Book Review: Niall Ferguson's The Cash Nexus

[Note: this post was written and published on June 14, 2012 but has been backdated.]

I just finished Niall Ferguson’s tome, The Cash Nexus (2001) (paperback, by Basic Books).  It took me a long time to get through it, and I still think The Ascent of Money is a much better book, but I wanted to share some tidbits:

1.  For whatever reason, the engineers I know don’t tend to be great investors.  So I wasn’t overly surprised to learn that Sir Isaac Newton, the genius of his time, failed at investing, buying at the peak and selling at the low—of a bubble, no less.  However, I was surprised to read that Karl Marx, of all people, was a daytrader or short-term trader.  He wrote his socialist friend, Ferdinand Lassalle, in 1862 about his market-timing skills:

I have, which will surprise you not a little, been speculating--partly in American funds, but more especially in English stocks, which are springing up like mushrooms this year (in furtherance of every imaginable and unimaginable joint stock enterprise) are forced up to a quite an unreasonable level and then, for most part, collapse. In this way, I have made over £400 and, now that the complexity of the political situation affords greater scope, I shall begin all over again. It’s a type of operation that makes small demands on one’s time, and it’s worth while running some risk in order to relieve the enemy of his money.   [page 319]

2.  Ferguson seems to have predicted the collapse or at least the instability of the present-day EU.  He points out that many historians believe that a “homogeneous nation-state was the only proper setting for a liberal polity” and then describes Europe's ethnic and linguistic diversity, especially in Central and Eastern Europe. [page 378 and 379]

Earlier in the book, he referred to a Freedom House survey that "suggests that countries without a predominant ethnic majority are less successful in establishing open and democratic societies than ethnically homogeneous countries (defined as countries in which over two-thirds of the population belong to a single ethnic group).  Of the 114 countries in the world which possess a dominant ethnic group, 66--more than half--are free.  By contrast, among multi-ethnic countries only 22 of 77 are free--less than a third." [pages 375-376]

Personally, I think the EU's current instability owes more to the lack of a single dominant language and differing corruption and tax enforcement levels (e.g., efficient Germany vs. corrupt Greece) than any ethnic differences.  Also, Ferguson is highlighting a survey with a 57.8% to 28.6% numerical difference--which is perhaps not statistically significant unless one examines the survey's definition of "ethnic" and the time periods involved (which could be either too limited or too broad).  In any case, Ferguson does not elaborate much on the survey's methods or underlying data.  

3.  Ferguson states that the Germans were the “worst offenders” in terms of ethnic conflict and forced resettlement: “In addition to murdering between five and six million Jews, their racial policies were responsible for the deaths of around three million Ukrainians, 2.4 million Poles, 1.6 million Russians, 1.4 million Belorussians and a quarter of a million gypsies.” [page 380]

4.  On state monopolies in relation to commodities: “Around 5 percent of American state and local government revenue comes from state utilities and liquor stores.  State lotteries play a similar role: in each case the state monopolizes the gratification of a particular vice…And like the vices themselves, the revenues they generate can be hard to give up.” [page 55]

5.  For the gold bugs: most gold is used for jewelry, and India consumes 700 tons of gold annually (at least per 2001 data).  Ferguson also includes this interesting note: "It should be emphasized that, contrary to popular belief, gold has been a poor hedge against inflation in Britain and the United States.  The purchasing power of gold has actually increased more in periods of deflation like the 1880s and 1930s; whereas during war-induced inflations it has lost ground relative to industrial commodities needed for military purposes.  The real attraction of gold is that it is accessible and exchangeable even when established monetary institutions fail."  [page 325]

Ferguson relies on The Changing Relationship Between Gold and the Money Supply, by Michael D. Bordo and Anna J. Schwartz, and Gold as a Store of Value by Stephen Harmston.  

