This Republic Of Suffering

I just finished reading the next book on our reading list, within the Houston Nonfiction Book Club that I am part of: This Republic of Suffering – Death and the American Civil War by Harvard President’s Drew Gilpin Faust. It is only fitting, from a timing perspective, that this post coincides with Memorial Day weekend. This book is a dire reminder of the atrocities committed during the civil war:

In the middle of the nineteenth century, the United States embarked on a new relationship with death, entering into a civil war that proved bloodier than any other conflict in American history, a war that would presage the slaughter of World War I’s Western Front and the global carnage of the twentieth century. The number of soldiers who died between 1861 and 1865, an estimated 620,000, is approximately equal to the total American fatalities in the Revolution, the War of 1812, the Mexican War, the Spanish-American War, World War I, World War II, and the Korean War combined. The Civil War’s rate of death, its incidence in comparison with the size of the American population, was six times that of World War II. A similar rate, about 2 percent, in the United States today would mean six million fatalities. As the new southern nation struggled for survival against a wealthier and more populous enemy, its death toll reflected the disproportionate strains on its human capital. Confederate men died at a rate three times that of their Yankee counterparts; one in five white southern men of military age did not survive the Civil War.

These atrocities, however, served as valuable – albeit very costly – lessons of meanings in “race, citizenship, and nationhood” that ultimately lead to re-uniting The Nation:

In the Civil War the United States, North and South, reaped what many participants described as a “harvest of death.” By the midpoint of the conflict, it seemed that in the South, “nearly every household mourns some loved one lost.” Loss became commonplace; death was no longer encountered individually; death’s threat, its proximity, and its actuality became the most widely shared of the war’s experiences. As a Confederate soldier observed, death “reigned with universal sway,” ruling homes and lives, demanding attention and response. The Civil War matters to us today because it ended slavery and helped to define the meanings of freedom, citizenship, and equality. It established a newly centralized nation-state and launched it on a trajectory of economic expansion and world influence. But for those Americans who lived in and through the Civil War, the texture of the experience, its warp and woof, was the presence of death. At war’s end this shared suffering would override persisting differences about the meanings of race, citizenship, and nationhood to establish sacrifice and its memorialization as the ground on which North and South would ultimately reunite. Even in our own time this fundamentally elegiac understanding of the Civil War retains a powerful hold…A war about union, citizenship, freedom, and human dignity required that the government attend to the needs of those who had died in its service. Execution of these newly recognized responsibilities would prove an important vehicle for the expansion of federal power that characterized the transformed postwar nation. The establishment of national cemeteries and the emergence of the Civil War pension system to care for both the dead and their survivors yielded programs of a scale and reach unimaginable before the war. Death created the modern American union—not just by ensuring national survival, but by shaping enduring national structures and commitments.

This civil war reshaped the lives of the soldiers and civilians who participated within it, and for generations to come:

As they faced horrors that forced them to question their ability to cope, their commitment to the war even their faith in a righteous God, soldiers and civilians alike struggled to retain their most cherished beliefs, to make them work in the dramatically altered world that war had introduced. Americans had to identify—find, invent, create—the means and mechanisms to manage more than half a million dead: their deaths, their bodies, their loss. How they accomplished this task reshaped their individual lives—and deaths—at the same time that it redefined their nation and their culture. The work of death was Civil War America’s most fundamental and most demanding undertaking.

Below are key captions from the topics covered within the book, that highlight how the Nation dealt with the Civil War from a perspective of death/suffering, both in the immediate aftermath and how these reactions had the impact they have had on the development of the nation.

On Dying:

Civil War soldiers were, in fact, better prepared to die than to kill, for they lived in a culture that offered many lessons in how life should end. But these lessons had to be adapted to the dramatically changed circumstances of the Civil War. The concept of the Good Death was central to mid-nineteenth-century America, as it had long been at the core of Christian practice. Dying was an art, and the tradition ars moriendi provided rules of conduct for the moribund and their attendants since at least the fifteenth century. Despite clerical efforts, the boundary between duty to God and duty to country blurred, and dying bravely and manfully became an important part of dying well. For some soldiers it almost served to take the place of the more sacred obligations of holy living that had traditionally prepared the way for the Good Death. As the intensity of this war and the size of its death tolls mounted in the months and years that followed, vengeance came to play an ever more important role, joining principles of duty and self-defense in legitimizing violence. The desire for retribution could be almost elemental in its passion, overcoming reason and releasing the restraints of fear and moral inhibition for soldiers who had witnessed the slaughter of their comrades.

On Killing:

Killing was the essence of war. But it also challenged men’s most fundamental assumptions about the sanctity of their own and other human lives. Killing produced transformations that were not readily reversible: the living into the dead, most obviously, but the survivors into different men as well, men required to deny, to numb basic human feeling at costs they may have paid for decades after the war ended, as we know twentieth- and twenty-first-century soldiers from Vietnam to Iraq continue to do; men who, like James Garfield, were never quite the same again after seeing fields of slaughtered bodies destroyed by men just like themselves.

On Burying:

The cemetery at Gettysburg was arranged so that every grave was of equal importance; William Saunders’s design, like Lincoln’s speech, affirmed that every dead soldier mattered equally regardless of rank or station. This was a dramatic departure from the privileging of rank and station that prevailed in the treatment of the war dead and different even from the policies of the Chattanooga cemetery that would be created later in the year. The establishment of the Gettysburg cemetery marked the beginning of significant shifts in attitude and policy produced by the nation’s confrontation with Civil War slaughter…The engagement of the Union government in these matters, first made highly visible in the Gettysburg dedication ceremonies. acknowledged a new public importance for the dead. No longer simply the responsibility of their families, they, and their loss, now belonged to the nation. These men had given their lives that the nation might live; their bodies, repositories of their “selfhood” and “surviving identity,” as Harpers had put it, deserved the nation’s recognition and care. The dead, as well as the living, had claims upon a government “deriving,” as Henry Bowditch proclaimed in his plea for ambulances, “all its powers from the people.”

