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Brazil Stays Populist

In a free and well informed election, a slim majority of Brazil’s 142 million eligible voters chose Sunday to reelect President Dilma Rousseff to a second four-year term, during which Latin America’s largest country will continue in the nationalist populist camp. The election was deeply confrontational and nothing in the campaign indicates Rousseff plans to modify her alliance with the Latin America’s leftist regimes, particularly those in Venezuela, Cuba and Argentina. Officials in these countries were jubilant with Sunday’s returns and showered congratulatory messages on Rousseff. President Obama also called Rousseff on Tuesday and, in addition to congratulations, offered an invitation for her to make an official visit to the United States in the near future, her previous visit having been cancelled after revelations that the NSA had recorded her personal communications.

Countering the Threat of North Korean Warheads

On Friday, General Curtis Scaparrotti, commander of UN and US forces in Korea, told reporters that he believes Pyongyang has developed the “capability” to miniaturize a nuclear device. The regime, he said during a Pentagon press briefing, also has the “technology” to deliver that device by ballistic missile. The general did not claim North Korea had actually mounted a warhead on a missile or that it had in fact tested the combination, but of course it is only a matter of time before it does so.

The Democratic People’s Republic of Korea, as the North likes to call itself, has claimed that its February 2013 atomic test was of a “miniaturized and lighter nuclear device.”

Tunisian Voters Say No to Islamists

Tunisia just held a parliamentary election and Ennahda, the sort-of-moderate-but-not-really Islamist party lost to the ardently secular Nidaa Tounes, which translates into Call of Tunisia.

Ennahda is the Tunisian Branch of the Muslim Brotherhood under another name, and it wears a more moderate face than the Egyptian branch. Tunisia is a genuinely moderate country and Ennahda’s leaders have no choice but to tone down their rhetoric and their platform if they want to seriously compete in elections.

Even so, they still only won 30 percent of the seats.

The previous regime was aggressively secular. Religion wasn’t banned, but it was heavily regulated by the state, as were the religious rights of individual citizens. Headscarves, for instance, were prohibited outright in schools and government buildings. The government wasn’t just secular. It was atheistic and hostile. Ordinary religious people who had no interest in living under an authoritarian or totalitarian theocracy found it offensive, and they voted for Ennahda not because they wanted an Islamic state but because they wanted a government that didn’t screw with them.

Ennahda earned the support of the true believers also, of course, the kind of people who really do pine for what Mohammad Morsi promised for Egypt before the country spit him out. Such people exist in Tunisia. Such people exist everywhere, including in the United States. They just can’t win elections on their preferred platform.

Tunisian politics might be more coherent if a viable mainstream conservative party were to compete with a more-brazen Ennahda and split the votes of religious moderates and religious extremists, but Ennahda certainly won’t split itself. The Islamists would have even fewer seats in the parliament if that were to happen. Ennahda can’t even win an election with its ostensibly moderate platform.

Much hay is being made of the fact that a large percentage of Islamic State terrorists in Syria and Iraq hail from Tunisia. We can speculate about the reasons for that, but I can tell you with absolute confidence that it’s not because Tunisia has a broader base of support for totalitarian political Islam than other Muslim countries.

On the contrary, Tunisia is the most liberal Arab country in the world. I’ve known that for a decade. In such marked contrast to Egypt, Libya, and Syria, it has emerged from the upheavals of the Arab Spring as a more-or-less properly functioning democracy. On January 26, 2014, Tunisia ratified the most liberal constitution in the entire Arab world.

There is no chance of establishing an ISIS-like “caliphate” on that soil unless an army invades and conquers it from the outside. The ideology can appear there, but it cannot grow there. Anyone interested in seriously pursuing it has little choice but to go somewhere else. So they’ve run off to Syria and Iraq where they will kill and where they will die. Think of it like brain drain, only the people being drained aren’t the smart ones.

Leave Putin His Scraps

Would territorial retreats whet Vladimir Putin’s imperialist appetite?

I’d be rich if I had a hryvnia for every time I’ve heard that question answered in the affirmative. Accordingly, if one concedes an inch to Putin, he’ll take a mile. And, naturally, that mile will only be the prelude to many more miles. In sum, you can’t concede an inch—or else.

Critics of Ukrainian President Petro Poroshenko’s “peace plan” for the Donbas enclave controlled by Russia and its terrorist proxies generally make this argument. Providing the enclave with a special status and effectively conceding Russian control of the territory isn’t just a “capitulation.” It’s an invitation to further Russian aggression.

Let’s unpack the arguments for inches becoming miles.

Only Tariffs Will Stop China's Cyber Attacks

On Monday, GreatFire.org, an Internet monitoring group, charged that China launched “a malicious attack on Apple in an effort to gain access to usernames and passwords and consequently all data stored on iCloud.”

