.  Alacevich has provided a perfect complement, a study of the works and life of the author of the classic, Exit, Voice, and Loyalty.

David Warsh, a veteran columnist and an economic historian, is proprietor of Somerville-based economicprincipals.com, where this piece first ran.

David Warsh: From eugenics to molecular biology

Representation of the now famous “Double Helix’’: Two complementary regions of nucleic acid molecules will bind and form a double helical structure held together by base pairs.

SOMERVILLE, Mass.

It was so long ago that I can no longer remember with any precision the pathways along which the book started me towards economic journalism. What I know with certainty is that The Double Helix: A Personal Account of the Discovery of the Structure of DNA (Athenaeum), by James Watson, changed my life when I read it, not long after it was first published, in 1968. Watson’s intimate account of his and Francis Crick’s race with Linus Pauling in 1953 to solve the structure of the molecule at the center of hereditary transmission was thrilling in all its particulars. I went into college one way and came out another, with a durable side-interest in molecular biology.

Thus when Horace Freeland Judson’s The Eighth Day of Creation: Makers of the Revolution in Modern Biology (Simon and Schuster), came along, in 1979, I marveled at Judson’s much more expansive collective portrait of the age. And when Lily Kay’s The Molecular Vision of Life: Caltech, the Rockefeller Foundation, and the Rise of the New Biology (Oxford) came out in, in 1993, I was quite taken by the institutional background it supplied.

Kay told the story of how the mathematician Warren Weaver in the 1930s decisively backed the Rockefeller Foundation away from its ill-considered funding  backing of the fringes of the eugenics movement – human engineering through controlled breeding – by initiating “a concerted physiochemical attack on [discovering the nature of] the gene… at the moment in history when it became unacceptable to advocate social control based on crude eugenic principles and outmoded racial theories.”

Not until 1938 would Weaver describe his campaign as “molecular biology.” In the dozen years after 1953, Nobel prizes were awarded to 18 scientists for investigation of the nature of the gene, all but one of them funded by the Rockefeller Foundation under Weaver’s direction.

For the past couple of weeks I have been reading Code Breaker: Jennifer Doudna, Gene Editing, and the Future of the Human Race (Simon & Schuster, 2021), by Walter Isaacson. Doudna, you may remember (pronounced Dowd-na), shared the Nobel Prize in Chemistry last autumn with collaborator Emmanuelle Charpentier “for the development of a method of genetic editing” known as the CRISPR/Cas 9 genetic scissors. The COVID pandemic prevented the journeys to Stockholm that laureates customary make to deliver lectures and accept prizes. Medalists will be recognized at some later date.  At that point, expect the significance of the new code-editing technologies to be emphasized. The new know-how recognized in 2020 Prize in Chemistry is probably the most important breakthrough since the Nobel Prize in Physiology or Medicine went to Crick, Watson and Maurice Wilkins, in 1962. Instead of the sterilization and other forceful measures envisaged by the eugenics movement, CRISPR promises to gradually eliminate hereditary disease.

Three themes emerge from Code Breaker.  The first is how much has changed with respect to gender, in biological science at least. X-ray crystallographer Rosalind Franklin died in 1958, four years before she might have shared the prize. (Dead persons are not eligible for the award.) She was cruelly disparaged in Watson’s book, despite the fact that her photographs were crucial to the discovery of the helical structure of the gene.

Opportunities for female scientists had begun to open up by the time that The Eighth Day was published, but women hadn’t yet reached levels of professional accomplishment such that their photographs would appear except rarely in pages dominated by White males. Doudna, born in 1964, and Charpentier, born in 1968, encountered abundant opportunities.

A second theme, less stressed, underscores the extent to which the tables have turned over the last century with respect to the importance attached by scientists to race.  Strongly held view about the dispersion of genetic endowments across various populations are nothing new, but, as The New York Times put it a couple of years ago, “It has been more than a decade since James D. Watson, a founder of modern genetics, landed in a kind of professional exile by suggesting that black people are intrinsically less intelligent than whites.”

A third theme, the main story, is Doudna’s decision, as a graduate student in the 1990s, to study the less-celebrated RNA molecule that performs work by copying DNA-coded information in order to build proteins in cells.  All this is clearly explained in Isaacson’s book, in relatively short chapters and sub-sections. The effect of this mosaic technique is to briskly move the story along.

After many twists and turns, Doudna and Charpentier showed in June 2012 that “clustered regularly interspersed palindromic repeats” (hence the easy-to-remember-and- pronounce acronym CRISPR), “Cas9” being a particular associated enzyme that did the cutting work, could be made to cut and replace fragments of genes work in a test tube. Within six months, five different papers appeared showing that such scissors would also work in live animal cells.

