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These Truths: A History of the United States (Jill Lepore) - 1 views

  • It was meant to mark the start of a new era, in which the course of history might be made predictable and a government established that would be ruled not by accident and force but by reason and choice. The origins of that idea, and its fate, are the story of American history.
  • It seems to have been reserved to the people of this country, by their conduct and example, to decide the important question, whether societies of men are really capable or not of establishing good government from reflection and choice, or whether they are forever destined to depend for their political constitutions on accident and force.6 This was the question of that autumn. And, in a way, it has been the question of every season since,
  • I once came across a book called The Constitution Made Easy.7 The Constitution cannot be made easy. It was never meant to be easy.
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  • THE AMERICAN EXPERIMENT rests on three political ideas—“these truths,” Thomas Jefferson called them—political equality, natural rights, and the sovereignty of the people.
  • After Benjamin Franklin read Jefferson’s draft, he picked up his quill, scratched out the words “sacred & undeniable,” and suggested that “these truths” were, instead, “self-evident.” This was more than a quibble. Truths that are sacred and undeniable are God-given and divine, the stuff of religion. Truths that are self-evident are laws of nature, empirical and observable, the stuff of science. This divide has nearly rent the Republic apart.
  • The real dispute is between “these truths” and the course of events: Does American history prove these truths, or does it belie them?
  • The United States rests on a dedication to equality, which is chiefly a moral idea, rooted in Christianity, but it rests, too, on a dedication to inquiry, fearless and unflinching. Its founders agreed with the Scottish philosopher and historian David Hume, who wrote, in 1748, that “Records of Wars, Intrigues, Factions, and Revolutions are so many Collections of Experiments.”9 They believed that truth is to be found in ideas about morality but also in the study of history.
  • understanding history as a form of inquiry—not as something easy or comforting but as something demanding and exhausting—was central to the nation’s founding. This, too, was new.
  • A new kind of historical writing, less memorial and more unsettling, only first emerged in the fourteenth century. “History is a philosophical science,” the North African Muslim scholar Ibn Khaldun wrote in 1377, in the prologue to his history of the world, in which he defined history as the study “of the causes and origins of existing things.”11
  • Only by fits and starts did history become not merely a form of memory but also a form of investigation, to be disputed, like philosophy, its premises questioned, its evidence examined, its arguments countered.
  • Declaring independence was itself an argument about the relationship between the present and the past, an argument that required evidence of a very particular kind: historical evidence. That’s why most of the Declaration of Independence is a list of historical claims. “To prove this,” Jefferson wrote, “let facts be submitted to a candid world.”
  • In an attempt to solve this problem, the earliest historians of the United States decided to begin their accounts with Columbus’s voyage, stitching 1776 to 1492. George Bancroft published his History of the United States from the Discovery of the American Continent to the Present in 1834, when the nation was barely more than a half-century old, a fledgling, just hatched. By beginning with Columbus, Bancroft made the United States nearly three centuries older than it was, a many-feathered old bird.
  • In 1787, then, when Alexander Hamilton asked “whether societies of men are really capable or not of establishing good government from reflection and choice, or whether they are forever destined to depend for their political constitutions on accident and force,” that was the kind of question a scientist asks before beginning an experiment. Time alone would tell. But time has passed. The beginning has come to an end. What, then, is the verdict of history?
  • In deciding what to leave in and what to leave out, I’ve confined myself to what, in my view, a people constituted as a nation in the early twenty-first century need to know about their own past, mainly because this book is meant to double as an old-fashioned civics book, an explanation of the origins and ends of democratic institutions, from the town meeting to the party system, from the nominating convention to the secret ballot, from talk radio to Internet polls. This book is chiefly a political
  • Aside from being a brief history of the United States and a civics primer, this book aims to be something else, too: it’s an explanation of the nature of the past. History isn’t only a subject; it’s also a method.
  • The truths on which the nation was founded are not mysteries, articles of faith, never to be questioned, as if the founding were an act of God, but neither are they lies, all facts fictions, as if nothing can be known, in a world without truth.
  • Between reverence and worship, on the one side, and irreverence and contempt, on the other, lies an uneasy path, away from false pieties and petty triumphs over people who lived and died and committed both their acts of courage and their sins and errors long before we committed ours. “We cannot hallow this ground,” Lincoln said at Gettysburg. We are obliged, instead, to walk this ground, dedicating ourselves to both the living and the dead.
  • studying history is like that, looking into one face and seeing, behind it, another, face after face after face. “Know whence you came,” Baldwin told his nephew.17 The past is an inheritance, a gift and a burden. It can’t be shirked. You carry it everywhere. There’s nothing for it but to get to know it.
  • Nature takes one toll, malice another. History is the study of what remains, what’s left behind, which can be almost anything, so long as it survives the ravages of time and war: letters, diaries, DNA, gravestones, coins, television broadcasts, paintings, DVDs, viruses, abandoned Facebook pages, the transcripts of congressional hearings, the ruins of buildings. Some of these things are saved by chance or accident, like the one house that, as if by miracle, still stands after a hurricane razes a town. But most of what historians study survives because it was purposely kept—placed
  • As nation-states emerged, they needed to explain themselves, which they did by telling stories about their origins, tying together ribbons of myths, as if everyone in the “English nation,” for instance, had the same ancestors, when, of course, they did not. Very often, histories of nation-states are little more than myths that hide the seams that stitch the nation to the state.15
  • When the United States declared its independence in 1776, plainly, it was a state, but what made it a nation? The fiction that its people shared a common ancestry was absurd on its face; they came from all over, and, having waged a war against England, the very last thing they wanted to celebrate was their Englishness.
  • Facts, knowledge, experience, proof. These words come from the law. Around the seventeenth century, they moved into what was then called “natural history”: astronomy, physics, chemistry, geology. By the eighteenth century they were applied to history and to politics, too. These truths: this was the language of reason, of enlightenment, of inquiry, and of history.
  • Against conquest, slaughter, and slavery came the urgent and abiding question, “By what right?”
  • Yet the origins of the United States date to 1492 for another, more troubling reason: the nation’s founding truths were forged in a crucible of violence, the products of staggering cruelty, conquest and slaughter, the assassination of worlds.
  • Locke, spurred both by a growing commitment to religious toleration and by a desire to distinguish English settlement from Spanish conquest, stressed the lack of cultivation as a better justification for taking the natives’ land than religious difference, an emphasis with lasting consequences.
  • Unlike Polo and Mandeville, Columbus did not make a catalogue of the ways and beliefs of the people he met (only later did he hire Pané to do that). Instead, he decided that the people he met had no ways and beliefs. Every difference he saw as an absence.22 Insisting that they had no faith and no civil government and were therefore infidels and savages who could not rightfully own anything, he claimed possession of their land, by the act of writing. They were a people without truth; he would make his truth theirs. He would tell them where the dead go.
  • It became commonplace, inevitable, even, first among the Spanish, and then, in turn, among the French, the Dutch, and the English, to see their own prosperity and good health and the terrible sicknesses suffered by the natives as signs from God. “Touching these savages, there is a thing that I cannot omit to remark to you,” one French settler wrote: “it appears visibly that God wishes that they yield their place to new peoples.” Death convinced them at once of their right and of the truth of their faith. “The natives, they are all dead of small Poxe,” John Winthrop wrote when he arrived in New England in 1630: “the Lord hathe cleared our title to what we possess.”
  • In much of New Spain, the mixed-race children of Spanish men and Indian women, known as mestizos, outnumbered Indians; an intricate caste system marked gradations of skin color, mixtures of Europeans, Native Americans, and Africans, as if skin color were like dyes made of plants, the yellow of sassafras, the red of beets, the black of carob. Later, the English would recognize only black and white, a fantasy of stark and impossible difference, of nights without twilight and days without dawns. And yet both regimes of race, a culture of mixing or a culture of pretending not to mix, pressed upon the brows of every person of the least curiosity the question of common humanity: Are all peoples one?
  • Elizabeth’s best defender argued that if God decided “the female should rule and govern,” it didn’t matter that women were “weake in nature, feable in bodie, softe in courage,” because God would make every right ruler strong. In any case, England’s constitution abided by a “rule mixte,” in which the authority of the monarch was checked by the power of Parliament; also, “it is not she that ruleth but the lawes.” Elizabeth herself called on yet another authority: the favor of the people.48 A mixed constitution, the rule of law, the will of the people: these were English ideas that Americans would one day make their own, crying, “Liberty!”
  • In the brutal, bloody century between Columbus’s voyage and John White’s, an idea was born, out of fantasy, out of violence, the idea that there exists in the world a people who live in an actual Garden of Eden, a state of nature, before the giving of laws, before the forming of government. This imagined history of America became an English book of genesis, their new truth. “In the beginning,” the Englishman John Locke would write, “all the world was America.” In America, everything became a beginning.
  • England’s empire would have a different character than that of either Spain or France. Catholics could make converts by the act of baptism, but Protestants were supposed to teach converts to read the Bible; that meant permanent settlements, families, communities, schools, and churches. Also, England’s empire would be maritime—its navy was its greatest strength. It would be commercial. And, of greatest significance for the course of the nation that would grow out of those settlements, its colonists would be free men, not vassals, guaranteed their “English liberties.”
  • Beginning with the Virginia charter, the idea of English liberties for English subjects was planted on American soil and, with it, the king’s claim to dominion, a claim that rested on the idea that people like Powhatan and his people lived in darkness and without government, no matter that the English called their leaders kings.
  • Twenty Englishmen were elected to the House of Burgesses. Twenty Africans were condemned to the house of bondage. Another chapter opened in the American book of genesis: liberty and slavery became the American Abel and Cain.
  • To build his case against the king, Coke dusted off a copy of an ancient and almost entirely forgotten legal document, known as Magna Carta (literally, the “great charter”), in which, in the year 1215, King John had pledged to his barons that he would obey the “law of the land.” Magna Carta wasn’t nearly as important as Coke made it out to be, but by arguing for its importance, he made it important, not only for English history, but for American history, too, tying the political fate of everyone in England’s colonies to the strange doings of a very bad king from the Middle Ages.
  • Magna Carta explains a great deal about how it is that some English colonists would one day come to believe that their king had no right to rule them and why their descendants would come to believe that the United States needed a written constitution. But Magna Carta played one further pivotal role, the role it played in the history of truth—a history that had taken a different course in England than in any other part of Europe.
  • The most crucial right established under Magna Carta was the right to a trial by jury.
  • in 1215, the pope banned trial by ordeal. In Europe, it was replaced by a new system of divine judgment: judicial torture. But in England, where there existed a tradition of convening juries to judge civil disputes—like disagreements over boundaries between neighboring freeholds—trial by ordeal was replaced not by judicial torture but by trial by jury.
  • This turn marked the beginning of a new era in the history of knowledge: it required a new doctrine of evidence and new method of inquiry and eventually led to the idea that an observed or witnessed act or thing—the substance, the matter, of fact—is the basis of truth. A judge decided the law; a jury decided the facts. Mysteries were matters of faith, a different kind of truth, known only to God.
  • The age of mystery began to wane, and, soon, the culture of fact spread from law to government.
  • There would never be very many Africans in New England, but New Englanders would have slave plantations, on the distant shores. Nearly half of colonial New Englanders’ wealth would come from sugar grown by West Indian slaves.
  • One million Europeans migrated to British America between 1600 and 1800 and two and a half million Africans were carried there by force over that same stretch of centuries, on ships that sailed past one another by day and by night.42 Africans died faster, but as a population of migrants, they outnumbered Europeans two and a half to one.
  • In the last twenty-five years of the seventeenth century, English ships, piloted by English sea captains, crewed by English sailors, carried more than a quarter of a million men, women, and children across the ocean, shackled in ships’ holds.44 Theirs was not a ship of state crossing a sea of troubles, another Mayflower, their bond a covenant. Theirs was a ship of slavery, their bonds forged in fire. They whispered and wept; they screamed and sat in silence. They grew ill; they grieved; they died; they endured.
  • By what right did the English hold these people as their slaves?
  • Under Roman law, all men are born free and can only be made slaves by the law of nations, under certain narrow conditions—for instance, when they’re taken as prisoners of war, or when they sell themselves as payment of debt. Aristotle had disagreed with Roman law, insisting that some men are born slaves. Neither of these traditions from antiquity proved to be of much use to English colonists attempting to codify their right to own slaves, because laws governing slavery, like slavery itself, had disappeared from English common law by the fourteenth century. Said one Englishman in Barbados in 1661, there was “no track to guide us where to walk nor any rule sett us how to govern such Slaves.”46
  • With no track or rule to guide them, colonial assemblies adopted new practices and devised new laws with which they attempted to establish a divide between “blacks” and “whites.”
  • Adopting these practices and passing these laws required turning English law upside down, because much in existing English law undermined the claims of owners of people. In 1655, a Virginia woman with an African mother and an English father sued for her freedom by citing English common law, under which children’s status follows that of their father, not their mother. In 1662, Virginia’s House of Burgesses answered doubts about “whether children got by any Englishman upon a Negro woman should be slave or ffree” by reaching back to an archaic Roman rule, partus sequitur ventrem (you are what your mother was). Thereafter, any child born of a woman who was a slave inherited her condition.
  • By giving Americans a more ancient past, he hoped to make America’s founding appear inevitable and its growth inexorable, God-ordained. He also wanted to celebrate the United States, not as an offshoot of England, but instead as a pluralist and cosmopolitan nation, with ancestors all over the world.
  • No book should be censored before publication, Milton argued (though it might be condemned after printing), because truth could only be established if allowed to do battle with lies. “Let her and falsehood grapple,” he urged, since, “whoever knew Truth to be put to the worst in a free and open encounter?” This view depended on an understanding of the capacity of the people to reason. The people, Milton insisted, are not “slow and dull, but of a quick, ingenious and piercing spirit, acute to invent, subtle and sinewy to discourse, not beneath the reach of any point the highest that human capacity can soar to.”52
  • All men, Locke argued, are born equal, with a natural right to life, liberty, and property; to protect those rights, they erect governments by consent. Slavery, for Locke, was no part either of a state of nature or of civil society. Slavery was a matter of the law of nations, “nothing else, but the state of war continued, between a lawful conqueror and a captive.” To introduce slavery in the Carolinas, then, was to establish, as fundamental to the political order, an institution at variance with everything about how Locke understood civil society.
  • Long before shots were fired at Lexington and Concord, long before George Washington crossed the Delaware, long before American independence was thought of, or even thinkable, a revolutionary tradition was forged, not by the English in America, but by Indians waging wars and slaves waging rebellions. They revolted again and again and again. Their revolutions came in waves that lashed the land. They asked the same question, unrelentingly: By what right are we ruled?
  • Rebellion hardened lines between whites and blacks. Before Bacon and his men burned Jamestown, poor Englishmen had very little political power. As many as three out of every four Englishmen and women who sailed to the colonies were either debtors or convicts or indentured servants; they weren’t slaves, but neither were they free.61 Property requirements for voting meant that not all free white men could vote. Meanwhile, the fact that slaves could be manumitted by their masters meant that it was possible to be both black and free and white and unfree. But after Bacon’s Rebellion, free white men were granted the right to vote, and it became nearly impossible for black men and women to secure their freedom. By 1680, one observer could remark that “these two words, Negro and Slave” had “grown Homogeneous and convertible”: to be black was to be a slave.
  • Benjamin Franklin eventually settled in the tidy Quaker town of Philadelphia and began printing his own newspaper, the Pennsylvania Gazette, in 1729. In its pages, he fought for freedom of the press. In a Miltonian 1731 “Apology for Printers,” he observed “that the Opinions of Men are almost as various as their Faces” but that “Printers are educated in the Belief, that when Men differ in Opinion, both Sides ought equally to have the Advantage of being heard by the Publick; and that when Truth and Error have fair Play, the former is always an overmatch for the latter.”
  • But if the culture of the fact hadn’t yet spread to newspapers, it had spread to history. In Leviathan, Thomas Hobbes had written that “The register of Knowledge of Fact is called History.”74 One lesson Americans would learn from the facts of their own history had to do with the limits of the freedom of the press, and this was a fact on which they dwelled, and a liberty they grew determined to protect.
  • Slavery does not exist outside of politics. Slavery is a form of politics, and slave rebellion a form of violent political dissent. The Zenger trial and the New York slave conspiracy were much more than a dispute over freedom of the press and a foiled slave rebellion: they were part of a debate about the nature of political opposition, and together they established its limits. Both Cosby’s opponents and Caesar’s followers allegedly plotted to depose the governor. One kind of rebellion was celebrated, the other suppressed—a division that would endure.
  • In American history, the relationship between liberty and slavery is at once deep and dark: the threat of black rebellion gave a license to white political opposition.
  • This, too, represented a kind of revolution: Whitefield emphasized the divinity of ordinary people, at the expense of the authority of their ministers.
  • he wrote in 1751 an essay about the size of the population, called “Observations concerning the Increase of Mankind, Peopling of Countries, &c.”
  • Franklin guessed the population of the mainland colonies to be about “One Million English Souls,” and his calculations suggested that this number would double every twenty-five years. At that rate, in only a century, “the greatest Number of Englishmen will be on this Side the Water.” Franklin’s numbers were off; his estimates weren’t too high; they were too low. At the time, more than 1.5 million people lived in Britain’s thirteen mainland colonies. Those colonies were far more densely settled than New France or New Spain. Only 60,000 French settlers lived in Canada and 10,000 more in Louisiana. New Spain was even more thinly settled.
  • he wrote about a new race, a people who were “white.” “The Number of purely white People in the World is proportionably very small,” Franklin began. As he saw it, Africans were “black”; Asians and Native Americans were “tawny”; Spaniards, Italians, French, Russians, Swedes, and Germans were “swarthy.” That left very few people, and chiefly the English, as the only “white people” in the world. “I could wish their Numbers were increased,” Franklin said, adding, wonderingly, “But perhaps I am partial to the Complexion of my Country, for such Kind of Partiality is natural to Mankind.”
  • Franklin’s “JOIN, or DIE” did some of that, too: it offered a lesson about the rulers and the ruled, and the nature of political communities. It made a claim about the colonies: they were parts of a whole.
  • When Benjamin Franklin began writing his autobiography, in 1771, he turned the story of his own escape—running away from his apprenticeship to his brother James—into a metaphor for the colonies’ growing resentment of parliamentary rule. James’s “harsh and tyrannical Treatment,” Franklin wrote, had served as “a means of impressing me with that Aversion to arbitrary Power that has stuck to me thro’ my whole Life.”7 But that was also the story of every runaway slave ad, testament after testament to an aversion to arbitrary power.
  • The American Revolution did not begin in 1775 and it didn’t end when the war was over. “The success of Mr. Lay, in sowing the seeds of . . . a revolution in morals, commerce, and government, in the new and in the old world, should teach the benefactors of mankind not to despair, if they do not see the fruits of their benevolent propositions, or undertakings, during their lives,” Philadelphia doctor Benjamin Rush later wrote.
  • There were not one but two American revolutions at the end of the eighteenth century: the struggle for independence from Britain, and the struggle to end slavery. Only one was won.
  • The Revolution was at its most radical in the challenge it presented to the institution of slavery and at its most conservative in its failure to meet that challenge. Still, the institution had begun to break, like a pane of glass streaked with cracks but not yet shattered.
  • “I wish our Poor Distracted State would atend to the many good Lessons” of history, Jane Franklin wrote to her brother, and not “keep always in a Flame.”21
  • After Annapolis, Madison went home to Virginia and resumed his course of study. In April of 1787, he drafted an essay called “Vices of the Political System of the United States.” It took the form of a list of eleven deficiencies,
  • it closed with a list of causes for these vices, which he located primarily “in the people themselves.” By this last he meant the danger that a majority posed to a minority: “In republican Government the majority however composed, ultimately give the law. Whenever therefore an apparent interest or common passion unites a majority what is to restrain them from unjust violations of the rights and interests of the minority, or of individuals?”27 What force restrains good men from doing bad things? Honesty, character, religion—these, history demonstrated, were not to be relied upon. No, the only force that could restrain the tyranny of the people was the force of a well-constructed constitution. It would have to be as finely wrought as an iron gate.
  • At the convention, it proved impossible to set the matter of slavery aside, both because the question of representation turned on it and because any understanding of the nature of tyranny rested on it. When Madison argued about the inevitability of a majority oppressing a minority, he cited ancient history, and told of how the rich oppressed the poor in Greece and Rome. But he cited, too, modern American history. “We have seen the mere distinction of color made in the most enlightened period of time, the ground of the most oppressive dominion ever exercised by man over man.”40
  • If not for the three-fifths rule, the representatives of free states would have outnumbered representatives of slave states by 57 to 33.44
  • Wilson, half Franklin’s age, read his remarks instead. “Mr. President,” he began, addressing Washington, “I confess that there are several parts of this constitution which I do not at present approve, but I am not sure I shall never approve them.” He suggested that he might, one day, change his mind. “For having lived long, I have experienced many instances of being obliged by better information, or fuller consideration, to change opinions even on important subjects, which I once thought right, but found to be otherwise. It is therefore that the older I grow, the more apt I am to doubt my own judgment, and to pay more respect to the judgment of others.” Hoping to pry open the minds of delegates who were closed to the compromise before them, he reminded them of the cost of zealotry. “Most men indeed as well as most sects in Religion, think themselves in possession of all truth, and that wherever others differ from them it is so far error.” But wasn’t humility the best course, in such circumstances? “Thus I consent, Sir, to this Constitution,” he closed, “because I expect no better, and because I am not sure, that it is not the best.”
  • Except for the Massachusetts Constitution, in 1780, and the second New Hampshire Constitution, in 1784, no constitution, no written system of government, had ever before been submitted to the people for their approval. “This is a new event in the history of mankind,” said the governor of Connecticut at his state’s ratification convention.
  • Nearly everything Washington did set a precedent. What would have happened if he had decided, before taking that oath of office, to emancipate his slaves? He’d grown disillusioned with slavery; his own slaves, and the greater number of slaves owned by his wife, were, to him, a moral burden, and he understood very well that for all the wealth generated by forced, unpaid labor, the institution of slavery was a moral burden to the nation. There is some evidence—slight though it is—that Washington drafted a statement announcing that he intended to emancipate his slaves before assuming the presidency. (Or maybe that statement, like Washington’s inaugural address, had been written by Hamilton, a member of New York’s Manumission Society.) This, too, Washington understood, would have established a precedent: every president after him would have had to emancipate his slaves. And yet he would not, could not, do it.65 Few of Washington’s decisions would have such lasting and terrible consequences as this one failure to act.
  • In the century and a half between the Connecticut charter and the 1787 meeting of the constitutional convention lies an entire revolution—not just a political revolution but also a religious revolution. So far from establishing a religion, the Constitution doesn’t even mention “God,” except in naming the date (“the year of our Lord . . .”). At a time when all but two states required religious tests for office, the Constitution prohibited them. At a time when all but three states still had an official religion, the Bill of Rights forbade the federal government from establishing one. Most Americans believed, with Madison, that religion can only thrive if it is no part of government, and that a free government can only thrive if it is no part of religion.
  • The replacement of debtors’ prison with bankruptcy protection would change the nature of the American economy, spurring investment, speculation, and the taking of risks.
  • as early as 1791, Madison had begun to revise his thinking. In an essay called “Public Opinion,” he considered a source of instability particular to a large republic: the people might be deceived. “The larger a country, the less easy for its real opinion to be ascertained,” he explained. That is, factions might not, in the end, consist of wise, knowledgeable, and reasonable men. They might consist of passionate, ignorant, and irrational men, who had been led to hold “counterfeit” opinions by persuasive men. (Madison was thinking of Hamilton and his ability to gain public support for his financial plan.)
  • The way out of this political maze was the newspaper. “A circulation of newspapers through the entire body of the people,” he explained, “is equivalent to a contraction of territorial limits.” Newspapers would make the country, effectively, smaller.90 It was an ingenious idea. It would be revisited by each passing generation of exasperated advocates of republicanism. The newspaper would hold the Republic together; the telegraph would hold the Republic together; the radio would hold the Republic together; the Internet would hold the Republic together. Each time, this assertion would be both right and terribly wrong.
  • Newspapers in the early republic weren’t incidentally or inadvertently partisan; they were entirely and enthusiastically partisan. They weren’t especially interested in establishing facts; they were interested in staging a battle of opinions. “Professions of impartiality I shall make none,” wrote a Federalist printer. “They are always useless, and are besides perfect nonsense.”92
  • Washington’s Farewell Address consists of a series of warnings about the danger of disunion. The North and the South, the East and the West, ought not to consider their interests separate or competing, Washington urged: “your union ought to be considered as a main prop of your liberty.” Parties, he warned, were the “worst enemy” of every government, agitating “the community with ill-founded jealousies and false alarms,” kindling “the animosity of one part against another,” and even fomenting “riot and insurrection.”
  • As to the size of the Republic, “Is there a doubt whether a common government can embrace so large a sphere? Let experience solve it.” The American experiment must go on. But it could only thrive if the citizens were supported by religion and morality, and if they were well educated. “Promote, then, as an object of primary importance, institutions for the general diffusion of knowledge,” he urged. “In proportion as the structure of a government gives force to public opinion, it is essential that public opinion should be enlightened.”95
  • “Passion” or variants of the word appear seven times in the Farewell; it is the source of every problem; reason is its only remedy. Passion is a river. There would be no changing its course.
  • Adams and Jefferson lived in an age of quantification. It began with the measurement of time. Time used to be a wheel that turned, and turned again; during the scientific revolution, time became a line. Time, the easiest quantity to measure, became the engine of every empirical inquiry: an axis, an arrow. This new use and understanding of time contributed to the idea of progress—if time is a line instead of a circle, things can get better and even better, instead of forever rising and falling in endless cycles, like the seasons. The idea of progress animated American independence and animated, too, the advance of capitalism.
  • The quantification of time led to the quantification of everything else: the counting of people, the measurement of their labor, and the calculation of profit as a function of time. Keeping time and accumulating wealth earned a certain equivalency. “Time is money,” Benjamin Franklin used to say.
  • The two-party system turned out to be essential to the strength of the Republic. A stable party system organizes dissent. It turns discontent into a public good. And it insures the peaceful transfer of power, in which the losing party willingly, and without hesitation, surrenders its power to the winning party.
  • Behind Madison’s remarks about “lessening the proportion of slaves to the free people,” behind Jefferson’s tortured calculations about how many generations would have to pass before his own children could pass for “white,” lay this hard truth: none of these men could imagine living with descendants of Africans as political equals.
  • If the battle between John Adams and Thomas Jefferson had determined whether aristocracy or republicanism would prevail (and, with Jefferson, republicanism won), the battle between Andrew Jackson and John Quincy Adams would determine whether republicanism or democracy would prevail (and, with Jackson, democracy would, eventually, win). Jackson’s rise to power marked the birth of American populism. The argument of populism is that the best government is that most closely directed by a popular majority.
  • He was provincial, and poorly educated. (Later, when Harvard gave Jackson an honorary doctorate, John Quincy Adams refused to attend the ceremony, calling him “a barbarian who could not write a sentence of grammar and hardly could spell his own name.”)68 He had a well-earned reputation for being ferocious, ill-humored, and murderous, on the battlefield and off. When he ran for president, he had served less than a year in the Senate. Of his bid for the White House Jefferson declared, “He is one of the most unfit men I know of for such a place.”69 Jackson made a devilishly shrewd decision. He would make his lack of certain qualities—judiciousness, education, political experience—into strengths.
  • Eaton, who ran Jackson’s campaign, shrewdly revised his Life of Andrew Jackson, deleting or dismissing everything in Jackson’s past that looked bad and lavishing attention on anything that looked good and turning into strengths what earlier had been considered weaknesses: Eaton’s Jackson wasn’t uneducated; he was self-taught. He wasn’t ill-bred; he was “self-made.”
  • Watching the rise of American democracy, an aging political elite despaired, and feared that the Republic could not survive the rule of the people. Wrote John Randolph of Virginia, “The country is ruined past redemption.”
  • “The first principle of our system,” Jackson said, “is that the majority is to govern.” He bowed to the people. Then, all at once, the people nearly crushed him with their affection.
  • The democratization of American politics was hastened by revivalists like Stewart who believed in the salvation of the individual through good works and in the equality of all people in the eyes of God. Against that belief stood the stark and brutal realities of an industrializing age, the grinding of souls.
  • The great debates of the middle decades of the nineteenth century had to do with the soul and the machine. One debate merged religion and politics. What were the political consequences of the idea of the equality of souls? Could the soul of America be redeemed from the nation’s original sin, the Constitution’s sanctioning of slavery?
  • Another debate merged politics and technology. Could the nation’s new democratic traditions survive in the age of the factory, the railroad, and the telegraph? If all events in time can be explained by earlier events in time, if history is a line, and not a circle, then the course of events—change over time—is governed by a set of laws, like the laws of physics, and driven by a force, like gravity. What is that force? Is change driven by God, by people, or by machines? Is progress the progress of Pilgrim’s Progress, John Bunyan’s 1678 allegory—the journey of a Christian from sin to salvation? Is progress the extension of suffrage, the spread of democracy? Or is progress invention, the invention of new machines?
  • A distinctively American idea of progress involved geography as destiny, picturing improvement as change not only over time but also over space.
  • If the sincerity of converts was often dubious, another kind of faith was taking deeper root in the 1820s, an evangelical faith in technological progress, an unquestioning conviction that each new machine was making the world better. That faith had a special place in the United States, as if machines had a distinctive destiny on the American continent. In prints and paintings, “Progress” appeared as a steam-powered locomotive, chugging across the continent, unstoppable. Writers celebrated inventors as “Men of Progress” and “Conquerors of Nature” and lauded their machines as far worthier than poetry. The triumph of the sciences over the arts meant the defeat of the ancients by the moderns. The genius of Eli Whitney, hero of modernity, was said to rival that of Shakespeare; the head of the U.S. Patent Office declared the steamboat “a mightier epic” than the Iliad.18
  • To Jackson’s supporters, his election marked not degeneration but a new stage in the history of progress. Nowhere was this argument made more forcefully, or more influentially, than in George Bancroft’s History of the United States from the Discovery of the American Continent to the Present. The book itself, reviewers noted, voted for Jackson. The spread of evangelical Christianity, the invention of new machines, and the rise of American democracy convinced Bancroft that “humanism is steady advancing,” and that “the advance of liberty and justice is certain.” That advance, men like Bancroft and Jackson believed, required Americans to march across the continent, to carry these improvements from east to west, the way Jefferson had pictured it. Democracy, John O’Sullivan, a New York lawyer and Democratic editor, argued in 1839, is nothing more or less than “Christianity in its earthly aspect.” O’Sullivan would later coin the term “manifest destiny” to describe this set of beliefs, the idea that the people of the United States were fated “to over spread and to possess the whole of the continent which Providence has given for the development of the great experiment of liberty.”23
  • To evangelical Democrats, Democracy, Christianity, and technology were levers of the same machine. And yet, all along, there were critics and dissenters and objectors who saw, in the soul of the people, in the march of progress, in the unending chain of machines, in the seeming forward movement of history, little but violence and backwardness and a great crushing of men, women, and children. “Oh, America, America,” Maria Stewart cried, “foul and indelible is thy stain!”24
  • The self-evident, secular truths of the Declaration of Independence became, to evangelical Americans, the truths of revealed religion. To say that this marked a turn away from the spirit of the nation’s founding is to wildly understate the case. The United States was founded during the most secular era in American history, either before or since. In the late eighteenth century, church membership was low, and anticlerical feeling was high.
  • The United States was not founded as a Christian nation. The Constitution prohibits religious tests for officeholders. The Bill of Rights forbids the federal government from establishing a religion, James Madison having argued that to establish
  • The separation of church and state allowed religion to thrive; that was one of its intentions. Lacking an established state religion, Americans founded new sects, from Shakers to Mormons, and rival Protestant denominations sprung up in town after town. Increasingly, the only unifying, national religion was a civil religion, a belief in the American creed. This faith bound the nation together, and provided extraordinary political stability in an era of astonishing change,
