The JP Morgan sign is pictured at its Beijing office. (Jason Lee/Reuters)
There is a wonderful word in Chinese that, soon after arrival in the country, every expatriate learns: guanxi. The most common English translation for guanxi is "relationship", but this only captures part of its meaning. In China, guanxi refers to the total strength of a person's interpersonal connections -- and his ability to leverage these connections in order to get ahead. This, in a country of 1.3 billion, is an essential asset. Having "good guanxi" can mean the difference in getting a job, getting into the right school, or ensuring that a new business venture avoids unnecessary government attention. Intractable problems can be resolved, quickly and without undue stress, by "pulling" guanxi.
So this brings us to the case of JPMorgan, now under investigation by the SEC for allegedly hiring the children of high-ranking Chinese officials in exchange for lucrative business deals. Hiring the sons and daughters of important Chinese officials is hardly unusual -- and not illegal -- for a company with Chinese business interests, but the SEC is weighing whether these hires led directly to bank business -- and thus violated the Foreign Corrupt Practices Act.
JPMorgan's alleged transgressions have met with a collective shrug in the United States, where Americans of privilege are long used to pulling guanxi in order to obtain plum jobs. Writing in the New York Times, Andrew Ross Sorkin defends this practice as practically harmless, even saying that the children of elite are better candidates for these jobs because -- lo and behold! -- they have better contacts and thus are more useful than mere commoners. Or, as the Chinese would say, they simply have more guanxi, a commodity of real value.
Sorkin's probably right that from Wall Street's point of view, hiring the well-connected -- people who are usually intelligent and competent, anyway -- makes sense. But what does it say about society as a whole? As The Atlantic Wire's Dashiell Bennett and others have pointed out, just because a Chelsea Clinton has the wit and education to succeed in finance doesn't mean that other members of her Stanford graduating class -- or those with less prestigious educational pedigrees -- do not. And over time, only hiring the well-connected seals off the entire industry to outsiders, making a mockery of the Horatio Alger-ism that supposedly underpins American prosperity.
In China, the guanxi problem is even more pronounced. Although bribery is technically illegal in the country, China lacks a regulatory body with the scope, mandate, and independence of the SEC, or any other institution overseeing the relationship between business and politics; which, in China, are so entwined that it would make a K Street lobbyist blush. This is not by accident; one way of explaining Chinese prosperity over the past three decades is that, by and large, business has bought into the political system, while politicians have bought into business.
But the consequences of this guanxi-led business have become apparent in China. First, income inequality has grown over the years to an extent that, by some measurements, China is a more unequal society than the United States. In addition to the effect inequality has had on the economy, a gulf between the well-born and everyone else has emerged in Chinese society. When a 19-year old Chinese student living in Italy was killed in July, many of her compatriots were unsympathetic; after all, in order for her to have gone abroad in the first place, she must have come from money. This was hardly a unique example: throughout the country, there's a pervasive belief that the rich get to play by their own rules. And while there are institutions in China that are supposed to mitigate inequality -- for example the gaokao, China's univeral college entrance examination, gives students from any background a chance to attend elite universities -- class divisions in China have grown worse over the years. Good guanxi has never been so important.
It isn't JPMorgan's responsibility to push for social mobility in China (or the United States), and in any case the company has denied wrongdoing. But whether or not the SEC investigation uncovers any criminality, the story at least highlights an issue that, in China, shouldn't just be ignored.
New research confirms what they say about nice guys.
Smile at the customer. Bake cookies for your colleagues. Sing your subordinates’ praises. Share credit. Listen. Empathize. Don’t drive the last dollar out of a deal. Leave the last doughnut for someone else.
Sneer at the customer. Keep your colleagues on edge. Claim credit. Speak first. Put your feet on the table. Withhold approval. Instill fear. Interrupt. Ask for more. And by all means, take that last doughnut. You deserve it.
Follow one of those paths, the success literature tells us, and you’ll go far. Follow the other, and you’ll die powerless and broke. The only question is, which is which?
Of all the issues that preoccupy the modern mind—Nature or nurture? Is there life in outer space? Why can’t America field a decent soccer team?—it’s hard to think of one that has attracted so much water-cooler philosophizing yet so little scientific inquiry. Does it pay to be nice? Or is there an advantage to being a jerk?
The Islamic State is no mere collection of psychopaths. It is a religious group with carefully considered beliefs, among them that it is a key agent of the coming apocalypse. Here’s what that means for its strategy—and for how to stop it.
What is the Islamic State?
Where did it come from, and what are its intentions? The simplicity of these questions can be deceiving, and few Western leaders seem to know the answers. In December, The New York Times published confidential comments by Major General Michael K. Nagata, the Special Operations commander for the United States in the Middle East, admitting that he had hardly begun figuring out the Islamic State’s appeal. “We have not defeated the idea,” he said. “We do not even understand the idea.” In the past year, President Obama has referred to the Islamic State, variously, as “not Islamic” and as al-Qaeda’s “jayvee team,” statements that reflected confusion about the group, and may have contributed to significant strategic errors.
19 Kids and Counting built its reputation on preaching family values, but the mass-media platforms that made the family famous might also be their undoing.
On Thursday, news broke that Josh Duggar, the oldest son of the Duggar family's 19 children, had, as a teenager, allegedly molested five underage girls. Four of them, allegedly, were his sisters.
