Group items tagged

China also sees hypocrisy in American discussions of Internet freedom. China comes in regularly for criticism over its "Great Firewall," but it suggests that the US government also restricts the Internet. While advocating Internet freedom, the US in fact imposes fairly strict restriction on cyberspace. On June 24, 2010, the US Senate Committee on Homeland Security and Governmental Affairs approved the Protecting Cyberspace as a National Asset Act, which will give the federal government "absolute power" to shut down the Internet under a declared national emergency. Handing government the power to control the Internet will only be the first step towards a greatly restricted Internet system, whereby individual IDs and government permission would be required to operate a website. The United States applies double standards on Internet freedom by requesting unrestricted "Internet freedom" in other countries, which becomes an important diplomatic tool for the United States to impose pressure and seek hegemony, and imposing strict restriction within its territory. An article on BBC on February 16, 2011 noted the US government wants to boost Internet freedom to give voices to citizens living in societies regarded as "closed" and questions those governments' control over information flow, although within its borders the US government tries to create a legal frame to fight the challenge posed by WikiLeaks. The US government might be sensitive to the impact of the free flow of electronic information on its territory for which it advocates, but it wants to practice diplomacy by other means, including the Internet, particularly the social networks. (The cyberspace bill never became law, and a revised version is still pending in Congress.)

Finally, there's pornography, which China bans. Pornographic content is rampant on the Internet and severely harms American children. Statistics show that seven in 10 children have accidentally accessed pornography on the Internet and one in three has done so intentionally. And the average age of exposure is 11 years old - some start at eight years old (The Washington Times, June 16, 2010). According to a survey commissioned by the National Campaign to Prevent Teen and Unplanned Pregnancy, 20 percent of American teens have sent or posted nude or seminude pictures or videos of themselves. (www.co.jefferson.co.us, March 23, 2010). At least 500 profit-oriented nude chat websites were set up by teens in the United States, involving tens of thousands of pornographic pictures.

This is why, for example, large numbers of Americans oppose the idea of an estate tax even though the current form of the tax, slated to return in 2011, is very unlikely to affect them or their estates. In narrowly self-interested terms, that view may be irrational, but most Americans are unwilling to frame national issues in terms of rich versus poor. There’s a great deal of hostility toward various government bailouts, but the idea of “undeserving” recipients is the key factor in those feelings. Resentment against Wall Street gamesters hasn’t spilled over much into resentment against the wealthy more generally. The bailout for General Motors’ labor unions wasn’t so popular either—again, obviously not because of any bias against the wealthy but because a basic sense of fairness was violated. As of November 2010, congressional Democrats are of a mixed mind as to whether the Bush tax cuts should expire for those whose annual income exceeds $250,000; that is in large part because their constituents bear no animus toward rich people, only toward undeservedly rich people.

envy is usually local. At least in the United States, most economic resentment is not directed toward billionaires or high-roller financiers—not even corrupt ones. It’s directed at the guy down the hall who got a bigger raise. It’s directed at the husband of your wife’s sister, because the brand of beer he stocks costs $3 a case more than yours, and so on. That’s another reason why a lot of people aren’t so bothered by income or wealth inequality at the macro level. Most of us don’t compare ourselves to billionaires. Gore Vidal put it honestly: “Whenever a friend succeeds, a little something in me dies.”

Occasionally the cynic in me wonders why so many relatively well-off intellectuals lead the egalitarian charge against the privileges of the wealthy. One group has the status currency of money and the other has the status currency of intellect, so might they be competing for overall social regard? The high status of the wealthy in America, or for that matter the high status of celebrities, seems to bother our intellectual class most. That class composes a very small group, however, so the upshot is that growing income inequality won’t necessarily have major political implications at the macro level.

All that said, income inequality does matter—for both politics and the economy.

The numbers are clear: Income inequality has been rising in the United States, especially at the very top. The data show a big difference between two quite separate issues, namely income growth at the very top of the distribution and greater inequality throughout the distribution. The first trend is much more pronounced than the second, although the two are often confused.

When it comes to the first trend, the share of pre-tax income earned by the richest 1 percent of earners has increased from about 8 percent in 1974 to more than 18 percent in 2007. Furthermore, the richest 0.01 percent (the 15,000 or so richest families) had a share of less than 1 percent in 1974 but more than 6 percent of national income in 2007. As noted, those figures are from pre-tax income, so don’t look to the George W. Bush tax cuts to explain the pattern. Furthermore, these gains have been sustained and have evolved over many years, rather than coming in one or two small bursts between 1974 and today.1

At the same time, wage growth for the median earner has slowed since 1973. But that slower wage growth has afflicted large numbers of Americans, and it is conceptually distinct from the higher relative share of top income earners. For instance, if you take the 1979–2005 period, the average incomes of the bottom fifth of households increased only 6 percent while the incomes of the middle quintile rose by 21 percent. That’s a widening of the spread of incomes, but it’s not so drastic compared to the explosive gains at the very top.

The broader change in income distribution, the one occurring beneath the very top earners, can be deconstructed in a manner that makes nearly all of it look harmless. For instance, there is usually greater inequality of income among both older people and the more highly educated, if only because there is more time and more room for fortunes to vary. Since America is becoming both older and more highly educated, our measured income inequality will increase pretty much by demographic fiat. Economist Thomas Lemieux at the University of British Columbia estimates that these demographic effects explain three-quarters of the observed rise in income inequality for men, and even more for women.2

Attacking the problem from a different angle, other economists are challenging whether there is much growth in inequality at all below the super-rich. For instance, real incomes are measured using a common price index, yet poorer people are more likely to shop at discount outlets like Wal-Mart, which have seen big price drops over the past twenty years.3 Once we take this behavior into account, it is unclear whether the real income gaps between the poor and middle class have been widening much at all. Robert J. Gordon, an economist from Northwestern University who is hardly known as a right-wing apologist, wrote in a recent paper that “there was no increase of inequality after 1993 in the bottom 99 percent of the population”, and that whatever overall change there was “can be entirely explained by the behavior of income in the top 1 percent.”4

And so we come again to the gains of the top earners, clearly the big story told by the data. It’s worth noting that over this same period of time, inequality of work hours increased too. The top earners worked a lot more and most other Americans worked somewhat less. That’s another reason why high earners don’t occasion more resentment: Many people understand how hard they have to work to get there. It also seems that most of the income gains of the top earners were related to performance pay—bonuses, in other words—and not wildly out-of-whack yearly salaries.5

It is also the case that any society with a lot of “threshold earners” is likely to experience growing income inequality. A threshold earner is someone who seeks to earn a certain amount of money and no more. If wages go up, that person will respond by seeking less work or by working less hard or less often. That person simply wants to “get by” in terms of absolute earning power in order to experience other gains in the form of leisure—whether spending time with friends and family, walking in the woods and so on. Luck aside, that person’s income will never rise much above the threshold.

The funny thing is this: For years, many cultural critics in and of the United States have been telling us that Americans should behave more like threshold earners. We should be less harried, more interested in nurturing friendships, and more interested in the non-commercial sphere of life. That may well be good advice. Many studies suggest that above a certain level more money brings only marginal increments of happiness. What isn’t so widely advertised is that those same critics have basically been telling us, without realizing it, that we should be acting in such a manner as to increase measured income inequality. Not only is high inequality an inevitable concomitant of human diversity, but growing income inequality may be, too, if lots of us take the kind of advice that will make us happier.