  • Slavery wasn’t an aberration in an industrializing economy; slavery was its engine. Factories had mechanical slaves; plantations had human slaves. The power of machines was measured by horsepower, the power of slaves by hand power. A healthy man counted as “two hands,” a nursing woman as a “half-hand,” a child as a “quarter-hand.”
  • With Walker, the antislavery argument for gradual emancipation, with compensation for slave owners, became untenable. Abolitionists began arguing for immediate emancipation. And southern antislavery societies shut their doors. As late as 1827, the number of antislavery groups in the South had outnumbered those in the North by more than four to one. Southern antislavery activists were usually supporters of colonization, not of emancipation. Walker’s Appeal ended the antislavery movement in the South and radicalized it in the North.
  • The rebellion rippled across the Union. The Virginia legislature debated the possibility of emancipating its slaves, fearing “a Nat Turner might be in every family.” Quakers submitted a petition to the state legislature calling for abolition. The petition was referred to a committee, headed by Thomas Jefferson’s thirty-nine-year-old grandson, Thomas Jefferson Randolph, who proposed a scheme of gradual emancipation. Instead, the legislature passed new laws banning the teaching of slaves to read and write, and prohibiting, too, teaching slaves about the Bible.43 In a nation founded on a written Declaration, made sacred by evangelicals during a religious revival, reading about equality became a crime.
  • One consequence of the rise of Jacksonian democracy and the Second Great Awakening was the participation of women in the reformation of American politics by way of American morals. When suffrage was stripped of all property qualifications, women’s lack of political power became starkly obvious. For women who wished to exercise power, the only source of power seemingly left to them was their role as mothers, which, they suggested, rendered them morally superior to men—more loving, more caring, and more responsive to the cries of the weak.
  • Purporting to act less as citizens than as mothers, cultivating the notion of “republican motherhood,” women formed temperance societies, charitable aid societies, peace societies, vegetarian societies, and abolition societies. The first Female Anti-Slavery Society was founded in Boston in 1833; by 1837, 139 Female Anti-Slavery Societies had been founded across the country,
  • After 1835, she never again spoke in public. As Catherine Beecher argued in 1837, in An Essay on Slavery and Abolitionism, with Reference to the Duty of American Females, “If the female advocate chooses to come upon a stage, and expose her person, dress, and elocution to public criticism, it is right to express disgust.”
  • Jacksonian democracy distributed political power to the many, but industrialization consolidated economic power in the hands of a few. In Boston, the top 1 percent of the population controlled 10 percent of wealth in 1689, 16 percent in 1771, 33 percent in 1833, and 37 percent in 1848, while the lowest 80 percent of the population controlled 39 percent of the wealth in 1689, 29 percent in 1771, 14 percent in 1833, and a mere 4 percent in 1848.
  • In New York, the top 1 percent of the population controlled 40 percent of the wealth in 1828 and 50 percent in 1845; the top 4 percent of the population controlled 63 percent of the wealth in 1828 and 80 percent in 1845.49
  • While two and a half million Europeans had migrated to all of the Americas between 1500 and 1800, the same number—two and a half million—arrived specifically in the United States between 1845 and 1854 alone. As a proportion of the U.S. population, European immigrants grew from 1.6 percent in the 1820s to 11.2 percent in 1860. Writing in 1837, one Michigan reformer called the nation’s rate of immigration “the boldest experiment upon the stability of government ever made in the annals of time.”51 The largest
  • Critics of Jackson—himself the son of Irish immigrants—had blamed his election on the rising population of poor, newly enfranchised Irishmen. “Everything in the shape of an Irishman was drummed to the polls,” one newspaper editor wrote in 1828.52 By 1860, more than one in eight Americans were born in Europe, including 1.6 million Irish and 1.2 million Germans, the majority of whom were Catholic. As the flood of immigrants swelled, the force of nativism gained strength, as did hostility toward Catholics, fueled by the animus of evangelical Protestants.
  • The insularity of both Irish and German communities contributed to a growing movement to establish tax-supported public elementary schools, known as “common schools,” meant to provide a common academic and civic education to all classes of Americans. Like the extension of suffrage to all white men, this element of the American experiment propelled the United States ahead of European nations. Much of the movement’s strength came from the fervor of revivalists. They hoped that these new schools would assimilate a diverse population of native-born and foreign-born citizens by introducing them to the traditions of American culture and government, so that boys, once men, would vote wisely, and girls, once women, would raise virtuous children. “It is our duty to make men moral,” read one popular teachers’ manual, published in 1830. Other advocates hoped that a shared education would diminish partisanship. Whatever the motives of its advocates, the common school movement emerged out of, and nurtured, a strong civic culture.56
  • With free schools, literacy spread, and the number of newspapers rose, a change that was tied to the rise of a new party system. Parties come and go, but a party system—a stable pair of parties—has characterized American politics since the ratification debates. In American history the change from one party system to another has nearly always been associated with a revolution in communications that allows the people to shake loose of the control of parties. In the 1790s, during the rise of the first party system, which pitted Federalists against Republicans, the number of newspapers had swelled. During the shift to the second party system, which, beginning in 1833, pitted Democrats against the newly founded Whig Party, not only did the number of newspapers rise, but their prices plummeted.
  • The newspapers of the first party system, which were also known as “commercial advertisers,” had consisted chiefly of partisan commentary and ads, and generally sold for six cents an issue. The new papers cost only one cent, and were far more widely read. The rise of the so-called penny press also marked the beginning of the triumph of “facts” over “opinion” in American journalism, mainly because the penny press aimed at a different, broader, and less exclusively partisan, audience. The New York Sun appeared in 1833. “It shines for all” was its common-man motto. “The object of this paper is to lay before the public, at a price within the means of everyone, ALL THE NEWS OF THE DAY,” it boasted. It dispensed with subscriptions and instead was circulated at newsstands, where it was sold for cash, to anyone who had a ready penny. Its front page was filled not with advertising but with news. The penny press was a “free press,” as James Gordon Bennett of the New York Herald put it, because it wasn’t beholden to parties. (Bennett, born in Scotland, had immigrated to the United States after reading Benjamin Franklin’s Autobiography.) Since the paper was sold at newsstands, rather than mailed to subscribers, he explained, its editors and writers were “entirely ignorant who are its readers and who are not.” They couldn’t favor their readers’ politics because they didn’t know them. “We shall support no party,” Bennett insisted. “We shall endeavor to record facts.”
  • During the days of the penny press, Tocqueville observed that Americans had a decided preference for weighing the facts of a matter themselves: They mistrust systems; they adhere closely to facts and study facts with their own senses. As they do not easily defer to the mere name of any fellow man, they are never inclined to rest upon any man’s authority; but, on the contrary, they are unremitting in their efforts to find out the weaker points of their neighbor’s doctrine.60
  • For centuries, Europeans had based their claims to lands in the New World on arguments that native peoples had no right to the land they inhabited, no sovereignty over it, because they had no religion, or because they had no government, or because they had no system of writing. The Cherokees, with deliberation and purpose, challenged each of these arguments.
  • Britain, Calhoun argued that if a state were to decide that a law passed by Congress was unconstitutional, the Constitution would have to be amended, and if such an amendment were not ratified—if it didn’t earn the necessary approval of three-quarters of the states—the objecting state would have the right to secede from the Union. The states had been sovereign before the Constitution was ever written, or even thought of, Calhoun argued, and they remained sovereign. Calhoun also therefore argued against majority rule; nullification is fundamentally anti-majoritarian. If states can secede, the majority does not rule.78 The nullification crisis was
  • New York abolished debtors’ prison in 1831, and in 1841, Congress passed a federal law offering bankruptcy protection to everyone. Within two years, 41,000 Americans had filed for bankruptcy. Two years later, the law was repealed, but state laws continued to offer bankruptcy protection and, still more significantly, debtors’ prisons were gone for good. In Britain and all of Europe except Portugal, offenders were still being thrown in debtors’ prison (a plot that animated many a nineteenth-century novel); in the United States, debtors could declare bankruptcy and begin again.
  • A nation of debtors, Americans came to see that most people who fall into debt are victims of the business cycle and not of fate or divine retribution or the wheel of fortune. The nation’s bankruptcy laws, even as they came and went again, made taking risks less risky for everyone, which meant that everyone took more risks.
  • the geographical vastness of the United States meant that the anxiety about the machinery of industrial capitalism took the form not of Marxism, with its argument that “the history of all hitherto existing society is the history of class struggles,” but instead of a romance with nature, and with the land, and with all things rustic. Against the factory, Americans posed not a socialist utopia but the log cabin.
  • Were all these vast designs and rapid strides worth it? Thoreau thought not. He came to this truth: “They are but improved means to an unimproved end.”112
  • Expansion, even more than abolition, pressed upon the public the question of the constitutionality of slavery. How or even whether this crisis would be resolved was difficult to see not only because of the nature of the dispute but also because there existed very little agreement about who might resolve it: Who was to decide whether a federal law was unconstitutional?
  • In the midst of all this clamoring among the thundering white-haired patriarchs of American politics, there emerged the idea that the authority to interpret the Constitution rests with the people themselves. Or, at least, this became a rather fashionable thing to say. “It is, Sir, the people’s Constitution, the people’s government, made for the people, made by the people, and answerable to the people,” Daniel Webster roared from the floor of Congress.14 Every man could read and understand the Constitution, Webster insisted.
  • The Notes, it appeared, could be read as variously as the Constitution itself. As one shrewd observer remarked, “The Constitution threatens to be a subject of infinite sects, like the Bible.” And, as with many sects, those politicians who most strenuously staked their arguments on the Constitution often appeared the least acquainted with it. Remarked New York governor Silas Wright, “No one familiar with the affairs of our government, can have failed to notice how large a proportion of our statesmen appear never to have read the Constitution of the United States with a careful reference to its precise language and exact provisions, but rather, as occasion presents, seem to exercise their ingenuity . . . to stretch both to the line of what they, at the moment, consider expedient.”22
  • A NATION HAS borders but the edges of an empire are frayed.23 While abolitionists damned the annexation of Texas as an extension of the slave power, more critics called it an act of imperialism, inconsistent with a republican form of government. “We have a republic, gentlemen, of vast extent and unequalled natural advantages,” Daniel Webster pointed out. “Instead of aiming to enlarge its boundaries, let us seek, rather, to strengthen its union.”24 Webster lost that argument, and, in the end, it was the American reach for empire that, by sundering the Union, brought about the collapse of slavery.
  • Although hardly ever reported in the press, the years between 1830 and 1860 saw more than one hundred incidents of violence between congressmen, from melees in the aisles to mass brawls on the floor, from fistfights and duels to street fights. “It is the game of these men, and of their profligate organs,” Dickens wrote, “to make the strife of politics so fierce and brutal, and so destructive of all self-respect in worthy men, that sensitive and delicate-minded persons shall be kept aloof, and they, and such as they, be left to battle out their selfish views unchecked.”
  • They spat venom. They pulled guns. They unsheathed knives. Divisions of party were abandoned; the splinter in Congress was sectional. Before heading to the Capitol every morning, southern congressmen strapped bowie knives to their belts and tucked pistols into their pockets. Northerners, on principle, came unarmed. When northerners talked about the slave power, they meant that literally.32
  • If the United States were to acquire territory from Mexico, and if this territory were to enter the Union, would Mexicans become American citizens? Calhoun, now in the Senate, vehemently opposed this idea. “I protest against the incorporation of such a people,” he declared. “Ours is the government of the white man.”
  • And yet, as different as were Wilmot’s interests from Calhoun’s, they were both interested in the rights of white men, as Wilmot made plain. “I plead the cause of the rights of white freemen,” he said. “I would preserve for free white labor a fair country, a rich inheritance, where the sons of toil, of my own race and own color, can live without the disgrace which association with negro slavery brings upon free labor.”
  • If the problem was the size of the Republic, the sprawl of its borders, the frayed edges of empire, couldn’t railroads, and especially the telegraph, tie the Republic together? “Doubt has been entertained by many patriotic minds how far the rapid, full, and thorough intercommunication of thought and intelligence, so necessary to the people living under a common representative republic, could be expected to take place throughout such immense bounds,” said one House member in 1845, but “that doubt can no longer exist.”45
  • even Americans with an unflinching faith in machine-driven progress understood that a pulse along a wire could not stop the slow but steady dissolution of the Union.
  • the Treaty of Guadalupe Hidalgo, under which the top half of Mexico became the bottom third of the United States. The gain to the United States was as great as the loss to Mexico. In 1820, the United States of America had spanned 1.8 million square miles, with a population of 9.6 million people; Mexico had spanned 1.7 million square miles, with a population of 6.5 million people. By 1850, the United States had acquired one million square miles of Mexico, and its population had grown to 23.2 million; Mexico’s population was 7.5 million.49
  • The Louisiana Purchase had doubled the size of the United States. In gaining territory from Mexico, the United States grew by 64 percent.
  • the territory comprising the United States had grown to “nearly ten times as large as the whole of France and Great Britain combined; three times as large as the whole of France, Britain, Austria, Prussia, Spain, Portugal, Belgium, Holland, and Denmark, together; one-and-a-half times as large as the Russian empire in Europe; one-sixth less only than the area covered by the fifty-nine or sixty empires, states, and Republics of Europe; of equal extent with the Roman Empire or that of Alexander, neither of which is said to have exceeded 3,000,000 square miles.”50
  • Sentiment was not Fuller’s way; debate was her way. She was a scourge of lesser intellects. Edgar Allan Poe, whose work she did not admire, described her as wearing a perpetual sneer. In “The Great Lawsuit: Man versus Men, Woman versus Women,” Fuller argued that the democratization of American politics had cast light on the tyranny of men over women: “As men become aware that all men have not had their fair chance,” she observed, women had become willing to say “that no women have had a fair chance.”
  • In 1845, in Woman in the Nineteenth Century, Fuller argued for fundamental and complete equality: “We would have every path laid open to Woman as freely as to Man.”56 The book was wildly successful, and Greeley, who had taken to greeting Fuller with one of her catchphrases about women’s capacity—“Let them be sea-captains, if you will”—sent her to Europe to become his newspaper’s foreign correspondent.
  • Reeling from those revolutions, the king of Bavaria asked the historian Leopold von Ranke to explain why his people had rebelled against monarchial rule, as had so many peoples in Europe that year. “Ideas spread most rapidly when they have found adequate concrete expression,” Ranke told the king, and the United States had “introduced a new force in the world,” the idea that “the nation should govern itself,” an idea that would determine “the course of the modern world”: free speech, spread by wire, would make the whole world free.61
  • Unlike Thoreau, who cursed the railroads, Free-Soilers believed in improvement, improvement through the hard work of the laboring man, his power, his energy. “Our paupers to-day, thanks to free labor, are our yeoman and merchants of tomorrow,” the New York Times boasted. “Why, who are the laboring people of the North?” Daniel Webster asked. “They are the whole North. They are the people who till their own farms with their own hands, freeholders, educated men, independent men.”
  • This attack by northerners led southerners to greater exertions in defending their way of life. They battled on several fronts. They described northern “wage slavery” as a far more exploitative system of labor than slavery. They celebrated slavery as fundamental to American prosperity. Slavery “has grown with our growth, and strengthened with our strength,” Calhoun said. And they elaborated an increasingly virulent ideology of racial difference, arguing against the very idea of equality embodied in the American creed.
  • Conservative Virginian George Fitzhugh, himself inspired by ethnological thinking, dismissed the “self-evident truths” of the Declaration of Independence as utter nonsense. “Men are not born physically, morally, or intellectually equal,” he wrote. “It would be far nearer the truth to say, ‘that some were born with saddles on their backs, and others booted and spurred to ride them,’—and the riding does them good.”
  • For Fitzhugh, the error had begun in the imaginations of the philosophes of the Enlightenment and in their denial of the reality of history. Life and liberty are not “inalienable rights,” Fitzhugh argued: instead, people “have been sold in all countries, and in all ages, and must be sold so long as human nature lasts.” Equality means calamity: “Subordination, difference of caste and classes, difference of sex, age, and slavery beget peace and good will.”
  • Progress is an illusion: “the world has not improved in the last two thousand, probably four thousand years.” Perfection is to be found in the past, not in the future.66 As for the economic systems of the North and the South, “Free laborers have not a thousandth part of the rights and liberties of negro slaves,” Fitzhugh insisted. “The negro slaves of the South are the happiest, and, in some sense, the freest people in the world.”67
  • HISTORY TEEMS WITH mishaps and might-have-beens: explosions on the Potomac, storms not far from port, narrowly contested elections, court cases lost and won, political visionaries drowned. But over the United States in the 1850s, a sense of inevitability fell, as if there were a fate, a dismal dismantlement, that no series of events or accidents could thwart.
  • over the United States in the 1850s, a sense of inevitability fell, as if there were a fate, a dismal dismantlement, that no series of events or accidents could thwart.
  • Douglas promoted the idea of popular sovereignty, proclaiming, “If there is any one principle dearer and more sacred than all others in free governments, it is that which asserts the exclusive right of a free people to form and adopt their own fundamental law.”75 Unfree people, within Stephen Douglas’s understanding, had no such rights.
  • the Fugitive Slave Law, required citizens to turn in runaway slaves and denied fugitives the right to a jury trial. The law, said Harriet Jacobs, a fugitive slave living in New York, marked “the beginning of a reign of terror to the colored population.”76 Bounty hunters and slave catchers hunted down and captured former slaves and returned them to their owners for a fee. Little stopped them from seizing men, women, and children who had been born free, or who had been legally emancipated, and selling them to the South, too. Nothing so brutally exposed the fragility of freedom or the rapaciousness of slavery.
  • February 1854, at their convention in Philadelphia, northern Know-Nothings proposed a platform plank calling for the reinstatement of the Missouri Compromise. When that motion was rejected, some fifty delegates from eight northern states bolted: they left the convention, and the party, to set up their own party, the short-lived North American Party. Nativism would endure as a force in American politics, but, meanwhile, nativists split over slavery.
  • Lincoln’s was the language of free soil, free speech, and free labor. He grounded his argument against slavery in his understanding of American history, in the language of Frederick Douglass, and in his reading of the Constitution. “Let no one be deceived,” he said. “The spirit of seventy-six and the spirit of Nebraska, are utter antagonisms.”
  • As a nation, we began by declaring that “all men are created equal.” We now practically read it “all men are created equal, except negroes.” When the Know-Nothings get control, it will read “all men are created equal, except negroes, and foreigners, and Catholics.” When it comes to this I should prefer emigrating to some country where they make no pretense of loving liberty—to Russia, for instance, where despotism can be taken pure, and without the base alloy of hypocrisy.
  • “That negroes, whether slave or free, that is, men of the African race, are not citizens of the United States by the Constitution.” The implications of the ruling stunned his readers. Even Americans who held no strong views on the question of slavery—and they were rare enough—were nonetheless shocked by the court’s exercise of the authority to determine the unconstitutionality of the law.
  • “A large meeting of colored people” was held in Philadelphia in April, at which it was resolved that “the only duty the colored man owes to a Constitution under which he is declared to be an inferior and degraded being, having no rights which white men are bound to respect, is to denounce and repudiate it, and to do what he can by all proper means to bring it into contempt.”
  • “You may close your Supreme Court against the black man’s cry for justice, but you cannot, thank God, close against him the ear of a sympathising world, nor shut up the Court of Heaven.” Taney’s interpretation of the Constitution would be ignored, Douglass predicted. “Slavery lives in this country not because of any paper Constitution, but in the moral blindness of the American people.”102
  • APHOTOGRAPH STOPS TIME, TRAPPING IT LIKE A BUTTERFLY in a jar.
  • No other kind of historical evidence has this quality of instantaneity, of an impression taken in a moment, in a flicker, an eye opened and then shut. Photographs also capture the ordinary, the humble, the speechless. The camera discriminates between light and dark but not between the rich and the poor, the literate and the illiterate, the noisy and the quiet.
  • portraits were also closely associated with death, with being trapped in time, on glass, for eternity, and, even more poignantly, with equality.3 With photography, Walt Whitman predicted, “Art will be democratized.”
  • Morse had long predicted that the telegraph would usher in an age of world peace. “I trust that one of its effects will be to bind man to his fellow-man in such bonds of amity as to put an end to war,” he insisted.8 War was a failure of technology, Morse argued, a shortcoming of communication that could be remedied by way of a machine. Endowing his work with the grandest of purposes, he believed that the laying of telegraph wires across the American continent would bind the nation together into one people, and that the laying of cable across the ocean would bind Europe to the Americas, ushering in the dawn of an age of global harmony.
  • But war isn’t a failure of technology; it’s a failure of politics.
  • Debate is to war what trial by jury is to trial by combat: a way to settle a dispute without coming to blows. The form and its rules had been established over centuries. They derived from rules used in the courts and in Parliament, and even from the rules of rhetoric used in the writing of poetry. Since the Middle Ages and the founding of the first universities, debate had been the foundation of a liberal arts education.
  • (Etymologically and historically, the artes liberales are the arts acquired by people who are free, or liber.)10 In the eighteenth century, debate was understood as the foundation of civil society. In 1787, delegates to the constitutional convention had agreed to “to argue without asperity, and to endeavor to convince the judgment without hurting the feelings of each other.”
  • Some twelve thousand people showed up for their first debate, at two o’clock in the afternoon on August 21, in Ottawa, Illinois. There were no seats; the audience stood, without relief, for three hours.
  • They’d agreed to strict rules: the first speaker would speak for an hour and the second for an hour and a half, whereupon the first speaker would offer a thirty-minute rebuttal.
  • And, as to the wrongness of slavery, he called it tyranny, and the idea of its naturalness as much an error as a belief in the divine right of kings. The question wasn’t sectionalism or nationalism, the Democratic Party or the Republican Party. The question was right against wrong. “That is the issue that will continue in this country when these poor tongues of Judge Douglas and myself shall be silent,” Lincoln said.16
  • The price of slaves grew so high that a sizable number of white southerners urged the reopening of the African slave trade. In the 1850s, legislatures in several states, including South Carolina, proposed reopening the trade. Adopting this measure would have violated federal law. Some “reopeners” believed that the federal ban on the trade was unconstitutional; others were keen to nullify it, in a dress rehearsal for secession.
  • “If it is right to buy slaves in Virginia and carry them to New Orleans, why is it not right to buy them in Cuba, Brazil, or Africa and carry them there?”21 Proslavery southerners made these arguments under the banner of “free trade,” their rhetorical answer to “free labor.”
  • To George Fitzhugh, all societies were “at all times and places, regulated by laws as universal and as similar as those which control the affairs of bees,” and trade itself, including the slave trade, was “as old, as natural, and irresistible as the tides of the ocean.”
  • In 1855, David Christy, the author of Cotton Is King, wrote about the vital importance of “the doctrine of Free Trade,” which included abolishing the tariffs that made imported English goods more expensive than manufactured goods produced in the North. As one southerner put it, “Free trade, unshackled industry, is the motto of the South.”23
  • Darwin’s Origin of Species would have a vast and lingering influence on the world of ideas. Most immediately, it refuted the racial arguments of ethnologists like Louis Agassiz. And, in the months immediately following the book’s publication—the last, unsettling months before the beginning of the Civil War—abolitionists took it as evidence of the common humanity of man.30
  • The truths of the Confederacy disavowed the truths of the Union. The Confederacy’s newly elected vice president, a frail Georgian named Alexander Stephens, delivered a speech in Savannah in which he made those differences starkly clear. The ideas that lie behind the Constitution “rested upon the assumption of the equality of races,” Stephens said, but
  • “Our new government is founded upon exactly the opposite idea: its foundations are laid, its cornerstone rests, upon the great truth that the negro is not equal to the white man; that slavery . . . is his natural and moral condition. This, our new government, is the first, in the history of the world, based upon this great physical, philosophical, and moral truth.”52 It would become politically expedient, after the war, for ex-Confederates to insist that the Confederacy was founded on states’ rights. But the Confederacy was founded on white supremacy.
  • Opposition to free speech had long been the position of slave owners, a position taken at the constitutional convention and extended through the gag rule, antiliteracy laws, bans on the mails, and the suppression of speakers. An aversion to political debate also structured the Confederacy, which had both a distinctive character and a lasting influence on Americans’ ideas about federal authority as against popular sovereignty.
  • Secessionists were attempting to build a modern, proslavery, antidemocratic state. In order to wage a war, the leaders of this fundamentally antidemocratic state needed popular support. Such support was difficult to gain and impossible to maintain. The Confederacy therefore suppressed dissent.55
  • By May of 1861, the Confederacy comprised fifteen states stretching over 900,000 square miles and containing 12 million people, including 4 million slaves, and 4 million white women who were disenfranchised. It rested on the foundational belief that a minority governs a majority. “The condition of slavery is with us nothing but a form of civil government for a class of people not fit to govern themselves,” said Jefferson Davis.
  • There would be those, after the war ended, who said that it had been fought over states’ rights or to preserve the Union or for a thousand other reasons and causes. Soldiers, North and South, knew better. “The fact that slavery is the sole undeniable cause of this infamous rebellion, that it is a war of, by, and for Slavery, is as plain as the noon-day sun,” a soldier writing for his Wisconsin regimental newspaper explained in 1862. “Any man who pretends to believe that this is not a war for the emancipation of the blacks,” a soldier writing for his Confederate brigade’s newspaper wrote that same year, “is either a fool or a liar.”
  • Lincoln would remain a man trapped in time, in the click of a shutter and by the trigger of a gun. In mourning him, in sepia and yellow, in black and white, beneath plates of glinting glass, Americans deferred a different grief, a vaster and more dire reckoning with centuries of suffering and loss, not captured by any camera, not settled by any amendment, the injuries wrought on the bodies of millions of men, women, and children, stolen, shackled, hunted, whipped, branded, raped, starved, and buried in unmarked graves.
  • No president consecrated their cemeteries or delivered their Gettysburg address; no committee of arrangements built monuments to their memory. With Lincoln’s death, it was as if millions of people had been crammed into his tomb, trapped in a vault that could not hold them.
  • People running for Congress didn’t have to meet property requirements; they didn’t have to have been born in the United States; and they couldn’t be subjected to religious tests. This same logic applied to citizenship, and for the same reason: the framers of the Constitution understood these sorts of requirements as forms of political oppression. The door to the United States was meant to be open.
  • Before the 1880s, no federal law restricted immigration. And, despite periods of fervent nativism, especially in the 1840s, the United States welcomed immigrants into citizenship, and valued them. After the Civil War, the U.S. Treasury estimated the worth of each immigrant as equal to an $800 contribution to the nation’s economy,
  • Nineteenth-century politicians and political theorists interpreted American citizenship within the context of an emerging set of ideas about human rights and the authority of the state, holding dear the conviction that a good government guarantees everyone eligible for citizenship the same set of political rights, equal and irrevocable.
  • The Civil War raised fundamental questions not only about the relationship between the states and the federal government but also about citizenship itself and about the very notion of a nation-state. What is a citizen? What powers can a state exert over its citizens? Is suffrage a right of citizenship, or a special right, available only to certain citizens? Are women citizens? And if women are citizens, why aren’t they voters? What about Chinese immigrants, pouring into the West? They were free. Were they, under American law, “free white persons” or “free persons of color” or some other sort of persons?
  • In 1866, Congress searched in vain for a well-documented definition of the word “citizen.” Over the next thirty years, that definition would become clear, and it would narrow.
  • In 1896, the U.S. passport office, in the Department of State, which had grown to thousands of clerks, began processing applications according to new “Rules Governing the Application of Passports,” which required evidence of identity, including a close physical description Lew Wa Ho worked at a dry goods shop in St. Louis; the photograph was included in his Immigration Service case file as evidence of employment. Age, _____ years; stature, _____ feet _____ inches (English measure); forehead, _____; eyes, _____; nose, _____; mouth, _____; chin, _____; hair, _____; complexion, _____; face, _____ as well as affidavits, signatures, witnesses, an oath of loyalty, and, by way of an application fee, one dollar.12
  • The Fourteenth Amendment, drafted by the Joint Committee on Reconstruction, marked the signal constitutional achievement of a century of debate and war, of suffering and struggle. It proposed a definition of citizenship guaranteeing its privileges and immunities, and insuring equal protection and due process to all citizens. “All persons born or naturalized in the United States, and subject to the jurisdiction thereof, are citizens of the United States and of the State wherein they reside,”
  • “No state shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States; nor shall any state deprive any person of life, liberty, or property, without due process of law; nor deny to any person within its jurisdiction the equal protection of the laws.”20
  • During the drafting of the amendment, the committee betrayed the national phalanx of women who for decades had fought for abolition and for black civil rights by proposing to insert, into the amendment’s second section, a provision that any state that denied the right to vote “to any of the male inhabitants of such state” would lose representation in Congress. “Male” had never before appeared in any part of the Constitution. “If that word ‘male’ be inserted,” Stanton warned, “it will take us a century at least to get it out.”21 She was not far wrong.
  • Women protested. “Can any one tell us why the great advocates of Human Equality . . . forget that when they were a weak party and needed all the womanly strength of the nation to help them on, they always united the words ‘without regard to sex, race, or color’?” asked Ohio-born reformer Frances Gage. Charles Sumner offered this answer: “We know how the Negro will vote, but are not so sure of the women.” How women would vote was impossible to know. Would black women vote the way black men voted? Would white women vote like black women? Republicans decided they’d rather not find out.
  • In the federal census of 1860, 24,282 out of 34,935 Chinese toiled in mines. Although some Chinese immigrants left mining—and some were forced out—many continued to mine well into the 1880s, often working in sites abandoned by other miners.
  • An 1867 government report noted that in Montana, “the diggings now fall into the hands of the Chinese, who patiently glean the fields abandoned by the whites.” Chinese workers began settling in Boise in 1865 and only five years later constituted a third of Idaho’s settlers and nearly 60 percent of its miners. In 1870, Chinese immigrants and their children made up nearly 9 percent of the population of California, and one-quarter of the state’s wage earners.
  • Their rights, under state constitutions and statutes, were markedly limited. Oregon’s 1857 constitution barred “Chinamen” from owning real estate, while California barred Chinese immigrants from testifying in court, a provision upheld in an 1854 state supreme court opinion, People v. Hall, which described the Chinese as “a race of people whom nature has marked as inferior, and who are incapable of progress or intellectual development beyond a certain point, as their history has shown.”29
  • And what about the voting rights of U.S.-born Chinese Americans? Much turned on the Fifteenth Amendment, proposed early in 1869. While the aim of the amendment was to guarantee African Americans the right to vote and hold office, its language inevitably raised the question of Chinese citizenship and suffrage. Opponents of the amendment found its entire premise scandalous. Garrett Davis, a Democratic senator from Kentucky, fumed, “I want no negro government; I want no Mongolian government; I want the government of the white man which our fathers incorporated.”33
  • Douglass spoke about what he called a “composite nation,” a strikingly original and generative idea, about a citizenry made better, and stronger, not in spite of its many elements, but because of them: “I want a home here not only for the negro, the mulatto and the Latin races; but I want the Asiatic to find a home here in the United States, and feel at home here, both for his sake and for ours.”36
  • Tilden won the nomination anyway and, in the general election, he won the popular vote against Hayes. Unwilling to accept the result of the election, Republicans disputed the returns in Florida, Louisiana, and South Carolina.
  • Eventually, the decision was thrown to an electoral commission that brokered a nefarious compromise: Democrats agreed to throw their support behind the man ever after known as Rutherfraud B. Hayes, so that he could become president, in exchange for a promise from Republicans to end the military occupation of the South. For a minor and petty political win over the Democratic Party, Republicans first committed electoral fraud and then, in brokering a compromise, abandoned a century-long fight for civil rights.
  • As soon as federal troops withdrew, white Democrats, calling themselves the “Redeemers,” took control of state governments of the South, and the era of black men’s enfranchisement came to a violent and terrible end. The Klan terrorized the countryside, burning homes and hunting, torturing, and killing people. (Between 1882 and 1930, murderers lynched more than three thousand black men and women.)
  • Black politicians elected to office were thrown out. And all-white legislatures began passing a new set of black codes, known as Jim Crow laws, that segregated blacks from whites in every conceivable public place, down to the last street corner. Tennessee passed the first Jim Crow law, in 1881, mandating the separation of blacks and whites in railroad cars. Georgia became the first state to demand separate seating for whites and blacks in streetcars, in 1891.
  • “Capital buys and sells to-day the very heart-beats of humanity,” she said. Democracy itself had been corrupted by it: “the speculators, the land-robbers, the pirates and gamblers of this Nation have knocked unceasingly at the doors of Congress, and Congress has in every case acceded to their demands.”44 The capitalists, she said, had subverted the will of the people.
