Federalist No. 4

Today we discuss Federalist No. 4. This is the third in the series of four contributions by John Jay that we will be covering in our thirty-six part blog series. In this essay, Jay again addresses the dangers from foreign force and influence while writing to the people of the State of New York.

In this essay, published in the Independent Journal, Jay notes that the safety of the people of America against dangers from FOREIGN force depends not only on their forbearing to give JUST causes of war to other nations, but also on their placing and continuing themselves in such a situation as not to INVITE hostility or insult. As Supply Management professionals, this essay hits close to home because Jay begins to explain this statement by noting that with France and with Britain and with most other European nations we are rivals in navigation and the carrying trade; and we shall deceive ourselves if we suppose that any of them will rejoice to see it flourish; for, as our carrying trade cannot increase without in some degree diminishing theirs, it is more their interest, and will be more their policy, to restrain than to promote it. Furthermore, in the trade to China and India, we interfere with more than one nation, inasmuch as it enables us to partake in advantages which they had in a manner monopolized, and as we thereby supply ourselves with commodities which we used to purchase from them.

The extension of our own commerce in our own vessels cannot give pleasure to any nations who possess territories on or near this continent, because the cheapness and excellence of our productions, added to the circumstance of vicinity, and the enterprise and address of our merchants and navigators, will give us a greater share in the advantages which those territories afford, than consists with the wishes or policy of their respective sovereigns.

Wow! Jay essentially predicted the global dominance, at least in GDP, that America, a country that did not yet exist, would attain 84 years before it happened! And he predicted the challenges America would face when it attained this dominance. Not bad. Plus, he realized that inducements to war may arise out of these circumstances. (Which they did. Thee was the Franco-American War which consisted of the French privateer attacks on U.S. Shipping, the War of 1812 brought partially about due to trade restrictions, the Mexican-American War, etc.)

As a result, he argues the need for a a union and a good national government … to put and keep the people of America in SUCH A SITUATION as, instead of INVITING war, will tend to repress and discourage it. A situation that consists in the best possible state of defence which can only be realized in a Union because one government can collect and avail itself of the talents and experience of the ablest men, in whatever part of the Union they may be found and move on uniform principles of policy. Plus, It can apply the resources and power of the whole to the defence of any particular part, and that more easily and expeditiously than State governments or separate confederacies can possibly do, for want of concert and unity of system. In addition, in the formation of treaties, it will regard the interest of the whole, and the particular interests of the parts as connected with that of the whole.

But, at least in this author’s view, the heart of the article appears in the last paragraph. Whatever may be our situation, whether firmly united under one national government, or split into a number of
confederacies, certain it is, that foreign nations will know and view it exactly as it is; and they will act toward us accordingly
.

If they see that our national government is efficient and well administered, our trade prudently regulated, our militia properly
organized and disciplined, our resources and finances discreetly managed, our credit re-established, our people free, contented, and united, they will be much more disposed to cultivate our friendship than provoke our resentment
.

In other words, if a country wants to be safe, and free, it needs a well administered national government that effectively organizes its militia, discreetly manages its resources and finances, and prudently regulates trade. As a result, it is important to elect officials that maintain a militia that is large enough to defend the country from perspective threats (but not so large that the military becomes a driving force), know how to balance the budget (and maintain a good credit rating), and believe in fair global trade (which should not be too protectionist or completely free of tariffs, especially considering that tariffs are still a significant part of the tax-base in many nations). And while appropriately regulated and fair is open to interpretation, that interpretation needs to be congruent with what the majority of countries that participate in global trade (which today participate in the United Nations) more-or-less accept as reasonable. And just like an extremist government will not minimize the chance of hostility (and maximize the safety of its people), neither will an extremist candidate.

 

Want to discuss? Join The Federalists on LinkedIn. The open group has been created specifically to discuss the philosophical underpinnings of the governance of nations and their ramifications on the national and international economics and global trade.

What is Newspaper and What Ethical Responsibilities Does It Have?

This is a topic that has been top of my mind as of late, and with the upcoming election, a topic that should be top of yours as this is still the primary source of news for many people, even if they get it in digital form.