On Naming:

The commitment to individual rights that emerged as such an important principle of the northern cause made attention to particular soldiers’ fates and identities inescapable; honoring the dead became inseparable from respecting the living. But the strongest impetus for these changes was the anguish of wives, parents, siblings. and children who found undocumented, unconfirmed, and unrecognized loss intolerable…But the dimensions of Civil War loss did not yield to small-scale, individual intervention or even to entrepreneurial improvisations, and Americans turned to the emerging philanthropic bureaucracies of the Sanitary and Christian commissions and ultimately to enhanced state power and responsibility. As Union victory became all but certain in the winter and early spring of 1864-65, the demands of the unnamed dead grew more pressing. At war’s end, the United States would embark on a program of identification and reburial that redefined the nation’s obligation to its fallen, as well as the meaning of both names and bodies as enduring repositories of the human self.

On Realizing:

In the twenty-first century Americans considering the impact of death regularly invoke the notion of “closure,” the hope and anticipation of an end to the disruption of loss. Civil War Americans expected no such relief For hundreds of thousands, the unknown fate of missing kin left a “dread void of uncertainty” that knowledge would never fill. Even for those who had detailed information or, better still, the consolation of a body and a grave, mourning had no easy or finite end. Many bereaved spent the rest of their lives waiting for the promised heavenly reunion with those who had gone before. Wives, parents, children, and siblings struggled with the new identities—widows, orphans, the childless—that now defined their lives. And they carried their losses into the acts of memory that both fed on and nurtured the widely shared grief well into the next century. But if such devastating loss could not be denied, if it was “realized” and acknowledged, it had to be explained. The Civil War’s carnage required that death be given meaning.

On Believing and Doubting:

Lincoln’s Gettysburg Address is perhaps the best-known example of such an explanation and justification of war’s carnage. Determined that “these dead shall not have died in vain,” Lincoln hallowed and sacralized a nation and its purposes with biblical cadences and mentioned God. In the address the dead themselves become the agents of political meaning and devotion; they act even in their silence and anonymity. Lincoln immortalized them as the enduring inspiration for an immortal nation. Unlike the “honored dead,” the Union would not “perish from the earth.” Soldiers’ deaths, like Christ’s sacrifice, become the vehicle of salvation, the means a terrestrial, political redemption. Civil War carnage transformed the mid-nineteenth century’s growing sense of religious doubt into a crisis of belief that propelled many Americans to redefine or even reject their faith in a benevolent and responsive deity. But Civil War death and devastation also planted seeds of a more profound doubt about human ability to know and to understand. In an environment in which man seemed already increasingly undifferentiated from animals, the failure of the uniquely human capacity of language represented another assault upon the foundations of the self. The Civil War compelled Americans to ask with intensified urgency, “What is Death?” and in answering to find themselves wondering why is death, what is life? And can we ever hope to know? We have continued to wonder ever since.

On Accounting:

The reburial program represented an extraordinary departure for the federal government, an indication of the very different sort of nation that had emerged as a result of civil war. The program’s extensiveness, its cost, its location in national rather than state government, and its connection with the most personal dimensions of individuals’ lives all would have been unimaginable before the war created its legions of dead, a constituency of the slain and their mourners, who would change the very definition of the nation and its obligations. “Such a consecration of a nation’s power and resources to a sentiment Whitman observed, “the world has never witnessed.” Honor to the dead required the continuing defense of Confederate principles, which had been “defeated, not necessarily lost.” Only vindication of the original purposes of the conflict could ensure the meaning of so many men’s sacrifice. The Confederacy would not live on as a nation, but its dead would in some sense become its corporeal and corporate representation, not only a symbol of what once was but a summons to what must be. Neither northern nor southern participants in the commemoration and reburial movement were “simply… mourners for the dead.” Instead, they became in a very real sense the instruments of the dead’s immortality. Gathered together in mass cemeteries with graves marshaled in ranks like soldiers on the field of battle, the dead became a living reality, a force in their very presence and visibility. They were also, paradoxically, a force in their anonymity. The establishment of national and Confederate cemeteries created the Civil War Dead as a category, as a collective that represented something more and something different from the many thousands of individual deaths that it comprised. It also separated the Dead from the memories of living individuals mourning their own very particular losses. The Civil War Dead became both powerful and immortal, no longer individual men but instead a force that would shape American public life for at least a century to come. The reburial movement created a constituency of the slain, insistent in both its existence and its silence, men whose very absence from American life made them a presence that could not be ignored.

On Numbering:

The effort to count the Civil War dead was only in part about numbers and casualty reports, only in part about the duties of a nation to its citizens. Numbering the dead was also about more transcendent questions that extended beyond the state and its policies and obligations. As William Fox observed, “Every story, even a statistical one, has a moral.” The rhetoric of Civil War mortality statistics provided the language for a meditation on the deeper human meaning of the conflict and its unprecedented destructiveness, as well as for the exploration of the place of the individual in a world of mass—and increasingly mechanized—slaughter. It was about what counted in a world transformed.

On Surviving:

But even as the Civil War brought new humanity—new attentiveness to “sentiment”—in the management of death, so too it introduced a level of carnage that foreshadowed the wars of the century to come. Even as individuals and their fates assumed new significance, so those individuals threatened to disappear into the bureaucracy and mass slaughter of modern warfare. We still struggle to understand how to preserve our humanity and our selves within such a world. We still seek to use our deaths to create meaning where we are not sure any exists. The Civil War generation glimpsed the fear that still defines us—the sense that death is the only end. We still work to live with the riddle that they—the Civil War dead and their survivors alike—had to solve so long ago.

A highly recommended historical read, with many enduring lessons.

On The Power Of Habit

I chose to read The Power Of Habit by Charles Duhigg, given my inherent belief in the power of habits and also the strong review/ratings this book has received. Let me start by saying this book did not disappoint in delivering both in terms of content and delivery.

