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I recently received from Khun Kasit Piromya, a Thai colleague of ours and a former Foreign Minister of Thailand, a copy of a letter recently sent to the leaders of the countries of the Association of Southeast Asian Nations insisting on a more determined engagement with the military junta in Myanmar. You may read the letter here.

A moment’s consideration will lead to the conclusion that the military commanders who have forcefully taken control of public authority in Myanmar are not following the ethics of moral government, as set forth in the Caux Round Table (CRT) Principles for Government.

The generals do not see themselves as trustees of a trust to serve all the people of Myanmar. They do not accept personal responsibility to serve the public as a worthy community, but rather would impose their own priorities on the people as subjects of a regime and not as citizens possessing rights.

However, in the history of humanity, getting those with power to live up to good ideals has not often been achieved. Conflict between rulers and the ruled has been too much the norm.

Roughly speaking, it has only been with the rise of middle classes and mass education that has permitted the emergence of more responsible governments, respecting the people and accepting constitutional norms. That social reality, which facilitated the rise of more fair and responsible governments in the modern era, was made possible by capitalism and its generation of the industrial and post-industrial economies.

Though reforming bad government is never easy, I believe we must always speak decency to power and set standards for those who hold political power. This is the course taken by the CRT to foster conditions in which moral capitalism may more fully be achieved within just political orders.

I have just learned that today – May 5^th, 2021 – is the 200^th anniversary of the death of Napoleon Bonaparte, for a while Emperor of France, in exile on the island of St. Helena.

It is said that history is written by the winners.  This is especially true about Napoleon.  He is well known and contributed much to modern France and Europe, but he left life as a prisoner.

But once he did, as Shakespeare said about Julius Caesar, “Bestride the narrow world like a Colossus.”

Once, I had occasion to read some of his writings.  I also, at the University Club of St. Paul, on a dusty bookshelf, stumbled upon several volumes of his biography written by Adolphe Thiers.  Thiers included many of Napoleon’s official communiques and memoranda.  His mastery of bureaucratic administration was impressive; his mind was attuned to both grand ideas and the minutia of getting things done with expeditious decisiveness.

To me, Napoleon took the scientific rationalism of the French Enlightenment and gave it sovereignty over a centralized bureaucracy, as professionalized by the Bourbon monarchy, to create a process for socially engineering society to conform its thoughts and beliefs with some normative “general will,” as had been recommended by the moral philosopher, Jean Jacques Rousseau.

This model of the state led by a master mind creating society has been the goal of socialists of all sorts ever since.

In Latin America, Spanish monarchical colonial governments were replaced by Napoleonic states by revolutionaries such as Simon Bolivar.  Since then, the political conflicts in all the countries once under Spanish rule have been rivalries between conservative elites who resist a powerful state and liberals or leftists who want to subordinate local and patriarchal hierarchies to regulation by the state on behalf of the common good.  We can see the Napoleonic state at work today in Venezuela, Bolivia and Cuba.

To some extent, the Napoleonic state is found in all the social welfare states in the European Union.

Napoleon left a precedent of relevance to the Caux Round Table.  He invented the modern field army – with a commander in chief with staff sections reporting to him; three corps; three divisions to a corps; three regiments to a division; three battalions to a regiment; three companies to a battalion; three platoons to a company; and three squads to a platoon – all in one command and control hierarchy, from the commander on top, to all the soldiers at the bottom.

This formation of combat power and the strategies and tactics to enable it to win battles was taught to young American officers at West Point and used by the federal government in its Union armies mobilized and deployed to crush the Confederacy.  After the Civil War (1861-1865), many of these officers, trained in the Napoleonic way of running a large organization, brought the decision-making structure to the new railroad and other corporations then being created as the managers of these new forms of private enterprise.

Thus, Napoleon’s command and control hierarchy was brought to capitalism and has become the global norm for corporations – CEO centric and focused on “winning.”

His role in human history, therefore, should not be forgotten.

Nor have his aphorisms lost their relevance:

“Music is the voice that tells us that the human race is greater than it knows.”

“The best cure for the body is a quiet mind.”

“Men are more easily governed through their vices than through their virtues.”

“Nothing is more difficult, and therefore more precious, than to be able to decide.”

“Ability is nothing without opportunity.  I had rather my generals be lucky than able.”

“Victory belongs to the most persevering.”

“I can no longer obey; I have tasted command and I cannot give it up.”