The “man-in-the-middle” attack, which deceived users into logging onto a Chinese government-controlled website instead of Apple’s, was directly traceable to China’s central government. “We know that the attack point is the Chinese Internet backbone and that it is nationwide, which would lead us to be 100 percent sure that this is again the work of the Chinese authorities,” said Charlie Smith, GreatFire co-founder, to the South China Morning Post. Only the Chinese government and Chinese Internet service providers “have access to the backbone.”

The Twisted Appeal of ISIS

A poll released last week by the Washington Institute suggestss that the Islamic State may be more popular in Europe than in the Middle East. Lee Smith tries to make sense of it.

Europe’s got great health care, welfare, and lots of attractive young men and attractive women who, unlike the vast majority of women in the Middle East outside of Israel, are sexually available. So, why given a choice between a comfortable, if somewhat boring, life as a pharmacist in Hamburg, or fighting and dying in the desert, are thousands of Western Muslims opting for the latter?

Because, for all the awesome social services and consumer goods it can offer, Europe has become incapable of endowing the lives of its citizens, Muslim or not, with meaning. A generation of young European Muslims are giving up their relatively easy lives in Malmö, Marseilles, and Manchester for the battlefields of Syria and Iraq, because Europe is devoid of values worth living—or dying—for. They are leaving for the same reason that Europe’s Jews are moving to Israel: Strength and a sense of purpose can be found elsewhere, whether it’s ISIS, Vladimir Putin, Ali Khameni, or the IDF.

Human beings are wired for struggle and strife. There will always be those who get bored with the tranquil and easy lives most of us have in advanced Western nations. I can relate to this a little bit myself. I had a dull office job before I ran off to places like Beirut and Baghdad. I certainly didn’t go there to fight or to kill anyone, but the sense of adventure was a massive antidote to feelings of ennui. 

A French anarchist brilliantly articulated the most extreme version of this sentiment with a can of spray paint in Paris in 1968: “In a society that has abolished all adventure, the only adventure left is to abolish that society.”

Then there's Anthony Loyd who moved from Britain to Bosnia during the Yugoslav war to resolve his emotional and substance abuse problems. "I had come to Bosnia partially as an adventure," he wrote in his book My War Gone By, I Miss it So. "But after a while I got into the infinite death trip. I was not unhappy. Quite the opposite. I was delighted with most of what the war had offered me: chicks, kicks, cash and chaos; teenage punk dreams turned real and wreathed in gunsmoke."

Don't discount this sort of impulse. You may not be able to relate to it at all, but it's real. War is hell--that's for damn sure--but it's also an incredible antitode to alienation and boredom.

Ukraine Should Abandon the Donbas Enclave

Ukraine has two nonnegotiable priorities in its ongoing war with Russia: survival and reform. Ukraine must survive as a sovereign democratic state in the short term if it is to reform, and it must reform itself in the medium term in order to survive and become a prosperous and secure sovereign democratic state in the long term. Both goals can be best advanced if Ukraine washes its hands of the enclave of the Donbas region that Russia and its proxies now control.

Europe’s foremost priority is inextricably connected to Ukraine’s. Europe’s two key pillars—the European Union and the North Atlantic Treaty Organization—must survive as effective institutions, but they can do so only if Ukraine survives and reforms. If Ukraine, a geopolitically pivotal country in the heart of Europe, falls to Russia or becomes a European Zimbabwe, Europe will be hard-pressed to remain functional, prosperous, and stable.

Ukraine Must Reform to Save Itself

Will NATO Save Ukraine from Russia? I’m surprised by how many people, especially in Ukraine, believe the answer is yes. And I’m no less surprised by how many Western analysts and Russian policymakers claim that that’s exactly what NATO hopes to do—and, by implication, will do. Naturally, Russians describe NATO’s presumed intentions as offensive and not defensive.

It’s time to wake up and smell the espresso in Brussels.

First, NATO has no army. As an institution, as a bureaucracy located in two complexes in and near the capital of Belgium, the alliance does not have troops. It can cajole, persuade, bluster, and the like, but the troop-sending is done—if it is done at all—by NATO member states on behalf of NATO member states or, more problematically, in out-of-area missions. Second, most Europeans have slashed their defense budgets way below the limits they have publicly agreed to sustain. The United States is the only significant exception to this general rule. To put it mildly, Europe has passed the military buck to America, while insisting on the right to kvetch about Washington’s occasionally unwise use of armed force.

Turkey Bombs the Kurds

Turkey finally decided to use military force after watching the Islamic State in Syria advance on the Kurdish city of Kobani—and did so by bombing the Kurds.

