Technology & Democracy Archives

I don't care if Bill Gates believes in man-caused global warming, he is right about at least one creative and practical response to the energy problem: The former Microsoft head has teamed up with Toshiba and--putting his money behind his ideas--is figuring out how to make the small nuclear reactor, via "Traveling Wave Reactor" technology, a business reality.

Toshiba's model nuclear reactor

Meanwhile, the Wall Street Journal has noticed the opportunity, too, publishing an op-ed today by Steven Chu, U.S. Secretary of Energy. "Small modular reactors would be less than one-third the size of current plants. They (would) have compact designs and could be made in factories and transported to sites by truck or rail."

My own dream is something even smaller: a nice, safe nuke for a neighborhood or city district. Even your private basement. ("The Bloom Box.")

Senior Fellow George Gilder has shot a little arrow into the Obama Administration plans for "net neutrality". The Tuesday Wall Street Journal carries George's attack.

The author of Life After Television, Microcosm and Telecosm, among others, has been trying hard to make the point that the very cutting edge of our economy is high technology and its abundant success is the product of freedom from government over-regulation. Obama and Co., he says, hope to change that.

Net neutrality is Orwellian. It is further evidence of America's careening drive into a planned economy--and stagnation.

The government expansionists have had their eyes on the Internet ever since Al Gore claims he invented it. Of course, the Feds' DARPA did help birth the Internet, but there is no reason why Washington now should imitate the Iranian mullahs or the Chinese and start restricting access and imposing financial or technical controls.

It is not just because the technology is new that it has made such a huge contribution to our economy; it's also because the new technology has been relatively unfettered by the government.

The whole subject of federal regulation re-emerges in a major way in coming weeks. Watch this space.

Meanwhile, Mark Landsbaum of the Orange County Register (in a column that I missed when it first came out) is among those trying to sound the alarm about losing freedom on the Internet.

Take note before they take it away.

Michael McConnell, former national security director, says the United States could lose a cyber-attack, and that such a major assault on the enormous U.S. reliance on computers and the Internet is likely. It may be our most under-recognized national security threat, potentially precipitating a sweeping economic crisis.

Legislative and technical fixes are in the works, but they have been in the works for too long a time. Leading Senate advocates are Senators Rockefeller and Snowe.

McConnell predicted that the United States will suffer a catastrophic cyberattack before it takes strong action, and said that America's cyber posture will be strengthened greatly after any attack. He added that the strongest action should focus on securing financial transactions and the financial sector. a bill in preparation.

Testifying before a Senate hearing, Information Week reports, "McConnell predicted that the United States will suffer a catastrophic cyberattack before it takes strong action, and said that America's cyber posture will be strengthened greatly after any attack. He added that the strongest action should focus on securing financial transactions and the financial sector."

Benjamin Netanyahu

Israeli prowess in technology is the subject that started George Gilder on the path to writing The Israel Test, and it is the subject also that Gilder will emphasize in the upcoming Gilder/Forbes Telecosm 20009 conference in Tarrytown, New York November 10-12.

In Israel last week to promote his book and to meet with Prime Minister Benjamin Netanyahu, Gilder talked to many old and new friends in the remarkable Israeli technology industry that now is second only to America's. Among the topics he investigated was the invention of new long life batteries at Technion, "the MIT of Israel."

The batteries seem destined to revolutionize electronics and eventually to lead to the long-sought, long term electric automobile battery that was discussed this past week, also, at the "Beyond Oil" conference sponsored by the Cascadia Center at Microsoft's Redmond, WA campus.

(Reminder to the media: Gilder is director of Discovery Institute's Technology and Democracy program, and Cascadia is a center within Discovery Institute.)

"Bibi" Netanyahu, in his meeting with Gilder, apparently expressed enthusiasm about the varied themes of The Israel Test, which he recently read; not just the explanations for Israel's dramatic contributions to technology in the past decade, but also Gilder's original insights about Jews, Israel, capitalism and the nature of creativity.

Gilder has lined up a stellar cast for Telecosm 2009, a project co-produced with Forbes, and he says he expects the political and cultural vibrations to nearly equal the investment and technology interest this year. The annual Telecosm conference is not a program of Discovery Institute, although a number of our fellows, in addition to George Gilder, take part.

In Israel, The Israel Test already is the number one book (in English) on Israel.

Hance Haney of Discovery's Technology and Democracy project describes the peculiar state of technology in this economy in which Verizon simply opts out of the regulated (over-regulated) field of landline telephony because unregulated wireless is more lucrative. Thus has government (the FCC and Congress) outsmarted itself and failed the consumers--that is, the people who pay the Feds' salaries.

There is much to be grateful for tonight here in Washington. Our senior fellow John Wohlstetter, who is writing on nuclear proliferation, a public policy topic so old it is new again (or going to be), just held an exquisite book party to celebrate his Discovery colleague George Gilder's The Israel Test (#590 on the Amazon list, #1 on the subject of Israel). In John's apartment in the famous Watergate, looking over the Potomac at sunset, George described the inspiration of his father, who visited Germany in 1936 and vowed to come back to the U.S. and do all he could to defeat Hitler. His father did that--a mere 22 year old, but well-connected in New York society--and then enlisted as a pilot in what became the Second World War, and died.

In The Israel Test, George has written an astonishing love letter to Israel that somehow also manages to be a new treatise on his long time theme of capitalism as a system that prizes human exceptionalism. He sees the need to defend Israel and the potential for Israel truly to become again a light to the nations.

