Thursday, May 28, 2015

Crucial Conversations by Patterson et al (Book Review #43 of 2015)


Crucial Conversations Tools for Talking When Stakes Are High, Second Edition
A pastor recommended this book to me as there are not many in the explicitly Christian genre that deal with how to reason with one another. A crucial conversation is one which "could have a huge impact on the quality of your life" (loc. 285). This book has immediate application in any marriage, therefore I also consider it a book on marriage. A book like Eggerich's Love and Respect will give you the motivation and the basics of what to say in having some crucial conversations with your wife but does not describe HOW to say it. What do you do when the adrenaline is pumping and you feel a vein popping out on your forehead? This book explains what to do, excellently. (My wife was a communications major in college, so she has had an advantage all these years.) It's applicable to any workplace, conversation with your teenager, etc. and there are plenty of hypothetical examples. I actually read this in motivation for a meeting with my boss in a semi-annual employee evaluation. If I were a pastor, like the friend who recommended this, I would have every church member read it-- even though the Gospel isn't in the book itself (you can insert it there if you try).

One criticism of the book is that it spends the first 10% just trying to sell you through testimonials. Hey, I have the book, so skip the sales pitch. The other criticism is that it's easy to get the sense that it's easy; the reality is it takes practice. The authors discuss this, they're still learning as they practice personally. We all fail, the goal is to "think a little more clearly during a few crucial conversations" (loc. 1513).

The authors begin with a look at the personal-- good (ie: healthy) organizations foster a safe environment for employees and members to discuss and critique. Mature adults should strive to improve their communication and respond to comments or criticism with respect for the giver.

"In the worst companies, poor performers are first ignored then transferred. In good companies, bosses eventually deal with problems. In the Best companies, everyone holds everyone else accountable--regardless of level or position" (Loc. 438).

(I work for a state government agency where this is rarely the case. Be the change you want to see, right?)

"People fall into three categories-- those who digress into threats and name-calling, those who revert to silent fuming, and those who speak openly, honestly, and effectively" (loc. 450).

The goal is to work against our natural survival instinct toward fight or flight. To avoid the false "fool's choice" of "telling the truth and keeping a friend." A healthy relationship sees conflicts and differences of opinions as opportunities to grow deeper into the relationship, not something to fear. "Skilled people find a way to get all relevant information (from themselves and others) out into the open" (Loc. 549).

The authors are correct that we first have to deal with ourselves, get the log out of our own eyes before we remove a speck from someone else's. Examine your own heart. "If you can't get yourself right, you'll have a hard time getting dialogue right...the first step to achieving the results we really want is to fix the problem of believing that others are the source of all that ails us" (loc. 668, 686).

They make two powerful (convicting) claims (loc. 1575):
1. "Others don't make you mad. You make you mad...scared, annoyed, or insulted. You and only you create your emotions."
2. "You can act on (your emotions) or be acted on by them. That is, when it comes to strong emotions you either find a way to master them or fall hostage to them."

So, when thinking about the above you realize that you tell yourself a story about the other person who you think "makes me mad." Over the weeks and years you've built up a list of grievances and examples that fit that story-- that person is out for you or is just plain ________ because ______. Recognizing that made-up story is harmful to the relationship is crucial in fostering effective conversation. You have to take control of the story, tell yourself a different story-- give the other person the benefit of the doubt, or figure out where he/she might be coming from. (Recognizing and overcoming our cognitive biases is half of the battles in life).

Don't confuse your story with facts. And don't spread your story to others. You may have indeed been aggrieved by a co-worker, but if you didn't bring it up with him at the time, or make a point to talk to him later, then you simply make the problem worse by spreading your grievance with others. That won't help you achieve what you want.

The key questions to ask yourself heading into any crucial conversation:
1. What do I really want for myself? (ie: to be happy in this relationship, heal, etc. My idea to be considered, etc.)
2. What do I really want for others? (For her to stop hurting me. For him to communicate with me, etc.)
3. What do I really want for the relationship? (For it to continue, grow closer, etc.)
4. How would I behave if I really wanted these results? (If the relationship is important to you, you won't resort to sulking silence or violence.)

Clarify the above by also asking what you DON'T want.

Next, refuse the "fool's choice" of truth or relationship, of fight or flight. Ask yourself "how can I hold a conversation with this person that achieves #1-3 while avoiding creating bad feelings or resentment?"

One key is to create a safe environment. The other person will not communicate if it's not safe. In engaging her with a crucial conversation she may react with hostility (snide remarks, darts, etc.) initially out of insecurity, perhaps from years of unsafe conversations and built-up stories she has told herself about you. You have to recognize that this is not about you, but about them, and keep circling back to make it safe. Own up to your past mistakes. Don't fake apologize for things that are not your fault, either. But do recognize that you have contributed to this situation.

A person will only hear what you say if it's safe. If at any time in the conversation, you sense a flight or fight response from the other, circle back to safety. (Don't counter-offend!) The authors have included a survey of T/F questions to help you determine your own style under stress. (Avoiding, attacking, etc.)

This is easier said than done, although the book provides some (somewhat realistic) examples. "(T)he first condition of safety is Mutual Purpose." You both want to increase company sales, for example, or enjoy spending time with one another in the evenings. "(W)hen mutual purpose is at risk, we end up in debate" (loc. 1220). We generally have to care about the other person's interests to establish mutual purpose. Mutual purpose demands mutual respect. Perceived disrespect jeopardizes safety. Disrespect includes rolling your eyes, or taking a bad posture (not mentioned by the authors, but critical).
"(F)eelings of disrespect often come when we dwell on how others are DIFFERENT from ourselves. We can counteract these feelings by looking for ways we are similar" (loc. 1260).

The authors teach the helpful technique of "contrasting" when others misinterpret your purpose or intent, or perceive disrespect. It's a combination of "don't" and "do" statements. Ex: "The last thing I wanted to do was communicate that I don't value the work you put in...I think your work has been nothing short of spectacular" (loc. 1321).

Contrasting is not apologizing, it's restating your concern and creating safety. It provides context and proportion (loc. 1351). Don't give into the temptation of saying "Ah, it's no big deal..." or "nevermind" or take back what you said. Simply put your remarks in context. Maybe your counterpart believes something that isn't true about your motives, this is your way to address that.