The Kurdistan Worker's Party (PKK) deserves plenty of blame here. Its fighters reportedly fired on Turkish positions near the Iraqi border. But no one who has paid the slightest attention to what Turkey has been up to for the last several decades has any right to be shocked by Turkish willingness to bomb the Kurds but not the IS.

There was never much chance that Turkey would help defeat the IS in Syria or Iraq. Prime Minister Recep Tayyip Erdogan is primarily opposed to Syrian President Bashar al-Assad and the PKK. Our interests are not in alignment.

He's quite right that Assad needs to go too, and the PKK is bad news--for real--but he, along with just about every other Turk in Turkey, is so freaked out by Kurdish independence anywhere in the world that he'd rather sit on his ass and let everyone die than do anything useful to resist the Islamic State. If he does feel like doing something useful he'll do it according to his interests, which means bombing the Kurds.

When he looks at the map he sees dominoes. Kurdish independence in Iraq could lead to Kurdish independence in Syria which could lead to Kurdish independence in Iran which could lead to Kurdish independence in Turkey. Every time a new independent Kurdish entity pops up in the Middle East, the liklihood that Turkey will lose an enormous swath of its territory increases.

His analysis is correct.

So he'll bomb the Kurds but not the Islamic State. He'd be against Kurdish independence in Syria even if the PKK didn't exist.

Turkish animosity against Kurds is hardly a secret, so I'm not sure why so many in Washington can't understand this guy. Maybe it's because he lets girls go to school and doesn't stone anybody to death.

Indian Economy to Overtake China’s

We are headed to “a world-turned-upside-down moment,” which could come as early as 2016. “That’s when,” Businessweek tells us, “India, always the laggard, may pull ahead of China and become the fastest-growing of Asia’s giants.”

Analysts used to ask, “Can India Catch Up with China?” Now, it looks almost inevitable.

There’s no mystery for the change in narrative. In a five-week-long election ending in May, 541 million voters went to the polls, and most of them demanded fundamental change. They rejected the ruling Congress Party of the Gandhi family, which had dominated national politics since independence in 1947, and gave a newcomer, the charismatic Narendra Modi of the Bharatiya Janata Party (BJP), an absolute majority in the Lok Sabha, the lower house of Parliament.

The Inter-American Defense Charade

Secretary of Defense Chuck Hagel made a trip to South America this week that engaged the United States in the murky security problems that destabilize this conflicted region. Some political forces now in power favor cooperation with the United States, such as Colombia and Mexico, but other sectors, led by Venezuela, and backed by Cuba, are openly antagonistic toward US leadership in the region. Hagel’s trip will test the waters and perhaps breathe new life into the Obama administration’s pallid policy toward Latin America.

The Rehabilitation of Felix Dzerzhinsky

We forget everything.

— Aleksandr Solzhenitsyn, The Gulag Archipelago, Volume 1

The failure to memorialize the victims of Communist terror has contributed to the moral corrosion of Russian society.

— David Satter, It Was a Long Time Ago, and It Never Happened Anyway: Russia and the Communist Past

In September President Vladimir Putin restored the title “Dzerzhinsky Division” to an elite Moscow police unit. So what, you say? Well, that’s the point. As the novelist Martin Amis put it in Koba the Dread: Laughter and the Twenty Million, “Everybody knows of Himmler and Eichmann. Nobody knows of Yezhov and Dzerzhinsky.”

From Havana to Hanoi

Vietnam’s communists are a hell of a lot smarter than Cuba’s.

Hanoi, the capital of Vietnam, thunders with economic productivity and bristles with new construction while most of Cuba’s capital Havana resembles a post-apocalyptic ruinscape.

While civilized countries have a minimum wage, Cuba has a maximum wage of twenty dollars per month for almost every job in the country. A beer costs an entire week’s salary and a meal out in a restaurants costs a month’s, so drinking and dining establishments are almost strictly for foreigners. In Hanoi, though, you can’t walk a block without passing restaurants, bars, cafes, and food stalls packed from one wall to its opposite with local patrons.

Vietnam’s middle class travels on motorbikes for the most part rather than in cars, but in the 1970s almost everyone got around on a bicycle. Cuba hasn’t even reached the bicycle stage yet. Its streets and highways are more bereft of traffic than anywhere in the world except North Korea.

You can find more goods for sale on a single block in Hanoi than in all of Havana.

Havana, Cuba

Some countries are just better at economics than others.

In Vietnam, citizens are allowed to earn and keep money. This makes them rich compared with Cubans who, for the most part, are not. But Cuba is not only poor because the government imposed a glass ceiling an inch off the floor. It’s also poor because the government has banned ordinary commerce for decades. One should hardly expect a booming economy when nearly all economic activity is prohibited.

