government, Meta Intelligence

Poly-Awareness, Checks & Commercial History

In an era moving towards electronic payment systems and replacing physical currency, it can be educational to look back at checks and how we arrived here. As Winston Churchill observed, “The longer you can look back, the farther you can look forward.”

In looking at history, it is just as important to study commercial practices as well as government leaders and military conquests.

…In the ten years following 1850, the world production of gold was ten times greater than in the ten preceding years. As is well known, the French had always preferred metal currency, and welcomed the gold with a special enthusiasm; the state struck an impressive quantity of coins, striking five hundred million in 1845, for the world’s gold found its way more readily to France where it fetched the highest price. The circulation of gold increased in other European countries also, and the banks of issue, in particular, filed their vaults. In this gold rush the English were more cautious after their long acquaintance with problems of values, and the upheaval in the gold market brought hardly any changes in the prices of the metal there. It is true England also minted new coins, but took advantage of it chiefly to establish her banking system more firmly. The influx of gold, which was exclusively Australian, had at first little effect on the prices of goods, but it developed credit with a paper currency. The minting of this money increased England’s metallic circulation by almost fifty percent, but the use of the banknote and especially of the cheque increased by a far higher proportion. The use of the cheque became so widespread in England that shopkeepers and farmers adopted it as the only possible way of doing business although it was almost unknown on the continent. Cheques were often used for amounts of less than two pounds. Even if he had an income of only fifty pounds a year, the Englishman immediately opened a bank account. In 1885, payments in metal currency represented only one per cent of the London Bank payments and six per cent of those in Manchester.

The Act of 1826 granted complete freedom of issue, except in an area of twenty-six miles around London, where the privilege of the Bank was absolute. There was a good deal of argument about the exact meaning of this privilege; for example the question arose as to whether provincial banks could open an office in London, the main centre of business, without losing their rights of issue.

When it was ruled that they could not, many banks nevertheless settled in London and forfeited their privilege of printing. Only the Scottish banks put up a firmer resistance to this extension of the privileges of the Bank of England. On the other hand, the right of issue was losing much of its significance, since the remarkable development of payment by cheque meant that there was less resort to the note. Settlements between the great deposit banks were made neither in metal nor in notes, but were transacted in the accounts of a clearing house, which dealt with transactions amounting to several hundreds of thousands of pounds every year.

The London and Westminster Bank, one of the most important of the English private deposit banks, soon became a model for every bank in Europe, for it had a reserve capital of less than three million pounds, and held approximately twenty-two million in deposits. Such influential private banks, established as joint stock companies, had to resort to the Bank of England only rarely, so the latter did not need to be unduly anxious about its insignificant gold reserves which were barely one-third of those held by the Banque de France. The privilege of issuing paper money, a relic of the royal right of minting money, was therefore bypassed to all intents and purposes by the gradual improvement of English banking procedure. At the same time the Bank of England enjoyed a monopoly of issue which it was in process of acquiring without the intervention of the state, since the development of banking led all the provincial banks to settle in London, near the clearing house. It was a masterpiece of liberalism to coordinate the free activity of the English economy in the capital without any pressure from the political power. In this way financial centralization was achieved purely by private initiative once the need for it had become apparent.

French banking evolved on very different lines. In order to meet the credit crisis, the provisional government had recommended the establishment of departmental banks and of trade credit societies when it was reforming the Banque de France. Most of these establishments, whose capital was to be provided partly by the state and the departments, were stillborn, while others lingered on for a month or two before wasting away. On the other hand, the Comptoir d’Escompte de la Seine became a private concern, and flourished under the name of the Comptoir National d’Escompte de Paris. The Banque du Département du Nord, which became the Crédit du Nord, was equally fortunate, as were several trade banks, particularly that of the Entrepreneurs de Travaux Publics. The unusual feature about the composition of the Comptoir National d’Escompte was that the Council of State had allowed it to set up as a joint stock company. Within a few years the Crédit Mobilier, the Crédit Industriel et Commercial, the Société Générale, the Société des Dépôtes et Comptes Courants, and other companies were established to benefit from this new way of accumulating capital.

Not all these new banks were as prudent as their English counterparts by any means and this point is worth dwelling on. After 1848 the Banque de France had the monopoly of issuing notes for the whole of France, because the local issuing banks created by Napoleon I and Louis-Philippe had been absorbed by the Banque de France, whose notes were the only ones in circulation. It was the state which had made this decision and had settled the problem of monetary unity by authoritarian measures. A few bankers, under the Second Empire, protested against the right of monopoly exercised by the Banque de France, which had been imposed on the whole of the country by the state. Very little use was made of payment by cheque, and compensation was meagre. The wide circulation of metal currency was a sign of a restricted paper currency, but this meant that credit was scarce and was based entirely on the Banque de France. The latter, taking no risks, consequently piled up in its coffers considerable reserves of precious metals, proud of the fact that it could now maintain a steady discount rate more easily than England. It also gained great satisfaction from being the gold-controller of Europe. Whenever a sudden drastic rise in the English bank rate sent businessmen, and even the Bank of England itself, as we have seen, hastening to Paris in search of precious metals, it was to the Banque de France that they turned. Although it was attacked by those who accused it of stifling credit, on the other hand it was defended by those who found its caution reassuring. It was a difference of opinion which further enlivened the quarrel between the Pereires and the Rothschilds.

As we know, Jewish bankers played a vital part in the building of the railways. Pereire, a railway enthusiast, and Rothschild, the largest holder of free capital in France, had at first been prepared to undertake the great task in complete agreement. Rothschild, content with holding the Nord and the English connections, was one of the directors whose word carried most weight in the Banque de France, while the Pereire brothers, their heads still full of Saint-Simonist projects, were interested in vast plans covering Austria, Spain and the Mediterranean. They financed the great development of the economy of the south although even so they were obliged to open a credit institution, the well-known Crédit Mobilier. But because they could not use it for the issue of paper notes, and had tied up the funds entrusted to them too quickly, the Pereires embarked on a struggle to deprive the Bank of its privilege of issue. They believed that the mere right of minting money would enable them to possess the wide credit necessary for the bold financial policy on which they were launching out. It so happened that when Savoy was annexed to France, the Banque de Chambéry brought its banknotes and its privileges within French frontiers. The Pereires and their friends seized the shares of this bank and tried to turn its notes into rivals of those of the central bank. The Banque de France then asserted its rights, Chambéry lost its rights of issue, and soon afterwards the Crédit Mobilier went into liquidation.

This incident occasioned a great quarrel between theorists for or against privilege; it was above all a demonstration of the solidity of the rights the Bank had acquired, while no-one doubted the right of the state to confirm its privileges any longer. This situation was all the more paradoxical since the state was in the hands of Napoleon III who was a firm supporter of the Pereires and the Crédit Mobilier. The underlying cause of this paradox lay in French scepticism about cheques, for the development of bank money lagged more than half a century behind England. It was to be chiefly the work of Henri Germain, founder of the Crédit Lyonnais. His patron of 1863 was mainly anxious to attract large deposits by guaranteeing them against theft and fire so that he insisted on the effective help the Bank could give industrialists and merchants by insuring their cash service itself. By making wise use of these deposits and by a cautious policy, the Crédit Lyonnais was able to open branches in Paris and Marseilles, so that it was soon as powerful as the Crédit Industriel et Commercial and then outstripped it. It even surpassed the Comptoir d’Escompte, and soon the Crédit Lyonnais became the leading French deposit bank. From 1860 it was the major bank to introduce cheques.

But there is little reason for surprise in the difficulties encountered by the cheque between 1860 and 1870.

The Banque de France was regarded as the most reliable of all issuing authorities, and French specie reserves as the most powerful stock of gold in the world; between notes and gold as the two methods of payment, there was very little room for the cheque. It is difficult to believe that France’s reserves could not have kept the deposit banks generously supplied, perhaps as much as, and even more than, the English reserves. But it kept a good part of its cash-balance in gold, which held up the full development of French credit institutions until the closing years of the nineteenth century.

In England there was security and in France hesitation, but in Germany there was an irresistible wave of enthusiasm which led to the rapid growth of credit institutions from 1840. There were a great many note-issuing banks in the Germany of the confederation, because each prince had his own currency. Hamburg had one of the soundest banks of issue, whose marc banco was esteemed throughout Europe and served as a standard for the whole of Germany. Nuremberg still had its old seventeenth-century bank and its florin, while a large number of private establishments were also manufacturing notes with a restricted circulation. In this scheme of things the Bank of Prussia held a pre-eminent position which was strengthened by the place Prussia had assumed in the Zollverein, but it still could not contest the superiority of Hamburg. In short, the legal position of the German banks was similar to that of the English, in that there was plurality of issue.

Bank money, and banknotes, increased in competition with each other, and the future of the four great and famous banks which were to dominate the destiny of capitalist Germany after 1880 had already begun to take shape.

The Dresner Bank was connected with the progress of the iron industry in the Rhineland, and particularly of Essen and Krupps. The Deutsche Bank operated in the countries of central Europe. The Darmstädter Bank and the Disconto Gesellschaft carved out a place for themselves; indeed bills on the latter increased from six to forty million marks between 1855 and 1862.
Charles Morazé, The Triumph of the Middle Classes: A Political and Social History of Europe in the Nineteenth Century, Anchor Books, 1968, pages 291-297.

Notice that in the discussion above, events are never monocausal. They are always part of a swirling tornado of change. If you become accustomed to this, the way the world works and the way the world changes will become more accessible to you.

For example, “The use of the cheque became so widespread in England that shopkeepers and farmers adopted it as the only possible way of doing business although it was almost unknown on the continent. Cheques were often used for amounts of less than two pounds.”

