tag:blogger.com,1999:blog-89808749119274609952024-02-19T09:11:56.117-08:003CNBSpecializing in Capitalism and Political Heresy since 2008.Scotthttp://www.blogger.com/profile/12915297057336831151noreply@blogger.comBlogger403125tag:blogger.com,1999:blog-8980874911927460995.post-38818361343383081182016-12-04T17:59:00.001-08:002016-12-04T17:59:19.416-08:00If I Had Trump's Ear...If I were Trump's economic advisor, my advice to him would be that his legacy hinges on fulfilling the most basic spirit of his campaign promises, which is to improve the quality of the average, middle-class, 'normal' American's way of life. And within this context (and the context of the recent election), that would seem to hinge on two, overwhelming concerns --<br />
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1) curtailing immigration</div>
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2) improving wages, especially of blue-collar type workers</div>
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And obviously these are related. Trying not to delve into too much of the contentious political aspects of pursuing these things (especially number 2), let me just suggest a couple of things that have occurred to me. </div>
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I see a lot of discussion in various whereabouts which seems to suggest that people have either forgotten or just to have relatively bad models in their head of the basics of how wages are determined, at least in my opinion. Very basic economic theory says that wages (or really, the 'return' to anything, wages being the return to labor) are determined by what is called Marginal Value Product (MVP). Not 'number of immigrants', not 'women entering the workforce', not 'supply of labor,' etc, though of course those are all relevant. What it seems has happened is people have made rather radical theoretical simplifications -- even some very smart people -- and ignored that the process of production is intrinsically an interplay.</div>
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To make a slightly smaller simplification that gives a much more accurate picture (in my opinion, at least) wages are (mostly) determined by the <b><i>ratio</i></b> of capital to labor. The higher the ratio of capital to labor, the higher wages will be, because labor has become relatively more dear (i.e., in lower supply compared to the amount of capital available for production.) When capital is in short supply, labor must compete hard and prices of labor fall. Conversely, when capital is abundant, capitalists must compete hard and wages increase.</div>
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Reducing the <i><b>ratio</b></i> of capital to labor, for example, through high immigration, hurts wages. But not <i>merely</i> by 'increasing the supply of labor.' If the supply of capital increases proportionately, <i style="font-weight: bold;">there might be no change. </i>Real wages might even increase, due to efficiencies discovered in a larger system. But typically, immigrants don't bring much capital with them, and often strain the system when they arrive in sufficient numbers (have you seen Houston traffic lately?) precisely because there isn't enough capital to accommodate them.</div>
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With that in mind, it appears that the two things Trump should focus on are keeping his promises to overhaul -- and ultimately curtail -- immigration, and simultaneously attract more capital to the US. Not 'raise the minimum wage.' Not engage in crony capitalism and special tax-break type arrangements to attract or retain businesses. Even a cut in personal income taxes, while obviously something desirable and frequently the object of much political attention, is probably not the best focus of his efforts. I don't think much of any tax cut he could arrange would help most people anywhere near as much as a raise would. At least to me, the most crystal clear and obvious way -- perhaps very nearly the only <b><i>real</i></b> way -- to address low wages is <b><i>more capital.</i></b></div>
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But how do you do it?</div>
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My second thought -- as weird as this sounds, probably the best way to do this would be to impose a small-ish, uniform, across-the-board import tariff, and simultaneously cut corporate tax rates back a bit. This kind of suggestion has of course attracted both enthusiasm and criticism -- most of the criticism on free-trade, free-market grounds -- but I think a little bit of thought could put it into a context that might make it easier to digest.</div>
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First, it is obvious that a lower corporate tax rate would attract capital, for obvious reasons. This is not an uncommon opinion. But it is not obvious that a tariff would -- how exactly would imposing a tax attract capital? Free-traders would protest 'protectionism!' And beyond a certain point, I have no doubt they are correct. Yet I have started to think these two are actually very closely related, and one actually implies the other -- so that to have the one and not the other could actually be something like the inverse of protectionism. 'Domestic vampirism,' or something. To discontinue doing it might be helpful.</div>
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I will argue by analogy from a perspective I am more familiar with, and maybe other people are, too -- the housing market. </div>
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According to at least some economic theory, different sorts of taxes are in fact interchangeable, and this is obviously the case (at least to me) in the housing market between property taxes and income taxes. I will try to make a brief, hopefully-intuitive explanation for those who don't already know this. Most people accept that the value of an asset is a function of the income derived from the asset, which can be expressed as an NPV (net present value). This relationship of asset prices to income is what makes metrics like PE ratios and bond rates 'work' and why making comparisons between them is meaningful (take the reciprocal of a bond rate and multiply by 100, and you have something comparable to a PE on a stock. I usually think of this as an 'asset multiplier' -- the multiple of income that the asset price commands, which is also used in business valuations, appraisals, etc., by the people who do these sorts of things. The inverse is the discount rate, but I'm not going to go into that...)</div>
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If this relationship holds, then it is intuitive that a government taxing a portion of income is equivalent to taxing a portion of its present value, because the present value <b><i>just is</i></b> a function of income and is interchangeable with it using relatively simple conversion factors. Theoretically, anyway. So, on a house -- suppose that a house 'yields' an income of $6000 per year (after all expenses, etc., except property tax). Further suppose that the government claims $2000 of this income in tax. If the discount rate in this market is 6% (i.e., the 'multiplier' is 16.67), the implied value of the house is $100,000 -- but this value is discounted by 1/3 on the market, because the government claims 1/3 of the income it generates ($2000/$6000 = 1/3) -- asset buyers will not pay for income that they do not expect to receive. So, the house will have a market price of about $67,000 with a property tax of about 3% (3% of $67,000 = $2000, approximately). </div>
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Therefore -- a 3% property tax and a 33% income tax on the property are (approximately) equivalent. (Yes, I'm rounding a bit.) It doesn't matter which way you charge it, the two taxes amount to the same thing. Guessing home valuations is a bit easier, I suppose, so that is the way it tends to be done. But to do it the other way would be equivalent.</div>
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I would like to argue that, I think, tariffs and business income taxes may likewise actually be interchangeable -- and by setting a lot of tariffs at zero and corporate taxes at 40%, our policies may have induced a really harmful disequilibrium. It might help a great deal to (try to) put them back into equilibrium.</div>
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Unfortunately, I do not know how to calculate the right values for this example, but the argument is basically as follows -- given that taxes are to be imposed, a domestic business pays income taxes in order to access American markets. Presumably, the taxes go to 'uphold the common good' -- to pay for roads, basic law and order, etc. (Or some such; I don't want to get into a debate about that -- call it pay-to-play, if you prefer.) Under a regime of no tariffs foreign companies get access to the American 'common good' for free -- so they are being subsidized by domestic companies and taxpayers. The foreign companies have no equivalent tax imposed for access to the American market, which constitutes a strong incentive to locate overseas. I don't really know what to call this, but it reminds me of the 'moral hazard' people used to talk about during the financial crisis -- privatization of profit, socialization of costs.</div>
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I will grant a few things -- first, that they do not have as much 'access' to the American 'common good' as domestic companies, since much of their operations are overseas. But it is absolutely inarguable that they derive value from it (else they wouldn't do business with us), and aren't required to support it as domestic companies do. A second thing I will grant -- just as a 3% property tax was equivalent to a 33% income tax, yet 3% and 33% are very different numbers, there is no doubt that a tariff equivalent to a 40% income tax would also be a very much smaller number. Income deducts expenses, but revenue does not.</div>
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But I'm not sure how to calculate it -- it seems like a sales or revenue tax, and so you would need to know how much profit was derived per unit to calculate what was equivalent to a 40% income tax. But obviously, most profit margins are in the less-than-10% range, especially for the kinds of things America tends to import, so likely an equivalent tariff would be something like 4%. Anyway, I think that's a reasonable estimate, and getting fairly close is at least a lot better than completely blowing it. Hopefully Trump would know someone smarter than me who could do the math. And hopefully if this was done, 40% would not be the target since one would want to reduce the corporate rate at the same time.</div>
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By making the two equivalent, the goal would be something like tax indifference -- it would not matter which side of a border a company was on, the impact of the American-imposed tax regime would be the same. And since America is a relatively great place to do business, more businesses would be induced to move here if they'd like to sell here. And with increasing levels of domestic production, capital would accumulate and wages would rise.</div>
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But even if companies didn't choose to relocate here, they could at least defray a little of the price it takes to keep this place running...</div>
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A rather massive caveat -- I'm not 100% sure that this is all actually true. If I think about it in terms of Arnold Kling's null hypothesis (that, basically, pretty much no matter what you do, nothing matters, assuming I understand him right), it could be that all this stuff is already 'priced in' and all material adjustments already made. So that a change in policy would simply result in a very large (and possibly painful) shifting and re-coordination of prices, with nothing materially changing as a result.</div>
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I don't really have an answer for that. I would like to say that it couldn't hurt to try, but I don't really think that's true. It probably could.</div>
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Also -- I'm hardly an expert on this stuff. I have no idea what fraction of our imports even have a tariff of less than 4%. The whole thing may not even be meaningful if it doesn't apply to very much trade volume.</div>
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Another idea I have seen floated -- create what are essentially uncapped IRA funds, so that any arbitrarily large amount of money could be invested with no tax consequences until the funds are withdrawn for other use. That would also, no doubt, lead to a massive accumulation of capital; however, I suspect that the capital would not lead to actual investment in the US. Most likely it would simply inflate asset bubbles in Asia, or some other place, as Americans used their 'IRA' funds to buy assets wherever the expected yield was highest, i.e., not here.</div>
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If Trump wants people to capitalize the US, he has to make it more profitable to do so. Maybe try some of both? As much as I like the idea of revamping the income tax code, though, I don't think it would help nearly as much, and I don't think he should use up too much political capital on it -- unless, of course, it was quite popular anyway.</div>
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Just an idea...</div>
Scotthttp://www.blogger.com/profile/12915297057336831151noreply@blogger.com0tag:blogger.com,1999:blog-8980874911927460995.post-88525532401753002092016-08-28T19:22:00.000-07:002016-08-28T19:22:05.790-07:00Hearken Unto John C. Wright!<div class="tr_bq">
In <a href="http://www.scifiwright.com/2016/08/a-general-query-to-all-panphysicalists-and-radical-materialists/" target="_blank">his words</a> (except for a few typos I corrected) --</div>
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Let us cut to the chase. </blockquote>
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Think back to the day when you first discovered that you were a meat robot without free will, without freedom, and without dignity. Did the discovery fill you with awe, rapture, wonder and gratitude? </blockquote>
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For, if not, the discovery is false. Truth is majestic and majesty provokes awe; truth is sublimely beautiful and beauty provokes rapture; truth is startling, because it shatters the lies we tell ourselves, and the bright surprise leaves us blinking in wonder; truth is a gift of prized above all price, and gifts provoke gratitude. </blockquote>
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If the discovery of materialism did none of these things, either your reactions are mis-calibrated and do not reflect reality, or your discovery was not a discovery at all, merely a falsehood you have yet to test with due rigor. </blockquote>
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So? What was your reaction?</blockquote>
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My reaction (to his argument, not to materialism) --<br />
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The only modification I would make is to simplify that Truth <i>affects -- </i>as do Lies, except to opposite effect. Some truth we'd rather not know, and of course then the effect might not seem as pleasant as is made out here. And yet, we somehow know it to be truth -- because it <i>affects.</i><br />
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I know a lot of people will dislike and disagree with this kind of argument, however, I think even such thinkers should deeply consider the slightly more primordial thought from which this train flows -- that the only way to know Truth, the only way to know or believe <i>anything,</i> is through <i>experience.</i> There just simply is no other avenue.<br />
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Do you believe in the Bible? Because you have somehow experienced the truth of it -- through reading it, through sermons, what-have-you. Do you <i>not</i> believe? Even that belief is through experience of some sort.<br />
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Do you believe in logic, even? Because you have experienced the truth of it, you have seen it work before your eyes. Otherwise, even <i>logic itself</i> is simply a proposition -- it might or might not have been true <i>to your eyes</i>. I know a lot of people are not going to like that, but there it is. <br />
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These days a lot of people like to argue for some other basis of belief -- 'proving' this or that through 'pure logic', 'rationality', etc. This is simply not the way it works. Even if you were convicted of such a system <i>it would be because of your experience of it, </i>and not, strictly speaking, because of the logic itself, in a direct sense.<br />
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Experience is the ground of all knowledge. It is the only way 'in.' Of course, it is just as fallible as people are, but nevertheless, it's all anybody has got to go on, and the only 'evidence' anybody has of the veracity of anything. Which means, at least to my mind, that experience is indeed very good and important evidence, i.e., that if you experience -- in some way or other -- that there very much <i>is</i> a divine aspect to reality, <i>then there probably is</i>, and you are <b><i>absolutely right</i></b> to believe even if it can't be 'proved,' even if you can't 'defend your faith rationally,' etc. Yes, you should probably work on those things -- <i style="font-weight: bold;">but they come second, not first!</i> Don't let the posers on the internet convince you that it is in some weird way otherwise.<br />
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This would all seem almost painfully self-evident, and yet, how many arguments have you seen where one side becomes incensed that the other won't accede once the case has been 'proven?' And yet -- of course! -- that is not at all on what it all turns -- if the other party does not experience the truth of what has been presented, of course he should not (and almost certainly <i>will</i> not) be converted over. He may be wrong or right in doing so; it may simply be that he does not understand, he thinks something or other important is missing, or maybe in some cases he is outright dishonest. But it is rather silly to think that he should on logical or 'rational' grounds, as if that were really what it were all about. If it is really one's purpose to bring him over, it would seem to be more prudent to search for a way to bring about the proper <i>experience.</i> Apparently, the one presented wasn't up to the task.<br />
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As always -- in my opinion... for whatever that's worth...Scotthttp://www.blogger.com/profile/12915297057336831151noreply@blogger.com0tag:blogger.com,1999:blog-8980874911927460995.post-23634948555563778752016-08-19T20:43:00.001-07:002016-08-19T20:55:28.733-07:00Borders -- an uncomfortable exampleApropos of the last post -- <a href="http://ktla.com/2016/07/07/7-latino-gang-members-charged-in-boyle-heights-firebombing-of-black-families/" target="_blank">a very uncomfortable example:</a><script type="text/javascript">var gaJsHost = (("https:" == document.location.protocol) ? "https://ssl." : "http://www."); document.write(unescape("%3Cscript src='" + gaJsHost + "google-analytics.com/ga.js' type='text/javascript'%3E%3C/script%3E"));</script><script type="text/javascript">try {var pageTracker = _gat._getTracker("UA-6540825-1"); pageTracker._trackPageview(); } catch(err) {}</script><br />
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A federal grand jury has indicted seven Latino gang members in connection with a 2014 firebombing attack at the Ramona Gardens housing project in Boyle Heights, accusing them of trying to drive black residents out of the neighborhood, prosecutors announced Thursday. </blockquote>
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Federal prosecutors allege that the men – all described as members of the Big Hazard street gang – met before the attack, where Carlos Hernandez, 31, is accused of telling the group they were going to use Molotov cocktails to firebomb homes where black families lived. </blockquote>
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While no one was injured in the May 12, 2014, firebombing, three of the four apartments targeted were occupied by black families, recalling uneasy times from decades ago when similar attacks prompted most African Americans to flee the housing project.</blockquote>
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I originally saw this on <a href="http://www.unz.com/isteve/" target="_blank">Steve Sailer's blog,</a> but I have lost the link.<br />
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There is the obvious racial angle, of course, but I wanted to come at it from another direction -- a failure in markets because of an unwillingness to acknowledge an important reality. <br />
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Basically, through my economic lens this looks to me like a black market in operation -- even though nobody is talking about buying or selling anything. You have people in the market for a neighborhood 'of their own people', resorting to violence and obnoxiousness because such a market is effectively closed off by law. There is demand frustrated for supply, and the result is violence and criminality. And to be sure, this is not the only place you see this kind of thing, it is just a very overt and nasty example. <br />
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Forget about race and all that for a moment -- it is just very hard to imagine being able to assemble, say, a Presbyterian, or an environmentalist, or a homeschooling community, or a whatever-enthusiast community, precisely because we have open markets in housing. There just isn't a good way to coordinate anything, because it is disallowable by our system of things to control who your neighbors sell their houses to. Maybe conceivably, some mega-bucks guy could just build a whole neighborhood and let his buddies live there, or something of that nature. But hopefully that sounds like an unreasonable stretch of things.<br />
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And yet people have a very strong interest in who their neighbors are. This is an extremely valuable thing for people, and how their communities are structured and who they interact with are extremely meaningful in their lives. But the only available mechanism for discrimination in markets is price. And so, as a result, we have a highly stratified market with people bidding up prices absolutely like mad, for houses probably many of them really don't even want, just for a chance to hopefully not wind up next door to criminals, or for 'good schools,' i.e., so their kids don't get shot. Which is a pretty low bar, but all you can ask for the way we have things set up. <br />
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And worse, you have miscreants in government actively stirring the pot by shuffling people into neighborhoods they have no business in and lifestyles they can't handle. (Sorry, no link, but you know the kinds of programs...)<br />
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I don't really know what the answer to this is. It isn't always reasonable to think that there should be a market in absolutely whatever people want -- we don't have a market in slavery anymore, for example. Or children. Maybe some wants just <i>should</i> be frustrated, criminality and violence in such cases being just that and no more. I don't really want to go down that particular avenue.<br />
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But this is really, really bad, it is a huge problem, and it is the result of a system which has little meaningful avenue for expressing the existence of <i>borders</i>. It isn't good for anyone.</div>
Scotthttp://www.blogger.com/profile/12915297057336831151noreply@blogger.com0tag:blogger.com,1999:blog-8980874911927460995.post-29293608243988800592016-08-19T17:04:00.003-07:002016-08-19T17:04:41.814-07:00Metaphysical Bumblings #3: MarketsI'm probably not the best person to 'do' philosophy, as I don't think I function in a particularly logically-driven fashion. When I read most modern stuff (and, frankly, when I read most anything in terms of the kinds of things you see in fairly intelligent writings) very quickly I start to hear that voice in my head from the <i>Peanuts</i> cartoons -- that nasally 'wah wah, whah wha wah, wha....' that the adults speak in. And...it usually glazes my eyes over and puts me to sleep.<br />
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</div><div>Sorry, I just don't find 98% of it very convincing. I can force myself to follow it, but it is almost always a waste of time, as I generally find that when I understand it, it is either trivial, repulsive, or wrong, and that 'style' of thinking seems to have this take-it-or-leave-it aspect to it that almost always means leaving it. For me, anyway. </div><div><br />
</div><div>I think in pictures -- if you want to convince me, invite me into your picture of things, and let me inspect the truth of it for myself. I might take all of it, or some of it, or maybe only a little of it, but I almost never find <i><b>that</b></i> sort of writing to be totally without value. I will almost always come away with <i>something.</i></div><div><br />
</div><div>That's what I'd like to do here -- sketch out a few pictures of things, and see if there isn't some truth to be had. Let's do some 'metaphysics of markets.'</div><div><br />
</div><div>First things, though -- I want to do something weird, and to do it, I need to do some clearing up of what seems to me some muddying that surrounds the ideas of 'subjective' and 'objective.' I hope you'll bear with me, but in my opinion, the ways these two words are used is 90% wrong.</div><div><br />
</div><div>If you don't agree -- and you probably won't, at least at first -- that's okay. You can keep your opinion. I'm just sketching a picture here; I need this as an element, and once I'm done, you can go back to the way you've always done things if you don't find it useful to you. But you probably won't be able to 'see' my picture if you don't first step into a different picture of these two terms.</div><div><br />
</div><div><div><b>Mere Objectivity</b></div></div><div><b><br />
</b></div><div>What I want to do -- and the reason most people won't like this -- is 'relativise' the meanings of objective and subjective. However, I promise that if you stick around to the end, you'll get something else to anchor yourself that you might like better. And as I said, you can always anchor yourself back to these terms if you don't like what I'm going to show you.</div><div><br />
</div><div>The reason I think you should consider 'relativising' the words objective and subjective is just because they are relative terms. I've even heard that Eric Voegelin once instructed his students to simply stop using them because they do not correspond to anything in reality. I do not think I would go that far, because I think they are useful in their place, nevertheless, I would agree with him that they are generally abused and therefore often unhelpful or downright misleading.</div><div><br />
</div><div>We usually like to think of rendering something like an 'objective' opinion or judgment, or giving 'objective' evidence, to mean something like 'true' evidence, or an 'impartial' opinion, or what have you. But I have to use words like 'true', and 'just', and 'universal', and 'absolute' and other such notions and connotations we commonly attach to the word objective precisely because <i>mere objectivity proper cannot render them on it's own.</i> Surely an opinion is more likely to be just if it is rendered objectively, but simply because one is 'outside' a situation (and therefore <i>objective</i> to it) does not render his opinion just. Merely objective evidence is often wrong, misleading and all the rest, otherwise it would be enough to get at the truth simply to <i>be</i> objective. Objectivity is certainly <i>something</i>, but it doesn't in itself render 'the whole enchilada.' You need more to the system to get all of that -- like logic and consistency, veracity to actuality, etc. Likewise for subjectivity.</div><div><br />
</div><div>So, at least for the moment, let's only use the words objective and subjective to mean, basically, whether we are viewing something from outside or inside a particular 'frame' at hand, and use the other sorts of words we have to mean those other things if we need them. For the moment, we are only using the words to consider how the situation is framed.</div><div><br />
</div><div>With that annoying stuff out of the way, let's draw a couple of pictures.</div><div><br />
</div><div><b>Market Picture #1</b></div><div><br />
</div><div>Suppose that I took a map of reality -- a nice 2D picture with you in it -- and I drew a circle around just you. You are <i>inside of</i> this circle (subjective frame of reference) with everything else <i>outside of</i> it (objective frame). This, as it happens, is a pretty common way of thinking about things, for hopefully obvious reasons.</div><div><br />
And if you think about markets in these terms, you can really go a long ways. One interesting thing you may notice -- and one of the most important discoveries of economics as a science -- is that <i>value is subjective</i>. It emerges from <i>within</i> market actors (like you). (Yes, okay, we'll afford the other market actors their own circles, too. I'm trying to keep it simple here. They also impute value 'subjectively.') <i>People</i> value goods, and this is what renders them valuable in markets.</div><div><br />
</div><div>Likewise, you will discover that <i>prices are objective</i>. You can look at an ad in the newspaper, and you will see there prices that are indifferent to what you think of them. You can consider them outrageous, you can consider them 'cheap.' But whatever they are, they just are. The numbers on the paper don't change depending on your opinion of them.</div><div><br />
</div><div>Do they emerge out of the physical laws of the universe? Or some such? No. They emerge out of the decisions made by marginal actors in markets -- the ones making immediate decisions to buy or sell at a particular price at a particular moment in time. Sometimes that marginal actor might be you, but most of the time not. And even then, you really only get half a say -- it takes two to tango. </div><div><br />
</div><div>Which is to say, that despite your very occasional participation, and despite being the outcome of the objectively visible actions of many individual actors, prices are nevertheless <b><i>objective</i></b> phenomena <i>using our frame of reference</i>. They are 'brute facts of your Universe', as far as you are concerned. Your 'say' in them reduces to a rounding error. You just have to deal with them, as they are.</div><div><br />
</div><div>And hopefully it is equally crystal clear that they are -- nevertheless, <i>nevertheless!</i> -- the product of <i>subjective valuations! </i>Time for some bold, large font --</div><div><br />
</div><div style="text-align: center;"><span style="font-size: x-large;"><b>Price structures are the outcome of value structures, <i>via</i> market mechanisms. <i>The objective structure of a market is a product of subjective values.</i></b></span></div><div style="text-align: left;"><br />
</div><div style="text-align: left;">...and that's kinda important, especially to the actors who have to navigate those structures.</div><div style="text-align: left;"><br />
</div><div style="text-align: left;">What I've sketched out here is the basics of Economic Subjectivism, one of the most critical insights of the subject of economics. It was originally articulated by the Austrian school, but eventually absorbed by pretty much every modern school of economic thought. I'm not gonna dwell on any more of the details within this picture much more than this, because lots of others already have much better than I could, it's pretty conventional, and I don't have a lot more to say about it as regards the point of his essay.</div><div style="text-align: left;"><br />