  • In the late nineteenth century, a curious reversal took place. Electoral politics, the politics men engaged in, became domesticated, the office work of education and advertising—even voting moved indoors. Meanwhile, women’s political expression moved to the streets. And there, at marches, rallies, and parades, women deployed the tools of the nineteenth-century religious revival: the sermon, the appeal, the conversion.45
  • 1862 alone, in addition to the Homestead Act, the Republican Congress passed the Pacific Railway Act (chartering railroad companies to build the line from Omaha, Nebraska, to Sacramento, California) and the National Bank Act (to issue paper money to pay for it all). After the war, political power moved from the states to the federal government and as the political influence of the South waned, the importance of the West rose. Congress not only sent to the states amendments to the Constitution that defined citizenship and guaranteed voting rights but also passed landmark legislation involving the management of western land, the control of native populations, the growth and development of large corporations, and the construction of a national transportation infrastructure.
  • The independent farmer—the lingering ideal of the Jeffersonian yeoman—remained the watchword of the West, but in truth, the family farming for subsistence, free of government interference, was far less common than a federally subsidized, capitalist model of farming and cattle raising for a national or even an international market. The small family farm—Jefferson’s republican dream—was in many parts of the arid West an environmental impossibility.
  • Much of the property distributed under the terms of the Homestead Act, primarily in the Great Basin, was semi-arid, the kind of land on which few farmers could manage a productive farm with only 160 acres. Instead, Congress typically granted the best land to railroads, and allowed other, bigger interests to step in, buying up large swaths for agricultural business or stock raising and fencing it in, especially after the patenting of barbed wire in 1874.46
  • In 1885, an American economist tried to reckon the extraordinary transformation wrought by what was now 200,000 miles of railroad, more than in all of Europe. It was possible to move one ton of freight one mile for less than seven-tenths of one cent, “a sum so small,” he wrote, “that outside of China it would be difficult to find a coin of equivalent value to give a boy as a reward for carrying an ounce package across a street.”48
  • instability contributed to a broader set of political concerns that became Mary Lease’s obsession, concerns known as “the money question,” and traceable all the way back to Hamilton’s economic plan: Should the federal government control banking and industry?
  • No group of native-born Americans was more determined to end Chinese immigration than factory workers. The 1876 platform of the Workingmen’s Party of California declared that “to an American death is preferable to life on par with a Chinaman.”55 In 1882, spurred by the nativism of populists, Congress passed its first-ever immigration law, the Chinese Exclusion Act, which barred immigrants from China from entering the United States and, determining that the Fourteenth Amendment did not apply to people of Chinese ancestry, decreed that Chinese people already in the United States were permanent aliens who could never become citizens.
  • Populists, whether farmers or factory workers, for all their invocation of “the people,” tended to take a narrow view of citizenship. United in their opposition to the “money power,” members of the alliance, like members of the Knights of Labor, were also nearly united in their opposition to the political claims of Chinese immigrants, and of black people. The Farmers’ Alliance excluded African Americans, who formed their own association, the Colored Farmers’ Alliance. Nor did populists count Native Americans within the body of “the people.”
  • In 1887, Congress passed the Dawes Severalty Act, under whose terms the U.S. government offered native peoples a path to citizenship in a nation whose reach had extended across the lands of their ancestors. The Dawes Act granted to the federal government the authority to divide Indian lands into allotments and guaranteed U.S. citizenship to Indians who agreed to live on those allotments and renounce tribal membership.
  • In proposing the allotment plan, Massachusetts senator Henry Laurens Dawes argued that the time had come for Indians to choose between “extermination or civilization” and insisted that the law offered Americans the opportunity to “wipe out the disgrace of our past treatment” and instead lift Indians up “into citizenship and manhood.”58
  • But in truth the Dawes Act understood native peoples neither as citizens nor as “persons of color,” and led to nothing so much as forced assimilation and the continued takeover of native lands. In 1887 Indians held 138 million acres; by 1900, they held only half of that territory.
  • In 1877, railroad workers protesting wage cuts went on strike in cities across the country. President Hayes sent in federal troops to end the strikes, marking the first use of the power of the federal government to support business against labor. The strikes continued, with little success in improving working conditions. Between 1881 and 1894, there was, on average, one major railroad strike a week. Labor was, generally and literally, crushed: in a single year, of some 700,000 men working on the railroads, more than 20,000 were injured on the job and nearly 2,000 killed.59
  • In 1882, Roscoe Conkling represented the Southern Pacific Railroad Company’s challenge to a California tax rule. He told the U.S. Supreme Court, “I come now to say that the Southern Pacific Railroad Company and its creditors and stockholders are among the ‘persons’ protected by the Fourteenth Amendment.”
  • In offering an argument about the meaning and original intention of the word “person” in the Fourteenth Amendment, Conkling enjoyed a singular authority: he’d served on the Joint Committee on Reconstruction that had drafted the amendment and by 1882 was the lone member of that committee still living. With no one alive to contradict him, Conkling assured the court that the committee had specifically rejected the word “citizen” in favor of “person” in order to include corporations. (A
  • Much evidence suggests, however, that Conkling was lying. The record of the deliberations of the Joint Committee on Reconstruction does not support his argument regarding the committee’s original intentions, nor is it plausible that between 1866 and 1882, the framers of the Fourteenth Amendment had kept mysteriously hidden their secret intention to guarantee equal protection and due process to corporations. But
  • in 1886, when another railroad case, Santa Clara County v. Southern Pacific Railroad, reached the Supreme Court, the court’s official recorder implied that the court had accepted the doctrine that “corporations are persons within the meaning of the Fourteenth Amendment.”62 After that, the Fourteenth Amendment, written and ratified to guarantee freed slaves equal protection and due process of law, became the chief means by which corporations freed themselves from government regulation.
  • In 1937, Supreme Court Justice Hugo Black would observe, with grim dismay, that, over the course of fifty years, “only one half of one percent of the Fourteenth Amendment cases that came before the court had anything to do with African Americans or former slaves, while over half of the cases were about protecting the rights of corporations.”63 Rights guaranteed to the people were proffered, instead, to corporations.
  • He devised an economic plan that involved abolishing taxes on labor and instead imposing a single tax on land. Tocqueville had argued that democracy in America is made possible by economic equality; people with equal estates will eventually fight for, and win, equal political rights. George agreed. But, like Mary Lease, he thought that financial capitalism was destroying democracy by making economic equality impossible. He saw himself as defending “the Republicanism of Jefferson and the Democracy of Jackson.”72
  • Between 1889 and 1893, the mortgages on so many farms were foreclosed that 90 percent of farmland fell into the hands of bankers. The richest 1 percent of Americans owned 51 percent of the nation’s wealth, and the poorest 44 percent owned less than 2 percent.
  • For all its passionate embrace of political equality and human rights and its energetic championing of suffrage, the People’s Party rested on a deep and abiding commitment to exclude from full citizenship anyone from or descended from anyone from Africa or Asia.
  • Many of the reforms proposed by populists had the effect of diminishing the political power of blacks and immigrants. Chief among them was the Australian ballot, more usually known as the secret ballot, which, by serving as a de facto literacy test, disenfranchised both black men in the rural South and new immigrants in northern cities.
  • to deliberate at length over the secret ballot. Quickest to adopt the reform were the states of the former Confederacy, where the reform appealed to legislatures eager to find legal ways to keep black men from voting. In 1890, Mississippi held a constitutional
  • Both by law and by brute force, southern legislators, state by state, and poll workers, precinct by precinct, denied black men the right to vote. In Louisiana, black voter registration dropped from 130,000 in 1898 to 5,300 in 1908, and to 730 in 1910. In 1893, Arkansas Democrats celebrated their electoral advantage by singing,         The Australian ballot works like a charm         It makes them think and scratch         And when a Negro gets a ballot         He has certainly met his match.82
  • One Republican said, “I felt that Bryan was the first politician I had ever heard speak the truth and nothing but the truth,” even though in every case, when he read a transcript of the speech in the newspaper the next day, he “disagreed with almost all of it.”85
  • In 1894, Bryan tacked an income tax amendment to a tariff bill, which managed to pass. But the populist victory—a 2 percent federal income tax that applied only to Americans who earned more than $4,000—didn’t last long. The next year, in Pollock v. Farmers’ Loan and Trust Company, the Supreme Court ruled 5–4 that the tax was a direct tax, and therefore unconstitutional, one justice calling the tax the first campaign in “a war of the poor against the rich.”
  • POPULISM ENTERED AMERICAN politics at the end of the nineteenth century, and it never left. It pitted “the people,” meaning everyone but the rich, against corporations, which fought back in the courts by defining themselves as “persons”; and it pitted “the people,” meaning white people, against nonwhite people who were fighting for citizenship and whose ability to fight back in the courts was far more limited, since those fights require well-paid lawyers.
  • After 1859, and the Origin of Species, the rise of Darwinism contributed to the secularization of the university, as did the influence of the German educational model, in which universities were divided into disciplines and departments, each with a claim to secular, and especially scientific, expertise. These social sciences—political science, economics, sociology, and anthropology—used the methods of science, and especially of quantification, to study history, government, the economy, society, and culture.96
  • For Wilson’s generation of political scientists, the study of the state replaced the study of the people. The erection of the state became, in their view, the greatest achievement of civilization. The state also provided a bulwark against populism. In the first decades of the twentieth century, populism would yield to progressivism as urban reformers applied the new social sciences to the study of political problems, to be remedied by the intervention of the state.
  • The rise of populism and the social sciences reshaped the press, too. In the 1790s, the weekly partisan newspaper produced the two-party system. The penny press of the 1830s produced the popular politics of Jacksonian democracy. And in the 1880s and 1890s the spirit of populism and the empiricism of the social sciences drove American newspapers to a newfound obsession with facts.
  • The newspapers of the 1880s and 1890s were full of stunts and scandals and crusades, even as they defended their accuracy. “Facts, facts piled up to the point of dry certitude was what the American people really wanted,” wrote the reporter Ray Stannard Baker. Julius Chambers said that writing for the New York Herald involved “Facts; facts; nothing but facts. So many peas at so much a peck; so much molasses at so much a quart.”
  • Ballot reform, far from keeping money out of elections, had ushered more money into elections, along with a new political style: using piles of money to sell a candidate’s personality, borrowing from the methods of business by using mass advertising and education, slogans and billboards. McKinley ran a new-style campaign; Bryan ran an old-style campaign. Bryan barnstormed all over the country: he gave some six hundred speeches to five million people in twenty-seven states and traveled nearly twenty thousand miles.
  • But McKinley’s campaign coffers were fuller: Republicans spent $7 million; Democrats, $300,000. John D. Rockefeller alone provided the GOP with a quarter of a million dollars. McKinley’s campaign manager, Cleveland businessman Mark Hanna, was nearly buried in donations from fellow businessmen. He used that money to print 120 million pieces of campaign literature. He hired fourteen hundred speakers to stump for McKinley; dubbing the populists Popocrats, they agitated voters to a state of panic.108 As Mary Lease liked to say, money elected McKinley.
  • Turner, born in Wisconsin in 1861, was one of the first Americans to receive a doctorate in history. At the exposition, he delivered his remarks before the American Historical Association, an organization that had been founded in 1884 and incorporated by an act of Congress in 1889 “for the promotion of historical studies, the collection and preservation of historical manuscripts and for kindred purposes in the interest of American history and of history in America.”110
  • like journalists, historians borrowed from the emerging social sciences, relying on quantitative analysis to understand how change happens. Where George Bancroft, in his History of the United States, had looked for explanations in the hand of providence, Frederick Jackson Turner looked to the census.
  • The difference between Turner’s methods and Bancroft’s signaled a profound shift in the organization of knowledge, one that would have lasting consequences for the relationship between the people and the state and for civil society itself. Like Darwinism, the rise of the social sciences involved the abdication of other ways of knowing, and, indirectly, contributed to the rise of fundamentalism.
  • Across newly defined academic disciplines, scholars abandoned the idea of mystery—the idea that there are things known only by God—in favor of the claim to objectivity, a development sometimes called “the disenchantment of the world.”111 When universities grew more secular, religious instruction became confined to divinity schools and theological seminaries.
  • theologian at the University of Chicago’s divinity school defined modernism as “the use of scientific, historical, and social methods in understanding and applying evangelical Christianity to the needs of living persons.”112 Increasingly, this is exactly what evangelicals who eventually identified themselves as fundamentalists found objectionable.
  • Influenced by both Jefferson and Darwin, Turner saw the American frontier as the site of political evolution, beginning with the “savages” of a “wilderness,” proceeding to the arrival of European traders, and continuing through various forms of settlement, through the establishment of cities and factories, “the evolution of each into a higher stage,” and culminating in the final stage of civilization: capitalism and democracy.114
  • “American democracy is fundamentally the outcome of the experiences of the American people in dealing with the West,” by which he meant the experience of European immigrants to the United States in defeating its native peoples, taking possession of their homelands, and erecting there a civilization of their own. This, for Turner, was the story of America and the lesson of American history: evolution.116
  • Douglass, who, as the former U.S. ambassador to Haiti, had represented the nation of Haiti at the Haitian pavilion, was the only eminent African American with a role at the fair, whose program had been planned by a board of 208 commissioners, all white.117 There were, however, black people at the fair: on display. In the Hall of Agriculture, old men and women, former slaves, sold miniature bales of cotton, souvenirs, while, in a series of exhibits intended to display the Turnerian progress of humankind from savagery to civilization, black Americans were posed in a fake African village. “As if to shame the Negro,” Douglass wrote, they “exhibit the Negro as a repulsive savage.”118
  • “A ship at anchor, with halliards broken, sails mildewed, hull empty, her bottom covered with sea-weed and barnacles, meets no resistance,” Douglass said that day, turning the idea of a ship of state to the problem of Jim Crow. “But when she spread her canvas to the breeze and sets out on her voyage, turns prow to the open sea, the higher shall be her speed, the greater shall be her resistance. And so it is with the colored man.”
  • He paused to allow his listeners to conjure the scene, and its meaning, of a people struggling against the sea. “My dear young friends,” Douglass closed. “Accept the inspiration of hope. Imitate the example of the brave mariner, who, amid clouds and darkness, amid hail, rain and storm bolts, battles his way against all that the sea opposes to his progress and you will reach the goal of your noble ambition in safety.”124
  • The majority in Plessy v. Ferguson asserted that separation and equality were wholly separate ideas. “We consider the underlying fallacy of the plaintiff’s argument to consist in the assumption that the enforced separation of the two races stamps the colored race with a badge of inferiority. If this be so, it is not by reason of anything found in the act, but solely because the colored race chooses to put that construction upon it.” The resulting legal principle—that public accommodations could be “separate but equal”—would last for more than half a century.
  • The sole dissenter, John Marshall Harlan, objecting to the establishment of separate classes of citizens, insisted that the achievement of the United States had been the establishment, by amendment, of a Constitution that was blind to race. “Our constitution is color-blind, and neither knows nor tolerates classes among citizens,” Harlan wrote, and it is therefore a plain violation of the Constitution “for a state to regulate the enjoyment by citizens of their civil rights solely upon the basis of race.”
  • What all these laws had in common, Harlan argued, was that they were based on race. And yet a war had been fought and won to establish that laws in the United States could not be based on race; nor could citizenship be restricted by race. The court’s opinion in Plessy, Harlan warned, was so dreadfully in error as to constitutional principles that “the judgment this day rendered will, in time, prove to be quite as pernicious as the decision made by this tribunal in the Dred Scott Case.”128 This prediction proved true.
  • Four centuries had passed since continents, separated by oceans, had met again. A century had passed since Jefferson had declared all men equal. Three decades had passed since the Fourteenth Amendment had declared all persons born or naturalized in the United States to be citizens.
  • And now the Supreme Court ruled that those who would set aside equality in favor of separation had not violated the nation’s founding truths. In one of the most wrenching tragedies in American history—a chronicle not lacking for tragedy—the Confederacy had lost the war, but it had won the peace.
  • Lippmann started out as a socialist, when even mentioning the masses hinted at socialism; The Masses was the name of a socialist monthly, published in New York, and, especially after the Russian Revolution of 1917, which brought the Bolshevists to power (“bol’shinstvo” means “the majority”), “the masses” sounded decidedly Red.
  • But Lippmann soon began to write about the masses as “the bewildered herd,” unthinking and instinctual, and as dangerous as an impending stampede. For Lippmann, and for an entire generation of intellectuals, politicians, journalists, and bureaucrats who styled themselves Progressives—the term dates to 1910—the masses posed a threat to American democracy.
  • This change was wrought in the upheaval of the age. In the years following the realigning election of 1896, everything seemed, suddenly, bigger than before, more crowded, and more anonymous: looming and teeming. Even buildings were bigger: big office buildings, big factories, big mansions, big museums. Quantification became the only measure of value: how big, how much, how many.
  • To fight monopolies, protect the people, and conserve the land, the federal government grew bigger, too; dozens of new federal agencies were founded in this era,
  • “Mass” came to mean anything that involved a giant and possibly terrifying quantity, on a scale so great that it overwhelmed existing arrangements—including democracy. “Mass production” was coined in the 1890s, when factories got bigger and faster, when the number of people who worked in them skyrocketed, and when the men who owned them got staggeringly rich.
  • “Mass migration” dates to 1901, when nearly a million immigrants were entering the United States every year, “mass consumption” to 1905, “mass consciousness” to 1912. “Mass hysteria” had been defined by 1925 and “mass communication” by 1927, when the New York Times described the radio as “a system of mass communication with a mass audience.”3
  • And the masses themselves? They formed a mass audience for mass communication and had a tendency, psychologists believed, to mass hysteria—the political stampede—posing a political problem unanticipated by James Madison and Thomas Jefferson,
  • To meet that challenge in what came to be called the Progressive Era, activists, intellectuals, and politicians campaigned for and secured far-reaching reforms that included municipal, state, and federal legislation.
  • Their most powerful weapon was the journalistic exposé. Their biggest obstacle was the courts, which they attempted to hurdle by way of constitutional amendments. Out of these campaigns came the federal income tax, the Federal Reserve Bank, the direct election of U.S. senators, presidential primaries, minimum-wage and maximum-hour laws, women’s suffrage, and Prohibition.
  • And all of what Progressives accomplished in the management of mass democracy was vulnerable to the force that so worried the unrelenting Walter Lippmann: the malleability of public opinion, into mass delusion.
  • Progressives championed the same causes as Populists, and took their side in railing against big business, but while Populists generally wanted less government, Progressives wanted more, seeking solutions in reform legislation and in the establishment of bureaucracies, especially government agencies.6
  • Populists believed that the system was broken; Progressives believed that the government could fix it. Conservatives, who happened to dominate the Supreme Court, didn’t believe that there was anything to fix but believed that, if there was, the market would fix it. Notwithstanding conservatives’ influence in the judiciary, Progressivism spanned both parties.
  • Woodrow Wilson himself admitted, “When I sit down and compare my views with those of a Progressive Republican I can’t see what the difference is.”7
  • Much that was vital in Progressivism grew out of Protestantism, and especially out of a movement known as the Social Gospel, adopted by almost all theological liberals and by a large number of theological conservatives,
  • The Social Gospel movement was led by seminary professors—academic theologians who accepted the theory of evolution, seeing it as entirely consistent with the Bible and evidence of a divinely directed, purposeful universe; at the same time, they fiercely rejected the social Darwinism of writers like Herbert Spencer, the English natural scientist who coined the phrase “the survival of the fittest” and used the theory of evolution to defend all manner of force, violence, and oppression.
  • argued that fighting inequality produced by industrialism was an obligation of Christians: “We must make men believe that Christianity has a right to rule this kingdom of industry, as well as all the other kingdoms of this world.”9 Social Gospelers brought the zeal of abolitionism to the problem of industrialism.
  • In 1908, Methodists wrote a Social Creed and pledged to fight to end child labor and to promote a living wage. It was soon adopted by the thirty-three-member Federal Council of Churches, which proceeded to investigate a steelworkers’ strike in Bethlehem, ultimately taking the side of the strikers.10
  • Washington, in the debate over the annexation of the Philippines, Americans revisited unsettled questions about expansion that had rent the nation during the War with Mexico and unsettled questions about citizenship that remained the unfinished business of Reconstruction. The debate also marked the limits of the Progressive vision: both sides in this debate availed themselves, at one time or another, of the rhetoric of white supremacy. Eight million people of color in the Pacific and the Caribbean, from the Philippines to Puerto Rico, were now part of the United States, a nation that already, in practice, denied the right to vote to millions of its own people because of the color of their skin.
  • “You are undertaking to annex and make a component part of this Government islands inhabited by ten millions of the colored race, one-half or more of whom are barbarians of the lowest type,” said Ben Tillman, a one-eyed South Carolina Democrat who’d boasted of having killed black men and expressed his support for lynch mobs. “It is to the injection into the body politic of the United States of that vitiated blood, that debased and ignorant people, that we object.”
  • Tillman reminded Republicans that they had not so long ago freed slaves and then “forced on the white men of the South, at the point of the bayonet, the rule and domination of those ex-slaves. Why the difference? Why the change? Do you acknowledge that you were wrong in 1868?”14
  • The war that began in Cuba in 1898 and was declared over in the Philippines in 1902 dramatically worsened conditions for people of color in the United States, who faced, at home, a campaign of terrorism. Pro-war rhetoric, filled with racist venom, only further incited American racial hatreds. “If it is necessary, every Negro in the state will be lynched,” the governor of Mississippi pledged in 1903.
  • By one estimate, someone in the South was hanged or burned alive every four days. The court’s decision in Plessy v. Ferguson meant that there was no legal recourse to fight segregation, which grew more brutal with each passing year.
  • Nor was discrimination confined to the South. Cities and counties in the North and West passed racial zoning laws, banning blacks from the middle-class communities. In 1890, in Montana, blacks lived in all fifty-six counties in the state; by 1930, they’d been confined to just eleven. In Baltimore, blacks couldn’t buy houses on blocks where whites were a majority.
  • In 1917, in Buchanan v. Warley, the Supreme Court availed itself of the Fourteenth Amendment not to guarantee equal protection for blacks but to guarantee what the court had come to understand as the “liberty of contract”—the liberty of businesses to discriminate.16
  • A generation earlier, he’d have become a preacher, like his father, but instead he became a professor of political science.23 In the academy and later in the White House, he dedicated himself to the problem of adapting a Constitution written in the age of the cotton gin to the age of the automobile.
  • “We have grown more and more inclined from generation to generation to look to the President as the unifying force in our complex system, the leader both of his party and of the nation. To do so is not inconsistent with the actual provisions of the Constitution; it is only inconsistent with a very mechanical theory of its meaning and intention.” A president’s power, Wilson concluded, is virtually limitless: “His office is anything he has the sagacity and force to make it.”24
  • the U.S. Supreme Court overruled much Progressive labor legislation. The most important of these decisions came in 1905. In a 5–4 decision in Lochner v. New York, the U.S. Supreme Court voided a state law establishing that bakers could work no longer than ten hours a day, six days a week, on the ground that the law violated a business owner’s liberty of contract, the freedom to forge agreements with his workers, something the court’s majority said was protected under the Fourteenth Amendment.
  • The laissez-faire conservatism of the court was informed, in part, by social Darwinism, which suggested that the parties in disputes should be left to battle it out, and if one side had an advantage, even so great an advantage as a business owner has over its employees, then it should win.
  • In a dissenting opinion in Lochner, Oliver Wendell Holmes accused the court of violating the will of the people. “This case is decided upon an economic theory which a large part of the country does not entertain,” he began. The court, he said, had also wildly overreached its authority and had carried social Darwinism into the Constitution. “A Constitution is not intended to embody a particular economic theory,” Holmes wrote. “The Fourteenth Amendment does not enact Mr. Herbert Spencer’s Social Statics.”
  • Wilson pointed out that the Constitution, written before mass industrialization, couldn’t be expected to have anticipated it, and couldn’t solve the problems industrialization had created, unless the Constitution were treated like a living thing that, like an organism, evolved.
  • Critics further to the left argued that the courts had become an instrument of business interests. Unions, in fact, often failed to support labor reform legislation, partly because they expected it to be struck down by the courts as unconstitutional, and partly because they wanted unions to provide benefits to their members, which would be an argument for organizing.
  • conservatives insisted that the courts were right to protect the interests of business and that either market forces would find a way to care for sick, injured, and old workers, or (for social Darwinists) the weakest, who were not meant to thrive, would wither and die.
  • “No other social movement in modern economic development is so pregnant with benefit to the public,” wrote the editor of the Journal of the American Medical Association. “At present the United States has the unenviable distinction of being the only great industrial nation without compulsory health insurance,” the Yale economist Irving Fisher pointed out in 1916.36 It would maintain that unenviable distinction for a century.
  • In California, the legislature passed a constitutional amendment providing for universal health insurance. But when it was put on the ballot for ratification, a federation of insurance companies took out an ad in the San Francisco Chronicle warning that it “would spell social ruin in the United States.” Every voter in the state received in the mail a pamphlet with a picture of the kaiser and the words “Born in Germany. Do you want it in California?” The measure was defeated. Opponents called universal health insurance “UnAmerican, Unsafe, Uneconomic, Unscientific, Unfair and Unscrupulous.”
  • “Scientific management has no place for a bird that can sing and won’t sing,” answered Taylor. “We are not . . . dealing with horses nor singing birds,” Wilson told Taylor. “We are dealing with men who are a part of society and for whose benefit society is organized.
  • Jim Crow thrived because, after the end of Reconstruction in 1877, reformers who had earlier fought for the cause of civil rights abandoned it for the sake of forging a reunion between the states and the federal government and between the North and the South. This wasn’t Wilson’s doing; this was the work of his generation, the work of the generation that came before him, and the work of the generation that would follow him, an abdication of struggle, an abandonment of justice.
  • War steered the course of American politics like a gale-force wind. The specter of slaughter undercut Progressivism, suppressed socialism, and produced anticolonialism. And, by illustrating the enduring wickedness of humanity and appearing to fulfill prophecies of apocalypse as a punishment for the moral travesty of modernism, the war fueled fundamentalism.
  • Bryan’s difficulty was that he saw no difference between Darwinism and social Darwinism, but it was social Darwinism that he attacked, the brutality of a political philosophy that seemed to believe in nothing more than the survival of the fittest, or what Bryan called “the law of hate—the merciless law by which the strong crowd out and kill the weak.”77
  • Germany was the enemy, the same Germany whose model of education had secularized American colleges and universities, which were now teaching eugenics, sometimes known as the science of human betterment, calling for the elimination from the human race of people deemed unfit to reproduce on the basis of their intelligence, criminality, or background.
  • Nor was this academic research without consequence. Beginning in 1907, with Indiana, two-thirds of American states passed forced sterilization laws.
  • In 1916, Madison Grant, the president of the Museum of Natural History in New York, who had degrees from Yale and Columbia, published The Passing of the Great Race; Or, the Racial Basis of European History, a “hereditary history” of the human race, in which he identified northern Europeans (the “blue-eyed, fair-haired peoples of the north of Europe” that he called the “Nordic race”) as genetically superior to southern Europeans (the “dark-haired, dark-eyed” people he called “the Alpine race”) and lamented the presence of “swarms of Jews” and “half-breeds.” In the United States, Grant argued, the Alpine race was overwhelming the Nordic race, threatening the American republic, since “democracy is fatal to progress when two races of unequal value live side by side.”79
  • fundamentalists were, of course, making an intellectual argument, if one that not many academics wanted to hear. In 1917, William B. Riley, who, like J. Frank Norris, had trained at the Southern Baptist Theological Seminary, published a book called The Menace of Modernism, whose attack on evolution included a broader attack on the predominance in public debate of liberal faculty housed at secular universities—and the silencing of conservative opinion.
  • The horror of the war fueled the movement, convincing many evangelicals that the growing secularization of society was responsible for this grotesque parade of inhumanity: mass slaughter. “The new theology has led Germany into barbarism,” one fundamentalist argued in 1918, “and it will lead any nation into the same demoralization.”
  • “If my re-election as President depends upon my getting into war, I don’t want to be President,” Wilson said privately. “He kept us out of war” became his campaign slogan, and when Theodore Roosevelt called that an “ignoble shirking of responsibility,” Wilson countered, “I am an American, but I do not believe that any of us loves a blustering nationality.”
  • Wilson had in fact pledged not to make the world democratic, or even to support the establishment of democratic institutions everywhere, but instead to establish the conditions of stability in which democracy was possible.
  • nearly five million were called to serve. How were they to be persuaded of the war’s cause? In a speech to new recruits, Wilson’s new secretary of state, Robert Lansing, ventured an explanation. “Were every people on earth able to express their will, there would be no wars of aggression and, if there were no wars of aggression, then there would be no wars, and lasting peace would come to this earth,” Lansing said, stringing one conditional clause after another. “The only way that a people can express their will is through democratic institutions,” Lansing went on. “Therefore, when the world is made safe for democracy . . . universal peace will be an accomplished fact.”88
  • Wilson, the political scientist, tried to earn the support of the American people with an intricate theory of the relationship between democracy and peace. It didn’t work. To recast his war message and shore up popular support, he established a propaganda department,
  • Social scientists called the effect produced by wartime propaganda “herd psychology”; the philosopher John Dewey called it the “conscription of thought.”89
  • To suppress dissent, Congress passed a Sedition Act in 1918. Not since the Alien and Sedition Acts of 1798 had Congress so brazenly defied the First Amendment. Fewer than two dozen people had been arrested under the 1798 Sedition Act. During the First World War, the Justice Department charged more than two thousand Americans with sedition and convicted half of them. Appeals that went to the Supreme Court failed.
  • “If we want real peace,” Du Bois wrote, “we must extend the democratic ideal to the yellow, brown, and black peoples.” But after the United States entered the war, Creel called thirty-one black editors and publishers to a conference in Washington and warned them about “Negro subversion.”
  • Du Bois asked black men who could not vote in the United States to give their lives to make the world “safe for democracy” and asked black people to hold off on fighting against lynchings, whose numbers kept rising.91
  • Wilson signed a tax bill, raising taxes on incomes, doubling a tax on corporate earnings, eliminating an exemption for dividend income, and introducing an estate tax and a tax on excess profits. Rates for the wealthiest Americans rose from 2 percent to 77, but most people paid no tax at all (80 percent of the revenue was drawn from the income of the wealthiest 1 percent of American families).
  • Wars, as ever, expanded the powers of the state. It rearranged the relationship between the federal government and business, establishing new forms of cooperation, oversight, and regulation that amounted to erecting a welfare state for business owners.
  • As the war drew to a close, the reckoning began. American losses were almost trivial compared to the staggering losses in European nations. Against America’s 116,000 casualties, France lost 1.6 million lives, Britain 800,000, and Germany 1.8 million. Cities across Europe lay in ashes; America was untouched. Europe, composed of seventeen countries before the war, had splintered into twenty-six, all of them deeply in debt, and chiefly to Americans.
  • Before the war, Americans owed $3.7 billion to foreigners; after the war, foreigners owed $12.6 billion to Americans. Even the terrifying influenza epidemic of 1918, which took 21 million lives worldwide, claimed the lives of only 675,000 Americans. The war left European economies in ruins, America’s thriving. In the United States, steel production rose by a quarter between 1913 and 1920; everywhere else, it fell by a third.98 The Armistice came on November
  • Wilson left a lasting legacy: his rhetoric of self-determination contributed to a wave of popular protests in the Middle East and Asia, including a revolution in Egypt in 1919; made the nation-state the goal of stateless societies; and lies behind the emergence and force of anticolonial nationalism.100
  • Thirty black men were lynched in 1917, twice as many the next year, and in 1919, seventy-six, including ten veterans, some still wearing their uniforms, having fought, some people thought, the wrong war.101
  • IN 1922, when Walter Lippmann turned thirty-two, he wrote a book called Public Opinion, in which he concluded that in a modern democracy the masses, asked to make decisions about matters far removed from their direct knowledge, had been asked to do too much. “Decisions in a modern state tend to be made by the interaction, not of Congress and the executive, but of public opinion and the executive,” he’d once observed.108 Mass democracy can’t work, Lippmann argued, because the new tools of mass persuasion—especially mass advertising—meant that a tiny minority could very easily persuade the majority to believe whatever it wished them to believe.
  • The best hope for mass democracy might have seemed to be the scrupulously and unfailingly honest reporting of news, but this, Lippmann thought, was doomed to fall short, because of the gap between facts and truth.
  • Reporters chronicle events, offering facts, but “they cannot govern society by episodes, incidents, and eruptions,” he said.109 To govern, the people need truth, sense out of the whole, but people can’t read enough in the morning paper or hear enough on the evening news to turn facts into truth when they’re driven like dray horses all day.
Javier E