The famed Broad Institute of MIT and Harvard, in Cambridge, where much important biomedical and genomic research is conducted.

An epic patent battle ensued, involving claims to various ways in which CRISPR systems could be used in different sorts of kinds of organisms.  A nearly metaphysical argument developed: Once Doudna and Charpentier demonstrated that the technique would work on bacteria, was it “obvious” that it would work in human cells?   Rival claimants included  Doudna, of the University of California at Berkeley; Charpentier, of Umeå University, Sweden; geneticist George Church, of the Harvard Medical School; and molecular biologist Feng Zhang, of the Broad Institute of MIT and Harvard.

Church and Zhang are colorful characters with powerful minds and different scientific backgrounds. Their complicated competition with Doudna and Charpentier is said to reprise the race of Watson and Crick with Pauling forty years before. Well-disposed toward all four principals, author Isaacson spends a fair amount of effort interpreting their rival claims.  At the end of the book, he expresses the hope that Zhang and Church might one day share a Nobel Prize in Medicine for their CRISPR work.

If there is a better all-around English-language journalist of the last fifty years than Isaacson, I don’t know who that might be. Born in 1952, he grew up in New Orleans, went to Harvard College and then Oxford, as a Rhodes Scholar, before beginning newspaper work. He joined Time magazine as a political reporter in 1978; by 1996 he was its editor. To that point he had written two books (the first with Evan Thomas):  The Wise Men: Six Friends and the World They Made; (1986); and Kissinger: A Biography (1992).

In 2001 Isaacson left Time to serve as CEO of CNN. Eighteen months later he was named president of the Aspen Institute.  There followed, among other books, biographies of Benjamin Franklin (2003), Albert Einstein (2007), Steve Jobs (2011) and Leonardo da Vinci (2017). He resigned from the Aspen Institute in 2017 to become a professor of American History and Values at Tulane University.

As editor of Time, Isaacson took a call in 2000 from Vice President Al Gore, asking on behalf of President Clinton that the visage of National Institutes of Health Director Francis Collins be added to that of biotech entrepreneur J. Craig Venter on the cover of a forthcoming issue.  A crash program to sequence the human genome was threatening to break apart after the abrasive Venter devised a cheaper means and formed a private company.

Isaacson consulted his sources, including Broad Institute president Eric Lander, a friend from Rhodes Scholar days, and complied. Science journalist Nicholas Wade wrote the story. At least since then, Isaacson has been involved at the highest levels in the story of molecular biology.  He is uniquely well-qualified to describe the most recent segment of its arc, and, in the second half of the book, to lay out the many thorny social choices that lie ahead.

David Warsh, a veteran columnist and an economic historian, is proprietor of Somerville-based economicprincipals.com, where this column first ran. © 2021 DAVID WARSH, PROPRIETOR

Walter Isaacson

David Warsh: Biden's policies, like Reagan's, are a big gamble, but based on experience

On Wall Street, with flag-draped New York Stock Exchange at right

SOMERVILLE, Mass.

Might Democrats retain control of the White House through 2032? When I ventured that possibility the other day, my sagacious copy editor observed that one party had won three consecutive terms only once in the 70 years since Harry Truman left office on Jan. 20, 1953 – during the dozen years after Ronald Reagan was elected in 1980, reelected in 1984, and succeeded by Vice President George H. W. Bush in 1988.

I’ve been thinking ever since about why it might happen again. I know, I said I planned to write for a while mostly about economic topics, but what’s more economics than this?

It is not easy to recall how unlikely a Reagan’s victory seemed in the months running up to the 1980 election. True, he had served two terms as governor of California, but he had run unsuccessfully for president twice; he’d announced at the last minute in 1968 before running again, in 1976. His right-wing instincts were so little trusted by the Republican Party’s Establishment that Henry Kissinger sought to persuade him to accept former President Gerald Ford as his running mate. He was 69, an additional factor against him.

Similarly, Reagan’s policy initiatives – big tax cuts for the well-to-do, a willingness to tolerate the Federal Reserve Board’s high interest rates, deregulation for everyone, and an expensive confrontation with the Soviet Union – were thought to be dangerous and, at least by the Democrats, were expected to fail. Not much about America’s future was clear in 1980, except the widespread dissatisfaction with President Jimmy Carter. (Former Republican John Anderson was also on the 1980 ballot, as an independent; Reagan still would have won if he hadn’t been, but it wouldn’t have been the landslide it turned out to be.)

Then two years into Reagan’s first term, the economy took off, inflation fell, financial markets boom and China entered global markets. Over the course of the decade, the Cold War ended, and the government of the Soviet Union collapsed. Vice President Bush succeeded Reagan and fought a successful war in Iraq. Bush was defeated in 1992 because of a lack-luster economy, but the next 24 years – the presidencies of Bill Clinton, George W. Bush and Barack Obama – were dominated, one way or another, by the “Washington Consensus” on economic policy that had formed during the Reagan years.

