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%pearl[w90,jmc]		Pearl Lagoon

	I posted a story about Pearl Lagoon in Nicaragua last
week.  By accident that Timothy's nanny is from Pearl Lagoon and
that other people from there now live on the Peninsula, I have
access to more information about what happened there.

	Among other things the story described how the Sandinistas
confiscated the business of ``the Chinaman'' and drove him out of
the country.  Here's more about him.

	He is Chinese named Young Chang (a phonetic rendering), but he
is at least second generation Nicaraguan.  He built up a business
during the Somoza era, buying dried shrimp from the locals and shipping
it to the U.S.  He made a lot of money (for Pearl Lagoon anyway).
Somoza demanded a half interest, and Chang refused, after which it
became impossible to ship directly to the U.S.  However, Chang found
a way to sell the shrimp in Costa Rica, but became a Sandinista.

	After the Sandinista victory, it became possible to settle old
scores.  Chang was accused of paying too little for the shrimp, his
business was confiscated, and he was driven out of the country.
According to my informant, much of his property, including his boats,
was destroyed.

	He came to the U.S. as a political refugee with his family.
He lives in San Francisco, and his children are putting themselves
through college.  Recently he received a letter from the INS demanding
that he return to Nicaragua in 90 days, since he can no longer claim
to fear political persecution.

	If he returns to Nicaragua, it is quite questionable whether
he will get any of his property back.  Doubtless, confiscating his
property counts as one of ``the gains of the revolution''.

	Consider the problem of doing business in a country that
has a rule of men rather than a rule of law.  It's very chancy.
The powers that be, whether they are Somocista or Sandinista,
will demand a cut.  Moreover, if someone better connected than
you, covets your business, he may get it.  What decisions will be
made are a random variable.  On the other hand, because of the
difficulty of doing business under arbitrary rule, if you do
succeed in getting along with the powers, you can make monopoly
profits.

	It is difficult for an American socialist to understand
how socialism actually works.  Usually, the American socialist
doesn't imagine himself making decisions about whose property
should be confiscated and how the business should be run.  If
he thinks about the matter at all, he rightly considers himself
unprepared (say) to take over the Safeway stores on the Peninsula.
I suppose he imagines socialism to work automatically.  Who would
run the Safeway if socialism took over the Peninsula?

	It is somewhat of a random variable, but the basic answer
is that it would be those people best suited to get power.  In
our case, since we have so many lawyers, it would be those
lawyers who proved most adept at using socialist slogans to get
power.  Very likely, the leftist lawyer who took over Safeway
wouldn't have very much interest in actually running it.  He
would be more interested in using his control of it to advance
further in the hierarchy.

	The Safeway would actually be run by someone with some
experience in the grocery business who proved adept at getting
along with the leftist lawyers.  Very likely it would be someone
who hadn't received the rewards he thought he was entitled to
under the previous Safeway management.  More likely than not, the
previous Safeway management would have had good reason for not
promoting the guy.  Things would fall apart gradually, but there
is no reason to suppose the results would be much different from
those in Nicaragua or East Germany.  Of course, there would be
resistance to the socialist arrogance and incompetence, and this
would result in punishment for those who resisted, and their
resistance would be blamed for the results of the incompetence.

	There is another interesting phenomenon---the gradual
emergence of the environmental movement as a protection racket.
The April 2 New York Times editorial page has an
item that reports the phenomenon but doesn't notice it.  Here's
a quote.

     For nearly a year, employees of the National Resources
     Defense Council in New York have had reason to feel
     better about going to their office.  It is a restful
     oasis of natural light in a city used to windowless
     confinement and harsh fluorescent glare.  Bettr still,
     the new office may show how businesses can control
     their appetite for energy.

     When the council planned a move to 25,000 square feet of
     space in an old loft building, it also planned a
     showcase for conservation of office electricity.  Con
     Edison like the idea enough to provide a $100,000
     grant.

This gives rise to some thoughts.

	1. Scientist and Engineers for Secure Energy, an organization
that take the position that the U.S. needs to develop more energy
sources and which supports nuclear energy also has an office in
New York.  Its office is less than 1,000 square feet, and it gets
no money from Con Edison, though not for lack of asking.  $100,000
is about its annual budget.

	2. Con Edison, and businesses generally, have discovered that
it is better to buy off their enemies than to support their friends.
They donate money to incumbents in Congress even when these incumbents'
political strength is based on attacking business.

	3. If Earth Day is a big success, and many people sign its
pledge to patronize environmentally sensitive companies, NRDC and
friends will be able to get much larger donations from corporations.

	4. If Earth Day is a big success, a subset of the eager young
people now manning its national office in Palo Alto will be around
20 years from now.  This subset will be the masters of environmental
politics and will be typical socialist-type bureaucrats, not expert
in science, not expert in engineering, not expert in business, but
expert in using regulatory power to get and retain more power.

	With communism collapsing, I fear the main menace is
environmentalism.  The former socialists seem particularly
subject to environmentalist slogans, since the socialist
countries were real environmental disasters.  Nevertheless, we're
better off.  At least environmentalism doesn't begin by shooting
people.