Cuba’s president Raul Castro is experimenting with microcapitalist reforms, but billboards in Havana broadcast a soul-crushing slogan even today: “In Cuba the only changes are for more socialism.”

By contrast, Vietnam’s Communist Party figured out that communist economics were bankrupt even before the Berlin Wall fell, a mere ten years after winning the war and conquering the south, and in 1986 it implemented the reforms known as Doi Moi. Decades later, the result is an extraordinary explosion of new prosperity that nullifies nearly everything the party did and said when it first came to power.

*

It wouldn’t be quite right to describe Vietnam’s reforms as economic liberalization. The ostensible goal was to produce a “socialist-oriented market economy” where the state still owned major industries. But it was still a far cry from the centrally-planned Soviet-style command economy, and as the reforms progressed the system functioned more or less as a market economy despite the fact that the largest companies were owned by the government.

Hanoi, Vietnam

Small businesses were left alone for the most part, and Vietnam developed what some have called “street front capitalism” where microbusinesses proliferated. You’ll still see them all over Vietnam now. Women sell fresh produce and baked goods from baskets. Men grill meat and sell it to passersby who sit on little stools and eat at tiny tables right on the sidewalk. Everything you can imagine is sold from little stalls in the night markets.

Nowhere in the world have I seen so many boutiques, from cafes and pubs to clothing and electronics stores. I can’t say with this with certainty, but I suspect, due to the sheer number of Vietnamese involved in one kind of small business another, that more people in Vietnam understand the basics of business and capitalism than people in the United States. And that’s in the north, which still lags behind the south.

When the communist leadership decided in the mid-1980s to put Karl Marx and Adam Smith into a blender and see what came out,” David Lamb wrote in Vietnam Now, “Southerners, exposed to capitalism for decades, were far more comfortable than their northern brethren in adapting to the demands of free markets.

“The Old Guard communist leadership of the North can bury its head in the sands of Marxist economic theory all it wants,” he added, “but its constituency wants the model that Saigon symbolized—an economy that rewards initiative, encourages private enterprise, values liberal ideas, and frees itself from rigid government control.”

He wrote those words in 2002. In the meantime, the north got what it wanted. At least it appears that way to me. I didn’t get a chance to visit the south and cannot compare them. Perhaps the south still has a freer economy, and everyone in the north will freely admit that it’s richer, but the north in 2014 is a capitalist wonderland, what Bill Hayton calls the “communist capitalist playground” in his book, Vietnam: Rising Dragon.

“The results of Doi Moi over the first eight or nine years were dazzling,” Lamb wrote. “The annual inflation rate fell to single digits from 700 percent. Farmers, freed from collectivization, transformed Vietnam from a rice importer into the world’s second-largest rice exporter after Thailand. The gross domestic product grew by nearly nine percent a year. Thirty-five thousand small businesses started up in the private sector.”

When Vietnam was still economically Marxist it was one of the world’s poorest countries. “Ninety percent of the roads were unpaved; farmers in the most impoverished provinces got by on the equivalent of perhaps five dollars per month; nationally, bicycles outnumbered cars forty-to-one…Personal freedoms had vanished for all but the communist elite. Food was rationed. A pair of shoes was beyond the means of most families, unless they were prominent Party members.”

Hayton notes that in 1993 more than half the county lived below the poverty line, but less than a fifth did by 2004. The government can cook its books however it wants, of course, and those figures are a decade old, but they seem more or less accurate now, at least in the capital.

Havana, Cuba

The same thing may eventually happen in Cuba after Fidel Castro is no longer with us. He doesn’t govern the country directly anymore—his less-doctrinaire brother Raul has been president since 2008—but it’s spectacularly unlikely than a Vietnam-style renovation is possible in Cuba until Raul and whoever follows him is entirely free of Fidel’s baleful presence and influence.

*

Hoan Do’s father was a fighter pilot for South Vietnam, and the communists put him in a re-education camp after the fall of Saigon.

His wife broke him out and they fled the country by boat. They were boarded by pirates, escaped to another boat, and finally made their way to the United States. Their son Hoan lives today in the Seattle area and works as a motivational speaker for high school students.

Hoan’s father has never gone back and doesn’t want to. He’s afraid the police will arrest him if they find out he escaped. He has so many bad memories there and doesn’t even like to discuss it.

But Hoan has been twice, eighteen years ago and again three years ago. The difference between Vietnam then and now, he said, is startling.