What similarities does Joe Biden share with Reagan? His candidacy was unexpected, for one thing; twice before Biden had run for president and failed to come close, in 1988 and 2008. At 78, Biden was even older than Reagan when elected. Most important, after nearly 50 years in the Senate, Biden is thoroughly wed to a movement, if that turns out to be what is unfolding, that has been in the making for as long or even longer than his service to it.

What movement? If Reagan’s gospel was that government was the problem, Biden’s credo seems to be that government spending is the solution to a variety of present-day problems – a fraying social safety net, deteriorating infrastructure, diminished U.S. competitiveness in global markets, and diminished opportunity. Gerald Seib, political columnist for the news pages of The Wall Street Journal, made a similar point to the one I’m making here the other day when he observed that not since Reagan’s presidency has a new administration opened with “a gamble as large as the one in which President Biden is now engaged” – an effort to change “not just the policies but the path of the country” with borrowed money.

Why might voters’ minds have changed in significant numbers about such fundamental matters as their enthusiasm for taxing and spending? Experience is one reason: Free markets and austerity failed to redress the problems they promised to solve. Indeed, they seem to have made them worse. Changing circumstances are others. Global warming has become manifest. A new kind of Cold War, this one with China, has emerged. And the Republican Party is deeply divided.

A shift of opinion on this scaled scale would, of necessity, entail a massive realignment of financial markets. As it happens, I have been reading The Day the Markets Roared: How a 1982 Forecast Sparked a Global Bull Market (Matt Holt Books, 2021), by Henry Kaufman. Kaufman was the authoritative Salomon Brothers economist whose forecast, on Aug. 18,1982, that interest rates would soon begin dropping ignited a stock market rally that hasn’t ended to this very day. Toward the end of his book, Kaufman mourns what he sees as a system of capitalism giving way to a system of “statism,” especially as the Treasury Department and the Federal Reserve System come under collaborative management in pursuit of White House goals. There is plenty more to be borrowed, he says — certainly enough to readjust in the future the currently skewed rates of return among stocks, bonds and commodities. Financial markets might yet sigh.

Saying how the battles of the next 10 years might play out would be a foolish venture. Forecasting who might be the Democratic and Republican Party nominees in 2024 and 2028 is considerably more pointless than guessing who will meet in the Super Bowl  next year since there are far more variables involved. But there is nothing foolish about acknowledging the existence of tides of public opinion that ebb and flow. Reagan’s presidency was a “triumph of the imagination,” wrote former New York Times reporter Richard Reeves, in 2005. Might someone say the same of Biden in 2045?

David Warsh, a veteran columnist and an economic historian, is proprietor of Somerville-based economicprincipals.com, where this column first ran.

David Warsh: Economic models and engineering

SOMERVILLE, Mass.

The best book about developments in the culture of professional economics to appear in the last quarter century is, in my opinion, The World in the Model: How Economists Work and Think (Cambridge, 2012), by Mary S. Morgan, of the London School of Economics and the University of Amsterdam. The best book of the quarter century before that is, again, according to me, An Engine, Not a Camera: How Models Shape Financial Markets (MIT, 1997), by Donald MacKenzie, of the University of Edinburgh.

Both books describe the introduction of mathematical models in the years beginning before World War II. Both consider how the subsequent use of those techniques has changed how economics is done by economists. Morgan’s book is about the kinds of models that economists devise experimentally, not those that interest MacKenzie most, models designed to be tested against the real world.  A deft cover illustrates Morgan’s preoccupation, showing the interior of a closed room with only a high window. On the floor of the room are written graphic diagram of supply and demand. The window opens only to the sky outside, above the world itself, a world the model-builder cannot see. The introduction of statistical inference to economics she dealt with in The History of Econometric Ideas (Cambridge, 1990).

I remember the surprise I felt when I first read Morgan’s entry “Economics” in The Cambridge History of Science Volume 7: The Modern Social Sciences (Cambridge, 2003). She described two familiar wings of economics, often characterized in the 19th Century as “the science of political economy” and “the art of economic governance.” Gradually in that century they were relabeled “positive” economics (the way it is, given human nature) and “normative” economics (the way it ought to be).

Having practiced economics in strictly literary fashion during the modern subject’s first century, Morgan continued, economists in the second half of the 19th Century began adopting differential calculus as a language to describe their reasoning. In the 20th Century, particularly its second half, the two wings have been firmly “joined together” by their shared use of “a set of technologies,” consisting mainly of mathematics, statistics and models.  Western technocratic economics, she wrote, had thereby become “an engineering science.”

