Category: Economics – Economy Types

The Death of Money / Dealings – BONUS POST

The first Bonus Book of the Week is “The Death of Money, The Coming Collapse of the International Monetary System” by James Rickards, published in 2014. This was an all-over-the-map hodgepodge of generalizations on global financial trends, economic theory and what the author claimed was the devastation those trends could lead to, as of the book’s writing.

Prior to 9/11, the CIA possessed no expertise in the nefarious goings-on in the securities industry that could presage the occurrence of a terrorist attack. America’s law enforcement and security agencies had plenty of data, but inter-agency rivalry inhibited information-sharing and creativity– that would have allowed them to “connect the dots” in getting more specific information.

Prior to 9/11, American intelligence did detect irregular trading patterns in the stocks of the two airlines whose planes were targeted in the attacks. A tiny percentage of those trades were illegal because they were made by insiders– by the terrorists who knew those airlines’ share prices would soon plummet; the remaining percentage of anomalous trading was done by those who noticed the unusual activity (but not the reason for it) and jumped on the bandwagon.

After the attacks, threat-detection software was created for monitoring not just stock trading, but also currency and precious metals trading. The author wrote that a recently trendy means for bringing down an enemy-nation is: doing serious economic and financial harm rather than physical harm. Assaults on a nation’s technology and infrastructure such as the money-handling parts of cyberspace, aviation, dams and utilities, instead of targeting a country’s military and weapons or people of a specific ethnic group, is becoming the new normal.

The author remarked that China’s institutions are actually at risk for attacks, because the country’s government, economically, owns a large chunk of the means of production and arguably, labor; not to mention, capital. Wealthy Chinese business owners and executives have a co-dependent relationship with (corrupt) government officials. Besides, there are: “cross ownership, family ties, front companies, and straw man stockholders.”

The author warned the reader that a global financial crisis is likely in the offing due to prevailing circumstances in the economic heavy hitters of the world (like, the United States and China); among those circumstances: misallocation of investment funds; employers’ power to minimize benefits and compensation; red ink and the ever-widening, (allegedly alarming) gap between rich and poor. Financial panic is correlated with social unrest. That can lead to revolution.

The magnitude and accelerating frequency of financial bailouts of the last twenty-five years just shows how fragile the economic systems of the world are. In the United States, excessive deregulation fueled out-of-control greed, etc., etc., etc. In Europe, the group of nations that agreed to adopt one currency (the euro) thought the other nations would help mitigate their own economic problems, when in reality– they were putting all their eggs in one basket. In effect, they had to get permission from the others to make significant changes to their economic policies; they were forced into unhealthy co-dependent relationships.

Read the book to get the lowdown on: all the different groups of nations which were trying to diminish the U.S. dollar’s hegemony (hint: BRICS, BELL, GIIPS, SCO, GCC) at the book’s writing; the United States’ economic system explained for laypeople (via a Venn diagram, along with how the author defined “money” and “death”– both buried in the middle of the book); and everything you ever wanted to know about the value of gold, among other factors in the American dollar’s declining power in the world.

The second Bonus Book of the Week is “Dealings, A Political and Financial Life” by Felix Rohatyn, published in 2010. This bragfest described the life of the typical alpha male who rode a fabulous career in the securities industry, starting in the 1950’s.

The aforementioned first Bonus Book described the trends indicative of a dire future global financial situation. Many such untoward events have already occurred in the last couple of centuries (!), and keep happening. Every time, the seeds of financial disaster are sown decades prior to when it hits the fan.

The selective memory and cherry-picking of data of participants and victims (not to mention propagandists!) cause readers to perceive that those kinds of events are unprecedented, or are becoming more frequent. Excuse the cliche, THERE IS NOTHING NEW UNDER THE SUN (For more info, see this blog’s posts: Serpent on the Rock, A Fighting Chance, Since Yesterday, Why I Left Goldman Sachs, The Zeroes and Dot Bomb).

Rohatyn described a few major stressful economic near-disasters that he was asked to help remedy. One situation was early 1970’s Wall Street, which was a house of cards about to collapse. Another was the near-bankruptcy of New York City in the mid-1970’s.