Hanoi, Vietnam

“It’s like night and day,” he told me. “The economic changes in the cities are incredible. The farmland hasn’t changed much—poverty is poverty—but the commerce in Saigon blows me away. It’s incredibly Americanized. The number of malls, shopping districts, and restaurants is amazing compared with when I was a kid. Eighteen years ago the entire country was broken-down. There was hardly any technology, but now even poor people can go to an Internet café and log onto Facebook and YouTube.”

Internet access in Cuba, though, is all but non-existent. Last year I was occasionally able to log on at a hotel in Havana on a shared dial-up connection if I paid the equivalent of a week’s local salary per hour, but it took almost that entire hour just to download my emails from the server. Internet access in private homes is still banned. You certainly can’t surf the Web from a smart phone, which hardly anyone in Cuba can afford to buy anyway unless they receive remittance cash from abroad.

In Vietnam, though, all the middle class kids seem to have smart phones and almost every hangout spot I found in Hanoi has blazing fast wi-fi. Facebook is no longer blocked like it once was.

The press is heavily censored, but I found the New York Times and the Wall Street Journal for sale whereas I couldn’t find any media whatsoever in Cuba that wasn’t produced by the Communist Party. Even if Western newspapers weren’t for sale on the newsstands in Hanoi, the Vietnamese can read them for free on the Internet.

I spoke with Nguyen Pham, the founder of a high tech startup incubator called 5desire. Her company manages small- to medium-sized investment funds for technology startups and advises on operation, growth, funding, partnership and expansion. 5desire is based in Vietnam, but it has three managing partners in Silicon Valley.

“The incubation and funding of tech startups is still a fragmented segment of our economy,” she said, “and we’re working on streamlining the process and modeling it rigorously after those in Silicon Valley.”

Ho Chi Minh could not have even imagined high tech startups backed by angel investors. Not even Americans could imagine the likes of Facebook, Google, and Amazon.com back in the 60s. Fidel Castro is perfectly aware of such companies, but when he was president he never would have allowed anyone to develop something similar, especially not for profit.

The Cuban government blames the US embargo for the poverty of its people, but the truth is the Castros love the embargo because it allows them to deflect blame onto outsiders. Even if that weren’t the case, it was Cuba, not the United States, that cut off all economic relations after the communists seized power.

Vietnam, though, is forging as many economic ties with the United States as it can. The government is forging ties, and so are companies like 5desire.

“We organize technology events that attract world-class foreign speakers and investors,” Nguyen said. “One of our notable events was Hackathon Vietnam 2014 in August where we partnered with Formation 8, a well known venture capitalist firm from Silicon Valley and the Ministry of Science and Technology in Vietnam. More than a thousand people attended, more than 60 percent of them developers. Joe Lonsdale, co-founder of Palantir Technologies and managing partner of Formation 8, has spoken at our events, as have Ngo Bao Chau, Mathematics professor from the University of Chicago, and Jonah Levey, the CEO and co-founder of Vietnamworks.”

You don’t need as much capital to become an angel investor in Vietnam as you need in the United States. A few thousand dollars will do the trick. Even investments of that size, though, are large enough that many Vietnamese still feel reluctant to make their investments publicly known. Prejudice against the rich goes down hard, especially in a country, capitalist playground or not, that is still run by a nominal Communist Party. It may fade in time, and perhaps it already has more in the south than in the north, but it’s still there. It has been a long time since Ho Chi Minh’s goons ran around the north executing landlords, but that bloody period in Vietnam’s history is still within living memory of older generations.

With all this technology, Nguyen said, “we have seen great improvements, but the bad side is huge too. It’s easier to communicate, but people are more lonely than they used to be. When you walk into a restaurant it’s common to see a group of friends sitting together without anyone saying a word. They’re all concentrating on their smart phones. A large number of Vietnamese youths are addicted to online games.”

Local markets are still the main focus of most Vietnamese startups, but some are aggressively expanding outside the country, especially in Asia and Africa. “Going global is a dream of many developers now,” she said. “After the success of Flappy Bird, many game developers aim for the global market with some success, such as AmazingBrick from Tung Hoang and NinjaRevenge from Divmod. Adatao has a team in Silicon Valley.”

Vietnam’s economy, capitalist as it is, is still directed to an extent by the government. It doesn’t own the company that made the Amazing Brick game, of course, but it steers things from on high much the way China’s government does. The system is hopelessly opaque to an outsider like me and isn’t entirely understood by average Vietnamese either, so I had to ask: does the state get in the way of a company like 5desire or does the government do anything to make its job easier?

“The Vietnamese government is now paying more attention to innovative technology,” she said, “and the Ministry of Science and Technology wants to take bigger steps to improve the startup community. They’re operating a fund backed by the World Bank. That’s good for us because startups will have more access finance and support. Some investors still complain about the high fees and bureaucracy when they invest in Vietnam. I believe the government is trying to fix this, but it won’t happen any time soon.”