Why is the top 1 percent doing so well?

Steven N. Kaplan and Joshua Rauh have recently provided a detailed estimation of particular American incomes.6 Their data do not comprise the entire U.S. population, but from partial financial records they find a very strong role for the financial sector in driving the trend toward income concentration at the top. For instance, for 2004, nonfinancial executives of publicly traded companies accounted for less than 6 percent of the top 0.01 percent income bracket. In that same year, the top 25 hedge fund managers combined appear to have earned more than all of the CEOs from the entire S&P 500. The number of Wall Street investors earning more than $100 million a year was nine times higher than the public company executives earning that amount. The authors also relate that they shared their estimates with a former U.S. Secretary of the Treasury, one who also has a Wall Street background. He thought their estimates of earnings in the financial sector were, if anything, understated.

Many of the other high earners are also connected to finance. After Wall Street, Kaplan and Rauh identify the legal sector as a contributor to the growing spread in earnings at the top. Yet many high-earning lawyers are doing financial deals, so a lot of the income generated through legal activity is rooted in finance. Other lawyers are defending corporations against lawsuits, filing lawsuits or helping corporations deal with complex regulations. The returns to these activities are an artifact of the growing complexity of the law and government growth rather than a tale of markets per se. Finance aside, there isn’t much of a story of market failure here, even if we don’t find the results aesthetically appealing.

When it comes to professional athletes and celebrities, there isn’t much of a mystery as to what has happened. Tiger Woods earns much more, even adjusting for inflation, than Arnold Palmer ever did. J.K. Rowling, the first billionaire author, earns much more than did Charles Dickens. These high incomes come, on balance, from the greater reach of modern communications and marketing. Kids all over the world read about Harry Potter. There is more purchasing power to spend on children’s books and, indeed, on culture and celebrities more generally. For high-earning celebrities, hardly anyone finds these earnings so morally objectionable as to suggest that they be politically actionable. Cultural critics can complain that good schoolteachers earn too little, and they may be right, but that does not make celebrities into political targets. They’re too popular. It’s also pretty clear that most of them work hard to earn their money, by persuading fans to buy or otherwise support their product. Most of these individuals do not come from elite or extremely privileged backgrounds, either. They worked their way to the top, and even if Rowling is not an author for the ages, her books tapped into the spirit of their time in a special way. We may or may not wish to tax the wealthy, including wealthy celebrities, at higher rates, but there is no need to “cure” the structural causes of higher celebrity incomes.

to be sure, the high incomes in finance should give us all pause.

The first factor driving high returns is sometimes called by practitioners “going short on volatility.” Sometimes it is called “negative skewness.” In plain English, this means that some investors opt for a strategy of betting against big, unexpected moves in market prices. Most of the time investors will do well by this strategy, since big, unexpected moves are outliers by definition. Traders will earn above-average returns in good times. In bad times they won’t suffer fully when catastrophic returns come in, as sooner or later is bound to happen, because the downside of these bets is partly socialized onto the Treasury, the Federal Reserve and, of course, the taxpayers and the unemployed.

if you bet against unlikely events, most of the time you will look smart and have the money to validate the appearance. Periodically, however, you will look very bad. Does that kind of pattern sound familiar? It happens in finance, too. Betting against a big decline in home prices is analogous to betting against the Wizards. Every now and then such a bet will blow up in your face, though in most years that trading activity will generate above-average profits and big bonuses for the traders and CEOs.

To this mix we can add the fact that many money managers are investing other people’s money. If you plan to stay with an investment bank for ten years or less, most of the people playing this investing strategy will make out very well most of the time. Everyone’s time horizon is a bit limited and you will bring in some nice years of extra returns and reap nice bonuses. And let’s say the whole thing does blow up in your face? What’s the worst that can happen? Your bosses fire you, but you will still have millions in the bank and that MBA from Harvard or Wharton. For the people actually investing the money, there’s barely any downside risk other than having to quit the party early. Furthermore, if everyone else made more or less the same mistake (very surprising major events, such as a busted housing market, affect virtually everybody), you’re hardly disgraced. You might even get rehired at another investment bank, or maybe a hedge fund, within months or even weeks.

Moreover, smart shareholders will acquiesce to or even encourage these gambles. They gain on the upside, while the downside, past the point of bankruptcy, is borne by the firm’s creditors. And will the bondholders object? Well, they might have a difficult time monitoring the internal trading operations of financial institutions. Of course, the firm’s trading book cannot be open to competitors, and that means it cannot be open to bondholders (or even most shareholders) either. So what, exactly, will they have in hand to object to?

Perhaps more important, government bailouts minimize the damage to creditors on the downside. Neither the Treasury nor the Fed allowed creditors to take any losses from the collapse of the major banks during the financial crisis. The U.S. government guaranteed these loans, either explicitly or implicitly. Guaranteeing the debt also encourages equity holders to take more risk. While current bailouts have not in general maintained equity values, and while share prices have often fallen to near zero following the bust of a major bank, the bailouts still give the bank a lifeline. Instead of the bank being destroyed, sometimes those equity prices do climb back out of the hole. This is true of the major surviving banks in the United States, and even AIG is paying back its bailout. For better or worse, we’re handing out free options on recovery, and that encourages banks to take more risk in the first place.

there is an unholy dynamic of short-term trading and investing, backed up by bailouts and risk reduction from the government and the Federal Reserve. This is not good. “Going short on volatility” is a dangerous strategy from a social point of view. For one thing, in so-called normal times, the finance sector attracts a big chunk of the smartest, most hard-working and most talented individuals. That represents a huge human capital opportunity cost to society and the economy at large. But more immediate and more important, it means that banks take far too many risks and go way out on a limb, often in correlated fashion. When their bets turn sour, as they did in 2007–09, everyone else pays the price.

And it’s not just the taxpayer cost of the bailout that stings. The financial disruption ends up throwing a lot of people out of work down the economic food chain, often for long periods. Furthermore, the Federal Reserve System has recapitalized major U.S. banks by paying interest on bank reserves and by keeping an unusually high interest rate spread, which allows banks to borrow short from Treasury at near-zero rates and invest in other higher-yielding assets and earn back lots of money rather quickly. In essence, we’re allowing banks to earn their way back by arbitraging interest rate spreads against the U.S. government. This is rarely called a bailout and it doesn’t count as a normal budget item, but it is a bailout nonetheless. This type of implicit bailout brings high social costs by slowing down economic recovery (the interest rate spreads require tight monetary policy) and by redistributing income from the Treasury to the major banks.

the “going short on volatility” strategy increases income inequality. In normal years the financial sector is flush with cash and high earnings. In implosion years a lot of the losses are borne by other sectors of society. In other words, financial crisis begets income inequality. Despite being conceptually distinct phenomena, the political economy of income inequality is, in part, the political economy of finance. Simon Johnson tabulates the numbers nicely: From 1973 to 1985, the financial sector never earned more than 16 percent of domestic corporate profits. In 1986, that figure reached 19 percent. In the 1990s, it oscillated between 21 percent and 30 percent, higher than it had ever been in the postwar period. This decade, it reached 41 percent. Pay rose just as dramatically. From 1948 to 1982, average compensation in the financial sector ranged between 99 percent and 108 percent of the average for all domestic private industries. From 1983, it shot upward, reaching 181 percent in 2007.7

There’s a second reason why the financial sector abets income inequality: the “moving first” issue. Let’s say that some news hits the market and that traders interpret this news at different speeds. One trader figures out what the news means in a second, while the other traders require five seconds. Still other traders require an entire day or maybe even a month to figure things out. The early traders earn the extra money. They buy the proper assets early, at the lower prices, and reap most of the gains when the other, later traders pile on. Similarly, if you buy into a successful tech company in the early stages, you are “moving first” in a very effective manner, and you will capture most of the gains if that company hits it big.