Also notice, “…soon the Crédit Lyonnais became the leading French deposit bank. From 1860 it was the major bank to introduce cheques.”

This is an example of poly-awareness, the core of meta-intelligence.

Science-Watching: From Ignition to Energy

[from Science & Technology Review July/August 2025 Research Highlights, by Noah Pflueger-Peters]

Achieving ignition at the National Ignition Facility (NIF) proved that harnessing the power of the Sun in a laboratory may be possible. The Sun’s extreme temperatures and pressures cause light elements to fuse together to create heavier ones, releasing enormous energy and sustaining conditions for more thermonuclear reactions. NIF replicates these conditions with inertial confinement fusion, in which lasers compress and heat a target capsule filled with deuterium and tritium (DT), “heavy” isotopes of hydrogen that contain extra neutrons. When the isotopes fuse, they create helium and a neutron, and the lost mass is converted into inertial fusion energy (IFE), which can be harnessed for energy production.

Nuclear fusion produces significantly more energy than either nuclear fission or burning fossil fuels for equivalent amounts of fuel. Since the input materials for fusion energy are plentiful on Earth, an IFE power plant could produce safe, abundant, power grid-compatible energy without highly radioactive byproducts.

Although significant work remains to harness fusion energy, pursuing the development and deployment of IFE is crucial for the nation’s energy security, enabling the United States to shape implementation worldwide, avoid technological surprises from adversaries, and influence technical leadership in other energy-intensive technologies such as AI, machine learning (ML), and supercomputing.

IFE research stretches back to the early days of Lawrence Livermore, and today the Laboratory is fostering the overall fusion ecosystem. Livermore’s unique capabilities, expertise, and connections will be critical to laying the technical, logistical, and legal groundwork to make IFE possible. “IFE is a grand scientific and engineering challenge, something that is so incredibly difficult and high-risk and takes enormous expertise,” says Tammy Ma, Livermore’s IFE Institutional Initiative lead. “This challenge makes it the right kind of problem for national laboratories to pursue.”

This artist’s rendering shows the concept for an inertial fusion energy (IFE) power plant design, with a cutaway to show the plant’s target chamber in the center. Livermore researchers are laying the groundwork for private fusion companies to build similar designs. (Illustration by Eric Smith.)

Designing for Viability

NIF is the only facility to date to demonstrate the ignition and burning plasma conditions that are prerequisites for IFE, but it is an experimental facility for stockpile stewardship research, not a power plant. To be commercially viable and produce the energy to offset costs and meet demands (baseload power), IFE plants will need to generate more than 30 times the energy they deliver to the fusion target on every shot while firing 10 or more shots per second, compared to NIF’s rate of one or two shots per day.

The Laser Inertial Fusion Energy (LIFE) study, conducted between 2008 and 2013, aimed to build directly on technology developed for NIF to achieve IFE and took a systematic approach to this requirement by developing the Integrated Process Model (IPM). (See S&TR, April/May 2009 [archived PDF], pp. 6-15.)

IPM is a technoeconomic model of an IFE power plant with detailed technical and cost breakdowns and interdependencies of key systems and subsystems. “The work done under LIFE was fantastic,” says Ma. “IPM lays out engineering and physics requirements for the entire system to test out different scenarios and see the impact. Now, we not only get to expand on all that but also leverage 15 years of new data from NIF, better codes, and high-performance computing (HPC), as well as new work in AI, ML, advanced manufacturing, diagnostics, and nonproliferation across the Laboratory.”

IPM describes an IFE power plant that requires a solid-state laser driver system to “pump” lasers with optical energy using laser diodes instead of flashlamps as at NIF. The plant will also need to fabricate and fill target capsules onsite and send them into its target chamber at a high enough frequency to produce baseload power. “We will have to repeatedly inject targets into the chamber, so the targets must be able to withstand and survive that process,” explains Ma. “Then, the lasers will track the moving targets, and when one gets to the center of the chamber, they would fire on the centered target, repeating 10 to 20 times per second.”

The facility would convert fusion energy into heat and then electricity via steam turbines, sending most of the electricity to the power grid and recycling the rest to power operations on subsequent shots. Neutrons from the reaction would produce tritium needed for the DT fuel by bombarding lithium isotopes in a “breeding blanket” material lining its target chamber. By closing both the power and fuel cycles, IFE plants are expected to be self-sustaining.

Thanks in part to IFE STARFIRE (IFE Science and Technology Accelerated Research for Fusion Innovation and Reactor Engineering), a Department of Energy (DOE)-funded multi-institutional IFE research and development hub, researchers across the Laboratory are working to meet the new system’s demands. IPM can help identify key challenges, test the viability of new designs, and direct future research. “Many technical models and cost models exist for IFE, but very few, if any, pair systems and cost models together at the same depth as IPM,” says Mackenzie Nelson, a technoeconomic systems analyst in the Computational Engineering Division. “This type of tool offers such an advantage because we can assess design choices from both a technical and economic standpoint and create blueprints for what an IFE plant could look like.”

(left to right) Livermore researchers Bassem El Dasher, Claudio Santiago, and Mackenzie Nelson discuss a 3D model of a proposed IFE power plant design alongside the Integrated Process Model (IPM). IPM has more than 270 potential user inputs that researchers and collaborators can use to assess different IFE design choices to see the technical and cost impact on the entire design.

Operational Demands

NIF’s target capsules are extremely precise, fragile, and can take weeks to fabricate, fill, and position. Researchers are trying to reconcile that factor with the estimated demand of more than 800,000 capsules per day produced at less than $0.50 each to achieve IFE plant viability. To do this, they are examining optimal target designs for IFE and exploring advanced manufacturing methods such as microfluidics, volumetric additive manufacturing, and two-photon polymerization. (See S&TR, April/May 2025 [archived PDF], pp. 16-19.) Additional projects involve developing diagnostic instruments that can collect, analyze, and combine data with other diagnostics at the 10 to 20 shot per second frequency and use it to improve lasers in real time.

Fusion energy systems such as IFE are also a regulatory challenge, as they generate high-energy neutrons capable of breeding plutonium or uranium-233 and rely on large quantities of tritium. “Pure fusion energy systems do not require fissile material, but there are still ways to misuse these technologies that pose proliferation risk,” says Yana Feldman, the associate program leader for international safeguards. Bad actors may only need small amounts of tritium to make nuclear weapons, and some breeding blanket designs may inadvertently produce traces of plutonium that may be diverted for military purposes.

Nuclear fission reactors are regulated through international agreements and export control rules, and the independent International Atomic Energy Agency (IAEA) verifies that nuclear material and facilities are only being used for peaceful purposes. Neither treaties nor the IAEA address fusion energy, and no consensus has been reached on whether fusion energy systems need an international verification program. Verification methods for safeguarding tritium are also far less developed than for plutonium and uranium and focus more on contamination and transfers than analytical accounting for discrepancies. The precise scale of allowable tritium unaccounted for without posing proliferation risk is also unclear.

Fusion systems can be designed for proliferation resistance, but not having an existing design remains a challenge.

International security analyst Anne-Marie Riitsaar and her colleagues are exploring these complexities and starting conversations with international fusion experts and private industry to raise awareness. Riitsaar also plans to collaborate with the IPM team to map tritium diversion vulnerabilities and identify high-risk points where researchers could incorporate surveillance methods into plant designs to detect and prevent potential misuse. “People sometimes ask me why I’m thinking about fusion energy regulations and proliferation risks at this point, but it’s not too early,” says Riitsaar. “Reaching a multinational consensus on regulating sensitive technologies takes considerable time and effort.”

The National Ignition Facility is an experimental facility and not a power plant, so a commercial IFE plant design has vastly different requirements—many of which are being studied by Livermore researchers and their collaborators.

	NIF	Viable IFE plant (estimated)
Repetition rate	One shot per day	10 to 20 shots per second
Energy gain	4.13 times (as of April 2025)	30 times (minimum), 50 times to 100 times (ideal)
How lasers gain energy	Flashlamps	Diode pumping
Target fabrication and fuel filling	Fabricated offsite over several weeks and filled manually in 1 to 5 days	Mass-manufactured and filled in a target factory within the facility
Target delivery	Positioned manually within the Target Chamber	Shot into the plant’s target chamber approximately 10 to 20 times per second
Laser alignment	Computationally in real time, taking up to 8 hours	In real time
Power cycle	Open, requiring outside energy sources	Closed, applying reused energy to power laser and ancillary plant operations
Fuel cycle (tritium)	Produced offsite	Bred onsite

The Laser Driven Fusion Integration Research and Science Test Facility (LD-FIRST) is a proposed blueprint for a proof-of-concept IFE facility that will test all the key IFE subsystems in an integrated fashion. A public-private partnership will likely be necessary to build the facility and will help the IFE community address the main subset of risks and the technological challenges of building a commercial plant.

Converging on a Solution

The team seeks to make IPM as accurate and comprehensive as possible by meeting with subject matter experts across the Laboratory to incorporate the latest research. “We’re trying to evolve the model so it has the same level of high detail across every single functional area to tell us where we can focus research and help us find optimized solutions that we could propose to industry,” says Nelson.

Computer scientist Claudio Santiago and his colleagues also modernized IPM by porting its framework from Microsoft Excel to Python in December 2024, making it compatible with AI, ML, design optimization, and HPC to further inform designs. “Once we think about all the forcing functions such as minimum shot yield and materials requirements pinning us in from every direction, we end up with an optimized solution space. As we sharpen the pencil more with these tools, that optimized solution box gets smaller until eventually we’ve converged on a point design,” says IFE lead systems engineer Justin Galbraith. Galbraith and his team’s point design is called the Laser Driven Fusion Integration Research and Science Test Facility, or LD-FIRST, a proof-of-concept physics demonstration facility for IFE. “That point design, we anticipate, will serve as the foundation for a future public-private partnership that would facilitate building and realizing a physical facility to focus the IFE community in pursuit of fusion power on the grid,” says Galbraith.