There are three parts to this work, as summarized by Charles, that cover the power of habits in three contexts from the most specific (individual) to the most general (society):

This book is divided into three parts. The first section focuses on how habits emerge within individual lives. It explores the neurology of habit formation, how to build new habits and change old ones, and the methods, for instance, that one ad man used to push toothbrushing from an obscure practice into a national obsession…The second part examines the habits of successful companies and organizations…The third part looks at the habits of societies. It recounts how Martin Luther King, Jr., and the civil rights movement succeeded, in part, by changing the ingrained social habits of Montgomery, Alabama—and why a similar focus helped a young pastor named Rick Warren build the nation’s largest church in Saddleback Valley, California. Finally, it explores thorny ethical questions, such as whether a murderer in Britain should go free if he can convincingly argue that his habits led him to kill. Each chapter revolves around a central argument: Habits can be changed, if we understand how they work.

Recent research in neurology and psychology has allowed us to advance our understanding of habits and their impact on our lives:

In the past decade, our understanding of the neurology and psychology of habits and the way patterns work within our lives, societies, and organizations has expanded in ways we couldn’t have imagined fifty years ago. We now know why habits emerge, how they change, and the science behind their mechanics. We know how to break them into parts and rebuild them to our specifications. We understand how to make people eat less, exercise more, work more efficiently, and live healthier lives. Transforming a habit isn’t necessarily easy or quick. It isn’t always simple. But it is possible. And now we understand how.

Habits are necessary shortcuts for our brains:

But that internalization—run straight, hang a left, eat the chocolate—relied upon the basal ganglia, the brain probes indicated. This tiny, ancient neurological structure seemed to take over as the rat ran faster and faster and its brain worked less and less. The basal ganglia was central to recalling patterns and acting on them. The basal ganglia, in other words, stored habits even while the rest of the brain went to sleep…Millions of people perform this intricate ballet every morning, unthinkingly, because as soon as we pull out the car keys, our basal ganglia kicks in, identifying the habit we’ve stored in our brains related to backing an automobile into the street. Once that habit starts unfolding, our gray matter is free to quiet itself or chase other thoughts, which is why we have enough mental capacity to realize that Jimmy forgot his lunchbox inside. Habits, scientists say, emerge because the brain is constantly looking for ways to save effort. Left to its own devices, the brain will try to make almost any routine into a habit, because habits allow our minds to ramp down more often.

Habits are a process loop consisting of three steps a cues, a trigger and a reward:

This process within our brains is a three-step loop. First, there is a cue, a trigger that tells your brain to go into automatic mode and which habit to use. Then there is the routine, which can be physical or mental or emotional. Finally, there is a reward, which helps your brain figure out if this particular loop is worth remembering for the future. Over time, this loop—cue, routine, reward; cue, routine, reward—becomes more and more automatic. The cue and reward become intertwined until a powerful sense of anticipation and craving emerges…Researchers have learned that cues can be almost anything, from a visual trigger such as a candy bar or a television commercial to a certain place, a time of day, an emotion, a sequence of thoughts, or the company of particular people. Routines can be incredibly complex or fantastically simple (some habits, such as those related to emotions, are measured in milliseconds). Rewards can range from food or drugs that cause physical sensations, to emotional payoffs, such as the feelings of pride that accompany praise or self-congratulation.

Marketing was among the first functions to leverage the power of the habit from a commercial perspective:

“I made for myself a million dollars on Pepsodent,” Hopkins wrote a few years after the product appeared on shelves. The key, he said, was that he had “learned the right human psychology.” That psychology was grounded in two basic rules: First, find a simple and obvious cue. Second, clearly define the rewards. If you get those elements right, Hopkins promised, it was like magic…And those same principles have been used to create thousands of other habits—often without people realizing how closely they are hewing to Hopkins’s formula.

Sport teams/coaching leverage habits as well:

“Champions don’t do extraordinary things,” Dungy would explain. “They do ordinary things, but they do them without thinking, too fast for the other team to react. They follow the habits they’ve learned.”

How can we effectively change a habit? The golden rule of habit change:

His coaching (Dungy) strategy embodied an axiom, a Golden Rule of habit change that study after study has shown is among the most powerful tools for creating change. Dungy recognized that you can never truly extinguish bad habits. Rather, to change a habit, you must keep the old cue, and deliver the old reward, but insert a new routine. That’s the rule: If you use the same cue, and provide the same reward, you can shift the routine and change the habit. Almost any behavior can be transformed if the cue and reward stay the same

The other key ingredient to successfully changing a habit? Belief:

It wasn’t God that mattered, the researchers figured out. It was belief itself that made a difference. Once people learned how to believe in something, that skill started spilling over to other parts of their lives, until they started believing they could change. Belief was the ingredient that made a reworked habit loop into a permanent behavior.

What about for changing corporate habits? The key there is to tackle a keystone habit that sets a chain reaction of changes:

‘I knew I had to transform Alcoa,” O’Neill told me. “But you can’t order people to change – That’s not how the brain works. So I decided I was going to start by focusing on one thing. If I could start disrupting the habits around one thing, it would spread throughout the entire company.” O’Neill believed that some habits have the power to start a chain reaction, changing other habits as they move through an organization. Some habits, in other words, matter more than others in remaking businesses and lives. These are “keystone habits,” and they can influence how people work, eat, play, live, spend, and communicate. Keystone habits start a process that, over time, transforms everything…If you focus on changing or cultivating keystone habits, you can cause widespread shifts. However, identifying keystone habits is tricky. To find them, you have to know where to look. Detecting keystone habits means searching out certain characteristics. Keystone habits offer what is known within academic literature as “small wins.” They help other habits to flourish by creating new structures, and they establish cultures where change becomes contagious.

Corporate habits are necessary shortcuts, just as our individual ones are for our brains:

Or, put in language that people use outside of theoretical economics, it may seem like most organizations make rational choices based on deliberate decision making, but that’s not really how companies operate at all. Instead, firms are guided by long-held organizational habits, patterns that often emerge from thousands of employees’ independent decisions. And these habits have more profound impacts than anyone previously understood…These organizational habits—or “routines,” as Nelson and Winter called them—are enormously important, because without them, most companies would never get any work done. Routines provide the hundreds of unwritten rules that companies need to operate. They allow workers to experiment with new ideas without having to ask for permission at every step.

In some cases, a crisis is needed to remake or changes some of these organizational habits:

Good leaders seize crises to remake organizational habits…In fact, crises are such valuable opportunities that a wise leader often prolongs a sense of emergency on purpose.

