Thursday, May 4, 2017

Dollars and Sense: Letter from Vietnam [feedly]

Letter from Vietnam
http://triplecrisis.com/letter-from-vietnam/

James K. Boyce

As a first-time visitor to Vietnam I'm struck by three things. First, the sheer beauty of the countryside, from the green sheen of rice paddies to the mist-shrouded mountains. Second, the vibrancy of the economy, tangible not only on the streets of its cities but even in the ethnic villages of the far north. Finally, most remarkable to me as an American, the lack of acrimony left by the war fought in my youth.

The American War, as it's called in Vietnam, killed one million Vietnamese combatants and civilians, maybe many more – no one kept reliable score. It took the lives of 58,000 Americans, including some of my high school classmates. It cost American taxpayers over $100 billion – more like $800 billion in today's money – in military spending alone, not counting the deferred costs of veterans' benefits and interest on government debt.

As I travel, a recurring thought loops through my mind: We fought the war to prevent … this?

On weekend evenings, the promenade and streets around Ho Kiem Lake in Hanoi's old quarter fill with people – families with children toting luminescent toys, seniors relaxing on lakeside benches, youngsters playing shuttlecock hacky sack and listening to live music. High school kids, torn between eagerness and shyness, approach us to practice the English they're learning in school. And I think: We fought the war to prevent … this?

When the first U.S. combat troops waded ashore on a beach near Danang in 1965, they were greeted by women who gave them flower leis. Unfortunately, the marines did not simply say "thank you" and go back home. Today bullet holes pockmark the buildings that survived the war and bomb craters pockmark the landscape, reminders of spilled blood that soaked into the earth. Fancy hotels line beaches near the city. I ask myself: We fought the war to prevent … this?

March 1965: U.S. marines land near Danang (Photo credit: United States Marine Corps, via Wikimedia Commons, public domain).

Today: Hyatt Regency Resort & Spa near Danang (Photo credit: Tungnguyen47, via Wikimedia Commons, Creative Commons Attribution-Share Alike 3.0 Unported license).

Vietnam is open for business. Construction is booming. For better or worse, the logos of Burger King and Starbucks are popping up alongside local noodle joints and coffee shops. The top destination for Vietnam's exports today is the United States. Again I think: We fought the war to prevent … this?

In "Operation Ranch Hand" from 1962 to 1971, U.S. forces sprayed almost 20 million gallonsof defoliants in Vietnam, covering an area roughly the size of Massachusetts. Today coarse "American grass" grows on many defoliated lands, and Vietnamese children suffer birth defects attributed to the toxic residue (Photo credit: National Museum of the U.S. Air Force, via Wikimedia Commons, public domain).

Hanoi's Nội Bài international airport, April 2017 (Photo credit: James K. Boyce).

America's war aim was to prevent a united Vietnam under communist rule. My nation's leaders assured us that this benefit justified the costs. A communist victory in Vietnam would trigger a "domino effect," as country after country fell to the Soviet empire, threatening the survival of the Free World and ultimately America itself.

But in the end, America lost the war. A decade after the first marines landed, the last American personnel were evacuated ignominiously by helicopter from the roof of the U.S. embassy in Saigon. The outcome that America wanted to prevent happened. Today the results are there for anyone who wants to see. And the idea that preventing this outcome was worth the cost seems, well, just plain nuts.

It turns out that Vietnam was not a domino tile, differing from its neighbors only by the number of spots. The communist victory did not herald an inexorable cascade to world dominion. Instead, within five years of America's exit Vietnam fought wars with its communist neighbors, China and Cambodia.

Our 32-year old guide tells us, "Now we understand that Vietnam was a victim in the contest between America and Russia and China." During the war his father worked in a brigade that maintained the Ho Chi Minh trail, along which the north sent fighters and supplies to south Vietnam. "Back then, we just thought we were defending our country." For the majority of Vietnamese who opposed the Americans and their client regime in the south, the war wasn't about communism. It was about patriotism.

Ho Chi Minh led Vietnam's fight against Japanese occupation during World War Two. After the war, he hoped his American allies would back his struggle against French colonial rule. Instead the U.S. government sided with the French (Photo credit: Author unknown, via Wikimedia Commons, public domain).