Livermore is leading the charge in IFE, helping the United States develop a technological roadmap, growing and coordinating science and technology efforts within the Laboratory, and fostering partnerships across the fusion industry, academia, and government.

Ma chaired DOE’s “Basic Research Needs for IFE” workshop and report in 2022 and co-chairs the subcommittee providing recommendations on the nation’s fusion activities through DOE’s Fusion Energy Sciences Advisory Committee. She and her team travel often to Washington, D.C., working with DOE and legislators to expand fusion energy research and advocacy in the nation. Livermore also leads a “Collaboratory” with other DOE national laboratories to connect research project leads and facilitate public-private partnerships. The Collaboratory has hosted multiple events with industry, and the Laboratory has partnered with three private companies who aim to design pilot IFE plants.

Meanwhile, Galbraith and other IFE leaders have served as technical advisors for engineering design teams at Texas A&M University and given them IFE-relevant problems to solve, including advanced chamber and blanket design. Galbraith is working with Nelson to develop the IFE plant design portion of a high-energy-density science summer school program, which Nelson is leading in 2025 at the University of California at San Diego, and they have developed IFE curriculum that has been deployed at six universities starting in spring 2025. “We’re hoping we can get a group of students really excited about fusion and start to build up the next generation of engineers and scientists that will make fusion a reality,” says Galbraith. The team has led IFE strategic planning exercises at the Laboratory, and Lawrence Livermore will stand up a new fusion institute—named “LIFT,” for Livermore Institute for Fusion Technology—a research and development center that will coordinate and centralize institutional fusion energy research.

Harnessing IFE will be a massive undertaking, but Livermore’s broad and deep expertise, facilities, and capabilities put the Laboratory in a unique position to lead and play an impactful role. “If we can set it up correctly, IFE will be a big piece of the Laboratory’s long-term vision,” says Ma. “IFE plays off of our history and all of our strengths, and it is critical for long-term national security.”

Newspapers and the “Manufacture of Consent”

When we think about newspapers, various associations come to mind. Examples include Jeff Bezos purchasing The Washington Post or William Randolph Hearst inspiring Citizen Kane. Newspapers have, to some extent, devolved into a vehicle for propaganda, as described in Walter Lippmann’s Public Opinion.

Lippmann is famously quoted for advocating the “manufacture of consent.”

Max Weber describes the economic function of newspapers:

The newspaper as an institution came into the service of commerce at an astonishingly late date.

The newspaper, as an institution, is not a product of capitalism. It brought together in the first place political news and then mainly all sorts of curiosities from the world at large. The advertisement, however, made its way into the newspaper very late. It was never entirely absent but originally it related to family announcements, while the advertisement as a notice by the merchant, directed toward finding a market, first becomes an established phenomenon at the end of the 18th century—in the journal which for a century was the first in the world, the “Times.” Official price bulletins did not become general until the 19th century; originally all the exchanges were closed clubs, as they have remained in America virtually down to the present. Hence in the 18th century, business depended on the organized exchange of letters. Rational trading between regions was impossible without secure transmission of letters. This was accomplished partly by the merchant guilds and in part by butchers, wheelwrights, etc. The final stage in the rationalization of transmission of letters was brought about by the post, which collected letters and in connection therewith made tariff agreements with commercial houses. In Germany, the family of Thurn and Taxis, who held the postal concession, made notable advances in the rationalization of communication by letter. Yet the volume of correspondence is in the beginning surprisingly small. In 1633, a million letters were posted in all England while today a place of 4,000 population will equal the number.
Max Weber, General Economic History, Collier Books, 1966 (Third Printing), page 220.

Herbert Hunt provides a useful overview of the newspaper as a political tool in his introduction to Honoré de Balzac’s Lost Illusions (French: Illusions perdues).

The first half of the nineteenth century witnessed the rapid rise to power of the periodical press. Journalism had been active — though dangerous to those engaged in it — during the Revolutionary period. Napoleon had kept the press under his thumb, as Giroudeau points out on page 235. The ‘freedom’ of the press was one of the most controversial issues both under the Restoration and the July Monarchy. Under Louis XVIII and Charles X the struggle between those who, like the Li b erals and Bonapartists, wanted to keep the Revolutionary principles and gains intact, and the Conservatives of various hues, especially the ‘Ultras’, who wanted to put the political clock back, was an affair of major importance; likewise, under Louis-Philippe, the conflict between the spirit of stagnation and the parties in favour of ‘movement’. Balzac’s contention is that the majority of journalists under these three monarchs, instead of recognizing that they were called to a serious, even sacred mission, turned the Press into an instrument for self-advancement, prostituted principles to intrigue and used journalism merely as a means of acquiring money, position and power. He is reluctant to admit that there were great, responsible press organs, like Le Journal des Débats, Le Conservateur, Le Constitutionnel and, from 1824, Le Globe, which stood firm on principle; he is above all aware of the vogue which the petits journaux enjoyed after the fall of Napoleon, and of the role they played as political privateers.

The petits journaux were so-called because they were produced in smaller format than the important dailies or weeklies, which were more or less grave, staid and ponderous. They proliferated in Paris once the fall of the Empire had given a relative, though still precarious liberty to the Press — precarious because it was constantly threatened by the increasingly reactionary governments of the time. The politicians of the Right found it difficult to keep the newspapers under control even by such means as stamp-duty, caution-money, fines, suspensions and suppressions, the object of these being mainly to put obstacles in the way of would-be founders of hostile periodicals. The ‘little papers’, short-lived as they often proved to be, were much given to journalistic sharp-shooting. They preferred satire, personal attack, sarcasm and scandal-mongering to serious argument or the affirmation of ideals. They were mostly Opposition journals and were a constant thorn in the flesh of the Government. Balzac’s aim was to expose their addiction to ‘graft’, intrigue, blackmail and the misuse of the feuilleton, namely the bottom portion of the first page or other pages generally reserved for critical articles and frequently devoted to the malicious task of slashing literary reputations. Andoche Finot — the prototype of such later newspaper magnates as Émile de Girardin and Armand Dutacq, pioneers in 1836 in the founding of cheap dailies which relied on advertisement and serialized novels as a chief source of income — acquires a large share in a big daily and hands on to the equally unprincipled Lousteau the editorship of the ‘little paper’ he already owns. Balzac probably had Le Figaro chiefly in mind, a periodical which was constantly going bankrupt or being suppressed but kept popping up again under different editors. Hector Merlin’s royalist Drapeau Blanc, edited by Martainville, really existed, having been founded in 1819; so did Le Réveil. Other examples of ‘little papers’ before 1830 were Le Nain Jaume (Bonapartist), Le Diable Boiteux and Le Corsaire (both Li b eral), Le Voleur, La Mode, La Silhouette, and, under Louis-Philippe, not only the phoenix-like Figaro, but also La Caricature, Le Charivari (ancestor of our English Punch), and once more Le Corsaire: a few among many. Louis-Philippe and his Cabinets were easy prey for these stinging gad-flies whose unremitting satire and innuendo remind one of the present-day Canard Enchaîné.

It is an amusing thought that, in the late twenties and early thirties, Balzac had himself been a contributor to these disreputable rags and sometimes had a hand in the running of them; for instance he had helped Philipon to found La Caricature. Throughout his career he contributed many novels in serial form to the more important newspapers, notably those founded by Girardin and Dutacq — La Presse and Le Siècle. But by the time he was writing A Great Man in Embryo he had left the petits journaux far behind him. He himself tried his luck as a newspaper-proprietor and editor: he bought La Chronique de Paris in 1836 and founded La Revue Parisienne in 1840. Both of these ventures failed. We can well imagine therefore what a large amount of bile was accumulating inside him. On the whole, reviews of his works appearing in periodicals had been hostile if not harsh. He suffered much from the disparagement of editors and critics such as Sainte-Beuve and Jules Janin respectively. He was always quarrelling with Émile de Girardin. And so he took his revenge. He had already made a preliminary attack on the periodical press in The Skin. And he followed up his attack of 1839 with his Monograph of the Paris Press (1842).
Honoré de Balzac, Lost Illusions, translated and introduced by Herbert Hunt, Penguin Books, 1971, pages xiv-xvi.

Balzac’s novel is very concerned with all aspects of journalism. For example, chapter 17 is titled “How a news-sheet is edited” and chapter 18 is a symposium on newspapers. Chapter 18 quotes a German guest who states, “I thank god there are no newspapers in my country.” (page 312). Another participant states, “In corporate crimes no one is implicated.” “A newspaper can behave in the most atrocious manner and no one on the staff considers that his own hands are soiled.” (page 314).

‘The influence and power of newspapers are only just dawning,’ said Finot. ‘Journalism is in its infancy; it will grow up. In ten years from now, everything will be subject to publicity. Thought will enlighten the world…’
Honoré de Balzac, Lost Illusions, Penguin Books, 1971, page 313.

‘Newspapers are an evil,’ said Claude Vignon. ‘An evil which could be utilized, but the Government wants to fight it. There’ll be a conflict. Who will go under? That’s the question.’
Honoré de Balzac, Lost Illusions, Penguin Books, 1971, page 313.

We should heed Vignon’s warning. Nazi Germany’s three main newspapers confirm this danger.