On social movements, and the role of habits to make them self-propelling and help them achieve critical mass:

A movement starts because of the social habits of friendship and the strong ties between close acquaintances. It grows because of the habits of a community, and the weak ties that hold neighborhoods and clans together. And it endures because a movement’s leaders give participants new habits that create a fresh sense of identity and a feeling of ownership. Usually only when all three parts of this process are fulfilled can a movement become self-propelling and reach a critical mass. There are other recipes for successful social change and hundreds of details that differ between eras and struggles. But understanding how social habits work helps explain why Montgomery and Rosa Parks became the catalyst for a civil rights crusade.

On a concluding note:

Habits are not as simple as they appear. As I’ve tried to demonstrate throughout this book, habits—even once they are rooted in our minds—aren’t destiny. We can choose our habits, once we know how. Everything we know about habits, from neurologists studying amnesiacs and organizational experts remaking companies, is that any of them can be changed, if you understand how they function. Hundreds of habits influence our days—they guide how we get dressed in the morning, talk to our kids, and fall asleep at night; they impact what we eat for lunch, how we do business, and whether we exercise or have a beer after work. Each of them has a different cue and offers a unique reward. Some are simple and others are complex, drawing upon emotional triggers and offering subtle neurochemical prizes. But every habit, no matter its complexity, is malleable. The most addicted alcoholics can become sober. The most dysfunctional companies can transform themselves. A high school dropout can become a successful manager. However, to modify a habit, you must decide to change it. You must consciously accept the hard work of identifying the cues and rewards that drive the habits’ routines, and find alternatives. You must know you have control and be self-conscious enough to use it—and every chapter in this book is devoted to illustrating a different aspect of why that control is real.

A must read book, and quoting Daniel H. Pink‘s advance praise of it – “Once you read this book, you’ll never look at yourself, your organization, or your world quite the same way.”

On The Price of Inequality

I just finished reading The Price of Inequality – How Today’s Divided Society Endangers Our Future – by Joseph E. Stiglitz. This book was a selected reading at the Houston Non Fiction Book Club that I am part of.

Below are key excerpts from the book that I found particularly insightful:

1- “But fully addressing a problem of the magnitude, depth, and duration of inequality in the United States will take comprehensive actions, of a kind that will require bipartisan support. Traditionally persons in both parties have understood that a nation divided cannot stand—and the divisions today ire greater than they have been in generations, threatening basic values, including our conception of ourselves as a land of opportunity Will we once again pull back from the brink? This book is written in the hope that we can and that we will—if only we grasp what has been happening to our economy and our society.”

2- “As we talked, it was clear to me that while specific grievances varied from country to country and, in particular, that the political grievances in the Middle East were very different from those in the West, there were some shared themes. There was a common understanding that in many ways the economic and political system had failed and that both were fundamentally unfair.”

3- “Three themes resonated around the world: that markets weren’t working the way they were supposed to, for they were obviously neither efficient nor stable; that the political system hadn’t corrected the market failures; and that the economic and political systems are fundamentally unfair. While this book focuses on the excessive inequality that marks the United States and some other advanced industrial countries today it explains how the three themes are intimately interlinked: the inequality is cause and consequence of the failure of the political system, and it contributes to the instability of our economic system, which in turn contributes to increased inequality—a vicious downward spiral into which we have descended, and from which we can emerge only through concerted policies that I describe below.”

4- “This book is about why our economic system is failing for most Americans, why inequality is growing to the extent it is, and what the consequences are. The underlying thesis is that we are paying a high price for our inequality—an economic system that is less stable and less efficient, with less growth. and a democracy that has been put into peril. But even more is at stake: as our economic system is seen to fail for most citizens, and as our political system seems to be captured by moneyed interests, confidence in our democracy and in our market economy will erode along with our global influence. As the reality sinks in that we are no longer a country of opportunity and that even our long-vaunted rule of law and system of justice have been compromised, even our sense of national identity may be put into jeopardy.”

5- “Given a political system that is so sensitive to moneyed interests, growing economic inequality leads to a growing imbalance of political power, a vicious nexus between politics and economics. And the two together shape, and are shaped by societal forces—social mores and institutions—that help reinforce this growing inequality.”

6- “The journalist Jonathan Chait has drawn attention to two of the most telling statistics from the Economic Mobility Project and research from the Economic Policy Institute Poor kids who succeed academically are less likely to graduate from college than richer kids who do worse in school Even if they graduate from college, the children of the poor are still worse-off than low-achieving children of the rich, None of this comes as a surprise: education is one of the keys to success; at the top, the country gives its elite an education that is the best in the world. But the average American gets just an average education—and in mathematics, key to success in many areas of modern life, it’s subpar.”

7- “Our political system has increasingly been working in ways that increase the inequality of outcomes and reduce equality of opportunity This should not come as a surprise: we have a political system that gives inordinate power to those t the top, and they have used that power not only to limit the extent of redistribution but also to shape the rules of the game in their favor, and to extract from the public what can only be called large “gifts.” Economists have a name for these activities: they call them rent seeking, getting income not as a reward to creating wealth but by grabbing a larger share of the wealth that would otherwise have been produced without their effort.”

8- “Three factors contributed to this increased monopolization of markets. First, there was a battle over ideas about the role that government should take in ensuring competition.Chicago school economists (like Milton Friedman and George Stigler) who believe in free and unfettered markets argued that markets are naturally competitive^^ and that seemingly anti-competitive practices really enhance efficiency A massive program to “educate” people, and especially judges, regarding these new doctrines of law and economics, partly sponsored by right-wing foundations like ^he Olin Foundation, was successful…A second factor giving rise to increased monopoly is related to changes in our economy. The creation of monopoly power was easier in some of the new growth industries. Many of these sectors were marked by what are called network externalities.”

9- “In many societies, those at the bottom consist disproportionately of groups that suffer, in one way or another, from discrimination. The extent of such discrimination is a matter of societal norms. We’ll see how changes in social norms—concerning, for instance, what is fair compensation—and in institutions, like unions, have helped shape America’s distribution of income and wealth. But these social norms and institutions, like markets, don’t exist in a vacuum: they too are shaped, in part, by the 1 percent.”