The information came to light because, in 2006—two years before 17 Kids and Counting first aired on TLC, and thus two years before the Duggars became reality-TV celebrities—the family recorded an appearance on TheOprah Winfrey Show. Before the taping, an anonymous source sent an email to Harpo warning the production company Josh’s alleged molestation. Harpo forwarded the email to authorities, triggering a police investigation (the Oprah appearance never aired). The news was reported this week by In Touch Weekly—after the magazine filed a Freedom of Information Act request to see the police report on the case—and then confirmed by the Duggars in a statement posted on Facebook.
The mock metropolis is meant to have everything but people who live there.
Grigory Potemkin, the 18th-century war hero and nobleman, was also Catherine the Great’s lover and military advisor. According to ubiquitous legend, Potemkin fabricated villages along the banks of the Dnieper River in a bid to impress her. Historians aren’t convinced that Potemkin really constructed entire fake villages, their facades illuminated by enormous bonfires—but the concept may not be so far-fetched.
These days, when people talk about a Potemkin village, they’re usually referring to a ruse to make something appear better than it actually is. It’s a useful metaphor, but also a reflection of people’s fascination with fake cities and questions about the line between authenticity and artificiality in man-made environments.
Advocates say that a guaranteed basic income can lead to more creative, fulfilling work. The question is how to fund it.
Scott Santens has been thinking a lot about fish lately. Specifically, he’s been reflecting on the aphorism, “If you give a man a fish, he eats for a day. If you teach a man to fish, he eats for life.” What Santens wants to know is this: “If you build a robot to fish, do all men starve, or do all men eat?”
Santens is 37 years old, and he’s a leader in the basic income movement—a worldwide network of thousands of advocates (26,000 on Reddit alone) who believe that governments should provide every citizen with a monthly stipend big enough to cover life’s basic necessities. The idea of a basic income has been around for decades, and it once drew support from leaders as different as Martin Luther King Jr. and Richard Nixon. But rather than waiting for governments to act, Santens has started crowdfunding his own basic income of $1,000 per month. He’s nearly halfway to his his goal.
In an interview, the U.S. president ties his legacy to a pact with Tehran, argues ISIS is not winning, warns Saudi Arabia not to pursue a nuclear-weapons program, and anguishes about Israel.
On Tuesday afternoon, as President Obama was bringing an occasionally contentious but often illuminating hour-long conversation about the Middle East to an end, I brought up a persistent worry. “A majority of American Jews want to support the Iran deal,” I said, “but a lot of people are anxiety-ridden about this, as am I.” Like many Jews—and also, by the way, many non-Jews—I believe that it is prudent to keep nuclear weapons out of the hands of anti-Semitic regimes. Obama, who earlier in the discussion had explicitly labeled the supreme leader of Iran, Ayatollah Ali Khamenei, an anti-Semite, responded with an argument I had not heard him make before.
“Look, 20 years from now, I’m still going to be around, God willing. If Iran has a nuclear weapon, it’s my name on this,” he said, referring to the apparently almost-finished nuclear agreement between Iran and a group of world powers led by the United States. “I think it’s fair to say that in addition to our profound national-security interests, I have a personal interest in locking this down.”
Why agriculture may someday take place in towers, not fields
A couple of Octobers ago, I found myself standing on a 5,000-acre cotton crop in the outskirts of Lubbock, Texas, shoulder-to-shoulder with a third-generation cotton farmer. He swept his arm across the flat, brown horizon of his field, which was at that moment being plowed by an industrial-sized picker—a toothy machine as tall as a house and operated by one man. The picker’s yields were being dropped into a giant pod to be delivered late that night to the local gin. And far beneath our feet, the Ogallala aquifer dwindled away at its frighteningly swift pace. When asked about this, the farmer spoke of reverse osmosis—the process of desalinating water—which he seemed to put his faith in, and which kept him unafraid of famine and permanent drought.
A majority of Senators wanted to stop a spy program that they never approved. They failed despite having more votes. And it only gets more bizarre from there.
In the wee hours of Saturday morning, the U.S. Senate played host to a moment that took mass surveillance on the phone records of Americans from outrage to farce.
The NSA’s phone dragnet had already been declared illegal.
Earlier this month, a federal appeals court ruled that while the surveillance agency has long claimed to be acting in accordance with Section 215 of the Patriot Act, the text of that law in fact authorizes no such program. The Obama Administration has been executing a policy that the legislature never passed into being.
But the law that doesn’t even authorize the program is set to expire at the end of the month. And so the court reasoned that Congress could let it expire or vote to change it. For this reason, the court declined to issue an order shutting the program down.
Why it’s so hard to defeat an enemy that won’t fight you, and what this means for U.S. strategy on everything from the Islamic State to China
The Scythians were nomadic horsemen who dominated a vast realm of the Pontic steppe north of the Black Sea, in present-day Ukraine and southern Russia, from the seventh century to the third century b.c. Unlike other ancient peoples who left not a trace, the Scythians continued to haunt and terrify long after they were gone. Herodotus recorded that they “ravaged the whole of Asia. They not only took tribute from each people, but also made raids and pillaged everything these peoples had.” Napoleon, on witnessing the Russians’ willingness to burn down their own capital rather than hand it over to his army, reputedly said: “They are Scythians!”
The more chilling moral for modern audiences involves not the Scythians’ cruelty, but rather their tactics against the invading Persian army of Darius, early in the sixth century b.c. As Darius’s infantry marched east near the Sea of Azov, hoping to meet the Scythian war bands in a decisive battle, the Scythians kept withdrawing into the immense reaches of their territory. Darius was perplexed, and sent the Scythian king, Idanthyrsus, a challenge: If you think yourself stronger, stand and fight; if not, submit.