Human exceptionalism is also the theme, as it were, of Stephen Meyer's Signature in the Cell. As George Gilder says, Meyer's book is a debate changer, the most comprehensive examination yet of the issue of Darwinism versus design. No one can claim to understand that debate without it. (The American Spectator reviewer, Dan Peterson, described himself as "Blown Away".) It's 700 on Amazon's list, and tops in at least two science categories.

Then there are all the books that have come out lately from Ben Wiker (Darwin's Myth) and Jay Richards (Money, Greed and God), among them, and hold your breath for David Berlinski's forthcoming The Deniable Darwin. Senor fellow Wesley J. Smith's current cover story in National Review, on Creeping Euthanasia, is a prelude for his new book this winter.

I add the film on the Cambrian Explosion of life forms 580 million years ago--"Darwin's Dilemma"--by Illustra Media that is just about to premier at the Oklahoma Museum of Natural History, featuring many Discovery fellows. Adolescent-acting Darwinists are trying to disrupt the opening, but their Acorn-style agitation only will add to the piquancy of the film's signal achievement. I was a guest at an early screening and conclude that it is going to be another winner.

The materialist Left is losing out.

One walks down Sixteenth Street near the White House and sees the monstrous, four story posters for "card check" and "full employment" on the lobbying organizations that now sidle up to power. One hears the stories, on the other hand, of the plain folk who showed up on the Mall in the hundreds of thousands last week to protest government health care, and one sees the cracks in our social consensus.

But that is the present. The future is in the minds--and writing--of colleagues like Gilder and Meyer, et al. In a gloomy time, they are a reason for gratitude and good cheer.

The Israel Test by George Gilder continues to get stunningly positive reviews by conservatives, such as this one today by Clifford May in National Review.

Somehow, however, the liberal media are pretending not to notice.

The best book reviews are the ones that add not only to what one knows about a subject, but also to what the book author knows. That is what characterizes Sol Stern's City Journal review of George Gilder's The Israel Test. Stern knows how Tel Aviv is faring in the current economy--which is, great--and how French Jews are buying condos on the new Israeli Riviera. And how, if the Palestinians had some control on their rage, Gaza's sandy beaches could become a huge tourist draw, too.

Needless to say, this all supports Gilder's themes in The Israel Test, and Stern, needless to say, thinks Gilder's book itself is outstanding. He goes on to express an amused observation about the likelihood that Gilder's "stark, almost apocalyptic terms will bring out all the old Gilder haters." Who might they be? Discovery Institute friends will know.

"Just as his seemingly elitist defense of the traditional capitalist virtues and of the nuclear family infuriated them, just as they were enraged by his objections to modern feminism and, more recently, his evangelizing for Intelligent Design, they will surely reject out of hand (Gilder's) understanding of the underlying factors behind the current conflict in the Middle East. That's too bad."

I'll say. But for all those who appreciate the full Gilder canon, The Israel Test will prove an exciting adventure.

John Wohlstetter is prejudiced in his praise of The Israel Test; he's a friend of the author, George Gilder. Of course, a review by an author's friend has never happened anywhere else, has it?

Regardless, John is a friend and colleague of mine, too, and I know what he does when he disapproves of a friend's views: he goes silent. This article in The American Spectator is, in fact, a very good introduction to the George Gilder's book.

The best lines are these, at the end:

Israel could be the economic engine for the entire Mideast. This is the new Israel, no longer a financial ward of America. It is this Israel that most Americans know not of. "Israel Inside" would be a great slogan for an ad campaign educating Americans about the new Israel, and its supreme value to America and the West. In lieu of an ad blitz, Gilder's book does the job beautifully.

Israel does need an "ad campaign" right now because its foes seem to have a great many people intimidated. George is fearless. His book goes where many media voices seem afraid to go.

See also this interview in National Review online, with Kathyrn Lopez. The Daily Telegraph's Stephanie Guttman just blogged her review, available here.

George Gilder's new book, The Israel Test, is starting to get around. We ourselves have already filled over 1,000 book orders in house. (Actually, we recommend that purchasers go to Amazon.com to order. For both orders you can still come to us.) Mona Charen had a terrific column a few days ago on George's appearance at the AEI. David Pryce Jones has a fine article out in the National Review, and The American has published a long excerpt of the book.

The growing buzz may have somthing to do with the fact that there really is an Israel test going on right now in international affairs. We definitely are on the case -- led by George.

The Ahmadinejad regime in Iran has been wounded internally, thanks to the brave advocates of freedom who took to the streets, but it probably will try to stabilize its position by foreign policy truculence and a "breakthrough" on nuclear weapons.

It is in this incendiary environment that George Gilder's incredibly timely book, The Israel Test, is coming out (pub date, July 23). It already is getting noticed.

Here is a tiny excerpt--and an admonition at the end!

"The central issue in international politics, dividing the world into two
fractious armies, is the tiny state of Israel.

"The prime issue is not a global war of civilizations between the West and
Islam or a split between Arabs and Jews. These conflicts are real and
salient, but they obscure the deeper moral and ideological war. The real
issue is between the rule of law and the rule of leveler egalitarianism,
between creative excellence and covetous "fairness," between admiration of
achievement versus envy and resentment of it.

"Israel defines a line of demarcation. On one side, marshaled at the United
Nations and in universities around the globe, are those who see capitalism
as a zero-sum game in which success comes at the expense of the poor and
the environment: every gain for one party comes at the cost of another. On
the other side are those who see the genius and the good fortune of some
as a source of wealth and opportunity for all.

