The Great Reversal: How America Gave Up On Free Markets by Thomas Philippon

Why do Americans pay more than Europeans or Asians for cellphone service that isn’t even as good as theirs? That’s a question Thomas Philippon, a professor of finance at New York University and an adviser to the Federal Reserve Bank of New York, asked himself one day. He attempts to answer the question in this book. His answers aren’t encouraging.

Philippon says he will offer three main arguments:

One: Competition has declined in most sectors of the US economy. Measuring competition is easier said than done, for we can find only imperfect proxies. We will look at prices, profit rates, and market shares. None is perfect, but together they can form a convincing picture.

Two: The lack of competition is explained largely by policy choices, influenced by lobbying and campaign fiance contributions. We will look at the dollars spent by every US corporation over the past twenty years to lobby their regulators, their senators, their congressmen, and members of key committees, as well as to finance federal and state elections. We will show how these efforts distort free markets: … corporate lobbying and campaign finance contributions lead to barriers to entry and regulations that protect large incumbents, weaker antitrust enforcement, and weaker growth of small and medium-sized firms.

Three: The consequences of a lack of competition are lower wages, lower investment, lower productivity, lower growth, and more inequality. We will examine how the decline in competition across industries has effects that reach into the wallets and bank accounts of everyday Americans. We will also demonstrate why lower competition leads to less of the sort of thing that we traditionally associate with growing economies: investment, technological advancement, and rising wages [9].

The author explains that economists look at three main variables “to assess the degree of competition in an industry”:

…the degree of concentration (that is, whether there are lots of small firms or whether the industry is dominated by a few large firms); the profits that these firms are making, and the prices that customers pay….The bad kind [of concentration] occurs when incumbents in an industry are allowed to block the entry of competitors, to collude, or to merge for the primary purpose of increasing their power over market-wide pricing…[25].

In most US industries, market shares have become more concentrated and more persistent. Industry leaders are less likely to be challenged and replaced than they were twenty years ago. At the same tine, their profit margins have increased [60].

The Great Reversal is filled with data and references to journal articles, but the material is presented in digestible form (the more technical explanations are marked off from the main text). One result of all the data and all the related concepts is that the book is a kind of introduction to economics. I came away with a much better understanding of the work economists do when they look for patterns in all the buying and selling a society does.

I also came away convinced that things will only get worse — there will be less competition and more inequality — unless we reform our political culture. I already knew that American political campaigns are incredibly expensive compared to campaigns in Europe. But on average 50 times as expensive? I didn’t realize that the European Union now does a better job insuring competition than we do. As Sen. Elizabeth Warren emphasizes, we need big, structural change if we’re going to increase competition, reduce inequality and deal with the major challenge of global warming.

The book’s title, The Great Reversal, refers to the fact that the US economy used to work better for society as a whole. The data shows that it was mainly in the last twenty years that competition seriously declined. Can the reversal be reversed in the next twenty?

However, after spending “hundreds of hours researching and writing this book”, the author was surprised to realize “how fragile free markets really are”:

We take them for granted, but history demonstrates that they are more the exception than the rule. Free markets are supposed to discipline private companies, but today, many private companies have grown so dominant that the can get away with bad service, high prices, and deficient privacy safeguards. Only two decades ago, the United States was effectively the land of free markets and a leader in … antitrust policy. If America wants to lead once more in this realm, it must remember its own history and relearn the lessons it successfully taught the rest of the world [287-288].

Children of Time by Adrian Tchaikovsky

This is a remarkable science fiction novel. It’s quite a story, quite a work of imagination.

What happens is that human beings have been screwing up the Earth to the point that it’s becoming uninhabitable. One response has been to try to create Earth-like conditions on planets in distant solar systems. It’s hoped that these planets will eventually become new homes for humanity.

The terraforming work on one such planet is sabotaged at the last moment. This leads to an enormous unintended consequence: some of the planet’s spiders rapidly evolve, becoming bigger, smarter and much more sociable than the spiders back on Earth.