Traveling in Vietnam today, we find no trace of bitterness toward Americans. A 2015 pollreported that 78 percent of Vietnam's people hold a favorable view of the U.S., more positive than in Britain, Australia or Japan.

But in my own mind a bitter residue still burns. How was it possible that we fought this war, and squandered so many lives and so much wealth, to prevent an outcome that turned out to be so … normal? With hindsight one can say the war was stupid, tragic, criminal – all true. But these verdicts fall short of a full reckoning.

The men who orchestrated the war weren't stupid. They were, in the phrase of the era, "the best and brightest." They knew about the slaughter and body bags, but they were sure that the benefit was worth the costs. Men like Johnson, McNamara, Nixon and Kissinger saw themselves as statesmen, not war criminals.

The question is not why they believed this – books have been written trying to explain it – but what permitted their hubris to go unchecked for so long.

To answer, we must turn the lens on ourselves. You have a republic "if you can keep it," Benjamin Franklin famously declared at the end of the Constitutional Convention in 1787. But the Vietnam war revealed a yawning deficit between the promise and reality of our democracy. Americans proved willing to trust their government to do the right thing – even if this meant sending their boys to die in a far-away land. Was it fear that explains it? Gullibility? Father-knows-best faith in a daddy state? These are questions we have never as a country faced squarely.

The irony is that the disillusionment fed by the war only widened the gulf between the American people and their government, rather than inspiring the responsibility and hard work needed to keep the republic alive and well.

The same civic maladies that brought us the Vietnam war – dread, ignorance, capitulation to smug leaders – haunt us today, and America continues to dissipate its wealth and power in war after war.

Vietnam has moved on. But in this regard America hasn't.

Triple Crisis welcomes your comments. Please share your thoughts below.


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This stage managed, policy free election [feedly]

This stage managed, policy free election
http://mainlymacro.blogspot.com/2017/05/this-drama-free-policy-free-election.html

The real drama of the election so far was provided after the GMB union called a strike at Nestle's York factory to protest at the management's announcementthat they were going to shift production of Blue Riband to Poland. Although the company merely talked about cutting costs, the local Labour MP blamedBrexit.

The day began with Theresa May, frontrunner in the forthcoming election, visiting both company management and union leaders to discuss the situation. The real drama began when Tim Farron, leader of the Liberal Democrats, who is campaigning to allow another referendum on Brexit, ambushed May by visiting workers who were picketing the factory. The anti-Brexit candidate shook hands and took selfies, and later said there was no doubt that the job cuts were a direct result of Brexit. I'm on the side of the workers who will lose their jobs as a result of leaving the EU, he said.

But Mrs. May was not to be outdone. After her talks she too went to talk with workers on the picket line, despite chants from some of the workers of 'we want a second referendum' and 'Farron for PM'. She talked with them for an hour, and although she might not have convinced them that she could help, she did win the respect of some.

This is fiction of course, apart from the job losses at York. But those who read this Guardian article, or who live in France, will know that this is exactly what happened in the presidential run-off, with Le Pen performing the ambush and Macron having the courage to subsequently talk to the striking workers. As the article pointed out, this French political drama is in complete contrast to the stage managed campaign of Theresa May. In addition Macron has not refused to debate Le Pen for tactical reasons, as both May and then Corbyn have done.

This and the last election have been about selling brands, but unlike advertising there is no requirement to tell the truth. 2015 was all about a strong economy in capable hands: the economy was not strong and the hands sacrificed the economy for political gain but they kept on saying 'long term economic plan' and won. This time they are selling Theresa May as strong and stable, strong enough to bow to pressure on self-employment tax and stable in her views on Brexit, but again the marketing will win.

There is no doubt that something is very wrong when politics becomes about selling advertising slogans that are not true. But who is to blame for this situation? Janan Ganesh saysthe problem is that there are just two attitudes among the public about politics: indifference and obsession. I often think that the indifference is summed up by the phrase 'all politicians are the same'. Taken at face value this assertion is clearly wrong, but what I think it means is that the person talking does not have the time or inclination to work out how politicians differ in a way that matters to them.