In the real world, sometimes your goal may not be compatible with the other's. Your boss may want you to do something you don't want to do. So, you have to "invent" a mutual purpose-- zoom out a bit to find where you do agree, like productivity of the workplace and morale. What are the long-term goals of the relationship? From there, you can brainstorm new strategies or reach some sort of agreement-- you do it your boss's way this time with the understanding that next time it will be done differently.

The above are summed up with the acronym CRIB:
Commit to seek Mutual Purpose
Recognize the purpose behind the strategy
Invent a mutual purpose
Brainstorm new strategies.

Five other tools for the crucial conversation are in the acronym STATE:
Share your facts.
Tell your story (what was your impression of what the other was doing, see above).
Ask for others' paths. (Let them tell their story)
Talk tentatively. (Be aware of the facts you're missing; the unknowns. Tell your story as a story and not a fact).
Encourage testing.

Facts are the most persuasive. "You were 20 minutes late yesterday" is better than "You are always late," or "You're taking advantage of this office." Talking tentatively does not mean attaching a disclaimer or doing it in a tone suggesting you're completely unsure of yourself (loc. 2110). Don't say "It's probably just my imagination but..."

An acronym for encouraging others to share their path is is AMPP (2343-2349):
Ask: "I'd like to hear your opinions." "What do you think about..."
Mirror: "From the way you're saying that, it doesn't sound like you're 'okay.'"
Paraphrase: "So, you're mad because you think I..."
Prime (when there's uncomfortable silence): "Are you thinking that I'm doing this because..."

The authors also discuss situations with multiple parties, maybe at a department meeting. Remember that the goal is not to "win" or persuade others you are "right." The goal is to get your ideas and opinions into the pool for consideration. The same strategies above apply, you above all need to seek safety for the members in the conversation, let everyone feel comfortable putting their ideas out there. Seek mutual purpose and keep directing the conversation towards it.

Use the acronym ABC (loc. 2525):
Agree. Agree when you share views.
Build. If others leave something out, agree where you share views, then build.
Compare. When you differ significantly, don't suggest others are wrong. Compare your two views.

The last part to consider is how to close the conversation. A decision has to be made (never hold a meeting for which there is no action plan). "Dialogue is not decision making" and all parties have to decide how the decision will be made (loc. 2542). Make sure you know who will make the final decision and how it will be made-- and what's required from you. (Never assume.)
A good manager or leader will also follow up to make sure the decision was carried out and all parties are still in agreement on mutual purpose. That should also be included in the conversation-- what's the time-line for follow-up?

The authors do deal with some difficult situations, giving some examples. It also gives advice for managers dealing with silent deference from employees or insubordination. The book doesn't deal with people who don't remember what was said in the last crucial conversation, or do not allow for such a conversation to take place in the first place. In general, the authors encourage you to work on yourself first, then work on safety for the other person, and eventually he or she will come around. That requires skills not covered in the book. They also don't consider other basic skills of communication (eye contact, posture, etc.) nor physiological issues that can affect how you feel emotionally (don't up your caffeine intake before beginning a crucial conversation, for example).

This is one book that perhaps everyone should read and practice. I give it 4.5 stars.

Monday, May 25, 2015

Political Order and Political Decay by Francis Fukuyama (Book Review #42 of 2015)

Political Order and Political Decay: From the Industrial Revolution to the Globalization of Democracy

I read this book immediately after reading Volume 1 (The Origins of Political Order). This work examines the development of political institutions from the French Revolution to today, and the last 1/3 of the book looks at what causes decay in those institutions. I only give this book three stars because I felt like Fukuyama didn't really add much value to the extensive sources he cited and left so many aspects of political order and decay unexamined. The first volume included overviews of thousands of years of Chinese, European, and Middle Eastern history. The scale of this book was much more narrow and not quite as interesting. He at least quotes Acemoglu and Robinson's 2012 work, which I found much better than either this book or the previous one. One real weakness of Political Order and Decay is that Fukuyama fails to address how political institutions and governments evolve, adapt, or decay in response to cooperation with other governments. If "the state makes war, and war makes the state" what about attempts at common global cooperation, like adherence to U.N. resolutions and WTO rules? Several countries reformed their legal institutions and surrendered an amount of sovereignty in order to join the EU, for example. Fukuyama never really addresses this. Ultimately, both volumes are intended to be a critique of and complement to Samuel Huntington's work, which I admittedly have never read.

Fukuyama spends much space recapping what was discussed in the previous work. Political institutions decay because of institutional rigidity and patrimonialism. Patronage exists in every government, as legislatures pass laws that people advocate for. But this is distinct from clientelism where there is an outright favors-for-votes understanding. Clientelism as Fukuyama tells it is what differentiates good governance from bad. No country can get rich without effective government there is a correlation between economic growth and the quality of governance. But while Jared Diamond (Collapse) and others are looking at the decline of societies as a whole, Fukuyama is simply focused on government institutions that might decline while other institutions around them may be flourishing-- such as in the United States. Fukuyama defines the rule of law to broadly encompass check on arbitrary rule of the authority. While this is essential to economic growth, China is experiencing economic growth without really having the rule of law-- the only modern civilization never to have adopted the rule of law. But China has granted enough property rights for incentives to exist and allowed a modicum of economic freedom. Fukuyama later details Chinese attempts at developing adherence to rule of law pre-Mao and post-Mao.

A political order's current state of decay is dependent on what came first-- democratic capitalism or industrial progress. The U.S. Constitution was written when the colonies were agrarian and had no need for a strong central authority; authority could be delegated to local administrations and defense handled by militias. American political institutions were unable to change with the rapid change of the industrial revolution-- new technology, greater communication, greater mobility, and urbanization. The inadequacy of the institutions culminated in the Civil War, which saw dramatic expansion and organization of federal power (including the standing army). America is more reliant on its courts to not only enforce laws but to apply them than any other developed country. Hence we have an army of lawyers that make change difficult (rigidity) and judges appointed for life can change how laws are interpreted (for example, the minimum wage was ruled unconstitutional before it was ruled constitutional).

