An old book of Texas history, pulled from storage during the Covid-19 shutdown, reminds us of the optimism that marked the start of the 20th century, in stark contrast to our fears for the 21st.
A young activist writer living in Austin, Texas, is inspired by a charismatic politician. He writes a successful novel, secures a good job close to the halls of power and passionately supports liberal causes. A global crisis breaks out. He volunteers to help, is exposed to an untreatable virus, and dies at the age of 33.
The writer is Sinclair Moreland; the year, 1918. The virus was the so-called Spanish Flu. I pulled his book, The Noblest Roman, a tale of idealism in the face of corporate greed and political corruption, from a box I stored a decade ago in preparation for — now?
When Moreland wrote The Noblest Roman, the world must have seemed full of possibilities. The Spindletop gusher of 1901 remade the oil industry in the image of Texas. Progressives took the reins of power and used a tax on oil production to create the state’s educational and transportation systems. They battled big business, reformed the prisons and passed laws to protect food safety and regulate lobbying. They created the Texas State Historical Society where Moreland became the archivist.
The corporate villain of the time was Ohio-based Standard Oil, the first company to master both vertical and horizontal integration and own its supply chain. Feared and disliked by competitors for its questionable business practices, Standard Oil built a loyal consumer base by keeping its practices low. The company’s CEO, John D. Rockefeller was the world’s richest man. Sound familiar?
The year after Moreland published The Noblest Roman, The Supreme Court split Standard Oil into 34 separate companies, one of which became Exxon-Mobil. The stage was set for what The New York Times columnist Thomas Friedman calls “the next train coming down the tracks,” climate change.
So goes the arc of history. Last week, six new Guggenheim Fellows were announced. Among them is Jeff Goodell, who like Moreland, lives here in Austin. But while Moreland paints an ideal of political leadership, Goodell’s award-winning The Water Will Come mourns its absence in the face of rapidly-rising sea levels, and the inevitable associated destruction and mass migration.
And while Moreland’s subject was bounded by Oklahoma, Louisiana and New Mexico, Goodell’s is global, differentiated only by economic disparity and whether there is too much or not enough water.
“Nature is going to win. Nobody wins with water. Think about the Grand Canyon.”
In 1917, the year before his death in the flu pandemic, Moreland wrote a second book, The Texas Women’s Hall of Fame, dedicated to the women of Texas for whom “social caste has no place” and who maintain a “vital interest in … clean streets, better factory conditions, child and animal protection, higher moral standards, public health, social justice and decent government.” With that in mind, I pass on the brilliant Arundhati Roy’s thoughts for our preset time:
Historically, pandemics have forced humans to break with the past and imagine their world anew. This one is no different. It is a portal, a gateway between one world and the next. We can choose to walk through it, dragging the carcasses of our prejudice and hatred, our avarice, our data banks and dead ideas, our dead rivers and smoky skies behind us. Or we can walk through lightly, with little luggage, ready to imagine another world. And ready to fight for it.
There’s a continuum (and a conundrum) between the social distancing mandated by the coronavirus pandemic and the vitality of our communities. Ancient Athens and a Nazi concentration camp remind us how much we need each other.
Surrounded by my four walls, I’ve been thinking about ancient Athens, which for a single generation, from 454 to 430 B.C., erupted in pure genius. In a perfect storm of creative class-like action, its citizens founded the Western world. Our systems of government, science, philosophy, law, the arts and education are outgrowths of those 24 years.
Athenians valued civic life above all else. Rich and poor lived in similar kinds of housing and ate the same plain fare. People congregated: the rich mixed with the poor, foreigners were welcomed, eccentrics praised, and differences tolerated. The author Eric Weiner writes the condemned Socrates chose death over exile from his beloved Athens.
In time, what Weiner describes as a “creeping vanity” set in. The global city grew insular. The rich built big, showy houses. The streets became wider, the differences between the haves and the have nots, more glaring. Foreigners were shunned. Political divisions erupted. Athens went to war with Sparta. Farmland was destroyed. Tolerance dwindled.
