http://www.capitalismv3.com/?p=2576Judith Curry discovers Hayek. I complain that scientists aren’t operating ethically. And we should be able to sue scientists the way we sue doctors, lawyers and accountants.
Source date (UTC): 2011-04-21 09:48:00 UTC
Camus starts The Myth of Sisyphus with this insight.
“There is but one truly serious philosophical problem and that is suicide.”
To which I’ll add:
“There is but one truly serious problem of political philosophy, and that is, why not kill others and take their property?”
We always assume common interest, and that politics starts with debate. Debate is a proxy for violence. But we too often assume that a proxy is equally advantageous. It isn’t. Debate arose uniquely in the west as a means of enfranchising fellow warriors who must pay the high cost of equipping themselves for battle, so that they can participate in the fraternal defense of market centers – what we call towns, or cities, or the polis. It was a transfer of social status and power from the strong to the weak, so that together they might be stronger. The assumed equality in debate is for the purpose of the debate itself. Equality does not exist outside of that venue. There are the weak, and the strong. Violence is still the choice of the strong. And debate is a trade off for them. They hope to be stronger by it. But if debate becomes a means of making them weaker, they have the choice to return to violence. The only serious question of politics is why the strong do not kill or enslave the weak. From that question all others follow. If instead, we start with any other assumption, there is already a transfer of wealth going on, from the strong to the weak.
Editing audiobook. Law, Legislation and Liberty. Priceless quote: “If our civilization survives, … I believe men will look back on our age as an age of superstition, chiefly connected with the names of Karl Marx and Sigmund Freud.”
Source date (UTC): 2011-04-19 22:17:00 UTC
There is a natural conflict between the need to avoid a scarcity of cash and credit, such that all opportunities for increases in productivity within the economy can be exploited, and the fact that fiat money and fiat credit tend to mask, obscure and distort the information that would come from climbing interest rates. The general strategy has been to monitor the interest rate. However, the interest rate alone is not a sufficient barometer because a) people ‘flock’ or ‘school’ to over exploit opportunities — and b) unfortunately, (and this is becoming a topic of interest by the serious mathematicians in the field due to the plethora of data collected from the boom) it appears the entire economy is becoming governed, not by opportunities and not by productivity, but by nothing more than *responses to the discount rate.* Which means, (as the austrians have said for a century), the distortion caused by fiat money is cumulatively, and recursively the source of booms and busts. Of course, the fact that those of us say it is logically obvious is countered by the short term quants who fall into the ludic fallacy of probabilism.
[callout]There is a natural conflict between the need to avoid a scarcity of cash and credit, such that all opportunities for increases in productivity within the economy can be exploited, and the fact that fiat money and fiat credit tend to mask, obscure and distort the information that would come from climbing interest rates.[/callout]
There is a way out of this problem. But we would need a long and deep discussion about the nature of government to fix it. We are using a system of lawmaking and taxation that was invented for an agrarian era when the unit of work was at best a season, but accounts were settled annually. We live today in a world where the month is a meaningless topic, and only weeks and quarters are of informational value. Instead, by the combination of pooling accounts (the error of aggregation of plastic categories under quantitative analysis), taxes (which are disconnected from the causal actions that produce profits), and fiat money and fiat credit (which obscure information signals) we effectively launder causality from the pricing system which is the entire purpose of HAVING a pricing system. If we issued loans rather than collected taxes, this problem would right itself quite quickly, and both our political rhetoric, and abuses by the government would be much more rational and tangible if we did. Or rather we taxed what we should (income against an averaged three year balance sheet) and we gave loans rather than provided general liquidity, we would allow private money to pursue it’s ends and public money it’s ends.
[callout]There is a way out of this problem. But we would need a long and deep discussion about the nature of government to fix it. [/callout]
Furthermore, tagging all financial transactions, then treating the internet, and the financial network as a utility that can tolerate failure through multiple layers of redundancy wouldn’t hurt either. There is nothing magic about this series of prescriptions. They simply prevent the laundering of causal information from the pricing system by the error of aggregation. In the simplest terms, tax pooling and general funds are money laundering. Loans are causally transparent. Taxes are causally opaque. We cannot have a RATIONAL government if the data that they rely upon is by DEFINITION, IRRATIONAL, null, and void of rational content. THE DISCOUNT RATE IS, FOR ALL INTENTS AND PURPOSES, AN ERROR OF AGGREGATION. THIS ERROR THEN “FINACIAL-IZES” THE ECONOMY OUT OF THE PURSUIT OF PRODUCTIVITY. (Of course, under that scenario the profits of the big banks would be captured by the public sector.)