The necessity of the railroads created a problem of monopoly, which led to regulation. The American Economics Association was formed, in part, to propose ideas on regulating the railroads which included the Interstate Commerce Commission (ICC). Fukuyama is correct to draw the comparison to today's health care system-- a critical sector of the economy with a lack of competition, lack of transparency in pricing, government mandates leading to hidden costs, and not easy to innovate around in the short-run. The Madisonian system of checks and balances apparently did not anticipate the capture of government entities, such as the ICC, by those it regulated. So, Fukuyama deems regulation as necessary but problematic. It helps maintain a democratic state but is also in contradiction with the democratic state. He writes that the ICC could have been better if it were not a commission, but an independent body of technocrats set up more like the later-created Federal Reserve Board of Governors.

Technocrats can help run a system well but are anti-democratic, hence you see the "audit the Fed" movements alive among conservatives today. Democracy correctly puts checks on the executive in order to keep tyranny from happening as it has since the Greeks invented democracy, but making everything democratic and subject to the whims of the people leads to every decision becoming political, and good governance needs to happen despite the people. Fukuyama writes that the turning point toward technocracy came with passage of the 14th Amendment (1868), which has been broadly interpreted by courts to extend to corporations and used to overturn everything from abortion laws to school segregation in order to essentially protect the electorate from itself. Fukuyama writes that the 14th Amendment resulted in the merit system that governments employ today-- where workers cannot be fired for political purposes and therefore are able to be more objective. However, this merit system is also a double-edged sword.  Government workers who are not at risk of being fired lack the incentives to perform well that their counterparts in the private sector respond to. (Disclosure: I'm a merit worker in government.) Government workers in some states have successfully unionized, creating an even greater rigidity.

Changes in political institutions must be examined in context of economic growth and other changes in the society. Fukuyama, oddly enough, does not note much of the overt evolution of U.S. institutions toward populist democracy. He never notes that America was founded as a Republic in order to insulate it from the illiterate masses (read some Gordon Wood). We forget today that Senators were only popularly elected in every state after the 17th Amendment (1913). America was revolutionary in giving all white males the right to vote in the Constitution (this didn't happen in England until after World War I), but the Founders intended a particular elite to govern. Giving African-Americans suffrage after the Civil War made the U.S. much more democratic than England, where only 40% of the population could vote up until the 1880s. He does note the changes that came with Jacksonian democracy, attributing the rise of clientelism to the increase in patronage due to the entrenchment of the political party system. Lexington, KY (my birthplace) makes a cameo here as Fukuyama notes it as an example of a relatively small place with an outsized political machine determining everything from congressional representatives to police officers-- similar to that of the later Tammany Hall in New York. However, clientelism does create a form of democratic accountability and participation. The politician must please his patrons or else be ousted.

Real progressive reform and a focus on scientific management came in the early 20th century. Besides the ICC above, Fukuyama focuses on the U.S. Forest Service, which began as a technocratic model headed by Gifford Pinchot under Teddy Roosevelt's Presidency. Pinchot was a competent expert/manager who was motivated and given wide discretion. The Forest Service was responsible for the long-run health of the forests and to maintain its overall profitability. It was "responsive, but not owned," and didn't have mandated rules. Pinchot and Roosevelt represented the "Elite American" class of people who were well-read and well-traveled abroad that Fukuyama laments no longer exists. The Forest Service serves as Fukuyama's example of political decay-- under Lyndon Johnson the service was mandated to do more fire suppression, which seems to be the primary focus of the service now. Fire is useful and necessary to the future health and profitability of the forest, but a government unresponsive to fires is at risk politically. Ironically, the emphasis on fire suppression actually led to more fuel for more frequent and hotter-burning and more dangerous fires today. Mandates took away discretion and dynamism, and the merit system entrenched certain incompetent and less-motivated managers. This has happened across government, and Fukuyama cites studies finding Americans would now rather work for non-profits than the government.

Hence, technocracy depends on benevolent directors, just as countries like China can experience increases in economic growth and standard of living with leaders like Deng Xiaping instead of Chairman Mao. This is an obviously slippery slope that has been dealt with in Western political philosophy since the Greeks, and Fukuyama pays it short shrift. He even argues with Hayek's knowledge argument: A central planner can never have all the information that millions of people voluntarily working together could have (hence the "magic" of the price system). Fukuyama argues that while this may be true at any (every) given moment, we can learn over time and correct our mistakes. But this is like arguing that history doesn't repeat itself and ignores the "this time is different" fallacy repeated so many times by would-be expert analysts and "benevolent" dictators.

It's fitting, then, that Bill Easterly's most recent book is titled The Tyranny of Experts as Fukuyama delves into the recent economic development literature to examine why some countries develop sound institutions and develop economically while others do not. He examines work by Easterly, Jeff Sachs, Acemoglu and Robinson, and Douglass North. Sachs, like Diamond, puts great emphasis on geography and factor endowment. Acemoglu and Robinson argue (persuasively in my opinion) that these are not the deciding factors. Fukuyama approvingly cites Easterly's work on poverty correlating with conflict. All economists  agree that factor endowments (natural resources) are crucial.

How British and French colonies reacted to introduction to the West depended on their pre-existing institutions. Were they high-trust societies with relatively homogenous people groups and a national identity? Or were they, like Greece and Southern Italy, more clan-like and lacking a strong state to enforce property rights? The author describes how the Britain and France tried to do colonialism "on the cheap," setting up extractive institutions and not investing much in developing the institutions needed to maintain good governance after independence. Nigeria is one country that went particularly badly, partly the consequence of being even less unified than Greece, with 200+ tribes all competing for power and patronage. Fukuyama argues that Nigeria is "weak in a moral sense," suggesting that cultural norms and mores matter and making Fukuyama the arbiter of morality and strength of weakness. This weakness and the clientelistic system is what keeps people from uniting to demand change since they indeed have a ballot box. The Arab Spring happened in the course of authorship, and this creates some issues for the author's analysis of countries where the clientelistic system is the status quo, as somewhat diverse entities united to demand change. But countries like Nigeria are more diverse and fractured than most.

Fukuyama details how Britain and France's approaches to colonialism differed. Initially, British overseers were generalists and not familiar with the specifics of the country they were in. Most never learned the language and never gained trust. "Producing Denmark" was not the goal, as Denmark wasn't Denmark then. Supposedly, both Britain and France learned from their errors and made strides toward what we would now call economic development in the latter days of colonialism. As I read this portion I wondered "Does Fukuyama add anything of value to the vast literature on economic development?" I think not.