In 430 B.C., a plague killed nearly two-thirds of this dense city’s population. One of its victims was the great Pericles, who had been censured in the city’s political upheaval. A series of despots and tyrants rose to power. After a brief period of peace, war resumed, and Athens was absorbed into Sparta. Some historians have postulated the plague was caused by the Ebola virus, a coronavirus.
The density conundrum
Years ago I visited the concentration camp Terezin outside of Prague. More than 150,000 Jews were sent to the camp; some 17,000 survived. I remember a guide commenting that the very act of crowding the Jews together so densely gave them the power of community. Artists, philosophers, musicians and scientists suffered alongside their fellows. There were no differences among them.
In 1944, the composer and conductor Rafael Schächter conducted a chorus of 150 prisoners singing Verdi’s massive “Requiem.” The performance was part of a Nazi propaganda initiative for a Red Cross inspection, and as chilling as the story is, I can’t help but wonder how much strength that beautiful project gave Schächter, his singers and their imprisoned audience.
The other thing I remember about visiting Terezin was a compulsion to leave as quickly as possible and never return, so vivid is the stamp imprinted by the place.
The need for foundations centered around people
We are not victims. We’ve ignored the Cassandras and their warning signals. We’ve pushed the natural world to a state of dry tinder and its inhabitants to homelessness, starvation and flea markets. There is a natural cycle to things, a cause and effect.
Will technology to save us? It will certainly help those who have the time and tools to use it, hopefully including both children and adults in need of a good education. It will continue to enrich those who create and dominate it. But, without guard rails, it will also drive us down the same path we’ve been on.
Dr. Vivek H. Murthy, a former surgeon general of the United States, has championed the role of happiness in health, including maintaining a vital social safety net. Quoted in a recent column on social distancing, he says:
“If we want to be a stronger, more resilient society, we have to focus on rebuilding foundations centered around people.”
Dr. Vivek H. Murthy, author and former surgeon general of the United States
If we learn anything from history, it’s that nothing lasts forever, and everything has its price. Oh, and leadership matters.
The eagle is America’s canary in a coal mine: As global warming accelerates, the agencies in charge of managing its impacts on our health will no longer issue clear-cut guidelines to protect Americans from life-threatening pollution and habitat loss. Rather, the government has decided to take a case-by-case approach to protecting us, our land and the animals we share it with.
When you reach the mezzanine of the LBJ Presidential Library as I did recently, turn, and you find yourself dwarfed by an immense presidential seal. At its center is the bald eagle, the symbol of both the United States of America and the office of its president. The scale and power of that symbol take your breath away.
But the eagle, tagged as the Endangered Species Act’s greatest success story, has fallen out of favor. Our government has decided to measure its value on the open market and reward the highest bidder.
Monetizing the environment
Bald eagles live in trees along waterways where they can nest and fish. Wetlands, prized by developers and vulnerable to hurricanes, droughts, floods, effluence and all manner of disruptions, are rich, bio-diverse ecosystems the EPA compares to coral reefs and rain forests noting, “More than one-third of the United States’ threatened and endangered species live only in wetlands, and nearly half use wetlands at some point in their lives.”
Like global financial markets, habitats are finely balanced. We tip the balance when we just don’t know any better, which is why clear-cut rules are so important. Water transmutes from rain to groundwater, to wetlands, to streams, each vulnerable in itself and as part of an interdependent ecosystem. Like the DDT which decimated eagle populations 50 years ago, contaminants flow into streams, rivers and seep into wetlands, poisoning fish, animals and humans.
Declaring war against ourselves
The Environmental Protection Agency and the Department of the Interior, charged with protecting our air, water and eagles, have been busy. Among their tsunami of actions is the “modernization” of the 1973 Environmental Species Act. New rules replace the Act’s clear-cut guidelines with a case-by-case approach, inserting subjectivity into legal determinations of whether protection is warranted. If the agencies’ track record is any indication, the government has refused to act even when the science is clear, and its own scientists recommend protection.