"The Israel test can be summarized by a few questions: What is your
attitude toward people who excel you in the creation of wealth or in other
accomplishment? Do you aspire to their excellence, or do you seethe at it?
Do you admire and celebrate exceptional achievement, or do you impugn it
and seek to tear it down? Caroline Glick, the dauntless deputy managing
editor of the Jerusalem Post, sums it up: "Some people admire success;
some people envy it. The enviers hate Israel."

". . . . Today in the Middle East, Israeli wealth looms palpably and
portentously over the mosques and middens of Palestinian poverty. But
dwarfing Israel's own wealth is Israel's contribution to the world
economy, stemming from Israeli creativity and entrepreneurial innovation.
Israel's technical and scientific gifts to global progress loom with
similar majesty over all others' contributions outside the United States.

"Though Jews in Palestine had been the most powerful force for prosperity
in the region since long before the founding of Israel in 1948, more
remarkable still is the explosion of innovation attained through the
unleashing of Israeli capitalism and technology over the last two decades.
During the 1990s and early 2000s Israel sloughed off its manacles of
confiscatory taxes, oppressive regulations, government ownership, and
Socialist nostalgia and established itself in the global economy first as
a major independent player and then as a technological leader.

"Contemplating this Israeli breakthrough, the minds of parochial intellects
around the globe, from Jerusalem to Los Angeles, are clouded with envy and
suspicion. Everywhere, from the smarmy diplomats of the United Nations to
the cerebral leftists at the Harvard Faculty Club, critics of Israel
assert that Israelis are responsible for Palestinian Arab poverty. . . .
Denying to Israel the moral fruits and affirmations that Jews have so
richly earned by their paramount contributions to our civilization, the
critics of Israel lash out at the foundations of civilization itself--at
the golden rule of capitalism, that the good fortune of others is also
one's own.

"In simplest terms, amid the festering indigence of Palestine, the state of
Israel presents a test. Efflorescent in the desert, militarily powerful,
industrially preeminent, culturally cornucopian, technologically
paramount, it lately has become a spearhead of the global economy and
vanguard of human achievement. Believing that this position was somehow
captured, rather than created, many in the West still manifest a primitive
zero-sum vision of economics and life. . . ."

Get an advance copy now! This is classic Gilder and on a "new" subject. I had the pleasure of editing it in two stages. This is going to be a winner.

Authoritarian regimes from China to Iran have made it their business to try to control what their peoples can see or do on the internet. It is usually about politics. Now Turkey joins the pack, even while its leader quips about how easy it is to thwart the government's censorship efforts.

Claire Berlinski

In this useful article from Radio Free Europe, Claire Berlinski wonders how Turkey thinks it is going to get into the European Union when it employs such behavior.

What George W. Bush named "The Axis of Evil" included Iraq, North Korea and Iran. Iraq is relatively, if perhaps deceptively, quiet, but Iran is "hot" and North Korea seems bent on getting into our faces whether we want to see them there or not. This AP story by Lolita Baldor should push the federal government--as well as the private sector--to greater defensive action. Computer security is national security, and in that light it is worth noting that cyber attacks have increased almost three fold in three years.

This is the kind of story that, in retrospect, may be seen as a lot more significant than what is daily emphasized in most of our hedonistic, anesthetized media.

Both hardware and software defenses are being evaluated and, in some cases, mounted by the feds, as well as by OEMs (original equipment manufacturers) and the private companies that purchase their products. But the general public is still in the dark about all this. There doesn't seem any over-riding interest in computer security options yet. But that may be about to change.

(UPDATE JULY 8: http://www.bloomberg.com/apps/newspid=20601087&sid=aVEB6XhdZTFA)

Cell phones are wonderful, especially the complicated new ones that do everything short of cooking dinner and baby sitting the children. The future George Gilder predicted thirty years ago in Life After Television is here.

But when it comes to cell phone etiquette we are stuck in the barbarian past. Some people still shout into the little devices as if they couldn't be heard otherwise. That is annoying even out on a busy street. But the worst bores are those who ruthlessly ignore everyone around them in restaurants, theaters and meetings, dulling their (probably well-justified) loneliness by talking loudly on their cell phones to whoever they think might validate their existence and the importance of their every fleeting thought.

A woman at the neighborhood coffee house sat right across from me one recent morning and for twenty minutes blathered on her phone about her job as a university soccer coach. She talked about her pay, the team's schedule, even the supposed derelictions of her fellow coaches.

There was no reading my paper; she had seized me by the eardrums and wouldn't let go. Like many with cellphonitis, she stared straight ahead, resolutely avoiding eye contact. Other patrons squirmed, finished their coffee and left. So did I. Too bad we couldn't have charged her for our time.

I am not going to let this happen again. Lady, you are going to be confronted. If you are happy to broadcast your private business to an uncaring world, fine, but I plan to share my own discomfiture in being forced to share that activity--and I will share it with you. I won't raise my voice, but I will stand in space where you can't avoid me and start discussing the situation reasonably with you until you give up your call and quit bellowing.

Meanwhile, here is a good indication that cell phone providers--like liquor makers who run ads about "responsible drinking"--are alert to the irritation their product can cause.

I don't want another law (please), just enforcement of a custom that civilized people respect in other situations. Keep your conversations to yourself.

There certainly is some hand-wringing at CNN and in the major media generally about the criticism of CNN. Much of it is coming from Iran. The widely cited Twitter address #CNNfail is based on disgust with that network. CNN is more popular internationally and has more sophisticated content, someone should point out, than does CNN inside the U.S.