</div><div style="text-align: left;">But to be sure, this is one doozy of a metaphysical system we have sketched out. This way of dividing up reality will get you <i>a lot</i>. You can see a long way from this mountaintop. An awful lot of what is known of economic systems derives from this treatment of things. And, I would submit, its effectiveness emerges for a <b><i>very</i></b> good reason -- because dividing things this way -- they way we drew our 'circle' -- captures a very important truth of the situation. Individuality is an important aspect of reality, so 'breaking it at this joint' gives good results.</div><div style="text-align: left;"><br />
</div><div style="text-align: left;"><b>Metaphysical Skepticism</b></div><div style="text-align: left;"><b><br />
</b></div><div style="text-align: left;">However (you knew there was going to be a 'however', didn't you?) when I have run across systems like this, I have come to find it good practice to ask two questions -- and I would encourage everyone who comes across some new train of reasoning or body of facts ("Evolution! It's so amazing -- it explains everything! Just like this --!") that is being put to use to make sweeping statements about all of reality ("Therefore, obviously, there's no God.") to make use of them.</div><div style="text-align: left;"><br />
</div><div style="text-align: left;"><b>Question 1 -- So what?</b> As in, does this thing <i>really</i> imply all of that? Are you sure? Do I <i><b>have</b></i> to take <i>it just this way,</i> all the way to the ends of reality? Or are the implications really more limited than all that?</div><div style="text-align: left;"><br />
</div><div style="text-align: left;"><b>Question 2 -- What else?</b> As in, is this all there is? The whole story? Might there be more -- especially more that might bear a bit more directly on questions that seem further removed from the original issues that led to this train of thought?</div><div style="text-align: left;"><br />
</div><div style="text-align: left;">In the case at hand, what we learned emerged out of a way of dividing up reality -- <i>one way among many we could have chosen</i> -- and the result turned out to be <i>pretty darn good.</i> But just what all should we conclude from it -- i.e., so what? Well, a lot, but maybe not everything. We definitely should not conclude that 'this is it' without any further inspection. We didn't bother (yet!) to divide it up some other way and see if something useful might shake out. <br />
<br />
<b><i>Is</i></b> there anything else? My tendency is to almost always answer this question one way -- there is almost <b><i>always</i></b> more! Reality is a big and wondrous place. I don't think that needs a lot of elaboration.</div><div style="text-align: left;"><br />
</div><div style="text-align: left;">Let's see if we can find more. How about another picture?</div><div style="text-align: left;"><br />
</div><div style="text-align: left;"><b>Market Picture #2</b></div><div style="text-align: left;"><br />
</div><div style="text-align: left;">This time, we're going to draw the circle in a different place -- instead of around individual people, around a group of people. We'll pick the one that's getting the most attention of late -- a <i>nation</i> of people. You could probably draw a circle around other groups and arrive at useful conclusions, but for now we'll stick with this one of interest.</div><div style="text-align: left;"><br />
</div><div style="text-align: left;">Now, a lot of people who support free-trade will talk about 'invisible lines' or 'imaginary lines', to ridicule the idea of the meaningfulness of national borders and such. And if we had bought in too deeply into the metaphysics from before -- that our way of dividing up reality was not merely a useful way for yielding truthful insight, <i>reflective</i> of truth, but in fact <i>necessarily</i> the whole truth of the matter -- we might be pulled in. But hopefully, by getting as far as we have in the way that we have, it is easy to see that this characterization carries not much weight -- of course the line is 'imaginary', so was the one that we drew around individuals! The whole point of drawing it was to imagine, to see if we found any truth in it, and the exercise proved <b>very</b> useful indeed! If the objections is, 'well of course, that's not really what I meant, I meant it doesn't correspond to anything 'real', in the way an individual is 'real',' well, then I will say at least this begins to get to the heart of the matter.</div><div style="text-align: left;"><br />
</div><div style="text-align: left;">And honestly, I wish the debates on the matter would go this way, instead of the way they usually go -- each side making fun of the other, without taking the debate to the actual issue at hand. Are groups real, or not? Because that is the issue, and no other. And as with our previous example, I would submit that if they are real, then we should immediately see that applying this metaphysical divide will yield us some useful insight. And since I am not very good at this sort of reasoning and this section is devolving into the sort of writing that I don't like, rather than run around and around with this, let's finish off the 'drawing' and see what the picture looks like.</div><div style="text-align: left;"><br />
</div><div style="text-align: left;">I think it is a very useful picture indeed. With the circle drawn around nations, the pattern one immediately notices <i>is that the price structure is typically fairly different within one circle as compared to outside of it.</i> In fact, a <b><i>lot</i></b> of things are different. If our inferences hold from the previous 'drawing,' <i>this is the result of differing value structures</i> -- that just happen to line up with the circles we drew. Clearly, there appears to be an underlying reality to the circle. Some would say that, well, it's the legal sanctions imposed at the border that causes the difference, and to a degree this is partially true, but even when borders were far looser than today and where they have had much less legal significance, there were still differences -- and further there are price structure differences <i>within</i> borders where there is no substantial legal differentiation between regions. Think -- one city versus another in the same state, or a city versus the countryside.<br />
<br />
Of more significance, I think, is that in this picture, to the degree that prices differ, <i><b>pricing is subjective!</b> The differences emerge from <b>within</b> the confines of the circle -- subjective to our delineation -- presumably in response to <b>local</b> economic conditions, as an expression of <b>local</b> valuations. </i>External conditions impinge only so far, even in the absence of any sort of purely legal differentiation. If we were to modify the large, bold statement we made earlier, we'd have to say further that price and value structures emerge from 'the' subjective valuations 'of the members of the system in question.' Not purely and abstractly from 'subjective valuation,' which is a bit different. Presumably you care about the values of the people around you that you live with and do business with. Their opinions are not wholly 'subjective' -- in the former, abused sense -- and arbitrary to you, as the previous formulation might seem to imply.</div><br />
So -- 'real' or not, groups at least matter. And to the degree they matter, well, to me at least they would seem to be 'real'. And I don't want to run to the clincher just yet, but generally, there is a rather wise conservative proverb concerning theories that ignore significant realities...<br />
<br />
How about valuations? This, I think, can get either very murky...or very trivial...or very interesting.<br />
<br />
At first glance, they are clearly subjective, because they also emerge locally from within the circle. Or, if you want to import more of the previous metaphysics, from within the individuals who are within the circle. And, as you probably intoned from the discussion so far, there is a significance to this -- different groups possess and express different value structures, and in turn will produce different price structures and consequently different economic structures. How could it be otherwise?<br />
<br />
Likewise, from within any particular circle, both prices and values outside the circle are <i style="font-weight: bold;">objective,</i> emerging from outside. There are 'your' values and structures and ways, and then there are 'the world's.' You could also have done this from the previous metaphysics (and probably seen some truth in a 'you versus the world' perspective, but hopefully you don't feel <b><i>quite</i></b> that isolated!)<br />
<br />
But suppose we ask of our picture this -- ok, so the value structures, as expressed in markets, come from groups of people. <i>But where do the groups and the people get them? Do they really emerge <b>'just'</b> from within them?</i><br />
<i><br />
</i> And for whatever reason, when you ask a question like this almost everyone will default to a materialist perspective, and say 'well, of course! Where else would they come from?' Which I guess is fine if you actually <b><i>are</i></b> a materialist, but since most people would say that they are not, that they belong to some religion or other that believes in 'spiritual' things, or otherwise believes in the 'immaterial,' this is kind of an inadequate answer. And I suspect that even most of the materialists don't <i>really</i> believe what they are saying, if they really think about it.<br />
<br />
As I pointed out in another post, most people will say that they at least nominally belong to one transcendent religion or another, so they probably ought to think that some portion of their beliefs and values are not merely subjective opinions but are given them from 'outside' -- that as individuals or as a group of faithful believers, they give expression to transcendent, eternal values <i>which could be said to be objective to the entirety of the material universe, coming as they do from beyond it.</i><br />
<br />
And if you say this is what you believe -- that it is a part of your metaphysics -- then why on earth is it not just habitually a part of your 'picture' of things?<br />
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As regards the picture we are presently drawing -- if we believe these sorts of things, then as 'beings made in the image of God', or however this idea is formulated by other religions, <i>we can act as 'metaphysical conduits' through whatever circle we choose to draw to that which is 'truly objective'.</i> There simply is no adequate 'firewall' to a transcendent God. And so -- in an important sense -- we could say that the values, prices, structures, etc, in our circle are our attempt at the expression of something much higher than our own subjective tastes, <b><i>objective</i></b> in the sense that really matters -- the ultimate sense. Therefore these things must take on something other than being 'merely subjective,' at least if we are to take our beliefs and ourselves seriously.<br />
<br />
Have I shot through the metaphysical picture well enough?<br />
<br />
Anyway, the picture that emerges is sets of value structures expressed by individuals and groups of people, occasionally, and unfortunately, sometimes even <i>arrayed against eachother</i> (i.e., in conflict). And, frankly, the way these structures get to maintain their identity and integrity -- the way that people and groups get to live out their values -- is through borders. Period. Without any reality to the imaginary lines, they don't exist anymore, and the temporal becomes the tyrannical. So, regardless of what I might think (or not think) about policy, or governments, or what any of these values should or should not be, it seems to be <i>at the very least</i> folly in my eyes to deny the reality and necessity of national borders -- provided there be such a thing as a nation. And probably much worse than folly.<br />
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I suppose you could take this picture a lot of directions, but I will just say a bit more -- it seems to me you could draw a great number of these circles in meaningful ways -- around family lineages (especially concerning the issue of inheritance, which seems to have completely gone to the dogs), around families themselves, around neighborhoods and communities, etc. Without representation of these realities in the here and now -- without <i>borders</i> -- well, you can expect them to have about as much reality <i>in truth</i> as the representation afforded them. When you open your borders up, you invite in external values. And since the world is bigger than you, and probably also your group, you'll likely be overwhelmed.<br />
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People need to allow for this...somehow. If you buy into this picture anyway...Scotthttp://www.blogger.com/profile/12915297057336831151noreply@blogger.com0tag:blogger.com,1999:blog-8980874911927460995.post-40791567815304886512016-08-12T19:55:00.000-07:002016-08-12T19:55:05.522-07:00Metaphysical Bumblings #2From <a href="http://slatestarcodex.com/2016/08/11/book-review-pihkal/#comment-396216" target="_blank">the comments section of an SSC post,</a> Scott Alexander answers why he thinks there might be some important truth to be uncovered in psychedelics research --<br />
<blockquote class="tr_bq">
When people are on psychedelics, they feel incredibly happy, incredibly compassionate, like the world is meaningful, like they want to help people, and like all of this is completely obvious and even logically necessary. They understand the problems of life but they feel able to deal with them in stride and believe that there’s a higher purpose behind them. </blockquote>
<blockquote class="tr_bq">
It seems really sad that there’s no way to promote this state that lasts more than a few hours and doesn’t have the same level of complications and side effects.</blockquote>
Hmmm.... meaning, a higher purpose, love, happiness, helpfulness, and compassion.<br />
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Jeez, where could we come by stuff like that? <br />
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Jeez, oh jeez... ok, no snickering about the psychedelics => religion. This is metaphysics -- serious stuff!<br />
<br />
Protip -- I'm pretty sure there's not just a whole lot that's 'logically necessary,' strictly speaking, at least when you are operating from a standard of 'contingent on nothing.' But you might ask ... oh ... I don't know ... Kim Jong Un, or somebody like that. But to my way of thinking (or at least, the way I understand it) if logic were a mill, it would need some grist. Just the way it is.<br />
<br />
And if a person takes a very strong and principled stance against <i>Be Not a Jerk Unto Others</i>, and <i>Don't Worry -- Be Happy!</i>, and <i>Stuff is, Like, Meaningful, and Stuff</i> until such time as it be proven logically necessary to A Very Exacting Degree of Satisfaction, well, methinks the problem is more likely to lie with him than with The Universe.Scotthttp://www.blogger.com/profile/12915297057336831151noreply@blogger.com0tag:blogger.com,1999:blog-8980874911927460995.post-53580951719541225322016-08-12T19:18:00.001-07:002016-08-12T19:18:04.357-07:00Metaphysical Bumblings #1From <a href="http://www.ribbonfarm.com/2016/08/04/the-quality-without-a-name-at-the-betsy-ross-museum/" target="_blank">somewhere</a> on the interwebz --<br />
<br />
<blockquote>Is beauty subjective? People have strong feelings in both directions. A stylized representation of possible opinions about the nature of beauty might look like this: </blockquote><blockquote><ul><li>Strong Subjectivism: the phenomenon of beauty is essentially random with little regularity, a purely personal response that is not predictable across time and person.</li>
<li>Weak Objectivism: the phenomenon of beauty can be partly predicted by definable regularities in its perception as a result of our specific environments of evolutionary adaptedness (EEA).</li>
<li>Strong Objectivism: the phenomenon of beauty can be predicted by definable regularities because of regularities in our EEAs and in the phenomenon of intelligence itself.</li>
</ul></blockquote><br />
What? That's it?<br />
<br />
Whatever happened to beings made in the image of God, or participation in the divine consciousness, or any of the other transcendent metaphysical whatsits that provide perfectly serviceable justifications for objective notions of truth, beauty and goodness? Aren't there supposed to be people out there -- quite a few I'm told -- that believe Man is fundamentally a divine spirit, ultimately grounded in the eternal, with ready access to eternal truths?<br />
<br />
Bueller? ... <a href="https://www.youtube.com/watch?v=f4zyjLyBp64" target="_blank">Bueller?</a><br />
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I mean, we're only talking about religions that the vast majority of human beings have ostensibly been members for, what, the last thousand years or so? And yet we're down to the deification of intelligence? Can't even crack the top three?<br />
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And while I'm asking obtuse hypotheticals, how come I have to be the one to bring up this kind of stuff in conversation? And people look at me weird? <br />
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Isn't this basic Christian metaphysical thought? Why don't I hear my pastor talking about this? Why do I have to go digging through the bowels of places like Project Gutenberg to find that kind of stuff? Why do I have to patch it all together for myself, and/or make it up out of whole cloth?<br />
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Maybe because it's all arm-wavey god-of-the-gaps X-tian nonsense. Obviously, the apotheosis of intelligence is a much more serious answer. Even better -- just not having a clue. Better yet, the denial of all meaning in such silly questions and notions.<br />
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Those silly religious idgets...Scotthttp://www.blogger.com/profile/12915297057336831151noreply@blogger.com0tag:blogger.com,1999:blog-8980874911927460995.post-82051406544180544002015-01-19T15:51:00.000-08:002015-01-19T15:51:39.504-08:00Monetary Inanity (Part Infinity)For those who have been living under a rock the last week or so, the Swiss franc went off like a rocket when the SNB (the Swiss National Bank, Switzerland's central bank) <a href="http://www.bloomberg.com/news/2015-01-17/swiss-franc-stages-historic-rally-as-snb-move-shocks-market.html">decided to end a currency peg against the euro.</a><br />
<br />
And as usual, when something like this happens, there's lots of rather poorly informed commentary making the rounds out there. Judging from their writing, I think that financial writers must not make very much money, so it is probably understandable that most of them don't have much of a grasp of monetary matters or any real incentive to learn, especially as concerns exchange rates and central banking. But at least some of these guys should know better, especially the ones talking about deflation.<br />
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So, once again, I'll do what I can to try and correct the internet...<br />
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<a name='more'></a><br />
First of all, the story really shouldn't be about the franc, it should be about the euro. As far as I can tell, there isn't much wrong with the Swiss economy, and (aside from this sort of incident) their monetary system is probably the best run in...well...more or less everywhere. Switzerland has achieved arguably the nearest approach of any modern country to monetary and economic Nirvana, which is to say, extreme boringness. Sorry, I meant <i>stability.</i> Which goes a long way towards understanding why this all happened -- especially in light of the fact that poor Switzerland is surrounded by Euro-country, which has not been managed nearly so well.<br />
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In a nutshell, with the Euro on the ropes and the European economy in the doldrums, wealthy Europeans have suddenly decided that what they really, really want is some Swiss francs in a nice, safe Swiss bank account. This has, of course, driven demand for the franc to the stratosphere, Switzerland being a rather small country with only so many francs to go around, and Europe being rather full of fearful aristocrats with wealth to protect at this unhappy juncture.<br />
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Which is to say, it is all being driven by events that have almost nothing at all to do with the Swiss economy <i>per se</i>, by bad policy the Swiss had absolutely nothing to do with, yet is no doubt rather disruptive to the Swiss. You might call it something of a 'monetary externality.' Yet it is the job of the SNB to deal with monetary matters, and when this came up on their radar, they apparently decided that it was important to try to shield the Swiss economy from the disruption. Understandable, but as it turned out, a rather bad idea.<br />
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A peg works by (or, rather, a peg is enforced by) the central bank undertaking activities to bring supply and demand for the two currencies in line so that the exchange rate is stabilized at a certain ratio. If demand for one currency or the other gets too far out of line, the bank intervenes as necessary to bring them back within the bounds it has set.<br />
<br />
In practice, this almost always means that the bank prints reams and reams of its own currency (figuratively, of course -- banking these days is done with digits) and uses it to buy assets which are sold in the other currency. This creates demand for the foreign currency in the course of the transaction, and satiates demand for their own currency without increasing 'price' (the exchange rate) by increasing its supply. Theoretically, it could go the other way around, (selling foreign assets to soak up your own currency, while reducing demand for the foreign one) except that the bank enforcing the peg is usually trying to bring down the value of its own currency, not up. They don't usually do this kind of thing to prop up their exchange rate, <a href="http://www.economist.com/news/americas/21595471-latin-americas-weakest-economies-are-reaching-breaking-point-party-over">(except maybe in really screwed up situations.</a> But that is not Switzerland.) <br />
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In the process, the central bank's balance sheet 'expands' (which means it buys up more and more assets, and issues out more and more money, which it counts as a liability) and the economy is stuffed with more and more of this created money. Usually, the Swiss are quite circumspect about this kind of thing (unlike most places), but I suppose they thought it was worth it in light of the magnitude of the disruption they were experiencing, which they probably thought would be temporary.<br />
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I think this is one of those things that, looking back, 'seemed like a good idea at the time.' (Famous last words, right?) The problem with a currency peg is that it forces the country creating
the peg to more or less adopt the monetary policy of the country they
are pegging their currency to -- for better or worse, i.e., with all that that entails. So, if Europe inflates, Switzerland has to as well -- whether Switzerland would like to or not -- if it wants to keep the peg. In effect, the announcement of the peg was the SNB unilaterally joining the euro. So -- the response of Switzerland to Europe's monetary woes...was for Switzerland to adopt their monetary policies?<br />
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What could possibly go wrong? (<i>More</i> famous last words...)<br />
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What probably triggered the SNB's 'immune response' was the sheer volume
of transactions it was undertaking to maintain the peg. Whenever a
central bank does something like this, it is going toe-to-toe with an
entire world of currency speculators and the like, having to match them
transaction for transaction to keep the price where it wants. This is a
tall order, especially for a small country, and it wouldn't be the
first time that a central bank failed (for a fascinating story of how
George Soros ended a BOE currency peg and made a billion dollars in one
day, see <a href="http://en.wikipedia.org/wiki/Black_Wednesday">here</a>). <br />
<br />
By pegging the franc, the SNB created for Switzerland the same, central problem that is internal to the euro itself -- bad policies, brought about externally, that nobody can get out of when they need to. Except that the SNB saw the light, and could, and did. And the market jacked up the exchange rate in response. Not really that big of a deal.<br />
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Yet you see people talking about <i>deflation</i>. The 'trigger' here that has set people off seems to be negative interest rates and falling prices in response to the movement (and the massive demand for Swiss bank deposits, no doubt). Sorry folks, yes, those are symptoms, but Switzerland is really, really not what deflation looks like.<br />
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If you want to see what deflation looks like, watch <a href="https://www.youtube.com/watch?v=lbwjS9iJ2Sw">the run on George Bailey's bank</a> in <i>It's a Wonderful Life</i>. Deflation looks like Wall Street in 1929, bankers jumping out of windows, mass asset seizure and liquidation by creditors, etc. In contrast, depositors are lining up to stuff money into Swiss banks, Swiss financial stock prices were up on the news, the Swiss economy is the rock of Europe, and those poor, poor <a href="http://www.huffingtonpost.com/2015/01/16/davos-scotch_n_6486668.html">Davos billionaires are coughing up more money</a> to conspire in comfort in Swiss resorts. They're grumbling I'm sure, but they're coughing.<br />
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Really folks, nothing to see here. Move along. The situations being created by falling oil prices -- instability in Russia, Venezuela, and the like -- seem much more interesting to me. Yet here again, these places engage in the same kinds of efforts, artificially pushing exchange rates around. Especially in these places, this looks really destructive to me. Probably the best thing for Russia and Venezuela would be a weaker currency, as it would make their manufacturing sectors more competitive, which might actually develop and eventually lead them to not be highly commodity-price sensitive, fragile, one-dimensional economies. Concerns about short term stability are preventing conditions that would eventually lead to longer-term stability through economic diversification.<br />
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Likewise, the Swiss are fairly well poised to take advantage of a higher exchange rate, given their well-developed financial sector. Maybe these guys should just listen to the market and let things unfold. Surely there are better ways to handle these things than mass, indiscriminate, across-the-board interventionism.<br />
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But what do I know? Maybe that's why I don't run a country.<br />
<br />
<script type="text/javascript">var gaJsHost = (("https:" == document.location.protocol) ? "https://ssl." : "http://www."); document.write(unescape("%3Cscript src='" + gaJsHost + "google-analytics.com/ga.js' type='text/javascript'%3E%3C/script%3E"));</script><script type="text/javascript">try {var pageTracker = _gat._getTracker("UA-6540825-1"); pageTracker._trackPageview(); } catch(err) {}</script>Scotthttp://www.blogger.com/profile/12915297057336831151noreply@blogger.com0tag:blogger.com,1999:blog-8980874911927460995.post-11753978162142732032014-06-08T17:17:00.000-07:002014-06-08T17:18:56.942-07:00Why Piketty is Wrong and Western Workers Have a Bright FutureI'm sorry. I'm supposed to be angry and dismal, because angry and dismal is smart, or at least that's the current received wisdom, and not wanting to look smart is practically a cardinal sin these days, and it would be a wilful sin to boot given that I could just keep my mouth shut, or at least write something angry. But I can't help it -- I'm just too happy and optimistic, though somewhat overworked, which I suppose goes a long way towards explaining many things, including my rather poor writing record of late. It seems kind of easy to write angry things (especially when you've gotten into the habit!), but harder to write other kinds of things, especially with pressing matters to attend to.<br />
<br />
But I do think I have something happy to say about Piketty's new book which also might happen to be smart. I confess to not having read the actual book (which is something of an economic tome at 700 pages, and a bestseller on Amazon, no less, an unusual juxtaposition, to say the least). But I have <a href="http://www.nybooks.com/articles/archives/2014/may/08/thomas-piketty-new-gilded-age/">read reviews!</a> And I will try to be fair, and trust that the reviews have been more or less accurate. I also don't intend to go into great detail, but just to stick with the basic idea, which I also confess to be a really interesting one, but, alas, as I said, wrong on a very central point.<br />
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<a name='more'></a><br /><br />
But first, I'd like to talk about what I think he got right.<br />
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There are a few things to know -- Picketty, first and foremost, appears to be a marxist. I use a little 'm' because he seems to be a methodological marxist, and not necessarily an ideological Marxist calling for a international revolution of the proletariat, or what have you. But the marxism is fairly well displayed in 1) his approach, which is more or less neo-classical (it sounds strange, but Marx is old enough that he pretty well had to be a classical economist, as there weren't any other schools around yet) 2) he sees the vying for income as a struggle between 'capitalists' and labor, and 3) calling for heavy government intervention and progressive taxation to diminish inequality.<br />
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Leaving #3 aside for the moment, his basic claim is that when the economy (g)rows slowly, while (r)eturns to capital are high (which seems to have garnered the rather catchy shorthand r > g), that 'capitalists' are able to bid for an overwhelming share of the fruits of the economy and effectively shut labor out of the gains. More and more income accrues to holders of capital over time, and this becomes a sort of 'steady-state disequilibrium' that undermines the ability of labor to participate in economic gains. (I call it a 'disequlibrium' because one would expect that as capital accrued, the return to capital would fall and the share of income that goes to labor would naturally rise. Some dreaded 'something' is keeping things in a state of disquilibrium to prop up the return to capital that would otherwise naturally fall. Brad DeLong had <a href="http://equitablegrowth.org/2014/04/12/notes-finger-exercises-thomas-pikettys-capital-twenty-first-century-honest-broker-week-april-12-2014/">some interesting things to say</a> about that.)<br />
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Piketty thinks that this state of affairs is currently in play, and that if nothing is done, the entire world is looking at a very protracted period of mounting inequality going forward. It is with respect to this last statement that I will disagree, and, somehow, find myself rather lonely in this regard; even many vehemently anti-Pikettians seem to agree with him on this point. Anyway, I don't.<br />