The late 1950’s saw the city becoming a bloated, bureaucratic civil-service gravy train, due to the increasing power of unions. The costs of generous contracts (along with other sociological factors) was eroding the city’s tax base. Local politicians stayed in power by staying friendly with the unions. One hand washed the other.

At the dawn of the 1970’s, the city needed more and more short-term loans from banks. Creative accounting allowed the debt explosion to continue. The city got subsidies from the state and federal governments, but only at the end of its fiscal year, so its deficit ballooned annually before then. The city got generous borrowing terms because it was in the state’s and fed’s best interest (excuse the pun) to deregulate the lending banks, as they were political patrons, too. Eventually, push came to shove.

In June 1975, Rohatyn was appointed to a bipartisan (truly bipartisan!) committee to help New York State governor Hugh Carey draft a bailout plan for the city, three weeks before the date on which the city would be forced into bankruptcy. Fortunately, Carey possessed the right temperament for saving the world.

Read the book to learn more about how the author helped impose some adult supervision in various, serious economic episodes in his career, and more about his career itself.

The Most Dangerous Man In Detroit

The Book of the Week is “The Most Dangerous Man in Detroit, Walter Reuther and the Fate of American Labor” by Nelson Lichtenstein, published in 1995.

Born in September 1907 in West Virginia, Walter Reuther was of German ancestry, raised Lutheran. He quit high school to learn the tool and die trade. In February 1927, he and a friend moved to Detroit for better pay and hours. He eventually made his way to Ford Motor Company, where he quickly rose through the ranks before the Great Depression hit America.

In the early 1930’s, Ford opened a plant to manufacture its Model “A” in the Soviet Union. Americans who believed in socialism were aware that the Stalin-led Soviet government ruled via one party– the Communist, and was perpetrating human rights abuses. But they liked certain economic aspects of its experimental “Five Year Plan.”

Beginning in early 1933, Walter and his brother Victor bicycled a distance of approximately twelve thousand kilometers during the nine months they were meeting with their European political contacts in various countries. In spring 1933, they were already seeing Fascist oppression in major German cities. In late 1933, they began working in a few Soviet industrial complexes to see labor and political conditions for themselves.

By the late 1930’s, the famine caused by Stalin’s disastrous agricultural-reform program prompted peasant-farmers to go to work in the factories that made steel, cars and tractors. In mid-1934, since they were foreigners and skilled middle-managers (training workers in tool and die making), Walter and Victor were permitted to travel between Stalingrad and Moscow to visit construction projects, collective farms and tractor factories. They were chaperoned by Party bureaucrats. They got special treatment, so perhaps they did not see the abuses suffered by unskilled workers. Their experiences led them to believe that the Soviet system was far less of a police-state than Germany’s.

Walter and Victor wanted to believe so badly in a Soviet workers’ paradise that they rationalized away the serious problems (such as impossible-to-meet production quotas, and reports of fancifully high numbers of vehicles manufactured). In 1934, on supervised tours, the brothers also took a look at labor conditions in China and Japan. October 1935 saw them return to the United States.

On May Day of 1936, in major cities across America, various political groups were speaking in the public square with the goal of unionizing workers; some of them– the Socialists, Proletarian and Communist parties– united to form a Popular Front (the joke in Spain was, “the girl with the Popular Front”).

By the mid-1930’s, the auto industry (which included carmakers, parts suppliers, tool and die makers, etc.) consisted of about a half million union members, thirty thousand of whom were in the United Auto Workers (UAW), a national union. In autumn 1936, Walter became a member of that union’s executive board. He planned and got employees to execute work-stoppages and sit-down strikes in order to get the big automakers like GM, Ford, Chrysler and Dodge to grant collective bargaining rights exclusively to the UAW. Other workplaces such as U.S. Steel were inspired to take such actions, too.

Ford was particularly hostile in its anti-union activities, as it had an in-house security department that spied on workers, fired some, and used violence against photographers. GM took measures to protect against productivity losses by rotating its parts suppliers and building new plants in different locations.

In the late 1930’s, Walter launched propaganda campaigns with the distribution of leaflets, and ran pro-union candidates in local political elections in Midwestern cities. In October 1945, he knew that his UAW workers couldn’t win their strike on just solidarity and militancy. He needed support from other ordinary Americans and the federal government. In January 1946, union workers in a bunch of other industries struck, too; electrical, meatpacking, steel milling, and iron mining.