But this indifference does not stop people forming political opinions, often quite strong opinions. So why are we getting an election where the Prime Minister wants to avoid debate or questioning as far as she can? Krishnan Guru-Murthy is rightthat the media should try and discourage this way of running elections. But that needs to involve more than telling people when meetings are completely stage managed. The media needs to look at why spin doctors might want to minimise encounters with the media. For part of the answer you only need to look at how it puts gaffes before policy, as Diane Abbott discovered on Tuesday. Guru-Murthy's own news program led with it, and all the discussion was about gaffes rather than police numbers.

Justifications along the lines of how this can reveal something about the competence of the person who made the gaffe may sometimes be true, but as a general defence it is not very convincing. As Mark Steel tweeted, if she had only put the numbers on a bus she would have got away with it. The real reason broadcasters make so much of gaffes is that they make great television. Who doesn't want to see a politician embarrassed? But the consequence is politicians retreat to gaffe-proof platitudes. Labour politicians used to speak in a strange manner that seemed to be designed to avoid giving ammunition to the Daily Mail. It was one of the reasons Jeremy Corbyn, who said what he thought, won the Labour leadership.

If the broadcast media saved all the time they currently spend commenting on the polls and instead used that time to talk about policy, it would allow viewers to connect their own opinions to each party more easily. We do not want to end up like the last US election, where the average voter who just watched the nightly news on the non-partisan TV channels saw more time devoted to Clinton's emails than all policy issues combined. That way we will end up with an incompetent, dishonest leader running a party whose policies will harm the country. Oh, wait...


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How Noncompetes Stifle Performance

killing, or weakening non-competes is a campaign that would capture the attention of almost ALL IT workers!

How Noncompetes Stifle Performance

On Amir
Orly Lobel

FROM THE JANUARY–FEBRUARY 2014 ISSUE of the Harvard Business Review


Noncompete clauses are a standard feature of many employment contracts. Surveys show that in the United States nearly half of engineers have signed agreements limiting their ability to later work for or start rival firms, as have senior managers at 70% of public companies. According to conventional wisdom, these agreements are crucial to innovation-driven businesses, because they help keep proprietary information and talent safe from the competition.

But noncompetes can be a double-edged sword. A growing body of evidence shows that innovation, productivity, and economic growth are all greater in regions where local laws don't allow (or authorities don't enforce) such contracts—most notably, Silicon Valley. Presumably, positive effects spread to many companies when employees are free to move around.

New research suggests another reason to think twice about imposing such restrictions: In a large-scale experiment, we found that subjects in simulated noncompete conditions showed significantly less motivation and got worse results on effort-based tasks. Why? We believe that limits on future employment not only dim workers' external prospects but also decrease their perceived ownership of their jobs, sapping their desire to exert themselves and develop their skills. The resulting drop in performance may be more damaging to companies than the actual loss of the employees would be.

We recruited 1,028 participants to complete an online task for pay. Half of them were asked to do a purely effort-based activity (searching matrices for numbers that added up to 10), and the other half, a creative activity (thinking of words closely associated with other words). Some subjects in each group were placed under restrictions that mimicked a noncompete agreement: They were told that although they would later be invited to perform another paid task, they'd be barred from accepting the same type of task. The remaining subjects were used as a control group and given no restrictions.

The drop in motivation and results may be more damaging to companies than the actual loss of the employees.

Sixty-one percent of the subjects in the noncompete group gave up on their task (thus forgoing payment), compared with only 41% in the control group. Among the subjects who completed the matrix task, people with noncompete conditions were twice as likely to make mistakes as people in the control group. Those who were restricted also skipped more items and spent less time on the task—further indications of low motivation.

All participants who completed the word-association task, regardless of whether they were under a noncompete restriction, performed similarly in terms of errors, skipped items, and time spent. We weren't surprised by that finding: Prior research had shown that in creative endeavors, people are primarily driven by intrinsic motivations. So it made sense that subjects working on the word associations would be less affected by a negative external incentive than people working on math tasks would be.

Given today's increasingly mobile labor market and the heightened competition in many industries, it's understandable that companies want to guard their talent closely. But if the walls meant to protect human capital diminish the quality of that capital, they may not be worth building.

A version of this article appeared in the January–February 2014 issue of Harvard Business Review.