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Piketty says that this has happened twice in recent history, and both times for roughly the same reason -- overly-free markets, more or less. The first time was the great Gilded Age, when capitalism combined with the recently unleashed forces of industrialization to produce woeful inequality as labor found itself at the mercy of a tidal wave of labor saving machinery <i>sans</i> substantial government regulation thereof. This was later 'ameliorated' by world wars which broke up a regimen of rampaging globalism and installed more social-welfare oriented governments that were amenable to interventionism.<br />
<br />
The second time was the great wave of deregulation under such personalities as Ronald Reagan and Margaret Thatcher. According to Piketty (again, more or less) the deregulation and flattening of the tax burden allowed the 'capitalists' to surge ahead in the income race and undermine the ability of labor to compete in the bid for income.<br />
<br />
Many people have objected to these ideas (and others Piketty presents) for many different reasons. A <a href="http://www.arnoldkling.com/blog/whats-wrong-with-the-neoclassical-production-function/">lot have to do with the neo-classical approach</a> -- how can you just lump 'capital' and 'labor' into groups and call this meaningful economic analysis? All capital is different -- over time, the fate (and the return) of each asset is different. Tell the buggy-whip manufacturers that they have been earning an above market return, see how that goes over. And much -- if not most -- labor owns at least some share of capital. How can you separate the two, or not differentiate one sort of labor from another, for that matter? I particularly liked one of Arnold Kling's criticisms (sorry, can't find the link at the moment) -- there isn't much of any meaningful labor aspect to income any more. Most 'labor' compensation is really compensation for education, training, and skills -- a form of capital, in other words. So this is really a story of different sorts of capital vying for income, not capital and labor.<br />
<br />
Such retorts are interesting, but I don't think this will really satisfy the people likely to be sympathetic to Piketty, who are worried about the fates of people 'working for a living' (mostly) versus those (mostly) living off investment income. I suppose that whether you find meaning in the question of labor income vs capital income, or whether you reject it as some sort of conjured-up 'philosophical construct,' is up to you, but most people do find meaning in it, which is to say, they find some truth in the distinction between capital and labor. And if you find meaning in this question, I can't see how the basic neo-classical approach is stupid or invalid, if taken merely for what it's worth, with the appropriate caveats that these sorts of critics are tossing Piketty's way. <br />
<br />
And, conservative opinion to the contrary, I can't find a bone to pick with Piketty's basic assertion that 'labor' (I'll get to those scare quotes in a minute) has gotten the short end of the stick in recent decades. The numbers seem to bear this out. I haven't got the statistics he's got at my fingertips, but I do have those that the FED has made public. Again, disclaimer -- yes, I'm fully aware that 'economic statistics' can't and don't tell the whole story about the economy. But at least as best as we're able to 'measure' the situation, they are the best we have to go on. And this is what they say --<br />
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh4p2Sjs8NWbivVGh_Jd9mjGhk0pTueS7TPkI6ncqMwcT4Mx647-vOggQ_QyEZApJf5lyEjZ_qBjI7iFIF-wQyjh5qKEaX4zow7uaozvfa2WnXgPsYcHLMg4ESyT-dZbUuG0PBh3mHpdnRd/s1600/wages-cpi.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh4p2Sjs8NWbivVGh_Jd9mjGhk0pTueS7TPkI6ncqMwcT4Mx647-vOggQ_QyEZApJf5lyEjZ_qBjI7iFIF-wQyjh5qKEaX4zow7uaozvfa2WnXgPsYcHLMg4ESyT-dZbUuG0PBh3mHpdnRd/s1600/wages-cpi.png" height="265" width="400" /> </a></div>
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This is a graph of wages (of non-supervisory employees, basically, 'labor' as close as one can approximate) corrected for inflation over the period 1960 to 2014, and the story it tells is unequivocal -- wages peaked in about 1973 and then fell until the mid-to-late 1990's when they began rising again, but still have not fully recovered.<br />
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There are, of course, objections to be made, the main one being that the CPI measure is bogus. But most who would make this objection would say that CPI is generally understated, which would only make the graph look worse if it were corrected (i.e., if price-inflation were higher over that time period, the graph would get lower and lower as one moved to the right). And as I pointed out before, there is Kling's objection that labor in modern economies is really just another kind of capital, but if you go that route the you've left the argument altogether by defining it into oblivion. It is an interesting insight, though.<br />
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This graph is supported by a second, which to my mind is the most direct measure of what Piketty wants to talk about (and it surprises me that I haven't seen it anywhere...)<br />
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiDQd5N-1JmVqzOekiv4qBCTdIkvgsUNbuzai-X0yv8eM7Eq6mIaARStG_tF8ohqiHxiHAU15F8qgqJ2ygn2gSMZkAW5R4A9EwnIRinVOE6696O6K87WHUOezt6TNR-H4Aoc2aA3usF-Ndn/s1600/labor+share+of+GDP.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiDQd5N-1JmVqzOekiv4qBCTdIkvgsUNbuzai-X0yv8eM7Eq6mIaARStG_tF8ohqiHxiHAU15F8qgqJ2ygn2gSMZkAW5R4A9EwnIRinVOE6696O6K87WHUOezt6TNR-H4Aoc2aA3usF-Ndn/s1600/labor+share+of+GDP.png" height="268" width="400" /></a></div>
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This is a graph of the percentage of income going to labor out of total GDP. Notice that it also peaks in the 1971-1973 period, and falls over time (though not as dramatically as in the first graph). It, however, does not recover, but keeps falling through 2014 with something of a spike in the latter 1990's. Of course, the scale is to be taken into consideration -- overall, from peak to trough is about a 10-12% drop ([~68% - 62%] /~60%), which is not enormous. Taken together with the first graph -- a much larger drop of about 20% -- tends to suggest that the return to capital in the US also fell over this time period, though not as much (an important clue, as we'll see...)<br />
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The 'non-recovery' of labor's share of income mentioned above vs. the recovery of wages is easily explained, I think, with a third graph --<br />
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjfVtCws14TTnd4g-yP4ePHElcB1olBMzzyJWjs_7skZ35zEUMp8bPuBy0uT-2vUSfpk7xFwiyrlgLEZhp01cyn16Eiv9vjQu2ViqnS1NxUEaJtK0WamPOUAu3bVXQq-CDTnP3eJ3Emdqnb/s1600/labor+participation.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjfVtCws14TTnd4g-yP4ePHElcB1olBMzzyJWjs_7skZ35zEUMp8bPuBy0uT-2vUSfpk7xFwiyrlgLEZhp01cyn16Eiv9vjQu2ViqnS1NxUEaJtK0WamPOUAu3bVXQq-CDTnP3eJ3Emdqnb/s1600/labor+participation.png" height="265" width="400" /></a></div>
<br />
Real wages increased ~1995-2014, but the labor share of income fell anyway because fewer people were working, which seems to be the economic story of the new millennium.<br />
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So, if all this seems sound, what if any objections are there to make to Dr. Piketty -- especially very happy, optimistic objections? (Hopefully, at least one is obvious at this point...)<br />
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The first -- and obvious, at least to me -- is that, while I am game to entertain interesting and even far-fetched ideas, I do have some minimum requirements when it comes to speculations of cause and effect, and one is that the cause needs to come before the effect, or at least at about the same time. All of these things started in the early 1970's -- almost ten years before anything Reagan could have done would possibly have had any affect at all <i><b>because he wasn't even president yet!</b></i> (I think that deserves at least bold and italic, don't you? I'm not trying to be mean, but how does this slip anyone's mind -- Piketty or the nay-sayers?)<br />
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So... what was really going on about this time? Let's see -- Nixon was president, the Vietnam War was ending... oh yes! Wage and price controls, high marginal tax rates, that barbarous relic (gold) finally taken off life-support and put into the grave, banking regulations still in place, basically not all that much Piketty would object to in terms of policy, I should think, and probably most importantly -- Deng Xiaoping was in the ascendant half a world away. Nixon visited about this time, if I recall, something about China 'opening up' -- maybe the single most important economic event of the latter half of the 20th century?<br />
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Which brings me to the second major problem with the Piketty narrative -- it tends to purport to be global in scope (in terms of global growth rates and returns to capital) but is decidedly Western in perspective (I seriously doubt, for instance, the Chinese experience of the 'Belle Epoque' (Gilded Age) or the 1980's was much like yours or mine...assuming you're reading this in English.) At least, that is how I understand it being described. It may make sense to 'average' capital with other capital and labor with other labor in getting a grasp of what is going on within an economy, or to lump the Canadian economy with America's (and even Europe's, Japan's, and Australia's in the post-WWII period). But it makes no sense at all to lump the undeveloped world with the developed world and average things out and call it a meaningful statistic as far as anyone's experience of either type of economy is concerned. Sorry, I draw the line with that one.<br />
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And here, I think one can get a better grasp of what is going on, and start to write a better narrative than Piketty's. So, I will do a little quasi-marxist economics of my own, and describe another neo-classical narrative that makes more sense, and comes to pretty well the opposite long-term conclusion.<br />
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The Gilded Age and the 1970s-2000's really did experience much the same thing in terms of a <i>temporary</i> falling ability of labor to bid for a share of total income, though the second experience was very much a dim echo of the first. The Gilded Age produced fantastic and unprecedented -- and unequalled since that time -- <a href="http://www.nytimes.com/ref/business/20070715_GILDED_GRAPHIC.html">inequality in the West</a> for one main reason -- extremely highly productive capital suddenly entered a market which contained very little in the same productivity league with the new technology, and suddenly access to this capital was extremely valuable versus labor (or, really, almost anything else). So, the owners and developers of that capital were able to bid for enormous shares of total wealth and income, which itself was increasing very rapidly (contra what Piketty would have reported, since he averaged things. This was a time of very high 'g' and very high 'r' for the people actually involved, not high 'r' and mediocre 'g'.)<br />
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The 1970's-2000's period became <i>like</i> this because a titanic sea-change occurred overseas -- China opened up. Later, Russia, India and other places also entered the game. This seriously upset the bidding war between 'labor' and 'capital' by opening up an entire venue full of labor with almost no capital. So, capital accumulation in the US stagnated, and labor in particular was put at a disadvantage. Some argue that capital 'fled' overseas, but I think this exaggerates -- how, pray tell, does one move the Hoover Dam? The Interstate Highway System? Los Angeles, California? Much capital of necessity stayed put, and supporting capital also would have stayed put, inasmuch as, for example, to strip a commercial building of its wiring and computer system would also render the building worthless. It is generally more economical to build new capital overseas than move it there, especially when the production of physical capital has become as efficient as in modern times.<br />
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(Note -- This is not to mention that the West was also coming to the end of a
business cycle, and trying to grapple with rising inflation, which
necessarily would have impacted policy in a relevant way -- a drive to open the
labor market to other bidders to try to keep wages down and tamp the
effects of inflation without actually tightening monetary policy, which would have induced recession.)<br />
<br />
But note here that all labor and all capital is not the same -- 'American' capital would have seen falling returns, as would American labor, the latter falling a bit further. The place to own capital would have been China, just as in 1870 it was America, and access to this market would have been available mostly to fairly financially sophisticated Westerners. So new capital tended to accumulate in the area with higher returns, which wasn't the West, and didn't improve Western worker's productivity/wages, and the returns went to a select few with better access. The Western experience, then, was one of rising inequality, but in the main not at all as a result of Reaganism and deregulation. And note that rising marginal tax rates since Clinton and increasing regulations have not helped solve the 'problem' -- which would be obvious to anyone who thought that the problem had nothing to do with tax rates and regulation, but really was a marxist and was looking at the competition between labor and capital for income.<br />
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You could also, I suppose, tell this story from a 'Klingian' perspective, that the rise of Deng and the fall of communism ushered in an explosion of 'social capital' overseas that went into competition with Western social capital, and began attracting away complementary physical capital to extend production to these areas as rapidly as possible, taking advantage of freed-up labor and resources. In the process, Western social capital, physical capital, and labor was relatively devalued, to varying degrees. That also has the ring of truth to it, but is kind of an awkward way to state it for most people, I think.<br />
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And the conclusion of this story is very, very different. You can't, after all, open up China again. (And you really, really can't open up the USSR again.) At the time -- the early 1970's -- I guestimate that approximately 1 billion people were living in relatively open, developed economies (the West plus Japan and a few other places). About 5 billion resided elsewhere, waiting to open up and develop. That is a very big differential -- 5 to 1. Today, you have at least 3.5-4 billion people in roughly open economies or economies in the process of opening and industrializing (Greater West, plus China, India, and Russia). Not all that many are left to 'open up' significantly (roughly, Latin America, central Asia, and Africa, maybe 2-3 billion, some of which are already significantly developed anyway). Even if they all experienced a similar sea-change in social capital, it would be a drop in the bucket compared to the last experience.<br />
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Further, if it did happen, the brunt of the impact would most likely be felt by those nations which have only recently industrialized -- again, China, Russia and India & Co. Why? Because they would be most directly in competition, and jobs and capital can't leave twice, either. Most of the manufacturing industries currently active in the West are either a) intrinsically more suited to highly-developed economies, or b) would have already left. Probably, some effect would still be felt, as Chinese and Russian firms felt the pressure and began competing for even more developed Western industries, but this 'wave' would have gone through a fairly large dilution in the process. So the echo of the Gilded Age felt in the 'second industrialization' of the 1970's-2000's would dwarf the changes felt in the 'third industrialization,' just as the second was dwarfed by the first.<br />
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But as there become fewer and fewer new places to industrialize, and capital accumulates at a faster and faster rate in a more evenly-spread fashion, I think we can expect once again for labor to get the upper hand in bidding for income, as we saw in the interim between the Gilded Age and its recent echo. Inequality will fall, or at least moderate, especially if well enough is left alone. I don't think progressive taxes and such will help the situation, or really have much of an impact one way or another, just as it didn't have much of an effect between the world wars and the 1980's, in my opinion. That seems to be the story of the last couple of centuries, in broad brushstrokes, at least.<br />
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All around, I think we've had the brunt of the changes, contra it seems almost everyone's forecast. Sorry, maybe that sounds out of tune for me or almost anyone writing today, but that's what I think. The financial crisis will have yet to play itself out, yes, and of course that isn't going to be all that pleasant. But accounting is (at least supposed to be) a reflection of reality, not reality itself. Real new technology is being developed, real new capital is being produced. The bad accounting may divert things to inefficient arrangements, yes, but it doesn't stop the train from rolling forward. Accounts may get settled badly, but they will get settled, and we will move on, bad accounting or no.<br />
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Further down the road, some people worry about things like robots and 3D printers ruining labor markets, in a Pikettyesque sort of fashion (upsetting the competition of labor and capital for income, in the favor of capital). But this idea operates on the principle of labor substitution, and while certainly, to a degree capital of this sort can substitute for labor, no one seems to take note that it substitutes even better for other capital -- especially of it's own kind. How much is a robot or printer worth if you can use robots to make other robots, and printers to print out other printers? What does ownership of capital mean in such an environment, in terms of claims to income? Certainly, there will be more goods produced in such an economy, and therefore, more income to bid for, but it is not entirely clear to me who will win in such a competition (unless, of course, one side manages to successfully collude against the other, at which point all bets are off. But that is always a threat.) At least, it is not at all clear to me that labor loses this fight as others seem to contend. It would even seem to have something of an advantage.<br />
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So, I am optimistic and happy, at least on this front. And I think you should be, too.<br />
<script type="text/javascript">var gaJsHost = (("https:" == document.location.protocol) ? "https://ssl." : "http://www."); document.write(unescape("%3Cscript src='" + gaJsHost + "google-analytics.com/ga.js' type='text/javascript'%3E%3C/script%3E"));</script><script type="text/javascript">try {var pageTracker = _gat._getTracker("UA-6540825-1"); pageTracker._trackPageview(); } catch(err) {}</script>Scotthttp://www.blogger.com/profile/12915297057336831151noreply@blogger.com0tag:blogger.com,1999:blog-8980874911927460995.post-51493455826539167182014-02-07T13:27:00.002-08:002014-02-07T13:34:15.107-08:00Texas, ExplainedMy sister forwarded me this video by Bill Whittle --<br />
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<iframe allowfullscreen="" frameborder="0" height="315" src="//www.youtube.com/embed/4CDFxeB7Y-s" width="560"></iframe><br />
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It is funny, and has a kernel of truth to it (I did these sorts of things growing up, too, and could do them still if the urge ever really got hold of me), but it did set me into a bit of a melancholy state, because it is very easy to make observations like this and come to conclusions that I think are a bit off and too optimistic.<br />
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For some reason -- well, not for some reason, for the reasons you see in that video -- Texas has a reputation among outsiders as a rather libertarian place. I can assure you that such appearances are totally deceiving. Texas is not really very libertarian in spirit; the only reason you can do this sort of stuff is because for a large swath of the population, these kinds of activities are not really remarkable. The only reason they are not 'regulated' I suspect is that to do so would be too much of a headache. Whoever granted the permits would be flooded with paperwork every day, and since nobody cares anyway (at least in the areas where people do that kind of thing), there would be little point.<br />
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But if, say, you were to go to a public school in Texas, you would probably see a police car in the parking lot. And you would probably find an officer somewhere in the building. He would have his own office, because he's permanently stationed there. This has become a commonplace. At one time, if there was a fight between students, the teachers or administrators of the school would deal with it internally. Now they just have the cop haul them off. The cop is usually a friendly guy, and the students are usually friendly with him; it doesn't exactly feel 'oppressive.' But his purpose there is what it is. You act right, and don't get into fights (or fight back, even) or you go to jail.<br />
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If you looked around, you would likely see surveillance cameras. Everywhere. Depending on the city, you might find metal detectors at the entrances, and if you did, likely the kids' backpacks would be see-through -- obviously, to make it difficult to carry around contraband.<br />
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If I had to distill Texas' political leanings down to a sentence, I would call it a strange mix of authoritarianism and don't-give-an-expletive. Basically, our political system is 'don't make the wrong people mad.' But maybe that's every political system. I know a man who grew up here and later moved to Louisiana, and swears that he will never, ever move back because Texas is 'Communist.' I kid you not, and coming from a man with actual experience, and not exactly a sentiment easy to square with 'libertarian.' And in an odd sort of way, I understand what he means. People observe the string of Republican governors and presidential candidates coming out of our state, the lack of an income tax and all of that, but they either don't know or forget that Texas was almost totally and completely dominated by the Democratic party for over a century. It was very much a one-party state. The Republican thing came about only very recently. It will probably end.<br />
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You might call it an atmosphere of lackadaisical vindictiveness. Not a lot of highly cerebral, elaborate political theory, here. No. Texans are a-okay with the state, so long as the state you are talking about is their own, and not California, or Massachusetts, or New York, or Washington D.C. (Do not try to correct my political geography -- I said no elaborate theories. Anyway, I'm only reporting, not opining.) A friend from Ohio once quipped that it must be a state law that a picture of Texas be on every can of beer sold within the state. It is as if people were worried you might get drunk and forget where you were.<br />
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Furthering the lackadaisicalness, there aren't many rules, not because anybody actually dislikes rules much, but because, as I said, nobody gives a flying expletive what anybody else is doing, so long as it is sufficiently Texan. Until, that is, you break one of the actual rules, however small, at which point they'll absolutely want to see you fry for it, so help you God and may He have mercy on your tender soul, because they for darn sure won't. I did say vindictive, and you can be sure they mean it. If nobody can find an excuse to shoot you on the spot, you <i>will</i> go to jail, and if they can find a reason to put a needle in your arm, they will do it with glee.<br />
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Hence the torrid love affair with law enforcement in the state, and the cops and cameras in the schools, and the general okayness with actual Texas government.<br />
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If I could propose a sort of poetic image of the Texas attitude, it would be a statue of the <a href="http://en.wikipedia.org/wiki/Lady_Justice">goddess Lady Justice</a>. Except in the Texas version, being rather non-cerebral and irreflective, she would not be hoisting a scales, but maybe a cold longneck, in recognition of general lackadaisacalness. That would be more fitting. And maybe I'd also get rid of the sword and the toga, those not really being very Texan, either. Maybe she could have her other hand resting on the grip of a .357 Mag, sitting in a holster on her hip. (Aside -- .357 Mag must be the official Texas caliber, if there ever was one. It would not surprise me that ownership of such were to be made a condition of residency, or at least voter registration, at some point in the future. Be sure to pick one up if you decide to drop by.) And she might be wearing something more appropriate, like maybe a nice frilly bustier, with maybe some lace or fringe or something. But I suppose at that point, you've got everybody thinking "Hey, who's the hottie, and why is she blindfolded?", and probably about how much fun this might turn out to be, and not so much about justice anymore. So that probably wouldn't work out. Oh well. I suppose it was a useful mental exercise. <br />
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I was reading an article describing a supposed <a href="http://www.tufts.edu/alumni/magazine/fall2013/features/up-in-arms.html">12 nations that make up America,</a> and it told me in so many roundabout words that I was an extremely violent person. Or at least, the people group which I belong to was, or some other such sociodemographical nonsense, or at least that my group was perceived to be that way by his group, no doubt a part of Puritanical Yankeedom, which apparently abhors violence right up until the point that it has to do it, like when witches need burning, or the time when <a href="http://en.wikipedia.org/wiki/English_Civil_War">King Charles needed his head cut off</a>, which I figure is just like everybody else. I suppose when you do things all together as opposed to individually, it's different. Somehow.<br />
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Anyway, I immediately took offence. But then I got to thinking...<br />
<br />
...about the time that kid in my PE class shot that other kid in the face with a .410...<br />
<br />
...and the time that kid in my English class got stabbed to death in a knife fight, right down the street from a good friend of mine's house...<br />
<br />
...and that friend of my dad's, who spent three days in jail for beating the living daylights out of an off-duty cop with a length of lead pipe. (The 'lenient sentence' was because he had been 'provoked,' and by 'provoked,' what I really mean is attacked, with self-same length of pipe, and he shouldn't have gone to jail at all. Did I mention that Texans love cops?)...<br />
<br />
...and that friend of the above man, who blew a guy to Kingdom Come with a 12-gauge shotgun, that had been holding up his wife with a 9mm in their garage...<br />
<br />
...and that other guy my dad used to eat breakfast with most mornings before work, who killed two guys who tried to rob him as he was opening up his check-cashing business down the street from my dad's office, and still had a cast on his leg at the time from the gunfight he had been in a few weeks before...<br />
<br />
...and that <a href="http://en.wikipedia.org/wiki/Joe_Horn_shooting_controversy">guy from Pasadena,</a> where I live now, who, well, you can read the link...<br />
<br />
...and that <a href="http://abclocal.go.com/ktrk/story?section=news/local&id=9059426">security guard at the plant where I work</a>, who was a recently returned Afghanistan war vet, who was strangled to death by his civilian neighbor in a fight, after he had stabbed said neighbor 12 times (seriously, do you really need another story than that one? A vet in the prime of life just happens to have a neighbor who can overpower and kill him bare-handed, <i>after</i> being stabbed multiple times and severely wounded!? He wasn't exactly the biggest guy in the world, but still...)...<br />
<br />
...and I got to thinking, "If I really thought about it, I could probably go on like this, for at least 45 minutes."<br />
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And then I remembered being in college, with those sort of casual acquaintances you meet in class and such, and after you've known eachother for a semester or so, you'd start relating interesting stories from your past, and after they'd had their turn, I'd start talking about some story like the above, and they would look at me like I'd just descended from an alien spacecraft or sprouted a second head out of my neck, right before their eyes, and the rest of the relationship would be dominated by long, awkward silences, and things like "yeah, you know, I've really got to go..." And that's when I realized that the author of the article might have been more right than I had first thought. <br />
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(Though to be fair, those other college students were also mostly from Texas, it's just that they were the sort of 'yuppy' Texans from the neighborhoods sprouting up in suburbs on the north sides of towns, who are able to get into the good schools, and at this point tend to dominate them. Which is to say, not very representative, and certainly not normal. I'll have more to say about them later. Did you know that Texas' two largest universities, the University of Texas in Austin and Texas A&M in College Station have some of the <a href="http://www.kbtx.com/home/headlines/14104667.html">highest rates of attendance </a>by National Merit finalists, batting way above their national standings? It's because, no matter how smart they are, Texans generally just won't leave, even if it might be good for them, no matter what. So, Harvard and Stanford and such just don't get many of them. [And if you bothered to read that link, I can assure you, Ed Funkhouser is completely full of it. Whatever A&M does to recruit students, it really doesn't matter. The '<a href="http://www.youtube.com/watch?v=vyFSdj1J5Vw">Steers and Queers</a>' Texas effect swamps whatever he is up to, I can assure you.])<br />
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I identify my own 'nation' as being more 'Greater Appalachia,' just looking at the descriptions, since I do not use 'sir' and 'ma’am' and Mr. and Mrs. the way the 'Deep South' does (and I can verify that -- that is exactly how people from southern Louisiana talk. But I don't.) -- though I don't generally 'identify' with actually being Appalachian, if you see what I mean. I just recognize my habits when I see 'em. But as I got to thinking about it more, I'm quite sure that there is quite a lot of upside to Texas being a lively mixture of the two most violent cultures America has to offer. For one, it appears to solve a longstanding mystery which I had up to now been unable to crack -- gangsterism.<br />
<br />