“The battlefield is a scene of constant chaos.  The winner will be the one who controls that chaos, both his own and the enemies.”

“Imagination rules the world.”

“Great ambition is the passion of a great character.  Those endowed with it may perform very good or very bad acts.  All depends on the principles which direct them.”

“You become strong by defying defeat and by turning loss and failure into success.”

“There are only two forces that unite men – fear and interest.”

“If you want a thing done well, do it yourself.”

“Take time to deliberate, but when the time for action has arrived, stop thinking and go.”

“Never interrupt your enemy when he is making a mistake.”

“Until you spread your wings, you’ll have no idea how far you can fly.”

“A leader is a dealer in hope.”

“Riches do not consist in the possession of treasures, but in the use made of them.”

“The fool has one great advantage over a man of sense; he is always satisfied with himself.”

Professor John Adams, retired, responded to my query on who benefits from the trillions of dollars in public spending sought by President Joe Biden.

John asks the question – how do we know who benefits from higher education as currently delivered?

His insights on the costs and benefits of such education can be read here.

Here is a letter I have sent to our state senators and state representatives on a stakeholder approach to law enforcement under our Principles for Government.

The concept is not new – it was launched by Sir Robert Peel in 1829 when he set up the first modern police force – the London “Bobbies.

In his address to the American people earlier this week, President Joe Biden added to his spending proposals.  He wants the U.S. government to spend some $6 trillion it doesn’t have to take better care of us folks.

Under modern monetary theory, not having ready money in hand to spend on us is not a problem for President Biden.  He can just order it up from the Treasury and the Federal Reserve System and dump the money into the economy, seemingly free of charge.

Some call this “helicopter money,” just dumped down on the washed and unwashed alike.

Biden and the modern monetary theorists are not alone in promoting such public largess. Liquidity transfusions into real economies is the template for a new system of nationalized capitalism.  It’s all the rage in Europe, Japan and China, to name just a few open-pocket governments.

Perhaps we should ask that ancient practical question: Cui bono? – “Who benefits?”

Now, I want to go beneath the surface in thinking about this question.  Of course, those who get the cash benefit – renters, those needing health care, students, others with subsidized living expenses, workers on infrastructure projects, federal, state and local bureaucrats and in some intangible way, society – will benefit from increased public goods flowing from provision of such private goods.  We have no way of measuring, as an offset, any public “bads” that might also come with these gifts of money.

But once the money is spent by its recipients, where does it go?  Mostly, it seems to flow ultimately into financial markets.  Middle and lower income people will spend it on consumption.  That will send money to those they buy from.  Ultimately, the money floats up to the wealthy.  They don’t consume so much, so they put their money in assets, mostly financial assets.

The flow of liquidity into financial assets raises asset prices, day in and day out.  Cui bono?  Obviously, the owners of financial assets.  These are mostly the top 1% and 10% of society.

So, the result of helicopter money is to make the rich richer in the short and long runs and the not-so-rich a little better off in the short-run.

Consider the growth in global liquidity:

Consider the result of liquidity creation on the purchasing power of the U.S. dollar:

Consider the stasis of average American incomes for the last 50 years:

Consider the shift in income towards the wealthy:

Consider the growth in the Dow Jones and the S&P 500:

Now, here are some news stories on what happens when financial assets appreciate:

Venture funds bask in blockbuster profits.  Sutter Hill made a $190 million investment in Snowflake Inc.  Last month, it distributed $12 billion in profit from that investment.  Sequoia Capital invested $235 million in Airbnb, which is now worth $14 billion.

With companies using SPACs or special purpose acquisition companies to issue stock to the public, The Economist reported that about half of recent SPACS are losing money.  Nevertheless, the 50 firms studied collectively report some $1 billion of gross operating profits. They forecast their profits to rise to $15 billion by 2023.  Five new electric vehicle companies, which were ushered into public markets in 2020, expect to go from no revenue to $10 billion in revenue in five years.  And people invest in these projections.  The cost of money is so low, why not, especially if you are a billionaire?  What else are you going to do with it, buy another mansion?

Four executives who ran GameStop in the most recent stock market bubble are leaving the company with stock worth $290 million at market price.

Market prices for all assets are on a tear-up!  And who buys assets to push prices up even more? Those who already own assets.

On April 27^th, Microsoft won from buyers of its shares a market capitalization of $1.97 trillion. Good for those who owned those shares, but what about you and me?

As I asked above: Cui bono?