To some analysts the rise of #CNNfail is a matter of demand for more coverage. http://www.ojr.org/ojr/people/robert/200906/1752/ CNN, they say, is held to higher standards than, say, Fox. That seems a peculiar reading of the Twitter and blog traffic

Try out this interpretation instead: CNN failed the Iranian people and its international audience because it was slow to acknowledge the breadth and depth of popular discontent in Iran. CNN's coverage exhibited this failure. CNN correspondents and anchors reflected the network's diffidence. They acted as if they lacked sympathy for the protesters. Perhaps that was because, at first, at least, they did lack such sympathy. A liberal (small "l") revolution in Iran didn't fit their template, for some reason.

That is why we have seen the phenomenon of #CNNfail. Even young Iranians are media critics now.

A Tehran University student's computer, purportedly broken during a militia raid.

The discussions in the White House right now must be fascinating and maybe heated--should we openly side with the Iranian demonstrators or hold to the neutrality pose? Just now the President's spokesman said he hopes Twitter will continue to delay needed maintenance downtime so that direct news can be reported from the Iranian people. That's a positive step. After all, Western reporters are being ordered to stay in their offices and not to report from the street. So brave reports from Iranians are all there are to get the truth out. (Two top Twitter sites #IranElection and #CNNfail--a running reproach to CNN's less than helpful coverage.)

Right now there are a spate of Twitter messages saying that there are more deaths today and raids of homes and offices; also that the Army has entered Tehran to confront the demonstrators. If so, this escalation raises the prospect of rank and file Iranian soldiers being called upon to attack their fellow citizens. It is a different prospect from the actions of the Basij ("Mobilization") militia that are a kind of kind of palace guard for the theocrats and have been beating demonstrators with batons over several days. In many revolutions, a critical moment comes when ordinary citizens in Army service are asked to fire on other citizens. They may do it once, even twice. But eventually, they may refuse their orders and then, whether planning it or not, may switch sides. If that happens, the revolution reaches a new, more explosive stage. Remember, too, the soldiers are young, and so are most demonstrators. They are all Iranians.

An alternative scenario is that the supposed reformer Moussavi goes on TV (which the Twitterers also say he is trying to do) and essentially cools down the protests with minimum demands, whereafter the regime regains control.

Regardless, as Amir Fakhravar, the former head of the Iran Student Confederation and a prisoner tortured repeatedly in the infamous Iranian prisons, said today, the people of Iran have not had a chance to express their will about the main contours of the government. The real powers in the theocracy merely present them with pre-approved candidates they can choose among. Fakhravar spoke eloquently at Discovery Institute two years ago; today he pointed out on FOX News that the Iranians are expressing themselves in the street as never before. The demonstrators are an appealing lot, not hateful, but peaceful, almost too pleading. And they are braver than the demonstrators of 30 years ago who were standing up to forces that already were crumbling.

They need to know our moral support.

Twitter in San Francisco must be uncommonly proud. Its service is defeating the Iranian censors. As this article indicates, Ahmadinejad government is playing "whack a mole", wielding centralized technology by theocrats against distributed technology in the hands of democrats.

(UPDATE: The most disturbing Twitter reports are of non-Farsi-speaking thugs attacking students and others in Teheran. Twitter reports believe they are Hizbollah and other imports. Many are on motorbikes. Michael Ledeen has fine analysis at Pajama Media. (Final note: It's nearly noon Tuesday in Iran. The country is literally on its own time--eleven and HALF hours later than Pacific Coast time, which is to say, eight and a half hours later than the East Coast.)

By George Gilder

(Cross-posted at Discovery's Disco-Tech's Blog.)

President Obama received a Cyberspace Policy Review from cybersecurity experts this week and pledged to create an Office of Cybersecurity Coordinator in the White House.

A federal cybersecurity coordinator may help government agencies better coordinate their responsibilities and authorities and eliminate duplicative or inconsistent efforts.

But most of the networks and computers which power the world's most dynamic economy and support the strongest military are owned and operated by the private sector, as the cybersecurity experts and the President acknowledged. The private sector has been hard at work improving the reliability of software and building security features into the network.

The importance of the network in combating cyber attacks has largely been overlooked. Network operators eliminate most spam, which, according to Semantech, comprises 90 percent of email.

Unusual traffic patterns give network operators early warning of worm strikes and distributed denial-of-service attacks. Network operators can divert malicious traffic to scrubbers so it never reaches its intended destination. Networks are the first and possibly the most effective line of defense.

The federal government will not dictate security standards for private companies nor monitor private sector networks or Internet traffic, according to the President. But with new high-level officials there will be a continuing temptation for government to micromanage the dynamic technology, telecommunications and cable sectors.

The President may bemoan the extent of taxpayer investment in cyberspace,

just as we failed in the past to invest in our physical infrastructure -- our roads, our bridges and rails -- we've failed to invest in the security of our digital infrastructure,
but unlike roads, bridges and rails, there are still opportunities for profit in software, hardware and broadband.

The biggest threat to continued private investment in cyberspace may be the President's oft-repeated support for net neutrality regulation, which would divert investment away from the core of the network. Cybersecurity requires investment throughout the network. The network is an ecosystem in which everyone has an important role to play.

The President's interest in cybersecurity is a good thing. But the federal government can do more to harm cybersecurity than to promote it.

One purpose of this blog is to call attention to issues that may well be about to assume increased public policy prominence. An example is the seemingly mundane matter of computer security. That includes security for public records.

Recently there have been disconnected stories about foreign efforts to attack military and commercial computers in this country and schemes to steal identities of credit card holders and other people whose personal data have been entered into computers. In practice, just about all of us are affected.