While conflict correlates with poverty, this mainly relates to internal conflict. Wars with neighbors are instead suggested by Fukuyama to be healthy. War requires rapid organization by government, organized industrial economic policy, and uniting somewhat diverse groups into a cohesive national identity. He suggests that Latin American countries have not developed as strongly as European countries because of the lack of war between states in South America (seriously). (He spent more time in Vol. 1 looking at the extractive institutions set up by Spain.) The author laments that economists ignore the effect geography has on military conquest and development. As I mentioned at the outset, he spends no time on peaceful cooperation between governments, like harmonizing laws and taxes to establish a customs union, trade agreement, or membership in a larger body like the U.N., EU, etc.

Fukuyama contrasts Costa Rica with its less-prosperous neighbors as well as Argentina. Argentina supposedly "proves" that endowments and geography aren't the most important, as Argentina has a variety of resources to draw from but has suffered from despotism, hyperinflation, and other maladies keeping it from becoming Costa Rica. He conveniently neglects to mention that Costa Rica is a haven for criminals and money laundering due to its lack of extradition treaties with the U.S., so much of its per-capita income is held by an elite few. He does not delve into Peronism but it's worth noting the strong national identity of Argentinians also has not seemed to correlate with good governance. South America's problems are further exacerbated by other powers' constant intervention, such as the U.S.'s Monroe Doctrine.

National identity is a double-edged sword, necessary for solid state-building but harmful as it can lead to nationalism. The Democratic process in Germany was obviously hijacked by nationalism. I think the promotion of nationalism by the Young Turks movement at the end of the Ottoman Empire and the war for independence after WWI, and the defense of nationalitic ferver today as a result, is a good example that Fukuyama does not recount. He does admit that the U.S. built its democracy at the expense of Native American lives. The rule of law did not apply to its Cherokee inhabitants and the U.S. Constitution represents such patriotism to some that it is essentially revered as holy and infallible document.

Greek and Italian problems in the eurozone are highlighted by the author. Greece and Southern Italy are low-trust societies where loyalty is to family. Is trust endogenous or exogenous? I'd say endogenous. Businesses tend to be family-owned for generations. There is still Shakespeare-esque rivalry among families and groups. In a stronger-state society, property rights are protected by a government such that one does not have to rely on family and clan (this is covered in Vol. 1). In Southern Italy, the mafia take the place of the state in providing protection. In modern times, brave judges have stood up to mafia rule and corruption, but at great cost. In Greece, public employment is patronage. Since the latest economic crisis and austerity measures, only one Greek public sector employee has been fired for every five private sector employees. Tax evasion is a national past time. I'm reminded of books I've read by travelers in the mid-1800s remarking that Greece had no schools of its own, relying on Westerners to build functioning schools.

Contrast this with England, which was already a fairly high-trust society due to various factors including the role of the Church in establishing law (see Vol. 1). Puritanism pushed further reforms in England and Europe, Fukuyama mentions William Wilberforce's religious effort to abolish the slave trade as an example. The industrial revolution undermined aristocracy and led to a growth of the middle class. As in Vol. 1, Fukuyama points out Marx's errors. Marx predicted that eventually capitalism would collapse as the factories were churning out goods on the back of the proletariat that only the bourgeoisie could afford. Eventually, too many goods would be produced than could be consumed and the system would collapse. Marx did not forsee that real incomes would rise such that the median voter in England would eventually be a middle-class worker who voted to secure greater rights and safety. Labour parties formed in Europe to represent the working class and trade unions became powerful constituents. This headed off Marxism in Germany. After the suffering of so many young men in WWI, greater suffrage was granted.

Fukuyama also examines Southeast Asia, particularly Japan and Indonesia. Sukarno, Indonesia's first President, is an example of the type of strong-armed coalition building leader Fukuyama likes. Sukarno unified an ethnically diverse population to fight for independence from the West. Like Mustafa Kemal Atatürk in Turkey (who sadly goes unexamined by Fukuyama), Sukarno oversaw a "guided democracy." Sukarno published his "pillars" on which governance rested. While rejecting Western-style capitalism, he opposed Marxism. While embracing the Islam of many Indonesians, he argued that there was no need for a strict Sharia state, and separated Islam from nationalism. He maintained that Indonesia would be integral to the international community and not just internally focused. Fukuyama does not detail that Sukarno eventually gleaned inspiration from Mao and adopted a heavier hand. Both the U.S. and the Australian governments supported armed resistance against him.

Fukuyama also looks at the development of the Meiji law in Japan at the turn of the 20th century. Japan had to import foreign law because it had no native institutions similar in many respects, and this was difficult since the Japanese language had no words for Western concepts such as "rights." Japan rejected the American Constitution and British institutions and decided to adopt a similar code as Germany's (Prussian legal code) at the time. China, in turn, imported much of their legal code from Japan. The point Fukuyama makes that various cultures do not have the same culture and even concepts in their language to translate a legal code from the West is an important one that deserved more thought. This has huge implications for the democratic institutions the West has tried to export. State-building is not the same thing as democracy-building, an important thing to keep in mind. Japan's 1948 constitution is contingent on U.S. military defense of the country, and should the U.S. pivot away from that Japan would have to adopt something else, and Fukuyama notes a desire among many Japanese to do just that.

China does not take up as much space in the book as in Volume 1. However, the author does chronicle legal reforms in 1911 and the eventual rise of Mao and the arbitrary application of law. The law could change at the whim of Mao from one day to the next with grave consequences, and it is a good reminder that laws should not change often. Aristotle's Politics still provides a good grounding for that idea in the West, although I think that concept is not well understood by young American progressives. While rigidity in the political system and laws contributes to its decay, China is an example of where lack of any rigidity in the rule of law has disastrous consequences. Post-Mao, village collectives were still run by the local government, but were allowed to turn a profit. This led to state-owned enterprises being free to operate and share the wealth. While much of the wealth is siphoned off by corrupt bureaucrats, that is simply the cost of not having implemented a real rule of law. The Chinese Communist Party's 10-year term limits helps keep things from becoming completely autocratic as they were under Mao or in much of the Arab world. Leaders are not permanent and can make incremental changes.