10- “I have emphasized that the problems concern globalization as it has been managed. Countries in Asia benefited enormously through export-led growth, and some (such as China) took measures to ensure that significant portions of that increased output went to the poor, some went to provide for public education, and much was reinvested in the economy to provide more jobs. In other countries, there have been big losers as well as winners—poor corn farmers in Mexico have seen their incomes decline as subsidized American corn drives down prices on world markets.”

11- “What is striking about the United States is that while the level of inequality generated by the market—a market shaped and distorted by politics and rent seeking—is higher than in other advanced industrial countries, it does less to temper this inequality through tax and expenditure programs. And as the market-generated inequality has increased, our government has done less and less.”

12- “Government today plays a double role in our current inequality: it is partly responsible for the inequality in before-tax distribution of income, and it has taken a diminished role in “correcting” this inequality through progressive tax and expenditure policies.”

13- “The central thesis of this chapter and the preceding one is also that inequality is not just the result of the forces of nature, of abstract market forces. We might like the speed of light to be faster, but there is nothing we can do about it. But inequality is, to a very large extent, the result of government policies that shape and direct the forces of technology and markets and broader societal forces. There is in this a note of both hope and despair: hope because it means that this inequality is not inevitable, and that by changing policies we can achieve a more efficient and a more egalitarian society; despair because the political processes that shape these policies are so hard to change.”

14- “We have seen how inequality gives rise to instability, as a suit of both the deregulatory policies that are enacted and the policies that are typically adopted in response to the deficiencies in aggregate demand. Neither is a necessary consequence of inequality: if our democracy worked better, it might have resisted the political demand for deregulation and might lave responded to the weaknesses in aggregate demand in ways that enhanced sustainable growth rather than creating a bubble.”

15- “Of all the costs imposed on our society by the top 1 percent, perhaps the greatest is this: the erosion of our sense of identity in which fair play, equality of opportunity, and a sense of community are so important. America has long prided itself on getting ahead, but the statistics today, as we’ve seen, suggest otherwise: the chances that a poor or even a middle-class American will make it to the top in America are smaller than in many countries of Europe. And as inequality itself creates a weaker economy, the chance can only grow slimmer.”

16- “Another vicious circle has been set in play: political rules of the game have not only directly benefited those at the top, ensuring that they have a disproportionate voice, but have also created a political process that indirectly gives them even more power. We have identified a whole series of forces contributing to the disillusionment with politics and distrust of the political system. The yawning divide in our society has made it difficult to reach compromise, contributing to our political gridlock.”

17- “As one of the world’s experts on globalization, the Harvard University professor Dani Rodrikhas pointed out, one cannot simultaneously have democracy, national self-determination, and full and unfettered globalization.”

18- “We are often told that this is the way it has to be, that globalization gives us no choice. This fatalism, v which serves those benefiting from the current system, obscures reality: the predicament is a choice. The governments of our democracies have chosen an economic framework f for globalization that has actually tied the hands of those democracies. The 1 percent was always worried that democracies would be tempted to enact “excessively” progressive taxation under the influence, say, of a populist leader. Now citizens are told they can’t do so, not if they want to partake of globalization. In short, globalization, as it’s been managed, is narrowing the choices facing our democracies, making it more difficult for them to undertake the tax and expenditure policies that are necessary if we are to create societies with more equality and more opportunity But tying the hands of our democracies is exactly what those at the top wanted: we can have a democracy with one person one vote, and still get outcomes that are more in accord with what we might expect in a system with one dollar one vote.”

19- “Of course, not every government effort is successful, or as successful as its advocates would have liked. Indeed, when the government undertakes research (or supports new private sector ventures), there should be some failures. A lack of failures means you are not taking enough risks. Success occurs when the returns from those projects that succeed are more than enough to offset the losses on those that fail And the evidence in the case of government research ventures is unambiguously and overwhelmingly that the returns from government investments in technology on average have been very, very high—^just think about the Internet, the Human Genome Project, jet airplanes, the browser, the telegraph, the increases in productivity in agriculture in the nineteenth century, that provided the basis for the United States’ moving from farming to manufacturing.”

20- “That there are successes and failures in both the public and the private sector is clear. And yet many on the right seem to think only the government can fail.”

21- “The powerful try to frame the discussion in a way that benefits their interests, realizing that, in a democracy they cannot imply impose their rule on others. In one way or another, they have to “co-opt” the rest of society to advance their agenda. Here again the wealthy have an advantage. Perceptions and beliefs are malleable. This chapter has shown that the wealthy have the instruments, resources, and incentives to shape beliefs in ways that serve their interests. They don’t always win—but it’s far from an even battle. We’ve seen how the powerful manipulate public perception by appeals to fairness and efficiency, while the real outcomes benefit only them.”

22- “We can take advantage of the extent to which different taxes and expenditures stimulate the economy, spending more on programs that have large multipliers (where each dollar of )ending generates more overall GDP) and less on programs that have small multipliers; raising taxes from sources with low multipliers while cutting taxes on those with high multipliers.”

23- “The lack of faith in democratic accountability on the part of those who argue for independent central banks should be deeply troubling. Where does one draw the line in turning over the central responsibilities of government to independent authorities. The same arguments about politicization could be applied to tax and budgetary policies. I suspect some in the financial market would be content to turn those responsibilities over to “technical experts.” But here’s the hidden agenda: the financial markets would not be content with just any set of technical experts. They prefer, as we have seen, “experts” who shared their views—views that support their interests and ideology. The Federal Reserve and its chairmen like to end that they are above politics. It is convenient not to be accountable, to be independent. hey see themselves as simply wise men and women, public servants, helping to steer the complex ship of the economy. But if there was any doubt of the political nature of the Fed and its chairmen, it should have been resolved by observing the seemingly shifting positions of the central bank over the past twenty years.”

24- “Inflation targeting was based on three questionable hypotheses. The first is that inflation is the supreme evil; the second is that maintaining low and stable inflation was necessary and almost sufficient for maintaining a high and stable real growth rate; the third is that all would benefit from low inflation.”