The moving-first phenomenon sums to a “winner-take-all” market. Only some relatively small number of traders, sometimes just one trader, can be first. Those who are first will make far more than those who are fourth or fifth. This difference will persist, even if those who are fourth come pretty close to competing with those who are first. In this context, first is first and it doesn’t matter much whether those who come in fourth pile on a month, a minute or a fraction of a second later. Those who bought (or sold, as the case may be) first have captured and locked in most of the available gains. Since gains are concentrated among the early winners, and the closeness of the runner-ups doesn’t so much matter for income distribution, asset-market trading thus encourages the ongoing concentration of wealth. Many investors make lots of mistakes and lose their money, but each year brings a new bunch of projects that can turn the early investors and traders into very wealthy individuals.

These two features of the problem—“going short on volatility” and “getting there first”—are related. Let’s say that Goldman Sachs regularly secures a lot of the best and quickest trades, whether because of its quality analysis, inside connections or high-frequency trading apparatus (it has all three). It builds up a treasure chest of profits and continues to hire very sharp traders and to receive valuable information. Those profits allow it to make “short on volatility” bets faster than anyone else, because if it messes up, it still has a large enough buffer to pad losses. This increases the odds that Goldman will repeatedly pull in spectacular profits.

Still, every now and then Goldman will go bust, or would go bust if not for government bailouts. But the odds are in any given year that it won’t because of the advantages it and other big banks have. It’s as if the major banks have tapped a hole in the social till and they are drinking from it with a straw. In any given year, this practice may seem tolerable—didn’t the bank earn the money fair and square by a series of fairly normal looking trades? Yet over time this situation will corrode productivity, because what the banks do bears almost no resemblance to a process of getting capital into the hands of those who can make most efficient use of it. And it leads to periodic financial explosions. That, in short, is the real problem of income inequality we face today. It’s what causes the inequality at the very top of the earning pyramid that has dangerous implications for the economy as a whole.

What about controlling bank risk-taking directly with tight government oversight? That is not practical. There are more ways for banks to take risks than even knowledgeable regulators can possibly control; it just isn’t that easy to oversee a balance sheet with hundreds of billions of dollars on it, especially when short-term positions are wound down before quarterly inspections. It’s also not clear how well regulators can identify risky assets. Some of the worst excesses of the financial crisis were grounded in mortgage-backed assets—a very traditional function of banks—not exotic derivatives trading strategies. Virtually any asset position can be used to bet long odds, one way or another. It is naive to think that underpaid, undertrained regulators can keep up with financial traders, especially when the latter stand to earn billions by circumventing the intent of regulations while remaining within the letter of the law.

For the time being, we need to accept the possibility that the financial sector has learned how to game the American (and UK-based) system of state capitalism. It’s no longer obvious that the system is stable at a macro level, and extreme income inequality at the top has been one result of that imbalance. Income inequality is a symptom, however, rather than a cause of the real problem. The root cause of income inequality, viewed in the most general terms, is extreme human ingenuity, albeit of a perverse kind. That is why it is so hard to control.

Another root cause of growing inequality is that the modern world, by so limiting our downside risk, makes extreme risk-taking all too comfortable and easy. More risk-taking will mean more inequality, sooner or later, because winners always emerge from risk-taking. Yet bankers who take bad risks (provided those risks are legal) simply do not end up with bad outcomes in any absolute sense. They still have millions in the bank, lots of human capital and plenty of social status. We’re not going to bring back torture, trial by ordeal or debtors’ prisons, nor should we. Yet the threat of impoverishment and disgrace no longer looms the way it once did, so we no longer can constrain excess financial risk-taking. It’s too soft and cushy a world.

Why don’t we simply eliminate the safety net for clueless or unlucky risk-takers so that losses equal gains overall? That’s a good idea in principle, but it is hard to put into practice. Once a financial crisis arrives, politicians will seek to limit the damage, and that means they will bail out major financial institutions. Had we not passed TARP and related policies, the United States probably would have faced unemployment rates of 25 percent of higher, as in the Great Depression. The political consequences would not have been pretty. Bank bailouts may sound quite interventionist, and indeed they are, but in relative terms they probably were the most libertarian policy we had on tap. It meant big one-time expenses, but, for the most part, it kept government out of the real economy (the General Motors bailout aside).

We probably don’t have any solution to the hazards created by our financial sector, not because plutocrats are preventing our political system from adopting appropriate remedies, but because we don’t know what those remedies are. Yet neither is another crisis immediately upon us. The underlying dynamic favors excess risk-taking, but banks at the current moment fear the scrutiny of regulators and the public and so are playing it fairly safe. They are sitting on money rather than lending it out. The biggest risk today is how few parties will take risks, and, in part, the caution of banks is driving our current protracted economic slowdown. According to this view, the long run will bring another financial crisis once moods pick up and external scrutiny weakens, but that day of reckoning is still some ways off.

Is the overall picture a shame? Yes. Is it distorting resource distribution and productivity in the meantime? Yes. Will it again bring our economy to its knees? Probably. Maybe that’s simply the price of modern society. Income inequality will likely continue to rise and we will search in vain for the appropriate political remedies for our underlying problems.

The “Asian Values” hypothesis is equally suspect. The UDHR recognises the universal applicability of human rights and any nation party to this treaty is not permitted to restrict rights purely on cultural, religious or political grounds.

“Asian governments are justified in restricting civil and political rights in some circumstances in favour of social stability and economic growth. Civil and political rights are immaterial when people are destitute and society is unstable.  Accordingly, as luxuries to be enjoyed once there is social order, civil and political liberties must be temporarily suspended so as to not inhibit the government’s delivery of economic and social necessities and so as to not threaten or destroy future development plans.” Whilst this argument may have been slightly more palatable if Singapore’s citizens were, in fact destitute, the reality is that Singapore is ranked as one of the world’s wealthiest countries and boasts a high life expectancy. Thus in Singapore’s case, arguments made in favour of a “liberty trade-off” are rendered completely untenable.

these cultural and religious justifications for violating rights are as unacceptable as Singapore’s purported assertion of an “Asian Values” conception of human rights. Even though the Singapore government’s language is more subtle, their arguments amount to same basic tenet: the purported justification of the denial of fundamental human rights, by reference to cultural, religious or political specific norms. Speaking recently in New York, the UN Secretary-General, Ban Ki Moon warned against such an interpretation of human rights:

“Yes, we recognize that social attitudes run deep.  Yes, social change often comes only with time.  Yet, let there be no confusion: where there is tension between cultural attitudes and universal human rights, universal human rights must carry the day. ” The universal and fundamental nature of human rights is the founding principle on which the United Nations was built: the right to freedom of expression must be guaranteed, “Asian Values” notwithstanding.