--
John Case
Harpers Ferry, WV

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Leonhardt: The Cynicism of Trumpcare

The Cynicism of Trumpcare

NYTimes:David Leonhardt
Earlier this week, the pollster Matt McDermott posed a question: Why are Democrats working so hard to prevent House Republicans from passing their health care bill?
"It's an extreme bill that's probably dead in Senate. And puts vulnerable GOPers on the record for vote that'll cost them House next year," McDermott predicted. Democrats were opposing it anyway, because they believed it was wrong — "a truly awful bill that will truly hurt everyday Americans," he wrote.
He added: "In this health care debate, Democrats are doing something few in politics ever do: staking a moral position regardless of the politics."
On Wednesday, House Republicans finally seemed to find a path to passing the bill. But it's an amazingly cynical path. They flipped the votes by adding a fig leaf, of an extra $8 billion over five years to help cover sick people. The amount is not nearly enough to prevent the bill from doing terrible damage, as reporting by Reed Abelson and Margot Sanger-Katz shows.
The bill, at its core, is still what it has always been: It's a large cut in health benefits for the sick, the old, the middle class and the poor, as an academic study published today — which I cover in a new column — shows. The savings from these cuts is then funneled into tax cuts for the rich.
That's why the bill continues to be opposed by conservative, moderate and liberal health care experts, as well as groups representing doctors, nurses, hospitals, the elderly, the disabled and people with cancer, diabetes and multiple sclerosis. Oh, and that's a partial list.
No wonder Republicans are hastily rushing through the bill. "There have been no hearings, no studies, no Congressional Budget Office analysis; not even the text of a bill circulated the day before Thursday's vote," Jonathan Chait's latest piece for New York magazine points out. No major bill has ever passed Congress in this fashion.
My colleague Ross Douthat put it this way: "Say what you will about European right-populists, but they wouldn't be dumb enough to vote for this health care bill."
In the end, the principled Republican resistance to the bill in the House appears to have been smaller than the desire to let President Trump and Paul Ryan claim a political victory. House Republicans seem to be betting that the progressive resistance to Trump has exhausted itself, as Ezra Klein noted.
If the bill really does pass, the next two battles become clear: Persuading at least three Republican senators that they shouldn't take away 24 million people's health insurance — and then, as McDermott's question suggested — making sure some House Republicans who voted to take away that insurance pay with their jobs in 2018.
The full Opinion report from The Times follows, including Andrew Rosenthal on James Comey.
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John Case
Harpers Ferry, WV

The Winners and Losers Radio Show
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Dissent: Brazil on Strike

Brazil on Strike








As darkness fell in Rio de Janeiro's historic center on Friday evening, the smell of tear gas hung heavy. It had been a day of mass mobilization across the country: more than a million Brazilians in at least 254 cities participated in a day-long general strike on Friday, according to organizers; more are taking to the streets today for May Day, a national holiday here. The strike, said to be the biggest in decades, was meant to rally opposition to an aggressive pension reform plan that would weaken labor laws and raise the retirement age by a decade—the centerpiece of an array of austerity measures put forth by President Michel Temer, whose approval rating sits at a dismal 4 percent.

The strike, organized by Brazil's biggest unions, had perhaps the greatest impact in industrial capital São Paulo, where protesters were able to march through the city for hours; buses and services were shut down in Brazil's other major metropolises. The hashtag #BrazilEmGreve (Brazil On Strike) had a wider reach on social media than the massive protests that led to Rousseff's impeachment.

Brazilians have good reason to be angry. The country is in the grip of a years-long recession that has cast millions of people out of work; meanwhile, a long-running corruption investigation has revealed that every major political party received bribes from most of the country's largest businesses in exchange for lucrative government contracts. The unelected, right-wing government of Michel Temer, who nominally came to power on the wings of an anti-corruption movement against the Workers' Party (PT)—which governed from 2003 until last July—is revealing itself to be at least as corrupt as its predecessor. One-third of Temer's cabinet ministers, and nearly every congressional leader, are currently under investigation on corruption charges; Temer himself has been accused of soliciting a $40 million bribe, though presidential immunity shields him from sanction for now.