By the late 1940’s, the power of the unions and corruption in government skyrocketed, so that organized crime used bribery, patronage-contracts and and physical violence in order to rule the “… construction industry, short haul trucking, East Coast longshoring , and the bakery and restaurant trades.”

It is a little-publicized datum that in 1962, president Kennedy granted a cut to all taxpayers that favored corporate America, which also got tax breaks. The rich got richer. That same year, members of the UAW executive board included 21 Caucasians, and one African American, whom they knew wouldn’t buck the status quo.

By then, Walter, a liberal, realized he had been incorrect in thinking that the American labor movement would eliminate discrimination in the workplace when the unions and the economy were strong. But he was still stubborn in insisting on an all-or-nothing egalitarianism. Others of his political ilk, such as Eleanor Roosevelt, Hubert Humphrey and Adlai Stevenson were willing to compromise with the Dixiecrats (Southern Democrats who opposed civil-rights legislation) to make a little progress rather than none. The following year, Walter had become more flexible, as he was friendly with JFK and his brother.

In July 1967, the race riots in Detroit resulted in the deaths of 43 people and $250 million in property damage. The mayor, and the governor of Michigan assigned a 39-member panel of leaders and influencers in the community to suggest solutions for quelling hostilities. Various actions were taken; among the major ones:

  • throwing money at low-cost housing;
  • hiring of black workers at Ford and GM; and
  • throwing money at black community groups

but nothing seemed to help. The automakers moved their plants from Detroit to Troy and Dearborn.

Read the book to learn a wealth of additional information on Walter’s trials, tribulations, triumphs, and disputes with the AFL and CIO (unions competing against, and with different views from, the UAW); the growing-pains of the labor movement– how it was affected by: the WWII years (hint– the government ordered it to make war weaponry), political elections, regulation of pricing / wages / production in the steel industry, the Civil Rights movement, the Vietnam War; how and why different automakers’ compensation structures changed, and much more. See this blog’s post “See You In Court” for more information on the pros and cons of unions in America.

The Passion of Ayn Rand

The Book of the Week is “The Passion of Ayn Rand, A Biography” by Barbara Branden, published in 1986.

Born in St. Petersburg in February 1905, Ayn (rhymes with “mine”) Rand, whose father was a chemist, spent her early childhood in a cultured, Jewish family in Petrograd. After graduating from high school in the Crimea, when the family was poverty-stricken and starving due to the Bolshevik Revolution, Rand taught literacy to Red Army soldiers.

In the early 1920’s, the Russian government evilly schemed to allow “former bourgeoisie” such as Rand’s family to work in cooperatives until it felt sufficient assets were accumulated, at which time it stole those assets by force. Its attitude was: “… workers and peasants were extolled as the highest types of humanity, and intellectuals, unless they employed their intelligence in selfless service to the state, were denounced as parasitical.”

Rand was headstrong in her desire to flee to America and never return to Russia. She eventually got her wish in the mid-1920’s, thanks to her mother’s distant relatives in Chicago. After overcoming numerous obstacles, she lived with her Orthodox-Jewish relatives, and later, struck out on her own in Los Angeles. She was driven to become a writer and let nothing stand in her way.

Rand eventually wrote what became a very famous novel– Atlas Shrugged— whose theme was that if intellectuals are the ones “…who make civilization possible– Why have they never recognized their own power? Why have they never challenged their torturers and expropriators? … it is the victims, the men of virtue and ability, who make the triumph of evil possible by…” being too nice to their oppressors.

Rand thought that the American government, with its anti-trust stance, was persecuting industrialists. She thought the latter deserved to enjoy every last penny of the fruits of their labor because they were the economic engine of the nation.

In rebelling against her former country’s socialist economic system under its Communist political system, Rand thought workers were becoming too powerful, and she denounced them as parasitical. She dogmatically advocated an extreme version of “survival of the fittest” or Libertarianism.