Consider the pesticide chlorpyrifos, cited by the EPA as the “most used conventional insecticide” and its own staff scientists as “dangerous.” Chlorpyrifos is sprayed on 50 of the crops we eat (broccoli, anyone), animal feed. Plan to call Mosquito Sam to get rid of those mosquitos in your yard or on the golf course? Chances are Sam will use chlorpyrifos. The ear tags used to identify cattle in feed lots are treated with it, as are wooden fences. It travels into our homes via indoor bait traps and the produce we eat. It’s been found in carpets and on children’s toys. If studies on rats are any indication, it attacks the nervous system and can cause attention-deficit disorders and hyperactivity in children. It kills birds, bees and is absorbed into the tissues of fish and whatever eats them, just as the DDT decimated our eagles decades ago.
What is an eagle worth?
The government will use a mathematical model to weigh the value of monetizing its habitat by say, calculating projected logging revenue against preserving the trees where the eagles nest. The problem? Subjectivity. A July 2019 analysis by Jim Damicis of the economic development consultancy Camoin Assoc., predicts the logging industry will decline over the next five years “driven by a slowdown of housing construction from recent peaks and from increased foreign competition.” Where’s the money? More environmentally sustainable alternatives.
As for wetlands, critical to flood protection as well as wildlife preservation? How does our eagle compare with a new resort?
There will be a reckoning
Outside, the temperature tops 99 degrees. The creek outside my window has been dry for over two months. Maps of the American West are the color of dried blood from drought. Our children are suing our government for its refusal to take positive action on global warming, emboldened by a 16-year with the audacity to sail across the Atlantic and tell Congress to pay attention to the science, and act.
Standing there on the mezzanine of the LBJ Presidential Library, turn away from the eagle and face the opposite direction. Now you face President Johnson’s papers, bound in red. It’s the reckoning of one man’s efforts to fill what’s been called the most powerful office in the world. Johnson passed the Civil Rights Bill and passed Medicare and Medicaid into law. But he forfeited his legacy fighting a war against a perceived foreign threat.
The current administration is fighting a war against the air, land and water we depend on. There will be a reckoning.
The Defense Innovation Board report on 5G is a warning that the U.S. is headed down a path of isolation that with disastrous economic and moral implications.
A super-fast national Internet exclusively for urban America? That’s the scenario that comes to mind in reading the Defense Innovation Board‘s report on 5G, the next generation of super-fast wireless communication. Written by technology’s A-List, it outlines a trajectory that separates cities from rural areas, the have’s from the have-not’s and the United States from the rest of the world in a “post-Western wireless ecosystem.”
“The leader in 5G stands to gain hundreds of billions of dollars in revenue over the next decade, with widespread job creation across the wireless technology sector. 5G has the potential to revolutionize other industries as well … The country that owns 5G will own many of these innovations and set standards for the rest of the world…
That country is currently not likely to be the United States.”
“The 5G Ecosystem: Risks & Opportunities for DoD,” Defense Innovation Board
Chaired by former Alphabet Chairman Eric Schmidt, the Board was commissioned by former Secretary of Defense Ash Carter to make recommendations to the Dept. of Defense on the next wave of innovation.
I recommend the 30-page document itself, but if you’re pressed for time, try Dr. Lee, Physic Genius’ more entertaining version though, disclosure, despite some inquiries, I have no idea who Dr. Lee is.
A technical approach that deepens divisions
In the United States, the Federal Communications Commission allocates the electromagnetic spectrum. Most current 5G development is in the “sub-6” range. But in the United States, the military owns that portion of the spectrum. So the FCC made a higher-band width known as “mmWave” available for commercial development, which is where Verizon and AT&T are developing their 5G offerings.
Only two other countries currently support mmWave for 5G. Both of these countries are now U.S. allies — Japan and South Korea — and both are using a dual strategy, developing both the sub-6 and mmWave ranges.
U.S. policy makers and suppliers hope mmWave will eventually become the global standard, but as the Defense Innovation Board report makes clear, it’s not a strategy to hang your hat on. MmWave transmissions are more powerful but shorter and blocked by solid barriers — walls, trees, even people. Providing comprehensive service will require what the report labels a “massive infrastructure build-out” ($$$). If and when that is successful, mmWave service may not be viable for rural areas, where reliable connectivity is a literally a lifeline.