How China's Tencent Avoided an Antitrust Push, For Now. - The New York Times - 0 views

  • There’s no company in the world like Tencent. It’s a true monopoly on many levels. It wields the kind of influence in China that Facebook, Amazon, Apple and Google can only aspire to.
  • Tencent is a mega entertainment platform. It is the world’s largest online game company, owning stakes in Riot Games and Epic Games. It owns China’s biggest online video, music and online literature businesses, too.
  • Tencent is a venture capital investor. In 2020, it lagged only Sequoia Capital, the Silicon Valley investment firm, in terms of the number of unicorns — start-ups valued at over $1 billion — it has invested in, according to the Hurun Report, a Shanghai research firm.
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  • it has invested in more than 800 companies, including a 12 percent stake in Snap and 5 percent in Tesla. By comparison, GV, formerly Google Ventures and the most active corporate venture capital arm in the United States, has invested in more than 500 companies.
  • Most important, Tencent is a platform operator. It runs WeChat, a mobile messaging app with social media and financial services abilities.
  • WeChat needs other companies to keep its one billion users glued to the app. An operating system and an app store in its own right, WeChat allows users to run miniprograms created and run by other companie
  • Those users can make purchases using WeChat’s payment system. Tesla, Airbnb and Starbucks all have their own WeChat miniprograms. So do most of major Chinese websites — barring those that WeChat forbids.
  • Friendly companies build miniprograms for WeChat. Tencent invested in China’s ride-sharing and bike-sharing companies because their users pay frequently, and Tencent wanted them to use WeChat Pay.
  • No matter how decent or humble Tencent may act, it’s a giant conglomerate with $24 billion in profit last year and spends much of it on investment. It picks winners and losers, but the winners won’t always be the best out there, thus harming innovation and efficiency.
  • It limits user access to other products and services. Its WeChat app doesn’t allow users to share links for merchandise on Alibaba’s Taobao online marketplace or for short videos on Douyin, TikTok’s Chinese sister company.
  • Tencent doesn’t just court the industry. It has also long tried to get close to the government. Compared with the sometimes defiant Alibaba, Tencent has long publicly underscored its willingness to comply fully with rules and regulations.
  • In April, the company said it would spend $7.8 billion on green energy, education, village revitalization and other pet topics of President Xi Jinping. In the view of Hong Bo, an internet commentator, Tencent is acting for self-preservation.
Javier E