6.  On the increasing size of government: “In 1891 total government personnel amounted to less than 2 per cent of the total labor force in Britain.  The figures on the continent were higher, but not by much.  For Italy in 1871 the equivalent was just 2.6 per cent; for Germany in 1881 3.7 per cent.  Even the famously elaborate Habsburg bureaucracy was small in relation to the swelling population of the Empire. But from the turn of the century onwards there was sustained growth in the public sector almost everywhere.  By the 1920s public employment exceeded 5 per cent of the workforce in Italy, 6 per cent in Britain and 8 percent in Germany.  [pages 90 and 91]

According to the United States Census Bureau, in 2010, state and local governments had 16.6 million full time employees.  (See here.)  The federal government had about 3 million total employees, with 2.583 million having full time jobs.  These federal numbers apparently do not include the 185,295 employees within the Department of Homeland Security.  (See here.)  Taken together, the aforementioned numbers indicate that we had about 19,368,295 full time government employees in 2010.  In 2010, the U.S. Census Bureau indicated that the resident population of the United States on April 1, 2010 was 308,745,538.  These figures indicate that in 2010, total government personnel in the United States was about 6.27% of the total resident population.  

7.  Some general facts: 

“At the time of [Bill] Clinton’s inauguration, more than 13 per cent of US federal government bonds were in foreign hands.” [page 263] 

Ferguson seems to have predicted the 2008 financial collapse when he wrote the following in 2001: 

“And the growth of international derivatives markets has been even more rapid.  The total amount of futures and options instruments traded on exchanges rose from $7.8 trillion at the end of 1993 to $13.5 trillion at the end of 1998.  The amount of so-called 'over-the-counter' (OTC) instruments traded outside established exchanges rose from $8.5 trillion to an astonishing $51 trillion.  The OTC derivatives market is now by any measure the biggest financial market in the world—more ‘terrifying’ even than the $34 trillion bond market.” [page 263] 

West by West: My Charmed, Tormented Life

[This post was published on October 26, 2011 but backdated.]

Jerry West's autobiography showcases a man of pure class and professionalism.  I've summarized parts of the book I found most interesting below. 

West grew up poor in West Virginia, the fifth of six children. He had a distant mother plagued by her husband's infidelity and a father who was abusive towards West and his siblings. West writes that his dislike of authority figures probably comes from his father. At the same time, West has a non-confrontational personality due to his shyness.

Jack Nicholson describes West as "fierce, frank, but very fragile."

West suffers from depression and atrial fibrillation. He takes Coumadin and Xanax for the atrial fibrillation and Prozac for the depression.

Two interesting quotes: "The coal industry and its lobbyists have run West Virginia for years, and it depresses me that education is not the first priority." (page 28)

"I have a coal -mining, company-store mentality, born out of the state we both grew up in: that if you are doing well, the company will reward you. But there's no point in asking because it would be un-Southern and ungracious, and besides, they have all the power anyway."

West voted for Obama. West dislikes Jesse Jackson. His hero is James Brown, who also wore #44.

Cooke, the Lakers' owner before Buss, was apparently a pompous arse. One example: he called John Wooden to his home to ask him to coach the Lakers, even though Wooden had insisted beforehand he would not leave UCLA. Nevertheless, Cooke wrote a number on a piece of paper and slid it over to Wooden. Wooden looked at it and said, "No coach is worth this amount of money." Cooke immediately told Wooden to get out of his house. 

West pulled a "Barry Bonds"--he surprised his second wife with a prenup shortly before the wedding day, primarily because his first marriage (he married too young) had ended badly and expensively. He is still married to his second wife, Karen.

West on Kobe Bryant, the player he recruited, with the help of Arn Tellum: "Kobe was young and immature. He had a showboat style and a bottomless reservoir of drive that fueled him; he wasn't content just to beat people, he had to embarrass them, even players on his own team."

Although West views himself as a father figure to Kobe, Kobe chose not to participate in the book, unlike Kareem, Pat Riley, etc.

West thinks that Kobe was "set up" by the woman in Colorado who accused him of rape. When the incident occurred, Kobe sought out West for advice, even though West was working for Memphis at the time.

Phil Jackson told Jerry to get the eff out of the locker room after a game. No one had ever told Jerry to get out of the Lakers locker room before, and that incident strained an already tense relationship. When Phil first joined the Lakers, West felt that Phil deliberately ignored him.  Jackson apparently wouldn't even say hello as he walked by West's office.

Basically, Phil had already won six championships when he joined the Lakers, had just come from a situation in Chicago where he and the GM had clashed, and had no need for West's advice or input. As Mitch Kupchak says, "Phil didn't need Jerry's advice and wouldn't have wanted it anyway."