Before the Earth becomes uninhabitable, giant spaceships are launched with thousands of people aboard. Most of the passengers are stored away as “cargo”, hibernating in an unconscious state, waiting to be resuscitated when their ships finally reach inhabitable worlds, many years in the future.

Throughout the book, the author switches back and forth between what’s happening to the spiders on their planet and what’s happening to the people in one of the spaceships. I felt closer to the people, but the author does a wonderful job explaining things from the perspective of the spiders. As you’d expect, the two species eventually meet.

Somebody is supposedly trying to turn Children of Time into a movie. It really deserves a TV series, possibly with multiple seasons. The author has also published a sequel, Children of Ruin. It’s probably remarkable too.

The American Pragmatists by Cheryl Misak

At least the internet doesn’t forget. I finished this book and had a question about the exact title. Right there on the first page of the search results appeared an entry from this very blog. It turns out I read this book in 2018. Who knew?

Let’s see if I agree with myself. (I see I left out a word. Now corrected.)

Well, I was concerned about trying to summarize this book today. I must have felt the same two years ago, since that earlier summary includes a lot of quotation. But I stand by every word (including the one I just added)!

I’ll simply add one thing.

Part of the author’s purpose was to counter the popular understanding among philosophers that pragmatism as a philosophical movement faded away in the 20th century under intense criticism, especially after the death of John Dewey in 1952. Misak shows it’s more accurate to say pragmatism was absorbed rather than replaced. Many of the leading philosophers in the last half of the 20th century (including former members of the Vienna Circle, as well as W. V. Quine, Wilfrid Sellars, Nelson Goodman, Hilary Putnam and Donald Davidson) argued for positions quite compatible with the early pragmatists, especially the views of Charles Sanders Pierce, even though these later philosophers rarely called themselves “pragmatists”. The same holds true for philosophers in this century. It’s the label that has mostly disappeared.

The American Pragmatists is worth reading, but repetitious at times. There are only so many points you can make about a concept like “truth”. But I want to learn more about two philosophers Misak thinks highly of: Clarence Irving Lewis and Hilary Putnam. I’ve got some of their books. I should open them — that’s what a pragmatist would do.

The Three-Body Problem by Cixin Liu, Translated by Ken Liu

When I was a teenager, I read lots and lots of science fiction. I joined the Science Fiction Book Club early on and bought the magazines (Galaxy, Analog and The Magazine of Fantasy and Science Fiction) as often as I could. But the only science fiction I can remember reading in the past forty years is William Gibson’s Neuromancer. So I’m surprised that I started reading The Three-Body Problem. The back cover’s extremely complimentary blurbs from The Washington Post, The Wall Street Journal and even Barack Obama helped get me started. The story was interesting enough and suspenseful enough to keep me going through 400 pages.

It all begins with China’s Cultural Revolution in the 1960s. Scientists and other intellectuals are being persecuted, even murdered. A young woman watches three Red Guards beat her father, a professor of physics, to death. The young woman, a physicist herself,  eventually joins a secret government project that’s looking into the possibility of extraterrestrial life. This project way out in China’s middle of nowhere leads to humanity’s first contact with aliens (unfortunately, it’s the aliens’ first contact with aliens too).

I kind of regret finishing the book. There are interesting parts, mostly the ones that delve into fundamental physics. A chapter involving the relationship between subatomic particles and multiple dimensions is terrific. There is a bizarre assault on a ship passing through the Panama Canal. It’s intriguing how the characters, both human and alien, react to the possibility of first contact. There are plenty of other parts that are tedious, however. Some of the characters are tiresome. Their motivations are hard to believe. Lengthy excursions into a complex computer game made me start skimming.

It was the suspense that kept me going. What will happen when first contact finally occurs? I thought I’d find out in the book’s concluding 25 pages. I didn’t realize the last 25 pages of this paperback edition are devoted to postscripts about writing and translating the book and a preview of the author’s forthcoming novel. The abrupt ending was disappointing.