China is dealing with the same basic problem that every nation deals with-- who gets to participate in the political process? Fukuyama quotes from Montesquieu, John Stuart Mill, and Walter Bagehot on this topic, and the difference in suffrage among Western nations I note above. As the middle class grows, as it is in China, it demands and commands a greater say in the working of things. While the growing middle class may be initially progressive, demanding a shorter workweek, worker's rights, etc., it can also eventually side with conservatives against populists as populist policies are harmful to the small-to-medium sized businesses that the middle class own. Fukuyama believes China will eventually decay under its tenuous system lacking true rule of law, but it's not clear exactly how that will happen.

Only the last 1/3 of the book deals with political decay, and these are the best chapters. While the last 30 years have seen a "third wave of democratization," Western institutions like the U.S. are decaying due to their rigidity and patronage in the form of large interest groups. Focusing on the U.S., Fukuyama does not have much optimism. He writes that the political class is more polarized than the American people are themselves. But the media tends to follow the political class, so it looks worse than it is if you just talk to your neighbor. But a polarized political class leads to more polarized politics and a deadlocked Congress.

Britain, on the other hand, with its parliamentary system is more of a "democratic dictatorship." The majority party basically gets to determine the budget and more is left in the hands of technocrats who are not subject to interrogation and the various committees that the U.S. Congress has created to impede good governance. The U.S. Congress delegates control of agencies to the President but at the same time hauls it back through its ongoing Congressional committees. There is also no filibustering in the U.K.

In the end, it seems that a potential solution Fukuyama favors (without stating it outright) is a sort of public-private partnership. The government should outsource activities at a local level to private firms and others would a strong incentive to manage activities efficiently and yet be ultimately accountable to the government through contracts or other means. The more management that can be removed from the political process the better, providing that it is not left completely unaccountable to democratic checks and balances. In the U.S., plenty of states have adopted "P3" laws in this spirit, which Fukuyama doesn't exaine. I would have liked to have read such things in the book.

He closes the book with a recap of Volume 1 and how it relates to this volume. I felt like this book lacked too much original thinking, added little to the development literature it cites from, and left too much out. 3 stars out of 5 for being a great compilation of research.

Friday, May 22, 2015

Sermon of the Week (5/17 - 5/23, 2015) R.C. Sproul on The Providence of God

Renewing Your Mind is a wonderful resource for apologetics, philosophy, and theology. They recently played several in Sproul's series on Providence and I found them quite good. Good enough to listen to again and think about all week. Questions addressed include:
What use is my praying since I can't change God's mind?

Is there room in the Hebrew for the "watchmaker" God who just set things into motion?
If God is all-knowing and ordains everything, why am I still morally accountable?
How is God not the author of sin?

and many more. Enjoy:
What is Providence?
God Makes it All Happen
God or Chance
Is God Responsible for Human Wickedness?
What About Human Freedom?
If God Knows Our Needs, Why Pray?



Thursday, May 21, 2015

The Secrets of Economic Indicators by Bernard Baumohl (Book Review #41 of 2015)


The Secrets of Economic Indicators: Hidden Clues to Future Economic Trends and Investment Opportunities, 2nd Edition
I read this book with the perspective of being in an office that does economic forecasting and pays for compilations of several of the indicators listed. I also have taught and used these indicators in undergraduate economics courses. Baumohl's value added is the research he's done on how each indicator is compiled and how it correlates with other indicators. For example: How many firms are surveyed, what questions are on the survey, what is the typical response rate, how does the indicator tend to correlate with future GDP growth (basic rules of thumb), what is the history of the survey, etc.? I've read books like Capital Ideas that give the history of the creation of the Dow, S&P, and other indicators we see on the nightly news, and this book is somewhat similar. If you've never been exposed to reports from the BLS, BEA, etc., this book is a tutorial on what's what.

The major indices are updated daily by Bill McBride at calculatedrisk.com (which I check first thing every morning), and he makes handy charts. But he focuses more heavily on real estate and does not cover dozens of indicators included in this book (some for good reason as some have minimal impact).

 Here's how I recommend reading it: Make a spreadsheet with tabs for leading, coincident, and lagging economic indicators (I made an additional one for international). Add indicators to the sheet where appropriate, follow the links (or search to find the correct ones as my version of the book [2008] has several broken links) and start tracking the numbers as they update over time. This gives you a one-page snapshot of the trends of several indicators as opposed to just one at a time, as you generally get with the news. It's a bit like reading an encyclopedia, but is a reference that should be on the shelf of anyone interested in the economy. 4 stars out of 5.

Friday, May 15, 2015

Podcast of the Week (5/10 - 5/16, 2015) You Are Not So Smart on Rejection, Changing People's Minds

David McRaney hosts You Are Not So Smart, also the title of his first book. He has two recent episodes that were very thought-provoking.

The first is "Overcoming our irrational and sometimes crippling fear of rejection with Jia Jiang." Jiang learned to get over the fear of rejection by practicing being rejected at least once a day for 100 days and posting all the events on YouTube. He discusses "rejection therapy," how to handle rejection, and how to gracefully reject others' ideas without rejecting the person. He has published a book on the experience and has an interesting website, fearbuster.com.

This brings to mind the "coffee challenge" that I also heard on a recent Tim Ferriss podcast. Wherever you next buy coffee, ask for a 10% discount. Just because. It will move you out of your comfort zone, allow you to practice being rejected, and be surprised at the discounts you get just by asking. (Might help your chances if you use cash, just sayin'.)

The second is in the same vein, "Contact: The power of disclosure to reduce prejudice, shift attitudes, and change minds forever."
This looks at research on changing peoples' minds, specifically in terms of gay marriage. McRaney follows a movement of "professional mind-changers" in the LGBT movement who spend time in Mississippi. McRaney records his experience in a Baptist church and interviews an ex-pastor who came out of the closet and now works to convince others of his cause. I think this has huge implications for personal evangelism. I'm currently reading Crucial Conversations and the psychological research highlighted in this podcast has much overlap with that book.

Enjoy, and learn something.