However, when government becomes an accomplice to its donors’ activities that involve excessive greed, conflicts of interest and unfair economic advantages– society becomes economically unbalanced as wealth becomes too concentrated in a tiny percentage of the population; this situation foments class resentment. For additional information on this situation, see this blog’s posts:

  • Wikinomics / Courting Justice
  • What’s the Matter With Kansas
  • Street Without A Name
  • Sons of Wichita
  • Outsider in the White House
  • Crossing the River
  • Burned Bridge, and
  • Forty Autumns.

Whittaker Chambers wrote in his negative review of Atlas Shrugged, “Miss Rand calls in a Big Brother of her own… She plumps for a technocratic elite… And in reality too, by contrast with fiction, this can only head into a dictatorship…”

Rand formulated the theory of Objectivism, whose purely capitalist-free-market-oriented, rational thinking completely rejected religion. Yet she never did explain– in her lucrative lectures to big-name, elitist, politically liberal (ironically!) American colleges, how that squared with her total rejection of godless Communism / Socialism.

Incidentally, the main character of the novel itself– whose cult of personality persuades intellectuals from all walks of life to go on strike– says, “Force and mind are opposites, morality ends where a gun begins… It is only in retaliation that force may be used and only against the man who starts its use.”

Along these lines, gun-control advocates in the United States have been too nice for too long. Except for short periods, whenever there’s been a proposal to:

  • curb the bearing of arms (not even all arms, just the most destructive ones–that are overkill for hunting or local law enforcement), or
  • enact stricter background checks on the granting of gun permits or licenses,

the opposition has repeatedly, through propaganda and money, convinced enough significantly powerful people that:

  • no stricter background checks should be done, and
  • no firearms should be banned pursuant to the Second Amendment of the Constitution.

Sources with more information include this blog’s posts:

  • A Good Fight
  • Undercover, and
  • Savage Spawn.

If America wants to return to “normal” (have pre-COVID gatherings of a large number of people in one place), it needs to put ILLEGAL-gun control at the top of the agenda.

Anyway, read the book to learn of Rand’s biographer’s relationship to Rand, a wealth of additional details on Rand and how she acquired her wealth, the romantic subplot in the soap opera of her life, and much more on her theories, writings and lectures.

Wikinomics / Courting Justice – BONUS POST

The First Bonus Book of the Week is “Wikinomics, How Mass Collaboration Changes Everything” by Don Tapscott and Anthony D. Williams, published in 2006.

This book’s authors slapped together a huge number of cliched, vast generalizations in pushing their overly idealistic scenarios of the future. They had high hopes for the open-source movement. Unfortunately, since the book’s writing, most of the open-source projects they mentioned have tapered off, because in the long run, few people can or would want to provide “sweat equity” without ever receiving any equity.

Nevertheless, cooperation and globalization– two other movements for which the authors had great enthusiasm– are still alive, well and prospering. It is debatable, however, how long these two can be implemented before their socialistic aspects reach critical mass, and fail.

The authors mentioned that crowdsourcing of strangers (competitors) who are offered a reward for submitting the best innovative solution for a specific problem- has been very successful. But once the problem has been solved, a corporate entity needs loyal employees to continue to implement the solution.

The authors also contended that cooperation among companies reminiscent of the way the Japanese conduct business, has also been successful. However, long-term, the Japanese way leads to groupthink and herd mentality– lack of new ideas and competition; an oligopoly or monopoly. Free-market economics– competition– forces a company to acknowledge its weaknesses and threats against it, of which it might not even be aware. This is why capitalist economics for most goods and services is the way to go– there is balance between cooperation and competition that allows workers to best fulfill their potential for their employer and themselves.

It might be recalled that pure socialism thrived for a short time when the State of Israel was born. That was an extremely special exception, for the following major reasons; the Kibbutzniks:

  • were forced to work together in order to survive in the desert, geographically surrounded by enemies;
  • were like-minded– oppressed for their religion– seeking a safe place in the world;
  • had a common goal bigger than themselves– building a country for themselves from the ground up– creating the political, social and cultural systems and infrastructure when everything was simple and their population was low;
  • had in common the shared, traumatic experience of WWII and/or the Holocaust; and
  • had substantial financial and military help from the United States.

In the United States, since the Depression Era, there has been heated political debate over how much socialism is too much. To be sure, specific socialistic entities have greatly enhanced the quality of life for Americans for decades: public libraries, the G.I. Bill, Social Security and Medicare.