At the center of Temer's plan to reassure investors is a far-reaching austerity package. Temer is hardly alone among Brazil's elites in hoping that drastic public-sector cuts will turn on the spigot of foreign capital, which has largely fled Brazil following a worldwide slump in commodities prices. When she was still in power, the PT's Dilma Rousseff herself cast pension reform as a necessary, if painful, measure to fixing Brazil's economic woes. But Temer has been far more aggressive, much to the markets' approval: since Temer and his allies ousted Rousseff in a parliamentary coup last year, the Brazilian stock market has surged to pre-recession levels.

The government's tired austerity formula conveniently downplays other possible areas for reform, like Brazil's notoriously complex tax system, which imposes a regressive burden on working-class and middle-class Brazilians through a combination of high consumption taxes and low capital-gains and wealth taxes. Worse, Temer's unpopularity and unelectability (he is barred from running for office in 2018) has inspired a particularly cynical line of thinking in technocratic circles and his own government. If anyone is going to force a broadly unpopular measure through a corrupt, self-enriching congress, the thinking goes, it might as well be an unpopular leader who has no chance of ever being elected anyway.

Scenes from São Paulo (left, right) and Rio de Janeiro (center), Friday, April 28 (Mídia Ninja / Flickr)

Indeed, Temer's government is making little effort to sugarcoat the reforms. Instead, it targeted Friday's strike with heavy police repression. On Friday evening in Rio, Jandira Feghali, an opposition congresswoman, was minutes into a speech denouncing Temer's reform package when tear gas grenades started falling onto the crowd. "It was madness," said Thiago Tadeu, a journalist who watched the ensuing mayhem unfold from the stage where Feghali was speaking. "They fired on all sides, surrounded the crowd."

Luciana Zanatte, an unemployed teacher, gathered with a few friends in the entrance of a nearby metro station, hoping to join the protests as they continued into the night. But rounds of tear-gas canisters and percussion grenades had already broken up the nascent march. Zanatte's friends passed around cell-phone photos of burning buses a few blocks away—at least nine were torched by protesters in the confrontations—and rubbed milk of magnesia on their eyes as they bitterly denounced Temer's government. A crowd gathered nearby had scattered after police rode through on motorcycles, firing tear gas grenades and waving long batons. But Zanatte said they remained defiant.

"People watching TV tonight will hear that these protests are being organized as a campaign strategy for the PT, but that's crazy," Zanatte said. "This isn't the movement of a political party. We're here because we disagree with the government."


Lucas Iberico Lozada is a writer and translator currently based in Rio de Janeiro.

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John Case
Harpers Ferry, WV

The Winners and Losers Radio Show
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Odds and ends: taxes, Kansas, GDP, residual seasonality… [feedly]

Odds and ends: taxes, Kansas, GDP, residual seasonality…
http://jaredbernsteinblog.com/odds-and-ends-taxes-kansas-gdp-residual-seasonality/

Just a few links folks might find worth perusing.

First, a few thoughts about President Trump's tax "plan:"

–I don't think it makes sense to discuss corporate or business taxation anymore without including pass-through businesses, which comprise most businesses and about half of business income. And Trump's plan opens up a fat, new loophole in this part of the code.

–The criticism of the Trump tax outline–it's like 200 words!–has been both fulsome and pretty bipartisan. It's actually hard to find anyone who's not completely on the take to accept the administration's claim that the tax cut will pay for itself.

–I've got one word for the tricklers: Kansas!

On an unrelated topic–I mean, it's all related, but…–I posted this tweet the other day which is a followup on this earlier post re the 2017Q1 GDP release (the figure below should say "and" not "are"). There's some evidence, including from BEA itself, that the seasonal adjustment procedures are not successfully extracting all the seasonality out of the non-adjusted data. So I just ran the SA data through the SA software again and got the results below. The readjusted Q1 real growth rates tend to be above the reported ones (which means other quarters must go the other way, since the annual change shouldn't be affected).

If you're curious about this, and who isn't, here's a nice explainer of the problem and what BEA is doing to fix it.