Opinion | Our Kids Are Living In a Different Digital World - The New York Times - 0 views

  • You may have seen the tins that contain 15 little white rectangles that look like the desiccant packs labeled “Do Not Eat.” Zyns are filled with nicotine and are meant to be placed under your lip like tobacco dip. No spitting is required, so nicotine pouches are even less visible than vaping. Zyns come in two strengths in the United States, three and six milligrams. A single six-milligram pouch is a dose so high that first-time users on TikTok have said it caused them to vomit or pass out.
  • We worry about bad actors bullying, luring or indoctrinating them online
  • I was stunned by the vast forces that are influencing teenagers. These forces operate largely unhampered by a regulatory system that seems to always be a step behind when it comes to how children can and are being harmed on social media.
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  • Parents need to know that when children go online, they are entering a world of influencers, many of whom are hoping to make money by pushing dangerous products. It’s a world that’s invisible to us
  • when we log on to our social media, we don’t see what they see. Thanks to algorithms and ad targeting, I see videos about the best lawn fertilizer and wrinkle laser masks, while Ian is being fed reviews of flavored vape pens and beautiful women livestreaming themselves gambling crypto and urging him to gamble, too.
  • Smartphones are taking our kids to a different world
  • Greyson Imm, an 18-year-old high school student in Prairie Village, Kan., said he was 17 when Zyn videos started appearing on his TikTok feed. The videos multiplied through the spring, when they were appearing almost daily. “Nobody had heard about Zyn until very early 2023,” he said. Now, a “lot of high schoolers have been using Zyn. It’s really taken off, at least in our community.”
  • all of this is, unfortunately, only part of what makes social media dangerous.
  • The tobacco conglomerate Philip Morris International acquired the Zyn maker Swedish Match in 2022 as part of a strategic push into smokeless products, a category it projects could help drive an expected $2 billion in U.S. revenue in 2024.
  • P.M.I. is also a company that has long denied it markets tobacco products to minors despite decades of research accusing it of just that. One 2022 study alone found its brands advertising near schools and playgrounds around the globe.
  • the ’90s, when magazines ran full-page Absolut Vodka ads in different colors, which my friends and I collected and taped up on our walls next to pictures of a young Leonardo DiCaprio — until our parents tore them down. This was advertising that appealed to me as a teenager but was also visible to my parents, and — crucially — to regulators, who could point to billboards near schools or flavored vodka ads in fashion magazines and say, this is wrong.
  • Even the most committed parent today doesn’t have the same visibility into what her children are seeing online, so it is worth explaining how products like Zyn end up in social feeds
  • influencers. They aren’t traditional pitch people. Think of them more like the coolest kids on the block. They establish a following thanks to their personality, experience or expertise. They share how they’re feeling, they share what they’re thinking about, they share stuff they l
  • With ruthless efficiency, social media can deliver unlimited amounts of the content that influencers create or inspire. That makes the combination of influencers and social-media algorithms perhaps the most powerful form of advertising ever invented.
  • Videos like his operate like a meme: It’s unintelligible to the uninitiated, it’s a hilarious inside joke to those who know, and it encourages the audience to spread the message
  • Enter Tucker Carlson. Mr. Carlson, the former Fox News megastar who recently started his own subscription streaming service, has become a big Zyn influencer. He’s mentioned his love of Zyn in enough podcasts and interviews to earn the nickname Tucker CarlZyn.
  • was Max VanderAarde. You can glimpse him in a video from the event wearing a Santa hat and toasting Mr. Carlson as they each pop Zyns in their mouths. “You can call me king of Zynbabwe, or Tucker CarlZyn’s cousin,” he says in a recent TikTok. “Probably, what, moved 30 mil cans last year?”
  • Freezer Tarps, Mr. VanderAarde’s TikTok account, appears to have been removed after I asked the company about it. Left up are the large number of TikToks by the likes of @lifeofaZyn, @Zynfluencer1 and @Zyntakeover; those hashtagged to #Zynbabwe, one of Freezer Tarps’s favorite terms, have amassed more than 67 million views. So it’s worth breaking down Mr. VanderAarde’s videos.
  • All of these videos would just be jokes (in poor taste) if they were seen by adults only. They aren’t. But we can’t know for sure how many children follow the Nelk Boys or Freezer Tarps — social-media companies generally don’t release granular age-related data to the public. Mr. VanderAarde, who responded to a few of my questions via LinkedIn, said that nearly 95 percent of his followers are over the age of 18.
  • They’re incentivized to increase their following and, in turn, often their bank accounts. Young people are particularly susceptible to this kind of promotion because their relationship with influencers is akin to the intimacy of a close friend.
  • The helicopter video has already been viewed more than one million times on YouTube, and iterations of it have circulated widely on TikTok.
  • YouTube said it eventually determined that four versions of the Carlson Zyn videos were not appropriate for viewers under age 18 under its community guidelines and restricted access to them by age
  • Mr. Carlson declined to comment on the record beyond his two-word statement. The Nelk Boys didn’t respond to requests for comment. Meta declined to comment on the record. TikTok said it does not allow content that promotes tobacco or its alternatives. The company said that it has over 40,000 trust and safety experts who work to keep the platform safe and that it prevented teenagers’ accounts from viewing over two million videos globally that show the consumption of tobacco products by adults. TikTok added that in the third quarter of 2023 it proactively removed 97 percent of videos that violated its alcohol, tobacco and drugs policy.
  • Greyson Imm, the high school student in Prairie Village, Kan., points to Mr. VanderAarde as having brought Zyn “more into the mainstream.” Mr. Imm believes his interest in independent comedy on TikTok perhaps made him a target for Mr. VanderAarde’s videos. “He would create all these funny phrases or things that would make it funny and joke about it and make it relevant to us.”
  • It wasn’t long before Mr. Imm noticed Zyn blowing up among his classmates — so much so that the student, now a senior at Shawnee Mission East High School, decided to write a piece in his school newspaper about it. He conducted an Instagram poll from the newspaper’s account and found that 23 percent of the students who responded used oral nicotine pouches during school.
  • “Upper-decky lip cushions, ferda!” Mr. VanderAarde coos in what was one of his popular TikTok videos, which had been liked more than 40,000 times. The singsong audio sounds like gibberish to most people, but it’s actually a call to action. “Lip cushion” is a nickname for a nicotine pouch, and “ferda” is slang for “the guys.”
  • “I have fun posting silly content that makes fun of pop culture,” Mr. VanderAarde said to me in our LinkedIn exchange.
  • I turned to Influencity, a software program that estimates the ages of social media users by analyzing profile photos and selfies in recent posts. Influencity estimated that roughly 10 percent of the Nelk Boys’ followers on YouTube are ages 13 to 17. That’s more than 800,000 children.
  • I’ve spent the past three years studying media manipulation and memes, and what I see in Freezer Tarps’s silly content is strategy. The use of Zyn slang seems like a way to turn interest in Zyn into a meme that can be monetized through merchandise and other business opportunities.
  • Such as? Freezer Tarps sells his own pouch product, Upperdeckys, which delivers caffeine instead of nicotine and is available in flavors including cotton candy and orange creamsicle. In addition to jockeying for sponsorship, Mr. Carlson may also be trying to establish himself with a younger, more male, more online audience as his new media company begins building its subscriber base
  • This is the kind of viral word-of-mouth marketing that looks like entertainment, functions like culture and can increase sales
  • What’s particularly galling about all of this is that we as a society already agreed that peddling nicotine to kids is not OK. It is illegal to sell nicotine products to anyone under the age of 21 in all 50 states
  • numerous studies have shown that the younger people are when they try nicotine for the first time, the more likely they will become addicted to it. Nearly 90 percent of adults who smoke daily started smoking before they turned 18.
  • Decades later — even after Juul showed the power of influencers to help addict yet another generation of children — the courts, tech companies and regulators still haven’t adequately grappled with the complexities of the influencer economy.
  • Facebook, Instagram and TikTok all have guidelines that prohibit tobacco ads and sponsored, endorsed or partnership-based content that promotes tobacco products. Holding them accountable for maintaining those standards is a bigger question.
  • We need a new definition of advertising that takes into account how the internet actually works. I’d go so far as to propose that the courts broaden the definition of advertising to include all influencer promotion. For a product as dangerous as nicotine, I’d put the bar to be considered an influencer as low as 1,000 followers on a social-media account, and maybe if a video from someone with less of a following goes viral under certain legal definitions, it would become influencer promotion.
  • Laws should require tech companies to share data on what young people are seeing on social media and to prevent any content promoting age-gated products from reaching children’s feeds
  • hose efforts must go hand in hand with social media companies putting real teeth behind their efforts to verify the ages of their users. Government agencies should enforce the rules already on the books to protect children from exposure to addictive products,
  • I refuse to believe there aren’t ways to write laws and regulations that can address these difficult questions over tech company liability and free speech, that there aren’t ways to hold platforms more accountable for advertising that might endanger kids. Let’s stop treating the internet like a monster we can’t control. We built it. We foisted it upon our children. We had better try to protect them from its potential harms as best we can.
Javier E

OpenAI Whistle-Blowers Describe Reckless and Secretive Culture - The New York Times - 0 views

  • A group of OpenAI insiders is blowing the whistle on what they say is a culture of recklessness and secrecy at the San Francisco artificial intelligence company, which is racing to build the most powerful A.I. systems ever created.
  • The group, which includes nine current and former OpenAI employees, has rallied in recent days around shared concerns that the company has not done enough to prevent its A.I. systems from becoming dangerous.
  • The members say OpenAI, which started as a nonprofit research lab and burst into public view with the 2022 release of ChatGPT, is putting a priority on profits and growth as it tries to build artificial general intelligence, or A.G.I., the industry term for a computer program capable of doing anything a human can.
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  • They also claim that OpenAI has used hardball tactics to prevent workers from voicing their concerns about the technology, including restrictive nondisparagement agreements that departing employees were asked to sign.
  • “OpenAI is really excited about building A.G.I., and they are recklessly racing to be the first there,” said Daniel Kokotajlo, a former researcher in OpenAI’s governance division and one of the group’s organizers.
  • Other members include William Saunders, a research engineer who left OpenAI in February, and three other former OpenAI employees: Carroll Wainwright, Jacob Hilton and Daniel Ziegler. Several current OpenAI employees endorsed the letter anonymously because they feared retaliation from the company,
  • At OpenAI, Mr. Kokotajlo saw that even though the company had safety protocols in place — including a joint effort with Microsoft known as the “deployment safety board,” which was supposed to review new models for major risks before they were publicly released — they rarely seemed to slow anything down.
  • So was the departure of Dr. Leike, who along with Dr. Sutskever had led OpenAI’s “superalignment” team, which focused on managing the risks of powerful A.I. models. In a series of public posts announcing his departure, Dr. Leike said he believed that “safety culture and processes have taken a back seat to shiny products.”
  • “When I signed up for OpenAI, I did not sign up for this attitude of ‘Let’s put things out into the world and see what happens and fix them afterward,’” Mr. Saunders said.
  • Mr. Kokotajlo, 31, joined OpenAI in 2022 as a governance researcher and was asked to forecast A.I. progress. He was not, to put it mildly, optimistic.In his previous job at an A.I. safety organization, he predicted that A.G.I. might arrive in 2050. But after seeing how quickly A.I. was improving, he shortened his timelines. Now he believes there is a 50 percent chance that A.G.I. will arrive by 2027 — in just three years.
  • He also believes that the probability that advanced A.I. will destroy or catastrophically harm humanity — a grim statistic often shortened to “p(doom)” in A.I. circles — is 70 percent.
  • Last month, two senior A.I. researchers — Ilya Sutskever and Jan Leike — left OpenAI under a cloud. Dr. Sutskever, who had been on OpenAI’s board and voted to fire Mr. Altman, had raised alarms about the potential risks of powerful A.I. systems. His departure was seen by some safety-minded employees as a setback.
  • Mr. Kokotajlo said, he became so worried that, last year, he told Mr. Altman that the company should “pivot to safety” and spend more time and resources guarding against A.I.’s risks rather than charging ahead to improve its models. He said that Mr. Altman had claimed to agree with him, but that nothing much changed.
  • In April, he quit. In an email to his team, he said he was leaving because he had “lost confidence that OpenAI will behave responsibly" as its systems approach human-level intelligence.
  • “The world isn’t ready, and we aren’t ready,” Mr. Kokotajlo wrote. “And I’m concerned we are rushing forward regardless and rationalizing our actions.”
  • On his way out, Mr. Kokotajlo refused to sign OpenAI’s standard paperwork for departing employees, which included a strict nondisparagement clause barring them from saying negative things about the company, or else risk having their vested equity taken away.
  • Many employees could lose out on millions of dollars if they refused to sign. Mr. Kokotajlo’s vested equity was worth roughly $1.7 million, he said, which amounted to the vast majority of his net worth, and he was prepared to forfeit all of it.
  • Mr. Altman said he was “genuinely embarrassed” not to have known about the agreements, and the company said it would remove nondisparagement clauses from its standard paperwork and release former employees from their agreements.)
  • In their open letter, Mr. Kokotajlo and the other former OpenAI employees call for an end to using nondisparagement and nondisclosure agreements at OpenAI and other A.I. companies.
  • “Broad confidentiality agreements block us from voicing our concerns, except to the very companies that may be failing to address these issues,”
  • They also call for A.I. companies to “support a culture of open criticism” and establish a reporting process for employees to anonymously raise safety-related concerns.
  • They have retained a pro bono lawyer, Lawrence Lessig, the prominent legal scholar and activist
  • Mr. Kokotajlo and his group are skeptical that self-regulation alone will be enough to prepare for a world with more powerful A.I. systems. So they are calling for lawmakers to regulate the industry, too.
  • “There needs to be some sort of democratically accountable, transparent governance structure in charge of this process," Mr. Kokotajlo said. “Instead of just a couple of different private companies racing with each other, and keeping it all secret.”
Javier E

The Influencer Is a Young Teenage Girl. The Audience Is 92% Adult Men. - WSJ - 0 views