Traditionally, a newspaper has been the primary vehicle of the free press, an establishment that was only first realized in the Polish-Lithuanian Commonwealth in 1539 and a reality that even England — despite its attractiveness for, and ability to produce, great thinkers — did not see until about a century and a half later. In fact, if it was not for the Areopagitica of John Milton, which is among history’s most influential and impassioned philosophical defences of the principle of a right to freedom of speech and expression (Source: Wikipedia), who knows if we would have freedom of the press today? (Milton was obviously among the great thinkers who inspired Hamilton, Madison, and the other delegates who drafted the US constitution which created the country which has produced some of the mightiest advocates for the free press in recent times.) In addition, one of Milton’s central premises was that the individual is capable of using reason and distinguishing right from wrong, good from bad so the press should not have to be licensed or censored.

So given that the newspaper is the primary vehicle of the free press, which is supposed to be the primary means by which free speech is spread in modern times, what ethical responsibilities does it have. Much ado is always made about the ethical responsibilities of the journalist, but what about the ethical responsibility of the publication? For example, what good does it do if the journalist dig deeps, finds something, comes up with a correlation that the publisher doesn’t like, and the story gets buried? What good does it do if a (printing) error is made and it is not corrected in a timely manner? What good does it do to only report one side of the story. (Especially when every story has essentially three sides in the mind’s eye — yours, mine, and the truth, which is meticulously sought by any good journalist.)

If you look at some of the commonly accepted principles of journalism, they typically say that a journalist must be:

  • obligated to the truth,
  • in allegiance with the citizens and their public interest,
  • possessive of a discipline of verification,
  • independent from the organizations, corporations, and people they cover,
  • open to feedback and criticism, and
  • of good conscious.

Based on this, one would think it would be safe to say that a newspaper — which is the outlet through which journalists report on the news, issues, and concerns of the day — must be:

  • obligated to the truth,
  • in allegiance with the community they serve and the public interests within,
  • possessive of a discipline of verification,
  • of detached independence from the organizations, corporations, and people they cover – completely separating advertising from news coverage, and
  • open to feedback and criticism.

But is that enough? Since a newspaper is a collective of journalists and the primary vehicle through which free speech is promoted and the public interests of the community addressed, it seems only logical that it be held to an even higher ethical standard. It seems fair to say that a newspaper should also:

  • hold itself accountable for all that it publishes, and if errors or omissions are made, quickly issue a retraction or correction in such a way that the retraction or correction is likely to be seen by everyone who was misinformed,
  • make an effort to report on both sides of a battle where there is a dispute or conflict,
  • make an effort to voice dissenting opinions, even if the opinion is limited to one reader; As John Stuart Mill wrote in his book On Liberty, If all mankind minus one, were of one opinion, and one, and only one person were of the contrary opinion, mankind would be no more justified in silencing that one person, than he, if he had the power, would be justified in silencing mankind,
  • make an effort to be balanced both in terms of the types of news reported, and the views associated with each topic, story, or debate, and
  • serve as an independent monitor of of power. James Madison got it right when he said that all power in human hands is liable to be abused, and that’s why we need a free press to monitor it. Chequered as it is with abuses, the world is indebted to the press for all the triumphs which have been gained by reason and humanity over error and oppression.

Furthermore, in today’s digital age, one could also that if the newspaper has an online edition, or is published digitally, that it also has a responsibility:

  • to provide a digital community forum for its readers to interact with it and each other,
  • to not criticize, or censor, the views and statements of its readers (unless such views or statements are made in a way that are libelious, hateful, or otherwise in opposition to municipal, state, or federal law, and only if such views are required by such law to be blocked),
  • and to address the concerns brought forth by the readers if those concerns demonstrate that a misprint was made, that the reporting was not factual, or that one or more sides to the issue, story, or debate was missed.

After all, if a newspaper is the vehicle of the free press, and the rationale of the free press is to serve the people, then the newspaper should at least react to all of the people it claims to serve. And it should remember, in the words of Andrew Vachss, a free press doesn’t mean it’s not a tame press.

What do you think?

In full disclaimer, just as the doctor has never claimed to be an analyst, he’s never claimed to be a journalist either. He is a blogger. Nothing more. Nothing less.

Want to discuss? Join The Federalists on LinkedIn. The open group has been created specifically to discuss the philosophical underpinnings of the governance of nations, their ramifications on the national and international economics and global trade, and the rights and responsibilities they suggest.

Federalist No. 3

Today we discuss Federalist No. 3. This is the second of four contributions by John Jay (in the thirty-six essays we will cover) who again addresses the dangers from foreign force and influence while writing to the people of the State of New York.