At the end of the day, West didn't leave the Lakers solely because of Phil--there were many reasons, including Buss's increasing separation from the team once they moved to Staples Center, as well as Glen Rice's back-handed salary negotiations.

West praises Kurt Rambis both in personal and professional terms. He also says that Kurt was responsible for the Showtime Lakers' success because of the quick way he would collect the ball, get out of bounds with one leg, and pass the ball to Magic to start the fast break. Magic agrees.

West participated in a strike where the players were demanding a pension plan. They succeeded.

West believes that the expansion of the NBA roster from 10 (the limit during his time) to 15 players allows non-NBA-caliber players to join the league.  These days, West says the additional three to five players basically serve as practice players, i.e., players who are primarily utilized to challenge teammates during practice.  He seems to say that we should either reduce the roster size or the number of teams.  He believes the higher number of teams harms the ability of small market teams to compete against larger market teams.  Ironically, West indicates that Pat Riley--whose work ethic was exceptional--may have been in the category of a practice player.  Given Riley's success as a coach, one wonders whether a modern-day version of a Pat Riley would still be able to get his start in the NBA today, especially if it had smaller rosters or fewer teams.

Some final notes: 1) Jerry's brother, David, died in the Korean War when Jerry was a boy. David was apparently the family's favorite. David's death probably gave Jerry a kind of survivor's guilt, which, coupled with his abusive father, led to his depression; 2) despite being asked to contribute some thoughts to the book, Kobe did not do so, which "shocked" West; 3) West continues to be plagued by the six times the Celtics beat his Lakers in the Finals, even though West won the championship in 1972; his Lakers team continues to hold the longest active winning streak in professional sports (33 games); and he won a gold medal in 1960, his most prized possession); 4) West claims he didn't give away Pau Gasol to the Lakers out of favoritism but because the owner of the Grizzlies wanted to save money; 5) one of the pictures in the book is of Riley with a mustache--it's hilarious; and 6) at the end of the book, West included a touching comment to his wife of "33 years (and counting)": "It has not always been smooth, I know that, but I am grateful that you stayed in the game."

Mr. West, on behalf of NBA fans everywhere, thank you for "staying in the game." 

© Matthew Rafat (2011)

Book Review: The Persia Cafe, by Melany Neilson

Ever since attempting Faulkner, I've always had a strange relationship with Southern literature. It's exasperating to read about the South and the thinking that inspired George Wallace (who was actually far more interesting than his infamous chant of "segregation today, segregation tomorrow, segregation forever" would indicate). Coming from California--mentioned in the book as a place to get away from constrictive social mores--reading about the Southern mentality before President Johnson and the Civil Rights Act seems foreign. But happy "normalcy" creates the same dullness, as Tolstoy might have said; indeed, perhaps the South has produced its outsized share of writers because of the turbulence caused by the civil rights movement, and the weight of history upon the Southern damp soil.

If Faulkner were a woman who could cook and wanted to write Mississippi Burning, The Persia Cafe might have been the result. Food is the motif that emanates throughout the book, placing its protagonist, a cafe owner, Fanny Leary, right on the DMZ of the racial divide. Of course, the notion of food separating people rather than bringing them together shows the reader the type of town that is Persia, Mississippi. Some passages are absolutely golden:

"You have to say this about the cafe: Smells curtained the place. Odors from one room climbed to another. Cinnamon. Frying bacon. Blackberry cobbler, serene as ink. There was a smell in our sheets like bread dough. There were nights when moonlight spilling along the river and through the window gave the wallpaper dimension."

Right away, we learn that Fannie Leary isn't your typical Southerner:

"I for one had often thanked the Lord that I did not have to listen to Brother Works's sermons as long as there was a pot of coffee and a pillowed bed, a newspaper, the loose-sheeted freedom of a Sunday morning. "

However, in the middle of the novel, some Southern soap opera makes its appearance, bogging down the novel. The beginning of The Persia Cafe is interesting, as we are getting to know the characters; the ending, absolutely enthralling, as the plot slowly unfolds; but the middle seems like one story too much as it focuses on Fanny's alcoholic husband, a Southern stereotype diluting the novel's interesting prose and plot. Still, some passages are too good not to share:

"So this too was Will. Pacing there, I had what I thought was a refreshing perspective and saw that the boy I had married had not been true and fine but just a boy. I saw that he had not been mine but merely near, and though he had taken me in his arms he had not fallen for me, but had merely felt that mysterious jolt in the pulse."