Practically speaking, Texas has none to speak of, which has long struck me as odd, because I do not get the impression that Texans are any less prone to beating the bejeezus out of people and the like than anyone else around. At least, there isn't the kind of gangsterism like you see depicted of in places like New York or Las Vegas, or what have you, where they are actually organized black-market criminal enterprises. In Texas, 'gangs' are pissant little things, composed mostly of poorly 'parented' (read -- 'disciplined') young men, who are too weak and proud to handle the butt-kickings the rest of us had to endure in school on our own. By 'mostly,' I mean approximately 98-99%, with the remainder being soul-less, conscienceless, totally animal killers, who would probably be that way, gang or no-gang or however they were parented. They form 'gangs,' rather than swallow their pride and stand on their own two feet like men, or not, as the case may be, but to at least run away or take it on your own, the way everybody else learns to. And they're really not hard to deal with in real life, when you realize that that's what they are, overgrown infants, just be friendly and don't expect too much. The non-killers, anyway. The killers are best just avoided. You can know 'em just looking at them.<br />
<br />
Fortunately, the killers usually wind up dead or in jail pretty young, rarely living to see 30, and the rest tend to disperse after they get out of school and become normal, if somewhat disgruntled and sociopathic peasants that go in to making up the underclass. They are associated with drugs, and crime, but only inasmuch as they might happen to be morally degenerate lowlifes. They are generally users, rather than dealers, though, and their crime tends to be opportunistic and disorganized. Dealers in Texas, at least the ones that I have known, are loners, and usually fall into one of two categories -- losers who barely scrape by, and generally friendly people who are fairly professional. Neither of them tends to be particularly violent, at least not much more than anybody else. There generally aren't 'territories' as depicted in New York and such, as far as I know. Mostly it is 'free-lance,' come and go as you please. The kiddy-gangs have 'territories,' but again that is more a matter of their delicate prides than anything else, not 'business' related, and doesn't much concern adults who aren't involved in such activities.<br />
<br />
The only place 'gangsterism' can sort of take root, to the degree that it even does, is in the Mexican neighborhoods. And I think this is telling. The reason that territories don't take hold in Texas, as they seem to in other places, I think, is because they can't. To have 'territories,' they must be able to embed themselves in the community, which is to say, the community must deal with them as members rather than outsiders, and 'gang business' as part of routine, in order for that kind of thing to work. Otherwise, it is too difficult; you can't operate 'below the table' when there isn't any table. And in Texas, you just don't act that way -- if you try, you usually fry, as I have said. There is no better way to attract the wrath of a thousand avenging angels descending down upon your sorry head, than to break a law, or cross the wrong person, in Texas. Basically, the reason it seems to me that the Mexican community in Texas has trouble with this stuff, (and the Mexicans in Mexico, for that matter) it that they tend to be 'too nice,' by which I mean, 'understanding and sympathetic.' Unsurprisingly, non-Mexicans tend to have a reputation among the Mexicans as being 'cold.'<br />
<br />
One result of this 'niceness,' is that the gangsters have breathing room (of course, there are many others, which don't always turn out so bad...). I have a friend who keeps a house just across the border, who tells me stories of people on this side going back to their homes in Mexico to find them occupied by members of the cartels and such, who inform them that they'll be needing to rent the house out, because of it's location, for business, or what have you. And, generally, the owners, not wanting to get shot or whatnot, find themselves going along, you know, to get along, and take the money and find someplace else to stay.<br />
<br />
I simply cannot imagine this kind of thing happening in Texas. There are few more effective ways I can think of to meet your Maker in extremely short order than to be caught in a house you're not supposed to be in by its owner. There is no engaging with, or treating with, or talking to, in any possible shape or form, unless such engaging and treating is considered to be strictly limited to shooting, and talking to consists of succinct notifications of imminent bodily harm. This is something that is just not done. Okay, well, it is, but one makes quite certain one is not caught doing it, and one quite often winds up either killing or dying if he is not absolutely careful on this point. He certainly is not given the option of paying rent. <br />
<br />
This kind of thinking goes for pretty much any such behavior. You can't cut deals with people hellbent on not 'getting to know you,' who give not a brass farthing where you spend eternity or when you begin spending it, that being between you and God, and nobody else. Texans, again, being generally non-cerebral, seem to sort of instinctively understand that their dealings with strangers are strictly limited to temporal concerns, such as the most expedient route for removing your sorry hide to a place it might actually have some sense to being when at present it isn't. If shooting may be productively incorporated, or even wedged in on some useful pretence, well so much the better. Exceptions and considerations and external concerns don't really figure in.<br />
<br />
You just can't gangsterize Texas, I don't think. At least not respectably. The mentality is all wrong. And have you ever heard of a riot in Texas? I haven't, and we have several large cities. There's been ample opportunity. I'm not saying it never happened, I just don't know of one. Or really much of any of significance in the South. Again, the mentality doesn't seem to be there. One just doesn't flout the rules lightly.<br />
<br />
(Might also have to do with 'individualism,' riots tending to be collective affairs associated with group identities. I'm really not sure. But again, the mentality is all wrong. I just can't imagine Texans doing that. Doesn't make sense. But I shouldn't give the impression that the atmosphere in Texas is extremely violent. It isn't. It's as friendly as anywhere else, as far as I can tell, it's just that different things tend to happen here than elsewhere.)<br />
<br />
So what makes Texas, well, Texas? What went into bringing about this strange state of affairs, and has perpetuated it all these years? Probably a lot, but if I had to guess the lynchpin of it all is, again, the public schools. Education in a Texas public school environment, at least up until recently (and again, I'll be returning to this point shortly) consists primarily of a sort of Holy Trinity of subject material -- fighting, football, and Alamo Worship, which generally goes by the more formalized name of Texas History. Yes, there are other actual subjects taught, at least in terms of going through the motions, you know, so parents are okay with it, but on the whole, anything else the kids happen to pick up is usually incidental.<br />
<br />
In general, it is not required to excel at any of these subjects (or really, probably any subject), but participation is practically mandatory. So, it seems to be the experience that counts. Using this regimen, our public schools (again, until recently) seem to have a remarkable way of chewing through whatever children happen to show up on school-day and faithfully and reliably churning out Texans regardless of circumstance. Whatever your background, and however you raise 'em at home, if you send 'em to public school, they <i>will</i> come out Texans, with all that entails, whether that suits you or not. That, I can assure you. We change 'em all over in one generation, tops.<br />
<br />
I've seen on the Internet some theories that 'civilization' comes about through a sort of process of natural selection. After many, many years of imposed 'law and order,' whatever 'uncivilized genes' are present will slowly be weeded out as they poke their heads up and run up against the long-arm-of-the-law lawnmower, so to speak, until one day whatever is left over is compatible with a civilized way of living. Well, I don't really know one way or another whether I really believe this, but I can say for certain, if it turns out to be true, that Texas was probably the most civilizing force that was ever known in the history of the world.<br />
<br />
I mean, just think about it. I really can't imagine a more civilizing regimen of selection, than pretty well turning kids loose in a survival of the fittest regimen, with barely any sort of civilizing instruction to sort of suppress the expression of uncivilized traits (unless they get it at home, of course), and then blasting to smithereens and jailing anybody who doesn't happen to make the cut once they're old enough for open-season to commence. Texas must surely be on the fastest track to civilization there ever was! And who knows, maybe one day we'll make it! Sure would be a shame in some ways, though...<br />
<br />
(I hope nobody is actually taking this stuff too seriously at this point. If you're from Texas, and you're kind of grinning with pride, or if you're not from Texas, and you're thinking "and here I had thought I was living in a first-world country for all these years" and laughing a little because it's not really true but kind of funny, then that's about what I was going for. If you're horrified, well, lighten up...)<br />
<br />
As I was saying, in some ways, sadly, we seem to be already getting there. Civilized, I mean. There's already getting to be a pretty large slice of Texas that doesn't have these kinds of experiences anymore, like those college students I had mentioned, from the 'good' suburbs. And as I had said, the schools, they are a-changing, and I expect their effect to weaken and weaken. <br />
<br />
There has been an enormous influx of out-of-state people, not to mention out of country people, and they have tended to want other things of their schools, and different ways of living. They have formed cultural exclaves, especially in North Dallas and North and West Houston, where things are, more or less, like everywhere else in North America. They send their kids to the best schools, and tend not to shoot at criminals. Or to shoot at much of anything, because they don't care too much for that kind of stuff, or have bonfires, or many of the other essential things that go into being Texan.<br />
<br />
Between the legalistic, bureaucratic rot that infects all public institutions, and the cultural dilution pouring in in response to the hot Texas economy, I expect that Texas will not last much more than two generations. At least, not in a form that someone like Bill Whittle would like to make a video about. Too many people won't want it to be that way anymore, and visiting Texas will maybe be about like visiting Iowa or Kansas.<br />
<br />
Oh well.<br />
<br />
<script type="text/javascript">var gaJsHost = (("https:" == document.location.protocol) ? "https://ssl." : "http://www."); document.write(unescape("%3Cscript src='" + gaJsHost + "google-analytics.com/ga.js' type='text/javascript'%3E%3C/script%3E"));</script><script type="text/javascript">try {var pageTracker = _gat._getTracker("UA-6540825-1"); pageTracker._trackPageview(); } catch(err) {}</script>Scotthttp://www.blogger.com/profile/12915297057336831151noreply@blogger.com0tag:blogger.com,1999:blog-8980874911927460995.post-58491680188606489882013-05-26T01:43:00.001-07:002013-05-26T01:43:02.804-07:00Karen Hudes<p dir="ltr">Holy moly, this lady is the mother of all smoking guns. If half of what she says is true - and from what I heard from her on the radio, she gives every indication of being legit - the mother of all cats is about to come out of the bag. </p>
<p dir="ltr">She really is unbelievable.  She is hopelessly naive, moralistic, and somehow got past the gatekeepers and landed herself right in the middle of the international banking system.   She's been in the middle of 20 years worth of scandals at the highest levels and decided to blow the whistle. </p>
<p dir="ltr">Maybe I'm late to the game on this one, but this is the first I've heard of her.  And she basically confirms all the worst things you might have guessed about places like the IMF,  the World Bank,  the national governments,  etc. </p>
<p dir="ltr">For some reason, she's naive enough to think it's a matter of rooting out corruption,  and she still has faith in state governments,  but anyway, 100% worth listening to if you are into that kind of thing. </p>
Scotthttp://www.blogger.com/profile/12915297057336831151noreply@blogger.com1tag:blogger.com,1999:blog-8980874911927460995.post-53799320637918802102013-05-22T12:38:00.001-07:002013-05-22T12:38:23.463-07:00Coffee...<p dir="ltr">...is not actually a substitute for food. Or sleep.  All rumors to the contrary.</p>
<p dir="ltr">It looks like it should work, but it doesn't.  And I never thought I'd become one of 'these people.'</p>
Scotthttp://www.blogger.com/profile/12915297057336831151noreply@blogger.com0tag:blogger.com,1999:blog-8980874911927460995.post-61015659356873302502013-05-22T12:21:00.001-07:002013-05-22T12:24:57.136-07:00KidsIt is incredible how difficult it is to raise kids.<br />
<br />
I have slogged through 4+ years of blogging, through living at 4-5 different addresses, through two different jobs -- one of them (my current) 24-hour rotating shift -- 60 to 80 hour weeks, and about a year and a half of that time with my in-laws living <i><b>with me </b><b>in my own house.</b></i><br />
<br />
Yet 'settled' as I am, I have never found it so difficult to get blog posts up. Or to get just about anything else done, for that matter.<br />
<br />
Part of the reason for the 80 hour weeks is, basically, what the hell? I'm not going to get anything done anyway. Or any sleep. Might as well get paid while I'm (not) doing it and feeling like crap. <br />
<br />
I hope and pray that all of this is worth it someday, because right now, it's all on faith. God only knows why I want <i><b>another</b></i> one...<br />
<br />
Anyway, this is not one of those 'screw it all, I'm quitting blogging' sorts of posts. Because that would be a lie. Writers are compelled to write. If they're not, they aren't writers. If you ever hear me utter such nonsense -- or any other once-prolific writer, for that matter -- you can know it for what it is. Writers are like crackheads. If they aren't posting their crap publicly, they are scribbling it on napkins and paper towels with crayons and stuffing it away somewhere. <br />
<br />
But I won't be writing much (as if I were already, anyway), and even of what I do, unfortunately you won't be seeing much of it. I actually have something of a backlog of (very) lengthy posts which will likely never see the light of day. The demands on me are much too high right now.<br />
<br />
For the life of me, I will never understand the apparently near-universal compulsion to demand the attention of others for the purpose of completely wasting it. In general, I tend to avoid the attention of others, even when I probably should speak up. But that is the way it is. And no, I'm not really talking that much about my kids at the moment. 'The job' has ratcheted itself up along these lines as well. But I'm afraid that until I can achieve some modicum of isolation, I'm just not going to be able to get anything done.<br />
<br />
My hope is that someday I'll be able to arrange some sort of life-hibernation, so that if I can erect enough barriers between myself and these people, I might actually be able to get something done. In the meantime, I have finally entered into the 21st century and gotten myself a shiny new smartphone. I hope that I can at least get up those little 'blurby' type posts ever now and then.<br />
<br />
Just to remind people that I'm alive.<br />
<script type="text/javascript">var gaJsHost = (("https:" == document.location.protocol) ? "https://ssl." : "http://www."); document.write(unescape("%3Cscript src='" + gaJsHost + "google-analytics.com/ga.js' type='text/javascript'%3E%3C/script%3E"));</script><script type="text/javascript">try {var pageTracker = _gat._getTracker("UA-6540825-1"); pageTracker._trackPageview(); } catch(err) {}</script>Scotthttp://www.blogger.com/profile/12915297057336831151noreply@blogger.com0tag:blogger.com,1999:blog-8980874911927460995.post-72539279216802506032013-05-18T07:43:00.002-07:002013-05-18T07:43:13.056-07:00Healthcare, If Any?According to a <a href="http://m.washingtonexaminer.com/insurers-predict-100-to-400-obamacare-rate-explosion/article/2529523/?page=2&referrer=http://www.garynorth.com/snip/1064.htm"><span id="goog_2132678174"></span>report<span id="goog_2132678175"></span></a> issued by a House committee bssed on data provided by a consortium of insurers, healthcare costs will increase dramatically under Obamacare -- by 100 to 400%:<br />
<br />
<blockquote class="tr_bq">
Internal cost estimates from 17 of the nation's largest insurance companies indicate that health insurance premiums will grow an average of 100 percent under Obamacare, and that some will soar more than 400 percent, crushing the administration's goal of affordability.</blockquote>
<br />
I...don't believe this. Oil from a turnip, anyone?<br />
<br />
People won't spend money they don't have. They can't. It's one of those quirky aspects of accounting. Costs imposed on insurers are certainly relevant, but this analysis seems crude to me.<br />
<br />
Quality will probably fall, waiting times will probably increase, etc. But I do not think prices can rise much.<br />
<br />
And wouldn't it surprise everyone if they fell?Scotthttp://www.blogger.com/profile/12915297057336831151noreply@blogger.com0tag:blogger.com,1999:blog-8980874911927460995.post-90545599429461632022013-02-17T21:42:00.002-08:002013-02-17T21:42:11.002-08:00Open Letter From Texas<br />
Dear Wealthy Californians --<br />
<br />
On behalf of those people of Texas who still retain a modicum of common sense, by which I mean all of us except for Governor Perry, I would like to rescind <a href="http://www.foxnews.com/politics/2013/02/16/perry-calif-bid-just-latest-in-republican-effort-to-lure-businesses-with-less/" target="_blank">the offer</a> which he has so graciously but injudiciously extended to you. You see, the whole thing is a really, really bad idea. I'm not sure what my governor is thinking, or even if he is even capable of actual thought in light of his horrendously bad suggestion.<br />
<br />
Over the years, I have met many Californians who have moved here to Texas, usually for a job, which they were apparently incapable of finding in their home state. Invariably, they have taken it upon themselves to inform me just how awful Texas is, and how much better it would be if Texas were more like California. In that respect, they have a great deal in common with the Mexicans I meet here. The irony of their position does not seem to dawn on them, but never mind, that is another subject for another time.<br />
<br />
Much as it pains me to say this, their complaints are largely correct. Texas is full of very ignorant people. For example, there are still people here who think homosex is wrong, even when done in public, and wouldn't have the slightest clue how to properly accessorize S&M apparel.<br />
<br />
We don't, in general, embrace the enlightened ideals of government which you favor, such as enormous tax burdens and deficit spending to fund important public initiatives like sex change operations and massive welfare spending. People here tend to think that spending more than you take in is generally a bad idea anyway, but worse if you happen to be a government. I may know as well as you that, although your present difficulty centers around a few accounting quirks in making this particular strategy work for you, nevertheless I'm confident you'll figure them out at some point. But here in our backwards state, that kind of thing is looked down on, and it is not generally believed that you can get around things like arithmetic.<br />
<br />
In general, I'm not a big government kind of guy, either, but in this case I do think I could get behind what I see as the only real solution to the 'California conundrum.' I propose that the Army Corps of Engineers dig a large moat around California, and fill it with radioactive waste. And pirannhas. And maybe land-mine the western half of Nevada.<br />
<br />
Because, you see, the problem with California as it seems to me is that there is just not enough commitment to its ideals. People embrace these kinds of innovative ideas, but then as soon as things start getting exciting, and the results of all these great plans start coming to fruition, they get all weak-kneed and want to bail out. How can anybody really accomplish anything great if he loses his nerve just when things start to get a little sketchy? No -- California and her people need to ride this train clear to the station, and I and I believe other Texans, and probably people from many other states, are fully committed to helping motivate Californians and steel their jittery nerves at this time of indecision to see things through to the end.<br />
<br />
But coming to Texas is just a stupid idea. What, really, does Texas have to offer? It won't accomplish anything. You won't like it here, and we won't like you being here. <br />
<br />
Seriously, don't come.<br />
<br />
<br />
<br />
Truly and Sincerely Yours,<br />
<br />
Texas<br />
<br />
P.S. OK, you're right. The real reason I don't want you here is that I'm not so keen on the idea of bringing into my state a whole bunch of people who have managed to utterly ruin what otherwise sounds like a really wonderful place. Texas isn't perfect, it has its own problems certainly, even some major ones, but one thing we sure don't need is a massive influx of foolishness.<br />
<br />
And we don't really need your money, either. Have you considered Florida? Or maybe Virginia or New Hampshire? They sound pretty nice.<br />
<script type="text/javascript">var gaJsHost = (("https:" == document.location.protocol) ? "https://ssl." : "http://www."); document.write(unescape("%3Cscript src='" + gaJsHost + "google-analytics.com/ga.js' type='text/javascript'%3E%3C/script%3E"));</script><script type="text/javascript">try {var pageTracker = _gat._getTracker("UA-6540825-1"); pageTracker._trackPageview(); } catch(err) {}</script>Scotthttp://www.blogger.com/profile/12915297057336831151noreply@blogger.com2tag:blogger.com,1999:blog-8980874911927460995.post-91695963656686159012013-02-02T15:31:00.000-08:002013-02-02T15:31:24.737-08:00Tex-Mex Egg Salad<div class="separator" style="clear: both; text-align: center;">
<a href="http://4.bp.blogspot.com/-IzzR0mEuYD0/UQ2edwjFu5I/AAAAAAAAACo/U06u80r0Fq4/s1600/0202131342.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="320" src="http://4.bp.blogspot.com/-IzzR0mEuYD0/UQ2edwjFu5I/AAAAAAAAACo/U06u80r0Fq4/s320/0202131342.jpg" width="240" /></a></div>
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I made a different version of my standard egg salad today and since I'm such a creative, inspired person I decided to call it Tex-Mex Egg Salad. I threw in some random stuff that I happened to have around, namely:</div>
<div class="separator" style="clear: both; text-align: center;">
</div>
<ul>
<li style="text-align: left;">Hard-cooked eggs</li>
<li style="text-align: left;">Mayo</li>
<li style="text-align: left;">Lime juice</li>
<li style="text-align: left;">Fresh cilantro</li>
<li style="text-align: left;">Dried oregano</li>
<li style="text-align: left;">Cumin</li>
<li style="text-align: left;">Queso blanco.</li>
</ul>
<div style="text-align: left;">
I was pleasantly surprised at how well it turned out, so I snapped a pic with my phone and decided to share. </div>
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<br /></div>
<div style="text-align: left;">
You're welcome.</div>
<br />
<script type="text/javascript">var gaJsHost = (("https:" == document.location.protocol) ? "https://ssl." : "http://www."); document.write(unescape("%3Cscript src='" + gaJsHost + "google-analytics.com/ga.js' type='text/javascript'%3E%3C/script%3E"));</script><script type="text/javascript">try {var pageTracker = _gat._getTracker("UA-6540825-1"); pageTracker._trackPageview(); } catch(err) {}</script>Beccahttp://www.blogger.com/profile/01221171860274027203noreply@blogger.com0tag:blogger.com,1999:blog-8980874911927460995.post-59596813033877106342013-01-08T07:11:00.001-08:002013-01-08T07:11:18.954-08:00Towards a Rational Gun Policy<br />
Gene Callahan <a href="http://gene-callahan.blogspot.com/2012/12/gun-control-foolishness.html" target="_blank">has suggested</a> (as <a href="http://bastionofliberty.blogspot.com/2012/12/organized-rationality-pokes-its-head.html" target="_blank">has Fran</a>) that any debate over proper gun policy would best be done rationally and without reference to emotional arguments. I concur, and though I am very much pro-gun, I would even extend it (as Gene suggests) to attempting a non-ideological argument to determine more exactly what a 'realistically ideal' policy would look like.<br />
<br />
What do I mean by non-ideological and 'realistically ideal'? What I meant in the last several posts -- resisting the impulse to assert an abstraction of reality as reality itself, or to construct a set of rules which flow from a direct translation of the abstract even when it flies in the face of reality. By this, I certainly do not mean thinking as a political moderate, especially as I see the facts of the matter very much in favor of something close to present policies, though perhaps somewhat more lax.<br />
<b><br /></b>
<b>WWPD?</b><br />
<br />
To begin, I turn to a suggestion by Plato, which I think is eminently helpful, as would anyone who had spent a substantial amount of time wading through arguments attempting to divine (or <i>obscure</i>...) the 'original intent' of law.<br />
<br />
Plato thought that an ideal law should consist of two parts -- a clear statement of the purpose of the law, followed by the concrete legal stricture itself. This structure makes very clear the intent and purpose of the law, so that any later reading and interpretation would be greatly facilitated and much less controversial, as would determining whether or not the law had been a plain failure in securing its purpose and needed to be altered or abolished.<br />
<br />
Oh, had only the Framers followed this advice!<br />
<br />
<a name='more'></a><br /><br />
The Second Amendment itself contains very little language to directly state its purpose outside of the phrase 'being necessary to the security of a free state.' I do think the intent is pretty clear on the basis of external writings, but the vagueness of the document itself has of course invited in all sorts of ludicrous interpretations. Further, the tendency of the Framers to 'concretize the abstract' ideas of the Enlightenment into law, instead of stating their aims in the abstract and securing these aims in the concrete, rather invites claims of a need for 'reasonable interpretations' as being practically necessary. Things would have been much more clear if they had followed Plato's advice.<br />
<br />
Undaunted, however, I plow ahead to look into the purpose of the 'right to keep and bear arms.'<br />
<br />
<b>On the Purpose of the Second Amendment</b><br />
<br />
I will begin to argue for what I think is the purpose of the Second Amendment by making an observation on the rather curious usage of the word 'right.'<br />
<br />
If you ask a conservative if he has a 'right to keep and bear arms,' he will almost certainly answer something along the lines of 'yes, absolutely.' But if you ask him if he has the right to something from a different sphere, say, the right to eat, or the right to decent food, he will most likely get a bit surly, and start talking about the logic of welfare or 'a chicken in every pot' or some other similar argument that anyone who has ever followed politics even a little bit has almost certainly heard before.<br />
<br />
Why is it that he thinks the second right implies that the government must supply the food, but not that the first implies that the government must supply the arms? Obviously, two different conceptions of the nature of rights is in operation.<br />
<br />
What he meant by the first right -- the right to keep and bear arms -- was that the government ought not to have the legal power to interfere with this practice. If the same were meant in the second case -- that the government ought not to have the legal power to interfere with eating or with the procurement of 'decent food,' whatever that means -- I don't think he would have any problem with it, though he might think it a rather strange law.<br />
<br />
In fact, I'm pretty sure that anyone might find the second law a bit strange. Why? Because it would probably not strike anyone that such a thing needed to be written, as no one would reasonably suspect a government of such designs that a populace would need protection from it. Maybe such incredulity has proven naïve, but anyway, there it is.<br />
<br />
Plainly, this is the interpretation to be given to the right to keep and bear arms. Nobody would reasonably argue that it meant for the government to supply weapons to those without access to them, the other common (if usually incorrect) interpretation of the word 'right.' But on the other hand, to interpret it in this way plainly means that the intent was to protect the populace from attempts by the government to limit access to weapons. <br />
<br />
However, this does not yet, I think, quite answer the question as to the purpose of the law. For if the Framers did indeed intend to protect the populace from this situation, they clearly feared designs of government to disarm the populace, <i>and therefore viewed the prospect of a disarmed citizenry as a dangerous, or at least undesirable, situation</i>. Otherwise, they would not have sought a level of legal protection on a par with freedom of speech, religion, and the other freedoms guaranteed in the Bill of Rights.<br />
<br />
Now we're making some progress. The Framers clearly intended for the Second Amendment to ensure that United States would have an armed populace. As it seems to me, this general state of affairs was seen by them to be desirable for three purposes which I will shortly enumerate. However, let me first deal with a few objections. It may be objected that, while this was the original intent of the law, it is no longer necessary or desirable that it should be interpreted in such a way, or that the law should be changed to fit a changing situation. Fine, I disagree, and I shall argue against this position. I suspect such a disagreement will simply have to stand, as the people on either side are not usually amenable to persuasion.<br />
<br />
However, what I will not brook is the suggestion that this was not the original intent of the law, that somehow there has been this great confusion over the last two-hundred plus years, that the Founders never really intended people to have guns and that they would have been perfectly fine with however legislators saw fit to regulate them. I don't care what creative interpretation is used to justify this position -- that they meant some sort of collective right, that they intended this right only in connection with the militia -- it is unworthy of serious consideration, and either the honesty or the intelligence of the person holding it is suspect, to say the least. This idea totally flies in the face of any reasonable understanding of the times and common sense. We are talking about 1) colonists, who 2) lived alongside and often fought with Indians 3) in what was generally considered a wilderness, 4) that had just fought and won a guerrilla war against Great Britain, mostly as voluntary militia. To suggest that such people would have been even slightly sympathetic to gun control is positively insane.<br />
<br />
Now, to enumerate the three main purposes, as I see them, of this piece of legislation --<br />
<blockquote class="tr_bq">
<ul>