Aristotle said you cannot properly judge a work of art by considering its parts in isolation. You have to judge it as a whole. If it’s a story, you have to finish it. On that basis, I don’t think The Three-Body Problem, although intriguing, lived up to its blurbs.

Beyond Good and Evil: Prelude to a Philosophy of the Future by Friedrich Nietzsche, translated by R. J. Hollingdale

After reading Sue Prideaux’s biography of Nietzsche, I Am Dynamite!, I wanted to read something from the philosopher himself. I hadn’t read anything of his since On the Genealogy of Morality — or Moralsseven years ago. I wanted to understand better what was bothering the poor man. And how he thought people should live.

Beyond Good and Evil has nine parts. Each part is composed of aphorisms or sections, sometimes a page or two, sometimes a single paragraph. Overall, it was rough going. I often had no idea what he was complaining about (he mostly complains). There were also passages like this, the meaning of which seems clear at first:

Today, … when the herd animal alone obtains and bestows honours in Europe, when “equality of rights” could all too easily change into equality of wrongdoing: I mean into a general war on everything rare, strange, privileged, the higher man, the higher soul, the higher duty, the higher responsibility, creative fullness of power and mastery — today, being noble, wanting to be by oneself, the ability to be different, independence and the need for self-responsibility pertains to the concept “greatness”; and the philosopher will betray something of his ideal when he asserts: “He shall be the greatest who can be the most solitary, the most concealed, the most divergent, the man beyond good and evil, the master of his virtues, the superabundant of will; this shall be called greatness…. [sec. 212].

Nietzsche’s fundamental idea is that the most important fact about human beings is their will to power — their desire to control and create. He was convinced that Christian morality, the morality of “the herd”, with its ideas like “turning the other cheek” and “the meek shall inherit the Earth”, interferes with humanity’s will to power. In particular, it interferes with the will to power of those blessed with genius, the greatest among us. He was well aware of Goethe, Beethoven, Napoleon and Wagner, all towering figures in his opinion, but he apparently believed there would be more such tremendously accomplished figures if only everyday morality didn’t hold them back. In order to achieve greatness, a person must go beyond the standard ideas of good and evil. If one is to achieve greatness, the transvaluation (or reconsideration) of all values is necessary.

But what values should a genius live by? Is it necessary to ignore the Golden Rule? Sacrifice everything else to one’s art or projects? Ignore common courtesy? Trample other people however and whenever it feels right? After reading Nietzsche’s biography, two of his books and several summaries of his ideas, I still don’t know. I also don’t understand why he was so bothered by everyday morality. He seems to have taken the existence of common beliefs about good and evil as a personal affront.

He offers a clue when discussing what “a born, unavoidable psychologist and reader of souls” is confronted by:

The corruption, the ruination of higher human beings, of more strangely constituted souls is the rule: it is dreadful to always have such a rule before one’s eyes [sec. 269].

If anyone has ever been one, Nietzsche was a born psychologist. Perhaps he was speaking for himself in this passage. He must have viewed himself as “strangely constituted”. After he lost his mind, he suffered from extraordinary delusions of grandeur, describing his frequent contacts with the leading statesmen of Europe and sometimes referring to himself as God.

Scholars have determined that Nietzsche was not a German nationalist or an anti-semite. Some say the notion of the Übermensch was not central to his philosophy. So it was surprising to read some of his strongly-worded views. For example:

… that what is right for one cannot … by any means be right for another, that the demand for one morality for all is detrimental to precisely the higher men, in short that there exists an order of rank between man and man, consequently also between morality and morality [sec. 228].

Every elevation of the type man has hitherto been the work of an aristocratic society — and so it will always be: a society which believes in … orders of rank and differences of worth between man and man and needs slavery in some sense or other [257].

The noble caste was always in the beginning the barbarian caste: … they were more complete human beings (which, on every level, also means … “more complete beasts”) [257].