Still, as soap operas go, that's not a bad piece. And again, I take you back to food to show you that the author never loses her touch for too long:

"I hung up. It rang again. I picked up and hollered, 'What the hell you want?' A listening silence, then click, the dial tone, a long hollow blowsy tunnel, spit and crackle, like frying eggs."

The following passage also integrates food with cats, a neat feat: "their nostrils sniffing the meaty air...soft paws scurried, tiny white fangs tore at bones, backs arched and tails batoned and fur rose and brushed my ankles, making electric shocks."

But the real sadness of the South is that one never truly knows one's neighbor because of the secrets and lies buried with the strange fruit Billie Holiday sang about. Laws and social mores that constrict human interaction prevent possibilities, and this is where the novel enters a more sophisticated realm:

"And I was still mad at her for being black and being my friend, two things that together she was never supposed to have been."

"Well I had not known. I had not known; how could I in this town where it seemed you could never really know another person? I was alone in the world, in a way that made me feel the dryness in my mouth and the deep ache in my breathing, and the darkness rising through the room, like smoke."

There are two sides to this loneliness. From one perspective, loneliness is good, at least where injustice is concerned--better to be alone than complicit in the company of apathy. Thus, the reader will empathize with Fanny, but also wonder why the situation arose in the first place. Looking around, especially in California, Mississippi just forty five(!) years ago seems like another planet. Southern novels seem strange to many readers because they chronicle a bygone era. The key is to remember that this tension did actually exist once upon a time. Without suspending modern day notions, Southern novels make no sense, and we should be glad that reality has to be pushed aside to let Southern literature into our lives.

Still, no Southern novel would be complete without some reference to the thick swampy climate, and I will leave you with that weight:

"I didn't find much to say to that. So I continued to sit there for quite a while, holding Mattie's hand, which she seemed to want, and looking out into the night, which coiled dampsweet and thick toward the river, in the direction of the cafe."

© Matthew Rafat (2007) 

Plus ça change, plus c'est la même chose, Part II: Theodore Roosevelt's New Nationalism

Theodore Roosevelt may have been the last down to earth, gritty politician America's had. Two of his speeches are classic, and it's interesting how a person can be so close-minded and yet so astute at the same time. Links to the speeches are below, but you can also do an online search for Roosevelt, The New Nationalism (August 31, 1910) and Expansion of the White Races (January 18, 1909). I am including a portion of the New Nationalism speech below as part of my ongoing series exploring how history repeats itself.

http://www.theodore-roosevelt.com/trwhiteraces.html

http://www.theodore-roosevelt.com/trnationalismspeech.html

(general link) http://usinfo.state.gov/usa/infousa/facts/speeches.htm

"Now, this means that our government, national and State, must be freed from the sinister influence or control of special interests. Exactly as the special interests of cotton and slavery threatened our political integrity before the Civil War, so now the great special business interests too often control and corrupt the men and methods of government for their own profit. We must drive the special interests out of politics. That is one of our tasks to-day. Every special interest is entitled to justice - full, fair, and complete - and, now, mind you, if there were any attempt by mob-violence to plunder and work harm to the special interest, whatever it may be, and I most dislike and the wealthy man, whomsoever he may be, for whom I have the greatest contempt, I would fight for him, and you would if you were worth your salt. He should have justice. For every special interest is entitled to justice, but not one is entitled to a vote in Congress, to a voice on the bench, or to representation in any public office. The Constitution guarantees protections to property, and we must make that promise good But it does not give the right of suffrage to any corporation. The true friend of property, the true conservative, is he who insists that property shall be the servant and not the master of the commonwealth; who insists that the creature of man's making shall be the servant and not the master of the man who made it. The citizens of the United States must effectively control the mighty commercial forces which they have themselves called into being.