25- “While the advocates of these policies may claim that they the best policies for all, this is not the case. There is no  single, best policy. As I have stressed in this book, policies lave distributive effects, so there are trade-offs between the interests of bondholders and debtors, young and old, financial sectors and other sectors, and so on. I have also stressed, however, that there are alternative policies that would have led to better overall economic performance—especially so if we judge economic performance by what is happening to the well-being of most citizens. But if these alternatives are to be implemented, the institutional arrangements through which the decisions are made will have to change. We cannot have a monetary system that is run by people whose thinking is captured by the bankers and that is effectively run for the benefit of the those at the top.”

26- “The Economic Reform Agenda…Curbing the financial sector…Stronger and more effectively enforced competition laws…Improving corporate Governance-especially to limit the power of the CEOs to divert so much of corporate resources for their own benefit…End government giveaways—whether in the disposition of public assets or in procurement…End corporate welfare—including hidden subsidies…Legal reform—democratizing, access to justice, and diminishing the arms race…Create a more progressive income and corporate tax system—with fewer loopholes…Create a more effective and effectively enforced estate tax system to prevent the creation of a new oligarchy…Improving access to education…Helping ordinary Americans save…Health care for all…Strengthening other social protection programs…Tempering globalization: creating a more even playing field and ending the race to the bottom…A fiscal policy to maintain full employment—with equality…A monetary policy—and monetary institutions—to maintain full employment…Correcting trade imbalances…Active labor market policies and improved social protection…Supporting workers’ and citizens’ collective action…Affirmative action to eliminate the legacy of discrimination…A growth agenda, based on public investment.”

Regards,

Omar Halabieh

The Price of Inequality

On Liberating the Corporate Soul

I recently finished reading Liberating The Corporate Soul – Building a Visionary Organization – by Richard Barrett.

Below are key excerpts from the books that I found particularly insightful:

1- “I started out with two ideas. The first idea was that organizational transformation must look and feel a lot like personal transformation. The second idea was that the values held by successful companies must be similar to the values held by successful individuals. These two ideas led me on a journey of discovery that gladdened my heart. I not only found these two theses to be correct but also found underneath the tough rhetoric of Wall Street a small but growing number of successful businesses that live by values that are concordant with the highest moral and ethical principles. This book celebrates their success and provides a road map and tools for those who want to travel the same path.”

2- “Corporate transformation begins with a shift in the values and behaviors of the leadership. Corporations don’t transform. People do. Corporate transformation is fundamentally about personal transformation. It will happen only if there is a willingness on the part of the leader and all those in authority to live according to values that are less focused on self-interest and more focused on the common good. For transformation to be success^l the espoused values and behaviors must become pervasive throughout the organization.”

3- “The key characteristics of long-lasting companies that have superior financial performance are summarized as follows. A strong, positive, values-driven culture A lasting commitment to learning and self-renewal continual adaptation based on feedback from internal and external environments Strategic alliances with internal and external partners, customers, and suppliers A willingness to take risks and experiment A balanced, values-based approach to measuring performance.”

4- “The basic reason why companies find it difficult to develop these characteristics is that they operate from the mental model of the organization as a machine. More and more organizations are making the transition to the mental model of a machine with a mind, but very few have made it to the model of the organization as a living entity. Consequently, most companies seek only to satisfy their physical and emotional needs.”

5- “Self-interest and the single-minded pursuit of accumulation of wealth are at the heart of our current crisis. Fueled by greed, businesses all over the world are engaged in the wholesale exploitation of the Earth and its people. What is extraordinary is lat they are doing it in collusion with society.”

6- “There are millions of people around the world embracing this new responsibility. They are turning from “What’s in it for me?” as their unconscious world view, to consciously embracing “What’s best for the common good?” Many of these people are business leaders. Companies around the world are beginning to recognize that their future is intimately linked to peace, prosperity for all, and environmental stewardship.”

7- “Our proficiency in expressing our creativity falls off as e accept other’s opinions and evaluations of what is good and )ad, right and wrong. Our education systems have much to answer in this arena.”

8- “The pathway to creativity begins with employee participation. T\ere are five stages to participation—invitation, engagement. reflection, listening, and implementation. When an organization attempts participation for the first time, it needs to take care to complete all the steps. At the beginning, it is important to i let all employees know that they are being invited to share their ideas and that their opinions are important. The engagement begins when employees are presented with information about he situation at hand and have the opportunity to ask questions”

9- “The challenge for leaders is to build an organizational culture that maximizes the development of human potential and strategic alliances while working within the framework of acceptable values and behaviors that relate to the type of activity, the dominant professional discipline, and the mores of the local community.”

10- “Companies that operate with values that support the common good are able to maintain morale, commitment, and loyalty even during difficult times. When staff reductions are necessary because of a downturn in sales, companies that operate from the higher levels of consciousness explore ways to share the burden. If this doesn’t work, layoffs are handled with compassion and caring.”

11- “When an organization moves from being profit-driven to being values-driven, it does not mean that it suddenly regards profit as unimportant. On the contrary. Profit remains a fundamental objective. In values-driven organizations the profit motive is contained within an overarching ethical framework. Limits are drawn as to what the organization will and will not do to make an extra dollar.”

12- “I would submit therefore that it is not the sharing of an organizational mission or vision that creates cohesion, but the creation of opportunities within the organizational mission for every individual find work that corresponds to his or her personal mission or vision.”

13- “The first three categories of the Balanced Need Scorecard represent the primary needs of an organization: Corporate Survival—profits, finance, and funding; Corporate Fitness— productivity, quality, and efficiency; and Customer/Supplier Relations—sales, service, and product excellence…’The next three categories support these front-line needs. They include Corporate Evolution—participation, innovation, and creativity; Corporate Culture—vision, mission, values, and employee fulfillment; and Society and Community Contribution—social and environmental responsibility, being of service, and making a difference.”

14- “For trust to blossom and flourish, there must be shared values and mutual accountability, nurtured by cooperation and friendship. Above all, there must be a strong sense of working together for the good of the whole. Therefore, to grow trust, an organization must first grow community. The foundation of community is sociability (measure of sincere friendliness among members of community) and solidarity (measure of a community’s ability to pursue shared objectives quickly and effectively regardless of personal ties).”