Powerlessness as a Deep Variable in World History

The famous German filmmaker Rainer Werner Fassbinder, wrote and directed Ali: Fear Eats the Soul. In the original German, the word is not fear, but rather anxiety (angst). We want to argue that the corrosiveness of powerlessness in world society destroys minds, hearts and souls that has never been explored in the depth it deserves.

History books usually talk about the rise of empires, Assyrian, Spanish, British, etc. and the conquests of famous military leaders. It’s also true that fiascos and defeats are mentioned (e.g., Napolean at Waterloo).

The brilliant American writer James Baldwin, said when a people is either marginalized for a long time (including self-marginalization), slowly goes insane and begins to step off the edge of the world (most famously in the documentary, I Am Not Your Negro). Baldwin’s insight illuminates a nation having a nervous breakdown.

Three examples of powerlessness eating the soul come to mind:

The Germans after World War I sleepwalking into Nazism.
The black population of America today.
Israel and the right-wing Zionists currently going into a destructive fantasy.

All of these behaviors are social, psychological pathologies with roots in a long exposure to powerlessness. By contrast, Napolean’s defeat at Waterloo is a single instance in time, not an extended period of crushing mental defeatism. This becomes a haunting ghost that never really goes away.

There are nuances to be explored here, for example the Civil War defeat of the South as expressed in A Stillness at Appomattox. Resentments festered in the South’s psyche, and could be argued to linger to this day.

Thinking of this as the field of powerlessness studies, a central classic is Power and Powerlessness in Jewish History by David Biale.

The Jews have chosen the modern nation-state in the form of the state of Israel or American democracy, as the best guarantee for their survival. That they have identified with the nation-state is no surprise, for they have always demonstrated a shrewd understanding of the political forms of each age, from partial sovereignty in imperial antiquity to corporate power in the Middle Ages. Identification with the state is the modern version of Jewish politics; different strategies pertained in the past. To suggest that modern Jews should adopt some other strategy for survival-to argue that nationalism or democratic pluralism are foreign to Judaism—is to ignore the political legacy of Jewish history, a persistent tradition of political imitation and accommodation, but never of passivity or retreat from politics. Zionism and Diaspora nationalism in their modern forms may be new in Jewish history, but they represent no more and no less than the latest incarnation of this political tradition.

These contemporary strategies for survival, for all their limitations and failures to fulfill messianic expectations, have still proven to be largely successful. The Jews of Israel and the Western Diaspora face less of a threat to their physical survival than at any other time since the end of the Holocaust and certainly less in comparison to the Jews of Europe before the Holocaust. To say that these Jews are secure would be foolhardy in light of Jewish history, but they are certainly more secure than many allow themselves to believe.

The discrepancy between contemporary Jewish power and the insecurity many Jews feel owes much to the inverted image that modern anti-Semites have of Jewish power. If Jews typically see themselves as less powerful than they really are, anti-Semites, since the nineteenth century, portray them as much more powerful: a secret cabal in control of the world. The state of Israel has not diminished this paranoia; on the contrary, anti-Semites now see Zionism as a force equal to twentieth-century imperialism. Afraid of feeding these bizarre delusions, many Jews shrink from acknowledging the actual power they possess. The reality, as I have argued throughout this book, lies somewhere between Jewish fear and anti-Semitic fantasy.

Traumatic historical memories play as great a role in the Jews’ misperception of their contemporary power. Every nation labors under the burden of its own history, caught in the tensions between its understanding of history and current political realities; these tensions are often the cause of misguided political decisions. The United States, torn between conflicting legacies of isolationism and interventionism, and fearful of being perceived as a “paper tiger,” became entangled in Vietnam. The Soviet Union, invaded repeatedly by the West, holds tenaciously to the countries of Eastern Europe as a buffer against imagined Western threats. The Germans, fearful of their neighbors and obsessed with national unification, repeatedly launched wars against the rest of Europe, only to hind themselves after World War II permanently divided and the most likely battlefield for a war between East and West; by succumbing to paranoid tears and messianic appetites, the Germans brought down on themselves exactly the situation they most dreaded.

None of these examples sheds direct light on the dilemma of the Jews, for no other nation has a history analogous to theirs. But each of these cases suggests that the burden of history is a problem common to all nation-states, even as the shape and content of the burden differs. For Jews, contemporary political problems return inevitably and fatefully to the Holocaust, the final denouement of European Jewish history.

The Jews have classically defined their history as unique, and in many ways it is. Their victimization by the Nazis revived anew this sense of uniqueness, at a time when ideologies of “normalization” had begun to undermine the concept of a Chosen People. For many, the return of the Jews to sovereignty could be understood only against the backdrop of the Holocaust, the epitome of the powerlessness of a powerless people: the Holocaust became a metaphor for the special character of all of Jewish history, and only Jewish sovereignty could be a response to this condition of impotence. I have argued that the extremes represented by the boundless terror of the Holocaust and by the victories of the state of Israel should not distort our perception of the Jews’ relationship to power throughout Jewish history; neither should they blur our vision of politics today. To see both past and present realistically without forgetting or suppressing the memory of the Holocaust remains the Jews’ particular burden from history.

When they consider their past, the Jews have no choice but to grapple with the Holocaust. But the Holocaust may also convey a different message with respect to the future: it may signify that the fate of the Jews is no longer unique, becoming instead a symbol for the fate of all mankind. In the twentieth century, the promise of the nation-state, which the European Enlightenment believed would free mankind, has been irrevocably compromised. With the murder of the Jews, the nation-state went mad, reducing some of its subjects to powerless pawns and, finally, corpses. The Nazis were by no means the only twentieth-century rulers to terrorize and murder those they ruled, but they did so with a systematic efficiency and industrial rationality never imagined before.

The total deprivation of human rights and utter degradation suffered by the Jews are not a closed chapter buried in history. Throughout the world today, dictatorships of widely different ideological persuasions have remembered the lessons of the totalitarian regimes of the 1930s and 1940s. In the atrocities committed by governments against their own citizens, the terrifying legacy of the Holocaust lives on. The very powerlessness of the Jews under the Nazis is a warning of the possible fate of human beings anywhere in the world.

The powerlessness of the Jews during the Holocaust also points to the fate of all humanity in the face of nuclear war. It is now possible for governments to deliver the ovens of Auschwitz to all corners of the earth, to make a holocaust of all mankind. Like the Jews of Nazi Europe, the people of the world will be utterly impotent in such a war, neither soldiers nor even innocent bystanders, but, again like the Jews, intentional victims.

As a metaphor for a new politics of irrationality, the Holocaust contains a message of inescapable relevance for a nuclear world. For the first time in human history, a government sought to eradicate a whole people from the earth for reasons that had nothing to do with political realities. In a similar way, the idea of nuclear war lacks the most elementary political rationality, for it would necessarily destroy everything it meant to save: it would take genocide, invented in its most systematic form by the Nazis, to its global and ultimately suicidal conclusion.

Post-Holocaust Jewish nationalism—the accepted ideology of many of the world’s Jews—derives its logic and its legitimacy from both the modern history of the Jews and the modern history of the world. From this point of view, Jewish nationalism is the irrefutable answer to the powerlessness of the holocaust. At the same time, as a prefiguration of the terrors of contemporary politics, the Holocaust has thrown a dark shadow over the future of the nation-state as such, diminishing the promise of modern nationalism for the Jews as for all other peoples.

The urge toward a normal existence in a Jewish state grew out of a profound desire to escape the “unique destiny of a unique people.” Yet, if a “normal existence” today means confronting the terror of global nuclear genocide, then instead of the Jews escaping their historical destiny, it is the world that has become Jewish; the Jews have entered the world of nations only to discover that all mankind faces the holocaust they themselves already suffered. In this world, power is no longer a complete antidote to powerlessness. Possessed of the power to destroy this world, the nations of the earth have become the prisoners of their own might, limited in their sovereignty by forces of their own making: power has created its own vulnerability.

In this dialectic between power and vulnerability, the long history of the Jews may unexpectedly serve as a beacon to the nations. From biblical times to the present day, the Jews have wandered the uncertain terrain between power and powerlessness, never quite achieving the power necessary to guarantee long-term security, but equally avoiding, with a number of disastrous exceptions, the abyss of absolute impotence. They developed the consummate political art of living with uncertainty and insecurity; their long survival owes much to this extraordinary achievement. Jews today must struggle to come to terms with this history in light of their present power, to see both past and present through a realistic lens, neither inflating their power nor exaggerating their powerlessness. The lessons this history can teach are necessary for their own continued existence and are equally relevant to the continued existence of mankind.
David Biale, “Epilogue: The Political Legacy of Jewish History”, Power and Powerlessness in Jewish History, Knopf Doubleday, pages 206-210.

If you combine Fassbinder’s notion of fear eating the soul with Baldwin’s warning against chronic marginalization, we begin to see the phenomenon of powerlessness as an under analyzed variable in world history.

China to Sustain Top-Down, Debt-Fueled Investment in Major Projects and Security Capacities, Ex-Official Says

Dong Yu, now at Tsinghua, says via state media that Beijing-decreed, central govt bond-backed construction will continue into the next five years.

[from the Center for China & Globalization’s Pekingology]

by Zichen Wang, 10 August, 2025

The key concept in today’s newsletter is 国家重大战略实施和重点领域安全能力建设, in abbreviation in Chinese as 两重 liǎng zhòng.

In English, it is translated officially as the implementation of major national strategies and building up security capacity in key areas, hereinafter referred to as “Two Major Undertakings.”

The concept first appeared in official policy documents in the Chinese Premier’s Report on the Work of the Government [archived PDF] in March 2024.

To systematically address funding shortages facing some major projects for building a great country and advancing national rejuvenation, it is proposed that, starting this year and over each of the next several years, ultra-long special treasury bonds be issued. These bonds will be used to implement major national strategies and build up security capacity in key areas. One trillion yuan of such bonds will be issued in 2024.