The past week the Obama Administration announced that it would like to put many of the nation's medical records--now on paper or on disparate computer files--into a centrally organized data base. The proposal in principle has merit as a way to make medical cases more portable for patients and to speed insurance and other processes. But it raises questions of cost, of course, and, even more importantly, questions of privacy. Who wants to see their private medical information bandied about on the Internet or, worse, sold to vendors of various kinds?
http://www.bizjournals.com/triad/stories/2009/04/13/daily9.html?ana=from_rss

There appear to be new technologies to prevent such problems and at reasonable cost, but the overall problem of vulnerable computer security--on medical records or national security--is not a minor threat for the country as a whole or for our citizens as individuals. It won't solve itself. It needs high priority notice by government and businesses alike.

One scary new idea is that the president could be empowered to close down the nation's computer systems to protect against cyber-attack:

http://www.informationweek.com/news/security/government/showArticle.jhtml?articleID=216500090

Dr. Medved, Seattle, 2008

David Medved, RIP

By David Klinghoffer

Whether in science, politics, or religion, one of the qualities most lacking in modern culture is breadth of vision. This is the gift of being able to see and express the whole, not merely a part. In the fields of thought and endeavor that matter most, too many of our leading figures are caught up and blinded by the narrow view of their little area of interest. Such narrowness breeds timidity and a suffocating orthodoxy.

All too painfully, we were reminded of this with the passing of our friend Dr. David Medved, a model of broadmindedness, in Jerusalem this past Tuesday. He was 83 and, last time we saw him, admirably vigorous in mind and body. Scientist, entrepreneur, and man of faith, father of radio host and Discovery Institute senior fellow Michael Medved, who is no less a dear friend, Dr. Medved was an amazing gentleman.

Accompanied by Michael and his Michael's wife Diane, David visited our Seattle offices last May to speak about his recent book, Hidden Light: Science Secrets of the Bible. A particular moment in his lecture seemed to crystallize much of what made him so special. There he was, tall and lean, standing in front of a huge map of the universe, displayed on the wall by a projector at the back of the room -- the famous WMAP picture of the cosmic microwave background radiation. What could be a more appropriate image, symbolizing breadth of thought?

DI president Bruce Chapman was standing to one side and gestured with a pointer to a spot in the upper left hand corner, noting dryly, "Seattle is right here." Dr. Medved smiled indulgently and carried on, mapping his own vision of the oneness of Biblical and scientific wisdom, hints of which he found scattered through the Hebrew Scriptures. You didn't have to agree with every detail of his interpretation to appreciate the major thrust of his perspective on the world.

That perspective was, in the words of the central Jewish prayer Sh'mah, that "the Lord is our God, the Lord is One" (Deuteronomy 6:4).
That kind of vision, increasingly rare today, is just part of what made David so unusual and so valuable. More personally, he was an exceptionally warm and charming man. A hero to his four sons -- Michael, Jonathan, Benjamin, and Harry -- he reminded other, younger fathers of the way we should hope to be regarded by our own sons and daughters some day.

He was a most kind and generous friend to the Discovery Institute. On trips to Israel, where he lived and worked, groups of DI-affiliated visitors David was our tireless guide, councilor, and chaperone. He seemed to know absolutely everyone, by whom he was held, without exception, in high and affectionate esteem.

David was, finally, an Orthodox Jew. From his viewpoint now in the supernal world, the Garden of Eden, he would no doubt be gratified if those he left behind would, according to Jewish custom, bless God in his merit with the brief prayer Baruch Dayan Ha'Emes, said upon hearing the news of a loved one's death: "Blessed are You, Lord, our God, King of the universe, the true Judge." May his family be comforted.

David Medved and The Israel Test

By Bruce Chapman

Friendships that suddenly arise late in a man's life; what an unexpected blessing for all concerned! Such were the friendships that David Medved developed with George Gilder, me and several of the rest of us at Discovery Institute in recent years. A physicist, an inventor, a businessman, he was an early signer of the list of scientists who Dissent from Darwin, and that is how his name first came up here. But then we started learning about so many other facets of David's remarkable personality and career. A resident of Israel, he described the best part of his daily routine as the prayers he he would offer on his terrace overlooking old Jerusalem as the morning sun broke through. That is the mental image of David I will always cherish.

David will also be recalled on the pages of George Gilder's new book, The Israel Test, that appears later this spring. David truly helped inspire and foster it by his devoted sponsorship of George in Israel, by his descriptions of his life in science, technology and business, and especially by the example of his own aliyah--his personal rediscovery of Israel and its significance for the modern world. The memory of his generous smile brings a smile to me now, and my own prayer of gratitude.

What is coming in Israel after this week's exciting elections is a coalition, as usual. But, facing stressful and consequential days ahead, this coalition could turn out to be unusually conducive to vital domestic stability.

It is in this sensitive moment that Discovery Senior Fellow George Gilder is completing the edits for a new book, The Israel Test. This work will surprise many of his fans, but it makes sense in the progression of George's interests over four decades--from war to politics to families to "wealth and poverty" to entrepreneurism to technology and technology companies to (now) the Israel of the past dozen years that concatenates new free market policies, brilliant minds and the most fecund technology, acre for acre, in the world. For Gilder, the success of the United States is now linked as never before to the success of Israel. The links are more than sentiment, and more than political and military interests. The new links are shared technical knowledge, imagination, business acumen and, most of all, mental agility.