There can be no effective control of corporations while their political activity remains. To put an end to it will be neither a short nor an easy task, but it can be done. We must have complete and effective publicity of corporate affairs, so that people may know beyond peradventure whether the corporations obey the law and whether their management entitles them to the confidence of the public. It is necessary that laws should be passed to prohibit the use of corporate funds directly or indirectly for political purposes; it is still more necessary that such laws should be thoroughly enforced. Corporate expenditures for political purposes, and especially such expenditures by public-service corporations, have supplied one of the principal sources of corruption in our political affairs...

Those who oppose all reform will do well to remember that ruin in its worst form is inevitable if our national life brings us nothing better than swollen fortunes for the few and the triumph in both politics and business of a sordid and selfish materialism.

If our political institutions were perfect, they would absolutely prevent the political domination of money in any part of our affairs. We need to make our political representatives more quickly and sensitively responsive to the people whose servants they are. More direct action by the people in their own affairs under proper safeguards is vitally necessary...

So it is in our civil life. No matter how honest and decent we are in our private lives, if we do not have the right kind of law and the right kind of administration of the law, we cannot go forward as a nation. That is imperative; but it must be an addition to, and not a substitution for, the qualities that make us good citizens...You must have that, and, then, in addition, you must have the kind of law and the kind of administration of the law which will give to those qualities in the private citizen the best possible chance for development. The prime problem of our nation is to get the right type of good citizenship, and, to get it, we must have progress, and our public men must be genuinely progressive."

Angels, Demons, and Lawyers

I've sometimes contemplated writing a novel. This could be the first chapter, which I started last year:

The 20th century killed the romantic. Capitalism vanquished socialism and then proceeded to elevate the twin values of starvation and survival. It didn't matter if it was real starvation, the kind that took place in Africa, what Robert Kennedy saw in the South--or high-class starvation, the kind that newly laid-off fathers with families understood. Choosing survival, the men in the modern world, tempted by luxuries of beauty and bare bellybuttons, reached back into Biblical times and remembered the fable of the apple. Women, not happy with being demonized, decided to either cut down the tree or plant their own gardens, further confusing Adam’s progeny.

Meanwhile, modern men branched out into three realms: one, the creature that refused to conform, saw political correctness as an affront to his being, spawned The Man Show and the Coors Twins; two, the blessed kind, that saw equality and self-control as either entitlements to Beemers or, perhaps more appropriately, to responsibility; and three, the other, the nerd in the corner, never popular in high school, now older, taller, appealing, but the holder of the modern apple of fear–scared of commitment, of falling behind, of starving and of losing the motivator of starvation. It was the last camp that Rustem Mahdy fell in, and his stomach rumbled as he took the elevator to the sixth floor of the law firm, where he played an attorney, propping up partners with wizened faces and dusty knowledge. He had contemplated stopping on the second floor to flirt with the office manager of a process service firm but decided against it. It was too early, and besides, work had to be done.

Women, of course, defied any easy description, but branched generally into several camps: the kind with strong, loving fathers (who of course had strong, loving mothers) and either chose to emulate their fathers professionally, or, having been given faith in man, gained the knowledge of how to identify men who would not let them down. Flannery O'Connor aside, it would be one of the surprising features of the modern world that the women who could identify a good man, even if lacking all other skills, would somehow be better off in terms of love. In the third camp were women who knew they were not as smart as the men they wanted, or as attractive as the women men wanted, and decided to gain security through the unifying force God had given all women. It was an interesting trade-off, and those women--once married--did seem to be quite happy. There was another camp, slowly dwindling in numbers, of women who had spent their lives raising children, ironing and cleaning, only to see Proctor and Gamble and the microwave culture passing them too quickly to give thanks (or even their condolences).

But Michelle Mosi, Esq. wasn't wondering what camp she was in. Born and raised in the Midwest, she was too practical for those kinds of questions and was more intent on getting opposing counsel to submit to her very reasonable demand of scheduling an independent medical exam in September rather than October. "It's all so simple," she thought to herself--"just get Plaintiff to the the exam, and I'll make my billables and keep the client happy. " Love-wise, Michelle was married with a reasonably-sized diamond ring--it wasn't a Tacori, but at least it was from Borsheim's. Michelle stopped looking at her ring and re-focused her attention on work. "Left Message for Client re: IME, 0.2."