By the end of the year, the yuan tag, despite being approved by the national legislature, had changed by 300 billion. The People’s Daily newspaper reported in December 2024.

As of now, the 700 billion yuan in ultra-long-term special treasury bonds allocated for the “two major undertakings” has been distributed in three batches to specific projects.

In 2025, the following year, the Report on the Work of the Government [archived PDF] says,

A total of 1.3 trillion yuan of ultra-long special treasury bonds will be issued, 300 billion yuan more than last year.

735 billion yuan will be earmarked in the central government budget for investment. We will put ultra-long special treasury bonds to good use, increase ultra-long-term loans and other types of financing support, and strengthen top-down organization and coordination to ensure greater support for the implementation of major national strategies and security capacity building in key areas.

A simultaneous Finance Ministry budget plan [archived PDF] rounds up the overall central government spending for the Two Major Undertakings to 800 billion yuan in 2025.

In yuan terms, the much-touted new government subsidies to households pale in comparison with the two major undertakings.

Also from the 2025 Report on the Work of the Government [archived PDF]:

Ultra-long special treasury bonds totaling 300 billion yuan will be issued to support consumer goods trade-in programs. This represents an increase of 150 billion yuan over the previous year.

This week, China announced this week that the phased free preschool education policy will cover all children in their final year of kindergartens, saving families 20 billion yuan. Childcare subsidies unveiled in July amount to 90 billion yuan.

As Joe Biden repeated over the years,

Don’t tell me what you value. Show me your budget, and I’ll tell you what you value.

The National Development and Reform Commission said last month:

In 2025, a total of 800 billion yuan has been allocated for the “two major undertakings,” supporting 1,459 projects in key areas such as ecological restoration in the Yangtze River Basin, major transportation infrastructure along the Yangtze River, the New Western Land–Sea Corridor, high-standard farmland, major water conservancy projects, urban underground pipeline networks, the “Three-North” shelterbelt program, and the renovation of hospital wards.

Now that the 2025 money has been spent by July and China is drawing up its next Five-Year Plan for 2026-2030, will there be more such projects in the future?

In a column for the state-run China News Service this week, Dong Yu, previously Deputy Director-General of the Second Economic Bureau of the Office of the Central Financial and Economic Affairs Commission and, before that, an official at China’s National Development and Reform Commission (NDRC), pointedly said,

In the next step, during the formulation and implementation of the 15th Five-Year Plan, the “two major undertakings” will continue to occupy an important place, be organically incorporated into the new five-year plan, and form close alignment and sustained momentum with major national strategies, major plans, major projects, and key initiatives…

…Such a major strategy will be pursued with persistence—it will not remain rhetorical, nor will it be reversed abruptly.

He did not cite a source of information in his article.

Continuing with his lecturing style, Dong, now Executive Vice Director of China Institute for Development Planning, Tsinghua University, rebuked some unspecified market analysis that had observed the investments just were a one-time boost shot.

Some market institutions once analyzed that when China’s economy was facing short-term difficulties and challenges, the launch of the “two major undertakings” was mainly aimed at expanding investment in the short term to stabilize growth. Such a view clearly lacks a professional understanding of the decision-making intentions and logic, fails to properly grasp the relationship between the short term and the medium-to-long term, as well as between objectives and means, and inverts the proper order of priorities—a misconception that needs to be pointed out and corrected.

Dong also highlighted what he said was the unusual nature of the “strategic move,” including that central government debts fueled the investments, and they were selected “top-down,” rather than primarily relying on local government proposal or input.

The two undertakings were formally submitted for deliberation at the 2024 National People’s Congress after the central leadership made its decision and arrangements…

The central authorities have shown firm determination in this work, adopting the ultra-long-term special treasury bond—a macro policy tool that has rarely been used. Compared with several past issuances of special treasury bonds, the funding arrangement for the “two major undertakings” spans a longer cycle, has a broader scope of application, and will continue to advance in the next stage. It can be said that the scale and intensity are unprecedented. In 2024, a total of 700 billion yuan in ultra-long-term special treasury bonds was allocated, and in 2025, the figure is 800 billion yuan, all of which have now been fully disbursed.

The organization of the “two major undertakings” construction is top-down, completely different from the past practice in the investment sector where projects were determined through bottom-up applications. The purpose is to facilitate the smoother downward transmission of the needs of major national strategies. Relevant [central] government departments, by identifying shortcomings and weaknesses, specifying key areas, and refining project requirements, have ensured that the project list is no longer a collection of fragmented local items. Instead, projects are planned in an integrated manner by category and sector, with strengthened guidance for key regions, more targeted measures, and clearer standards.

Although an exhaustive list of the 1,459 projects does not appear to be available to the public, the “security capacity” build-up in the two major undertakings should be understood in broad terms, and Dong claims the investments put China on a sounder footing globally now that Donald Trump rules America again.

In recent years, the central authorities have emphasized security awareness and bottom-line thinking in development planning, a shift closely related to changes in the international situation. The closer China’s economy becomes intertwined with the global economy, the more comprehensive its considerations must be regarding issues such as food security, energy security, industrial security, and ecological security. The second “undertaking” in the “two major undertakings”—the strengthening of security capabilities in key areas—is precisely a forward-looking arrangement. The dramatic changes in the international environment since the beginning of 2025 have further underscored and confirmed the necessity of enhancing security capabilities, fully demonstrating that the central authorities’ thinking and deployment have been prescient and ahead of the curve.

Dong’s article via China News Service is fully translated below.

中央这一先手棋很不寻常

This Strategic First Move by the Central Authorities Is Highly Unusual

by Dong Yu, Executive Vice President, Institute for China Development Planning, Tsinghua University

The issuance of ultra-long-term special treasury bonds to support the implementation of major national strategies and the building of security capacities in key areas (hereinafter referred to as the “two major undertakings”) has become one of the hottest topics in China’s economy in recent years. Any observation of China’s present and future economic trajectory must include research and analysis of these two undertakings. More than a year has passed since the initiative was launched, making it both necessary and timely to evaluate its effectiveness, understand its operating mechanisms, and look ahead to its prospects.

The “Two Major Undertakings” Are by No Means Ordinary Policy Measures

In terms of decision-making background and process, as well as policy intensity and scope, the launch and implementation of the two major undertakings stand out from other policies. They represent a top-level design initiative.

Understanding a policy starts with its background. From the sequence of events leading to the proposal, this was a proactive, historic choice. The two undertakings were formally submitted for deliberation at the 2024 National People’s Congress after the central leadership made its decision and arrangements. The timing was significant: the 20th Communist Party of China National Congress had laid out a series of major long- and medium-term strategic initiatives that needed concrete engineering projects to push forward. China was midway through two Five-Year Plans, yet strategic advancement could not wait. The central leadership thus introduced the two major undertakings as a groundbreaking initiative.

Strategically, the undertakings directly address the needs of advancing long-term objectives. From the outset, they have been aimed squarely at the goals of Chinese modernization. By breaking down these goals into specific tasks and identifying the most difficult bottlenecks, the undertakings found their points of focus. Some of these tasks might take decades for other countries to achieve, but China has chosen not to delay—tackling them head-on at the starting stage of the new journey toward modernization. This model is uniquely Chinese and has been proven by history to be a key factor in China’s remarkable development successes.

The undertakings are also highly forward-looking—a “first move” by the central leadership. In recent years, national development planning has placed greater emphasis on security and on guarding the bottom line, in response to changes in the international environment. The closer China’s economy is linked to the global economy, the more comprehensive its considerations must be on food security, energy security, industrial security, and ecological security, and other issues. The second “major” in the initiative—security capacity building in key areas—is an arrangement made in anticipation of future challenges. The sharp changes in the international environment since 2025 have only highlighted and validated the necessity of strengthening security capacities, demonstrating that the central leadership’s thinking and arrangements were ahead of the curve.

The undertakings also have a strong overall and systemic quality, constituting a key move in macroeconomic governance. They focus on areas of outstanding importance to economic and social development and have a high degree of relevance to the overall development landscape. The policy toolkit they employ integrates investment, fiscal, science and technology, education, social, and ecological policies. This comprehensive package embodies the use of systems thinking to drive development and will significantly impact all aspects of the economy and society.

A Manifestation of Central Will

Extraordinary measures are for extraordinary tasks. The strategic objectives of Chinese modernization are long-term undertakings, and the two major undertakings provide the foundational support through systematic design and substantial funding.

The central leadership has committed to this initiative by adopting the rarely used macroeconomic tool of ultra-long-term special treasury bonds. Compared with previous special bond issuances, the funding for the two undertakings spans a longer cycle and serves a wider range of purposes, with plans for continued implementation. In both scale and intensity, this is unprecedented: 700 billion yuan in 2024 and 800 billion yuan in 2025, all of which has already been allocated.

In terms of priorities, it vividly reflects the principle of “concentrating resources to accomplish major undertakings.” The focus areas include urban–rural integration, regional coordination, high-quality population development, food security, energy and resource security, ecological security, and self-reliance and strength in science and technology—all crucial to building a strong nation and achieving national rejuvenation. These require coordinated planning and advancement. In just over a year, the high-level requirements have been translated into batches of concrete projects, reflecting the efficiency of implementation.

Project selection is guided by the principle that only the central government can resolve these issues. Some involve urgent development bottlenecks with significant obstacles that cannot be overcome by conventional means, such as scientific and technological breakthroughs, high-standard farmland construction, and upgrading the quality of higher education. Others are long-desired but previously unachievable projects that lack local willingness or capacity to implement, such as major cross-regional infrastructure, cross-basin wastewater treatment, and urban underground utility upgrades.