<li>That the right and ability of people in general to 'pursue happiness' in the manner they see fit, independent of the opinion of others, ought to be given the greatest consideration practically possible by the law. This is consistent with the general tenor of the Declaration of Independence, the Constitution, and the Bill of Rights, though as I'll argue, this probably does not secure as much 'firepower' as the other two purposes. I would say that this applies to hobby and recreational type shooting, and that such use of arms was probably intended to be preserved by this law.</li>
<li>That the right of people to defend themselves from depredation and abuses by others ought to be preserved and protected under law, again, to the greatest degree possible consistent within a functional, peaceable society. This would protect defensive weapons such as handguns and other weapons independent of their utility for hunting and recreation.</li>
<li>That the capacity of the citizenry to credibly resist government intrusion and encroachment -- especially illegitimate encroachment using means outside of legal sanction and without due process, as with political corruption, coups, revolutions, and other such actions which do not have public sanction -- is absolutely critical to minimizing the probability of such events actually taking place. Basically, guns are the best security against tyranny. The capacity of the people to resist oppression is the last line of defense against oppression. Of all the purposes of the Second Amendment, this is probably most clearly central to its intent, especially given the background of the people who wrote it, and yet it will be the most controversial.</li>
</ul>
</blockquote>
<br />
It is this final purpose which I think most directly indicates that this legal protection was intended to secure the right to weapons such as assault rifles. Far from being 'controversial,' these types of weapons are the <i>most</i> deserving of legal protection, as they are the weapons which present the most credible threat to any attempt at armed suppression of the population. They are absolutely central to the purpose of the Second Amendment.<br />
<br />
Now, before the gun control sympathizers go completely crazy with me, let me just say that yes, there are considerations to weigh against these assertions. I am actually committed to the non-ideological analysis of the question, and am not going to do something like attempt to use the first purpose as a <i>carte blanche</i> legalization of absolutely everything. In general, I think the law was meant to secure for citizens the right to arms as widely as practically possible, and that any attempt to restrict this right must not run directly afoul of these three purposes. But there are very real factors which I think do necessitate some limitation.<br />
<br />
They just probably aren't the factors you might think.<br />
<br />
<b>Factors Weighing Against an Absolute Right to All Weaponry</b><br />
<br />
To interpret the Second Amendment as an Absolute Right to All Weaponry is to interpret it ideologically. Actually, though, that is probably not totally inconsistent with its original intent. Washington and Jefferson lived in a day when the very best weapons were available to practically everyone; governments did not control a stash of extra-special instruments of death and in general, the Founders probably would not have imagined something like a nuclear warhead was even possible. So, even the most extreme interpretation would probably not have sounded outrageous to them.<br />
<br />
But I do think that, basically, certain aspects of material reality necessitate some limitations on what would othewise be an absolute right, the main one being the fact that the Second Amendment is embedded in the framework of a state. Like it or not, for better or worse, the system of soverign political authority in the US is presently a state, and that comes with consequences.<br />
<br />
A state is generally taken to have more or less absolute authority over a number of functions, and one of those is the waging of war. Even for people who don't much like the state, this is an important function that the state simply cannot tolerate other powers under its authority to engage in. A state in which private persons are free to engage in foreign invasions and campaigns against one another is not much of a state, as it apparently has no sovereign authority. One may disagree with the present wars which the US is engaged in, but nevertheless, the issue of state tolerance or sponsorship within its borders of violent activities against other powers must be taken seriously, and necessarily call into question the legitimacy of such a sovereign power. Who is to be held accountable for such a state of affairs when these kinds of events come to pass, if not the state?<br />
<br />
The state therefore has an obligation to maintain a semblence of order within its territory, lest it no longer is sovereign and no longer a state. Really, this goes for any authority of any kind. An authority which has lost the ability to maintain order within its given, legitimate sphere of jurisdiction is a failed authority, whether one is talking about a parent, a pastor, a school board, or an emperor.<br />
<br />
Given that we live under a state, then, the state is obliged to take measures necessary to ensure that civil order -- and by extension, its own authority -- is upheld. The test, then, of the necessity of any particular 'necessary' measure which might infringe on certain rights and the purposes of law would appear to be the the degree to which not taking the measure would cause a descent into chaos -- or, I suppose looked at in another way, the degree to which pursuing one purpose would cause another vital purpose to fail. As has been famously said, 'The Constitution is not a suicide pact.' That would defeat the purpose of law.<br />
<br />
Many aspects of this question, then, would boil down to the character of the people. Can they handle living with firearms in their midst, or would liberality (taken in the old sense of the word) in these matters result in the dissolution of society? To the degree that human character is allowed to decay, I find it difficult to see how one would expect the legal regime to continue on as if it had not -- that law written for people of one nature would function <i>or even continue to exist</i> when said people manifestly possess some other nature. As the decay progresses, what the legal policy of the state 'should be' becomes rather immaterial; it will be what it will be. People who can't behave themselves with guns usually have states that won't allow them. And vice versa. There isn't a lot of choice about it.<br />
<br />
But I suppose that this whole discussion was always a bit of an exercise in futility. Still, I will slog on.<br />
<br />
Absent some comprehensive and highly accurate theory on the exact nature of human nature, I doubt the question of exactly where the line ought to be drawn (such that both liberty and civil society are both maximally preserved) may be settled by a purely theoretical inquiry. This would be the point where statistics would usefully enter the argument, and I would grow bored while the frothing-mouthed, hairsplitting ideologues would begin trembling with anticipation and glee.<br />
<br />
I'll have no part of bringing joy to such people, so I'll skip that part and move on to the question of how far the regulatory incursion might be allowed to come before one has truly violated the purposes of existing law in an intolerable way. But what one has here is basically an intersection of two abstract systems and one concrete reality -- the rights of free people and the obligations of the state, plus the concrete reality of the actual, non-idealized situation. For the ideologue, this intersection becomes a insoluble collision. If taken in the absolute, these two abstractions cannot coexist with the real-world. For the non-ideologue, it becomes a puzzle, the balancing act necessary between the two idealized abstractions necessary to make them work with the concrete reality of the situation.<br />
<br />
Now, to define the limits of the balancing act.<br />
<br />
<b>Thus Far and No Further</b><br />
<br />
What kinds of weapons might be banned or restricted to such a point that the three purposes I have enumerated experience violation of their substance? At what point have they been substantially compromised?<br />
<br />
Firstly, I think most of the kinds of availability restrictions that one sees so commonly proposed (and inflicted) are ineffectual and a waste of time and resources. So long as the market is in operation, and human beings are allowed any degree of privacy and latitude in their commerce with one another, whatever items are available to a substantial fraction of the populace will ultimately be available to all with very little to do about it. <br />
<br />
There isn't much point in disallowing some to own what others are allowed -- real enforcement of the law would require intolerably draconian and intrusive measures. The recent incidents in Connecticut and <a href="http://www.cnn.com/2012/12/28/justice/new-york-arrest-firefighter-ambush/index.html" target="_blank">the firefighter attack</a> are prime examples. Disallowing psychotics and felons to own weapons would have made little or no material difference in availability in either case, while the record-keeping and other such means necessary for the restrictive mechanism do pose a very real threat to the legitimate owners, as evidenced by the recent publication of the names and addresses of New York gun owners. There is almost nothing to recommend such forms of regulation; they are simply not effective and pose dangers in their own right. At the least, they should be kept to a minimum, and quickly discarded if (or more likely, <i>when</i>) they prove ineffective.<br />
<br />
The only really effective form of such restriction is to allow the targeted items only to a very small, tightly regulated fraction of the population. This is presently the case with fully automatic weapons, and it does seem to be effective. It is very rare to observe such weapons for sale at, for example, a gun show. But on the other hand, this type of policy more than smacks of elitism, and is highly inappropriate, in my opinion, in a system committed to equality before the law. So, I think it also should not really be entertained as a legitimate gun control option.<br />
<br />
What is more effective is outright banning, much as I might dislike that fact. An item which is not available or only in very limited quantity really does become hard to come by. The usual kinds of social detritus that do things like attack innocent people are much less likely to summon the faculty to procure such items. Witness the very few (if any) nuclear warheads, F-15's and M1 Abrams that have ever landed in private hands. That kind of regulation really is effective. To get one of these kinds of things would require a Herculean feat either of corruption or industry.<br />
<br />
So, what kinds of weapons would be fair game, however reluctantly one might be to accept it, in the state's effort to preserve civil order, if it proved absolutely necessary? <br />
<br />
Well, clearly with respect to the first two enumerated purposes, the violation would have to effectively be either total or non-existent, as there is very little material difference between one sporting rifle and another, or between one handgun and another. There would be almost no point or effect in banning any one or two or ten in particular without banning them all. So I would put these totally off limits, unless it were actually desired to have a society totally free of guns and to totally be rid of the right to keep and bear arms. Which, again, I think is a really, really stupid idea, but if that is one's belief, it is one's belief. Just let there be no confusion that such a person is a tyrant, and in my opinion, an intolerable individual, given the real circumstances.<br />
<br />
The question, then, really only concerns military style weapons, and as I have said, this is a delicate issue, as it concerns the central purpose of the law.<br />
<br />
I think the key lies in the notion of <i>credible resistance</i>. The widespread possession of these weapons must pose a credible threat to civil authorities in the attempted imposition of its will without public sanction, i.e. oppression of the populace. Which means that these weapons need to be of sufficient capability to cause a general to think twice about attempting such a thing.<br />
<br />
Now, this clearly does not require tanks, aircraft carriers and warplanes. Resistance is not the same as wielding invasive force. These are offensive weapons of mass warfare, appropriate to conflicts between states, and totally unnecessary to resist the militaries of even the most powerful states in the world. Witness the effectiveness of Al Qaeda. In fact, for a rebellious group to attempt to engage an established state with such weapons, as equal against equal, would almost certainly prove a horrendous failure, no matter the size of such a group. Witness the fate of the South in the Civil War. <br />
<br />
The state claims the sole right to wage outright warfare, rightfully so if it is in fact to be a state, so I would say that regulation of such things is fair game <i>if shown by the facts to be necessary,</i> especially as it bears upon the issue of preventing one's own citizens from launching attacks against foreign states. But again, the legitimacy of such a prohibition flows directly from the existence of the state. In a stateless organization, such as some kind of feudal or clan structure, obviously things might be different, as these bodies would need the means to defend themselves from groups with similar capabilities.<br />
<br />
Low-level guerrilla warfare is the only realistic option for resisting a state militarily. History has shown this repeatedly. Of course, civil disobedience and free expression are better, so long as they are effective, but here we are assuming that things will have come to blows. Therefore, coming from the other direction, in order for the law to serve its purpose it would seem that access to such weapons would need to be preserved <i>whatever the circumstance, so long as the state remains the sovereign power and the central purpose of this law is to remain intact</i>.<br />
<br />
What kinds of weapons does this entail? Small arms such as assault rifles, clearly, form the core component of such a resistance. Probably also, at least to a degree, explosives, though not necessarily whole grenades, mines and other such readily-deployed weaponry, and other low-level equipment -- night-vision, laser sights, body armor, etc. Beyond this, at least for me, the line blurs; I am not exactly a military tactician, and that is the question that must be answered, the answer depending of course on the capabilities of the force to be opposed. Perhaps it is incapable of being answered perfectly clearly. I certainly lack the details.<br />
<br />
At any rate, here the line lies, in this general vicinity. Any further, and the purpose of the law is defeated. Obviously, it would be better for the citizenry to enjoy an absolute right, with no limitation whatsoever. But in the interests of securing its obligations in the real-world, a state might encroach up to this point within reason.<br />
<br />
Pushed beyond this by circumstance, and perhaps the state really ought to dissolve itself, as its citizens would appear incapable of reasonably sustaining such an order without the potential for horrific consequences. When a state begins dismantling prudent checks against its own power, either of its own accord, in an attempt to maintain adequate order, or because a sizable portion of its citizenry has deemed it expedient or proper to do so, it has entered territory which I think history has quite clearly shown is dangerous. Witness almost every attempt at modern statecraft outside the West, and more than a few episodes within the West's own history.<br />
<br />
Absent a state, people could seek out some other order for themselves, perhaps as smaller, more cohesive states or other governments.<br />
<br />
<div style="text-align: center;">
***</div>
<br />
While I am on the subject of assault rifles, I thought I might contribute some small bit of thought to a discussion which appears to have gone totally amuck.<br />
<br />
The first fact to correct is that the Connecticut shooter <a href="http://digitaljournal.com/article/340113" target="_blank">did not, in fact, use an AR-15,</a> as was widely claimed. If he did use an assault rifle, it would appear to have been one of the hundreds of lower-grade weapons. The Colorado shooter earlier this year did use an AR-15, however, as did the shooter who attacked the firemen.<br />
<br />
In making sense of the world of assault rifles, several categorizations would probably help the lay-person to think a little bit more clearly about the matter.<br />
<br />
The first would concern what exactly is an assault rifle, and what is not. I would say that a firearm must satisfy a number of conditions to qualify. First, it must be a long-arm, and it must use full-sized ammunition suitable to a rifled long-arm. This would exclude shotguns, and also submachine guns, which use handgun ammunition and I think deserve their own category. Submachine guns have a different intended tactical purpose and considerably different capabilities, especially concerning range and knock-down power. For those who are unfamiliar with what a submachine gun is, perhaps an analogy would explain it most succintly -- long-arm rifle:handgun::machine gun:sub-machine gun. A submachine gun is a bit bigger than a typical handgun, but not a great deal bigger, and has a similar range.<br />
<br />
An assault rifle must also be at least semi-automatic, which means that it automatically reloads after being fired. Fully automatic means that it also automatically fires again, so long as the trigger is pulled -- i.e., it is a full-blown 'machine gun.' A semi-automatic weapon can be fired as fast as the trigger is pulled, a fully automatic weapon fires as fast as its mechanism can operate. Finally, to qualify as an assault rifle, it must accept a detachable magazine capable of holding several rounds, usually ten or more. Anything with these four characteristics might reasonable be called an 'assault rifle', though perhaps not all such weapons might actually be called so in general practice.<br />
<br />
Within the category of assault rifles, there are several useful distinctions that might be made to think more clearly about this large and varied class of weapons. The first might be what presently is legally allowed to the citizenry vs. the military. At present, even though the guns may look almost exactly the same, civilians are <i>not</i> allowed to possess automatic weapons. The AR-15s widely available for purchase by civilians are not capable of fully automatic fire, while the military versions are. As I said before, fully automatic weapons require a special, tightly regulated license which is difficult to come by and possessed by vanishingly few people.<br />
<br />
Another useful distinction would be between the types of ammunition these guns use. While there are many varieties, four dominate the market, and these four can be categorized usefully into two pairs. The first pair are sort of 'standard issue' -- the .223 (used by the AR-15) and .308. The second pair are used by NATO -- the 5.56mm and 7.62mm. Probably 90% or more of assault rifles use one of these four shells.<br />
<br />
In fact, some use more than one. The .223 and 5.56 rounds are so similar that many weapons can use both. Likewise, 7.62 and .308 are also very similar, to the point of being nearly identical. So, what you really have is two basic types of weapon in two different systems of ammunition. This distinction is useful, I think, to get a handle on the design and purpose of these weapons, which I think reveals some important truths, some of which are a bit uncomfortable.<br />
<br />
After the muzzleloader was exchanged for the 'repeating rifle,' designers of small arms for warfare rather quickly settled on the .30 caliber range. The .30 caliber established itself as the optimum man-killing caliber -- large enough to kill efficiently, not so large that it poses an unnecessary expense or burden for troops carrying a supply of them. The modern .308 and 7.62 caliber weapons carry on this tradition. Much larger than this, and the rounds become expensive and burdensome without being significantly more lethal; smaller than this and their lethality begins to drop off.<br />
<br />
But these are not the weapons being implicated in these shootings. Rather, it is the smaller caliber .223. Apparently even more strangely, these are no longer the calibers favored by our own military -- again, that distinction belongs to the .223. What is going on here?<br />
<br />
The key is in recognizing that, first and foremost, the AR-15 was designed <i>as a weapon of war</i>, not as a defensive weapon or for target shooting or any other purpose. But seemingly paradoxically, <i>it is not actually designed for maximum killing efficiency.</i> That may seem a rather strange claim, but it is easily born out by the facts.<br />
<br />
Probably the easiest demonstration rests in a simple definition. In warfare, casualties are given as the number killed <i>plus the number wounded</i>. The AR-15 was designed to maximize casualties, not kills. As a weapon of war, its purpose is to subdue enemy infantry, as part of the ultimate goal of commanding the field of battle. To this way of thinking, whether or not any particular broken and torn heap of flesh allied with the enemy happens to be alive or dead is immaterial. The point is that it isn't fighting back. <br />
<br />
The AR-15 can certainly be used to kill, but that isn't its primary purpose. It is not optimized for lethality; if anything, it is more optimized for maiming. This is reflected in the relatively few deaths in the Colorado shooting -- 12 dead out of some 70 hit. If the shooter had used a truly deadlier weapon -- like an AK-47, or an M1A, which use 7.62/.308 ammunition -- there probably would have been a considerably higher number of fatalities. As well, our own military is perfectly aware of this, and for some special forces missions -- where deadliness counts over casualties -- the weapon of choice is often the larger caliber weapons.<br />
<br />
But any hunter could have told you that. A hunter that went after deer with a .223 would not be held in very high regard. He would be considered rather cruel and inhumane for using such a small caliber. I suppose what's good enough to use against people doesn't cut it when it comes to animals. But needless to say, all the comments one hears in the news about 'these people' having access to 'high power, heavy military ammunition' is pure stupidity. The .223 round is one of the smallest and weakest rounds in use that isn't explicitly designed for a handgun. Almost any deer rifle is far more powerful.<br />
<br />
The adoption of the AR-15 as the primary weapon of US infantry (going by the military designation M16) occurred during the Vietnam War as a result of a change of thinking. It replaced the M14 (now known as the M1A) which, as I said before, fires the more traditional .30 caliber round. Because of this, the M14 is sometimes called 'the last battle rifle,' as it was the last one that used full-power ammunition. The defense planners at the time thought that the M16 would be more effective, as the ammunition was far cheaper and lighter, and would allow soldiers to carry and use far more ammunition. It also has less recoil, making the weapon easier to operate.<br />
<br />
These qualities all helped to optimize the process of inflicting wanton destruction, as opposed to the more 'gentlemanly' forms of engagement in which one actually expected to kill the people he shot at rather than simply maiming them into relatively inert hunks of meat and letting mother nature take care of the details, in keeping with the general decline in standards of conduct in war over the course of the 20th century. They also helped to make assault rifles of this caliber extremely popular with hobby shooters. They are just more fun to handle and much cheaper to shoot, and as a result have tended to proliferate.<br />
<br />
Truth be told, they are not nearly as deadly as other weapons that might have been chosen. And if they are banned out of hand without banning the far more powerful weapons available, in all likelihood future shootings could actually prove more deadly.<br />
<br />
But if these weapons are actually rather weak and not particularly effective at killing lots of people, which, ostensibly, would seem to be the goal of these types of shooters, why on earth would anyone choose such a weapon?<br />
<br />
First of all, they are likely morons who don't know any of this and have little experience with guns. The Colorado shooter in particular would probably have killed far more people with a plain-Jane shotgun than he did with his assault rifle. But if he really wanted to use the type of weapon that he did, there are a number of much cheaper varieties with almost exactly the same performance as the AR-15. In particular, the <a href="http://en.wikipedia.org/wiki/Mini-14" target="_blank">mini-14</a> is far more widely available at about half the price. <br />
<br />
But there is probably a more important reason that is easily demonstrated by looking at a few pictures. The mini-14 and <a href="http://en.wikipedia.org/wiki/M1a" target="_blank">M1A</a> look more or less similar, and are not particularly noteworthy. If you didn't already know what to look for, you probably would not think they were anything special, just ordinary 'deer rifles.' The <a href="http://en.wikipedia.org/wiki/AK-47" target="_blank">AK-47</a> -- another popular and widely available assault rifle that would have been a deadlier choice -- is a bit flashier, but also not especially noteworthy.<br />
<br />
The <a href="http://en.wikipedia.org/wiki/AR-15" target="_blank">AR-15</a>, on the other hand, boasts a much more unconventional design. It just looks like what you would expect of an assault rifle. No doubt the 'cool factor' contributes to the reputation of this weapon and the desire to ban it. I suspect that the shooter in Colorado was not primarily interested in killing people so much as doing what he did as some kind of sick form of 'expression.' Hence the crazy hair and the choice of a flashy, yet low-firepower weapon.<br />
<br />
Stupid.<br />
<br />
<div style="text-align: center;">
***</div>
<br />
One last aspect of this situation simply can't be passed over without mention. The central issue here isn't really guns or gun control. The gun issue is only one facet of a much larger conflict that is really at the center of what divides America these days. That issue is <i>lifestyle</i>.<br />
<br />
The reason that gun control comes up is that guns simply don't fit into the lifestyle of a certain relatively large portion of the population. They believe that widespread ownership of firearms threatens the way of life which they would prefer, even if they don't necessarily have a problem with other people enjoying the use of firearms in-and-of-itself. And in truth, they are right.<br />
<br />
Note that almost nary a soul has suggested that the problem of school shootings isn't the guns but the schools. It is simply unthinkable that schools should change in any substantial way. A great number of factors go into events such as these, yet rarely do the other factors get mentioned. They are too central to the lives of the majority of the population; to make any significant changes that might address them is unthinkable because it is inconceivable that life could be lived any other way. Some -- most -- people simply deal with the situation. <i>C'est la vie</i>. So it is. <br />
<br />
But the vocal fraction feels that it shouldn't have to. It does not want this responsibility, and it does not care why such things happen, so long as they don't in the future and their chosen lifestyle is unaffected. It wants responsibility to be in someone else's hands -- preferably someone competent and effective. In other words, it wants to employ the division of labor -- in this case, government -- to keep itself safe, and doesn't mind giving up an entire realm of life and experience in order to achieve this -- a potentially rewarding and enjoyable realm, if not for themselves, certainly for others.<br />
<br />
It wants specialization. But more than that, it wants hyper-specialization. <br />
<br />
In general, gun control advocates are found among the more urban, liberal, and 'sophisticated' than the remainder of the population. While they are often known for wanting to 'broaden their horizons' through experiences, say, of other cultures and such (which is all well and good), nevertheless it seems to me that one of the hallmarks of this way of thinking is its enthusiasm for <i>narrowing</i> existence and cutting out experience in other realms which are not so appealing.<br />
<br />
Hence the enthusiasm for government subsidy of things like childcare and schooling. Nobody wants to change diapers or deal with obnoxious toddlers and teenagers, but raising children, including the annoying parts, is a big part of the experience of life -- and of maturing and growing as a person. Ostensibly, the purpose of these types of 'programs' is to broaden experience, by allowing women to have a career, for example. But really -- how does that compare with raising your kids, especially in terms of importance, even if you believed this kind of thing? The imperative of having a two income family is used to justify what in other times would appear a rather intrusive and disjointed life-arrangement.<br />
<br />
More disturbingly, <a href="http://thelastpsychiatrist.com/2011/09/how_to_be_mean_to_your_kids.html" target="_blank">the case could be made</a> that the same is true of the regulatory, welfare, and criminal justice system. There are certain individuals who seem to simply have no useful place in our system, especially as relates to the competitive economy intersecting with this type of sensibility. In regulating the poor out of the experience of poverty, many of them get regulated clean out of a job. With the added costs, they simply aren't worth hiring, such as they are. And of course, 'how they are' is often a product of... well, never mind.<br />
<br />
Rather than 'deal with them,' we choose to pay them to stay out of everyone else's way -- i.e., welfare. Or we incarcerate them when they choose lifestyles we'd rather not see lived out in public, warehousing them in a nice and orderly fashion, similar to the way we do our children. While expensive, the upshot of this arrangement to all involved is obvious -- it obviates anyone from the necessity of personal growth, which can be a tiresome and uncomfortable process.<br />
<br />
Just how is it that government so consistently and reliably winds up dealing with trash, criminals, indolents, and children? Because it becomes a sort of catch-all for dealing with things most people would rather not deal with or spend too much time and effort thinking about or worrying over -- so they can spend more time on what they supposedly enjoy. Witness the push for 'universal healthcare' and other such arrangements across the West. Who wants to think about that stuff, when you can just...not? Why not just pay for it all with taxes and let somebody else deal with it? Then the rest can be like an allowance, for the fun stuff!<br />
<br />
In the process, <a href="http://gene-callahan.blogspot.com/2013/01/the-dangers-and-limits-of-division-of.html" target="_blank">people become stunted and infantilized,</a> their experience and existence as people ever more narrow and slanted. But maybe they like this existence. Perhaps pawning off yet another unpleasant bit of reality like the existence of guns onto the shoulders of government seems to be the way to go.<br />
<br />
Well, it isn't, and as I've discussed, eventually this sort of process will come to a screeching and unpleasant halt.<br />
<br />