The essential thing in a good and healthy aristocracy is [that it] accepts with a good conscience the sacrifice of innumerable men who for its sake have to be suppressed and reduced to imperfect men, to slaves and instruments. Its fundamental faith must be that society should not exist for the sake of society but only as a foundation and scaffolding upon which a select species of being is able to raise itself .. to a higher existence [258].

One has to … resist all sentimental weakness: life itself is essentially appropriation, injury, overpowering of the strange and weaker, suppression, severity, imposition of one’s own forms, incorporation and, at the least and mildest, exploitation… Exploitation … pertains to the essence of the living thing … it is a consequence of the intrinsic will to power [259].

There is master morality and slave morality … The noble type of man feels himself to be the determiner of values, he does not need to be approved of, he judges “what harms me is harmful in itself”, he knows himself to be that which … accords honour to things, he creates values [260].

A morality of the rulers [says] that one has duties only toward one’s equals; that towards beings of a lower rank, towards everything alien, one may act as one wishes or “as the heart dictates” and in any case “beyond good and evil” [260].

The grander, more manifold, more comprehensive life lives beyond the old morality; the “individual” stands there, reduced to his own law-giving, to his own arts and stratagems for self-preservation, self-enhancement, self-redemption [262].

Egoism pertains to the essence of the noble soul, I mean the immovable faith that to a being such as “we are” other beings have to be subordinate by their nature, and sacrifice themselves to us … “it is justice itself” [265].

Nietzsche’s ethical theory might be called “aristocratic egoism” — self-centered behavior for the natural aristocrats among us (not the aristocrats with hereditary titles); a reasonable amount of respect for other aristocrats; and everybody else knowing their place. Who knows how many impressionable readers have taken these ideas seriously enough to have acted on them? The man wasn’t joking when he wrote: “I am dynamite!”

In conclusion, the best thing I can say about Nietzsche’s Beyond Good and Evil is that I no longer feel the need to understand its author.

I Am Dynamite!: A Life of Friedrich Nietzsche by Sue Prideaux

I’m more interested in Nietzsche’s philosophy than his life, but I visited a famous bookstore this summer and wanted to buy a book. I’m glad I bought this one.

It’s an understatement to say that Nietzsche was quite a character. He was an accomplished scholar who left the academy when he was 35, citing his poor health. He had enough income (partly from his academic pension) to travel about Europe, develop various friendships, propose marriage a couple times, spend lots of time with Richard Wagner and his wife Cosima, do a great deal of hiking, compose music nobody cared for and write philosophy books hardly anyone bought when they were published. He suffered terribly from unspecified ailments and wrote short bursts of text in order to protect his eyesight.

Although Nietzsche was a fairly normal, although brilliant, young man, he became more eccentric as the years passed, until he totally lost his mind at the age of 55. He lived another eleven years, being watched over by his horrible sister, Elisabeth, one of the nastiest people I’ve ever read about. Being a great admirer of Hitler (who admired her in return), Elisabeth used her control of Nietzsche’s writings to give him a reputation as a proto-Nazi, when in fact he wasn’t a German nationalist or anti-Semitic at all. He was a cultured, mild-mannered European with interesting, vividly-expressed ideas about how to live in a world without using religion as a crutch. (This is the positive, revisionist view of Nietzsche that’s become widely accepted among scholars in the last 70 years.)

I Am Dynamite! won a prize in Britain as the best book of 2019. From the prize’s announcement:

… this magnificent biography of a very strange and difficult subject is wonderfully well-written, lucid and clear-headed. It is full of sharp and stylish turns of phrase, it gallops along at an energetic pace, and it is often extremely and surprisingly funny, with a great gift for characterisation….

Friedrich Nietzsche’s work rocked the foundation of Western thinking, and continues to permeate our culture, high and low – yet he is one of history’s most misunderstood philosophers. Sue Prideaux’s myth-shattering book brings readers into the world of a brilliant, eccentric and deeply troubled man, illuminating the events and people that shaped his life and work. I Am Dynamite! is the essential biography for anyone seeking to understand Nietzsche: the philosopher who foresaw – and sought solutions to – our own troubled times.