  • Instagram makes it easy for strangers to find photos of children, and its algorithm is built to identify users’ interests and push similar content. Investigations by The Wall Street Journal and outside researchers have found that, upon recognizing that an account might be sexually interested in children, Instagram’s algorithm recommends child accounts for the user to follow, as well as sexual content related to both children and adults.
  • That algorithm has become the engine powering the growth of an insidious world in which young girls’ online popularity is perversely predicated on gaining large numbers of male followers. 
  • Instagram photos of young girls become a dark currency, swapped and discussed obsessively among men on encrypted messaging apps such as Telegram. The Journal reviewed dozens of conversations in which the men fetishized specific body parts and expressed pleasure in knowing that many parents of young influencers understand that hundreds, if not thousands, of pedophiles have found their children online.   
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  • One man, speaking about one of his favorite young influencers in a Telegram exchange captured by a child-safety activist, said that her mother knew “damn well” that many of her daughter’s followers were “pervy adult men.”
  • Meta looms over everything young influencers do on Instagram. It connects their accounts with strangers, and it can upend their star turns when it chooses. The company periodically shuts down accounts if it determines they have violated policies against child sexual exploitation or abuse. Some parents say their accounts have been shut down without such violations. 
  • Over the course of reporting this story, during which time the Journal inquired about the account the mom managed for her daughter, Meta shut down the account twice. The mom said she believed she hadn’t violated Meta’s policies. 
  • Meta’s guidance for content creators stresses the importance of engaging with followers to keep them and attract new ones. The hundreds of comments on any given post included some from other young fashion influencers, but also a large number of men leaving comments like “Gorgeous!” The mom generally liked or thanked them all, save for any that were expressly inappropriate. 
  • Meta spokesman Andy Stone said the company enables parents who run accounts for their children to control who is able to message them on Instagram or comment on their accounts. Meta’s guidance for creators also offers tips for building a safe online community, and the company has publicized a range of tools to help teens and parents achieve this.
  • Like many young girls, the daughter envied fashion influencers who made a living posting glamour content. When the mother agreed to help her daughter build her following and become an influencer, she set some rules. Her daughter wouldn’t be allowed to access the account or interact with anyone who sent messages. And they couldn’t post anything indicating exactly where they live. 
  • The mom stopped blocking so many users. Within a year of launching, the account had more than 100,000 followers. The daughter’s popularity earned her invitations to modeling events in big coastal cities where she met other young influencers. 
  • Social-media platforms have helped level the playing field for parents seeking an audience for their children’s talents. Instagram, in particular, is visually driven and easily navigable, which also makes it appealing for child-focused brands.
  • While Meta bans children under the age of 13 from independently opening social-media accounts, the company allows what it calls adult-run minor accounts, managed by parents. Often those accounts are pursuing influencer status, part of a burgeoning global influencer industry expected to be worth $480 billion by 2027, according to a recent Goldman Sachs report. 
  • Young influencers, reachable through direct messages, routinely solicit their followers for patronage, posting links to payment accounts and Amazon gift registries in their bios.
  • The Midwestern mom debated whether to charge for access to extra photos and videos via Instagram’s subscription feature. She said she has always rejected private offers to buy photos of her daughter, but she decided that offering subscriptions was different because it didn’t involve a one-on-one transaction.
  • The Journal asked Meta why it had at some points removed photos from the account. Weeks later, Meta disabled the account’s subscription feature, and then shut down the account without saying why. 
  • “There’s no personal connection,” she said. “You’re just finding a way to monetize from this fame that’s impersonal.”
  • The mom allowed the men to purchase subscriptions so long as they kept their distance and weren’t overtly inappropriate in messages and comments. “In hindsight, they’re probably the scariest ones of all,” she said. 
  • Stone, the Meta spokesman, said that the company will no longer allow accounts that primarily post child-focused content to offer subscriptions or receive gifts, and that the company is developing tools to enforce that.
  • he mom saw her daughter, though young, as capable of choosing to make money as an influencer and deciding when she felt uncomfortable. The mom saw her own role as providing the support needed for her daughter to do that.
  • The mom also discussed safety concerns with her now ex-husband, who has generally supported the influencer pursuit. In an interview, he characterized the untoward interest in his daughter as “the seedy underbelly” of the industry, and said he felt comfortable with her online presence so long as her mom posted appropriate content and remained vigilant about protecting her physical safety.
  • an anonymous person professing to be a child-safety activist sent her an email that contained screenshots and videos showing her daughter’s photos being traded on Telegram. Some of the users were painfully explicit about their sexual interest. Many of the photos were bikini or leotard photos from when the account first started.
  • Still, the mom realized she couldn’t stop men from trading the photos, which will likely continue to circulate even after her daughter becomes an adult. “Every little influencer with a thousand or more followers is on Telegram,” she said. “They just don’t know it.”
  • Early last year, Meta safety staffers began investigating the risks associated with adult-run accounts for children offering subscriptions, according to internal documents. The staffers reviewed a sample of subscribers to such accounts and determined that nearly all the subscribers demonstrated malicious behavior toward children.
  • The staffers found that the subscribers mostly liked or saved photos of children, child-sexualizing material and, in some cases, illicit underage-sex content. The users searched the platform using hashtags such as #sexualizegirls and #tweenmodel. 
  • The staffers found that some accounts with large numbers of followers sold additional content to subscribers who offered extra money on Instagram or other platforms, and that some engaged with subscribers in sexual discussions about their children. In every case, they concluded that the parents running those accounts knew that their subscribers were motivated by sexual gratification.
  • In the following months, the Journal began its own review of parent-run modeling accounts and found numerous instances where Meta wasn’t enforcing its own child-safety policies and community guidelines. 
  • The Journal asked Meta about several accounts that appeared to have violated platform rules in how they promoted photos of their children. The company deleted some of those accounts, as well as others, as it worked to address safety issues.
  • In 2022, Instagram started letting certain content creators offer paid-subscription services. At the time, the company allowed accounts featuring children to offer subscriptions if they were run or co-managed by parents.
  • The removal of the account made for a despondent week for the mom and daughter. The mother was incensed at Meta’s lack of explanation and the prospect that users had falsely reported inappropriate activity on the account. She was torn about what to do. When it was shut down, the account had roughly 80% male followers.
  • The account soon had more than 100,000 followers, about 92% of whom were male, according to the dashboard. Within months, Meta shut down that account as well. The company said the account had violated its policies related to child exploitation, but it didn’t specify how. 
  • Meta’s Stone said it doesn’t allow accounts it has previously shut down to resume the same activity on backup accounts. 
Javier E

The most expensive lottery ticket in the world | Felix Salmon - 0 views

  • No Exit, the new book from Gideon Lewis-Kraus, should be required reading for anybody who thinks it might be a good idea to found a startup in Silicon Valley. It shows just how miserable the startup founder’s life is
  • Silicon Valley is gripped by a mass delusion, compounded by a deep “fake it til you make it” attitude toward success. Why do so many people in Silicon Valley want to be founders? Because every founder they meet is always killing it, crushing it, having massive success, just about to close a huge round, etc etc
  • people tend to believe the evidence of their own eyes, and what they see is a combination of two things: the founders they know all seemingly doing great, and also a steady stream of headlines showing other founders cashing out for millions or even billions of dollars.
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  • No Exit makes it very clear that the life of a startup founder is a miserable one, and that engineers are invariably happier when they’re working for a big company.
  • Financially, starting up a company in Silicon Valley makes very little sense. You have a very high chance (indeed, a certainty) of having to scrape by on a very low income in a very expensive city. At a time of your life when you should be out enjoying life and meeting friends and generally having lots of fun, you will instead be unhappily tethered to your laptop at all times. In return for sacrificing a six-figure salary elsewhere and general enjoyment of life, you’re given a lottery ticket: you get a minuscule chance of making untold millions of dollars.
  • So where does it come from, this intense Silicon Valley desire to buy the most expensive lottery ticket in the world?
  • The Silicon Valley trade is also pretty close to being zero-sum. Even on a purely financial basis, if you add up all the profits from successful investments, they barely cover the losses on all the unsuccessful ones. A few big-name angels and VCs can do OK for themselves, but in aggregate the industry of investing in startups does not make money.
  • Essentially the way that the startup ecosystem works is by taking the valuable labor of thousands of hopeful founders, and converting it into large amounts of capital for a tiny number of successes
  • On its face, the winners, here, are the people with the big successful exits. But after reading No Exit, a different conclusion presents itself. The real winners are the happy and well-paid engineers, enjoying their lives and their youth while working for great companies like Google. In the world of startups, the only winning move is not to play.
  • Everything in American culture would lead one to think that it is easy to launch a new restaurant, hair salon, company, or fill in the blank. I wouldn’t go so far to say that those who do it have a false sense of entitlement – but there’s seemingly no sense of contentment in being a no. 2 or lower in a company.
  • most of the website or mobile app start-ups that you guys in the general media (I will lazily generalize like you all do and lump you all together) lazily or ignorantly refer to as “tech” or “silicon valley” are not founded by computer engineers. They are started by coders, which are a couple notches below computer engineers on the knowledge and experience scale. They are willing to forego a big steady paycheck because they are short on knowledge and experience, and are not usually “incredibly qualified engineers – in fact, they are mostly just qualified to work on mobile apps and economically unsustainable web start-ups. Their value to established companies that need to develop products that generate revenue and profits is questionable, at best.
  • I don’t know if you have ever worked for a very large multi-national company that compartmentalizes your job into little tasks so that your skills can be exploited for a few years, and then discarded when they are obsolete. Many big companies are poorly managed, and while they may offer stable employment in the short term, when the errors of their executives impose their costs on the company, the employees usually pay the price. And then what do they do? People who avoid working for large companies and seek the excitement of start-ups have a different value system than you and all those who would choose the illusion of job security.
Javier E

The Battle for DuPont - NYTimes.com - 0 views

  • DuPont is a pretty well-run company. Under the leadership of Ellen Kullman, a company veteran who became its chief executive in 2009, this once unwieldy conglomerate has undergone a great deal of change, with more still to come. It has cut some $2 billion in costs, eliminating a third of its management; announced the spinoff of its performance chemicals business; and “refreshed” its board with such corporate stalwarts as Edward Breen, who is best known for turning around Tyco International in the early 2000s. Since Kullman took over, the company has delivered 266 percent in total shareholder returns, easily outpacing the Standard & Poor’s 500-stock index. It is in the middle of a major restructuring designed to boost earnings growth.
  • Have we really gotten to the point where the activist now gets the benefit of the doubt, no matter how well run the company?
  • In the DuPont/Trian fight, the hedge fund is on record as saying that the company is not getting a return on its research-and-development spending. Yet R.& D. — science — is at the very heart of DuPont’s business model and always has been. And it can take years to turn a scientific advance into a successful product. A DuPont stripped of much of its R.& D. doesn’t just hurt the company; it hurts the country.
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  • Activist funds are now such a powerful force in the market that many companies — even good ones — have no choice but to offer them board seats.
  • “Activism has caused companies to cut R.& D., capital investment and, most significantly, employment,” he said. “It forces companies to lay off employees to meet quarterly earnings.”“It is,” he concluded, “a disaster for the country.”
Javier E

Wall Street's Dead End - NYTimes.com - 0 views

  • the glory days of publicly traded companies dominating the American business landscape may be over. The number of companies listed on the major domestic exchanges peaked in 1997 at more than 7,000, and it has been falling ever since. It’s now down to about 4,000 companies, and given its steep downward trend will surely continue to shrink.
  • the stock market is becoming little more than a place for speculators and algorithms to compete over who can trade his way to the most money.
  • What the market is not doing so well is its core public function: allocating capital efficiently.
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  • the companies in which people most want to invest, technology stars like Facebook and Twitter, are managing to avoid the public markets entirely by raising hundreds of millions or even billions of dollars privately. You and I can’t buy into these companies; only very select institutions and well-connected individuals can. And companies prefer it that way.
  • A private company’s stock isn’t affected by the unpredictable waves of the stock market as a whole. Its chief executive can concentrate on running the company rather than answering endless questions from investors, analysts and the press.
  • That burden comes largely from the Securities and Exchange Commission, which was created in the wake of the 1929 stock-market crash to protect small investors. But if the move to private markets continues, small investors aren’t going to need much protection any more: they’ll be able to invest in only a relative handful of companies anyway.
  • Only the biggest and oldest companies are happy being listed on public markets today. As a result, the stock market as a whole increasingly fails to reflect the vibrancy and heterogeneity of the broader economy. To invest in younger, smaller companies, you increasingly need to be a member of the ultra-rich elite.
  • At risk, then, is the shareholder democracy that America forged, slowly, over the past 50 years.
katyshannon

Apple Fights Order to Unlock San Bernardino Gunman's iPhone - The New York Times - 0 views

  • Last month, some of President Obama’s top intelligence advisers met in Silicon Valley with Apple’s chief, Timothy D. Cook, and other technology leaders in what seemed to be a public rapprochement in their long-running dispute over the encryption safeguards built into their devices.
  • But behind the scenes, relations were tense, as lawyers for the Obama administration and Apple held closely guarded discussions for over two months about one particularly urgent case: The F.B.I. wanted Apple to help “unlock” an iPhone used by one of the two attackers who killed 14 people in San Bernardino, Calif., in December, but Apple was resisting.
  • When the talks collapsed, a federal magistrate judge, at the Justice Department’s request, ordered Apple to bypass security functions on the phone.
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  • The order set off a furious public battle on Wednesday between the Obama administration and one of the world’s most valuable companies in a dispute with far-reaching legal implications.
  • This is not the first time a technology company has been ordered to effectively decrypt its own product. But industry experts say it is the most significant because of Apple’s global profile, the invasive steps it says are being demanded and the brutality of the San Bernardino attacks.
  • Law enforcement officials who support the F.B.I.’s position said that the impasse with Apple provided an ideal test case to move from an abstract debate over the balance between national security and privacy to a concrete one
  • The F.B.I. has been unable to get into the phone used by Syed Rizwan Farook, who was killed by the police along with his wife after they attacked Mr. Farook’s co-workers at a holiday gathering.
  • Magistrate Judge Sheri Pym of the Federal District Court for the District of Central California issued her order Tuesday afternoon, after the F.B.I. said it had been unable to get access to the data on its own and needed Apple’s technical assistance.
  • Mr. Cook, the chief executive at Apple, responded Wednesday morning with a blistering, 1,100-word letter to Apple customers, warning of the “chilling” breach of privacy posed by the government’s demands. He maintained that the order would effectively require it to create a “backdoor” to get around its own safeguards, and Apple vowed to appeal the ruling by next week.
  • Apple argues that the software the F.B.I. wants it to create does not exist. But technologists say the company can do it.
  • pple executives had hoped to resolve the impasse without having to rewrite their own encryption software. They were frustrated that the Justice Department had aired its demand in public, according to an industry executive with knowledge of the case, who spoke on the condition of anonymity about internal discussions.
  • The dispute could initiate legislation in Congress, with Republicans and Democrats alike criticizing Apple’s stance on Wednesday and calling for tougher decryption requirements.
  • His vote of confidence was significant because James Comey, the F.B.I. director, has at times been at odds with the White House over his aggressive advocacy of tougher decryption requirements on technology companies. While Mr. Obama’s national security team was sympathetic to Mr. Comey’s position, others at the White House viewed legislation as potentially perilous. Late last year, Mr. Obama refused to back any legislation requiring decryption, leaving a court fight likely.
  • The Justice Department and the F.B.I. have the White House’s “full support,” the spokesman, Josh Earnest, said on Wednesday.
  • Donald J. Trump, the Republican presidential contender, also attacked Apple on Fox News, asking, “Who do they think they are?”
  • But Apple had many defenders of its own among privacy and consumer advocates, who praised Mr. Cook for standing up to what they saw as government overreach.
  • Many of the company’s defenders argued that the types of government surveillance operations exposed in 2013 by Edward J. Snowden, the former National Security Agency contractor, have prompted technology companies to build tougher encryption safeguards in their products because of the privacy demands of their customers.
  • Privacy advocates and others said they worried that if the F.B.I. succeeded in getting access to the software overriding Apple’s encryption, it would create easy access for the government in many future investigations.
  • The Apple order is a flash point in a dispute that has been building for more than a decade. Advertisement Continue reading the main story Advertisement Continue reading the main story
  • The F.B.I. began sounding alarms years ago about technology that allowed people to exchange private messages protected by encryption so strong that government agents could not break it. In fall 2010, at the behest of Robert S. Mueller III, the F.B.I. director, the Obama administration began work on a law that required technology companies to provide unencrypted data to the government.
  • Lawyers at the F.B.I., Justice Department and Commerce Department drafted bills around the idea that technology companies in the Internet age should be bound by the same rules as phone companies, which were forced during the Clinton administration to build digital networks that government agents could tap.
  • The draft legislation would have covered app developers like WhatsApp and large companies like Google and Apple, according to current and former officials involved in the process.
  • There is no debate that, when armed with a court order, the government can get text messages and other data stored in plain text. Far less certain was whether the government could use a court order to force a company to write software or redesign its system to decode encrypted data. A federal law would make that authority clear, they said.
  • But the disclosures of government surveillance by Mr. Snowden changed the privacy debate, and the Obama administration decided not to move on the proposed legislation. It has not been revived.
  • The legal issues raised by the judge’s order are complicated. They involve statutory interpretation, rather than constitutional rights, and they could end up before the Supreme Court.
  • As Apple noted, the F.B.I., instead of asking Congress to pass legislation resolving the encryption fight, has proposed what appears to be a novel reading of the All Writs Act of 1789.
  • The law lets judges “issue all writs necessary or appropriate in aid of their respective jurisdictions and agreeable to the usages and principles of law.”
Javier E

The Antitrust Case Against Facebook, Google and Amazon - WSJ - 0 views

  • A growing number of critics think these tech giants need to be broken up or regulated as Standard Oil and AT&T once were.
  • antitrust regulators have a narrow test: Does their size leave consumers worse off?
  • By that standard, there isn’t a clear case for going after big tech—at least for now. They are driving down prices and rolling out new and often improved products and services every week.
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  • That may not be true in the future: If market dominance means fewer competitors and less innovation, consumers will be worse off than if those companies had been restrained. “The impact on innovation can be the most important competitive effect” in an antitrust case
  • Yet Google’s monopoly means some features and prices that competitors offered never made it in front of customers. Yelp Inc., which in 2004 began aggregating detailed information and user reviews of local services, such as restaurants and stores, claims Google altered its search results to hurt Yelp and help its own competing service. While Yelp survived, it has retreated from Europe, and several similar local search services have faded.
  • In a 2005 paper, Mr. Scherer found that Standard Oil was indeed a prolific generator of patents in its early years, but that slowed once it achieved dominance.
  • Standard Oil and AT&T used trusts, regulations and patents to keep out or co-opt competitors. They were respected but unloved.
  • By contrast, Google and Facebook give away their main product, while Amazon undercuts traditional retailers so aggressively it may be holding down inflation. None enjoys a government-sanctioned monopoly; all invest prodigiously in new products.
  • All are among the public’s most loved brands, according to polls by Morning Consult.
  • Yet there are also important parallels. The monopolies of old and of today were built on proprietary technology and physical networks that drove down costs while locking in customers, erecting formidable barriers to entry.
  • . If they’re imposing a cost, it may not be what customers pay but the products they never see.
  • When the federal government sued to break up Standard Oil, the Supreme Court acknowledged business acumen was important to the company’s early success, but concluded that was eventually supplanted by a single-minded determination to drive others out of the market.
  • Amazon hasn’t yet reached the same market share as Google or Facebook but its position is arguably even more impregnable because it enjoys both physical and technological barriers to entry. Its roughly 75 fulfillment centers and state-of-the art logistics (including robots) put it closer, in time and space, to customers than any other online retailer.
  • “Just like people joined Facebook because everyone else was on Facebook, the biggest competitive advantage AT&T had was that it was interconnected,”
  • Early in the 20th century, AT&T began buying up local competitors and refusing to connect independent exchanges to its long-distance lines, arousing antitrust complaints. By the 1920s, it was allowed to become a monopoly in exchange for universal service in the communities it served. By 1939, the company carried more than 90% of calls.
  • After AT&T was broken up into separate local and long-distance companies in 1982, telecommunication innovation blossomed, spreading to digital switching, fiber optics, cellphones—and the internet.
  • “There should be hundreds of Yelps. There’s not. No one is pitching investors to build a service that relies on discovery through Facebook or Google to grow, because venture capitalists think it’s a poor bet.”
  • At that same hearing Jeffrey Katz, then the chief executive of Nextag, responded, “That is like saying move to Panama if you don’t like the tax rate in America. It’s a fake choice because no one has Google’s scope or capabilities and consumers won’t, don’t, and in fact can’t jump.”
  • In 2013 the U.S. Federal Trade Commission concluded that even if Google had hurt competitors, it was to serve consumers better, and declined to bring a case. Since then, comparison sites such as Nextag have largely faded.
  • The different outcomes hinge in part on different approaches. European regulators are more likely to see a shrinking pool of competitors as inherently bad for both competition and consumers. American regulators are more open to the possibility that it could be natural and benign.
  • Internet platforms have high fixed and minimal operating costs, which favors consolidation into a few deep-pocketed competitors. And the more customers a platform has, the more useful it is to each individual customer—the “network effect.”
  • But a platform that confers monopoly in one market can be leveraged to dominate another. Facebook’s existing user base enabled it to become the world’s largest photo-sharing site through its purchase of Instagram in 2012 and the largest instant-messaging provider through its purchase of WhatsApp in 2014. It is also muscling into virtual reality through its acquisition of Oculus VR in 2014 and anonymous polling with its purchase of TBH last year.
  • Once a company like Google or Facebook has critical mass, “the venture capital looks elsewhere,” says Roger McNamee of Elevation Partners, a technology-focused private-equity firm. “There’s no point taking on someone with a three or four years head start.”
  • when Google launched its own comparison business, Google Shopping, those sites found themselves dropping deeper into Google’s search results. They accused Google of changing its algorithm to favor its own results. The company responded that its algorithm was designed to give customers the results they want.
  • As the dominant platform for third-party online sales, Amazon also has access to data it can use to decide what products to sell itself. In 2016 Capitol Forum, a news service that investigates anticompetitive behavior, reported that when a shopper views an Amazon private-label clothing brand, the accompanying list of items labeled “Customers Who Bought This Item Also Bought,” is also dominated by Amazon’s private-label brands. This, it says, restricts competing sellers’ access to a prime marketing space
  • In the face of such accusations, the probability of regulatory action—for now—looks low, largely because U.S. regulators have a relatively high bar to clear: Do consumers suffer?
  • “We think consumer welfare is the right standard,” Bruce Hoffman, the FTC’s acting director of the bureau of competition, recently told a panel on antitrust law and innovation. “We have tried other standards. They were dismal failures.”
  • What would remedies look like? Since Big Tech owes its network effects to data, one often-proposed fix is to give users ownership of their own data: the “social graph” of connections on Facebook, or their search history on Google and Amazon. They could then take it to a competitor.
  • A more drastic remedy would be to block acquisitions of companies that might one day be a competing platform. British regulators let Facebook buy Instagram in part because Instagram didn’t sell ads, which they argued made them different businesses. In fact, Facebook used Instagram to engage users longer and thus sell more ads
  • Ben Thompson, wrote in his technology newsletter Stratechery. Building a network is “extremely difficult, but, once built, nearly impregnable. The only possible antidote is another network that draws away the one scarce resource: attention.” Thus, maintaining competition on the internet requires keeping “social networks in separate competitive companies.”
  • How sound are these premises? Google’s and Facebook’s access to that data and network effects might seem like an impregnable barrier, but the same appeared to be true of America Online’s membership, Yahoo ’s search engine and Apple’s iTunes store, note two economists, David Evans and Richard Schmalensee, in a recent paper. All saw their dominance recede in the face of disruptive competition.
  • It’s possible Microsoft might have become the dominant company in search and mobile without the scrutiny the federal antitrust case brought. Throughout history, entrepreneurs have often needed the government’s help to dislodge a monopolist—and may one day need it again.
Javier E

Nazis Killed Her Father. Then She Fell in Love With One. - The New York Times - 0 views