Capitalistic free markets have also done the same, but when the gap between rich and poor people in a nation becomes too wide because the rich exploit vehicles to wealth through unethical political means, there occurs too much resentment among the poor.

Along these lines, the Second Bonus Book of Week, “Courting Justice, From New York Yankees v. Major League Baseball to Bush v. Gore, 1997-2000” by David Boies, published in 2004, described a few cases of how the author legally fought for underdogs (which were suing super-rich, politically entrenched entities). In antitrust and price-fixing cases, consumers have always been wronged– overcharged– and they are never fully compensated, even when the court rules against the offenders.

Born in 1941, the author (later) attended Northwestern law school in Illinois. He got a scholarship that paid his tuition, books and rent. He wrote, “I also discovered that I could borrow several thousand dollars from the government at no interest, which I did.”

Beginning in 1997, on behalf of the U.S. government, the author litigated an antitrust case against monopolist Microsoft. He helped win the portion of the case he worked on. Unfortunately, he was forced to withdraw from the case due to a conflict of interest. His role in the whole affair was meta-relevant– he represented Al Gore in the 2000 presidential election court fight. The pro-business bent of George W. Bush with his new antitrust department personnel (unethically, at best) changed the course of the Microsoft case.

The author asserted that, “The enforcement of our nation’s laws is supposed to be free from political influence, particularly when a case is ongoing [as was Microsoft’s]… [and in Gore’s case:] The rule of law means, first, that what a court (or other decision-maker) will do must be reasonably predictable, and second, that what a court does must be independent of the identity of the parties. The majority opinion [of the U.S. Supreme Court] failed both tests.”

Read the book to learn the details, as well as several other cases personally litigated by the author.

The Monopolists

The Book of the Week is “The Monopolists, Obsession, Fury, and the Scandal Behind the World’s Favorite Board Game” by Mary Pilon, published in 2015.

A passionate believer in Henry George’s philosophy– a Georgist– invented a board game called “The Landlord’s Game” which she patented in January 1904. The game had two versions, one whose object was to win by generating a monopoly; the other, to win by generating wealth through free-market competition. The latter was accompanied by the philosophy (Georgism) that land belongs to everyone, so only real-property ownership should be taxed, not income from other sources. In those days, ownership of land was a major source of income, but there was only so much land to go around.

Another incarnation of the aforementioned game– the monopoly-creating version only– was played by hundreds of Quakers and university students across the country. They made modifications to the names on the board spaces and the various rules on property purchases, monetary distribution, jail, etc. People fashioned their own boards, pieces, cards and money.

Somehow, Atlantic City streets became a theme for the property names of the game version eventually sold by Parker Brothers. In Atlantic City, the streets physically represented the division of rich and poor people, while the game indicated which was which by their purchase prices.

Read the book to learn the details of how Parker Brothers came to own the intellectual-property rights to Monopoly (by fittingly using tactics of monopolists), and how those rights were contested in prolonged, grueling litigation.

Mastering the Art of Soviet Cooking

The Book of the Week is “Mastering the Art of Soviet Cooking” by Anya Von Bremzen, published in 2013. This volume recounts the food-related details of the lives of the author (born in 1963) and her mother, who, up until 1974, lived in the former Soviet Union before moving to the United States. As can be surmised, they suffered many hardships from successive oppressive regimes that gave rise to hunger.

Under Vladimir Lenin in 1918 Russia, “The very notion of pleasure from flavorful food was reviled as capitalist degeneracy.” Millions died of starvation under Stalin in 1927 when he took over the means of grain production. The author’s grandfather, possessor of exceptional survival skills, was an intelligence officer under Stalin, so Von Bremzen’s family had access to the food of the wealthy. The author’s mother raised her to be a food snob. Stalin’s personal culinary expert Anastas Mikoyan visited America in 1936. “Unlike evil, devious Britain, the US was considered a semi-friendly competitor – though having American relatives could still land you in the gulag.” That attitude had changed by 1952.

The author’s mother celebrated the anniversary of Stalin’s March 1953 death, with a dinner party. She wed in 1958 at a government office and “…moved into her mother-in-law’s communal apartment where eighteen families shared one kitchen.”