15- “A leader is someone who holds a vision and courageously pursues that vision in such a way that it resonates with the souls of people.”

16- “To find real happiness at work, I had learned that I had to stop putting my energy into pleasing my boss, competing with others, and being the best. I had to release my unconscious fears about being valued and respected and pass through transformation.^ When I was free of the fears that were driving my competitive behavior, I was able to be my true self and be my own person. Only then was I able to discover my true passion and the joy of working in service to others.”

17- “The critical factors in successful transformations are (a) the management team’s commitment to modeling the new values and behaviors; (b) integrating the new values into the structural incentives of the human resource processes of the organization; (c) building psychological ownership by involving employees in defining the mission, vision, and values and the Balanced Needs Scorecard objectives and targets; (d) helping employees to think like owners; and (e) assigning responsibilities and developing structural mechanisms to support innovation, learning, and cultural renewal.”

Regards,

Omar Halabieh

Liberating the Corporate Soul

On The Lexus and the Olive Tree

I recently finished reading The Lexus and the Olive Tree by Thomas L. Friedman.

Below are key excerpts from the book that I found particularly insightful:

1- “While there are a lot of similarities in kind between the previous era of globalization and the one we are now in, what is new today is the degree and intensity with which the world is being tied together into a single globalized marketplace and village. What is also new is the sheer number of people and countries able to partake of today’s globalized economy and information networks, and to be affected by them.”

2- “As you will see from the book, I am keenly aware of them. I believe the best way for us to deal with the brutalities of globalization is by first understanding the logic of the system and its moving parts, and them figuring out how this system can benefit the most people. While inflicting the least amount of pain. That is the spirit that motivated this book.”

3- “The driving idea behind globalization is free-market capitalism—the more you let market forces rule and the more you open your economy to free trade and competition, the more efficient and flourishing your economy will be. Globalization means the spread of free-market capitalism to virtually every country in the world. Therefore, globalization also has its own set of economic rules—rules that revolve around opening, deregulating and privatizing your economy, in order to make it more competitive and attractive to foreign investment.”

4- “Globalization also has its own demographic pattern—a rapid acceleration of the movement of people from rural areas and agricultural lifestyles to urban areas and urban lifestyles more intimately linked with global fashion, food, markets and entertainment trends.”

5- “The globalization system, by contrast, is built around three balances. which overlap and affect one another. The first is the traditional balance between nation-states…The second balance in the globalization system is between nation-states and global markets…The third balance that you have to pay attention to in the globalization system—the one that is really the newest of all—is the balance between individuals and nation-states.”

6- “So what to do? How to understand and explain this incredibly complex system of globalization? The short answer is that I learned you need to do two things at once— look at the world through a multilens perspective and, at the same time, convey that complexity to readers through simple stories, not grand theories. I use two techniques: I “do information arbitrage” in order to understand the world, and I “tell stories” in order to explain it.”

7- “The challenge in this era of globalization—for countries and Individuals—is to find a healthy balance between preserving a sense of identity, home and community and doing what it takes to survive within the globalization system. Any society that wants to thrive economically today must constantly be trying to build a better Lexus and driving it out into the world.But no one should have any illusions that merely participating in this global economy will make a society healthy. If that participation comes at the price of a country’s identity, if individuals feel their olive tree roots crushed, or washed out, by this global system, those olive tree roots will rebel. They will rise up and strangle the process. Therefore the survival of globalization as a system will depend, in part, on how well all of us strike this balance.”

8- “To fit into the Golden Straitjacket a country must either adopt, or be seen as moving toward, the following golden rules: making the private sector the primary engine of its economic growth, maintaining a low rate of inflation and price stability, shrinking the size of its state bureaucracy. maintaining as close to a balanced budget as possible, if not a surplus, eliminating and lowering tariffs on imported goods, removing restrictions on foreign investment, getting rid of quotas and domestic monopolies, increasing exports, privatizing state-owned industries and utilities. deregulating capital markets, making its currency convertible, opening its industries, stock and bond markets to direct foreign ownership and investment, deregulating its economy to promote as much domestic competition as possible, eliminating government corruption, subsidies d kickbacks as much as possible, opening its banking and telecommunications systems to private ownership and competition and allowing its citizens to choose from an array of competing pension options and foreign-run pension and mutual funds. When you stitch all of these pieces together you have the Golden Straitjacket. Unfortunately, this Golden Straitjacket is pretty much “one size fits all.” So it pinches certain groups, squeezes others and keeps a society under pressure to constantly streamline its economic institutions and upgrade its performance. It leaves people behind quicker than ever if they shuck it off, and it helps them catch up quicker than ever if they wear it right. It is not always pretty or gentle or comfortable. But it’s here and it’s the only model on the rack this historical season.”

9- “While we are on the subject of the diversity of the Electronic Herd, there is one other critically important thing we should always keep in mind about it—this herd is not simply an exogenous force. It is lot just made up of stateless offshore money funds, Internet investors from abroad and distant Supermarkets. It is also made up of locals in every country that has opened itself to the herd. What gives the herd its power is not only the fact that when capital controls in a country are lifted foreigners can easily come in and buy and sell currency, stocks and bonds. It is the fact that the locals can easily go out!”

10- “In the globalization system your state matters more, not less. Because the quality of your state really means the quality of the software and operating system you have to deal with the Electronic Herd. The ability of an economy to withstand the inevitable ups and downs of the herd depends in large part on the quality of its legal system, financial system and economic management—all matters still under the control of governments and bureaucrats.”

11- “To be an effective shaper you have to be able to attract a lot of adapters. But the key to having a lot of adapters to your standard is that it be able to create a lot of value for other people too—whether it is a product, a human value or a set of geopolitical rules. If people become reluctant members of your value network, eventually they will rebel against it by seeking a different standard. So one thing a shaper always has to be aware of is whether he is leaving room in his value chain—some food on the table—so that others will have an incentive to adapt to his standards.”