Some European leaders, including Angela Merkel, may be backtracking fast on their commitment to nuclear power, but despite yesterday's escalation of the ongoing crisis in Fukushima, Japan, there appear to be no signs that India, China and other emerging economies will succumb to a similar backlash. For the emerging economies, overcoming poverty and insecurity of supply remain the overriding priorities of energy policy.

this truth, which economists hold self-evident: Relative to a status quo of no or limited international trade, permitting full free trade across borders will leave in its wake some immediate losers, but citizens who gain from such trade gain much more than the losers lose. On a net basis, therefore, each nation gains over all from such trade.

In their work, economists are typically are not nationalistic. National boundaries mean little to them, other than that much data happen to be collected on a national basis. Whether a fellow American gains from a trade or someone in Shanghai does not make any difference to most economists, nor does it matter to them where the losers from global competition live, in America or elsewhere.

I say most economists, because here and there one can find some who do seem to worry about how fellow Americans fare in the matter of free trade. In a widely noted column in The Washington Post, “Free Trade’s Great, but Offshoring Rattles Me,” for example, my Princeton colleague Alan Blinder wrote: I’m a free trader down to my toes. Always have been. Yet lately, I’m being treated as a heretic by many of my fellow economists. Why? Because I have stuck my neck out and predicted that the offshoring of service jobs from rich countries such as the United States to poor countries such as India may pose major problems for tens of millions of American workers over the coming decades. In fact, I think offshoring may be the biggest political issue in economics for a generation. When I say this, many of my fellow free traders react with a mixture of disbelief, pity and hostility. Blinder, have you lost your mind? Professor Blinder has estimated that 30 million to 40 million jobs in the United States are potentially offshorable — including those of scientists, mathematicians, radiologists and editors on the high end of the market, and those of telephone operators, clerks and typists on the low end. He says he is rattled by the question of how our country will cope with this phenomenon, especially in view of our tattered social safety net. “That is why I am going public with my concerns now,” he concludes. “If we economists stubbornly insist on chanting ‘free trade is good for you’ to people who know that it is not, we will quickly become irrelevant to the public debate. Compared with that, a little apostasy should be welcome.

it can be trained from very early in a child’s education. There’re ways that you can get quite young children to recognize what’s a good argument and what’s a bad argument. And as children grow older, it can be done in a more and more sophisticated form until by the time they’re undergraduates in universities they would be studying Plato’s dialogues for example and really looking at those tricky arguments and trying to figure out how to think. And this is important not just for the individual thinking about society, but it’s important for the way people talk to each other. In all too many public discussions people just throw out slogans and they throw out insults. And what democracy needs is listening. And respect. And so when people learn how to analyze an argument, then they look at what the other person’s saying differently. And they try to take it apart, and they think: “Well, do I share some of those views and where do I differ here?” and so on. And this really does produce a much more deliberative, respectful style of public interaction.

The second [quality] is what I call “the ability to think as a citizen of the whole world.” We’re all narrow and this is again something that we get from our animal heritage. Most non-human animals just think about the group. But, of course, in this world we need to think, first of all, our whole nation -- its many different groups, minority and majority. And then we need to think outside the nation, about how problems involving, let’s say, the environment or global economy and so on need cooperative resolution that brings together people from many different nations.

That’s complicated and it requires learning a lot of history, and it means learning not just to parrot some facts about history but to think critically about how to assess historical evidence. It means learning how to think about the global economy. And then I think particularly important in this era, it means learning something about the major world religions. Learning complicated, nonstereotypical accounts of those religions because there’s so much fear that’s circulating around in every country that’s based usually on just inadequate stereotypes of what Muslims are or whatever. So knowledge can at least begin to address that.

the third thing, which I think goes very closely with the other two, is what I call “the narrative imagination,” which is the ability to put yourself in the shoes of another person to have some understanding of how the world looks from that point of view. And to really have that kind of educated sympathy with the lives of others. Now again this is something we come into the world with. Psychologists have now found that babies less than a year old are able to take up the perspective of another person and do things, see things from that perspective. But it’s very narrow and usually people learn how to think about what their parents are thinking and maybe other family members but we need to extend that and develop it, and learn how the world looks from the point of view of minorities in our own culture, people outside our culture, and so on.

since we can’t go to all the places that we need to understand -- it’s accomplished by reading narratives, reading literature, drama, participating through the arts in the thought processes of another culture. So literature and the arts are the major ways we would develop and extend that capacity.

For many years, the leading model of development ... used by economists and international agencies measuring welfare was simply that for a country to develop means to increase [its] gross domestic product per capita. Now, in recent years, there has been a backlash to that because people feel that it just doesn’t ask enough about what goods are really doing for people, what can people really do and be.

so since 1990s the United Nations’ development program has produced annually what’s called a “Human Development Report” that looks at things like access to education, access to health care. In other words, a much richer menu of human chances and opportunities that people have. And at the theoretical end I’ve worked for about 20 years now with economist Amartya Sen, who won the Nobel Prize in 1998 for economics. And we’ve developed this as account of -- so for us what it is for a country to do better is to enhance the set of capabilities meaning substantial opportunities that people have to lead meaningful, fruitful lives. And then I go on to focus on a certain core group of those capabilities that I think ought to be protected by constitutional law in every country.

Life; health; bodily integrity; the development of senses, imagination, and thought; the development of practical reason; opportunities to have meaningful affiliations both friendly and political with other people; the ability to have emotional health -- not to be in other words dominated by overwhelming fear and so on; the ability to have a productive relationship with the environment and the world of nature; the ability to play and have leisure time, which is something that I think people don’t think enough about; and then, finally, control over one’s material and social environment, some measure of control. Now of course, each of these is very abstract, and I specify them further. Although I also think that each country needs to finally specify them with its own particular circumstances in view.

when kids learn in a classroom that just makes them sit in a chair, well, they can take in something in their heads, but it doesn’t make them competent at negotiating in the world. And so starting, at least, with Jean Jacques Rousseau in the 18th century, people thought: “Well, if we really want people to be independent citizens in a democracy that means that we can’t have whole classes of people who don’t know how to do anything, who are just simply sitting there waiting to be waited on in practical matters.” And so the idea that children should participate in their practical environment came out of the initial democratizing tendencies that went running through the 18th century.

even countries who absolutely do not want that kind of engaged citizenry see that for the success of business these abilities are pretty important. Both Singapore and China have conducted mass education reforms over the last five years because they realized that their business cultures don’t have enough imagination and they also don’t have enough critical thinking, because you can have awfully corrupt business culture if no one is willing to say the unpleasant word or make a criticism.