Consider that despite diplomatic tensions with China, Canada recently signed a contract with Huawei to deliver 4G LTE to rural communities in the Arctic, remote areas of north-eastern Quebec and Newfoundland and Labrador and according to Huawei, some 25 communities in the largely Inuit areas of the Nunavut territory.
Own the IP; own the industry
No American company makes the base station equipment to transmit 5G signals. The United States owned the majority of 4G-related standards-essential patents. But today over one-third, (34%) of worldwide standards-essential patents for 5G technology are owned by Chinese companies, 15% by Huawei alone, according to Asia Nikkei News. South Korea is second, with over 25% of standard-essential patents.
That will make building the network infrastructure for autonomous cars or next generation factories more expensive for U.S. companies. But owning the intellectual property will reduce costs and accelerate China’s building the infrastructure of the future.
Huawei has signed 50 contracts to provide next-generation 5G networks to 30 countries including Italy and the United Kingdom.
We damn the consequences at our peril
Were the United States to decide to compete with the rest of the world, the Board’s report provides a timeline. Sharing the sub-6 spectrum will take five years, and the Board considers a sharing spectrum a viable alternative. Clearing the spectrum would take 10 years. This would get us to the starting gate — if the federal government were to open up the sub-6 range. And that’s a big “if” in this political environment.
“Damn the consequences!”
General George Patton
The consequences of isolation are immeasurable. Beyond the obvious — American competitiveness, jobs, standard of life, education, opportunity — connectivity is the root capability for solving every over-arching problem we face — climate change, income inequality, immigration, human rights.
I just finished reading Hyeonseo Lee‘s remarkable story of escaping from North Korea with her family. She’s paid a broker to get her mother and brother to South Korea when they are imprisoned in Laos. Here, she’s waiting to enter Laos to rescue them:
“About 20 people were waiting in line to have their passwords stamped. A few were backpacking white Westerners in high spirits. I looked at them with envy. They were inhabitants of that other universe, governed by laws, human rights and welcoming tourist boards. It was oblivious to the one I inhabited, of secret police, assumed IDs and low-life brokers.”
Hyeonseo Lee, The Girl with Seven Names
Laws, human rights and a high standard of living are part of a vulnerable legal and moral infrastructure. Protecting its integrity and viability requires an actionable connectivity policy and a cogent strategy. The Defense Innovation Board report is a warning salvo. We must make sure that it is heard.
When is fear a valid reason for protectionism? At what point does openness become bad business and a national security concern? David Firestein, the executive director of the China Public Policy Center, stopped by the “World Spins” to remind us that relationships make the world go round, and punitive tariffs don’t win trade wars.
David Firestein dropped by last week’s “World Spins” session to reassure us that at about $1 trillion, give or take a few million, the U.S.-China trade relationship is too big to fail. But he had some thoughts on where we’re taking it.
Firestein‘s credentials in U.S.-China relations are wide and deep — the State Department, EastWest Institute, and now, president and CEO of the George H.W. Bush Foundation for U.S.-China Relations — in addition to his role in academia launching the LBJ School of Public Affairs’ China Public Policy Center.
Perceptions of growing authoritarianism
“China’s rising authoritarianism colors U.S. views in a profound way.”
The Uighur minority and the telecom giant Huawei are the poster children of American perceptions of China, prompting national security concerns that have underpinned both the administration’s trade narrative and domestic regulatory actions. On the heels of watching China use facial recognition software to persecute the Uighur and other Muslim minorities, San Francisco banned the technology. Last week those same concerns spread to Washington, bubbling up at the House Committee on Oversight and Reform.
Blacklisted by the administration, Huawei typifies China’s state-supported hybrid economy. The telecom giant sits on a deepening Maginot Line between the Internet of the East and that of the West, drawing a line between American interests and increasingly, everyone else’s.
“In public and private statements, American intelligence officials and telecommunications executives and experts have begun to concede that the United Sates will be operating in a world where Huawei and other Chinese telecom companies most likely control 40 percent to 60 percent of the networks over which business, diplomats, spies and citizens do business.”
There’s a silver lining for Big Tech. Nothing unites like a common enemy, and China has provided Qualcomm, Facebook, Google et. al. with a new “America First” narrative to relieve regulatory threats.