The organization of the “two major undertakings” construction is top-down, completely different from the past practice in the investment sector where projects were determined through bottom-up applications. The purpose is to facilitate the smoother downward transmission of the needs of major national strategies. Relevant [central] government departments, by identifying shortcomings and weaknesses, specifying key areas, and refining project requirements, have ensured that the project list is no longer a collection of fragmented local items. Instead, projects are planned in an integrated manner by category and sector, with strengthened guidance for key regions, more targeted measures, and clearer standards.

A Combination of “Hard” and “Soft” Measures

From the start, the undertakings were designed not only to fund “hard” engineering projects but also to include comprehensive arrangements for “soft” institutional and policy measures—an important innovation.

The emphasis on soft measures is pragmatic. Given the high importance and public nature of the projects, long-term mechanisms must be designed to ensure smooth progress during construction and sustainable operation thereafter. This includes drafting specialized plans to provide strategic guidance, introducing targeted policies to improve funding efficiency, and innovating institutional arrangements to safeguard implementation.

The implementation process is thus also a process of improving the investment and financing system, updating project management approaches, and enhancing investment effectiveness. In some sectors, soft-measure experiments have had positive impacts, creating healthy interaction with hard investments.

For example, the healthy operation of urban underground pipelines depends on sound maintenance mechanisms. Some local governments have attracted long-term institutional funds into major pipeline projects through debt or equity investment plans, stabilizing private sector returns via operational rights, government subsidies, and tax incentives. Others have introduced province-wide upstream–downstream gas price linkage, set reasonable water supply return rates based on market profits, and advanced the marketization of gas and water prices—reducing losses for public utilities and encouraging private investment.

Similarly, in the quality undergraduate expansion program, mechanisms play a guiding role: schools effectively implementing expansion plans receive increased support, while those performing poorly see reduced support; universities without expanded undergraduate admission plans are generally excluded from special bond funding. Disciplines and programs are adjusted dynamically to align talent training with economic and societal needs.

Directly Relevant to Everyone

The nature of the undertakings is not determined by project size but by their strategic objectives and significance. As long as they align with major national strategies, they are included—whether as large standalone projects, such as high-speed rail along the Yangtze River, or as “project packages,” such as Yangtze River wastewater treatment composed of multiple treatment facilities. This flexible, problem-oriented approach allows better alignment with public needs.

As projects break ground and enter operation, their benefits to people’s livelihoods will become increasingly evident. Observers should not see the undertakings as distant from daily life; they will bring tangible improvements to everyone’s quality of life.

For example:

Urban underground pipelines: Upgrades to gas, water, and heating systems will greatly improve safety and resilience. Renovation of old gas pipelines is nearing completion, reducing accident rates by over 30%. Eliminating hidden risks in unseen places increases residents’ sense of security.
Food security: Gradually converting all permanent basic farmland into high-standard farmland will stabilize grain output and enhance food safety. Higher standards mean safer products, so people will eat with greater confidence.
Yangtze River protection: Building or upgrading over 60,000 kilometers of sewage pipelines in the Yangtze Economic Belt will greatly improve the river’s ecological environment and resolve long-standing public concerns.
Transportation: Creating the shortest Shanghai–Chengdu high-speed rail corridor (approx. 1,900 km) will connect the Yangtze River Delta, the middle Yangtze region, and the Chengdu–Chongqing area more quickly, cutting travel time nearly in half and boosting east–west connectivity.
Ecological security: Implementing the “Three-North” shelterbelt project over 130 million mu (93 million hectares), with good survival rates for trees, shrubs, and grasses, will safeguard northern ecological security and create new income opportunities.
Higher education: “Double First-Class” universities will see markedly improved conditions, with over 500,000 new standard dorm beds. Quality undergraduate enrollment will rise by 16,000 in 2024 and over 20,000 in 2025, giving more students access to quality education and ensuring basic living needs for those from low-income families.

A Bold Stroke in the History of Development

The two major undertakings are a major decision by the CPC Central Committee and the State Council, aimed at the overall strategy of building a strong country and achieving national rejuvenation. They play an irreplaceable role in advancing Chinese modernization.

They are not short-term measures but focus on medium- to long-term development. Some market institutions once analyzed that when China’s economy was facing short-term difficulties and challenges, the launch of the “two major undertakings” was mainly aimed at expanding investment in the short term to stabilize growth. Such a view clearly lacks a professional understanding of the decision-making intentions and logic, fails to properly grasp the relationship between the short term and the medium-to-long term, as well as between objectives and means, and inverts the proper order of priorities — a misconception that needs to be pointed out and corrected.

Since implementation began, the undertakings have provided important support for economic stability. Although their starting point was not short-term growth, the resulting investment has boosted employment and consumption, helping to expand domestic demand and stabilize growth. In the next step, during the formulation and implementation of the 15th Five-Year Plan, the “two major undertakings” will continue to occupy an important place, be organically incorporated into the new five-year plan, and form close alignment and sustained momentum with major national strategies, major plans, major projects, and key initiatives.

They will also bolster the country’s core competitiveness. As foundational support for Chinese modernization, they will strengthen factor security and resolve long-term bottlenecks, with far-reaching significance for shaping China’s development prospects. In an era of intensifying major-power competition, they will provide stable expectations and significantly enhance China’s capacity to manage international uncertainty. Such a major strategy will be pursued with persistence—it will not remain rhetorical, nor will it be reversed abruptly.

Though implementation has only recently begun, the undertakings’ historic role will continue to grow over time. In the future, looking back, they will surely stand as an important part of the “China story” and leave a bold stroke in the history of the People’s Republic’s development.

World-Watching: Old Problem, Modern Solution: Emerging Technologies for Anti-Corruption

[from Asia-Pacific Economic Cooperation, 29 July, 2025]

by Emmanuel A. San Andres and Glacer Nino A. Vasquez

Harnessing new tools to strengthen transparency and accountability can help APEC economies combat corruption and build public trust.

The Code of Hammurabi is one of humanity’s oldest surviving legal texts. Etched in basalt nearly four millennia ago, one of the many crimes it proscribes is corruption by a judge, for which the punishment is a hefty fine—“twelve times the fine set by him in the case”—plus removal and perpetual disqualification from office. Today, laws are published online rather than on stone tablets, but corruption remains a scourge across societies.

Thousands of years later, the fight against corruption continues. Corruption scandals continue to make headlines across the region, affecting both public and private institutions. Whether involving procurement fraud or illicit finance flows, these cases underscore how quickly trust can erode when institutions fail to adapt. The need for preventive systems, powered by data, backed by law and enabled by technology, has never been more urgent. Across APEC, the principles of transparency, accountability and integrity remain central to strong public institutions. As economies become more interconnected and more data-driven, emerging technologies are offering new ways to advance these goals.

APEC economies have long relied on oversight mechanisms such as audits, procurement rules, and internal checks to prevent, detect and prosecute corruption. These tools have been effective in fighting corruption, and they remain essential. But at the same time, new technology has also opened new pathways for corruption: The discreet meeting at a coffeeshop may now occur over an encrypted messaging app, and the cash-filled envelope replaced by a cryptocurrency transfer.

As corrupt actors grow more technologically sophisticated, so too must anti-corruption efforts. APEC economies are not new to digital solutions—e-government and e-procurement portals have reduced opportunities for hidden transactions. Beneficial ownership registries and asset tracking systems make it easier to prosecute and penalise incidents of corruption when they do occur. But emerging technologies offer even more powerful tools to prevent, detect and deter corruption.

For example, artificial intelligence and machine learning (AI/ML) enable real-time monitoring, risk scoring, pattern detection, and predictive analytics. These tools can support monitoring and investigation by automating document review and evidence gathering. AI/ML can also enhance institutional capacity through adaptive, personalized training systems. Meanwhile, advanced data analytics can support the review of large volumes of data, revealing patterns of corrupt activity and informing decision-making. When data from different sources are connected, it becomes easier to understand corruption risks early and act with greater precision.

Blockchain—the technology that enables cryptocurrencies—can be used to create immutable, transparent ledgers for government transactions, supply chain monitoring and secure identity management, making it harder to conceal corrupt activity. Remote sensing and facial recognition technologies also offer potential in compliance monitoring and anomaly detection.

However, implementing these emerging technologies have their share of challenges and risks. The effectiveness of AI/ML systems is only as good as the quality, integrity and objectivity of the data they are fed; biased inputs can produce biased outcomes. Blockchain technology is very energy-intensive, which may hinder its scalability and availability. Facial recognition raises serious concerns over privacy and due process, enabling widespread surveillance without individual consent.

These trends mirror growing international momentum around the digitalization of integrity systems. International organizations are helping lead the way: the OECD is leveraging AI and big data to detect corruption risks and improve compliance, while the World Bank’s Governance Risk Assessment System [archived PDF] uses analytics to uncover fraud in public procurement, with pilots already underway in Brazil. As stewards of major anti-corruption conventions, these institutions are turning innovation into accountability. For APEC economies, this alignment offers a timely opportunity to shape global standards while advancing domestic reform.

It is also important to recognize the central role of human and institutional elements in anti-corruption efforts. Emerging technologies are not a silver bullet; they will only be effective if they are well integrated into government processes and are aligned with the skills of the people who need to use them. Training and capacity building will be essential to bridge capability gaps, while a committed leadership will be needed to implement the legal reforms and oversight structures needed to ensure effective adoption.

Buy-in from anti-corruption stakeholders across government, the private sector and civil society is also crucial to this pursuit. Technologies like AI/ML and advanced analytics require large volumes of reliable data, requiring cooperation and information sharing. Public understanding and trust, ethical use of data and equitable access to technology are all essential to ensuring long-term success.