<script type="text/javascript">var gaJsHost = (("https:" == document.location.protocol) ? "https://ssl." : "http://www."); document.write(unescape("%3Cscript src='" + gaJsHost + "google-analytics.com/ga.js' type='text/javascript'%3E%3C/script%3E"));</script><script type="text/javascript">try {var pageTracker = _gat._getTracker("UA-6540825-1"); pageTracker._trackPageview(); } catch(err) {}</script>Scotthttp://www.blogger.com/profile/12915297057336831151noreply@blogger.com0tag:blogger.com,1999:blog-8980874911927460995.post-7976406213213881502012-12-10T21:50:00.000-08:002012-12-10T21:51:25.131-08:00Technologies That Will Change EverythingEvery now and then, a technology comes along and changes things so radically that it disrupts whole economic structures and ways of life. No doubt, just about anyone can name quite a few of these off the top of his head -- the internal combustion engine, the printing press, the computer, etc.<br />
<br />
Here are three technologies which I think are on the cusp of doing just that.<br />
<br />
<a name='more'></a><br /><br />
<b>3D Printing</b><br />
<br />
This technology will revolutionize manufacturing. Using a CAD program and one of these devices, practically any three-dimensional structure can be produced out of a plastic resin --<br />
<br />
<iframe allowfullscreen="allowfullscreen" frameborder="0" height="315" src="http://www.youtube.com/embed/8aghzpO_UZE" width="560"></iframe><br />
<br />
Other materials are also in the works. Right now this technology is still rather expensive, so it mostly only finds limited use in the production of relatively high-value, custom parts (dental implants, prototype parts, etc.) But the cost is rapidly falling, and already <a href="http://www.youtube.com/watch?v=AQ6Q3BfbVBU">low-end consumer models</a> are available, some of which are being used <a href="http://www.youtube.com/watch?v=AQ6Q3BfbVBU">for purposes</a> that the finger-waggers might not like.<br />
<br />
Talk about decentralization. Oh, and goodbye cheap plastic Chinese crap. Whole economies are going to need new economic models.<br />
<br />
<b>A Breakthrough Treatment for Leukemia</b><br />
<br />
About five years ago, I was talking to a chemistry professor after a seminar, and I told him that I thought that 'the' cure for cancer would come from a combined approach using genetics and immunology. I thought that once immunology had reached a certain point, it would become possible to genetically modify immune systems to better recognize cancers. These modified cells could be injected back into the patient (or possibly created there, for that matter), where they would seek out and destroy the cancer which they had been 'trained' to find.<br />
<br />
This was not going much out on a limb -- the human immune system already has the capacity to destroy cancers <i>that it can recognize</i>; in fact it does so on a regular basis. This is one reason that AIDS sufferers and other immune compromised people so regularly contract cancers that almost nobody else ever gets. Normally, the immune system destroys these cancers, but if you don't have an immune system, well, tough luck for you.<br />
<br />
Anyway, several researchers appear to have used just this approach against a type of leukemia, with amazing success. Again, I will not go much out on a limb, and call <a href="http://www.uphs.upenn.edu/news/News_Releases/2011/08/t-cells/" target="_blank">this 'the' cure for cancer. </a><br />
<br />
(Sorry, could not embed the video, as it was somehow ruining my html...)<br />
<br />
The really, really nice thing about this approach...well, there are too many really nice things about it. They appear to have solved a number of problems that have plagued this type of approach in the past. <br />
<ul>
<li>First, though they don't tout this so much, is that the approach is modular. They identified an antigenic marker for the targeted cells, and then 'trained' T-cells to identify and destroy cells with this marker by genetically modifying them. This is a general strategy -- you just need to identify an antigen on the cells you would like to destroy. If you can find the antigen, you've got a more or less packaged approach for producing an overwhelming immune response against it. Most likely there will be complications in every particular case to overcome, yes, but it is still remarkably general.</li>
<li>They found a way to use a virus for 'gene therapy' (i.e., human genetic engineering) without using the virus directly on a human. This has been a big obstacle for gene therapy. Viruses are immensely useful genetic tools, but you've got to be very careful about engineering them and using them on people. After all, a number of cancers and lots of really nasty diseases are known to be caused by viruses. By using the virus on human tissue outside of the body, the tissue can be 'checked' before it is used, to confirm that there haven't been any oncogenic or other untoward side effects. Assuming, of course, that you've got a good screen for this...</li>
<li>They seem to have solved the 'oomph' problem. Many, many approaches to cancer therapy have made use of the basic strategy of 1) identifying a good antigen or other cell marker, 2) finding something to bind to the marker, then 3) attaching some really nasty poison or other toxic agent to the binding agent, so that the coupled system forms a sort of 'guided missile' to seek out and destroy the specified tissue. The problem that most of these attempts have run into is that they only partially work. They attack some of the target, but don't have quite enough 'oomph' to finish the job and eradicate the cancer, so that the patient isn't really cured. This approach seems to have done very well in this regard -- mainly because the 'guided missile' is itself alive and capable of flourishing inside the body on its own.</li>
<li>The approach is highly personalized, using the patient's own <i>living</i> tissue and a target specific to the cancer being treated. It avoids a great number of complications and difficulties in this regard, such as the general bodily malaise caused by chemotherapy, and the necessity of large doses and prolonged application of very expensive materials. One patient was given a dose of cells more appropriate to a mouse. Nevertheless, once inside his body, the cells multiplied and gave the cancer holy hell anyway.</li>
</ul>
To use this approach on other cancers will of course require a rather encyclopedic knowledge of cancer itself, in order to identify the requisite cellular markers specific to each case. But a great deal of this knowledge has already been compiled, and better tools are being developed every day to add to it. It will also require a tailoring of this approach for each type of cancer, so that a virus carrying the requisite marker will be produced for each type of cancer that the treatment is to be applied to. Nevertheless, I expect that either this technology, or one very much like it, will rather soon begin seeing widespread application as a personalized and cost effective treatment for a wide range of cancers. <b> </b> <b> </b><br />
<br />
<b>A Promising Approach for Alzheimer's</b><br />
<br />
OK, this one is a bit of a stretch. But I really needed three to round out my list, as you can't have a respectable list with only two entries, and even so, it is a pretty good one. I don't think these guys have hit upon the cure yet (for a number of reasons), nevertheless, the approach and the results are quite promising, and I wish more labs would use approaches like this --<br />
<br />
<iframe allowfullscreen="allowfullscreen" frameborder="0" height="315" src="http://www.youtube.com/embed/xz_0zujJjD0" width="560"></iframe><br />
<br />
What these guys have used is a sort of 'irrational' approach to problem solving. There are many labs using this kind of approach for all sorts of applications, mostly going under the heading of 'combinatorial.' The strategy is to throw up one's hands at trying to understand the problem and engineer a rational approach, admitting that the difficulty and complexity of the problem has defeated you, and simply start 'trying things,' usually on the basis of a 'lead.' You figure out some really cheap and effective way to produce loads and loads of 'candidate answers,' and start trying them one by one.<br />
<br />
In this case, it would be too difficult and expensive to just start injecting elderly people suffering from dementia with experimental chemical compounds. Not to mention just plain mean. So, instead, they grew 'brain cells' in little dishes, treated them with their 'candidates,' and then subjected the cells to all sorts of abuse to mimic the conditions that prevail in the brain of a person suffering from Alzheimer's. If some of the 'candidates' were able to prevent the cells from dying -- effectively protecting them from the 'abuse,' they could be investigated further in animal models.<br />
<br />
Yes, I'm vastly simplifying. Actually, you can tell from the rather awkward wording of <a href="http://www.plosone.org/article/info%3Adoi%2F10.1371%2Fjournal.pone.0027865">their paper</a> that they did a lot of improvisation and work-around, probably because their synthetic chemist appears to have had trouble making pure compounds, which is what you get our of a $40K/yr synthetic chemist. So, they actually wound up fishing out the useful compound from a complex mixture. I once had a Mongolian postdoc commend me on one of my reactions with "Ahhh! What a wonderful reaction! So many products!" Which passes for humor among such people (because, no, reactions that produce lots of different products are <i>not</i> good reactions...). Anyway, that appears to have been this guy's problem, but you get the basic idea.<br />
<br />
As it turned out, they did indeed find a compound that 'cured' rats genetically engineered to have 'rat Alzheimer's.' But there has been no follow up on this paper that I can find. So, I suspect that it has died, probably because it has been found to have side effects, likely with regards to cancer, which is something that tends to happen when you start interfering with cell death.<br />
<br />
Nevertheless, 1) it is a very promising approach, the surface of which is barely scratched in this paper, and 2) such compounds can often serve as useful 'leads' to help researchers identify other pathways involved in the disease, as well as pathways that might be used to alleviate things if the undesirable side effects can be minimized. With small molecules, it is often the case that the compound binds many different targets, most with little effect but sometimes a few will cause trouble. It is simply a problem of thermodynamics -- a small compound which binds one type of protein (or other target) is likely to bind many similar molecules, simply because it is too small to distinguish between them energetically. It only has so much surface area to work with. If the effects can be teased apart, however, more specific molecules can be designed.<br />
<br />
On the other hand, if anyone would just develop <a href="http://bastionofliberty.blogspot.com/2012/08/little-tommy.html">my suggested technology,</a> in a few generations we might not be worrying about a lot of this stuff at all...<br />
<br />
<script type="text/javascript">var gaJsHost = (("https:" == document.location.protocol) ? "https://ssl." : "http://www."); document.write(unescape("%3Cscript src='" + gaJsHost + "google-analytics.com/ga.js' type='text/javascript'%3E%3C/script%3E"));</script><script type="text/javascript">try {var pageTracker = _gat._getTracker("UA-6540825-1"); pageTracker._trackPageview(); } catch(err) {}</script> Scotthttp://www.blogger.com/profile/12915297057336831151noreply@blogger.com3tag:blogger.com,1999:blog-8980874911927460995.post-18173153074739512222012-11-29T18:49:00.000-08:002012-11-29T18:51:15.651-08:00Banking as a Rent-Seeking EnterpriseA little bit back, Gene Callahan <a href="http://gene-callahan.blogspot.com/2012/10/why-investment-banks-having-booms-and.html" target="_blank">favorably quoted</a> economist Hyman Minsky in support of the argument that the banking/finance industry benefits from market instability ... --<br />
<br />
<blockquote class="tr_bq">
<h3 class="post-title entry-title" itemprop="name" style="text-align: left;">
Why Investment Banks <i>Like</i> Having Booms and Busts
</h3>
<div class="post-header" style="text-align: left;">
</div>
<div dir="ltr" style="text-align: left;">
"In an unstable economy, speculation dominates enterprise." -- Hyman Minsky, <i>Stabilizing an Unstable Economy</i>, p. 17</div>
</blockquote>
<br />
... the veracity of which was questioned by commenter Prateek by pointing to a break-down of operating profits at Goldman-Sachs --<br />
<blockquote class="tr_bq">
Investment banks largely earn their revenues from underwriting IPOs,
helping stabilize IPO prices with a stabilizing mechanism, and
arbitrating negotiations between merging companies. These are activities
that directly channel funds to the real economy, rather than just shift
funds between financial assets. So they are very vulnerable to the
state of the real economy.<br />
<br />
The last time I checked Goldman Sach's
financial statements, I saw that their revenue breakdown was 40%
deal-making, 40% wealth management advisory, and only 20% trading in the
markets.</blockquote>
<br />
Gene stood by his assertion, but declined to elaborate -- I suspect mostly because he didn't feel like it at the moment, not because he actually couldn't. <br />
<br />
I think Prateek raises an interesting objection, though. If trading only accounts for 20% of revenue, then how much can Goldman-Sachs really be profiting from unstable markets -- which would presumably put a big dent in the sectors of their business that actually make most of their money? Since Gene declined to take on this objection directly, I thought I'd take a stab at answering it myself.<br />
<br />
<a name='more'></a><br /><br />
<div style="text-align: center;">
***</div>
<br />
In general, when someone persuaded of the Austrian take of things says something like "banks are parasitizing the economy," he will be talking about inflation, and how extending credit through expansion of the money supply allows the bank access to what is effectively 'free income.' They get to collect interest on money which they printed themselves -- nice gig if you can get it. I won't go into the details here, as you can find them a million other places.<br />
<br />
But a bank like Goldman is not really a money-issuing bank. It is an investment bank, not a commercial bank (though, as I recall, it temporarily re-designated itself a commercial bank in order to qualify for bailout money back in '08...), so it does not really profit through this mechanism. I contend that it does profit, however, from many indirect effects of this process -- for one, market instability -- and that this is mostly a matter of reaping a rent-seeking profit.<br />
<br />
Maybe the best way to see how this works is to think in terms of a similar market that is intrinsically unstable and therefore has come to incorporate a great deal of financial risk-mitigation -- agricultural commodities. Farmers generally use two main financial arrangements to mitigate risk: insurance and futures contracts. Crop insurance allows the farmer to protect himself from the vagaries of weather and other matters of chance that might have the effect of destroying large portions of his crop. By purchasing an insurance policy, he ensures that he will at least receive some income, come what may.<br />
<br />
Futures contracts allow the farmer to sell his crop far in advance -- before the crop is even produced, and before the price of his crop at harvest time is known. Many crops are highly perishable, and nobody knows for sure just how much will be produced until the time to harvest comes. At this point, if the market is glutted with his particular crop, he will not get a good price and will probably be faced with tremendous losses. By selling his crop in advance with a futures contract, he will know ahead of time exactly how much he will make -- again, come what may.<br />
<br />
I go through all of this to show how the arrangement has a real effect of contributing actual utility to markets. People employed in insurance and futures market speculation perform a valuable service by inquiring into and researching possible future conditions, providing valuable information to markets. This allows farmers and other agricultural workers to plan their production strategies to better optimize their efforts and use of resources and avoid waste -- such as by producing way too much of one crop and not enough of another.<br />
<br />
Contrast this with, say, your own experience buying groceries at the grocery store. When you go to the store, you probably do not spend too much time worrying about how much prices will change from one moment to the next, or from one location to another. You pretty well know that prices are generally uniform from one place to the next, and generally stable over time. You probably do not employ people to track the prices of things to try to get a better deal, because this would be a waste of your money and the employed person's time. <br />
<br />
But suppose that prices were somehow artificially made quite volatile, from place to place and time to time, and in a manner that was rather complex and not easy to predict. It might actually make sense for people to get together to employ someone to spend all of his time studying the 'grocery market' to get the best deals while his clients were away at work or spending time with their families. When things are straightforward and simple, people are mostly able to take care of themselves without too much additional effort. But when things get hairy, they must resort to the division of labor, employing labor and resources to deal with the instability.<br />
<br />
Enter Goldman-Sachs. To the extent that its activities profit its clients by mitigating real risks <i>inherent to a market economy</i>, it is generating income for itself by performing a valuable service that contributes utility to the marketplace. But to the extent that the 'risks' they are mitigating are merely a creation of a dysfunctional financial system -- which is to say, they are artificial and not intrinsic to the market itself -- their efforts are actually a waste, but necessary to their clients who must deal with the system as it is. It would be more efficient overall to have a functional financial system and less labor and resources spent trying to cope with all the chaos. <br />
<br />
To the extent that this is the case, Goldman-Sachs is like a tire repair shop located right outside the nail-and-screw factory. There may be some necessary repairs in any event, but it is not helpful that the drivers for the factory deliberately strew some of their cargo about the road. 90% of the repairs -- and the income derived from them -- are actually just 'make work' and wasted resources.<br />
<div style="text-align: center;">
<br /></div>
<div style="text-align: center;">
***</div>
<br />
The other money-making activities could be subjected to a similar analysis, with similar results. Certainly, there is utility to be derived from public issue of stock, mergers and acquisitions, and the like, but <i>only under a limited range of conditions.</i> To the extent that these conditions emerge naturally, intrinsic to the market dynamics in play, the services of an entity like Goldman-Sachs are providing real utility in return for real income.<br />
<br />
But to the extent that such conditions are produced artificially -- such as through the centralizing effects of inflation -- these incomes do not represent contributions to the economy, but mere rent-seeking in response to conditions which are the product of dysfunction. And again, such volatility is going to be centralizing for the reasons described above -- it encourages an elaboration of the division of labor, much as convoluted regulatory structures encourage larger company sizes so that compliance costs can constitute a smaller share of revenues.<br />
<br />
So, even though very little of Goldman-Sach's revenue derives from actual trading, I would suspect that market volatility contributes very heavily to their ability to 'earn' income.<br />
<script type="text/javascript">var gaJsHost = (("https:" == document.location.protocol) ? "https://ssl." : "http://www."); document.write(unescape("%3Cscript src='" + gaJsHost + "google-analytics.com/ga.js' type='text/javascript'%3E%3C/script%3E"));</script><script type="text/javascript">try {var pageTracker = _gat._getTracker("UA-6540825-1"); pageTracker._trackPageview(); } catch(err) {}</script>Scotthttp://www.blogger.com/profile/12915297057336831151noreply@blogger.com0tag:blogger.com,1999:blog-8980874911927460995.post-10069475730606974492012-11-04T17:23:00.000-08:002012-11-04T18:22:40.729-08:00Great (And, Occasionally, Mediocre) Minds Think AlikeFrom George MacDonald's <a href="http://www.gutenberg.org/ebooks/2561" target="_blank"><i>Robert Falconer:</i></a><br />
<blockquote class="tr_bq">
My reader must understand that Andrew had never been a man of resolution. He had been willful and headstrong; and these qualities, in children especially, are often mistaken for resolution, and generally go under the name of strength of will. There never was a greater mistake. The mistake, indeed, is only excusable from the fact that extremes meet, and that this disposition is so opposite to the other, that it looks to the careless eye most like it. He never resisted his own impulses, or<br />
the enticements of evil companions.</blockquote>
This is a simply brilliant observation about children. Children who are 'strong-willed' are not strong at all; in fact they have no 'will' of their own to speak of, only impulses which they cannot control <i><b>because they are actually weak.</b></i> They do not need to be 'weakened' in any way, what they need is strengthening. True strength of will is not a vice, in whatever proportion (though, obviously, imprudence and ignorance certainly are, whether or not they are married to a strong will.)<br />
<br />
I disagree with him about 'extremes meeting' in any kind of a real sense, certainly not in this one, but occasionally they do show a superficial similarity. But that may have been what he meant.<br />
<br />
Secondly, from <a href="http://thelastpsychiatrist.com/2012/10/the_story_of_narcissus.html" target="_blank"><i>The Last Psychiatrist:</i></a><br />
<blockquote class="tr_bq">
No one knows what Liriope and Cephisus did [to leave Narcissus vulnerable to the curse by trying to satisfy a prophecy which they thought would give him a long life], but whatever they did, it worked: he didn't even recognize his own reflection. That's a man who doesn't know himself. That's a man who never had to look at himself from the outside.<br />
<br />
How do you make a child know himself? You surround him with mirrors. "This is what everyone else sees when you do what you do. This is who everyone thinks you are."<br />
<br />
You cause him to be tested: this is the kind of person you are, you are good at this but not that. This other person is better than you at this, but not better than you at that. These are the limits by which you are defined. Narcissus was never allowed to meet real danger, glory, struggle, honor, success, failure; only artificial versions manipulated by his parents. He was never allowed to ask, "am I a coward? Am I a fool?" To ensure his boring longevity his parents wouldn't have wanted a definite answer in either direction. <br />
<br />
He was allowed to live in a world of speculation, of fantasy, of "someday" and "what if". He never had to hear "too bad", "too little" and "too late." <br />
<br />
<i><b>When you want a child to become something-- you first teach him how to master his impulses, how to live with frustration.</b></i> But when a temptation arose Narcissus's parents either let him have it or hid it from him so he wouldn't be tempted, so they wouldn't have to tell him no. They didn't teach him how to resist temptation, how to deal with lack. And they most certainly didn't teach him how NOT to want what he couldn't have. They didn't teach him <i>how to want. </i><br />
<br />
The result was that he stopped having desires and instead desired the feeling of desire.<br />
<br />
Nemesis had an easy job, she only had to work backwards: show him something that didn't return his love, and he'd be hooked.<br />
<br />
Narcissus's parents were demi-gods-- didn't they know how to raise a good son, what a proper parent needs to do? Yet they listened to a charlatan anyway. They were given meaningless information by a supposed expert and abandoned all common sense, and so created a monster who brought death to at least one person and misery to all. <i><b></b></i></blockquote>
<div style="text-align: right;">
<blockquote class="tr_bq">
<i><b>(emphasis mine)</b></i></blockquote>
</div>
<br />
Almost the exact same idea, from an actual psychiatrist. (By the way, if you aren't a regular reader of <i>The Last Psychiatrist,</i> you are missing out on one of the best thinkers on the Web.)<br />
<br />
And lastly, from some other <a href="http://3cnb.blogspot.com/2012/02/reflections-on-virtue.html#more" target="_blank">mediocre half-wit:</a><br />
<blockquote class="tr_bq">
[I]f virtue can be 'taught,' or in some way 'conferred,' it is not likely to be accomplished in the same way as knowledge is through education. Rather, virtue is probably more a capacity to be trained in -- or disciplined to -- through practice. And as self-control is the common root of virtue, then it stands to reason that the clearest method of 'teaching virtue,' at least at its earliest stages, is through simple discipline. 'Spare the rod and spoil the child,' as they say. In a way, <i><b>what discipline does is to provide a sort of strength -- the strength to assert will over impulse -- and it is the developing of this strength which is the beginnings of virtue.</b></i></blockquote>
Emphasis...uh....mine?<br />
<br />
So, as election day approaches, forget about all that politics and voting stuff for a minute. Remember that the one thing that you could do with the best chance of actually improving the future of this nation is to --<br />
<br />
<div style="text-align: center;">
<span style="color: red;"><b><span style="font-family: "Helvetica Neue",Arial,Helvetica,sans-serif;"><span style="font-size: x-large;">SPANK YOUR KIDS!</span></span></b></span></div>
<script type="text/javascript">var gaJsHost = (("https:" == document.location.protocol) ? "https://ssl." : "http://www."); document.write(unescape("%3Cscript src='" + gaJsHost + "google-analytics.com/ga.js' type='text/javascript'%3E%3C/script%3E"));</script><script type="text/javascript">try {var pageTracker = _gat._getTracker("UA-6540825-1"); pageTracker._trackPageview(); } catch(err) {}</script>Scotthttp://www.blogger.com/profile/12915297057336831151noreply@blogger.com0tag:blogger.com,1999:blog-8980874911927460995.post-3020608222220028022012-10-22T21:36:00.002-07:002012-10-22T21:36:45.966-07:00A Taxing Epiphany: An Unfortunate Defense of LoopholesAs I have been enduring these early not-so-glamorous-or-rewarding experiences of landlording -- which I think come to anyone who tries to do this and have more or less totally consumed all my free time and energy of late -- a sad epiphany has come to me.<br />
<br />
I have long been an advocate that taxes be as simple and un-meddlesome as possible and have looked with absolute loathing upon attempts to carve out 'special privelege' by inserting 'deductions' into the tax code. So, it is with much chagrin and a difficult and embarrassing wince that I must admit that I appear to be very wrong with respect to at least one 'deduction' -- interest. It seems that, even though I very much dislike this conclusion, it is absolutely necessary that interest payments be deducted from income for the purposes of taxation, otherwise it appears that all hell breaks loose. And if it is true for interest, it is likely true for many other expenses which I have yet to think through quite as thoroughly.<br />
<br />
<a name='more'></a><br /><br />
I arrived at this unfortunate conclusion because I finally realized that income received as rent from a property <i>which must then be paid out to another party with an ownership stake in the property</i> <b><i>isn't actually income</i>,</b> at least in a strict sense. Which is to say, according to the abstractions by which one understands the dynamics of the free-market. So even though those annoying real estate gurus are always trying to sell people on the idea of leveraged investments in real estate by telling them that the interest is deductible, as if they were getting away with something by being in bed with government, actually, it could hardly be any other way. It is actually a simple acknowledgement of the way things really are. For once, it seems, the meddlesome bureaucrat eggheads have got something right.<br />
<br />
The thinking goes something like this. The property in question 'produces' various utilities -- shelter, comfort, security, etc. -- which are enjoyed by the occupant. If the occupant does not own the property, then this utility is purchased through periodic 'rent' payments to the landlord. Again, strictly speaking, it isn't quite proper to call this payment 'rent,' as rent refers purely to land, and as a dwelling is a heavily improved piece of land requiring maintenance and other costs, the payment actually contains a mixture of elements. If anything, it would be more proper to call it 'interest,' since the landlord is acting mostly as a capitalist, curtailing his own consumptions and 'advancing' the use of the house to his tenant, so that the tenant does not have to pay for the entirety of the house at once. The tenant only pays for time in the house -- for use of capital, a bit at a time -- which is the capitalist's interest income.<br />
<br />
Therein lies the rub. In the case of a leveraged investment, the capitalist does not possess full ownership of the asset. A landlord with a mortgage does not fully own the house, he only possesses limited <i>equity</i> (there's that annoying word you always hear those know-it-all financial guys throwing around...). So, the interest generated by the capital asset should <i>only</i> accrue to him in proportion to his equity. The rest goes to the other owners -- in this case, the bank which is the mortgage holder. And does, actually, except of course as the real rate of interest deviates from the money rate, <a href="http://www.3cnb.blogspot.com/2012/09/i-slumlord.html" target="_blank">as I talked about last time.</a><br />
<br />
In an ideal world, this would all be simple enough to resolve by having the tenant write separate checks to each partial owner. But this is not an ideal world, and the tenant writes only one check to the landlord. The landlord then remits the bank's 'share' to the bank, <i>the interest portion of which is the income of the bank and not merely an expense of the landlord. </i><br />
<br />
To count the interest as regular income of both the landlord and the bank would be to tax it twice. This would probably be no big deal if income tax rates were on the order of, say, 2%. It would be a rounding error. But with marginal rates in the 20-30+% range, not to deduct this 'income' would be to shut down the housing market.<br />
<br />
This conundrum makes me wonder if the whole notion of a 'flat tax' is nothing more than a ridiculous pipe dream -- for totally non-political reasons. So long as the income tax is a non-trivial amount, there will necessarily have to be a maze of deductions and adjustments just to keep the economy moving. Everyone realizes that it would be impossible to tax a business on its total receipts as if it were income, because obviously, income is total revenue <i>minus expenses.</i> To tax the total money taken in would be a revenue tax -- a completely different animal.<br />
<br />
If people are acting as businesses -- by renting houses, among other things -- it would seem that there would have to be deductions for expenses if there is to be an income tax. Period. Otherwise, it isn't actually an income tax. I don't see any way around it, other than a name change.<br />
<br />
So... now who's on board with a national sales tax?<br />