Benjamin Netanyahu helped usher in this new era when he was finance minister in the 90s. Now, as George first found on a Discovery-sponsored trip two years ago, the country is fairly bouncing with brash young businesses that have made tiny Israel an amazing tech powerhouse. In his distinctive fashion George weaves a story of the people who made this happen and their successors today. He interprets this account in the context of the history of the Jews in modern times and gives a frank report on the undeniable genius of the Jewish people.

Our Discovery colleague David Klinghoffer, who writes often on Jewish matters, read a draft this week and tells me he found it "brilliant, visionary, original, exciting, and beautiful... The fundamental insight about an 'Israel test' we all face is so intuitive and obviously true--yet not like anything I've heard before. Once he articulates it, I know exactly what he means and have to admit I've not always passed it myself.... It snaps so much into perspective, unarguably, I think."

Gilder is original. He's also funny and challenging.

Richard Vigilante Books is the publisher. The Israel Test is slated for publication this spring.

You heard about it here first.

Senior Fellow Hance Haney entertains the useful contrarian suggestion that in some spheres, such as technology, less government regulation is needed--maybe to the extent of abolition.

Abolishing the FCC stands little chance in the Obama Administration. But worthy ideas require a long road to implementation, and that one might as well start now.

By George Gilder (taken from his weekly subscriber newsletter):

It is the view of The New York Times' Tom Friedman that the Israelis, who hold less than half of one percent of mid eastern territory, should trade land for peace with the Palestinians:

After thirty years covering this area, cataloguing every olive tree in the
Middle East, Friedman no can longer see the imperious forest of basic
facts before him in the region. G.K. Chesterton got it right. As I
paraphrase: "If it were true that the man who is trained is the man to be
trusted--if the man who saw something every day saw more and more of its
significance--the argument for expertise would be unanswerable. But the man
who sees and studies and practices something every day does not understand
more and more of its significance, but less and less."

Reflecting this blindness of expertise is the utterly conventional and
obviously fantastic consensus view of Friedman and nearly all the other
authorities on the subject. The key problem in the mid-East, they conclude
in chorus, is that Israel has too much land. Their remedy is for Israel to
give up land for the creation of yet another fanatical Moslem nation-state
in various areas of Palestine amazingly even more cramped than Israel.
Created would be a prospective nation with no identity to sustain it
beyond the Palestinian sense of grievance and its hatred of Israelis.

It is hard to imagine two more preposterous ideas so widely and
prestigiously upheld by experts. Chesterton's law is fully vindicated by
Friedman's follies.

Also supporting this pastiche of absurdities is French writer-"activist"
Bernard-Henri Levy. Author of a book on the killers of Daniel Pearl of the
Wall Street Journal and articles and essays galore on Israel and
anti-Semitism, he amazingly slips into an objectively anti-Semitic mode
himself. Believing that Israel must trade land for "peace," and give the
Palestinians a state, Levy fails to explain why, of all the nations of the
world, the only one not permitted to command a defensible territory,
capture the staging areas of invaders, or exclude immigrants devoted to
their destruction are Israel's Jews.

By contrast to Israel, the Palestinians are surrounded on all sides by
spacious and compatible Arab countries of whom they theoretically could
become citizens. Why not the East Bank? That's Jordan, where 100 thousand
Palestinians voluntarily fled during the 1967 war? As David Pryce-Jones
witnessed at the time on the Allenby bridge, "Fear did not seem to be the
motivation. These people had not seen a single Israeli soldier....Something
in the culture more powerful than either self-interest or common sense was
at work."

A Moslem Arab state from time to time sustained by Israel and created in
part as a home for the Palestinians, Jordan held the West Bank until King
Hussain's treacherous 1967 invasion and shelling of Jerusalem. Jordan
retains a far more compelling obligation to these people than Israel does.
In the 1980s, Palestinians taking refuge in Jordan did attempt to
overthrow the Jordanian government. So the Jordan solution may take some
work, but it is surely more practical than the seawater solution favored
by the Palestinians.

Should the Palestinians shun Jordan, perhaps they would prefer the Soviet
Jihad state of Syria, which in its guise as "Greater Syria" stretches its
reptilian tentacles throughout the region, including nearby Lebanon.
Moreover, Egypt is contiguous with Gaza and could easily absorb the Gazan
Palestinians. It is outlandish to say that, because of some democratic
nicety interpreted tendentiously by the U.N., Israel must commit effective
suicide by giving citizenship and equal voting rights to 4.5 million
anti-Semite enemies who want to kill them.

Yet Jeffrey Goldberg of the Atlantic, in a helpful piece called "Is Israel
Finished?" reports that accepting this line of democratic thought are not
only leading Israeli writers such as the prizewinning Amos Oz and my own
favorite, the eloquent Edward Grossman, but also the then incumbent prime
minister Ehud Olmert himself. Grossman's waffles may be understandable
because of the loss of his son Uri during the Lebanon War in 2006. But
Olmert and his allies had no excuse. Nonetheless, this former mayor of
Jerusalem nominally dedicated himself to removing the some 400 thousand
Jewish settlers in the West Bank and Eastern Jerusalem. Goldberg's article
justifies this surrender by suggesting that, together with the demographic
trend, the West Bank settlements are "a castastrophe." Echoing Jimmy
Carter's ingenuous view, Goldberg even raises fears that "Israel will
become a state like pre-Mandela South Africa, in which the minority ruled
the majority."

Clinching the argument, Goldberg writes: "If the Arabs of the West Bank
and Gaza were given the vote, then Israel, a country whose fundamental
purpose has been to serve as a refuge for persecuted Jews [where they
could live as a majority], would disappear, to be replaced by an
Arab-dominated 'binational' state."