This was the new world that God had to play with, and He wondered how to manage marriage and love in a culture suspicious of sacrifice and unused to thinking in terms of centuries rather than seconds. The Devil cackled, egging on his right-hand man, Materialism, and informed him of the pullback. The news from the front came soon enough: Cupid had been shot and was D.O.A.

God, never one to appreciate losing a round, sent one of his most trusted angels, Bryan Gabriel, back to America to assess the damage and to help restore faith. Gabriel, after surveying how he could be most effective, decided to apply for a law firm emphasizing employment law. If it didn’t work out, Gabriel thought, he could always become an investment banker and hear what this Soros character had to say. Gabriel decided to set up an office on the second floor of a tall commercial building in downtown San Jose. There was work to be done, and not a second to lose.

[In later chapters, Milton Black aka the Devil, will send down a man named Mark Lusy, who will apply for and be accepted at a law firm called Nicholson, Lytler, and Reese.]

Music Lyrics 1

While Supertramp’s less eloquent song, "Take a Look at My Girlfriend" is more mellifluous, the lyrics for "The Logical Song" are classic, and if you want to see a timely satire, google Barron Knights and The Topical Song. I thought I'd share this one, in case anyone's forgotten the song and/or the lyrics. My favorite line is, "Now watch what you say or they’ll be calling you a radical."

Someone should call Bob Dylan, because we need better lyrics in today's music scene. Without the rock n' rollers, modern music no longer seems to fill in the role of counter-culture. The younger generation used to function as a counterweight to war, and in doing so, promoted idealism. Today, with many of the largest media outlets in the hands of shareholders, whose job is to maximize profits, and much of the younger generation in debt, it will be interesting to see where new societal counterweights come from.

The Logical Song, by Supertramp

When I was young, it seemed that life was so wonderful,
A miracle, oh it was beautiful, magical
And all the birds in the trees, well they’d be singing so happily,
Joyfully, playfully watching me.
But then they sent me away to teach me how to be sensible,
Logical, responsible, practical.
And they showed me a world where I could be so dependable,
Clinical, intellectual, cynical.

There are times when all the world’s asleep,
The questions run too deep
For such a simple man.
Won’t you please, please tell me what we’ve learned
I know it sounds absurd
But please tell me who I am.

Now watch what you say or they’ll be calling you a radical,
Liberal, fanatical, criminal.
Won’t you sign up your name, we’d like to feel you’re
Acceptable, respectable, presentable, a vegetable.

At night, when all the world’s asleep,
The questions run so deep
For such a simple man.
Won’t you please, please tell me what we’ve learned
I know it sounds absurd
But please tell me who I am.

Plus ça change, plus c'est la même chose

First in an occasional series. I will be posting links to speeches that remind us that the more things change, the more they stay the same. See, for example, President Sukarno of Indonesia: Speech at the Opening of the Bandung Conference, April 18 1955:

http://www.fordham.edu/halsall/mod/1955sukarno-bandong.html

This twentieth century has been a period of terrific dynamism. Perhaps the last fifty years have seen more developments and more material progress than the previous five hundred years. Man has learned to control many of the scourges which once threatened him. He has learned to consume distance. He has learned to project his voice and his picture across oceans and continents. lie has probed deep into the secrets of nature and learned how to make the desert bloom and the plants of the earth increase their bounty. He has learned how to release the immense forces locked in the smallest particles of matter.

But has man's political skill marched hand-in-hand with his technical and scientific skill? Man can chain lightning to his command-can be control the society in which be lives? The answer is No! The political skill of man has been far outstripped by technical skill, and what lie has made he cannot be sure of controlling.

The result of this is fear. And man gasps for safety and morality.

Perhaps now more than at any other moment in the history of the world, society, government and statesmanship need to be based upon the highest code of morality and ethics. And in political terms, what is the highest code of morality? It is the subordination of everything to the well-being of mankind. But today we are faced with a situation where the well-being of mankind is not always the primary consideration. Many who are in places of high power think, rather, of controlling the world.

Yes, we are living in a world of fear. The life of man today is corroded and made bitter by fear. Fear of the future, fear of the hydrogen bomb, fear of ideologies. Perhaps this fear is a greater danger than the danger itself, because it is fear which drives men to act foolishly, to act thoughtlessly, to act dangerously. . . .