APEC economies are at different stages of readiness to adopt these emerging technologies. While some economies have yet to develop adequate digital infrastructure, human capital and institutional structures, others are already in a position to expand or integrate more advanced anti-corruption tools into their day-to-day processes. Capacity building, information sharing and dialogue can help narrow this gap while learning from the experiences of those ahead.

This is where regional cooperation can make a difference APEC provides a platform for knowledge sharing, capacity building and policy cooperation. The Anti-Corruption and Transparency Experts Working Group could provide a venue for a collaborative strategy to mainstream emerging technology in anti-corruption work, while building technical capacity for economies that need it. Likewise, the upcoming APEC High-Level Dialogue on Anti-Corruption Cooperation provides an opportunity to reaffirm values and shared commitments in the fight against corruption.

Corruption has existed since the dawn of civilization. As methods to commit corruption have evolved, so must the tools to combat it. People and institutions will always remain at the heart of anti-corruption efforts, but with the right governance and safeguards, emerging technologies can be game-changers in fighting corruption and recovering its proceeds, whether it’s in Babylonian sheqels or in bitcoins.

Emmanuel A. San Andres is a senior analyst, Glacer Niño A. Vasquez is a researcher at the APEC Policy Support Unit. For more on this topic, read the latest issue paper “Technologies for Preventing, Detecting, and Combatting Corruption” [archived PDF].

Wrestling with History: Alexis de Tocqueville

Alexis de Tocqueville, a brilliant French historian, wrote Democracy in America. This book is a supreme example of U.S.-watching.

Another book of his, Recollections, shows him wrestling with history itself. If we remember that Clio is the muse of history, then we might say that Recollections is the chronicle of de Tocqueville’s encounter with her.

The question of human history and what de Tocqueville called “the world’s destiny” are described as follows:

l wrote histories without taking part in public affairs, and politicians whose only concern was to control events without a thought of describing them. And I have invariably noticed that the former see general causes everywhere, whereas the latter, spending their lives amid the disconnected events of each day, freely attribute everything to particular incidents and think that all the little strings their hands are busy pulling daily are those that control the world’s destiny. Probably both of them are mistaken.

For my part I hate all those absolute systems that make all the events of history depend on great first causes linked together by the chain of fate and thus succeed, so to speak, in banishing men from the history of the human race. Their boasted breadth seems to me narrow, and their mathematical exactness false. I believe, pace the writers who find these sublime theories to feed their vanity and lighten their labours, that many important historical facts can be explained only by accidental circumstances, while many others are inexplicable. Finally, that chance, or rather the concatenation of secondary causes, which we call by that name because we can’t sort them all out, is a very important element in all that we see taking place in the world’s theatre. But I am firmly convinced that chance can do nothing unless the ground has been prepared in advance. Antecedent facts, the nature of institutions, turns of mind and the state of mores are the materials from which chance composes those impromptu events that surprise and terrify us.
Alexis de Tocqueville, Recollections, 1893, Anchor Books, page 78.

De Tocqueville warns us that the world’s destiny is always murky and what he calls a labyrinth and a whirlwind. He says:

Mentally I reviewed the history of our last sixty years and smiled bitterly to myself as I thought of the illusions cherished at the end of each phase of this long revolution; the theories feeding these illusions; our historians’ learned daydreams, and all the ingenious false systems by which men sought to explain a present still unclearly seen and to foresee the unseen future.
Recollections, page 83.

He continues:

Shall we reach, as other prophets as vain perhaps as their predecessors assure us, a more complete and profound social transformation than our fathers ever foresaw or desired, and which we ourselves cannot yet conceive; or may we not simply end up in that intermittent anarchy which is well known to be the chronic incurable disease of old peoples? I cannot tell, and do not know when this long voyage will end; I am tired of mistaking deceptive mists for the bank. And I often wonder whether that solid land we have sought for so long actually exists, and whether it is not our fate the rove the seas forever!
Recollections, pages 83-84.

And yet, with all that profound uncertainty, he offers a very sweeping interpretation of French history from the French Revolution (1789) to the French Revolution of 1848. The famous painting by Eugène Delacroix, Liberty Leading the People (French: La Liberté guidant le peuple), commemorating the July Revolution of 1830, falls in between.

Despite de Tocqueville’s warnings about the slipperiness of historical judgement, he arrives at an extremely precise interpretation of his own:

Seen as a whole from a distance, our history from 1789 to 1830 appears to be forty-one years of deadly struggle between the Ancien Régime with its traditions, memories, hopes and men (i.e. the aristocrats), and the new France led by the middle class. 1830 would seem to have ended the first period of our revolutions, or rather, of our revolution, for it was always one and the same, through its various fortunes and passions, whose beginning our fathers saw and whose end we shall in all probability not see. All that remained of the Ancien Régime was destroyed forever. In 1830 the triumph of the middle class was decisive and so complete that the narrow limits of the bourgeoisie encompassed all political powers, franchises, prerogatives, indeed the whole government, to the exclusion, in law, of all beneath it and, in fact, of all that had once been above it. Thus the bourgeoisie became not only the sole director of society, but also, one might say, its cultivator. It settled into every office, prodigiously increased the number of offices, and made a habit of living off the public Treasury almost as much as from its own industry.
Recollections, page 5.

Reviewing the first sentence from the quote above, one can see a deep characterization of an era, with the conclusion “in 1830 the triumph of the middle class was decisive…” Notice the profound paradox that on one hand de Tocqueville spoke of the elusiveness of history despite providing the definite description of this period. Contrast “seen as a whole from a distance” with one of the themes of his recollections, that it is not given to us to understand history.

Economics-Watching: BRICS Currency Creates Dilemma for the Dollar

by Christopher Whalen, from China Daily

The term “BRICS currency” typically refers to a hypothetical or proposed unified currency for the BRICS grouping. It’s not a single, physical currency currently in use, but rather a concept for a potential future monetary system that some suggest will reduce the dominance of the U.S. dollar in international trade and finance.

Is BRICS currency cooperation about immediate de-dollarization or long-term financial sovereignty? The answer is that BRICS cooperation may include reducing long-term dependence on the dollar as a means of exchange. The dollar is involved in more than half of all trade and 80 percent of all foreign exchange transactions. BRICS currency cooperation aims to gradually reduce the group’s dollar dependency, but challenges remain.

The BRICS concept came about not because the dollar is unsuitable as a means of exchange or unit of account, but rather because of the use of the dollar by Washington as a weapon. As I note in my book, Inflated: Money, Debt and the American Dream, the special role of the dollar in U.S. finance allows the U.S. government to impose harsh compliance and reporting requirements on foreign nationals and institutions. The U.S. is an arbitrary hegemon and does not follow reciprocity with other countries.

The global role of the dollar is an anomaly, the byproduct of two world wars had left the other antagonists broke by the time the Bretton Woods Agreement was signed in July 1944.

Choosing the fiat paper dollar as the default global reserve currency more than seven decades ago reflected the fact that the United States was one of the victors and possessed the wealth that gave Washington unchallenged economic leadership. Prior to World War I, the United Kingdom’s pound sterling was the global standard, but importantly, this paper currency was backed by gold — the only money that is not debt. The dollar, too, was backed by gold — until 1933, when the Franklin Roosevelt administration confiscated gold in private hands to prevent his government from collapsing.

Pound notes started to circulate in England in 1694, shortly after the establishment of the Bank of England. The paper pound helped to fuel the expansion of the British Empire, in large part because the only competing form of money was physical gold. When Britain and other nations left the gold standard in the 1930s, it was due to the deflation caused by the Great Depression rather than a deliberate choice.

The 19th-century rule attributed to English journalist and businessman Walter Bagehot says that in times of crisis, lend freely at a high rate against good collateral. Yet since the currency devaluation and gold seizures of 1933, fiat currencies and below-market interest rates have been the rule. In a global scheme in which the government occupies the prime position, the operative term remains “financial repression”, whereby governments control markets and artificially suppress rates of return on debt. For this reason, the dollar is losing its role as a store of value to gold.

The fact that the dollar continues to trade strongly versus other currencies reflects the reality that as the main means of exchange globally, the dollar cannot be easily replaced. One reason for this continued support for the dollar is that the trade in petroleum and other commodities is so large that it requires an equally large currency to accommodate it. Also, neither the Europeans nor the Japanese, the only two possible alternatives, are willing to risk the external deficits or inflation that the U.S. suffers as the host for the global currency.

What global currency will replace the fiat paper dollar? None. As this article is being written, gold is the second-largest reserve asset for central banks after the dollar. “The initiation in 2002 of the Shanghai Gold Exchange was of great strategic significance, both for gold and the global monetary system,” notes veteran gold fund manager Henry Smyth in an interview in The Institutional Risk Analyst. “Now it is completely clear what happened.”

Smyth and many other observers see the creation of the SGE in 2002 as the return of gold to the international monetary system. But while gold is growing in importance as a reserve asset for many countries, it does not mean that the role of the dollar as a global means of exchange or unit of account is about to change.

The dollar will remain the dominant asset. And even then, displacing the dollar will require a major change in the international monetary system, a change that is already underway.

The author is the chairman of Whalen Global Advisors LLC in New York and the author of Inflated: Money, Debt and the American Dream published by Wiley Global (2025).

“De-Globalization?”

The classic study of the “swirl of processes and events” that ended previous globalization episodes is the theme of Princeton Professor Harold James’ 2002 book, The End of Globalization: Lessons from the Great Depression.

“Globalization” is here. Signified by an increasingly close economic interconnection that has led to profound political and social change worldwide, the process seems irreversible. In this book, however, Harold James provides a sobering historical perspective, exploring the circumstances in which the globally integrated world of an earlier era broke down under the pressure of unexpected events.