This is a democratic ideology that accords no significance to the prospect
that an Arab run Israel would quickly expel all its Jews and cripple its
capitalist economy. Such rules of democracy would make democracy a suicide
pact.

Without a functioning and legally protected capitalist system, democracies
swiftly sink into ochlocracies, ruled by mobs. Without the independent
private sources of power imparted by free businesses, unbiased courts, and
other institutions of economic order, any democracy becomes a despotism
ruled by any tribe of thug politicians that manage to gain control. If
they have oil or foreign aid they may stay in power for decades. The
failure of leading Israeli intellectuals and politicians to comprehend
this reality is far more portentous than any supposed demographic trend.

In stark terms, Israel and Palestine raise the issue not only of the
prerequisites of viable democracy but also of the nature of capitalist
wealth. Are entrepreneurs, in Israel and around the world, chiefly givers
and benefactors, or are they predators and exploiters? Should policy focus
on fostering economic growth for all or on closing "gaps" between rich and
poor? Should it seek to enable an economic spearhead of excellence and
creativity or to dispossess the successful to subsidize the wretched of
the earth? Clutching their Fanon and their Koran, their Howard Zinn and
their Noam Chomsky, the ersatz voices of the "wretched of the earth"
punctuate their claims by a flaunted fist of hate, a clenched mind of
murder. Does Israel owe anything at all to such people?

To many observers--in the army of the left--it is obvious that Israeli
wealth causes Palestinian misery. How could it be otherwise? Jews have
long been paragons of capitalist wealth. Capitalist wealth, as
Pierre-Joseph Proudhon put it in regard to "property," is "theft." Karl
Marx was said to have shaped his opposition to property rights and his
Jewish self-hatred, by reading Proudhon, who in anti-Semitic virulence,
exceeded even Marx. In an 1883 diary, Proudhon declared that, "The Jew is
the enemy of mankind. This race must be sent to Asia or eliminated." This
fits well with Osama Bin Laden's view that warping the entire U.S. economy
and its global impact has been the effects of Jewish usury.

History, however, favors the view that poverty springs chiefly from envy
and hatred of excellence--from class war Marxism, anti-Semitism, and
cleptocratic madness. It stems from the belief that wealth inheres in
things and material resources that can be seized and redistributed, rather
than in human minds and creations that thrive only in peace and freedom.
In particular, the immiseration of the Middle East stems chiefly from the
covetous and crippling idea among Arabs that Israel's wealth is not only
the source of their humiliation but also the cause of their poverty.

Most of the world, even many citizens of Israel itself, want to muddle
these issues. The favored answer to all categorical pronouncements is:
"All of the above." Democracy, equality, multicultural kumbaya, Sharia
law, gay marriage, capitalism and freedom, the children of coddled West
want it all in a cornucopian cocktail party of inebriated contradictions,
from green austerity to entitled affluence. They mix nominal political
support for Israel with celebration of Palestinian voters who elect and
applaud anti-Semite terrorists. They match a devout belief in abortion
with fears of demographic disaster in Israel, and with continual bows of
political reverence toward an ever-diminishing complement of children.
They combine opposition to nuclear weapons and defense spending with
demands for American intervention everywhere the U.S. has no conceivable
national interest, from Burma to Tibet. They oppose nuclear proliferation
while urging US nuclear disarmament that hugely enhances the incentives
for secret nuclear programs. Without peremptory US nuclear superiority a
small complement of nukes can confer global dominance and make it
impossible for the US to defend Israel or anyone else.

The Israel test forces a remorseless realism. It disallows all the bumper
sticker contradictions of pacifistic bellicosity. Either the world,
principally the U.S., makes the sacrifices to support Israel or Israel,
one way or another, will be destroyed. There are no other realistic
choices. And if Israel is destroyed, capitalist Europe will likely die as
well, and America, as the epitome of productive and creative capitalism,
spurred by Jews, will be in jeopardy.

Discovery Sr. Fellow George Gilder, co-founder of Discovery Institute, has a fine Forbes magazine piece up today that shows the confidence and hope the political candidates are missing.

The answer, George Gilder tells me, may be hedge funds.

The disappearance of Lehman Brothers and the transformation of Morgan and Goldman Sachs into heavily regulated commercial banks presents an opportunity for entrepreneurial risk taking by someone else. Such as hedge funds. New technologies make it possible for them to stay in touch with clients and handle trades quickly.

The turmoil in the markets world-wide disagregates the economy and makes new entitites possible. Dispossessed "animal spirits" will surely find a new home.

It is worth pausing here to recall that Fannie Mae and Freddy Mac helped over several decades to get home ownership up to 70 percent in this country. Very good, up to a point. They were distinguished by one advantage, government guaranteed money, and one vice, greed (or, if you prefer, self-serving ideological pride). Financial organizations looked at this situation and saw opportunities to build huge new leveraged edificies on top of it. They and Fannie and Freddy went overboard.

The "mark to market" regulation, meanwhile (for all you who love regulations) quite possibly has made the current situation seem worse than it needsto be. No one really knows what the price of a house is if it isn't selling, so the mark to market exercise is conducted with far too little knowledge. Now we see through a glass darkly.

Overall, is this not a political problem as much as an economic one? Is not the risk of posturing members of Congress now at least as big a scare factor as the housing market and financial markets?