Thursday, May 14, 2015

The Origins of Political Order by Francis Fukuyama (Book Review #40 of 2015)

The Origins of Political Order: From Prehuman Times to the French Revolution
This is one of those "theory of everything" books worth examining. Fukuyama's work is two volumes and he urges the reader see the first and second as one work. I have not read the second yet, so these are my notes from the first. The closest book in style and subject matter to this work (2011) that I have read is Acemoglu and Robinson's Why Nations Fail (2012). Both books look at societies from prehistory onward and try to determine why good governance did or did not take root. Why Nations Fail is more comprehensive (looks at more societies), more interesting, and in my opinion better. Fukuyama's work can be read alongside it, along with Jared Diamond's Guns, Germs, and Steel (1997) and Rodney Stark's The Victory of Reason (2005). I expect Fukuyama's sequal to read a bit like Diamond's Collapse (2005). Fukuyama's history ends with roughly the French Revolution but he often jumps ahead to make analogies with modern-day America, China, and Russia as well as allusions to implications the past has for the present and future of these countries.

Fukuyama wrote a critique of Acemoglu and Robinson's (AR) work, to which they penned a response. Fukuyama points out areas of perceived weakness in AR like China and England's Glorious Revolution, where Fukuyama provides much more detail and history. On modern China, however, there is actually little daylight between Fukuyama and AR. China is one state seeing relative prosperity without the rule of law because they have granted just enough in the area of property rights for people to respond to incentives. AR similarly write that China's extractive institutions loosened enough in the 1980s to allow people to respond to incentives... I find it odd that the authors don't argue from Fukuyama's work since it's so similar. I digress...

Both Origins and Diamond's GGS begin with curiousity about New Guinea-- why did the West develop so differently than elsewhere? Why did different societies and governments evolve differently, and what is the connection between this and economic growth? What importance is the "rule of law" in good governance and economic prosperity? Why are some societies today more authoritarian than others, and what will this mean for the future?

Definitions matter greatly in Fukuyama's book. Fukuyama is borrowing heavily from the work of Samuel Huntington, which Fukuyama found to be seminal but inadequate, motivating him to pen Origins. He is also utilizing many of the same definitions of Max Weber and Karl Marx, both of whom Fukuyama cites and critiques throughout the book. The most important is the definition of "rule of law." It is essentially the definition I found in wikipedia of "the legal principle that law should govern a nation, as opposed to being governed by arbitrary decisions of individual government officials." I would channel Thoma Paine and call Fukuyama's use of the term more as "the rights of man," it's a respect for human life, liberty, and the pursuit of happiness codified such that ruling authorities do not have ultimate power to infringe upon it. Fukuyama also pits Hobbes against Locke, rational choice theory economists (who Fukuyama dislikes) against behavioral economists, and Hayek against himself.

One major point of the book is that history is contingent and the individualistic-oriented capitalist system that arose in England and is prevalent in the U.S. was not inevitable. Fukuyama's critique of AR's thesis (and likely Stark if he'd read him) is that The Glorious Revolution (17th century) would not have happened had there not already been an underlying cultural history of property rights and common law in England going back to the Norman invasion (11th century). The English people were already more individualistic than the Irish or Scots (more loyalty to clan), which helps explain the differing economic progress between parts of the later United Kingdom. Another major theme is that a relatively strong state is required to maintain the rule of law and defend property rights. (Early on, Fukuyama appears to be taking aim at "Tea Party" conservatives fomenting gridlock in the U.S. Congress and the Grover Norquists who want to "drown the government in the bathtub." His introduction to the book already laments American political dysfunction, and his points about individual liberty being impossible seperate from a government powerful and feared enough to protect those liberties seem aimed more at a libertarian caricature than any real argument, which detracts from the book.) Fukuyama even quotes Alexander Hamilton at length to make the point that America's Founding Fathers understood this in their switch from the Articles of Confederation to a stronger Constitution.

Fukuyama writes that the consensus of anthropology is that prehistoric societies were communal and not individualistic. That the individualism we see hailed in the West is a recent invention and likely unrealistic. Hunter-gathering necessitates division of labor and trade. Humans also have a "natural propensity to violence" and design institutions to both mitigate and channel it. While some rational choice theorists may surmise that violence is an outgrowth of economic necessity, Fukuyama dances around the idea of sin nature without mentioning it-- sometimes people kill each other for recognition or other random purposes. This propensity to violence requires defense against ourselves and an importance of establishing means of defense with those we trust-- so, tribal ties develop.

Which came first, religion or kinship? Religion exists in all societies and mitigates the problem of cooperation and cheating on agreements. The author writes that religion cannot be explained by pre-existing environmental factors. Fukuyama appeals to game theory, writing that religion makes everything a tit-for-tat game instead of a one-off game like the Prisoner's Dilemma that leads to a sub-optimal equilibrium. Religion plays an important role in establishing a "normative rule of order." People obey laws if perceived as fair, not just as a rational judgement made by cost-benefit analysis. The fairness of the law is determined by the norms established by religion. "Grounding morals" enhance cooperation and well-being.

I'll note here that Fukuyama does not discuss any absolutes among those "grounding morals" across societies. Are there fundamental truths those morals and norms are based on? If so, what does it mean when those erode in a society? If norms matter, shouldn't today's emphasis on moral relativism be of concern to our society?

From here, the author gives an overview of the history of political development in the East and West. How did states form? How does population density relate to the establishment of political institutions? The basic formula is natural resources + population density + tribal willingness to submit to a greater authority (probably for religious reasons) = the possibility of State creation. From there, you have the age-old question as to whether good governance is exogenous to (causes) economic growth or endogenous (results from) economic growth. In the end, Fukuyama writes that the causation runs both ways depending on the country you're looking at.