The missing quid pro quo
“China is vastly more closed to us than we are to them,” Firestein said. “When someone from China gets off a plane in San Francisco, they have immediate access to their email through WhatsApp. But an American landing in Beijing can’t access their Gmail.”
For an administration determined to deliver on its “America First” campaign promises, protecting America from China is a top priority. Vice President Mike Pence’s watermark speech at the Hudson Institute frames the U.S. response to Chinese “economic aggression.”
With China, all silk roads lead to intellectual property. In the absence of any Chinese quid pro quo to American openness, in 2018 the administration has expanded its powers to protect domestic technology from foreign investment. The Treasury Department’s Committee on Foreign Investment in the United States (CFIUS) began to block mergers and acquisitions considered a threat to national security. The Export Control Reform Act (ECRA) and the Foreign Investment Risk Review Modernization Act (FIRRMA) are charged with protecting tech sectors that map with its “Made in China 2025” strategy — advanced manufacturing, artificial intelligence, self-driving vehicles, semiconductors and telecommunications.
Applying worst-of-breed practices
Unintended consequences abound. The ban on Huawei network technology hits rural areas the hardest because the small network providers have to swap out cheaper Huawei equipment for more expensive offerings. And faced with its American supply chain being cut off, China will accelerate its build-your-own strategy, a trend that is already impacting U.S. tech companies’ stock prices.
Which brings us to where Firestein breaks rank. A trade strategy based almost exclusively on punitive tariffs has penalized American producers by eliminating lucrative markets, disrupted supply chains and cost consumers at check out.
“The United States is adopting “worst of breed” practices that are destructive to the economy … Our trade deficit with China is the largest good and services deficit dating back to 1776.”
Nowhere is the cost of the trade war more obvious than in the agricultural sector. Last week at a “hats on” event, President Trump announced a $16 billion farm aid package in a robbing Peter to pay Paul strategy to offset farmers’ losses with taxpayers’ dollars.
In fact, tariffs can make industries less competitive.
It breeds a kind of laziness here,” said Simon Lester, director of the Herbert A. Stiefel Center for Trade Policy Studies at the Cato Institute. Tariffs are taxes on outside goods, so they inherently protect some U.S. businesses from foreign competition. “You don’t have to compete with the best in the world you can just relax you don’t have to work that hard and face any competition,” he says.
Despite the national security narrative, the relationship between China and the United States is not about military might. Certainly, the U.S. technology industry is rooted in federal defense funding, and the Department of Defense continues to fund innovation. But this is a 21st century struggle not a 20th century one. China’s goals are economic.
“Military interests are a function of power. China is building its military to define its power … But let me assure you, China has no interest in becoming the world’s policeman.”
Relationships make the world go round
The conversation closed with a reminder that relationships grease the wheels that make the world go round. Firestein brought up a flash point from his first few weeks in Austin when two U.S. Congressmen, a U.S. Senator, numerous professors and the University of Texas student newspaper protested an offer from the Confucius Institute to make a donation to the CPPC. Firestein noted, however, that the United States has similar practices, and that in the end:
“Relationship matters. We have to get it in sync.”
What does the future look like?
A year ago, Firestein cautioned that competing with China was like a no-holds barred cage fight in wrestling. China knows what it wants its future to look like. State control provides a longterm planning horizon. It has a clearly written industrial strategy, state funding and a non-interference strategy with its people. The United States operates from tweet to tweet. As for a strategy?
In the end, we’re going to have to step up and compete. China is not our enemy but it is our fiercest competitor.
David Firestein, in a May 2018 talk at the “World Spins”
In the not too distant future artificial intelligence, autonomous vehicles, advanced manufacturing, semiconductors, telecommunications will shape not just American competitiveness but what our world will become. Even the current administration, loathe to cooperate on much of anything, went so far as to endorse a set of international AI guidelines sketched out by the Organization for Economic Cooperation and Development. To echo a comment made by Senator Richard Burr at the University of Texas’ Fifth Annual Texas National Security Forum:
If we don’t create a framework for this technology, who will?