<script type="text/javascript">var gaJsHost = (("https:" == document.location.protocol) ? "https://ssl." : "http://www."); document.write(unescape("%3Cscript src='" + gaJsHost + "google-analytics.com/ga.js' type='text/javascript'%3E%3C/script%3E"));</script><script type="text/javascript">try {var pageTracker = _gat._getTracker("UA-6540825-1"); pageTracker._trackPageview(); } catch(err) {}</script>Scotthttp://www.blogger.com/profile/12915297057336831151noreply@blogger.com2tag:blogger.com,1999:blog-8980874911927460995.post-33578958721158470402012-09-28T08:53:00.001-07:002012-09-28T08:57:16.210-07:00I, SlumlordWell, I've been hard at it lately, and don't have much to talk about. So, I suppose I'll talk about what I've been hard at.<br />
<br />
I never wanted to be a real estate guy, but sometimes these things just happen. I had looked into real estate rather exhaustively for a number of years, and could never see how people made the numbers work. I always supposed that they must be doing some kind of tax maneuvering to make it worth it, and I am not much disposed to that kind of thing, because it is usually just a trap to control your behavior and limit your future options...so that you get to keep the tax benefits which were necessary to make the investment worthwhile in the first place.<br />
<br />
Bad idea, and besides, I just don't like real estate. I don't have the right personality for it.<br />
<br />
Well, things have changed, and you'd have to be brain dead not to be in rental houses -- even if you don't like them, at least in my area. So, I'll soon be a landlord.<br />
<br />
I'm moving to a larger house to make room for another kid (plus, of course, to make the wife happy). So I was left having to decide what to do with the one I'm in. Let this be a lesson to the wise.<br />
<br />
I could have sold it, and basically gotten back out of it what I put in a few years ago. But my realtor advised us to hold it for a bit 'until the market comes back in a couple of years' which no doubt you already know my own views of the prospect of that. But, just because, I looked into the numbers to see how it would work out as a rental.<br />
<br />
Holy moly!<br />
<br />
First, I guessed that it would generate about 5% rental outcome, just because of the tendency for capital to uniformly return the natural rate of interest, supposing it is a fairly competitive market -- which real estate generally is. Turns out, deducting expenses and maintenance, this was more or less correct (it was actually about 6%, which for most people, after taxes would be 5%).<br />
<br />
I do not really want to own real estate making the 5%, as this would be very foolish. It would be paying me some income, yes, but it would be in a slumping market, the market value of my asset unlikely to keep up with inflation, despite the income.<br />
<br />
So, I looked into ways of holding it and putting my cash elsewhere in the meantime. Which is to say, borrowing against it and using the money to purchase a different asset, while at the same time using the income it generates to pay off the loan.<br />
<br />
Now, theoretically, I should not be able to do this and make it work. If I borrow, say, 80% of the equity, the interest should theoretically eat up 80% of the income the property generates -- because the loan rate should be in equilibrium with the natural rate. So, this strategy should be a useless wash.<br />
<br />
As it turns out -- not so! Not at all! The interest rates on loans are so low right now (and prices low, and rents high) that I can effectively give up 80% of the equity and retain 62% of the income! Outrageous!<br />
<br />
If you do the math (which will be difficult for you, as I'm suppressing the actual numbers, as I have to have SOME privacy), that works out to a 16% return! And the freedom to invest the balance of my equity any way I want -- i.e. in an actual appreciating asset!<br />
<br />
Granted, the majority of the income is in the form of equity in the house, but who cares? The longer it goes on, the surer my position, until I'm no longer leveraged at all -- at somebody else's expense. <br />
<br />
I know that when I went on that whole Veblen tangent, I lost a lot of people. I hope you, gentle reader, sees this for what it is -- free income, an economic abomination, courtesy of somebody out there who is getting fleeced. I will be adding absolutely nothing to the economy except the use of my capital, which should earn me about 5%. I'll be making three times that. I will become a member of the parasitic rent-seeking class, thanks to the crazy money system, laws and policies of this country -- that all too many people want to dismiss people like me for criticizing.<br />
<br />
Keep it up. Meanwhile, I'll be sucking you dry, without the slightest remorse. I will explore every opportunity to exploit this situation, while you keep shoveling money in the black hole of your 401K. And when the banks collapse, and the government men inform you that you're broke and have to keep working, because your accounts don't exist anymore, and neither does Social Security, I'll be sitting pretty on physical, income generating assets. My critics may say what they like -- I'm putting my money where my mouth is. Oh, and I'll also be doing my part to help devalue the currency, drive up prices, and hastening the impending financial Armageddon.<br />
<br />
And you know what? You're welcome.<br />
<br />
Think about this. If you're, say, 50 years old, with $500K to invest, you could put down $100K on $500K worth of house, generate $16K per year of income, and have the other $400K to invest however you want. If you get into trouble, you just cash out the investment and pay off the debt. Or sell the houses. Or let the bank have them. Piece of cake.<br />
<br />
Like I said, no brainer. Or you could, you know, keep investing in the stock and bond markets, and pray.<br />
<br />
In case you hadn't noticed, gold is back on a tear, up about $200 per ounce in a couple of months. In case you hadn't noticed, the Europeans are going all-in for yet another round of inflationary mass-bailout. In case you hadn't noticed, the FED has basically announced an open-ended QE until...who knows?<br />
<br />
The money-printing is not going to end anytime soon -- but at some point, the low rates will. Prices are going up. Debts will be devalued.<br />
<br />
Think about it. Anyway, whatever you choose to do, I know what <i>I'm</i> doing. <br />
<br />
<br />
<script type="text/javascript">var gaJsHost = (("https:" == document.location.protocol) ? "https://ssl." : "http://www."); document.write(unescape("%3Cscript src='" + gaJsHost + "google-analytics.com/ga.js' type='text/javascript'%3E%3C/script%3E"));</script><script type="text/javascript">try {var pageTracker = _gat._getTracker("UA-6540825-1"); pageTracker._trackPageview(); } catch(err) {}</script>Scotthttp://www.blogger.com/profile/12915297057336831151noreply@blogger.com0tag:blogger.com,1999:blog-8980874911927460995.post-63933101676541434472012-09-14T13:01:00.002-07:002012-09-14T13:01:47.211-07:00An Idea to Make Space AffordableForget about the 'privatization' of NASA. Check out this idea for ways to make space travel cheaper:<br />
<br />
<iframe allowfullscreen="allowfullscreen" frameborder="0" height="315" src="http://www.youtube.com/embed/1IXYsDdPvbo" width="560"></iframe><br />
<br />
The shift to using private enterprise to economize space travel is of course a good idea, but so far seems to overlook the central problem with getting to space cheaply -- rocketry. Using a rocket to get into space is simply too inefficient to be economical. Something like 2% of a rocket is actual payload; the rest, fuel and associated hardware for containing and harnessing the energy in said fuel.<br />
<br />
The trick, as it seems to me -- get the fuel 'off' the space vehicle. At least for now, until otherwise radically different technologies become available.<br />
<br />
The thing I really like about this guy's 'sales pitch' is that he has a hard and practical goal -- get fuel and supplies into space at about 90% less cost than presently feasible. Nothing particularly 'sexy,' just a clear and useful goal that could make a profit in relatively short order.<br />
<br />
And he has a fair amount of hard evidence and experience to back up the feasibility his idea, not just theoretical calculations. Interesting.<br />
<br />
<script type="text/javascript">var gaJsHost = (("https:" == document.location.protocol) ? "https://ssl." : "http://www."); document.write(unescape("%3Cscript src='" + gaJsHost + "google-analytics.com/ga.js' type='text/javascript'%3E%3C/script%3E"));</script><script type="text/javascript">try {var pageTracker = _gat._getTracker("UA-6540825-1"); pageTracker._trackPageview(); } catch(err) {}</script>Scotthttp://www.blogger.com/profile/12915297057336831151noreply@blogger.com0tag:blogger.com,1999:blog-8980874911927460995.post-52885330630691923782012-08-26T14:19:00.001-07:002012-08-26T14:19:25.634-07:00Meddlers, Muddlers, and MartyrsIn the same vein as Fran's post on <a href="http://bastionofliberty.blogspot.com/2012/08/brothers-and-their-keepers.html" target="_blank">the limits of charity</a> – with which, by the way, I completely agree – I have recently finished <a href="http://www.amazon.com/Bonhoeffer-Pastor-Martyr-Prophet-Spy/dp/1595552464/ref=sr_1_1?ie=UTF8&qid=1346013274&sr=8-1&keywords=dietrich+bonhoeffer" target="_blank">a biography of Dietrich Bonhoeffer </a>which leaves me pondering a related, or perhaps more general question:<br />
<br />
What are the limits of moral intervention?<br />
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To summarize the story, Bonhoeffer is a somewhat-famous German Lutheran minister involved in several assassination plots against Adolf Hitler. He was from a family of patriotic Germans who disliked Hitler and the Nazis almost from the moment they came onto the scene. This, of course, shows a level of prescience that was sorely lacking in all too many others of the time -- both among Germans and the whole world over.<br />
<br />
The various members of the family dealt with the odious regime in different ways. As they were something of an aristocratic family, they were unfortunately drawn into rather close proximity with much that went on at high levels.<br />
<br />
Dietrich Bonhoeffer initially dealt with events by remaining a forthright annunciator of the contemporary Protestant position wherever the Nazi movement intersected with the church. He denounced cooperation with Nazi activities aimed at bringing the church into the Nazi program and perverting its doctrine. He brought about a split in the German church which fractured along this line. He also made certain that foreign powers had an accurate idea of events within Germany by serving as a contact with influential members of foreign churches. In all of these actions, he brought unwanted light to bear on Nazi activities and caused them a great deal of embarrassment. He was a tremendous and highly respected thorn in their side.<br />
<br />
Then comes a turning point -- he is drafted into the Nazi army. He decides to flee service, not wishing to cooperate, and secures passage to the US. But this decision does not sit well with him as he sees himself fleeing his problems and his troubled nation and church in its time of need.<br />
<br />
So...he goes back...and joins the Military Intelligence!<br />
<br />
From here, he leads a double-life of intrigue, joining a conspiracy to assassinate Hitler, blah, blah, blah...fails several times, gets jailed and eventually executed.<br />
<br />
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***</div>
<br />
It may seem rather profoundly morally idiotic to question the decision to assassinate Adolf Hitler in this day and age, especially given the benefit of hindsight – something not available to Bonhoeffer – not to mention that he died in the attempt. In my defense, I am not trying to say that the guy is not a hero, and certainly that I believe he was a brave and upstanding man. My question is more philosophical, and I ask the reader to compare Bonhoeffer's actions and attitudes with another famous theologian who wrestled with similar problems – C. S. Lewis.<br />
<br />
I hope I might be forgiven for continually bringing up Lewis, however, he is the only such thinker for which I feel I am familiar enough that I can really speak intelligently about him. I can't speak on his behalf, but from my reading of him he seems to have had a very profound and acute sense for exactly where his 'business' began and ended, including his moral obligations, and that he observed them rather absolutely. This makes him come off as a rather 'standoffish-libertarianish' soul in a way that I think many people who claim to find his writings endearing simply do not understand because they haven't read him well enough. I'm not so sure that they would like him quite as much if they did know.<br />
<br />
Consider, for example, his service in WWI. One night he observed that the German defensive positions were not very well secured, and that a night-time raid might be particularly effective against them. He reported this to his officer, who replied something along the lines of “Well, yes, we could do that. But if we did, the Germans might get the idea that they should maybe try something similar, and then where would we be? Fighting eachother all day long, and now all night long, too. Why don't we just leave well-enough alone, and each be a little bit less miserable?”<br />
<br />
Lewis seems to have found this an excellent suggestion, and honorably served out the rest of the war without experiencing any more 'pangs of heroism.' Now, this may not seem quite the same as Bonhoeffer's position, and surely it isn't. After all, Lewis was asked to serve on the 'good side,' and could do as he was told in good conscience. But Lewis also knew full well that such 'lack of initiative' could very well prolong the war, and perhaps even more, since as yet the outcome of the war hadn't been decided. How could being such a 'moral slacker' in itself be moral?<br />
<br />
Simply because, I think, Lewis had a very different understanding of his own moral obligations. He did not operate at the same 'moral specific heat' as one like Bonhoeffer. In fact, I think he would have recoiled at the idea that such a weight was upon his shoulders at all, as Bonhoeffer appears to have felt. That would not have set well with his understanding of God, His creation, and his expectations of man, I think. One can find evidence of this 'stand-offishness' very consistently throughout his writings, almost regardless of topic. <br />
<br />
His contemporary and friend J.R.R. Tolkien expressed similar sentiments:<br />
<br />
<blockquote class="tr_bq">
<i>What a pity Bilbo did not stab the vile creature, when he had a chance!</i><br />
<i><br />
</i> <i>Pity? It was pity that stayed his hand. Pity and Mercy: not to strike without need.</i><br />
<i><br />
</i> <i>I do not feel any pity for Gollum. He deserves death.</i><br />
<i><br />
</i> <i>Deserves death! I daresay he does. Many that live deserve death. And some die that deserve life. Can you give that to them? Then be not too eager to deal out death in the name of justice, fearing for your own safety. Even the wise cannot see all ends.</i><br />
<br />
'Very well,' he answered aloud, lowering his sword. 'But still I am afraid. And yet, as you see, I will not touch the creature. For now that I see him, I do pity him.</blockquote>
<br />
Again, not an exact parallel. Hitler was hardly a Gollum (to most people's understanding, anyway...) and the situations are different. But the argument does turn on what exactly it is one's business to be up to – and both 'self-elected final arbiter of justice' and the argument from 'eventual ends' are specifically excluded.<br />
<br />
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***</div>
<br />
Speaking of which, would Bonhoeffer's 'ends' have realistically been achieved by such actions? I cannot help but think that this is a naïve perspective -- that had the conspirators succeeded in their assassination attempt, all would have been well, more or less. Somehow, I doubt that their optimistic expectations would have been realized. There seems to be a sort of romantic notion of 'heroes of history' somehow deflecting history from its course, averting mass horrific events and with acts of dash and daring or self-sacrifice. As if the Nazis hadn't been popularly elected, did not have widespread support, no intrinsic sympathy for their propaganda and programs for society existed, and Hitler did all the bad stuff himself. Do they really think that if they had deposed the leader, the 'sheep' would have dispersed?<br />
<br />
Or perhaps the attitude is not quite that straightforward. Perhaps it is more a rather severe and dramatic sense of personal responsibility – in keeping with the sense of urgent moral interventionism. <br />
<br />
I can't help but think that perhaps this attitude of urgent moral interventionism is/was actually a part of the problem. Hitler, after all, was a man of and for the <i>volk</i>. If any government was ever activist and interventionist, his was. Despite its horrific outcomes, the whole totalitarian movement was originally motivated by intense instincts of compassionate intervention – for the 'common man' – into every corner of life. It attained power by appealing to this apparently very widespread instinct in the populace.<br />
<br />
Why is it that so many modern leaders seem to have this feeling that they need to do so much for everyone else – even when they are elected explicitly on promises that they won't! Was it always this way? Is it really mostly because they are craven manipulators and conspirators? Maybe sometimes, yes. Maybe most of the time.<br />
<br />
But politicians are almost of necessity incurable 'people persons' – especially the type that tends to get elected nowadays. One almost has to be to go through the rigmarole and to get the votes. How many of them actually have gone off to govern with the right intentions, only to be swept away by their sympathies when it came down to actually making the choice?<br />
<br />
But it is not as if these people are space aliens – 'they' are 'us.' In other words, its not just them, its almost everybody else, too. I think it is embedded in the modern way of thinking. Most 'good' people can't help but be 'motherly' about everyone and everything – liberal and conservative alike. They see this as doing what is right. Probably the most telling observation of how deeply this idea is embedded can be seen in popular Christian notions of God – everything 'according to His plan,' even the death and suffering of the innocent. Yes, God planned for innocent little children to starve to death. It's actually all for the best, if we could only understand; it has to be.<br />
<br />
No, that position is not theologically elementary and obvious. But it is very common.<br />
<br />
If you saw evil, and had the power to act, would you decline? Could you stay your hand, 'on principle,' especially when surrounded by others who will condemn you for it? If you could, what percentage of your fellows do you think could?<br />
<br />
There is, at least, some dignity in being violently oppressed by a thuggish, manly dictator. But to be coddled to death by people intent on being overbearing nursemaids and finger-waggers? The Cubans at least get to smoke.<br />
<br />
Bonhoeffer was adamantly opposed to the Nazis, fought them bravely, and is a hero for it. But I can't help but thinking that the very attitudes which animated him, which he shared with so many of his fellows, which are almost universal today, and which caused me to be rather repulsed by this book, are not precisely the kinds of attitudes which set the stage for groups like the Nazis to attain power in the first place.<br />
<br />
Hence, I think perhaps, the modern popularity of Mr. Bonhoeffer. <br />
<div style="text-align: center;">
<br /></div>
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***</div>
<br />
A lot of people probably wonder why I tend to post odd things that seem to have little to do with – or sometimes seem at odds with – the theme of <b><i>Liberty's Torch.</i> </b>The reason is thoughts like these. With all the bad things one sees going on, what is a guy <i>really</i> to do?<br />
<br />
Not vain fantasies of somehow showing the bad guys what for, king-for-a-day castle-building, &c. What if pretty much <i>everybody</i> is a bad guy, the <i>whole world</i> is evil? How do you solve <i>that</i>?<br />
<br />
How can I posit answers to these things – call others to arms, even – if I don't even know what is going on? I may not like the direction the ship is sailing, but do I know where to take it? Not just which general direction it should go, but an actual, real course and destination? What should I be willing to do to get it there? That is the job of a captain. Further, is it my place to wrest the helm away from others, or realistic to think that I could? Or is it only given to me to mind my own affairs, and to take care of the things which have legitimately fallen to me as best I can?<br />
<br />
Isn't the whole problem that so many people aren't doing just that? Or have even I fallen into this same thinking, and inadvertently created a false analogy – there is no 'big ship,' only a fleet of little ones, and by default, whether I like it or not, I stand at the helm of my own little dinghy? If so, perhaps there is really nothing else to do than remain indifferent to what the cruisers and tankers are up to. Perhaps Captain Bonhoeffer was deluded, and was never the mutineer aboard the USS Nazi Germany that he thought he was, but only imagined himself to be and was plowed under and drowned before his time because he refused to mind her wake and steer his little john-boat clear of her. Perhaps he shared the very delusions of the crew whose efforts he set out to torpedo.<br />
<br />
I don't think that ideology is enough. I'm beginning to think it is positively bad – part of the problem. Ideology is pretend certainty, and if I know anything it's that I'm not certain. I've spent a lot of time with free-market economics – well, more than most people, anyway. I've read the views of many experts, and I can find holes. There is no concrete 'answer' there, only abstraction and insight and suggestion. These are wonderful things – perhaps more important than the answers themselves – but brass-tacks in the physical here-and-now they are not. The brass-tacks are concrete things – actual laws, customs, traditions, attitudes.<br />
<br />
Of these, I find that I cannot say so easily what should be and what should not. I can see them in the light of the abstraction, but they are of two different worlds, and can never bear directly on one another – only indirectly, through our own eyes and thoughts and minds. It seems that maybe many such systems could fit under the umbrella of 'free' more or less well, but that they can't all necessarily fit there together, nor necessarily persist there for long. 'And yet, it moves.' Reality bears upon reality, tomorrow is never today which is never yesterday. Neither history nor society are <a href="http://en.wikipedia.org/wiki/Functions_of_state" target="_blank">state-functions,</a> to be held in idyllic motionlessness, except in the dreams of the central planners and hardened ideologues.<br />
<br />
<i>What is my place?</i> It seems a question more central to the world of medieval hierarchy than to modern politics, especially of the libertarian variety. In fact, it seems almost irrelevant today, and maybe that's a shame. As for me, I'm not entirely sure how to answer it, but in lieu of positive certainty, I've settled on a more modest goal – developing ideas, as opposed to fighting battles. As to the concrete, I shall try to hew to the path of the muddlers like Lewis.<br />
<br />
<script type="text/javascript">var gaJsHost = (("https:" == document.location.protocol) ? "https://ssl." : "http://www."); document.write(unescape("%3Cscript src='" + gaJsHost + "google-analytics.com/ga.js' type='text/javascript'%3E%3C/script%3E"));</script><script type="text/javascript">try {var pageTracker = _gat._getTracker("UA-6540825-1"); pageTracker._trackPageview(); } catch(err) {}</script>Scotthttp://www.blogger.com/profile/12915297057336831151noreply@blogger.com0tag:blogger.com,1999:blog-8980874911927460995.post-58044261132437272812012-08-14T18:31:00.001-07:002012-08-14T18:35:08.293-07:00Metaphysics and Murray Rothbard<a href="http://mises.org/rothbard/mes.asp" target="_blank"><i>Man, Economy and State</i></a> is a very, very long book, an interesting book, and a worthwhile book. But I think it also suffers from a few very big flaws.<br />
<br />
The main problem, in my opinion, is that Rothbard is just simply 'too modern' a man. Even as he objects to economic approaches which are too tainted with the 'scientific' slant -- inappropriately 'mathematical' and 'objective,' as if all phenomena can be distilled down to something like classical physics -- nevertheless, he too is infected with the tendency on a more fundamental and less obvious level.<br />
<br />
(And to be fair, I probably am, too, so maybe this is a case of the pot calling the kettle black. But hopefully, maybe the pot and kettle can sometimes get together and scrape some of the soot off of each other.)<br />
<br />
<a name='more'></a><br />
<br />
The biggest problem I have is a very broad objection which I think would qualify as what Michael Oakeshott calls 'rationalism,' but I think other authors have called by different names and addressed in slightly different ways. Basically, I think he has some difficulty with the notion of abstraction and the application of the subjective point of view.<br />
<br />
He actually talks about abstraction quite a bit, but in a way I've never seen anyone else use the word. He tends to speak in terms of 'abstracting away' from certain irrelevant phenomena, such that the 'mental image' so obtained does not contain these irrelevant parts. But, in principle, it still contains everything else. <br />
<br />
To my understanding (and I may be wrong, as I'm new to this myself), an abstraction is formed almost in the exact opposite manner. This approach misses the whole point. The reason one forms abstractions of concrete objects and phenomena is that these things in their totality are inconceivable to the human mind due to their immense complexity. What can be conceived are idealized simplifications. What is 'abstracted from' the concrete situation is the essential characteristics and parameters and everything else is excluded. Thus the essential characteristics become manageable, and an idealized system with practical, predictive utility is constructed.<br />
<br />
For example, in a problem of classical physics, one might be given an initial position, the mass, and an accelerating force applied to an object, and asked to predict its future position. This is an abstraction of the problem in that only three parameters are used to characterize the situation (six if you want to make it a force vector in three dimensional space, but anyway...). The position and mass of the moon and sun (with their consequent gravitational attraction), of every other particle in the universe, and the history of every particle making up the object in question, are not of interest insofar as their effects on the situation in question are minuscule. In general, one wouldn't even think to include these things at all unless it were clear that they had some substantial bearing on the problem.<br />
<br />
To do things Rothbard's way would have it all backwards and leave things impossibly complicated -- if one could actually do it. He would have to expend a great deal of mental energy finding every parameter to exclude before settling on the few things that actually mattered, which tells me that he's not actually doing this. If he were, as soon as he thought about a situation, he'd be like a computer that gets stuck in an infinite loop and winds up on the 'blue screen of death.' He's really thinking more or less the way that everybody else thinks, but somehow his way of 'thinking about thinking' isn't quite on the same page.<br />
<br />
Somehow he conceives of things as if his thoughts really encompassed concrete reality completely as a matter of simple inspection, and then he goes about excluding things he thinks aren't important, or more often, are complicating factors which he would like to exclude so that he can get at a particular point. Because of this, for him, his thoughts seem more or less perfect images of the concrete, so his conclusions appear to him far more sweeping and inescapable than most people would think warranted.<br />
<br />
Basically, he seems to believe that his thoughts and theories are actually exact expressions of concrete reality, allowing for some abstract contribution from external contingencies -- his oft invoked <i>ceteris paribus</i>. This results in a curious 'feel' to his philosophy. Sometimes he seems to want to say that his assertions are very narrow, that they apply very specifically, if absolutely, to only a narrow slice of human experience, and maybe shouldn't weigh quite so heavily on people's conscience if their thoughts don't much incline towards these matters. Other times, he seems to think that they are extremely broad, that they touch on everything within their own peculiar capacity, in a very predictable and ironclad fashion. This is the way he seems to view abstractions -- as 'slices' of reality, within which they are fully as concrete as reality itself, rather than as idealizations from which there may be considerable departure when the fully relevant picture hasn't quite been captured in the process of forming a mental image of the situation.<br />
<br />
He thus falls into the trap of most modern thinkers -- of trying to take his thoughts too close to the concrete, so that rather than being valued for their capacity to convey truth to human consciousness, they fall in love with their own precision and logical 'consistency,' and emerge from the affair as ideology. The truth which they do contain is lost in a torrid orgy of desire for absoluteness in assertion, usually expressed in an obnoxious particularness and an air of unwarranted certainty. <br />
<br />
For him, a good theory is like the snapshot from a good point-and-shoot camera -- all-encompassing field of view, every detail in sharp focus, all of the time, no matter what. But most people recognize the superior quality of photograph from a professional camera, and some will pay good money for a camera that produces a much more natural image that essentially renders half or more of the image unfocused and blurry.<br />
<br />
The blurriness is an essential feature of such a camera, not a liability. The image it produces, with its indistinct suggestions of detail beyond and before the focal plane, but wonderfully sharp focus and detail at the point of interest, rings of truth because this is the way the eye sees the world. Likewise, truth and understanding is not generally to be found buried in a morass of undifferentiated detail, however precise and fine, it is to be apprehended in a clear understanding of the relations of things. The clearer, simpler, more elegant and vivid manner in which relations are manifested in thought, so much the better the apprehension of truth. Detail which is unessential is detail which distracts, which is detail which obscures. <br />
<br />
This is not to belittle the necessity of precision or detail, but it is to point out the danger of habitually swimming as close to the shoals of the concrete as possible at all times. Too often, in the pursuit of certainty, modern thinkers like Rothbard want to abstract as little as possible, and in doing so confuse themselves into thinking that they are not abstracting at all. Thought exhausts itself at such an effort, and ultimately destroys itself when it is inevitably smashed against the concrete. Thought which is too concrete ceases to be thought at all. In attempting to apprehend reality too perfectly, it ceases to actually apprehend, and falls into an endless cataloging.<br />
<br />
Anyway, enough flowery metaphors. You get the idea.<br />
<br />
This kind of confusion Voegelin identifies with positivism, and Oakeshott with rationalism. Or perhaps these are two slightly different tendencies that revolve around a confusion of subject and object, the concrete and the abstract. In any event, Rothbard's tendency is to believe that since he has perfectly apprehended reality in this body of semi-abstract theory, that it constitutes some body of inarguable truth perfectly binding upon all of reality. <br />