I doubted at the time that it was especially helpful to think economics that way.

Having read Economics and Engineering: Institutions, Practices, and Cultures (2021, Duke), I still doubt it. That annual conference volume of the journal History of Political Economy appeared earlier this year, containing 10 essays by historians of thought, with a forward by engineering professor David Blockley, of the University of Bristol, and an afterword by Morgan herself. Three developments – the objectification of the economy as a system; the emergence of tools, technologies and expertise; and a sense of the profession’s public responsibility – had created something that might be understood as “an engineering approach” to the economy and in economics, writes Morgan. She goes on to distinguish between two modes of economic engineering, start-fresh design and fix-it-up problem-solving, noting that enthusiasm for the design or redesign of whole economies and/or vast sectors of them had diminished in the past thirty years.

It’s not that the 10 essays don’t make a strong case for Morgan’s insights about various borrowings from engineering that have occurred over the years: in particular, Judy Klein, of Mary Baldwin University, on control theory and engineering; Aurélien Saïdi, of the University of Paris Nanterre, and Beatrice Cherrier, of the University of Cergy Pontoise and the Ecole Polytechnique, on the tendencies of Stanford University to produce engineers; and William Thomas, of the American Institute of Physics, on the genesis at RAND Corp. of Kenneth Arrow’s views of the economic significance of information.

My doubts have to do with whether the “science” of economics and the practice of its application to social policy have indeed been in fact been “firmly joined” together by the fact that both wings now share a common language. I wonder whether more than a relatively small portion of what we consider to be the domain of economic science is sufficiently well understood and agreed-upon by economists themselves as to permit “engineering” applications.

Take physics. In the four hundred years since Newton many departments of engineering have been spawned: mechanical, civil, electrical, aeronautical, nuclear, geo-thermal. But has physics thereby become an engineering science?  Did the emergence of chemical engineering in the 1920s change our sense of what constitutes chemistry? Is biology less a science for the explosion of biotech applications that has taken place since the structure of the DNA molecule was identified in 1953? Probably not.

Some provinces of economics can be considered to have reached the degree of durable consensus that permits experts to undertake engineering applications.  I count a dozen Nobel prizes as having been shared for work that can be legitimately described as economic engineering: Harry Markowitz, Merton Miller and William Sharpe, in 1990, for “pioneering work in financial  economics”;  Robert Merton and Myron Scholes, in 1997, “for  a new method to determine the value of derivatives”;  Lloyd Shapley and Alvin Roth, in 2012, “for the theory of stable allocations and the practice of market design”:  Abajit Banerjee, Esther Duflo and Michael Kremer, in 2019, for “their experimental approach to alleviating global poverty”; and Paul Milgrom and Robert Wilson, in 2020, for “improvements to auction theory and inventions of new auction formats.”

This is where sociologist Donald McKenzie comes in. In An Engine Not a Camera, he describes the steps by which, in the course of embracing the techniques of mathematical modeling, finance theory had become “an active force transforming its environment, not a camera, passively recording it,” but an engine, remaking it. When market traders themselves adopted models from the literature, the new theories brought into existence the very transactions of which abstract theory had spoken – and then elaborated them. Markets for derivatives grew exponentially.  Such was the “performativity” of the new understanding of finance. After all, writes Morgan in her afterword, hasn’t remaking the world been the goal of economic-engineering interventions all along?

Natural language has a knack for finding its way in these matters. We speak easily of “financial engineering” and “genetic engineering.”  But “fine-tuning,” the ambition of macro-economists in the 1960s, is a dimly remembered joke. The 1942 photograph on the cover of Economics and Engineering – graduate students watching while a professor manipulates a powerful instrument laden with gauges and controls – seems like a nightmare version of the film Wizard of Oz.

John Maynard Keynes memorably longed for the day when economists would manage to get themselves thought of as “humble, competent people on a level with dentists.”  Nobel laureate Duflo a few years ago compared economic fieldwork to the plumbers’ trade.  “The scientist provides the general framework that guides the design…. The engineer takes these general principles into account, but applies them to a specific situation…. The plumber goes one step further than the engineer: she installs the machine in the real world, carefully watches what happens, and then tinkers as needed.”

The $1.9 trillion American Rescue Plan Act that became law last week, with its myriad social programs, is not founded on what “the science” says. It is an intuition, an act of faith. Better to continue to refer to most economic programs as “strategies” and “policies” instead of “engineering,” and consider effective implementations to be artful work.

David Warsh, an economic historian and a veteran columnist, is proprietor of Somerville-based economicprincipals.com, where this column first appeared

      Copyright 2021 by David Warsh, proprietor