There was a time, not long ago, when the government wanted everyone to think it and only it was responsible for technological advancement. I saw two statues in Hanoi of men wielding gigantic power plugs, presumably representing the Communist Party’s electrification of the countryside.

Power Plug Guy, Hanoi, Vietnam

Communists governments all over the world have bragged about their electrification of poor rural countrysides despite the fact that, once discovered, electricity spread all over the world under every conceivable form of government, from liberal to monarchist to fascist as well as to communist.

It’s not like Saigon lived in the dark before 1975. Electricity would have found its way to the countryside no matter who was in charge. So it’s a bit of a stretch to credit the Communist Party with improvements that likely would have happened regardless, but the party deserves all kinds of credit for voluntarily scrapping communist economics. Hanoi’s rulers learned much faster how to enrich their country than the Castro family, which is only just now beginning to implement the kind of reforms that will allow people to join the 21st century after walling them off from nearly all progress the human race has experienced since the 1960s.

*

Southerners still hold grudges against the north for what it imposed on them in 1975, despite the fact that Vietnam is communist-in-name-only and despite the fact that South Vietnam wasn’t a free country either. Southerners today are arguably more free and are certainly more wealthy than they were when the United States defended their republic from the north during the war.

“We hate northerners,” said Tuong Vi Lam, “because they changed our lives overnight. Everyone became workers.”

“In the south there’s still amazing prejudice against the north,” her American husband Alex Kasner told me. “Whenever a crime is committed, someone always blames northerners. They are supposedly uneducated. Not all people think this way, but it’s astounding to me how much of it there is. They’re all Vietnamese, but at the end of the day they’re not the same people.”

Even though the north is richer than it used to be, the south is still vastly more wealthy. It only suffered full-blown communist economics for a decade or so. Almost everyone still remembered how capitalism worked once it was permitted again.

Saigon is the center of economics and culture while Hanoi is the center of government. The north dictates to the south and has since 1975. Southerners naturally feel resentment about it. They also resent the north for changing Saigon’s name to Ho Chi Minh City, which to this day many refuse to acknowledge.

The hatred, for the most part, goes only one way.

“I’m from the south,” Huy Dang told me in Hanoi, “but I live in the north and I married a northern girl. In the south they don’t like the north, but northerners feel okay about the south. Northern people see southerners as open and happy all the time. Northerners are more reserved. They’re more careful and lazy.”

“Hanoi doesn’t look at all to me like a lazy place,” I said. Really, it doesn’t. Everyone is busy going somewhere and doing something all the time, even in the unspeakable heat of the summer, which, for quirky reasons of climate, is hotter and more stifling than the south for a few months of the year.

“It’s lazy compared with the south,” Huy said. “Northerners do things slowly. They procrastinate. If you tell them to do something they’ll say, ‘Okay, I’ll do it tomorrow.’ But the next day they still haven’t done it. Northerners like working with people from the south because we meet deadlines. We get it done. We are responsible. But not here in Hanoi.”

I have no idea how much of that is true, how much of it used to be true, and how much of it is simple prejudice. I’m not qualified to say. I can tell you just by looking around that Hanoi is not objectively lazy by global standards, but I didn’t get a chance to visit Saigon and can’t compare the two.

“Why is the south so different?” I said to Huy.

“The south has been with the Western world for a long time,” he said, “much longer than the north, for several generations. The north has opened up, but less so and it happened more recently. Young people haven’t had time to learn it from their parents yet, but in the south it’s part of their culture. Saigon is like New York and Hanoi is like Paris.”

Huy works for General Motors, so I thought he might have an idea how easy or difficult it is for an American company to open up shop in Vietnam.

“It’s very easy,” he said. “After Bill Clinton's visit, the post-war restrictions were lifted. Just present them with a business plan, tell them what you want to do, and you're good to go.”

“What about small businesses?” I said. “I see a lot of them on every street, so I imagine it's not too hard, but let's say you want to run coffeeshop. Can you just rent the space and open it up, or do you have to go through some complicated bureaucratic procedure?”

“It’s easy,” he said. “Just rent the space, pay the taxes, and that's it.”

That seemed slightly hard to believe, but Vietnam is one of the most capitalistic places I've ever seen. It can’t be too difficult to go into business if so many people are doing it. “Is there anything left of communism here aside from the name of the ruling party?” I said.

“The Communist Party still controls electricity, communications—including the cell phones companies—mining companies, and shipping companies,” Huy said. “But they're now selling stock to the employees like your stock options in the US.”