Being relatively ignorant of China and East Asia, I found Fukuyama's retelling of millenia of Chinese history somewhat interesting but also too broad to draw conclusions from. The first modern state developed in China in the 3rd century B.C. In some cases, he describes a particular detail of Chinese history at length just because it's "interesting" (such as the story of Empress Wu), but seems unnecessary. War was a major driver of state formation in China, clans fought major wars almost non-stop and clans were willing to submit to a united power in order to gain protection. The author explains the basics of Confucianism and how Daoism rose out of famines and 40 million deaths during a self-coup that entrenched power among aristocrats in the 3rd or 4th century BC. The history of Chinese dynasties are ones of patrimonial consolidation. Eunuchs were trusted as advisors and with power because they were incapable of marrying and had no goal of passing something on to their descendents. (This is a common theme throughout history and cultures.) China has never had rule of law or a ruler submissive to a higher law-- such as those established by religious norms in the West. There was no source of law to appeal to. Rulers had the "Mandate of Heaven" - legitimacy of rule that gave them arbitrary power. But while China has never had the rule of law, it does not mean that it has always been ruled badly. Fukuyama writes that it's possible to have "high quality authoritarian government," which is what China and Russia might or might not have today. Nonetheless, there were checks on the Chinese ruler's authority: It was a challenge to collect taxes over such a large area, which gave more distant lands more autonomy than local ones. There was no consolidated method for recording the taxes, especially if they were charged in-kind (goods). Leaders/governments typically do not maximize taxation, even where they can. There was also delegation of power from the ruler to the military, budget officers, managers, etc. This puts power in the hands of delegates over the delegator, they know and understand things he cannot and this keeps the ruler in check (in turn, the ruler's spies like the eunuchs keep those delegates in check). So, sometimes good government can be maintained without checks on executive authority. Modern China does not have true rule of law, but grows anyway. The property rights it has established are good enough to maintain its current rate of growth.

Perhaps controversially, Fukuyama writes that the rule of law sometimes get in the way of economic progress and good governance. As China (and various periods of time in Russia) shows, the rule of law is not necessary for economic growth. Unsatisfyingly to me, Fukuyama chalks China's lack of historic economic growth to its lack of a "spirit of maximization," and points to periods of history where progress and technological innovations were inexplicably abandoned and forgotten. This is not a problem for China now.

Fukuyama writes significant chapters on Indian history as well. How the caste system developed, the benefits and drawbacks to the system, etc. Historically, Hinduism discouraged literacy and therefore encouraged poverty and dependence upon religious authorities. But various traits about Hindu religion and culture made it hard for an aristocracy to rise as well.

There is a bit of focus on Roman history, though not as much because Western economic development has been covered by so many sources. Fukuyama looks at the development of Arabic political economy from Mohammed onward. I have recently read Hourani's History of the Arab Peoples and find that Fukuyama focused on history not included in that book, particularly the Mamluks of Egypt. Christianity and Islam are similar in that laws are based on norms of "the book," and this creates a rule of law that holds rulers in check. Fukuyama writes that Mohammed was able to bind warring tribes together through his charisma and a common religion and text all could refer to. His system essentially left no one in charge, and rulers were judged legitimate by their adherance to Islamic teaching. He writes that the caliphate, consolidating power into the hands of a few legal interpreters, was a later invention. Even then, the Caliph was subject to removal under certain conditions and did not have unlimited power.

The author writes that the Mamluks saved Islam. The Mamluks were military slaves, a practice that was later adopted by the Ottoman Turks and peculiar in world history. Mamluks were similar to eunuchs in China in that they were completely dependent upon their patron and often forbidden to marry-- hence they were not motivated by wealth for their own lineage. Eventually, the Mamluk orders gained power for themselves and became a caste defending themselves from other groups. This led to further decay and decline, replaced in power by the Ottomans. Fukuyama retells stories of the Ottoman's enslavement of Christian children in their elite Janissary corps from the 14th century to the 19th century. Like the mamluk's, they were forbidden to marry and janissaries often went on to be the most trusted advisors and have considerable individual power. Fukuyama details the cruelty of this practice but also its effectiveness in maintaining power among certain groups by enlisting and trusting others outside that group who had no ability or motive to take the power away. Eventually, janissaries were given the right to marry and became powerful enough to challenge the Sultans, which led to reprisals and wholesale slaughter and the order was abolished in 1826.

The political history of Western Europe focuses mainly on England, France, and Denmark. The Catholic Church was the major agent in undermining clan/family loyalties as Rome sought to consolidate its power. At one point, 1/3 of the lands in the West were owned by the Church. It could collect a tax via a tithe, and the Church made it hard for its members to give inheritances. Pope Gregory forbid cross-cousin marriage. Priests were forbidden to marry for the same reason as the eunuchs and the jannisaries, they sought to serve the Church and Pope alone rather than their family interests. Kings and secular authorities also had begun entrusting priests with non-religious duties and to spy for them for the same reason of trust.
The Investiture Controversy (11th-12th centuries) led to both sides seeing legal legitimacy. This led to a rediscovery of Justinian's Codex, which then became the basis for Western laws and future constitutions. The Reformation is therefore explained partly as a reaction to the Church's stamping out of kinship and clans, and Protestantism flourished where there had already been a cultural history of individualism apart from the church. One can see how the Enlightenment, with its emphasis on reason and individual liberty, created tension with both the government and the church since the two were so intertwined.

Fukuyama explains feudalism in the European context, the contractual relationship between a lord and a vassal. This at least allowed for some property rights and inheritance. Common law developed early on, but Fukuyama critiques Hayek in that English common law was not necessarily developed spontaneously as Hayek claimed. Sometimes, ruling authorities intervened or changed the law to their wishes. Common law further requires strong institutions to keep it enforced. In England and mainland Europe, this institution was the Church. However, the rule of Law was strengthened in the West as systematic theology developed. Particularly after the Reformation, literacy was encouraged and this led to greater cooperation. Fukuyama seems to hold up Denmark as the model state, there Lutherans encouraged education and literacy, which led to the development of better laws and better adherance to them.

The feudalism of the West is contrasted with the Serfdom of the East, particularly Hungary and Russia. Russia, like China, has a long history of autocrats ruling large areas. Fukuyama opines that the Russian model is the result of two centuries of rule by Mongols, who could be indiscriminately cruel and extractionary. In the aftermath of Mongol occupation, Muscovite rulers adopted the same practices and the Russian middle class was recruited to serve the Muscovite state. In Russia, the Orthodox church did not play the same role as its Catholic counterpart in the West-- it was not a bulwark against violations of the rule of law and there was no "canon law." Literacy and adherance to Scripture were apparently not upheld as something to bind people together and keep the ruler in check. Fukuyama describes the terror of Ivan IV and its aftermath. Peasants lost the right of movement in Russia, and the government expropriated property without any pretense of legality. The author notes that alternatives have sprouted and periodically propspered in Russia, but then always been squashed, a pattern that appears to be continuing after the 1990s.