  • Peter Harf, who joined the company in 1981 and became chairman this year, and whose own father was a Nazi, said he never really bought the idea that the organization had nothing to hide.“I knew the stories they told,” he said. “It didn’t smell right.”
  • 12, as JAB was acquiring high-profile coffee brands and drawing global attention, Mr. Harf pressed the family to open its archives to an independent scholar. By 2016, Paul Erker, an economic historian at the University of Munich, took on the task.
  • Only now, 74 years after World War II, are the family and the company grappling with their dark and complicated history.
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  • Its employees — there are 180,000 around the world — have reported that customers accuse them of “working for Nazis
  • Mr. Harf noted that he lived in three places — New York, London and Milan — where nationalism and ethnic division were on the rise. For most of his long career, he said, he considered shareholder capitalism to be value neutral. No longer. In the age of Trump, Brexit and Matteo Salvini, he said, businesses can no longer pretend that they are operating in a “value-free space.”
  • “This is once again a time when everybody needs to take a stance,” Mr. Harf said. “I’m very scared of what’s happening.”
  • the men gave the company a makeover in keeping with Nazi principles. By the time Hitler took over, Benckiser already housed a Nationalist Socialist Company Organization — a worker council that sought to uphold Nazi ideology. It later became a “model NS plant.”
  • “Reimann Sr. and Reimann Jr. were not just opportunistic followers of the regime,” Mr. Harf said. “They were fully signed up to the Nazi project.”
  • In 1933, it employed 181 people. As an important supplier to the food industry, Benckiser benefited from the Nazi system, more than tripling sales over the next decade. Mr. Reimann Sr. served as president of the regional Chamber of Industry and Commerce, which helped orchestrate the Aryanization, expropriation and expulsion of Jewish businesses
  • starting in late 1940, the Reimanns routinely took advantage of forced labor: men and women taken from their homes in Nazi-occupied territories, as well as prisoners of war, who were allocated by the Nazis to farms and industrial companies across Germany.
  • It was around this time that Emilie Landecker started working in the accounting department as a clerk
  • According to Mr. Harf, Benckiser’s use of forced laborers grew so fast that she would surely have been aware of the abuses.
  • By 1943, 175 people, or a third of the total work force, were forced laborers, most of them from France and Eastern Europe. Benckiser operated two labor camps, one of them overseen by a brutal foreman, Paul Werneburg, who had been with the company since 1910. On his watch, female workers were forced to stand at attention naked outside their barracks, and those who refused risked sexual abuse. Workers were kicked and beaten, among them a Ukrainian woman who also cleaned in the Reimanns’ private villa.
  • During a bomb raid on Jan. 7, 1945, Werneburg threw dozens of workers out of a camp bomb shelter. Thirty were injured, and one died. As word of Werneburg’s brutality spread, even the local Nazi office in charge of allocating forced laborers reprimanded the Reimanns for mistreating their workers.
  • Ms. Landecker would have witnessed it all, said her son, Wolfgang Reimann, in an email. “She lived through the horror show happening in our own company,” he said. “She probably sat in the very bunker when Werneburg threw out the workers.”
  • Mr. Reimann Jr. wrote a letter to the commanding officer on Sept. 22, dismissing allegations that he had been an “early and enthusiastic Nazi” as mere “denunciations” — and insisting that he was in fact a victim of the Nazis.
  • It worked. While the French initially barred Mr. Reimann Jr. from continuing his business activities, American officials overturned the judgment, classifying him as a “follower” of Nazism, rather than an active Nazi himself.
  • In 1947, the wealth of the Reimann family totaled 686,000 Reichsmark, or approximately $2.4 million in today’s money. Over the decades, the fortune grew in step with Benckiser and its successor companies, and today the family’s worth is estimated at €33 billion. On one recent list of the wealthiest families in Germany, the Reimanns ranked second.
  • Ms. Landecker was at work at Benckiser when the Gestapo came for her father.It was April 24, 1942
  • A few weeks later, one last letter arrived from Mr. Landecker, but only the envelope has survived. It shows that he was interned in block III 416/2 in Izbica, a ghetto serving as a transfer point for the deportation of Jews to the Belzec and Sobibor death camps in Nazi-occupied Poland.
  • Mr. Landecker did two things that would prove prescient. He made sure his children were baptized Catholic, like his late wife. And he officially transferred to them his main possessions, including the family apartment, so that they could not be expropriated.
  • “We fought for five years only to have an age like this,” he wrote, referring to World War I. “I hope you, my dear children, remain well-behaved and good, and keep loving me, even if you suffer because of me.”
  • he had a brother and sister-in-law. “Aunt Pauline has written from America,” he wrote that December. “She is trying for us, maybe things will work out.” But there wasn’t enough money. Mr. Landecker was not allowed to work, which meant that Emilie, still a teenager, became the family’s only earner.
  • he wrote his last letter to Bavaria.“My dear Gerdele,” he wrote. “As you can see, I’m still here, but not for long. Today I learned that my departure is on the 24th of the month — in two days. So this is the last letter that you receive from me from here or perhaps ever. We don’t know what is waiting for us.”
  • “You won’t be able to marry here in Germany,” he continued. “Learn languages!! You have your future ahead of you — don’t waste it.”
  • No one knows when exactly their love affair started. But in 1951, their first child was born
  • Two more followed. Twice a week, every Sunday and Wednesday, Mr. Reimann Jr. would leave his wife and visit Ms. Landecker.
  • years later, she admitted in a letter to Mr. Reimann Jr. that she always missed not being his wife — and not having a regular family
  • Ms. Landecker was a quiet woman. She did not speak much. But her children say that despite everything, she loved their father. “I never understood why,” said Wolfgang Reimann. “He was not very lovable from my perspective.”
  • “My mother never said anything,” Wolfgang Reimann said. “For the longest time, I believed it was her personality.” But he has changed his mind. “If I had to live with the love of my life, as my mother did, and this person was also responsible for the terrible things that happened during the war, I would not have spoken much, either, I guess,
  • the Reimanns channeled much of their wealth into JAB. In recent years the holding company has spent billions to become a rival to the likes of Starbucks and Nestlé by buying chains including Panera Bread, Krispy Kreme and Pret A Manger. Last year, it also helped Keurig Green Mountain buy Dr Pepper Snapple for nearly $19 billion. JAB also controls the cosmetics giant Coty, the owner of Calvin Klein fragrances
  • “When I heard and read of the atrocities committed at Benckiser, sanctioned by my grandfather, I felt like throwing up,” said Martin Reimann, 30, who is a grandchild to Ms. Landecker and Mr. Reimann Jr. “I cannot claim that I was very interested in politics before. I was just living my life. But after what happened, I changed my mind. I have to do something. In our family council, the younger generation created a little bit of a rebellion.”
  • By renaming its foundation after Alfred Landecker, the Reimann family is bringing back one name from the millions killed by the Nazis. But it is also explicitly linking the memory of crimes past to today’s fight to preserve the values of liberal democracy.
  • “What we can learn from history and how we can learn from history is at the core of this foundation,”
  • “This is not just about researching and remembering the past,” he added. “It’s about stabilizing and maintaining democracy today.”
  • Mr. Harf, JAB’s chairman, agrees. He said he had recently read “The Order of the Day,” a historic novella by Éric Vuillard set in the years before World War II. One scene takes place in February 1933, when Hitler and the president of the Reichstag encourage 24 German industrialists to donate to the Nazi party. The businessmen — representing companies that are still prominent German corporate names, like Siemens, Bayer and Allianz — duly open their wallets.
  • Mr. Harf said it made him think that not enough voices in business were speaking up against the re-emergence of nationalism and populism in Europe and the United States.
  • Every time business leaders make decisions, he said, they should ask, “What does this mean for our children? What does it mean for the future?”
  • “In history, businesses have enabled populists,” he added. “We mustn’t make the same mistake today.” Then he quoted the Holocaust survivor Simon Wiesenthal: “For evil to flourish, it only requires good men to do nothing.”
  • He added, “As the successors and descendants of people who committed horrendous acts, it is vital that our generation accepts what has happened, that we do whatever we can to bring tolerance and equality to the communities in which we live
andrespardo

US lets corporations delay paying environmental fines amid pandemic | Environment | The... - 0 views

  • US lets corporations delay paying environmental fines amid pandemic
  • Ten corporations that agreed to a total of $56m in civil penalties for allegedly breaking environmental laws are not being required to make payments under a pause granted by the US government during the Covid-19 pandemic.
  • They signed settlements with the government agreeing to pay fines without admitting liability but the justice department last month advised most of the companies of extensions in letters which were obtained by the government watchdog group Accountable.US via public records requests.
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  • Denver-based oil and gas company K P Kauffman allegedly violated air pollution laws, emitting volatile organic compounds that form smog in the Denver-Julesburg Basin, an area that wasn’t meeting smog standards. The company settled and agreed to pay $1m in eight installments over four years, but it has not been required to pay its second installment because of the freeze. The company did not respond to requests for comment.
  • Chris Saeger, director of strategic initiatives at Accountable.US, said: “This is exactly the time to make sure support is flowing to the federal, state and local governments that need a hand with responding to the coronavirus crisis and with the environmental problems that these special interests have caused.”
  • The companies will not be required to pay penalties before 1 June, although they have the option to do so and at least two companies told the Guardian they made payments despite the extension. The EPA would not respond to inquiries about its policy and or say which companies paid penalties.
  • One company, Virginia power provider Dominion Energy, settled and agreed to pay $1.4m for allegedly releasing 27.5m gallons of water from a coal ash impoundment that seeped into groundwater along the shore of the James River. Coal ash contains dangerous pollutants, including mercury, cadmium and arsenic, which can cause widespread environmental damage. The company said it plans to pay the settlement penalty once it is finalized.
  • Another alleged violator, one of the world’s largest steel companies, ArcelorMittal, decided to pay the $5m penalty it agreed to for air quality issues at steel plants in East Chicago, Indiana; Burns Harbor, Indiana; and Cleveland, Ohio, according to a spokesman.
  • BP was accused of emitting too much particle pollution, which is linked to asthma and heart attacks. The justice department’s assistant attorney general Brian Benczkowski represented BP in the past. BP employees have given $85,000 to Trump campaign groups.
Javier E

Will China overtake the U.S. on AI? Probably not. Here's why. - The Washington Post - 0 views

  • Chinese authorities have been so proactive about regulating some uses of AI, especially those that allow the general public to create their own content, that compliance has become a major hurdle for the country’s companies.
  • As the use of AI explodes, regulators in Washington and around the world are trying to figure out how to manage potential threats to privacy, employment, intellectual property and even human existence itself.
  • But there are also concerns that putting any guardrails on the technology in the United States would surrender leadership in the sector to Chinese companies.
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  • Senate Majority Leader Charles E. Schumer (D-N.Y.) last month urged Congress to adopt “comprehensive” regulations on the AI industry.
  • Restrictions on access to the most advanced chips, which are needed to run AI models, have added to these difficulties.
  • n a recent study, Ding found that most of the large language models developed in China were nearly two years behind those developed in the U.S., a gap that would be a challenge to close — even if American firms had to adjust to regulation.
  • This gap also makes it difficult for Chinese firms to attract the world’s top engineering talent. Many would prefer to work at firms that have the resources and flexibility to experiment on frontier research areas.
  • Rather than focusing on AI technology that lets the general public create unique content like the chatbots and image generators, Chinese companies have instead focused on technologies with clear commercial uses, like surveillance tech.
  • Recent research identified 17 large language models in China that relied on Nvidia chips, and just three models that used Chinese-made chips.
  • No Chinese tech company has yet been able to release a large language model on the scale of OpenAI’s ChatGPT to the general public, in which the company has asked the public to play with and test a generative AI model, said Ding, the professor at George Washington University.
  • Despite the obstacles, Chinese AI companies have made major advances in some types of AI technologies, including facial recognition, gait recognition, and artificial and virtual reality.
  • These technologies have also fueled the development of China’s vast surveillance industry, giving Chinese tech giants an edge that they market around the world, such as Huawei’s contracts for smart city surveillance from Belgrade, Serbia, to Nairobi.
  • Companies developing AI in China need to comply with specific laws on intellectual property rights, personal information protection, recommendation algorithms and synthetic content, also called deep fakes. In April, regulators also released a draft set of rules on generative AI, the technology behind image generator Stable Diffusion and chatbots such as OpenAI’s ChatGPT and Google’s Bard.
  • They also need to ensure AI generated content complies with Beijing’s strict censorship regime. Chinese tech companies such as Baidu have become adept at filtering content that contravenes these rules. But it has hampered their ability to test the limits of what AI can do.
  • While Beijing pushes to make comparable chips at home, Chinese AI companies have to source their chips any way they can — including from a black market that has sprung up in Shenzhen, where, according to Reuters, the most advanced Nvidia chips sell for nearly $20,000, more than twice what they go for elsewhere.
  • “That level of freedom has not been allowed in China, in part because the Chinese government is very worried about people creating politically sensitive content,” Ding said.
  • Although Beijing’s regulations have created major burdens for Chinese AI companies, analysts say that they contain several key principles that Washington can learn from — like protecting personal information, labeling AI-generated content and alerting the government if an AI develops dangerous capabilities.
  • AI regulation in the United States could easily fall short of Beijing’s heavy-handed approach while still preventing discrimination, protecting people’s rights and adhering to existing laws, said Johanna Costigan, a research associate at the Asia Society Policy Institute.
  • “There can be alignment between regulation and innovation,” Costigan said. “But it’s a question of rising to the occasion of what this moment represents — do we care enough to protect people who are using this technology? Because people are using it whether the government regulates it or not.”
Javier E

Cleaning Up ChatGPT's Language Takes Heavy Toll on Human Workers - WSJ - 0 views

  • ChatGPT is built atop a so-called large language model—powerful software trained on swaths of text scraped from across the internet to learn the patterns of human language. The vast data supercharges its capabilities, allowing it to act like an autocompletion engine on steroids. The training also creates a hazard. Given the right prompts, a large language model can generate reams of toxic content inspired by the darkest parts of the internet.
  • ChatGPT’s parent, AI research company OpenAI, has been grappling with these issues for years. Even before it created ChatGPT, it hired workers in Kenya to review and categorize thousands of graphic text passages obtained online and generated by AI itself. Many of the passages contained descriptions of violence, harassment, self-harm, rape, child sexual abuse and bestiality, documents reviewed by The Wall Street Journal show.
  • The company used the categorized passages to build an AI safety filter that it would ultimately deploy to constrain ChatGPT from exposing its tens of millions of users to similar content.
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  • “My experience in those four months was the worst experience I’ve ever had in working in a company,” Alex Kairu, one of the Kenya workers, said in an interview.
  • OpenAI marshaled a sprawling global pipeline of specialized human labor for over two years to enable its most cutting-edge AI technologies to exist, the documents show
  • “It’s something that needs to get done,” Sears said. “It’s just so unbelievably ugly.”
  • eviewing toxic content goes hand-in-hand with the less objectionable work to make systems like ChatGPT usable.
  • The work done for OpenAI is even more vital to the product because it is seeking to prevent the company’s own software from pumping out unacceptable content, AI experts say.
  • Sears said CloudFactory determined there was no way to do the work without harming its workers and decided not to accept such projects.
  • companies could soon spend hundreds of millions of dollars a year to provide AI systems with human feedback. Others estimate that companies are already investing between millions and tens of millions of dollars on it annually. OpenAI said it hired more than 1,000 workers for this purpose.
  • Another layer of human input asks workers to rate different answers from a chatbot to the same question for which is least problematic or most factually accurate. In response to a question asking how to build a homemade bomb, for example, OpenAI instructs workers to upvote the answer that declines to respond, according to OpenAI research. The chatbot learns to internalize the behavior through multiple rounds of feedback. 
  • A spokeswoman for Sama, the San Francisco-based outsourcing company that hired the Kenyan workers, said the work with OpenAI began in November 2021. She said the firm terminated the contract in March 2022 when Sama’s leadership became aware of concerns surrounding the nature of the project and has since exited content moderation completely.
  • OpenAI also hires outside experts to provoke its model to produce harmful content, a practice called “red-teaming” that helps the company find other gaps in its system.
  • At first, the texts were no more than two sentences. Over time, they grew to as much as five or six paragraphs. A few weeks in, Mathenge and Bill Mulinya, another team leader, began to notice the strain on their teams. Workers began taking sick and family leaves with increasing frequency, they said.
  • The tasks that the Kenya-based workers performed to produce the final safety check on ChatGPT’s outputs were yet a fourth layer of human input. It was often psychologically taxing. Several of the Kenya workers said they have grappled with mental illness and that their relationships and families have suffered. Some struggle to continue to work.
  • On July 11, some of the OpenAI workers lodged a petition with the Kenyan parliament urging new legislation to protect AI workers and content moderators. They also called for Kenya’s existing laws to be amended to recognize that being exposed to harmful content is an occupational hazard
  • Mercy Mutemi, a lawyer and managing partner at Nzili & Sumbi Advocates who is representing the workers, said despite their critical contributions, OpenAI and Sama exploited their poverty as well as the gaps in Kenya’s legal framework. The workers on the project were paid on average between $1.46 and $3.74 an hour, according to a Sama spokeswoman.
  • The Sama spokeswoman said the workers engaged in the OpenAI project volunteered to take on the work and were paid according to an internationally recognized methodology for determining a living wage. The contract stated that the fee was meant to cover others not directly involved in the work, including project managers and psychological counselors.
  • Kenya has become a hub for many tech companies seeking content moderation and AI workers because of its high levels of education and English literacy and the low wages associated with deep poverty.
  • Some Kenya-based workers are suing Meta’s Facebook after nearly 200 workers say they were traumatized by work requiring them to review videos and images of rapes, beheadings and suicides.
  • A Kenyan court ruled in June that Meta was legally responsible for the treatment of its contract workers, setting the stage for a shift in the ground rules that tech companies including AI firms will need to abide by to outsource projects to workers in the future.
  • OpenAI signed a one-year contract with Sama to start work in November 2021. At the time, mid-pandemic, many workers viewed having any work as a miracle, said Richard Mathenge, a team leader on the OpenAI project for Sama and a cosigner of the petition.
  • OpenAI researchers would review the text passages and send them to Sama in batches for the workers to label one by one. That text came from a mix of sources, according to an OpenAI research paper: public data sets of toxic content compiled and shared by academics, posts scraped from social media and internet forums such as Reddit and content generated by prompting an AI model to produce harmful outputs. 
  • The generated outputs were necessary, the paper said, to have enough examples of the kind of graphic violence that its AI systems needed to avoid. In one case, OpenAI researchers asked the model to produce an online forum post of a teenage girl whose friend had enacted self-harm, the paper said.
  • OpenAI asked the workers to parse text-based sexual content into four categories of severity, documents show. The worst was descriptions of child sexual-abuse material, or C4. The C3 category included incest, bestiality, rape, sexual trafficking and sexual slavery—sexual content that could be illegal if performed in real life.
  • Jason Kwon, general counsel at OpenAI, said in an interview that such work was really valuable and important for making the company’s systems safe for everyone that uses them. It allows the systems to actually exist in the world, he said, and provides benefits to users.
  • Working on the violent-content team, Kairu said, he read hundreds of posts a day, sometimes describing heinous acts, such as people stabbing themselves with a fork or using unspeakable methods to kill themselves
  • He began to have nightmares. Once affable and social, he grew socially isolated, he said. To this day he distrusts strangers. When he sees a fork, he sees a weapon.
  • Mophat Okinyi, a quality analyst, said his work included having to read detailed paragraphs about parents raping their children and children having sex with animals. He worked on a team that reviewed sexual content, which was contracted to handle 15,000 posts a month, according to the documents. His six months on the project tore apart his family, he said, and left him with trauma, anxiety and depression.
  • In March 2022, management told staffers the project would end earlier than planned. The Sama spokeswoman said the change was due to a dispute with OpenAI over one part of the project that involved handling images. The company canceled all contracts with OpenAI and didn’t earn the full $230,000 that had been estimated for the four projects, she said.
  • Several months after the project ended, Okinyi came home one night with fish for dinner for his wife, who was pregnant, and stepdaughter. He discovered them gone and a message from his wife that she’d left, he said.“She said, ‘You’ve changed. You’re not the man I married. I don’t understand you anymore,’” he said.
Javier E

How Insurers Exploited Medicare Advantage for Billions - The New York Times - 0 views

  • The health system Kaiser Permanente called doctors in during lunch and after work and urged them to add additional illnesses to the medical records of patients they hadn’t seen in weeks. Doctors who found enough new diagnoses could earn bottles of Champagne, or a bonus in their paycheck.
  • Anthem, a large insurer now called Elevance Health, paid more to doctors who said their patients were sicker. And executives at UnitedHealth Group, the country’s largest insurer, told their workers to mine old medical records for more illnesses — and when they couldn’t find enough, sent them back to try again.
  • Each of the strategies — which were described by the Justice Department in lawsuits against the companies — led to diagnoses of serious diseases that might have never existed.
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  • But the diagnoses had a lucrative side effect: They let the insurers collect more money from the federal government’s Medicare Advantage program.
  • Medicare Advantage, a private-sector alternative to traditional Medicare, was designed by Congress two decades ago to encourage health insurers to find innovative ways to provide better care at lower cost.
  • by next year, more than half of Medicare recipients will be in a private plan.
  • a New York Times review of dozens of fraud lawsuits, inspector general audits and investigations by watchdogs shows how major health insurers exploited the program to inflate their profits by billions of dollars.
  • The government pays Medicare Advantage insurers a set amount for each person who enrolls, with higher rates for sicker patients. And the insurers, among the largest and most prosperous American companies, have developed elaborate systems to make their patients appear as sick as possible, often without providing additional treatment, according to the lawsuits.
  • As a result, a program devised to help lower health care spending has instead become substantially more costly than the traditional government program it was meant to improve.
  • Eight of the 10 biggest Medicare Advantage insurers — representing more than two-thirds of the market — have submitted inflated bills, according to the federal audits. And four of the five largest players — UnitedHealth, Humana, Elevance and Kaiser — have faced federal lawsuits alleging that efforts to overdiagnose their customers crossed the line into fraud.
  • The government now spends nearly as much on Medicare Advantage’s 29 million beneficiaries as on the Army and Navy combined. It’s enough money that even a small increase in the average patient’s bill adds up: The additional diagnoses led to $12 billion in overpayments in 2020, according to an estimate from the group that advises Medicare on payment policies — enough to cover hearing and vision care for every American over 65.
  • Another estimate, from a former top government health official, suggested the overpayments in 2020 were double that, more than $25 billion.
  • The increased privatization has come as Medicare’s finances have been strained by the aging of baby boomers
  • Medicare Advantage plans can limit patients’ choice of doctors, and sometimes require jumping through more hoops before getting certain types of expensive care.
  • At conferences, companies pitched digital services to analyze insurers’ medical records and suggest additional codes. Such consultants were often paid on commission; the more money the analysis turned up, the more the companies kept.
  • they often have lower premiums or perks like dental benefits — extras that draw beneficiaries to the programs. The more the plans are overpaid by Medicare, the more generous to customers they can afford to be.
  • Many of the fraud lawsuits were initially brought by former employees under a federal whistle-blower law that allows them to get a percentage of any money repaid to the government if their suits prevail. But most have been joined by the Justice Department, a step the government takes only if it believes the fraud allegations have merit. Last year, the department’s civil division listed Medicare Advantage as one of its top areas of fraud recovery.
  • In contrast, regulators overseeing the plans at the Centers for Medicare and Medicaid Services, or C.M.S., have been less aggressive, even as the overpayments have been described in inspector general investigations, academic research, Government Accountability Office studies, MedPAC reports and numerous news articles,
  • Congress gave the agency the power to reduce the insurers’ rates in response to evidence of systematic overbilling, but C.M.S. has never chosen to do so. A regulation proposed in the Trump administration to force the plans to refund the government for more of the incorrect payments has not been finalized four years later. Several top officials have swapped jobs between the industry and the agency.
  • The popularity of Medicare Advantage plans has helped them avoid legislative reforms. The plans have become popular in urban areas, and have been increasingly embraced by Democrats as well as Republicans.
  • “You have a powerful insurance lobby, and their lobbyists have built strong support for this in Congress,”
  • Some critics say the lack of oversight has encouraged the industry to compete over who can most effectively game the system rather than who can provide the best care.
  • “Even when they’re playing the game legally, we are lining the pockets of very wealthy corporations that are not improving patient care,”
  • In theory, if the insurers could do better than traditional Medicare — by better managing patients’ care, or otherwise improving their health — their patients would cost less and the insurers would make more money.
  • But some insurers engaged in strategies — like locating their enrollment offices upstairs, or offering gym memberships — to entice only the healthiest seniors, who would require less care, to join. To deter such tactics, Congress decided to pay more for sicker patients.
  • Almost immediately, companies saw ways to exploit that system. The traditional Medicare program provided no financial incentive to doctors to document every diagnosis, so many records were incomplete
  • Under the new program, insurers began rigorously documenting all of a patient’s health conditions — say depression, or a long-ago stroke — even when they had nothing to do with the patient’s current medical care.
  • But for insurers that already dominate health care for workers, the program is strikingly lucrative: A study from the Kaiser Family Foundation, a research group unaffiliated with the insurer Kaiser, found the companies typically earn twice as much gross profit from their Medicare Advantage plans as from other types of insurance.
  • The insurers also began hiring agencies that sent doctors or nurses to patients’ homes, where they could diagnose them with more diseases.
  • Cigna hired firms to perform similar at-home assessments that generated billions in extra payments, according to a 2017 whistle-blower lawsuit, which was recently joined by the Justice Department. The firms told nurses to document new diagnoses without adjusting medications, treating patients or sending them to a specialist
  • Nurses were told to especially look for patients with a history of diabetes because it was not “curable,” even if the patient now had normal lab findings or had undergone surgery to treat the condition.
  • Adding the code for a single diagnosis could yield a substantial payoff. In a 2020 lawsuit, the government said Anthem instructed programmers to scour patient charts for “revenue-generating” codes. One patient was diagnosed with bipolar disorder, although no other doctor reported the condition, and Anthem received an additional $2,693.27, the lawsuit said. Another patient was said to have been coded for “active lung cancer,” despite no evidence of the disease in other records; Anthem was paid an additional $7,080.74. The case is continuing.
  • The most common allegation against the companies was that they did not correct potentially invalid diagnoses after becoming aware of them. At Anthem, for example, the Justice Department said “thousands” of inaccurate diagnoses were not deleted. According to the lawsuit, a finance executive calculated that eliminating the inaccurate diagnoses would reduce the company’s 2017 earnings from reviewing medical charts by $86 million, or 72 percent.
  • Some of the companies took steps to ensure the extra diagnoses didn’t lead to expensive care. In an October 2021 lawsuit, the Justice Department estimated that Kaiser earned $1 billion between 2009 and 2018 from additional diagnoses, including roughly 100,000 findings of aortic atherosclerosis, or hardening of the arteries. But the plan stopped automatically enrolling those patients in a heart attack prevention program because doctors would be forced to follow up on too many people, the lawsuit said.
  • Kaiser, which both runs a health plan and provides medical care, is often seen as a model system. But its control over providers gave it additional leverage to demand additional diagnoses from the doctors themselves, according to the lawsuit.
  • At meetings with supervisors, he was instructed to find additional conditions worth tens of millions of dollars. “It was an actual agenda item and how could we get this,” Dr. Taylor said.
  • Last year, the inspector general’s office noted that one company “stood out” for collecting 40 percent of all Medicare Advantage’s payments from chart reviews and home assessments despite serving only 22 percent of the program’s beneficiaries. It recommended Medicare pay extra attention to the company, which it did not name, but the enrollment figure matched UnitedHealth’s.
  • Even before the first lawsuits were filed, regulators and government watchdogs could see the number of profitable diagnoses escalating. But Medicare has done little to tamp down overcharging.
  • Several experts, including Medicare’s advisory commission, have recommended reducing all the plans’ payments.
  • Congress has ordered several rounds of cuts and gave C.M.S. the power to make additional reductions if the plans continued to overbill. The agency has not exercised that power.
  • The agency does periodically audit insurers by looking at a few hundred of their customers’ cases. But insurers are fined for billing mistakes found only in those specific patients. A rule proposed during the Trump administration to extrapolate the fines to the rest of the plan’s customers has not been finalized.
  • Ted Doolittle, who served as a senior official for the agency’s Center for Program Integrity from 2011 to 2014, said officials at Medicare seemed uninterested in confronting the industry over these practices. “It was clear that there was some resistance coming from inside” the agency, he said. “There was foot dragging.”
  • few analysts expect major legislative or regulatory changes to the program.
  • “Medicare Advantage overpayments are a political third rail,” said Dr. Richard Gilfillan, a former hospital and insurance executive and a former top regulator at Medicare, in an email. “The big health care plans know it’s wrong, and they know how to fix it, but they’re making too much money to stop. Their C.E.O.s should come to the table with Medicare as they did for the Affordable Care Act, end the coding frenzy, and let providers focus on better care, not more dollars for plans.”
Javier E