After sunset I walked through the local night market in the Old Quarter when the heat was slightly less oppressive. Individual proprietors set up shop in the middle of a street closed to vehicle traffic. I saw grilled meat, clothing, bootleg DVDs, sunglasses, smart phones, incense sticks, fake money to burn as offerings to dead ancestors, motorcycle helmets—you name it. The market reminded me of a Middle Eastern souk, only this one was out in the open under the sky.

Ad hoc markets have been a feature of local economies for millennia. Today we call this capitalism, but nobody needed to construct an ideological ism before it took off. Buying and selling is what people naturally do when governments don’t get in the way and ban commerce. You don’t have to read Adam Smith to figure out how it works. You don’t even need to be literate. The process is natural, organic, and it’s universal across cultures.

Cubans would naturally behave much like the Vietnamese do if the government would let them, but Raul Castro’s reforms are still in their infancy. The tiniest businesses are still micromanaged by the state to the brink of oblivion. Even a ruined and shattered country like Iraq is more economically robust than Cuba right now.

In Havana there is hardly anything to buy. Across the street from the Melia Cohiba Hotel, which is known as the most luxurious in the country even though it’s faded and drab, is a “mall” where “rich” people go. It’s a concrete box from the 1960s. You can buy a washing machine or a TV there, or you can hit the grocery store and pick up a few things that aren’t available with government ration books, but I’ve never seen such a pathetic mall in my life, nor have I seen such a grim grocery selection.

Royal City Mall, Hanoi, Vietnam

Hanoi, though, has one of the most extraordinary shopping malls I’ve seen in the world. I wandered around the Royal City mega mall for hours without retracing my steps, gawking at its splendor and vastness. Enough middle class families fill it at any given moment to populate a small city. I would have been impressed by the Royal City if I found it in Los Angeles, and I don’t even like malls. I can only imagine how it would look to somebody whisked there from Havana.

*

All communist countries revert to capitalism eventually. Some just get there quicker than others.

Hardly anyone bothers to defend Cuba’s groaning economic system anymore, but a stodgy core of calcified defenders haven’t quite given up yet.

Havana, Cuba

Oliver Stone—whose documentary Comandante was axed by HBO for being “incomplete,” as the channel euphemistically put it—said Fidel Castro is “one of the Earth's wisest people, one of the people we should consult.”

And The Nation magazine recently took travelers to Cuba on an “educational” trip.

The Nation,” writes editor Katrina vanden Heuvel, “for decades has covered Cuba in a way that few publications have done or dared.”

That’s true. And the article produced by the magazine’s “educational” trip is yet another in its long line of ludicrous reads. “Cuba has democracy and freedom but they are defined differently,” vice president Miguel Diaz-Canel is uncritically quoted as saying.

The piece as a whole isn’t uncritical, but it bristles with defensiveness about a system that even its president realizes needs to be overhauled.

Decades of disinformation to the contrary, Cuba never had a kinder and gentler version of communism that works. No, the island is not North Korea or Cambodia under Pol Pot, but it was never any better than Vietnam or East Germany in the 1970s and the 1980s. It just had better PR. The sorry truth is that of all the communist regimes that have ever existed—with the single exception of North Korea’s—Cuba’s is the most stubborn, the most reactionary, and the slowest to figure out how economics actually works.

It’s too bad the individuals who paid good money for The Nation’s dog-and-pony show didn’t head to Vietnam when they were finished. Every single one of the Cuban regime’s talking points would have been shown up as absolute nonsense within an hour of leaving Hanoi’s airport. The fools who think Cuba is anything but a disaster need to visit Vietnam post-haste and see what Fidel Castro’s socialist paradise will look and feel like when his imbecilic ideology is finally overthrown or reformed out of existence.

Post-script: If you enjoyed reading this dispatch, please consider contributing with a donation. Many thanks in advance!

China’s Economy Slides—and Capital Flees

In a few days, China’s official National Bureau of Statistics will report the results for both September, the last month of the third calendar quarter, and the quarter as a whole. Analysts generally expect growth of gross domestic product will fall slightly from the second quarter’s 7.5 percent. Bank of China, one of the country’s Big Four state banks, predicts the economy will expand 7.3 percent.

In reality, growth is far less than that. Especially indicative is electricity consumption, often viewed as a proxy for the economy as a whole and widely considered to be the most reliable indicator. Electricity was up 5.9 percent in June from the same month in 2013, up 3.0 percent in July, and down 1.5 percent in August. Notice a trend?

Some analysts are fond of saying that electricity is no longer as indicative as it once was because it tracks manufacturing and manufacturing is no longer the biggest sector of the economy, having been narrowly eclipsed by services, now about 46 percent of GDP.