So they have striven to introduce more critical thinking and more imagination into their curricula. But, of course, for them, they want to cordon it off -- they want to do it in the science classroom, in the business classroom, but not in the politics classroom. Well, we’ll see -- can they do that? Can they segment it that way? I think democratic thinking is awfully hard to segment as current events in the Middle East are showing us. It does have the tendency to spread.

so maybe the people in Singapore and China will not like the end result of what they tried to do or maybe the reform will just fail, which is equally likely -- I mean the educational reform.

if you really don’t want democracy, this is not the education for you. It had its origins in the ancient Athenian democracy which was a very, very strong participatory democracy and it is most at home in really true democracy, where our whole goal is to get each and every person involved and to get them thinking about things. So, of course, if politicians have ambivalence about that goal they may well not want this kind of education.

when we bring up children in the family or in the school, we are always engineering. I mean, there is no values-free form of education in the world. Even an education that just teaches you a list of facts has values built into it. Namely, it gives a negative value to imagination and to the critical faculties and a very high value to a kind of rote, technical competence. So, you can't avoid shaping children.

ncreasingly the child should be in control and should become free. And that's what the critical thinking is all about -- it's about promoting freedom as the child goes on. So, the end product should be an adult who is really thinking for him- or herself about the direction of society. But you don't get freedom just by saying, "Oh, you are free." Progressive educators that simply stopped teaching found out very quickly that that didn't produce freedom. Even some of the very extreme forms of progressive school where children were just allowed to say every day what it was they wanted to learn, they found that didn't give the child the kind of mastery of self and of the world that you really need to be a free person.

This wasn’t the case everywhere. Germany’s standards agency, established in 1887, was busy setting rules for everything from the content of dyes to the process for making porcelain; other European countries soon followed suit. Higher-quality products, in turn, helped the growth in Germany’s trade exceed that of the United States in the 1890s. America finally got its act together in 1894, when Congress standardized the meaning of what are today common scientific measures, including the ohm, the volt, the watt and the henry, in line with international metrics. And, in 1901, the United States became the last major economic power to establish an agency to set technological standards. The result was a boom in product innovation in all aspects of life during the 20th century. Today we can go to our hardware store and choose from hundreds of light bulbs that all conform to government-mandated quality and performance standards.

Technological standards not only promote innovation — they also can help protect one country’s industries from falling behind those of other countries. Today China, India and other rapidly growing nations are adopting standards that speed the deployment of new technologies. Without similar requirements to manufacture more technologically advanced products, American companies risk seeing the overseas markets for their products shrink while innovative goods from other countries flood the domestic market. To prevent that from happening, America needs not only to continue developing standards, but also to devise a strategy to apply them consistently and quickly.

The best approach would be to borrow from Japan, whose Top Runner program sets energy-efficiency standards by identifying technological leaders in a particular industry — say, washing machines — and mandating that the rest of the industry keep up. As technologies improve, the standards change as well, enabling a virtuous cycle of improvement. At the same time, the government should work with businesses to devise multidimensional standards, so that consumers don’t balk at products because they sacrifice, say, brightness and cost for energy efficiency.

This is not to say that innovation doesn’t bring disruption, and American policymakers can’t ignore the jobs that are lost when government standards sweep older technologies into the dustbin of history. An effective way forward on light bulbs, then, would be to apply standards only to those manufacturers that produce or import in large volume. Meanwhile, smaller, legacy light-bulb producers could remain, cushioning the blow to workers and meeting consumer demand.

Technologies and the standards that guide their deployment have revolutionized American society. They’ve been so successful, in fact, that the role of government has become invisible — so much so that even members of Congress should be excused for believing the government has no business mandating your choice of light bulbs.

The issue is particularly important because most users still hold their phones close to the head; since the brain is particularly sensitive to external stimuli, even a small amount of heat could lead to medical trouble in the long term.

What makes it challenging to determine if a link between cell phones and cancer actually exists are the many variables involved. “The incidence of brain tumors is quite small, making it more difficult to study in large numbers,” says Dr. Eric Olyejar, a Radiation Oncologist from Ironwood Cancer and Research Centers, based in Chandler, Ariz. That means “quantifying the lifetime dose each patient received is extremely difficult.”

To make things more difficult, cancer often develops as a result of many different factors. “Family history, exposure to chemicals or radiation, growth defects, the amount of radiation that is actually coming from the phone, amount of time used, proximity to the brain, skull thickness, and wave frequency are only a few of the many variables,” Olyejar says.

cell phones have become so ubiquitous that it’s hard to compare the health of users and non-users.

Jeffrey Sachs, an advisor to the United Nations and director of Columbia University's Earth Institute, is one such expert. In books and countless speeches and television appearances, he has argued that poor countries are poor because they are hot, infertile, malaria-infested, and often landlocked; these factors, however, make it hard for them to be productive without an initial large investment to help them deal with such endemic problems. But they cannot pay for the investments precisely because they are poor -- they are in what economists call a "poverty trap." Until something is done about these problems, neither free markets nor democracy will do very much for them.

But then there are others, equally vocal, who believe that all of Sachs's answers are wrong. William Easterly, who battles Sachs from New York University at the other end of Manhattan, has become one of the most influential aid critics in his books, The Elusive Quest for Growth and The White Man's Burden. Dambisa Moyo, an economist who worked at Goldman Sachs and the World Bank, has joined her voice to Easterly's with her recent book, Dead Aid. Both argue that aid does more bad than good. It prevents people from searching for their own solutions, while corrupting and undermining local institutions and creating a self-perpetuating lobby of aid agencies.

The best bet for poor countries, they argue, is to rely on one simple idea: When markets are free and the incentives are right, people can find ways to solve their problems. They do not need handouts from foreigners or their own governments.

According to Easterly, there is no such thing as a poverty trap.

To find out whether there are in fact poverty traps, and, if so, where they are and how to help the poor get out of them, we need to better understand the concrete problems they face. Some aid programs help more than others, but which ones? Finding out required us to step out of the office and look more carefully at the world. In 2003, we founded what became the Abdul Latif Jameel Poverty Action Lab, or J-PAL. A key part of our mission is to research by using randomized control trials -- similar to experiments used in medicine to test the effectiveness of a drug -- to understand what works and what doesn't in the real-world fight against poverty. In practical terms, that meant we'd have to start understanding how the poor really live their lives.

Mahathir did not leave it at that. He foreshadowed the Wikileak-chastised countries of today saying what William, the Singapore Ministry of Foreign Affairs, the US and Iran today, amongst others, must agree with, “It’s very difficult now for us to write letters at all because we might as well negotiate through the media.”

I proceeded to the Ministry of Foreign Affairs homepage to search for the full press release. As I anticipated, there was a caveat. This is the press release in full: In response to media queries on the WikiLeaks release of confidential and secret-graded US diplomatic correspondence, the MFA Spokesman expressed deep concerns about the damaging action of WikiLeaks. It is critical to protect the confidentiality of diplomatic and official correspondence, which is why Singapore has the Officials Secrets Act. In particular, the selective release of documents, especially when taken out of context, will only serve to sow confusion and fail to provide a complete picture of the important issues that were being discussed amongst leaders in the strictest of confidentiality.

The sentence in red seems to posit that the selective release of documents can be legitimised if released documents are not taken out of context. If this interpretation is true, then one can account for the political decision to release confidential correspondence covering the Singapore and Malaysia water talks referred to above. In parallel, one can imagine Assange or his supporters arguing that lies of weapons of mass destruction in Iraq and the advent of abject two-faced politics today to be sufficient grounds to justify the actions of Wikileaks. As for the arguments about confidentiality and official correspondence, the events in parliament in 2003 tell us no one should underestimate the ability of nation-states to do an Assange if it befits their purpose – be it directly, as Jayakumar did, or indirectly, through the media or some other medium of influence.