The Soviets recycled mayonnaise jars all the time for many purposes, including medical samples; the jar itself was expected to be provided by the patient. When the author and her mother moved to the U.S., “Ahead of us was an era of blithely disposable objects.” Von Bremzen’s culture shock arose while food-shopping not from the dizzying array of products, but from the inability to show off those products to less fortunate people, such as Soviets. All Americans took such cornucopia for granted. She was disgusted that American food appeared to be phony and lowbrow, like Spam. At Christmas, Von Bremzen was grossed out by Oreos: “…charcoal-black cookies filled with something white and synthetic. A charcoal-black cookie! Would anyone eat such a thing?”

Mikhail Gorbachev’s anti-alcohol campaign ired many Soviets, as “Getting booze for the holidays ranked at the top of everyone’s concerns.” All the Soviet intelligentsia drank excessively. It was unpatriotic to not drink. Everyone had a drinking partner. Proposing toasts and making conversation with the partner was mandatory. Drinking alone was anathema, socially unacceptable.

Read the book to learn more about the Soviet culinary culture and history through the decades, and even see some authentic recipes.

Red Notice

The Book of the Week is “Red Notice, A True Story of High Finance, Murder and One Man’s Fight For Justice” by Bill Browder, published in 2015. This suspenseful, emotional saga should be made into a motion picture, as it is not only entertaining and engaging, but is a comprehensive picture of the extremes of human nature.

Rebelling against his left wing intellectual family, Browder became a capitalist. During his career, he worked under two big bosses who died under mysterious, suspicious circumstances– Bob Maxwell and Edmond Safra. As a young whippersnapper, he longed to do investment consulting in Eastern Europe, but had to settle for London. Browder got in on the ground floor when the Russian securities industry was in its infancy in the early 1990’s.

In early 2000, the power of Russian Federation president Vladimir Putin, was actually held by “… oligarchs, regional governors, and organized-crime groups.” Browder started a hedge fund called Hermitage. What with complex economic and political goings-on, his hedge fund became the victim of the Russian mentality. In 2006, Hermitage had to “… sell billions of dollars worth of Russian securities without anyone knowing.” That was just one of many traumatic episodes in Browder’s career.

The author had the brains and skills to become not only a successful financial consultant and investor, but a muckraker; however, this made him a “Darwin Award” candidate. He became involved in a true thriller with intrigue, greed, power hunger, human rights abuses and karma. Russia struck at his attorney, Sergei Magnitsky. Numerous Russians in positions of authority– in the government, prisons, the police– all lied to the world about what happened to Magnitsky. Under Putin’s rule, Russia had reverted to the Stalinism of the 1920’s, with thousands of dissidents tortured and killed.

The few people whose eyes were open, who were raising the alarm– were risking their own lives. The rest of the world didn’t want to get involved because they were of the mentality that the violence was confined to Russia, and it wouldn’t spread to them. And they might end up like those dissidents if they rocked the boat. Besides, in the 2000’s, people have become desensitized to human rights abuses due to the widespread, propagandized publicizing of them (like video clips arousing viewers’ morbid curiosity, of the alleged beheadings of journalists by Middle Easterners on YouTube).

(Please excuse the legalese in this paragraph- but it is the briefest way of explanation) Some people would say that Browder had “unclean hands” and there was “contributory negligence” on his part, so his story should not have deserved the special attention it got. Admittedly, he was out for revenge, not because he truly wanted to stem uncivil behavior in the world. He made his living in an industry full of greedy people whose scruples are less than stellar– securities. He made a ton of money by engaging in “self-dealing” and insider trading, which would be considered violations of American securities laws. He was from America, the country that gave rise to the corrupt economic system in Russia in the first place. It might be recalled that Harvard economist Jeffrey Sachs gave bad advice to Boris Yeltsin (to put it generously), convincing him to adopt “shock capitalism” — a ruinous financial plan. Lastly, Browder had “constructive knowledge” that doing business in Russia was especially risky (not just financially), compared to other countries. Arguably, he was trying to apply American morals and laws to get justice in a situation in which he had profited from Russian morals and lawlessness. Some people would say, “Pox on everyone’s house.”