The Walking Dead in an Age of Anxiety

After the release of my zombie novel, Resurrection, City Journal asked if I could explain why so many people worldwide are obsessed with zombies. Here’s the first part of my essay:

“Wild, dark times are rumbling toward us,” the German poet and journalist Heinrich Heine wrote in 1842, “and the prophet who wishes to write a new apocalypse will have to invent entirely new beasts, and beasts so terrible that the ancient animal symbols of Saint John will seem like cooing doves and cupids in comparison.” Heine wasn’t thinking of zombies, necessarily, but 170 years later, many of us are. Zombies seem to be everywhere these days. Barnes and Noble called the decade from 2003 to 2013 a “Golden Age for zombie fiction.” Max Brooks—son of comedian Mel Brooks—has written several zombie-themed books, the most popular of which—2006’s World War Z—sold more than 1 million copies and inspired the blockbuster 2013 movie of the same name, starring Brad Pitt. (I recently jumped into the genre myself, with a novel called Resurrection, which has been optioned for film.)

Zombies dominate the video-gaming world. Dead Rising 3 for Xbox One and Microsoft Windows, released last November—the latest in a zombie-killing franchise—has already sold 1.2 million copies, at $50 a pop. In May 2014, CNN reported that the Department of Defense had come up with an elaborate (fictional) zombie-based contingency plan for a military response to “a planet-wide attack by the walking dead.” Pentagon planners liked CONOP 8888 (a.k.a. Counter-Zombie Dominance), the report claimed, because it allowed them to avoid “casting” the role of the bad guys in their training scenario with denizens of real countries. The Centers for Disease Control and Prevention has posted a Zombie Preparedness page on its website, meant to be “a tongue in cheek campaign to engage new audiences with preparedness messages.” The Wall Street Journal recently noted a surge in dissertations and academic books with the word “zombie” in the title. Zombie characters show up frequently in everything from road races to flash mobs, as well as at the expected Halloween parties.

But when it comes to zombies’ hold on our collective imagination, AMC’s The Walking Dead, starting its fifth season October 12, is in a class by itself. Based on Robert Kirkman’s long-running comic book of the same name, the show chronicles the efforts of a small group of survivors of a zombie apocalypse to stay alive in the ruins of civilization. Ratings were good for the first season, in 2010, and have grown every year since, making The Walking Dead a massive hit—indeed, a cultural phenomenon. According to Variety, 16.1 million viewers watched the season-four premiere—a record not just for AMC but for basic cable—and that’s before counting everyone who saw it on Hulu, Netflix, and other on-demand outlets. The Walking Dead’s popularity has spawned a small industry of related products, from video games to action figures, and regularly put stars Andrew Lincoln and Norman Reedus on the covers of big magazines like Entertainment Weekly, Rolling Stone, and GQ.

Why so much enthusiasm for a show filled with gruesome violence and almost unbearable tension? Why all the interest in the end of the world generally?

The ongoing story of The Walking Dead begins with sheriff’s deputy Rick Grimes (Lincoln) waking in a hospital bed, dazed, from a three-month coma—he’d been wounded in a gun battle—and finding himself in a world gone mad. The hospital, located near Atlanta, is seemingly empty, with signs of violence, including the mangled corpse of a woman and blood-splattered walls, all around. Outside, the dead are piled high in bags. Stumbling about, Rick heads home to find his family. On the way, he comes to a park—where, to his horror, a severely decomposed body, missing its lower half, begins to crawl toward him.

At first, Rick doesn’t understand any of this. He slept through the apocalypse—a virus has animated the dead with a mindless, relentless urge to consume human flesh, spreading the plague further by their lethal bites, and civilization has collapsed—and it’s too much to comprehend. But he soon meets a live human being, Morgan Jones, who gives him shelter and a rude education.

“Hey mister,” Jones says. “You even know what’s going on?”

“I woke up today in the hospital,” explains Rick, “came home, and that’s all I know.”

“But you know about the dead people, right?” Jones asks.

“Yeah,” Rick says. “I saw a lot of that, out on the loading docks piled in trucks.”

“No,” Jones says. “Not the ones they put down. The ones they didn’t. The walkers”—what The Walking Dead’s protagonists call zombies. “They might not seem like much, one at a time,” Jones later warns Rick, “but in a group all riled up and hungry, man, you watch your ass.”

Rick sets out to find his missing wife, Lori, and son, Carl, and, against the longest odds, succeeds, becoming the leader of a small group of ragged survivors, struggling against infection and death in a world where everything is shattered and danger lurks around every corner. The suicidal Dr. Edwin Jenner, whom the group meets at the abandoned offices of the Centers for Disease Control, sums up the bleak reality in the season-one finale. “This is what takes us down,” he says. “This is our extinction event.”

Read the rest at City Journal.

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