In this essay, Jay notes that among the many objects to which a wise and free people find it necessary to direct their attention, that of providing for their SAFETY seems to be the first. As a result, in this essay, he takes up the subject, but only as it respects security for the preservation of peace and tranquillity, as well as against dangers from FOREIGN ARMS AND INFLUENCE, as from dangers of the LIKE KIND arising from domestic causes. His goal, to examine whether the people are not right in their opinion that a cordial Union, under an efficient national government, affords them the best security that can be devised against HOSTILITIES from abroad.

To this end, he puts forward the argument that when once an efficient national government is established, the best men in the country will not only consent to serve, but also will generally be appointed to manage it; for, although town or country, or other contracted influence, may place men in State assemblies, or senates, or courts of justice, or executive departments, yet more general and extensive reputation for talents and other qualifications will be necessary to recommend men to offices under the national government. As a result, the administration, the political counsels, and the judicial decisions of the national government will be more wise, systematical, and judicious than those of individual States, and
consequently more satisfactory with respect to other nations, as well as more SAFE with respect to us
.

Let us deliberate on this for a moment. In this paragraph he is making a number of claims which not only serve as the basis for his argument that a Union is stronger than a collection of confederacies, but also highlight the key difference between a Union and a collection of confederacies. In these statements, Jay is stating that

  1. A national government will attract the best men,
  2. The best of the best men will be elected by the population to manage it, and, as a result,
  3. The decisions from the whole will not only be better than the decisions from the part, but, as they will be coming from a nation, they will be more amicable to other nations and, thus, decrease the chance of conflicts, increasing the nation’s safety.

Of these claims, the first two are paramount. If you are going to have an effective republic, then

  1. the best candidates have to be put forth and run for office and
  2. the people have to elect from those candidate the candidate who is best able to serve them as a whole.

If the best candidates are not put forth, the Union will not offer the benefits it is designed to offer. This means that if you are running a party system, the party has to put forward the candidates who will best serve the interests of all of the citizens with a leaning toward that party, and not just the senior party members. If it doesn’t, then you, as a citizen, have to vote for an independent as it is your responsibility to elect the best possible candidate just as it is the responsibility of the best possible candidate to represent the needs of the people as a whole to the best of her ability. The needs of the many outweigh the needs of the few.

In addition, Jay also argues that while the prospect of present loss or advantage may often tempt the governing party in one or two States to swerve from good faith and justice … those temptations … consequently having little or no influence on the national government … will be fruitless, and good faith and justice be preserved. In other words, while it may be easy for a person, corporation, or nation to sway the decisions of a rather small body of people that represent a small entity like a state, it will not be so easy at the level of the Union. For example, while you may be able to bribe a few elected officials to sway a vote at the level of the state, such an act would be considerably harder to do at the Union level.

 

Want to discuss? Join The Federalists on LinkedIn. The open group has been created specifically to discuss the philosophical underpinnings of the governance of nations and their ramifications on the national and international economics and global trade.

Should Manufacturing Jobs Be ‘Re-Shored’ to the U.S.?

Yes. No. Maybe.

A recent article over on the Knowledge @ Wharton site that questions if manufacturing jobs should be ‘re-shored’ to the U.S. points out that the Boston Consulting Group forecasts that 2 Million to 3 Million manufacturing jobs will come back to the U.S. because of the fundamental shift in economics between China and the United States. While the projected shift will increase U.S. economic growth by about $100 Billion, let’s not get too excited. First of all, this is less than 1% of current GDP. Secondly, if the right jobs aren’t brought back for the right reasons, they’ll just shift again next decade.

Before we dive into this discussion, let’s summarize some key statistics from the article. Namely:

  • it is projected that the wage differential will drop from the 22X it was in 2000 to 4X in 2015, not adjusted for productivity
  • many global manufacturers have begun to move their outsourcing to even lower cost countries such as Vietnam, Indonesia, and Cambodia
  • outsourcing costs include higher transportation/logistics costs, extra inventory costs, and quality control costs
  • improved lean manufacturing processes can often cut production-times per unit considerably, up to 65% in one instance at GE
  • more than 60% of the cost of manufactured goods can be attributed to goods and services that the average firm buys from its suppliers

When you consider these points, it becomes clear that:

  • if the primary reason for outsourcing to China was labour savings, this is no longer a good reason; in some districts, the wage savings are less than 40%!
  • the wage game requires a constant move, often into unknown, or dangerous territory (as Africa will be next)
  • there are ‘hidden’ costs as transportation costs are rising, inventory carry costs can explode if demand patterns shift, and quality control costs are exponentially higher as the only sure way to ensure quality is to get feet on the ground … regularly
  • innovation and creativity can slash the relative cost of manufacturing at home if productivity is doubled (or tripled)
  • the production costs will probably be less than the procurement costs for the raw materials, components, and services — which means cost reduction is more reliant on Procurement efficiencies and successes than manufacturing, as it should be

This means that:

  • you should never outsource on a wage analysis alone, but it doesn’t necessarily mean you should pull back to the U.S. — sometimes near-sourcing, to Mexico for instance, is the right solution
  • you shouldn’t play the wage game unless you are planning two moves ahead
  • bulky items, items that can experience unpredictable demand spikes, and items that require a lot of quality control are typically not good options for outsourcing
  • you should never underestimate the potential of talent — and what can be accomplished with the right incentive
  • decisions should be made from a true TCO perspective, not just a manufacturing perspective

And when you start looking at the overall picture, the overall product lifecycle, and the strengths and weaknesses of outsourced manufacturing partners, you’ll realize that some manufacturing, even with the disappearing wage differential, should be left in China; some should be brought back home yesterday; and some should be near-sourced. For example, you can’t build a FoxConn in the U.S. China is dominant in many areas of electronic manufacturing now and will stay that way — and considering the density of phones, tablets, and laptops, it makes sense to produce them in China. On the other hand, major appliances and automobiles should be produced at home, where efficiencies in production and greatly reduced transportation costs more than make up for the labour differential. And major appliance and automotive sub-assemblies should probably be produced in Mexico, where they have idle factories, and from where shipping costs are relatively minimal.

Federalist No. 2

Today, we continue our review of the Federalist. The goal, to review the first thirty (30) before Election Day in the U.S. Why 30? When the Federalist essays — which first appeared in the Independent Journal, the New-York Packet, and the Daily Advertiser between 1787 and 1788 — were first collected and printed in book form in 1788, only the first 36 essays were included, which covered the first three topics that Hamilton said the essays would cover in Federalist No. 1:

  • The utility of the UNION to your political prosperity,
  • The insufficiency of the present Confederation to preserve that Union, and
  • The necessity of a government at least equally energetic with the one proposed to the attainment of this object.

And since we only have enough time to cover thirty (30) at the rate of six (6) a week, we will content ourselves with that number, as it is still quite significant. 

Federalist No. 2 begins the discussion of the utility of the Union to your political prosperity. One of the four essays authored by John Jay, and also addressing the people of the State of New York, the essay addresses the dangers from foreign force and influence, but the key message is the strength of the Union as a whole compared to the sum of its parts.

The essay, that notes that independent America is one connected, fertile, wide-spreading country with a succession of navigable waters [that] forms a kind of chain round its borders, as if to bind it together while the most noble rivers in the world, running at convenient distances, present them with highways for the easy communication of friendly aids, and the mutual transportation and exchange of their various commodities, states that this country … should never be split into a number of unsocial, jealous, and alien sovereignties. Because, as a nation we have made peace and war, as a nation we have vanquished our common enemies; as a nation we have formed alliances, and made treaties, and entered into various compacts and conventions with foreign states. In short, the prosperity of America [has] depended upon its Union.

The essay, which ends with the statement that whenever the dissolution of the Union arrives, America will have reason to exclaim, in the words of the poet: “FAREWELL! A LONG FAREWELL TO ALL MY GREATNESS“, insists that for America to remain strong, it must be a Union, and not a collection of state level confederacies. It is essentially stating that the whole is stronger than the part, and this is a key tenet in the argument for a Union, and a key tenet for one who wants to be an elected representative to take to heart. The idea of a Senate and a House of Representatives is that, as a whole, the representatives in the room are collectively wiser and more capable of serving the nation than each on his or her own. So while a candidate is in a battle during a campaign in which she is vying for the privilege of representing the people in the constituency in which she is running, once elected, she has to stop being combative and start being collaborative, looking for solutions that benefit everyone, not just his or her constituents. Just like failing to put the good of the nation ahead of the good of the state will lead to dissolution of the Union and the greatness it offers, failing to put the good of the people as a whole ahead of select groups of individuals will limit the prosperity of the people as a whole.

Want to discuss? Join The Federalists on LinkedIn. The open group has been created specifically to discuss the philosophical underpinnings of the governance of nations and their ramifications on the national and international economics and global trade.