Not everyone has been so enthusiastic. Brian Leiter, a philosophy professor at the University of Chicago, wrote a review in the Times Literary Supplement (which is mostly behind a paywall):

Prideaux is an especially vivid and engaging writer, who covers the facts of Nietzsche’s life well, although sometimes in soap-operatic detail….If Hollywood were to produce a movie of Nietzsche’s life, this book could provide the blueprint. Hollywood ought, however, to consult some philosophers if the movie is to do better than the book in conveying Nietzsche’s ideas.

Leiter argues briefly that Nietzsche wasn’t skeptical about science — he merely doubted science could teach us how to live. He says Prideaux gives too much importance to Nietzsche’s concept of the Übermensch and too little to his opinion that “human excellence, and the aesthetic pleasure it provided (think Beethoven or Goethe), made life worth living”. Leiter criticizes Prideaux for implying Nietzsche believed the universe has purpose, when he clearly didn’t, and that he was in pursuit of a “universal morality”, which is more debatable. The professor concludes:

Prideaux has the correct sense that Nietzsche is profound; but it is not clear she has much idea why.

I very much enjoyed this biography, but it is not for those wanting to learn something about the philosophy. Prideaux’s discussions of his ideas are at best superficial, at worst wrong.

I think the professor is a bit harsh in his assessment (as professors often are when a non-specialist writes about one of their particular specialties). I Am Dynamite! explains what it was like to be Friedrich Nietzsche and provides an introduction to his distinctive philosophy. If you want to understand more of what he thought, there are plenty of other books and articles to read, many of which feature opinions from experts who don’t always agree with Professor Leiter. As Nietzsche himself would say, his philosophy, as with most everything else in the world, is open to interpretation.

The Story of the Eye by George Bataille, Translated by Joachim Neugroschel

If your local New Jersey library doesn’t have a book, you can usually get it through the state’s Interlibrary Loan Service. It’s usually easy to find several libraries that will loan you their copy of whatever you want. But New Jersey’s statewide system has only one copy of The Story of the Eye. Rider University must have acquired it because it’s a work of academic interest. Other libraries must have avoided getting it because it’s really, really dirty.

The author, George Bataille (1897-1962), was “a French intellectual and literary figure working in literature, philosophy, anthropology, consumerism, sociology and history of art” [Wikipedia]. He wrote “essays, novels and poetry”. He published The Story of the Eye, a novella, in 1928 using a pseudonym. An American publisher issued this translation fifty years later.

Briefly, the story describes the sexual and criminal adventures of two teenagers, an unnamed boy and a girl named Simone. They are joined for a while by another girl, Marcelle, and later by a British nobleman, Lord Edward. Along the way, there is an absurd amount of sex, described in explicit and bizarrely dramatic fashion, mixed in with suicide, murder and lots and lots of bodily fluids, especially urine. There is bullfighting, an interlude in a pigsty and goings on in a cathedral that the Catholic Church would not like at all. Eyes, eggs and eye- or egg-like objects also turn up in various, usually disgusting ways.

In a phrase, The Story of the Eye is an early example of “transgressive fiction”, a literary genre in which the characters violate the norms and expectations of society in various “unusual or illicit” ways. As such, it’s been discussed and celebrated through the years by a number of academics, intellectuals and artists. Someone even used it as the basis for a movie.

I wouldn’t say I exactly enjoyed reading it. It’s a curiosity. I assumed it was supposed to “mean something”, but didn’t know what. So it was a relief to find a brief final chapter that possibly provides a partial explanation. It’s called “Coincidences”. It describes events from the author’s life that may have given rise to his work. His father was disabled and died of syphilis. His mother tried to kill herself. The “author”, or Bataille, refers to “certain images …, the most scandalous, … those on which the conscious floats indefinitely, unable to endure them without an explosion or aberration” [105]. I don’t know if this final chapter actually describes some of the events from Bataille’s life that led to this story. I do know that The Story of the Eye is an explosion and an aberration.