<br />
That leads to the second major problem -- the ideological aspect. A mathematician knows the laws of geometry, but if he's intelligent and given it some thought, he knows that geometry can never apply perfectly to reality. There are, for example, no such things as Euclidean lines. A true Euclidean line has zero thickness, and in a three-dimensional world, that corresponds to a nothingness. Real lines must have thickness else they cannot exist, are never perfectly straight, etc. Euclidean lines are an ideal never realized in reality. Like all abstractions, they are a tool for thinking about other things. Like all theoretical systems, geometry can only work perfectly applied to abstract idealizations. <br />
<br />
Rothbard does not seem to think that he has idealized anything, so he sometimes takes some things a bit too far, as it seems to me. This becomes particularly acute and obvious as he wanders into territory outside his economic abstractions but continues to apply the same supposedly concrete and universally binding laws inappropriately. I do not generally hold contradiction against people, at least at a certain level, and I'm not really doing it here. I'm just using it to point out where he has made a mistake of application.<br />
<br />
On page 1215, he argues that --<br />
<blockquote class="tr_bq">
There is no objection at all to discussion of ethical concepts when they are needed, provided that the economist realizes always (a) that economics can establish no ethical principles by itself—that it can only furnish existential laws to the ethicist or citizen as data; and (b) that any importation of ethics must be grounded on a consistent, coherent set of ethical principles, and not simply be slipped in ad hoc in the spirit of “well, everyone must agree to this. . . .” Bland assumptions of universal agreement are one of the most irritating bad habits of the economist-turned-ethicist. </blockquote>
Yet just 97 pages before, in dealing with the political problem of the administration of justice, he says that even in a completely free system--<br />
<blockquote class="tr_bq">
<i>Every</i> legal system needs some sort of socially-agreed-upon cutoff point, a point at which judicial procedure stops and punishment against the convicted criminal begins. </blockquote>
Why did he cross himself up like this? Because he wandered into the moral/political realm, where his theories do him little good because their abstraction of the situation is in at least some ways orthogonal to the dynamics actually in operation in this realm of thought. If they didn't apply perfectly before, they will apply even less well now.<br />
<br />
The 'we can all agree' blunder of 'democratic logic' is pretty typical of philosophers who want to construct viable 'value-free' legal systems out of pure logic. Inevitably they trip themselves up with a statement like this, which gives away the true moral core about which their system turns. They would have you believe (and they may truly believe themselves) that the core is actually the logical structure they have built up, that its most basic principles are readily observable, objective facts of the universe. But in reality, the core will be found to actually consist of a body of sentiment -- which the logical system will be found to protect and defend. And try to hide. At least, that is my experience with such things. All such systems eventually boil down to moral sentiments; some of their purveyors are just not willing to admit it.<br />
<br />
But this example is just to illustrate a general mistake -- thinking that since he is not really using abstractions, that the situation and the theories he derives apply to all sorts of areas where they do not. The manner of thinking then goes on to produce a lot of nonsense and ideology. If I were to choose a general abstraction under which to operate in the political realm of thought, I would probably go with something like Eric Voegelin's way of looking at things. He really thought about the problem and came up with a powerful way to abstract it. Rothbard, through his insistence on 'doing geometry' with everything, would not be anywhere near the top of my list in terms of politics. I think that if he'd cleared this up a bit, he would have made a better thinker in this department, would have formulated some better ideas, and been able to defend them better.<br />
<br />
Which is not to say that he has absolutely nothing interesting to say here at all, just that I'm more interested in his economics than his politics.<br />
<br />
All of this I'm afraid too many readers will interpret as me '<a href="http://www.lewrockwell.com/lewrockwell-show/2012/07/31/297-the-anti-rothbard-cult/" target="_blank">bashing Rothbard</a>,' which is unfortunate, because to my mind, I'm not really doing that. I'm only criticizing, and my way if thinking and evaluating -- so I've learned -- is not like most other people's.<br />
<br />
To most people, it seems that the measure of an idea's worth is how expansive and detailed it can get without getting 'contradictory.' (Heaven forbid it outright contradict itself!) It also needs to encompass a great deal of 'known fact' without getting anything wrong. Once it starts getting a few things wrong, well, it <i>IS</i> wrong, and the holder of it needs to chuck it altogether if he is 'intellectually honest.'<br />
<br />
I don't really care much if some idea -- or its purveyor -- contradicts itself or 'known facts' to some degree. All thought and all theory is abstraction, which means it is simplification, which means it is 'wrong' from the outset. I expect every idea to be 'wrong' -- at least if this is the measure of 'wrong' -- from the get-go. To me, that is not the measure of an idea. The only way a thought could not be 'wrong' would be if it corresponded exactly to concrete reality itself. If it did that, it would in fact be a perfect articulation of concrete reality itself, unimaginably complex, meaningless, and unintelligible to the human mind.<br />
<br />
But more damning, it would provide no window into truth. It would be totally worthless as an idea. <br />
<br />
On top of this, consider that 'theory' (and everyone has heard at least one of these) that is totally consistent with an extensive body of 'known fact,' but presents a totally absurd, plainly incorrect interpretation of a situation. One (supposedly, anyway) can't argue with it, but clearly it is totally wrong. Now, which is the worse -- that 'consistent' system of thought, or one that gets some of the facts wrong and contains a few contradictory elements, but provides a reasonable, useful interpretation of things and clear insight into a situation? I say the latter is better by far.<br />
<br />
At least, that is my understanding of metaphysics, to this point. I have heard that some philosophers think that the concrete reality of the mind, at least, can be known completely -- "I think, therefore, I am," and all of that -- but I am not that far along, and I'm not sure I'll agree when I get there. But since we are talking about the concrete reality of economics, which encompasses more than a human mind, I think I can say with a fair amount of certainty that it falls under the aforementioned regimen of thinking -- that abstraction is instant death as far as contradiction and an incorrect correspondence to reality is concerned, but necessary to making reality intelligible.<br />
<br />
Insight is a window into truth. My measure of an idea is the degree which 1) it shows insight or reveals truth, and/or 2) it provides a useful 'mental picture' of things under which to operate that makes the universe more easily grasped, i.e., it is a good abstraction of a system. I do confess that that might be two ways of saying the same thing. I like good analogies, models, and insights. To say in an argument that one had contradicted himself with most people would mean the argument was over and done with. With me, it is a minor quibble, maybe something that might need a little work. To say that something (or someone) is insightful, on the other hand, is no mere observation but very high praise in my book – about as high as you can get.<br />
<br />
With that in mind, Rothbard is both very insightful and very good at constructing abstract systems for thinking about economic systems. I got a great deal out of his discussion of the division of labor, the production structure, the relationships between price, income, profit, interest, wages, rents, factors of production, and the like, which I hadn't quite had straight in my mind for a long time. His discussion of supply and demand were excellent. Even his discussion of the incidence of taxation I found extremely worthwhile -- even where I disagreed with him! What it really did was to help me to think about the problem, which is immensely helpful. <a href="http://bastionofliberty.blogspot.com/2012/07/why-murray-rothbard-is-wrong-about.html" target="_blank">The post I did</a> criticizing him on the sales tax was really a minor thing, in my opinion. I wouldn't have even known how to think about the problem if I hadn't read his treatment of it.<br />
<br />
But the reason I could get all of that out of the book is that I didn't blow it off as 'wrong' at the first problem I had with it. I could spend months criticizing parts of it (especially at <i>my</i> pace of things...) but what would that accomplish? To treat it the way most modern thinkers seem to operate would be like entering a vast and beautiful garden and getting hung up on a patch of thorns right at the entrance and never getting any further. You'd never get to see anything else, because you got hung up on one stupid thing right at the beginning. Even if it's a big thornbush, it's not worth it missing all the good things by getting caught up in nitpicking the bad.<br />
<br />
Another great thing about the book is that the writing is very approachable and expressed very clearly. Actually, I prefer slightly more convolution and 'vivid vagueness' than he uses, but I realize that that is a matter of taste, and it is a great thing to be able to express exactly what you mean so clearly and simply. You may not agree with Rothbard, but you are never confused about where he stands. Such precision and approachability is very difficult on such a complex topic. <br />
<br />
There are really only a few places in the book that become intellectually demanding, which is pretty amazing to me. While it does make it a bit simpler to do such analyses when you decide ahead of time to simplify a problem the way that he did -- by abstracting it rather unrealistically -- still, if one just accepts that the way the situation has been framed is a little off, his approach is a very clear and useful way to get at some important insights. I don't think there are many people, living or dead, who could pull off something like that.<br />
<br />
<div style="text-align: center;">
***</div>
<div style="text-align: center;">
<br /></div>
Apparently, I'm getting at least fairly close with most of my metaphysics. Ed Feser -- a professor of philosophy -- <a href="http://edwardfeser.blogspot.com/2012/08/concretizing-abstract.html">has a post</a> discussing more or less exactly the error I'm talking about here.<script type="text/javascript">var gaJsHost = (("https:" == document.location.protocol) ? "https://ssl." : "http://www."); document.write(unescape("%3Cscript src='" + gaJsHost + "google-analytics.com/ga.js' type='text/javascript'%3E%3C/script%3E"));</script><script type="text/javascript">try {var pageTracker = _gat._getTracker("UA-6540825-1"); pageTracker._trackPageview(); } catch(err) {}</script>Scotthttp://www.blogger.com/profile/12915297057336831151noreply@blogger.com0tag:blogger.com,1999:blog-8980874911927460995.post-87305702781465258892012-08-04T08:47:00.001-07:002012-08-04T08:47:30.965-07:00Little TommyBill and Susan Barton strode into the fertility center at the appointed time Thursday morning. But their confident outward demeanor belied an anxiety just below the surface.<br />
<br />
In a moment, one of the young assistants entered the waiting room and announced that the doctor would see them.<br />
<br />
The two kept up the charade of confidence as they entered into a plush office. A balding middle-aged man in a white coat peered at them through a pair of wire-rimmed glasses from across an expansive desk.<br />
<br />
"Mr. and Mrs. Barton, my name is Dr. Seabram. So, it seems you are interested in conceiving through our meiotic selection procedure?" he prompted them.<br />
<br />
"Well, yes, Dr. Seabram, we are certainly interested," said Susan, "but we would like to know a bit more first."<br />
<br />
<a name='more'></a><br /><br />
Susan and Bill looked like the stereotypical patients Dr. Seabram encountered every day, day in, day out : nervous, middle-class, mid-thirties, want to know more. He began his well-worn explanation.<br />
<br />
"Well, the meiotic selection procedure is not actually an engineering procedure, as far as the genetic material is concerned. Which is why we can do it, perfectly legally, within the parameters of the Cold Spring Harbor Protocol. Very safe. It's simply a way to sort out more promising gametes -- reproductive cells -- from among the possible cells each of you are capable of producing.<br />
<br />
"We take a sample of cells from each of you -- a blood sample, very simple -- and grow them in culture, where we induce them to undifferentiate back into stem cells. We then transfer them to new culture media where they are induced to undergo meiosis. Meiosis is the process where the genes segregate to produce the unique combinations that unite at conception to produce a unique person.<br />
<br />
"These thousands of unique meiotic segregants are separated from one another and used to establish vegetative lines" -- here he carefully avoided the word 'clones' -- "which we test with a parallel genetic analyzer.<br />
<br />
"The analyzer is just basically a big machine designed to analyze many samples all at once and output the results to a computer. It checks both the genetic content of each line, and also the integrity of the cells, just in case there might have been any unusual rearrangement in the segregation process. Because we have established lines of each segregant, we can match the results back to the specific line, and pick out the best candidates for you two to conceive a child.<br />
<br />
"The chosen lines are induced to continue differentiation to form fully developed reproductive cells -- sperm and egg, which we check for genetic integrity once again -- and combine in a routine IVF procedure and implant into the uterus. Nine months later, you've got your little baby," he said, with a smile at the end.<br />
<br />
"But, what about all the other little embryos?" asked Susan.<br />
<br />
"There are no other embryos," said Seabram confidently, "the only embryo formed is the one implanted into you."<br />
<br />
"I see," said Susan, hesitantly.<br />
<br />
"What exactly can you tell -- genetically, I mean -- about the different segregants?" asked Bill.<br />
<br />
"You know, my husband studied genetics in college," said Susan, confidently squeezing Bill's leg.<br />
<br />
"That was a long time ago, honey; things have changed since then," he said, a bit impatiently.<br />
<br />
"And that's just where the rubber meets the road, isn't it?" began Seabram "Things are changing because we have been learning more -- which begs the question 'Just how much do we really know?' And I would not be being totally honest with you if I told you that we could tell you everything you wanted to know about your future offspring. Because, frankly, there's a lot we still don't know about how genetics works. In fact, I'd even venture to say that we probably won't ever know everything. There will probably always be a large element of mystery to these processes.<br />
<br />
"We can tell you what genes are there, to the extent we have identified certain sequences as genes. Unfortunately, we can't say for sure that we've got them all yet, and we can't always say what the outcome will be of having any particular gene -- or even if we have established a proper definition of what a gene is! We haven't really learned all the ways that different sequences of DNA can interact to produce biological characteristics. We are always learning more, but there is simply a very great deal that we don't know at this time.<br />
<br />
"On the other hand, there is quite a bit that we do know, and this procedure can greatly reduce the probability that your offspring will suffer from those genetic diseases which we do understand. We can also give your child a better chance at being able to achieve more in life by stacking the deck in his favor in terms of those genes which we have identified that can confer particular advantages -- an above-average IQ and such. But we can't in general predict just how the particular combination of genes will turn out, and outside of this genetic deck-stacking -- which, really, is fairly narrow in terms of the overall genetic content -- the rest is up to chance."<br />
<br />
"Hmmm..." said Susan, pensively.<br />
<br />
Bill leaned forward, his complexion taking on a keen squint of a gaze at the doctor. "What about your pre-selected lines?"<br />
<br />
"Bill," said Susan, in a tone of warning, "we talked about this."<br />
<br />
"I'm just asking," said Bill, turning back towards the doctor.<br />
<br />
"Well," said the doctor, adjusting his glasses and straightening up in his chair. "I'm glad you asked. It sounds as if you've been doing you homework.<br />
<br />
"In the course of our practice, as well as research, we have accumulated an extensive collection of meiotic lines, some of which have already undergone extensive selection. Now, when -- or I suppose I should say 'if' at this point -- if we were to perform a meiotic selection on one or both of you, no doubt that with a large enough sample, we would identify some lines which contained a 'better' set of genetic material -- on average, at least, and if 'better' is really the right word -- than would be at all likely if you were to produce a child the old fashioned way. As a matter of chance, some lines will contain considerably more of those advantageous genes, and fewer of the genes likely to cause trouble. Which, of course, is why we do the selection in the first place!<br />
<br />
"But you have to understand -- the human genome contains a <i>lot</i> of DNA, and a <i>lot</i> of genes. Neither of you appears to have an overt genetic defect, but chances are that each of you carries at least a few genes that would kill you if you didn't have a complementary gene to make up for the bad one. Probably also several more that wouldn't really be very good for you. Fortunately, the probability of having two such genes is rare; unfortunately, natural meiosis is non-selective and these things persist, every now and then causing some poor individual a great deal of trouble.<br />
<br />
"Our procedure would likely be able to identify at least a few of your own segregants which were mostly free of such defects -- again, at least of the ones we know of. But, let's say for argument's sake, you've got seven potentially lethal or otherwise deleterious genes you are trying to exclude. Right off the bat, we're talking about the elimination of over 99% of the lines we produce -- before we have even started trying to select for advantageous characteristics! This is pretty typical. Now, you don't necessarily <i>have</i> to get rid of all the bad genes, so long as you can ensure they wind up in a background where they won't cause any trouble. But it illustrates the principle of the thing -- the more cards you are trying to stack, the tougher it gets, and we often wind up having to make tough decisions and weighing one thing against another.<br />
<br />
"Our pre-selected lines can help with this process immensely. They are actually the result of several such procedures -- they are derived from individuals whose lineage has been undergoing this type of selection for several generations. These lines contain no known genetic defects, but in addition, contain a disproportionate number of those genes which have been identified as particularly beneficial or advantageous, in that they can confer what many people would consider more desirable characteristics. Some are positively <i>stacked</i> with these genes.<br />
<br />
"With one of these lines as the complementary line to one of your own, everything becomes much more flexible. It isn't so critical that the stars align, and you have a lot more options. We have a wide selection of such lines, for starters, which you can search to find one that is most compatible with the genetics you have to offer, and in whatever line you choose, at least one good gene at every known locus. You can start thinking about particular combinations that work together that maybe wouldn't otherwise be possible, without worrying so much about the deleterious genes."<br />
<br />
"But it wouldn't really be our child, would it?" asked Susan, more as an assertion than a question.<br />
<br />
"I'm afraid you've entered philosophical territory with that question," said the doctor. "If you want my perspective, I deal with this stuff every day, so it's sort of lost its magic for me. And I have an adopted daughter whom I love very much. I think you have to answer those kinds of questions for yourself."<br />
<br />
Susan squirmed in her seat a little, and there was a rather long, awkward silence.<br />
<br />
"I'll tell you what," began the doctor again, "I'll put it to you this way. You basically have three choices -- You can use all of your own DNA, from both of you, or you can use half of your own DNA, from either one of you, or you can use none of your DNA, using two of our own pre-selected lines --"<br />
<br />
"People do that?" asked Susan, in a tone of amazement.<br />
<br />
"Oh my, yes," said the doctor. "You're chances of having a prodigy for a child are practically guaranteed. If that is what you are looking for, naturally. Of course, it is not the most popular choice. The most popular is to use one of our lines with one from one of the parents. As I said, this allows for a great deal more flexibility, and in all likelihood a very promising offspring in terms of the potential for high achievement.<br />
<br />
"And since most families that have children have more than one child, there are always opportunities to include the genetics of the other parent in subsequent children. But if do you choose to use both of your own in the same child, the child will still probably stand a good chance at having the potential for at least above average achievement, and will be spared a great deal of anxiety over suffering from heritable diseases or passing them on to his own children. It is up to you."<br />
<br />
"So, wait, you mean we could have, say, a son with Bill's DNA, and a daughter with mine?" said Susan, apparently warming to the idea a little.<br />
<br />
"Oh yes," said the doctor, "we do just that all the time -- selecting the sex and everything. It's one of our most popular plans."<br />
<br />
Bill and Susan looked at one another for a moment. "I suppose we've got a lot to think about," said Bill.<br />
<br />
"How about this," said the doctor. "What we can do is get samples from both of you, and create the lines. We can do some hypothetical computer matchups with these different options, so that you can see what kinds of choices you are really looking at. That can maybe help you to decide what you want to do. As it is, you don't really know your own genetic backgrounds, so all of this is a bit hypothetical at this point. Neither of you have been tested before, have you?"<br />
<br />
They both shook their heads.<br />
<br />
"OK," he continued. "We can do this free of charge, the only catch being that once the lines are created, they become our property, whether you decide to use them or not. How does that sound?"<br />
<br />
"What will you do with our lines?" asked Bill.<br />
<br />
"Probably nothing," answered the doctor. "If you do a selection, the lines of your child would be far more valuable to us -- and we do ask that they be donated, should you make such a decision. But since you are both from the general population, most of your own lines will contain too many defective genes to be of much use as a pre-selected line. We'll probably wind up throwing them all away. There's always a chance, though."<br />
<br />
"But..." said Susan, timidly, "what about..."<br />
<br />
The doctor smiled. "Don't worry," he said, "they are nothing more than tissue lines. Your own bodies are doing the same thing as we speak, turning over potential reproductive cells. That is all we're doing, making reproductive cells, not embryos. That has to wait until you are actually ready for the baby."<br />
<br />
The Bartons assented to this plan of action. The doctor showed them into a clinical room, where they signed release forms and a nurse drew blood from each of them. An assistant gave them some informational brochures, and the couple was on their way.<br />
<br />
Later that evening Bill Barton examined some of the material, and looked up a website with additional information. He found a webpage that gave a brief history of the technique. It was fascinating.<br />
<br />
Apparently, about twenty years ago, a very wealthy elderly couple set up a trust for genetic research, with the explicit aim of alleviating -- or better yet, eliminating -- genetic disease from the human population. Both their families had been rather aristocratic, and wracked with heritable diseases -- his with Parkinson's, hers with Alzheimer's and heart disease.<br />
<br />
But the money came with strings attached -- no unethical means could be employed, either in the techniques developed, or in the research which went into developing the techniques. This meant that no embryos could be created outside of the express purpose of producing a human life, and no human cloning. Embryos were not to be created for experimentation or for use as genetic tools, and the prohibition on cloning eliminated the standard recombinant strategies of genetic tailoring.<br />
<br />
For most researchers, this was too much of a straightjacket. But one promising geneticist agreed to the challenge -- one Dr. John Anderson. Dr. Anderson pitched his idea to the trust, and it was off to the races.<br />
<br />
At that time, methods for manipulating cellular differentiation were already being developed, and within a few years he had already perfected the technique in mice. He experimented for some time with cultures of his own cells until he had mastered the process of differentiation, induction of meiosis, and conversion into reproductive cell lines. By all measures he could devise, they were indistinguishable from naturally occuring egg and sperm cells.<br />
<br />
He then gathered together a group of volunteers -- ten couples committed to raising large families. He performed his technique with each couple, producing a first generation of meiotically selected children. All pregnancies went texbook-perfect. No birth defects, and a clean bill of health on every baby, genetic and otherwise. Among them, the incidence of deleterious genes was drastically reduced, and as all combinations had been pre-screened for compatibility, the possibility of a known defective combination in any particular child had been eliminated.<br />
<br />
But he did not declare victory over genetic disease and stop there. Recognizing that these children represented a pre-sorted 'genetic pool,' he used cells from this generation for a subsequent generation, implanting the embryos back into the original mothers to produce a second generation within only a few short years of the first. The result was a complete eradication of all known deleterious genes within this generation -- and a substantial improvement in the frequency of known advantageous alleles. A few years and a few generations later, and Dr. Anderson had isolated multiple highly-sorted lines -- some still in use today by couples like Bill and Susan -- and delivered over a dozen child prodigies. Five generations of selection -- in a fraction of a single human lifetime.<br />
<br />
Only twenty years ago, and already the technique was so advanced and widespread! The impacts on human health were already being felt. The incidence of birth defects and heritable disease among children fell like a stone. And as the genetic segregation was permanent once established in individual people, the suppression of the frequency of defective genetic loci would persist whether or not children of these couples opted for the procedure themselves. The frequency of defective genes in the population at large was being permanently reduced.<br />
<br />
But there were other effects as well. The standardized test scoring systems were thrown into a tailspin. Public schools did not know what to do with the enormous influx of 'statistical outliers.' Religious and political groups began to question everything from the morality of the procedure to the 'fairness' of its availability only to the 'privileged' groups that could afford it. Some groups wanted it banned; some to make it manditory and a crime to conceive by other means. Charities were set up to subsidize the procedure for poorer families -- and burned down by militant fringe church leaders proclaiming 'judgment' and bloody apocalypse. All told, it was an intensely controversial and socially disruptive development.<br />
<br />
It was the drive of aspiring middle-class families like the Barton's -- always looking for a perceived 'competitive advantage' to propel themselves and their children into the upper-echelons -- that pushed the technology into the mainstream. Almost overnight, a cohort erupted demanding the procedure, their demands backed up by dollars. The procedures therefore remained legal and took place; the propelling, not so much, as there is only so much echelon to go around. In the span of twenty years, it had become a commonplace. By the time Bill and Susan were having their samples drawn, it was no longer unusual, though still controversial. Some of their friends were having it done, but not all of them.<br />
<br />
Two weeks later, they were contacted by email that their results were in. They were directed to a website that showed them their 'best-ranked' possibilities, as generated by a computer algorithm.<br />
<br />
As it turned out, Bill and Susan were not all that compatible, which they were informed was a fairly typical result. Each of them carried a number of genes which could potentially confer a particularly favorable set of characteristics if present in the right combination with other genes, but these complementary genes were not present in their partner. And Bill in particular carried a number of rare but debilitating genes that severely restricted the number of lines they would really want to use from his segregants.<br />
<br />
However, there were a number of compatible pre-selected lines that could provide a useful genetic background for each of them. This way of doing things would allow the couple to better utilize it's own genetic assets to produce healthy children without sacrificing possibly advantageous combinations.<br />
<br />
In the end, Susan and Bill settled on the last approach -- they would first have a boy using one of Bill's segregants and a pre-selected line, and then a girl with one of Susan's in the same manner. They set another appointment, at which time they were presented an enormous bank of computer generated choices using the center's library of cell lines. After some agonizing, they made their selection, and within a few days were summoned back to the clinic for implantation.<br />
<br />
Nine months later, little Tommy Barton was born, and as soon as Susan saw him, she could tell he had his father's eyes.<br />
<br />
<script type="text/javascript">var gaJsHost = (("https:" == document.location.protocol) ? "https://ssl." : "http://www."); document.write(unescape("%3Cscript src='" + gaJsHost + "google-analytics.com/ga.js' type='text/javascript'%3E%3C/script%3E"));</script><script type="text/javascript">try {var pageTracker = _gat._getTracker("UA-6540825-1"); pageTracker._trackPageview(); } catch(err) {}</script>Scotthttp://www.blogger.com/profile/12915297057336831151noreply@blogger.com1