Timothy Garton Ash put out the dilemma perfectly when he said, “There is a public interest in understanding how the world works and what is done in our name. There is a public interest in the confidential conduct of foreign policy. The two public interests conflict.”

the advent of technology will only further blur the lines between these two public interests, if it has not already. Quite apart from technology, the absence of transparent and accountable institutions may also serve to guarantee the prospect of more of such embarrassing leaks in future.

In August 2009, there was considerable interest in Singapore about the circumstances behind the departure of Chip Goodyear, former CEO of the Australian mining giant BHP Billiton, from the national sovereign wealth fund, Temasek Holdings. Before that, all the public knew was – in the name of leadership renewal – Chip Goodyear had been carefully chosen and apparently hand-picked to replace Ho Ching as CEO of Temasek Holdings. In response to Chip’s untimely departure, Finance Minister Tharman Shanmugaratnam was quoted, “People do want to know, there is curiosity, it is a matter of public interest. That is not sufficient reason to disclose information. It is not sufficient that there be curiosity and interest that you want to disclose information.”

Overly secretive and furtive politicians operating in a parliamentary democracy are unlikely to inspire confidence among an educated citizenry either, only serving to paradoxically fuel public cynicism and conspiracy theories.

I believe that government officials and politicians who perform their jobs honourably have nothing to fear from Wikileaks. I would admit that there is an inherent naivety and idealism in this position. But if the lesson from the Wikileaks episode portends a higher standard of ethical conduct, encourages transparency and accountability – all of which promote good governance, realpolitik notwithstanding – then it is perhaps a lesson all politicians and government officials should pay keen attention to.

Post-script: “These disclosures are largely of analysis and high-grade gossip. Insofar as they are sensational, it is in showing the corruption and mendacity of those in power, and the mismatch between what they claim and what they do….If American spies are breaking United Nations rules by seeking the DNA biometrics of the UN director general, he is entitled to hear of it. British voters should know what Afghan leaders thought of British troops. American (and British) taxpayers might question, too, how most of the billions of dollars going in aid to Afghanistan simply exits the country at Kabul airport.” –Simon Jenkins, Guardian

The finding comes at a critical moment for NOAA as some newly empowered Republican House members seek to rein in the Environmental Protection Agency’s plans to regulate greenhouse gas emissions, often contending that the science underpinning global warming is flawed. NOAA is the federal agency tasked with monitoring climate data.

The inquiry into NOAA’s conduct was requested last May by Senator James M. Inhofe, Republican of Oklahoma, who has challenged the science underlying human-induced climate change. Mr. Inhofe was acting in response to the controversy over the e-mail messages, which were stolen from the Climatic Research Unit at the University of East Anglia in England, a major hub of climate research. Mr. Inhofe asked the inspector general of the Commerce Department to investigate how NOAA scientists responded internally to the leaked e-mails. Of 1,073 messages, 289 were exchanges with NOAA scientists.

The inspector general reviewed the 1,073 e-mails, and interviewed Dr. Lubchenco and staff members about their exchanges. The report did not find scientific misconduct; it did however, challenge the agency over its handling of some Freedom of Information Act requests in 2007. And it noted the inappropriateness of e-mailing a collage cartoon depicting Senator Inhofe and five other climate skeptics marooned on a melting iceberg that passed between two NOAA scientists.

The report was not a review of the climate data itself. It joins a series of investigations by the British House of Commons, Pennsylvania State University, the InterAcademy Council and the National Research Council into the leaked e-mails that have exonerated the scientists involved of scientific wrongdoing.

But Mr. Inhofe said the report was far from a clean bill of health for the agency and that contrary to its executive summary, showed that the scientists “engaged in data manipulation.”

“It also appears that one senior NOAA employee possibly thwarted the release of important federal scientific information for the public to assess and analyze,” he said, referring to an employee’s failure to provide material related to work for the Intergovernmental Panel on Climate Change, a different body that compiles research, in response to a Freedom of Information request.

In this New York Times’ article, “Teachers Wonder, Why the scorn?“, the writer notes the often scathing comments from counter-demonstrators – “Oh you pathetic teachers, read the online comments and placards of counterdemonstrators. You are glorified baby sitters who leave work at 3 p.m. You deserve minimum wage.” What had begun as an ostensibly ‘economic reform’ targeted at teachers’ unions has gradually transmogrified into a kind of “character attack” to this section of American society – teachers are people who wage violent protests (thanks to borrowed footage from the West Coast) and they are undeserving of their economic benefits, and indeed treat these privileges as ‘rights’. The ‘war’ is waged on multiple fronts, economic, political, social, psychological even — or at least one gets this sort of picture from reading these articles.

as Singaporeans with a uniquely Singaporean work ethic, we may perceive functioning ‘trade unions’ as those institutions in the so-called “West” where they amass lots of membership, then hold the government ‘hostage’ in order to negotiate higher wages and benefits. Think of trade unions in the Singaporean context, and I think of SIA pilots. And of LKY’s various firm and stern comments on those issues. Think of trade unions and I think of strikes in France, in South Korea, when I was younger, and of my mum saying, “How irresponsible!” before flipping the TV channel.

The reason why I think the teachers’ protests should not be seen solely as an issue about trade-unions, and evaluated myopically and naively in terms of whether trade unions are ‘good’ or ‘bad’ is because the protests feature in a larger political context with the billionaire Koch brothers at the helm, financing and directing much of what has transpired in recent weeks. Or at least according to certain articles which I present here.

In this NYT article entitled “Billionaire Brothers’ Money Plays Role in Wisconsin Dispute“, the writer noted that Koch Industries had been “one of the biggest contributors to the election campaign of Gov. Scott Walker of Wisconsin, a Republican who has championed the proposed cuts.” Further, the president of Americans for Prosperity, a nonprofit group financed by the Koch brothers, had reportedly addressed counter-demonstrators last Saturday saying that “the cuts were not only necessary, but they also represented the start of a much-needed nationwide move to slash public-sector union benefits.” and in his own words -“ ‘We are going to bring fiscal sanity back to this great nation’ ”. All this rhetoric would be more convincing to me if they weren’t funded by the same two billionaires who financially enabled Walker’s governorship.

I now refer you to a long piece by Jane Mayer for The New Yorker titled, “Covert Operations: The billionaire brothers who are waging a war against Obama“. According to her, “The Kochs are longtime libertarians who believe in drastically lower personal and corporate taxes, minimal social services for the needy, and much less oversight of industry—especially environmental regulation. These views dovetail with the brothers’ corporate interests.”

Their libertarian modus operandi involves great expenses in lobbying, in political contributions and in setting up think tanks. From 2006-2010, Koch Industries have led energy companies in political contributions; “[i]n the second quarter of 2010, David Koch was the biggest individual contributor to the Republican Governors Association, with a million-dollar donation.” More statistics, or at least those of the non-anonymous donation records, can be found on page 5 of Mayer’s piece.

Naturally, the Democrats also have their billionaire donors, most notably in the form of George Soros. Mayer writes that he has made ‘generous private contributions to various Democratic campaigns, including Obama’s.” Yet what distinguishes him from the Koch brothers here is, as Michael Vachon, his spokesman, argued, ‘that Soros’s giving is transparent, and that “none of his contributions are in the service of his own economic interests.” ‘ Of course, this must be taken with a healthy dose of salt, but I will note here that in Charles Ferguson’s documentary Inside Job, which was about the 2008 financial crisis, George Soros was one of those interviewed who was not portrayed negatively. (My review of it is here.)