Former colleague Richard Rahn writes in The Washington Times that inflation is high or low depending on what you are buying and how you are living. High technology products actually are making many activities more efficient and cheaper. See below:

The Washington Times
www.washingtontimes.com

What is Measured?
By Richard W. Rahn
Published February 29, 2008

Do you think inflation is rising faster than the government says (an annualized of 4.1 percent in December)? Many people do, because they are keenly aware of supermarket and gas station prices, but that is not the whole story.
Inflation is defined as an overall increase in the price level, but the "inflation" that each individual faces is different. Over the last year, there has been a big jump in the price of gasoline and in many foods, such as milk and bread. (The increase in food prices is almost entirely due to the government"s foolish policy to subsidize corn for ethanol, thereby driving up the price of not only corn, but every crop that competes with corn for field space.)

However, if a person spends a lot of money on electronic items and communications, and does not drive much, his or her total expenditures might have declined as a result of the continuing rapid drop in prices of most electronic items and communications.

If you bought a Blackberry or Apple iPhone, you purchased an item that can replace your computer for Internet and e-mail access, cell phone, Rolodex and calendar, camera, calculator, global positioning navigator, personal music and video player, etc. To replicate all the things you now get in one Blackberry or iPhone would have cost you many thousands of dollars even a decade ago (even if available).
In the late 1990s and the early in this decade, inflation as reported by the government was quite low, though asset prices, such as homes in many areas, were rising at double digit rates. Now prices of homes and HD flat-screen TVs are falling.
Government economists and statisticians responsible for measuring inflation do not have an easy task, which is only getting more difficult. As the rate of technology change increases, the goods and services we consume radically change, so historical measures become less and less relevant. Yes, bread and milk prices have not changed much, but as people become more affluent, the portion of income they spend on such staples becomes smaller and smaller.

At the same time, the Internet, which for most people is only a decade-old, has caused prices to drop for millions of items -- most information now is almost free as are international phone calls using Skype and its competitors.

If inflation becomes more and more difficult to measure, how can central bankers determine how much money to produce to keep a stable price level?
Some call for a return to the gold standard, but that is not the panacea some may think. Gold prices over the last three decades have swung back and forth between $250 and the current $900 per ounce. Sales of gold by governments, as well as global market psychology, can cause substantial price shifts; and the additions to the gold supply each year tend to be less than the potential increase in global GDP, which can have a deflationary effect. Despite these problems, gold may be better than some other alternatives.

For readers desiring a more in-depth, but clearly written and brief discussion of the pros and cons of alternative money systems, I highly recommend a new book with the off-putting title, "One Currency for Bosnia," by Warren Coats. Mr. Coats is a highly regarded monetary economist who has specialized in setting up new monetary and banking systems for countries whose economic systems have collapsed because of war or revolution (i.e., Bosnia-Herzegovina, Iraq, Afghanistan, many of the former communist republics, et al.).

The book is a riveting tale of how Mr. Coats and his International Monetary Fund teams have quite literally risked their lives to help rebuild the economies of war-torn countries. And it is also a wonderful and easy to understand primer on money and banking, in which key concepts are presented in succinct inserts.
Measuring the value of money and inflation within a national economy is difficult enough; but when it comes to measuring real global price changes, the problem is greatly magnified. Why should the cost of a Big Mac (identical to one in America) be 50 percent more in some European countries, even where their real wages are lower than in the United States?

Why should the value of the euro and the dollar swing more than 60 percent against each other in only five years? These relative currency and price swings wreak havoc with global business people who engage in long-term contracts or build manufacturing operations in several different countries. While the search for a global monetary constant will always remain elusive, there is a need for a more stable reference point than either gold or any national currency can provide.

A highly regarded nongovernmental private organization, with no vested interest (other than enhancing its reputation), could provide a greatly needed service by creating an artificial monetary unit to measure against the price of any good or service on the globe. This unit would need to be a transparent basket index of standard goods and services produced and/or consumed in many countries (the index would evolve over time -- like the Dow-Jones stock index -- as technologies and global consumption patterns change). Once established, contracts, and even interest-bearing securities, could be written in the monetary unit. Such a widely accepted unit would substantially add to global economic stability and better resource allocation, leading to higher global economic growth.

Richard W. Rahn is the chairman of the Institute for Global Economic Growth.

At the very time when the media are warning about threatened unemployment, the technology sector is complaining about the lack of available qualified personnel for all the new jobs opening up. This reminds me of the comments of Sen. McCain during the Michigan primary: We cannot recreate the old industrial jobs that we have lost. Instead, we have to train and retrain for the jobs of the future.http://www.cioinsight.com/article2/0,1540,2248193,00.asp?sp=0&kc=HOTTOPICS012308STR2

Our Senior Fellow George Gilder and I were in Israel recently so that he could meet with high tech entrepreneurs--led by the tech investor, executive Jonathan Medved--and also to meet with academics interested in the intersection of technology and intelligent design.

Israel's dynamic technology scene--it rivals our own and surpasses all others in inventiveness and sheer business panache--should be the subject of another blog. But here I would like to call your attention to the excellent article published by the Jerusalem Post after our visit. Ruthie Blum conducted an adroit interview that managed to provide comprehensive context and yet allowed George to speak for himself and in his own voice. It was refreshing to have a reporter who was so self-confident that she didn't feel obliged to interpret his words for him. It should be a common strength in a reporter, but it actually is rare.

In a couple of places, as an interview subject will do, George fails to provide connective tissue between two thoughts; i.e., when he discusses "multiple universe" theory, he seems by implication to criticize Richard Feinman, when he means only Richard Feinman's less able followers (I checked to be sure).

And Ms. Blum terms Gilder a "scientist," which, of course, he is not and doesn't pretend to be.

What George does do is integrate the world of computer technology with the debate over intelligent design.