12- “The best countries and companies will mirror one another’s habits. So, after asking the two most basic questions—how wired is your country or company and is it a shaper or adapter—here are the other nine questions I ask to measure its economic power and potential. 1) How Fast Is Your Country or Company? 2) Is Your Country or Company Harvesting Its Knowledge? 3) How Much Does Your Country or Company Weigh? 4) Does Your Country or Company Dare to Be Open on the Outside? 5) Does Your Country or Company Dare to Be Open on the Inside? 6) Does Your Country’s or Company’s Management Get It and Can You Change Management If They Don’t? 7) Is Your Country or Company Willing to Shoot Its Wounded and Suckle the Survivors? 8) How Good Is Your Country or Company at Making Friends?”

13- “The Golden Arches Theory highlights one way in which globalization affects geopolitics—by greatly raising the cost of warfare through economic integration. But globalization influences geopolitics in many other ways. For instance, it creates new sources of power, beyond the classic military measures of tanks, planes and missiles, and it creates new sources of pressure on countries to change how they organize themselves, pressures that come not from classic military incursions of one state into another, but rather by more invisible invasion lie invasions of Supermarkets and Super-empowered individuals.”

14- “The other method for greening globalization is to demonstrate to corporations and their shareholders that their profits and share prices will  increase if they adopt environmentally sound production methods.”

15- “If the intellectual critics of globalization would spend more time thinking about how to use the system, and less time thinking about how to tear it down, they might realize what a lot of these little folks have already realized—that globalization can create as many solutions and opportunities as it can problems.”

16- “How we learn to strike the right balance between globalization’s inherently empowering and humanizing aspects and its inherently disempowering and dehumanizing aspects will determine whether it is reversible or irreversible, a passing phase or a fundamental revolution in he evolution of human society.”

17- “America does have a shared national interest to pursue in today’s globalization system—one that constitutes both a big opportunity and a big responsibility. Put simply: As the country that benefits most from today’s global integration—as the country whose people, products, values, technologies and ideas are being most globalized—it is our job to make sure that globalization is sustainable. And the way we do that is by ensuring that the international system remains stable and that advances lead declines for as many people as possible, in as many countries as possible, on as many days as possible.”

18- “First, we want as open, and growing, a free-market-oriented economy as possible, in which people are encouraged to swing free and take crazy leaps. Without risk takers and venture capitalists, there is no entrepreneurship and without entrepreneurship there is no growth. Therefore, at the heart of every healthy economy are the free-swinging trapeze of free markets. Because there is no better safety net than a healthy economy with low unemployment.”

19- “Democratizing globalization—it’s not only the most effective way to make it sustainable, it’s the most self-interested and moral policy that any government can pursue.”

Regards,

Omar Halabieh

The Lexus and the Olive Tree

On The Big Switch

I recently finished reading The Big Switch – Rewiring The World, From Edison to Google by Nicholas Carr.

Below are key excerpts from the book that I found particularly insightful:

1- “What made large-scale electric utilities possible was a series of scientific and engineering breakthroughs – in electricity generation and transmission as well as in the design of electric motors – but what ensured their triumph was not technology but economics.”

2- “At a purely economic level, the similarities between electricity and information technology are even more striking. Both are what economists call general purpose technologies…they can both be delivered efficiently over a network.”

3- “If the electric dynamo was the machine that fashioned twentieth-century society – that made us who we are – the information dynamo is the machine that will fashion the new society of the twenty-first century.”

4- “What the fiber-optic Internet does for computing is exactly what the alternating current network did for electricity: it makes the location of the equipment unimportant to the user. But it does more than that. Because the internet has been designed to accommodate any type of computer and any form of digital information, it also plays the role of Insull’s rotary converter: it allows disparate and formerly incompatible machines to operate together as a single system. It creates harmony out of a cacophony. By providing a universal medium for data transmission and translation, the Net is spurring the creation of centralized computing plants that can serve thousands or millions of customers simultaneously. What companies used to have no choice but to supply themselves, they can now purchase as a service for a simple fee. And that means they can finally free themselves from their digital millwork.”

5- “It will take many years for the utility computing system to mature. Like Edison and Insull before them, the pioneers of the new industry will face difficult business and technical challenges. They’ll need to figure out the best ways to meter and set prices for different kinds of services. They’ll need to become more adept at balancing loads and managing diversity factors as demand grows. They’ll need to work with governments to establish effective regulatory regimes. They’ll need to achieve new levels of security, reliability, and efficiency. Most daunting of all they’ll need to convince big companies to give up control over their private systems and begin to dismantle the data centers into which they’ve plowed so much money. But these challenges will be met just as they were met before. The economics of computing have changed, and it’s the new economics that are now guiding progress. the PC age is giving way to a new era: the utility age.”

6- “Virtualization allows companies – or the utilities that serve them – to regain the high capacity utilization that characterized the mainframe age while gaining even more flexibility that they had during the PC age. It offers the best of both worlds.”

7- “Some of the old-line companies will succeed in making the switch to the new model of computing; others will fail. But all of them would be wise to study the examples of General Electric and Westinghouse. A hundred years ago, both these companies were making a lot of money selling electricity production components and systems to individual companies. That business disappeared as big utilities took over electricity supply. But GE and Westinghouse were able to reinvent themselves. They became leading suppliers of generators and other equipment to the new utilities, and they also operated or invested in utilities themselves. Most important of all, they built vast new businesses supplying electric appliances to consumers – businesses that only became possible after the arrival of large scale electric utilities.”

8- “When applications have no physical form, when they can be delivered as digital services over a network, the constraints disappear. Computing is also much more modular than electricity generation. Not only can applications be provided by different utilities, but even the basic building blocks of computing – data storage, data processing, data transmission – can be broken up into different services supplied from different locations by different companies. Modularity reduces the likelihood that the new utilities will form service monopolies, and it gives us, as the users of utility computing, a virtually unlimited array of options.”

9- “Not only will the Internet tend to divide people with different views, in other words, it will also tend to magnify the differences.”

10- “All technological change is generational change. The full power and consequence of a new technology are unleashed only when those who have grown up with it become adults and begin to push their outdated parents to the margins. As the older generations die, they take with them their knowledge of what was lost when the new technology arrived, and only the sense of what was gained remains. It’s in this way that progress covers its tracks, perpetually refreshing the illusion that where we are is where we were meant to be.”

Regards,

Omar Halabieh

The Big Switch