Senator Richard Burr, chairman, Senate Select Committee on Intelligence, Nov. 2018
The March 29 deadline for a Brexit go now/go later/no go (unlikely) is around the corner. Despite some defections, especially in fintech, many U.S. companies are opting to stay. The tragedy has spotlighted two leadership flaws: the hubris in calling for a referendum and the inflexibility in dealing with it.
As I made my way to the Capital Factory, that go-go hive of entrepreneurial-ism in the center of Austin, to hear what the U.K. Dept. of International Trade had to say about Brexit, I thought about a University of London marketing class I took years ago. The professor, a Scot, turned to a world map. He drew a line between Europe and the United Kingdom. Then he drew an arrow across the Atlantic pointing toward the United States and made a prediction: At some point, the British will break away from Europe and join the United States in an economic block. Prescient fellow.
Borders, walls and disagreements
It takes guts to tell your story when the facts aren’t clear, but the U.K. team did an admiral job. Representatives from the British Consulate’s Department for International Trade, law firm Taylor Wessing and accountancy Blick Rotherberg were optimistic that even the Irish border conundrum could be resolved — at the last minute (“That’s the way Europeans do things.”).
It was one day after Parliament sent Prime Minister Theresa May once more into the breach of negotiations with the European Union, and less than a week after Congress reached an agreement to pause the longest government shutdown in U.S. history so our elected officials could settle a disagreement about a wall between neighbors.
Do we stay or do we go?
Ross Allen, the New York City-based director at the U.K. Department for International Trade led the discussion, reminding us that the United Kingdom has a special relationship with the United States. The two countries are genetically linked — in language, history, laws and culture — and those commonalities matter a great deal.
Data Privacy: Privacy continues is a hot button for the U.S. GDPR is in place in the U.K., as is Privacy Shield. Regulation is a moving target, but there is a common foundation.
Business Headquarters: “Pragmatism” is the operative word. Considerations such as degree of industry regulation, the need to move people around Europe, the size of the organization, labor laws and tax rates all factor into a decision.
Regional Differences: London will continue to be its own country, as are all great cities. But other regions, particularly the north, where businesses that rely on international supply chains will be hit hard – Leeds, Northern Ireland, Wales. I read this morning that U.K. automotive production declined 8% in 2018, as investment plummets and jobs disappear.
Trade: Separate trade agreements are in the works with Israel and talks are underway with South Korean and Japan.
Defense: NATO, an intelligence community that’s joined at the hip.
Worst case scenario? On March 29, Parliament decides not to decide. A second referendum to stay in the E.U.? Too late and too expensive. Unlikely.
“I am England”
Every muddle has its heroes, and I asked Vice Consul Haileigh Meyers and her Silicon Valley-based colleague David what they thought about Prime Minister Theresa May.
She (Mrs. May) is a true public servant, and she realizes she needs to get this done. She’s driven by a commitment to public service.
UK International Trade and Investment British Consulate-General
Imagine taking a job that no one else wants, a job that brings you defeat and humiliation by even your closest allies. Imagine sticking with that job as other opportunities more to your liking and skill set pass you by. If you haven’t read the New Yorker piece on Mrs. May, do. Here’s hoping Queen Elizabeth, another woman who knows a great deal about sacrifice in the name of public service, can offer guidance from her own long tenure as leader of a nation that faced and dealt with dwindling political and economic power.
Closing the session, Allen tossed out a provocative idea: “What if it’s just like Y2K, and we wake up and nothing happens?” Some of us remember the panic that preceded the turn of the century hysteria about whether networks and data centers could tolerate the transition between “1999” and “2000.”
After the session, I rode down in the elevator with Drew Haas, who is moving to London next week to open the U.K. office of San Saba Pecan. They have a warehouse outside of York, and Drew will be growing the business in Europe, where almonds are vulnerable to some stiff Texas competition.
POSTSCRIPT: Inflexibility: The flip side of determined leadership?
UPDATE March 18, 2019: The BBC reports Mrs. May will try to get her proposal passed after two rejections, something the now-famous House of Commons Speaker John Bercow has ruled as a no-go unless there are “substantive changes” to the proposal. Will Mrs. May charge into the same brick wall once again?