The first reason that the USA wanted it’s own money is so that it did not export profits to England or France in the form of currency appreciation. The second reason was to reduce trade friction between the colonies. The third was because private money is a riskier proposition, and trade was artificially limited by the instability and problems that came from runs and scares. The reasons that the USA developed the banking system and fiat money was because there was a shortage of money to lend in order to finance the westward expansion of the country.
[callout]Since only the government, which consists of citizens who spend their time on geographic protection, protects the geographic territory, and since the citizens are shareholders in the government, then to expect the government to conduct territorial wars, yet to allow private profiteering of the windfall opportunity of geographic expansion because the state is unable to create money to provide the credit, is for individuals to PRIVATIZE WINS AND SOCIALIZE LOSSES. [/callout]
Credit money is useful to all societies and it DOES cause inflation, because there is no way for people to KNOW when and when not to lend. As long as there is credit money there will be booms and busts. Paper money is necessary for the same reasons – there are artificial limits to competitive productivity without paper money, and without fiat money. Furthermore, as we have seen in the PIGS countries, fiat money tends to decrease corruption. Early in US history, when they tried a multiplicity of monies it created financial instability and trade friction. It was only after taking the dollar off the gold standard that we saw the abuse of it. The question is, if there is a geographic opportunity, should private investors profit from that or should the government profit from it? That is not the same type of investment as the use of private personal knowledge for the purpose of increasing production. Since only the government, which consists of citizens who spend their time on geographic protection, protects the geographic territory, and since the citizens are shareholders in the government, then to expect the government to conduct territorial wars, yet to allow private profiteering of the windfall opportunity of geographic expansion because the state is unable to create money to provide the credit, is for individuals to PRIVATIZE WINS AND SOCIALIZE LOSSES. This may take a few readings to understand. But this is the entire point. Christian Classical liberalism and it’s restatement as Hayekian libertarianism differs from jewish anarchism and it’s restatement as Hothbardian libertarianism almost entirely because christians are philosophically fraternal land holders, and their metaphysics assumes the necessity of land holding, while jews assume land is magically held by someone else because they are metaphysically nomadic and have been diasporic since being conquered by Rome. These assumptions have been part of both groups’ tribal sentiments, philosophy and cultural ethics for thousands of years. Judaism is an arrested civilization. Christianity is an overextended civilization. But you will have a hard time pointing to the success of non-landed civilizations. So, in the end, private money is as often a means of privatizing wins and socializing losses as is fiat money a means of destroying productivity and socializing profits that were made by individuals taking personal risks. The problem with money is that it serves to coordinate diverse and dispersed and fragmentary human KNOWLEDGE, and that gold, or hard money, or private money, because it is scarce, serves better to make use of that dispersed knowledge by capturing willingness to put it behind any initiative or investment that might be poorly considered. While soft money helps to solve the problem that occurs when people have a willingness because they agree on an opportunity for investment, yet they cannot obtain the scarce money to do so. Our problem is not necessarily fiat money. It is that the state can use ‘pooling’ of funds to mask transfers. That is a deeper conversation. But hopefully I have given you some food for thought.
“If instead, our government operated as a bank and insurance company, it would be empirical, calculative and specific rather than rational and deliberative, and general. As such, it would be far less easy to rely upon supposedly moral arguments, that are in effect, universally, without exception, forms of deception or convenient rationalizations and justifications for either theft, class warfare, or corruption.”
Source date (UTC): 2011-04-18 11:47:00 UTC
http://www.capitalismv3.com/?p=2556Three articles on money #2 : Fiat and Private Money : Privatizing wins and socializing losses.
Source date (UTC): 2011-04-18 11:41:00 UTC
http://www.capitalismv3.com/?p=2558Three articles about our government and money. #1 “Financial-izing” the Economy out of productivity.
Source date (UTC): 2011-04-18 11:40:00 UTC
Shaved off the beard. Too much grey: Amanda looks ten years younger than she is, so I have keep myself well preserved, so to speak. I don’t recognize myself in the mirror, and now I have to learn to shave again…. Sigh.
Source date (UTC): 2011-04-16 11:00:00 UTC
http://mises.org/daily/5211/Conventional-Education-Will-Go-the-Way-of-Farming?sms_ss=facebook&at_xt=4da8bacf251b69e9%2C0Doug French posted this short article on our education ‘bubble’. I”m trying to figure out if it’s thought provoking. Maybe. I don’t think we’ll save on education in the future. I think that we overspend on irrelevant education, but that we could spend much less on relevant education. Unfortunately, under Democratic Secular Humanism, the university is the church. And good luck getting the church to change it’s doctr
Source date (UTC): 2011-04-15 17:42:00 UTC