Browder wrote, “There was something almost biblical about Sergei’s story, and even though I am not a religious man, as I sat there watching history unfold, I couldn’t help but feel that God had intervened in this case.” This blogger thinks that, but for Browder’s powerful professional and political contacts who intervened in this case, it would be just another infuriating, depressing, suppressed, and eventually forgotten human rights abuse story.

Read the book to learn the details of the story, including the actions taken against the morally bankrupt, brazen Russian criminals, and learn whether justice was done.

My Crazy Century

The Book of the Week is “My Crazy Century” by Ivan Klima, published in 2010. This ebook discusses the life of a Czech writer from the 1930’s to the tail end of the 1980’s.

Luck was a major factor in why Klima survived WWII. His family was sent to the forced-labor camp in Terezin because his father, all-around handyman and mechanical engineer, was reputed to be an expert who proved useful to the Nazis. His father believed in socialism because “… he realized our society was corrupt, that it bred inequality, injustice, poverty, millions of unemployed, who then put their faith in a madman.”

After the war, there was momentary joy for the winners, but in Europe, people also possessed “… hatred and a longing for revenge.” The author, a teenager, had been conditioned to think of the Red Army as virtuous and the Germans as evil. In high school, he watched weekly newsreels of Comrades Stalin, Gottwald, Slansky, and Zapotocky; plus black marketeers, who were blamed for the consumer-goods shortages in Czechoslovakia. People who were considered war criminals– members of the old regime, traitors and collaborationists– were brought to justice through summary executions.

The author’s family had their house raided several times for subversive materials. Klima got a job with a construction crew, where he got his first taste of socialism in action. “No one could earn more than was necessary for daily subsistence.” The government was stealing the economic surplus from the people. That was why corruption came into play. He was pressured into joining, surprise, surprise, the Communist Party. He said, “I was stunned by how the environment bubbled over with rancor, continual suspicion, malicious gossip, and personnel screening.”

Housing in Czechoslovakia, as in other countries under Soviet influence, was hard to come by. The author, his wife and three-year-old son lived in his mother-in-law’s house for years. There was an average fifteen-year wait for better accommodations (a tiny apartment), unless one was prepared to spend about two years’ salary and join a co-op, or engage in a housing swap with strangers.

Read the book to learn the details of how Klima became a dissident reporter, novelist and playwright, how he: came to be invited to teach in the United States, and became disillusioned with the kibbutzniks in Israel and with the Communist Party; how he “… had been kicked out of all organizations and deprived of the possibility of working anywhere [he] might be able to employ [his] knowledge and skills.”

Siberia Bound

The Book of the Week is “Siberia Bound” by Alexander Blakely, published in 2002. This is the personal account of a recent college graduate who decided life in the United States was too easy.

In the early 1990’s, the author moved to Novosibirsk, Siberia to see, with a business partner, whether he, fluent in Russian, could help a region of the former Soviet Union make the transition from Communism to capitalism. He and his partner borrowed money to buy cocoa beans and sold them to chocolate factories on credit.

Blakely wrote about Siberian culture. One amusing passage told of the detergent brand “Barf” imported from Iran. “Things got dirty all the time: In summer, it was dust and car exhaust. In winter, it was coal soot and body odor trapped by layers of insulation.” The relationship between Blakely’s business partner’s wife and her mother-in-law was less than friendly. This was partly because the wife spoiled her young daughter, and the mother-in-law was strict with her– the opposite behavior of mothers and grandmothers in American culture.

Sadly, the moral of the author’s story became “Be careful what you wish for.” He realized that the major cultural, political and economic changes taking place in his community meant that Siberians had become like Americans. They started riding in cars instead of walking. They ate fatty foods for lunch and the men stopped exercising. The women started going to aerobics classes at the gym.

Blakely thought that bringing capitalism to them would be a good thing. However, they soon developed an insatiable appetite for consumer goods. Once they were made of aware of their severe deprivation by the media and increased their connections with the rest of the world, they became depressed. Previously, they had been happy due to their ignorance of how materially poor they were.

Read the book to learn of the sea changes taking place at the author’s business, which sold not just chocolate, but surgical gloves, potatoes and other products; and the formerly Communist community, over the next four years.