Of the Koch brothers’ political investments, what interested me more was the US’ “first libertarian thinktank”, the Cato Institute. Mayer writes, ‘When President Obama, in a 2008 speech, described the science on global warming as “beyond dispute,” the Cato Institute took out a full-page ad in the Times to contradict him. Cato’s resident scholars have relentlessly criticized political attempts to stop global warming as expensive, ineffective, and unnecessary. Ed Crane, the Cato Institute’s founder and president, told [Mayer] that “global-warming theories give the government more control of the economy.” ‘

K Street refers to a major street in Washington, D.C. where major think tanks, lobbyists and advocacy groups are located.

with recent developments as the Citizens United case where corporations are now ‘persons’ and have no caps in political contributions, the Koch brothers are ever better-positioned to take down their perceived big, bad government and carry out their ideological agenda as sketched in Mayer’s piece

with much important news around the world jostling for our attention – earthquake in Japan, Middle East revolutions – the passing of an anti-union bill (which finally happened today, for better or for worse) in an American state is unlikely to make a headline able to compete with natural disasters and revolutions. Then, to quote Wisconsin Governor Scott Walker during that prank call conversation, “Sooner or later the media stops finding it [the teacher protests] interesting.”

What remains more puzzling for me is why the American public seems to buy into the Koch-funded libertarian rhetoric. Mayer writes, ‘ “Income inequality in America is greater than it has been since the nineteen-twenties, and since the seventies the tax rates of the wealthiest have fallen more than those of the middle class. Yet the brothers’ message has evidently resonated with voters: a recent poll found that fifty-five per cent of Americans agreed that Obama is a socialist.” I suppose that not knowing who is funding the political rhetoric makes it easier for the public to imbibe it.

In contrast, each of the new genes increases risk by no more than 10 to 15 percent; for that reason, they will not be used to decide if a person is likely to develop Alzheimer’s. APOE, which is involved in metabolizing cholesterol, “is in a class of its own,” said Dr. Rudolph Tanzi, a neurology professor at Harvard Medical School and an author of one of the papers.

But researchers say that even a slight increase in risk helps them in understanding the disease and developing new therapies. And like APOE, some of the newly discovered genes appear to be involved with cholesterol.

The other paper is by researchers in Britain, France and other European countries with contributions from the United States. They confirmed the genes found by the American researchers and added one more gene.

The American study got started about three years ago when Gerard D. Schellenberg, a pathology professor at the University of Pennsylvania, went to the National Institutes of Health with a complaint and a proposal. Individual research groups had been doing their own genome studies but not having much success, because no one center had enough subjects. In an interview, Dr. Schellenberg said that he had told Dr. Richard J. Hodes, director of the National Institute on Aging, the small genomic studies had to stop, and that Dr. Hodes had agreed. These days, Dr. Hodes said, “the old model in which researchers jealously guarded their data is no longer applicable.”

So Dr. Schellenberg set out to gather all the data he could on Alzheimer’s patients and on healthy people of the same ages. The idea was to compare one million positions on each person’s genome to determine whether some genes were more common in those who had Alzheimer’s. “I spent a lot of time being nice to people on the phone,” Dr. Schellenberg said. He got what he wanted: nearly every Alzheimer’s center and Alzheimer’s geneticist in the country cooperated. Dr. Schellenberg and his colleagues used the mass of genetic data to do an analysis and find the genes and then, using two different populations, to confirm that the same genes were conferring the risk. That helped assure the investigators that they were not looking at a chance association. It was a huge effort, Dr. Mayeux said. Many medical centers had Alzheimer’s patients’ tissue sitting in freezers. They had to extract the DNA and do genome scans.

“One of my jobs was to make sure the Alzheimer’s cases really were cases — that they had used some reasonable criteria” for diagnosis, Dr. Mayeux said. “And I had to be sure that people who were unaffected really were unaffected.”

Meanwhile, the European group, led by Dr. Julie Williams of the School of Medicine at Cardiff University, was engaged in a similar effort. Dr. Schellenberg said the two groups compared their results and were reassured that they were largely finding the same genes. “If there were mistakes, we wouldn’t see the same things,” he added. Now the European and American groups are pooling their data to do an enormous study, looking for genes in the combined samples. “We are upping the sample size,” Dr. Schellenberg said. “We are pretty sure more stuff will pop out.”

thanks to Wikileaks, the world has been enlightened to the fact that the Obama administration not only refused to prosecute these individuals itself, it also exerted pressure on the governments of Germany and Spain not to prosecute, or even indict, any of the torturers or war criminals from the Bush dictatorship.

we see many right-wing commentators demanding that Assange be hunted down, with some even calling for his murder, on the grounds that he may have endangered lives by releasing confidential government documents. Yet, for the right-wing, this apparently was not a concern when the late columnist Robert Novak "outed" CIA agent Valerie Plame after her husband Joseph Wilson authored an OP-ED piece in The New York Times criticizing the motivations for waging war against Iraq. Even though there was evidence of involvement within the highest echelons of the Bush dictatorship, only one person, Lewis "Scooter" Libby, was indicted and convicted of "outing" Plame to Novak. And, despite the fact that this "outing" potentially endangered the lives of Plame's overseas contacts, Bush commuted Libby's thirty-month prison sentence, calling it "excessive."

Why the disparity? The answer is simple: The Plame "outing" served the interests of the military-industrial complex and helped to conceal the Bush dictatorship's lies, tortures and war crimes, while Wikileaks not only exposed such evils, but also revealed how Obama's administration, and Obama himself, are little more than "snake oil" merchants pontificating about government accountability while undermining it at every turn.

When the United States Constitution was being created, a conflict emerged between delegates who wanted a strong federal government (the Federalists) and those who wanted a weak federal government (the anti-Federalists). Although the Federalists won the day, one of the most distinguished anti-Federalists, George Mason, refused to sign the new Constitution, sacrificing in the process, some historians say, a revered place amongst America's founding fathers. Two of Mason's concerns were that the Constitution did not contain a Bill of Rights, and that the presidential pardon powers would allow corrupt presidents to pardon people who had committed crimes on presidential orders.

Mason's concerns about the abuse of the pardon powers were eventually proven right when Gerald Ford pardoned Richard Nixon, when Ronald Reagan pardoned FBI agents convicted of authorizing illegal break-ins, and when George H.W. Bush pardoned six individuals involved in the Iran-Contra Affair.

Mason was also proven right after the Federalists realized that the States would not ratify the Constitution unless a Bill of Rights was added. But this was done begrudgingly, as demonstrated by America's second president, Federalist John Adams, who essentially destroyed the right to freedom of speech via the Alien and Sedition Acts, which made it a crime to say, write or publish anything critical of the United States government.

Most criminals break laws that others have created, and people who assist in exposing or apprehending them are usually lauded as heroes. But with the "espionage" acts, the criminals themselves have actually created laws to conceal their crimes, and exploit these laws to penalize people who expose them.

The problem with America's system of government is that it has become too easy, and too convenient, to simply stamp "classified" on documents that reveal acts of government corruption, cover-up, mendacity and malfeasance, or to withhold them "in the interest of national security." Given this web of secrecy, is it any wonder why so many Americans are still skeptical about the "official" versions of the John F. Kennedy or Martin Luther King Jr. assassinations, or the events surrounding the attacks of September 11, 2001?