James examines one of the great historical nightmares of the twentieth century: the collapse of globalism in the Great Depression. Analyzing this collapse in terms of three main components of global economics—capital flows, trade and international migration—James argues that it was not simply a consequence of the strains of World War I, but resulted from the interplay of resentments against all these elements of mobility, as well as from the policies and institutions designed to assuage the threats of globalism.

Could it happen again? There are significant parallels today: highly integrated systems are inherently vulnerable to collapse, and world financial markets are vulnerable and unstable.

While James does not foresee another Great Depression, his book provides a cautionary tale in which institutions meant to save the world from the consequences of globalization—think WTO and IMF, in our own time—ended by destroying both prosperity and peace.

Legitimate fears about “globalization reversal” have been well put by Zakaria:

Davos, Switzerland —

President Trump’s speech here at the World Economic Forum went over relatively well. That’s partly because Davos is a conclave of business executives, and they like Trump’s pro-business message. But mostly, the president’s reception was a testament to the fact that he and what he represents are no longer unusual or exceptional. Look around the world and you will see: Trump and Trumpism have become normalized.

Davos was once the place where countries clamored to demonstrate their commitment to opening up their economies and societies. After all, these forces were producing global growth and lifting hundreds of millions out of poverty. Every year, a different nation would become the star of the forum, usually with a celebrated finance minister who was seen as the architect of a boom. The United States was the most energetic promoter of these twin ideas of economic openness and political freedom.

Today, Davos feels very different. Despite the fact that, throughout the world, growth remains solid and countries are moving ahead, the tenor of the times has changed. Where globalization was once the main topic, today it is the populist backlash to it. Where once there was a firm conviction about the way of the future, today there is uncertainty and unease.

This is not simply atmospherics and rhetoric. Ruchir Sharma of Morgan Stanley Investment Management points out that since 2008, we have entered a phase of “deglobalization.” Global trade, which rose almost uninterruptedly since the 1970s, has stagnated, while capital flows have fallen. Net migration flows from poor countries to rich ones have also dropped. In 2018, net migration to the United States hit its lowest point in a decade.

The shift in approach can best be seen in the case of India. In 2018, Prime Minister Narendra Modi came to Davos to decry the fact that “many countries are becoming inward focused and globalization is shrinking.” Since then, his government has increased tariffs on hundreds of items and taken steps to shield India’s farmers, shopkeepers, digital companies and many others from the dangers of international competition. The Office of the U.S. Trade Representative recently called out India for having the highest tariffs of any major economy in the world.

Indian officials used to aggressively court foreign investment, which was much needed to spur growth. Last week, with India’s economy slowing badly, Jeff Bezos announced a $1 billion investment in the country. (Bezos owns The Post.) But the minister of commerce and industry scoffed at the move, saying Amazon wasn’t “doing a great favor to India” and besides was probably engaging in anti-competitive, “predatory” practices. Often, protectionist policies help favored local producers. Malaysian Prime Minister Mahathir Mohamad recently criticized some of Modi’s policies toward Muslims. The Indian government effectively cut off imports of Malaysian palm oil. In a familiar pattern, one of the chief beneficiaries was a local billionaire long associated with Modi.

The Economist notes that Europe, once one of the chief motors for openness in economics and politics, is also rediscovering state intervention to prop up domestic industries. And if you think the Internet is exempt from these tendencies, think again. The European Center for International Political Economy tracks the number of protectionist measures put in place to “localize” the digital economy in 64 countries. It has been surging for years, especially since 2008.

It’s important not to exaggerate the backlash to globalization.

As a 2019 report by DHL demonstrates, globalization is still strong and, by some measures, continues to expand. People still want to trade, travel and transact across the world. But in government policy, where economic logic once trumped politics, today it is often the reverse. Economist Nouriel Roubini argues that the cumulative result of all these measures — protecting local industries, subsidizing national champions, restricting immigration — is to sap growth. “It means slower growth, fewer jobs, less efficient economies,” he told me recently. We’ve seen it happen many times in the past, not least in India, which suffered decades of stagnation as a result of protectionist policies, and we will see the impact in years to come.

Nevertheless, today, nationalism and protectionism prevail.

This phase of deglobalization is being steered from the top. The world’s leading nations are, as always, the agenda-setters. The example of China, which has shielded some of its markets and still grown rapidly, has made a deep impression on much of the world. Probably deeper still is the example of the planet’s greatest champion of liberty and openness, the United States, which now has a president who calls for managed trade, more limited immigration and protectionist measures. At Davos, Trump invited every nation to follow his example. More and more are complying.
“The world is de-globalizing. Trump set the example.” The Washington Post, Fareed Zakaria

Students should sense that while history does not repeat itself, it sometimes rhymes and this is a major danger. It also might imply that coping with climate change will be all the harder because American-led unilateralism everywhere would mean world policy paralysis.

Movies As Parallel Universities: The Promised Land

The Promised Land is a Polish film masterpiece based on Nobel laureate Reymont’s 1899 novel. The novel describes the industrialization of the Polish city of Łódź in the nineteenth century and reminds one a little of Upton Sinclair’s The Jungle of 1906 but with the emphasis not on dangers and miseries for labor but on the “mad dance” of the capitalist industrial free-for-all:

“The Promised Land (Polish: Ziemia obiecana) is a 1975 Polish drama film directed by Andrzej Wajda, based on the novel by Władysław Reymont. Set in the industrial city of Łódź, The Promised Land tells the story of a Pole, a German, and a Jew struggling to build a factory in the raw world of 19^th century capitalism.”
(Wikipedia)

Wajda presents a shocking image of the city, with its dirty and dangerous factories and ostentatiously opulent residences devoid of taste and culture. The film follows in the tradition of Charles Dickens, Émile Zola and Maxim Gorky, as well as German expressionists such as Dix, Meidner and Grosz, who gave testimony of social protest. Think also of the English poet, William Blake’s metaphor describing industrial England as a world of “dark Satanic mills.”

Reymont, the author of the original novel, was in his heart a ruralist and intensely disliked the modern industrial world, which he saw as maniacal and destructive.

In the 2015 poll conducted by the Polish Museum of Cinematography in Łódź, The Promised Land was ranked first on the list of the greatest Polish films of all time.

Plot

“Karol Borowiecki (Daniel Olbrychski), a young Polish nobleman, is the managing engineer at the Bucholz textile factory. He is ruthless in his career pursuits, and unconcerned with the long tradition of his financially declined family. He plans to set up his own factory with the help of his friends Max Baum (Andrzej Seweryn), a German and heir to an old handloom factory, and Moritz Welt (Wojciech Pszoniak), an independent Jewish businessman. Borowiecki’s affair with Lucy Zucker (Kalina Jędrusik), the wife of another textile magnate, gives him advance notice of a change in cotton tariffs and helps Welt to make a killing on the Hamburg futures market. However, more money has to be found so all three characters cast aside their pride to raise the necessary capital.
On the day of the factory opening, Borowiecki has to deny his affair with Zucker’s wife to a jealous husband who, himself a Jew, makes him swear on a sacred Catholic object. Borowiecki then accompanies Lucy on her exile to Berlin. However, Zucker sends an associate to spy on his wife; he confirms the affair and informs Zucker, who takes his revenge on Borowiecki by burning down his brand new, uninsured factory. Borowiecki and his friends lose all that they had worked for.
The film fast forwards a few years. Borowiecki recovered financially by marrying Mada Müller, a rich heiress, and he owns his own factory. His factory is threatened by a workers’ strike. Borowiecki is forced to decide whether or not to open fire on the striking and demonstrating workers, who throw a rock into the room where Borowiecki and others are gathered. He is reminded by an associate that it is never too late to change his ways. Borowiecki, who has never shown human compassion toward his subordinates, authorizes the police to open fire nevertheless.”
(Wikipedia)

Notice the sentence above:

Borowiecki’s affair with Lucy Zucker (Kalina Jędrusik), the wife of another textile magnate, gives him advance notice of a change in cotton tariffs and helps Welt to make a killing on the Hamburg futures market.

Textiles and hence cotton prices and tariffs are, as elsewhere, “the name of the game” in Łódź industry.

There is a concrete basis in reality for this 19^th century version of our derivatives trading contributing to 2008 and the Great Recession:

In a discussion of futures markets, we read:

“Already in 1880 merchants were buying an idea rather than a palpable commodity, as we saw happen in the grains futures market. In that year, sixty-one million bags (coffee, in this example) were bought and sold on the Hamburg futures market, when the entire world harvest was less than seven million bags!
It was this sort of speculation that caused the German government to shut down the futures market for a while.”
(Global Markets Transformed: 1870-1945, Steven Topik & Allen Wells, Harvard University Press, 2012, page 234)

The danger with such speculative excesses is that the economy, national or global, becomes a “betting parlor” (bets on bets on bets in an infinite regress, as in the lead-up to 2008) and governments have been paralyzed and passive in the face of such “casino capitalism” (to use Susan Strange’s vocabulary) because laissez-faire neoliberal ideology has a profound hold in the West, especially in Anglo-America.

Professor Milton Friedman (died in 2006) argued in interviews going back to the 1960s and before, that speculators fulfill a valuable economic function since they “keep the system efficient.”

The current semi-dismantling and neutralizing of the Dodd-Frank financial reforms and guidelines has to do not only with lobbying but also with the hold of various strands of such “laissez-faire” ideology and market fundamentalism.

Keynes’s classic essay, “The End of Laissez-Faire” tends to yield to the countervailing force of this market fundamentalism/“laissez-faire religion.”