Eastern Europe was relatively free until the 15th century. Hungary had a remarkable event in the Golden Bull of 1222, possibly inspired by the Magna Carta, where the King was forced to accept legal limits on his power. Hungary was later occupied by the Mongols and later the Ottomans.

Fukuyama notes various errors made by Marx. He notes, as above, that English individualism existed long before the bourgeoisie and capitalism, giving evidence as far back as the 13th century. He also both embraces and critiques Weber, he particularly notes Weber's errors in looking at China and India.

France's centuries of fiscal follies are highlighted, in parallel with Spain. I found these sections to be similar to Niall Ferguson's The Ascent of Money, although John Law came on the scene in France long after things had already gotten ridiculous. France, like other states in the book, needed to grow its tax revenue in order to fund endless wars and increasingly bloated government bureaucracy. As it borrowed, and borrowed again, it began to sell government positions and titles for cash. This created even more bloated government, rinse and repeat. The Spanish government looked to consolidate its power through the wealth of New World conquest, relying on slave labor for silver extraction. Fukuyama chronicles the chronic inflation and military defeats that took place in both France and Spain.

So, what made England different than the other European countries. Fukuyama writes that this was not inevitable. First, solidarity in England was always more political than social. Second, common law and English legal institutions were broadly considered legitimate. They gave property owners a stronger stake as property rights were locally protected. Religion was also a unifying force in the kingdom throughout the period. The rule of law was strengthened after the Glorious Revolution but Fukuyama writes like it just cemented a culture already in place. A strong state remained in place for rule of law to be maintained.

Fukuyama closes in chapter 30 with a look at modern political development and previews the next volume. He writes that competition is essential to innovation and good governance-- Russia forbid that competition when it forbid peasants from moving, which led to centuries of poor governance at all levels. Political decay is caused by 1) patrimonialism and 2) institutional rigidity. Compare this with AR's thesis that a nation's failure is caused by extractive economic institutions maintained by exclusive political institutions. There are similarities In some cases, Fukuyama writes that violence is necessary to cause change and eliminate the rigidity, although this is an unfortunate outcome. It's the irony that the rule of law that provides property right incentives sometimes creates too much rigidity. One hopes that the U.S.'s current political rigidity is temporary.

The book oddly ends with a critique of Malthus and an explanation of the book in a Malthusian context.

I give this book 4 stars out of 5. The attempts to relate things to modern American politics is problematic. When Fukuyama is quoting from modern economists like Gary Becker or Jeff Sachs, he does so with an annoyed contempt that is also somewhat of a turn-off. He is making interesting arguments, but I don't find the book nearly as compelling as Why Nations Fail.

Tuesday, May 12, 2015

Gospel Treason by Brad Bigney (Book Review #39 of 2015)


Gospel Treason: Betraying the Gospel With Hidden Idols
I have been going through this book with a weekly gathering of men (age 30s-70s). A couple of men in the group had been assigned this book in a Biblical Counseling course at Southern Seminary. As I was reading it, the chapters were often morning devotionals for me. The notes for personal study and discussion questions are available for free on his website, I recommend taking a look even before buying the book as they've been helpful. This book contains some hard-hitting questions right up front. After the first few chapters, it sort of gets rather repetitive. I agree with other reviewers that it seems Bigney's publisher convinced him to stretch this out for use as a book study. I would recommend a book or study like McGee's Search for Significance, which focuses heavily on Jesus' being propitiation for our sins, and John Piper's Desiring God or Future Grace before this book.

What is an idol and are you an idolater? "An idol is anything or anyone that begins to capture our hearts, minds, and affections more than God." Look at an object, person, or activity in your life that you devote a good bit of time, money, and attention/affection toward. Ask yourself: Would I sin to get this? Would I sin to keep from losing this? Does this object, person, or activity fill my heart and affections more than Jesus? If you answered "yes," then you've found an idol.

Bigney, a pastor in my state, had an idol of needing approval of everyone in the church. Hence, he was the uber-servant devoting all of his time to God and little to his wife and kids. Anything that interfered with his idol or what people's perceptions of him were caused him to be angry. This was a recipe for a failed marriage, and it was through marriage counseling that he came across the principles of this book. Most of the works he quotes in the book are recent, he quotes especially often from Paul David Tripp. As the book goes on, you realize the questions asked above were from these sources which suggests to me that one ought to read books from his bibliography first.

One challenge with this book was to keep the focus on the Gospel and away from legalism in our efforts toward repentance. As one man in our group asked "What am I going to be able to enjoy anymore after reading this book?" which is not what the author intends. The point is to make sure that the things we enjoy we're ultimately willing to let go of if God demands. To realize that we can enjoy them because Christ set us free from sin, and has given us talents and abilities to enjoy those things as a greater part of subduing the earth (not explained well at all by Bigney).

Some chapters do a better job than others of keeping the focus off of our thinking and behavior. Chapter 11 was in my opinion the best chapter in the book, a Gospel-filled chapter reminding us that "People who live under the weight of a self-made perfectionistic standard are...so consumed with measuring themselves that there's no time to fix their eyes on Christ." In our desire to repent of idols and to stop sinning, we often put our performance on ourselves and forget that we are only able to claim righteousness because of the imputed righteousness of Christ. Our efforts toward quiet times, Bible-reading, prayer, fasting, etc. may turn into the habits we worship (as Oswald Chambers rightly points out) instead of Christ. "Don't let your spiritual disciplines degenerate into raw regulations instead of a living relationship with Christ." Bigney admonishes us to "get rid of your 'checklist' mentality."

However, Chapter 12 follows with a list of "habits" the author encourages one to start including a diagram on pg. 194 that looks incredibly like it's all on our own decisions and power.

A greater concern with this book is in the lack of recognition of other factors that help exacerbate our hostile responses when people mess with our idols. There are a host of physiological factors that influence our desires. Your testosterone level affects your desire for pornography, for example, and that can be heavily influenced by diet and exercise. How you breathe can influence how you treat your spouse when you get home, etc. I'm concerned with the amount of Christian literature that gets published for counseling that ignores biology and psychology (particularly areas like behavioral economics).

In all, I give this book 3 stars out of 5. I gleaned a lot from it, but found it was longer than it needed to be, and Bigney does not quite from extremely helpful sources like Piper and Keller who I feel have dealt extensively with the idols of our hearts.