I want to believe that the Wikileaks documents will change America for the better. But what undoubtedly will happen is a repetition of the past: those who expose government crimes and cover-ups will be prosecuted or branded as criminals; new laws will be passed to silence dissent; new Liebermans will arise to intimidate the corporate-controlled media; and new ways will be found to conceal the truth.

What Wikileaks has done is make people understand why so many Americans are politically apathetic and content to lose themselves in one or more of the addictions American culture offers, be it drugs, alcohol, the Internet, video games, celebrity gossip, text-messaging-in essence anything that serves to divert attention from the harshness of reality.

the evils committed by those in power can be suffocating, and the sense of powerlessness that erupts from being aware of these evils can be paralyzing, especially when accentuated by the knowledge that government evildoers almost always get away with their crimes

3. Collaboration at scale Across many economies, the number of people who undertake knowledge work has grown much more quickly than the number of production or transactions workers. Knowledge workers typically are paid more than others, so increasing their productivity is critical. As a result, there is broad interest in collaboration technologies that promise to improve these workers' efficiency and effectiveness. While the body of knowledge around the best use of such technologies is still developing, a number of companies have conducted experiments, as we see in the rapid growth rates of video and Web conferencing, expected to top 20 per cent annually during the next few years.

4. The growing ‘Internet of Things' The adoption of RFID (radio-frequency identification) and related technologies was the basis of a trend we first recognised as "expanding the frontiers of automation." But these methods are rudimentary compared with what emerges when assets themselves become elements of an information system, with the ability to capture, compute, communicate, and collaborate around information—something that has come to be known as the "Internet of Things." Embedded with sensors, actuators, and communications capabilities, such objects will soon be able to absorb and transmit information on a massive scale and, in some cases, to adapt and react to changes in the environment automatically. These "smart" assets can make processes more efficient, give products new capabilities, and spark novel business models. Auto insurers in Europe and the United States are testing these waters with offers to install sensors in customers' vehicles. The result is new pricing models that base charges for risk on driving behavior rather than on a driver's demographic characteristics. Luxury-auto manufacturers are equipping vehicles with networked sensors that can automatically take evasive action when accidents are about to happen. In medicine, sensors embedded in or worn by patients continuously report changes in health conditions to physicians, who can adjust treatments when necessary. Sensors in manufacturing lines for products as diverse as computer chips and pulp and paper take detailed readings on process conditions and automatically make adjustments to reduce waste, downtime, and costly human interventions.

5. Experimentation and big data Could the enterprise become a full-time laboratory? What if you could analyse every transaction, capture insights from every customer interaction, and didn't have to wait for months to get data from the field? What if…? Data are flooding in at rates never seen before—doubling every 18 months—as a result of greater access to customer data from public, proprietary, and purchased sources, as well as new information gathered from Web communities and newly deployed smart assets. These trends are broadly known as "big data." Technology for capturing and analysing information is widely available at ever-lower price points. But many companies are taking data use to new levels, using IT to support rigorous, constant business experimentation that guides decisions and to test new products, business models, and innovations in customer experience. In some cases, the new approaches help companies make decisions in real time. This trend has the potential to drive a radical transformation in research, innovation, and marketing.

Using experimentation and big data as essential components of management decision making requires new capabilities, as well as organisational and cultural change. Most companies are far from accessing all the available data. Some haven't even mastered the technologies needed to capture and analyse the valuable information they can access. More commonly, they don't have the right talent and processes to design experiments and extract business value from big data, which require changes in the way many executives now make decisions: trusting instincts and experience over experimentation and rigorous analysis. To get managers at all echelons to accept the value of experimentation, senior leaders must buy into a "test and learn" mind-set and then serve as role models for their teams.

6. Wiring for a sustainable world Even as regulatory frameworks continue to evolve, environmental stewardship and sustainability clearly are C-level agenda topics. What's more, sustainability is fast becoming an important corporate-performance metric—one that stakeholders, outside influencers, and even financial markets have begun to track. Information technology plays a dual role in this debate: it is both a significant source of environmental emissions and a key enabler of many strategies to mitigate environmental damage. At present, information technology's share of the world's environmental footprint is growing because of the ever-increasing demand for IT capacity and services. Electricity produced to power the world's data centers generates greenhouse gases on the scale of countries such as Argentina or the Netherlands, and these emissions could increase fourfold by 2020. McKinsey research has shown, however, that the use of IT in areas such as smart power grids, efficient buildings, and better logistics planning could eliminate five times the carbon emissions that the IT industry produces.

7. Imagining anything as a service Technology now enables companies to monitor, measure, customise, and bill for asset use at a much more fine-grained level than ever before. Asset owners can therefore create services around what have traditionally been sold as products. Business-to-business (B2B) customers like these service offerings because they allow companies to purchase units of a service and to account for them as a variable cost rather than undertake large capital investments. Consumers also like this "paying only for what you use" model, which helps them avoid large expenditures, as well as the hassles of buying and maintaining a product.

In the IT industry, the growth of "cloud computing" (accessing computer resources provided through networks rather than running software or storing data on a local computer) exemplifies this shift. Consumer acceptance of Web-based cloud services for everything from e-mail to video is of course becoming universal, and companies are following suit. Software as a service (SaaS), which enables organisations to access services such as customer relationship management, is growing at a 17 per cent annual rate. The biotechnology company Genentech, for example, uses Google Apps for e-mail and to create documents and spreadsheets, bypassing capital investments in servers and software licenses. This development has created a wave of computing capabilities delivered as a service, including infrastructure, platform, applications, and content. And vendors are competing, with innovation and new business models, to match the needs of different customers.

8. The age of the multisided business model Multisided business models create value through interactions among multiple players rather than traditional one-on-one transactions or information exchanges. In the media industry, advertising is a classic example of how these models work. Newspapers, magasines, and television stations offer content to their audiences while generating a significant portion of their revenues from third parties: advertisers. Other revenue, often through subscriptions, comes directly from consumers. More recently, this advertising-supported model has proliferated on the Internet, underwriting Web content sites, as well as services such as search and e-mail (see trend number seven, "Imagining anything as a service," earlier in this article). It is now spreading to new markets, such as enterprise software: Spiceworks offers IT-management applications to 950,000 users at no cost, while it collects advertising from B2B companies that want access to IT professionals.

9. Innovating from the bottom of the pyramid The adoption of technology is a global phenomenon, and the intensity of its usage is particularly impressive in emerging markets. Our research has shown that disruptive business models arise when technology combines with extreme market conditions, such as customer demand for very low price points, poor infrastructure, hard-to-access suppliers, and low cost curves for talent. With an economic recovery beginning to take hold in some parts of the world, high rates of growth have resumed in many developing nations, and we're seeing companies built around the new models emerging as global players. Many multinationals, meanwhile, are only starting to think about developing markets as wellsprings of technology-enabled innovation rather than as traditional manufacturing hubs.

10. Producing public good on the grid The role of governments in shaping global economic policy will expand in coming years. Technology will be an important factor in this evolution by facilitating the creation of new types of public goods while helping to manage them more effectively. This last trend is broad in scope and draws upon many of the other trends described above.