At Kimberly-Clark, 'Dead Wood' Workers Have Nowhere to Hide - WSJ - 0 views

  • One of the company’s goals now is “managing out dead wood,” aided by performance-management software that helps track and evaluate salaried workers’ progress and quickly expose laggards. Turnover is now about twice as high it was a decade ago, with approximately 10% of U.S. employees leaving annually, voluntarily or not, the company said.
  • Armed with personalized goals for employees and large quantities of data, Kimberly-Clark said it expects employees to keep improving—or else. “People can’t duck and hide in the same way they could in the past,” said Mr. Boston, who oversees talent management globally for the firm.
  • Coca-Cola Co. KO -0.41 % in June approved pushing its new performance-management process from the pilot stage to a global rollout. The new system encourages managers to conduct a monthly “reflection” on every direct report, answering five questions that include “Given his/her performance, would you assign this associate to increased scale, scope, and responsibilities?” and “Is this associate at risk for low performance?”
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  • The changes mirror what is happening inside many large companies, where “performance management” reflects the conviction that a sharpened focus on creating a high-performing workforce is a vital tool to generate revenue and profit.
  • Performance management shifts companies away from backward-looking, once-a-year reviews framed largely as compliance requirements—a paper trail for potential job cuts and salary decisions—to a process that is real-time, continuous and focused on helping people meet ambitious goals, or move out of the company faster.
  • The last recession led many employers to rethink the nearly automatic merit raises they had been doling out, forcing them to do a better job identifying high and low performers when giving raises and bonuses. Millennial workers, meanwhile, demand more feedback, more coaching and a stronger sense of their career path.
  • systems let managers track workers’ progress via dashboards that display their goals, accomplishments, attendance, peer feedback and other data.
  • Executives’ use of phrases like “performance culture” in conference calls with analysts and investors has doubled in the past five years, according to a review of transcripts in the Factiva news database. Firms that set goals and hold workers accountable “clearly outperform,” said Nicholas Bloom, an economist at Stanford University and co-author of a recent paper that used Census data to examine more than 32,000 U.S. manufacturing plants. He said they have faster growth, higher profitability and are less likely to go bankrupt.
  • Some academics say constant monitoring can feel intrusive and threatening to workers, especially those who value stability. But human-resources experts largely agree that the traditional review process is a waste of time and needs an overhaul.
  • Remaining employees are expected to work “smarter” and meet regularly raised targets. “We have to routinely shuffle the resources and say, what’s the most important thing we need to do today, this week, this month, to drive this objective?”
  • Using the Workday tool, Kimberly-Clark’s salaried employees set goals and report their progress, record accomplishments or mistakes, and solicit and send feedback
  • The system collects and archives feedback, which can be seen by employees’ managers. It also holds data on staffers’ strengths and development needs, their performance ratings and the risk they might leave the company.
  • “It’s certainly more challenging” for employees, said Mr. Herbert, the retired sales director. “If you really don’t have the mettle, you’re asked to get on with your life’s work [elsewhere].”
  • In 2015, Kimberly-Clark retained 95% of its top performers. Among the employees whose work was rated “unacceptable” or “inconsistent,” 44% left the company voluntarily or were let go. Ms. Gottung said she is “pretty pleased” that low-performer turnover has been rising.
  • Mr. Falk, the CEO, reviews 100 senior managers’ performance plans every year to make sure their goals are ambitious and reflect company priorities. Managers are instructed to begin every meeting with a story about how someone demonstrated one of the six behaviors the company promotes, such as “build trust” or “think customer.”
  • Regular “culture of accountability” sessions train employees in giving and receiving difficult feedback. When a colleague suggests improvements, “the proper response was ‘thank you for the feedback,’ not defensiveness,” Mr. Luettgen said. Employees also practice reinforcing positive behaviors, such as praising a colleague who had given up a weekend to solve a customer complaint.
  • More than 10,000 of Kimberly-Clark’s workers used the feedback feature in Workday in 2014, and about 25% of the comments were considered “constructive,” while the rest were positive or neutral, said Sandy Allred, a senior director on the talent management team. Staffers can send feedback to peers or workers above or below them
Javier E

Top British Spy Warns of Terrorists' Use of Social Media - NYTimes.com - 0 views

  • One of Britain’s highest-ranking intelligence officials on Tuesday castigated the giant American companies that dominate the Internet for providing the “command-and-control networks of choice for terrorists and criminals” and challenged the companies to find a better balance between privacy and security.
  • the accusation went beyond what United States officials have said about Apple, Google and others that are now moving toward sophisticated encryption of more and more data on phones and email systems.
  • companies like his “will move to strengthen encryption,” and require governments to get court orders if they want data.
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  • But the companies, saying they are responding to demand from their users, show no signs of backing down. Recently the chief executive of Apple, Tim Cook, said governments that want data should deal with the users of the technology, not with the providers of the hardware and services.
  • Mr. Hannigan, in an opinion article on Tuesday in The Financial Times, singled out the Islamic State, the radical group also known as ISIS and ISIL, as one “whose members have grown up on the Internet” and are “exploiting the power of the web to create a jihadi threat with near-global reach.”
  • Increasingly encrypted products and services are “a challenge,” Admiral Rogers said. “And we’ll deal with it.”But he also pushed for better sharing of data between the intelligence community and private technology companies. Moves to set up a formal information-sharing system have stalled in Congress in the face of objections from the private sector.
  • But Mr. Hannigan’s comments, calling for “a new deal between democratic governments and the technology companies in the area of protecting our citizens,” seemed to urge a further review of the balance between civil liberties and national security. Britain, like other European nations, has been increasingly concerned about online recruitment of potential fighters from within its borders by radical groups.
  • Facebook said in a company blog post that requests by governments for user information were rising steadily, by about a quarter in the first half of the year over the second half of last year.“In the first six months of 2014, governments around the world made 34,946 requests for data,” the post said. “During the same time, the amount of content restricted because of local laws increased about 19 percent.”
  • Twitter received more than 2,000 requests for information about user accounts from roughly 50 countries in the first six months of 2014, according to a company statement. The number of requests represented a 46 percent increase compared with the same period last year, and more than 60 percent of the requests came from the United States government.
  • In the past, Al Qaeda and its affiliates, which have broken with the Islamic State, “saw the Internet as a place to disseminate material anonymously or meet in ‘dark spaces,’ ” Mr. Hannigan wrote, while the Islamic State “has embraced the web as a noisy channel in which to promote itself, intimidate people and radicalize new recruits.”The opinion article by Mr. Hannigan referred specifically to messaging and social media sites and apps such as Twitter, Facebook and WhatsApp.“There is no need for today’s would-be jihadis to seek out restricted websites with secret passwords: They can follow other young people posting their adventures in Syria as they would anywhere else,” he wrote.
Javier E

For Stanford Class of '94, a Gender Gap More Powerful Than the Internet - NYTimes.com - 0 views

  • “The Internet was supposed to be the great equalizer,” said Gina Bianchini, the woman who had appeared on the cover of Fortune. “So why hasn’t our generation of women moved the needle?”
  • identity politics pushed many people into homogeneous groups; Scott Walker, one of the only African-Americans in the class to try founding a start-up, said in an interview that he regretted spending so much time at his all-black fraternity, which took him away from the white friends from freshman year who went on to found and then invest in technology companies.
  • If the dawn of the start-up era meant that consumer-oriented ideas were becoming more important than proprietary technology, he asked himself aloud, shouldn’t more women have flooded in?
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  • But with the web, “all of the sudden we began moving to a market where first mover advantage became enormous,” he said. Connection speeds were growing faster, Americans were starting to shop online, and multiplying e-commerce sites fought gladiatorial battles to control most every area of spending.
  • But there were still many hoops women had greater trouble jumping through — components that had to be custom-built, capital that needed to be secured from a small number of mostly male-run venture firms.
  • “The notion that diversity in an early team is important or good is completely wrong,” he added. “The more diverse the early group, the harder it is for people to find common ground.”
  • David Sacks, on the other hand, was unmarried and unencumbered, and in 1999 he left politics, his law degree and a job at the consulting firm McKinsey & Company to join his Stanford Review friends at a technology start-up, because of “the desire to live on the edge, to fight an epic battle, to experience in a very diluted way what previous generations must have felt as they prepared to go to war,” he wrote at the time. For his generation, he wrote, “instead of violence, unbridled capitalism has become the preferred vehicle for channeling their energy, intellect and aggression.”
  • his lack of social grace became an asset, according to Mr. Thiel and other former colleagues. He did not waste time on meetings that seemed pointless, and he bluntly insisted that the engineers whittle an eight-page PayPal registration process down to one.
  • he and Mr. Thiel now had a setting in which to try out their ideas about diversity and meritocracy. “In the start-up crucible, performing is all that matters,” Mr. Sacks wrote about that time. He wanted to give all job applicants tests of cognitive ability, according to his colleague Keith Rabois, and when the company searched for a new chief executive, one of the requirements was an I.Q. of 160 — genius level.
  • But those debates did a great deal for Mr. Sacks. After graduation, he and Mr. Thiel published “The Diversity Myth,” a book-length critique of Stanford’s efforts. Within a few more years, he, Mr. Thiel, Mr. Rabois and others had transformed themselves into a close-knit network of technology entrepreneurs — innovators who created billion-dollar business after billion-dollar business, using the ideas, ethos and group bonds they had honed at The Stanford Review.
  • intentionally or not, he stated something many people quietly believed: The same thing that made Silicon Valley phenomenally successful also kept it homogeneous, and start-ups had an almost inevitable like-with-like quality.
  • The kind of common ground shared by the early PayPal leaders “is always the critical ingredient on the founding teams,” Mr. Thiel said in an interview. “You have these great friendships that were built over some period of time. Silicon Valley flows out of deep relationships that people have built. That’s the structural reality.”
  • Less than 10 years after graduation, he and Mr. Thiel had been transformed from outcasts into favorites with a reputation for seeing the future. Far from the only libertarians in Silicon Valley, they had finally found an environment that meshed perfectly with their desire for unfettered competition and freedom from constraints. The money they made seemed like vindication of their ideas.
  • The success of the struggle to create PayPal, and its eventual sale price, gave the men a new power: the knowledge to create new companies and the ability to fund their own and one another’s. Billion-dollar start-ups had been rare. But in the next few years, the so-called PayPal Mafia went on to found seven companies that reached blockbuster scale, including YouTube, LinkedIn, Yelp and a business-messaging service called Yammer, founded by Mr. Sacks and sold a few years later to Microsoft for $1.2 billion.
  • Since 1999, the number of female partners in venture capital has declined by nearly half, from 10 percent to 6 percent, according to a recent Babson College study.
  • in early 2014, Ms. Vassallo was quietly let go. The firm was downsizing over all, especially in green technology, one of Ms. Vassallo’s specialties, and men were shown the exit as well. But in interviews, several former colleagues said it was far from an easy environment for women, with all-male outings and fierce internal competition for who got which board seat — meaning internal credit — for each company, not to mention a sexual discrimination lawsuit filed by a female junior partner, scheduled for trial in early 2015.
  • They also said that Ms. Vassallo, earnest and so technical that she started a robotics program at a local girls’ school, had not been as forceful, or as adept a politician, as some of her male peers.
  • Another woman from the class of 1994 was quoted in the Fortune article: Trae Vassallo, who was Traci Neist when she built the taco-eating machine all those years ago, attended Stanford Business School with Ms. Herrin and Ms. Bianchini, co-founded a mobile device company, and then joined Kleiner Perkins, a premier venture capital firm.
  • As classmates started conversations with greetings like “How’s your fund?” some of those who did not work in technology joked that they felt like chumps. The Stanford campus had gone computer science crazy, with the majority of students taking programming courses. A career in technology didn’t feel like a risk anymore — it felt like a wise bet, said Jennifer Widom, a programming professor turned engineering dean. Computer science “is a degree that guarantees you a future, regardless of what form you decide to take it in,” she said.
  • The nature of start-ups was shifting again, too, this time largely in women’s favor. From servers onward, many components could be inexpensively licensed instead of custom-built. Founders could turn to a multiplying array of investment sources, meaning they no longer had to be supplicants at a handful of male-run venture firms. The promise that the Internet would be a leveler was finally becoming a bit more fulfilled.
  • The frenzy had an unlikely effect on the some members of the Stanford Review group: They were becoming cheerleaders for women in technology, not for ideological reasons, but for market-based ones.
  • Like many others, he was finding that the biggest obstacle to starting new companies was a dearth of technical talent so severe they worried it would hinder innovation.
  • The real surprise of the reunion weekend, however, was that more of the women in the class of ’94 were finally becoming entrepreneurs, later and on a smaller scale than many of the men, but founders nonetheless.
  • The rhythms of their lives and the technology industry were finally clicking: Companies were becoming easier to start just as their children were becoming more self-sufficient, and they did not want to miss another chance.
Javier E

Companies' pursuit of high profits is making the rich richer at everyone else's expense... - 0 views

  • In 2016, U.S. companies' pursuit of bigger profits through higher prices transferred three percentage points of national income from the pockets of low-income and middle-class families to the wealthy, according to new research on market concentration and inequality.
  • The study, forthcoming in the Oxford Review of Economic Policy, examines how growing corporate power, particularly in industries dominated by shrinking numbers of huge companies, effectively “transfer[s] resources from low-income families to high-income families.
  • In the latter part of the 20th century, the share of U.S. households owning some form of stock rose dramatically, from 32 percent in 1989 to 52 percent in 2001. That shift was driven largely by a decline in defined-benefit pension plans and the rise of the 401(k) retirement account. As a result, the traditional line between shareholders and consumers has become blurrier than ever. That’s led a number of economists to declare that what’s good for shareholders is also, by definition, good for the middle class.
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  • At the risk of oversimplifying, take the example of a family with a diabetic member who must pay for insulin on a regular basis
  • The family also happens to own stock in the three powerful pharmaceutical companies that manufacture insulin in the United States
  • price increases have resulted in higher profits for company executives and their shareholders.
  • Whether those price hikes ultimately harm or benefit the family depends on two factors: how much they spend on insulin and how much of a stake in the insulin companies they own through the stock market.
  • researchers use data from the federal Survey of Consumer Finances and the Consumer Expenditure Survey to calculate the distribution of corporate equity (e.g., stocks and business equity) and of total consumer expenditures. They find that corporate equity is much more unequally distributed than expenditures.
  • The top 20 percent of U.S. households own nearly 90 percent of the country’s total equity, according to their calculations. But those households account for a hair under 40 percent of total consumer spending
  • the bottom 80 percent of the country owns just 10 percent of the equity but spends 60 percent of the money.
  • On net, that means it’s nearly impossible for the typical U.S. family to make up for higher prices via the performance of their stock portfolio. When prices rise, low- and middle-class families pay. Wealthy families profit
  • They find that monopolistic pricing takes a bite out of every income group’s share of national income, with the notable exception of the top 20 percent, whose incomes rise. In effect, companies are using their market power to extract wealth from poor and middle-class households and deposit it in the pockets of the wealthy, to the tune of about 3 percent of national household income in 2016.
  • The implication of these findings is that antitrust enforcement has potential to be a tool in the fight against rising inequality by reducing the ability of large companies to set high prices that primarily benefit the wealthy. Conversely, the findings suggest that a recent lapse in that enforcement is contributing to the growing gap between the rich and poor.
Javier E

Silicon Valley Powered American Tech Dominance-Now It Has a Challenger - WSJ - 0 views

  • Asian investors directed nearly as much money into startups last year as American investors did—40% of the record $154 billion in global venture financing versus 44%,
  • Asia’s share is up from less than 5% just 10 years ago.
  • That tidal wave of cash into promising young firms could herald a shift in who controls the world’s technological innovation and its economic fruits, from artificial intelligence to self-driving cars.
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  • Many Chinese tech companies are “at this critical size that the China market alone is not enough to support their business and valuation,
  • The surge also positions Asia’s investors to win stakes in markets that Western companies covet, or that have national security implications.
  • . “If you think that being the locus of invention gives you a boost to your GDP and so forth, that’s a deterioration of the U.S. competitive advantage.”
  • Although one of the biggest Asian investors is Japan’s SoftBank Group Corp. , which has tapped Middle Eastern money to create the world’s largest tech-investment fund, it is Chinese activity that is having the greatest impact.
  • China is creating unicorns—startups valued at a billion dollars or more—at much the same pace as the U.S., drawing on funding from internet giants like Alibaba Group Holding Ltd. and Tencent Holdings Ltd. as well as more than a thousand domestic venture-capital firms that have raised billions of dollars a year for the past few year
  • Chinese-led venture funding is about 15 times its size in 2013, outpacing growth in U.S.-led financing, which roughly doubled in that time period
  • Most Chinese-led investment so far has gone to the country’s own firms, the Journal analysis found. Many of them, like the Yelp equivalent Meituan-Dianping, are household names with millions of customers in China, yet virtually unknown elsewhere.
  • The rise of China’s venture market “signifies a shift from a single-epicenter view of the world to a duopoly,” he says.
  • Madhur Deora, chief financial officer for Paytm, one of India’s biggest e-payments firms, says the company approached Alibaba affiliate Ant Financial instead of U.S. backers for funding in 2015 because Chinese mobile-internet innovations are “way far ahead of anything that’s happened in the U.S.
  • One reason China’s push into new technologies worries many in the U.S. is that, unlike the hunt for good returns that underpins most Western venture finance, a lot of Chinese investment is driven by strategic interests, some carrying the specter of state influence.
  • China is pushing hard into semiconductors, for which the government has provided billions of dollars in public funding, and artificial intelligence, where Beijing in July set a goal of global leadership by 2030
  • Mr. Lee, the venture investor, predicts that in the next five to 10 years Chinese tech companies will become pacesetters for tech-related development, vying with the likes of Alphabet Inc.’s Google and Facebook for dominance in markets outside the English-speaking world and Western Europe.
  • “All the rest of the world will basically be a land grab between the U.S. and China,
  • “The U.S. approach is: We’ll build a better product and just win over all the countries,” says Mr. Lee. The Chinese approach is “we’ll fund the local partner to beat off the American companies.”
  • Asia’s rise as a startup financier is even starker in the biggest venture investments—those of $100 million or more. These megadeals have become an increasingly important part of venture finance as valuations have ballooned, with their proportion of deal volume growing from around 8% in 2007 to around half of the total last year.
  • In Southeast Asia, a flood of Chinese money into local startups—such as the $1.1 billion Alibaba-led investment into Indonesian online marketplace PT Tokopedia last year—is drawing the region closer to China
  • Chinese money is also playing a big role in India, which, with a population of 1.2 billion, has been described as the next big internet market. Chinese and Japanese investors each led nearly $3 billion in venture finance in India last year, ahead of the nearly $2 billion in deals led by U.S. investors
  • “Think of strategic investments and M&A as playing a game of go,” said Mr. Tsai, the Alibaba executive vice chairman, at the investor conference last year. “In a game of go the strategic objective is to put your pieces on the chessboard and surround your opponent.”
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