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Perspectives on transportation history [feedly]

Perspectives on transportation history
http://understandingsociety.blogspot.com/2017/04/perspectives-on-transportation-history.html

I view transport as a crucial structuring condition in society that is perhaps under-appreciated and under-studied. The extension of the Red Line from Harvard Square (its terminus when I was a graduate student) to Davis Square in Somerville a decade later illustrated the transformative power of a change in the availability of urban transportation; residential patterns, the creation of new businesses, and the transformation of the housing market all shifted rapidly once it was possible to get from Davis Square to downtown Boston for a few dollars and 30 minutes. The creation of networks of super-high-speed trains in Europe and Asia does the same for the context of continental-scale economic and cultural impacts. And the advent of container shipping in the 1950's permitted a substantial surge in the globalization of the economy by reducing the cost of delivery of products from producer to consumer. Containers were a disruptive technology. It is clear that transportation systems are a crucial part of the economic, political, and cultural history of a place larger than a village; and this is true at a full range of scales.

We can look at the history of transport from several perspectives. First, we can focus on the social imperatives (including cultural values) that have influence on the development and elaboration of a transportation system. (Frank Dobbin considers some of these factors in his Forging Industrial Policy: The United States, Britain, and France in the Railway Age, where he considers the substantial impact that differences in political culture had on the build-out of rail networks in France, Germany, and the United States; link.) Second, we can focus on the social and political consequences that flow from the development of a new transportation system. For example, ideas and diseases spread further and faster; new population centers arise; businesses develop closer relationships with each other over greater distances. And third, we can consider the historiography of the history of transport -- the underlying assumptions that have been made by various historians who have treated transport as an important historical phenomenon.

Over fifty years ago L. Girard treated these kinds of historical effects in his contribution to Cambridge Economic History of Europe: Volume VI (Parts I and II), Part I, in a chapter dedicated to "Transport". He provides attention to the main modalities of transport -- roads, sea, rail. In each case the technology and infrastructure are developed in ways that illustrate significant contingency. Consider his treatment of the development of the English road network.
Eventually the English network, the spontaneous product of local decisions, progressed out of this state of disorganization. Its isolated segments were linked up and ultimately provided a remarkably comprehensive network corresponding to basic national requirements. By trial and error and by comparing their processes, the trustees and their surveyors arrived at a general notion of what a road should be. (217) 
(Notice the parallels that exist between this description and the process through which the Internet was built out in the 1980s and 1990s.)

 Similar comments are offered about the American rail system.
The American railroad was the product of improvisation, in contrast to the English track, which was built with great care. At first all that was required was a fairly rough and ready line which could operate with a minimum amount of equipment. Then as traffic increased and profits began to be made, the whole enterprise was transformed to take account of the requirements of increased traffic and of the greater financial possibilities. (232)
Despite all their improvisations and wastage, the American railroads astonished Europe, which saw a whole continent come to life in the path of the lines. The railways opened up America for a second time. By 1850 the east-west link between western Europe and the Mississippi valley was already created by means of the States on the Atlantic seaboard. The supremacy of the Chicago-New York axis had become established, at the expense of the South and of Canada, which were taking more time to get organized. America swung away from a north-south to an east-west orientation. (233)
And here is a somewhat astounding claim:
The northern railways allowed the Union to triumph in the Civil War, which was fought in part to determine the general direction to be taken by the future railways. (233-234)
Also surprising is the role that Girard attributes to the politics of railroads in the ascendancy of Napoleon III in 1851 (239).

Here is Girard's summary of the large contours of the development of transport during this critical period:
Whatever the course of future history, the century of the railway and the steamer marks a decisive period in the history of transport, and that of the world. Particular events in political history often tend to assume less and less importance as time goes on. But the prophecies of Saint-Simon on the unification of the planet, and the meeting of the races for better or for worse, remain excitingly topical. Man has changed the world, and the world has changed man -- in a very short time indeed. (273)
This history was written in 1965, over fifty years ago. One thing that strikes the contemporary reader is how disinterested the author appears to be in cause and effect. He does not devote much effort to the question, what forces drove the discoveries and investments that resulted in a world-wide network of railways and steamships? And he does not consider in any substantial detail the effects of this massive transformation of activities at a national and global scale. Further, Gerard gives no indication of interest in the social context or setting of transport -- how transport interacted with ordinary people, how it altered the environment of everyday life, how it contributed to social problems and social solutions. It seems reasonable to believe that the history of transport during this period would be written very differently today.

(Prior posts have given attention to transport as a causal factor in history; link.)

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