All of us, I am certain, are united by more important things than those which superficially divide us. We are united, for instance, by a common detestation of colonialism in whatever form it appears. We are united by a common detestation of racialism. And we are united by a common determination to preserve and stabilise peace in the world. . . .

We are often told "Colonialism is dead." Let us not be deceived or even soothed by that. 1 say to you, colonialism is not yet dead. How can we say it is dead, so long as vast areas of Asia and Africa are unfree.

And, I beg of you do not think of colonialism only in the classic form which we of Indonesia, and our brothers in different parts of Asia and Africa, knew. Colonialism has also its modern dress, in the form of economic control, intellectual control, actual physical control by a small but alien community within a nation. It is a skillful and determined enemy, and it appears in many guises. It does not give up its loot easily. Wherever, whenever and however it appears, colonialism is an evil thing, and one which must be eradicated from the earth. . . .

Not so very long ago we argued that peace was necessary for us because an outbreak of fighting in our part of the world would imperil our precious independence, so recently won at such great cost.

Today, the picture is more black. War would riot only mean a threat to our independence, it may mean the end of civilisation and even of human life. There is a force loose in the world whose potentiality for evil no man truly knows. Even in practice and rehearsal for war the effects may well be building up into something of unknown horror.

Not so long ago it was possible to take some little comfort from the idea that the clash, if it came, could perhaps be settled by what were called "conventional weapons "-bombs, tanks, cannon and men. Today that little grain of comfort is denied us for it has been made clear that the weapons of ultimate horror will certainly be used, and the military planning of nations is on that basis. The unconventional has become the conventional, and who knows what other examples of misguided and diabolical scientific skill have been discovered as a plague on humanity.

And do not think that the oceans and the seas will protect us. The food that we cat, the water that we drink, yes, even the very air that we breathe can be contaminated by poisons originating from thousands of miles away. And it could be that, even if we ourselves escaped lightly, the unborn generations of our children would bear on their distorted bodies the marks of our failure to control the forces which have been released on the world.

No task is more urgent than that of preserving peace. Without peace our independence means little. The rehabilitation and upbuilding of our countries will have little meaning. Our revolutions will not be allowed to run their course. . . .

What can we do? We can do much! We can inject the voice of reason into world affairs. We can mobilise all the spiritual, all the moral, all the political strength of Asia and Africa on the side of peace. Yes, we! We, the peoples of Asia and Africa, 1,400,000,000 strong, far more than half the human population of the world, we can mobilise what I have called the Moral Violence of Nations in favour of peace. We can demonstrate to the minority of the world which lives on the other continents that we, the majority are for peace, not for war, and that whatever strength we have will always be thrown on to the side of peace.

In this struggle, some success has already been scored. I think it is generally recognised that the activity of the Prime Ministers of the Sponsoring Countries which invited you here had a not unimportant role to play in ending the fighting in Indo-China.

Look, the peoples of Asia raised their voices, and the world listened. It was no small victory and no negligible precedent! The five Prime Ministers did not make threats. They issued no ultimatum, they mobilised no troops. Instead they consulted together, discussed the issues, pooled their ideas, added together their individual political skills and came forward with sound and reasoned suggestions which formed the basis for a settlement of the long struggle in Indo-China.

I have often since then asked myself why these five were successful when others, with long records of diplomacy, were unsuccessful, and, in fact, had allowed a bad situation to get worse, so that there was a danger of the conflict spreading. . . . I think that the answer really lies in the fact that those five Prime Ministers brought a fresh approach to bear on the problem. They were not seeking advantage for their own countries. They had no axe of power-politics to grind. They had but one interest-how to end the fighting in such a way that the chances of continuing peace and stability were enhanced. . . .

So, let this Asian-African Conference be a great success! Make the "Live and let live" principle and the "Unity in Diversity" motto the unifying force which brings us all together-to seek in friendly, uninhibited discussion, ways and means by which each of us can live his own life, and let others live their own lives, in their own way, in harmony, and in peace.

If we succeed in doing so, the effect of it for the freedom, independence and the welfare of man will be great on the world at large. The Light of Understanding has again been lit, the Pillar of Cooperation again erected. The likelihood of success of this Conference is proved already by the very presence of you all here today. It is for us to give it strength, to give it the power of inspiration-to spread its message all over the World.