I’ve purchased two books, this one “Adam’s Fallacy: A Guide To Economic Theology”, as well as “Economics As Religion: From Samuelson to Chicago and Beyond”. There are any number of books on this theme. Note: This book was a waste of time and money. It is a silly marxist pamphlet. I can summarize it as “poor people breed too much and capitalism doesn’t care” when in fact, capitalism simply makes it very expensive to have children and those who breed irresponsibly are punished abstractly by enduring poverty rather than forced by village and tribal elders to leave their child exposed and dead. The vast silliness of the logic in this book is unworthy of further commentary. I’m surprised that this notion of economic religion is not more commonly discussed in the venal press. But it is too valuable a tool of those who wish to empower a democratic state and it’s politicians who are, quite frankly, at a loss to apply something other than the practicalities of getting elected, or the mysticisms of our founding documents, christian religion, or marxian fantasy. I start with Adam’s Fallacy. Using the KIndle edition on a mac, and therefore cannot annotate in place, and am not sure of page numbers. (This is a problem we need to fix, because we’re going to increasingly use dynamic text, which requires paragraph numbering not page numbering. Anyone remember wordperfect versus word?) PREFACE I am not sure I buy the argument that smith created a fallacy by separating market life from personal life. The Wealth Of Nations (TWON) is only the second half of his philosophy. the first is The Theory Of Moral Sentiments. (TOMS) They together represent his insight that the division of labor increases production and that human sentiments to cooperation at both the intimate, interpersonal, local, social and global level. While we are only in the preface, I’m not sure I buy the assumption because it’s too loose an assertion. Instead, I blame Knight and Keynes. Smith is nothing but a moral philosopher. “Contemporary economics has grown into a major intellectual industry” I hope this is elaborated further because it’s the the same problem presented by the clergy. People depend on perpetuating the faith. “Teaching economics reinforces the world view I call Adam’s Fallacy”. I don’t think so. I think that’s the crowd post 1900. “Teaching students to think like economists .. is hard.. and thinking like an economist … is just as value laden as any other way of thinking about society”. The idea in economic reasoning is the broken window problem: the need for all humans to think in terms of secondary causes and to follow the chain of secondary causes. This teaches people to think more deeply about the trade offs of both personal and political decisions. Yes it’s hard for people. Otherwise we wouldn’t need a market. CHAPTER 1 “The moral fallacy of smith’s positin is that it urges us to accept direct and concrete evil in order that indirect and abstract good may come of it.” Well, now, we need a definition of evil, don’t we? “neither smith nor … his successors have been able to demonstrate rigorously ad robustly how private selfishness turns into public altruism”. I don’t think he says that. I think he says that by participating in the market europeans will have fewer wars. CH1 – The Division Of Labor “Smith leaves unanswered the chicken and egg question of whether it is ultimately the human propensity to truck and barter that lads to the division of labor, or the division of labor that compels people to exchange.” Isn’t this a false dichotomy? People have always bartered and exchanged. the division of labor is simply more profitable for the individual. Ask any art-jeweler or craftsperson, who starts out producing one offs, but determines that quality of life depends upon his or her development of a product line that can reliably produce revenue, so that she is free to create those individually interesting pieces. The VIrtuous spiral of economic development. “Smith puts his faith in the ultimate benefits to be gained from the virtuous spiral to in crease standards of living and enhance the wealth of …. the sovereign.” “Smith SAYS LAW “… rise in labor productivity has at least one immediate and negative effect: a reduction in the demand for labor in the industries undergoing raid rises in productivity. …. unemployment can result.” “thus say’s law is based on a belief in the efficiency of the financial institutions of a capitalist economy” I don’t think so. I think it’s based on the belief that no other alternative is available while retaining the productivity RELATIVE to other nations, so that wars can be averted, and we can overcome the myth of the fixed-pie. “some of these displaced workers will eventually find alternative jobs” Yes, they will. They just might not like them. The alternative is that people should subsidize workers to produce goods at increased cost of goods to themselves and/or that the entire enterprise of production that employs ALL workers will fail to compete for market share against people from OTHER nations. In other words, it’s the smallest of three evils. “It appears that over long periods of time, says law does operate” Well, of course it does. At this point I’m frustrated because I don’t understand the problem. I know marxian fantasy must be in here somewhere by now. THEORIES OF VALUE I cannot for the life of me discern what point he is trying to make here. MARKET PRICE AND NATURAL PRICE Well, since the time of smith we understand that the labor theory of value is flawed and we have dismissed this part of smith as an error. So I don’t see this as material. he states in many more words ,that natural prices and market prices are in disequilibrium at all times. This makes no sense because a natural price is a tool for us to use to conceptualize movement, and a market price is a thing that comes into existence. So far either he is trying to accumulate a later argument or he’s simply confused. “contemporary economics on the the hand, focuses more theoretical attention on the the ideal imaginary state of equilibrium where market price and natural price coincide.” At this point he is trying to build an argument upon a falsehood – the labor theory of value and natural price. I hope that this is going somewhere. Either that or he is trying to state that the DSEM construct is a myth, and we all understand that it’s a myth. There is no bell curve. There is no equilibrium. It’s just a construct we use so that we can apply math because without that construct we CANNOT apply math. WAGES “… wages have the social function of allowing workers to reproduce themselves” (he means have children). “In order for wages to perform this function, they have to be high enough to allow workers to buy a subsistence standard of living” Ok, so this is supposed to be that the poor have the right to breed? So when did this become a social good? the problem for mankind since industrialization is that people simply don’t die, and they’re expensive. Our problem is overpopulation not supporting the unproductive people’s fantasy of unrestrained child birth. “Smith associates high wages and a high workers standard of living with a growing capital stock” Yes, I agree. at this point I understand that he is providing contemporary context. I read the rest of chapter1 and move to chapter 2 in the hopes that he is going to provide some insight here. Note to authors. Make your premise first then prove it so we don’t have to guess our way through your fantasy. FAR AHEAD “Behind this…. lies the unpleasant truth about capitalist social relations. The organization of the social division of labor through commodity exchange and wage labor systematically inverts the ordinary logic of human relationships.” What logic is that? That people have not exposed children for years, or even outright murdered them or sold them into slavery if they could not support them? In fact, breeding differences account for large differences in the prosperity of difficult cultures. So is this the author’s point? That he has some fallacious concept of the ‘right to breed’, instead of the ‘responsibility to only breed a child you can afford to feed?” Then he goes on to say that marx systematically breaks down and…. helps us understand. What he does instead is create a system of justifying primitivism. Look. We converted from hunter gatherers to farmers. We figured out how to control our breeding by creating the ‘family’ and monogamy. This made families economic units that could manage resources. We invented the market, and the tools of quantitative cooperation we call money, accounting, numbers, interest and credit. We increased our ability to breed further, but penalized those who have less foresight. Capitalism creates temporary extraordinary wealth then forces people to control their breeding in order to participate in the wealth. Those who don’t, suffer because of their choices. We just have a more abstract way of controlling population. ( INSERT A VAST AMOUNT OF JUSFICATIONISM OF MARX HERE. ) ESCAPING ADAM’S FALLACY “thus we cannot look to capitalism to solve inequality and poverty” That is correct. WE can only look to capitalism to provide the incentives for controlling reproduction so that the poor do not doom themselves to perpetual poverty in a world where children do not provide security or comfort but are a drain on resources. In other words. This is a silly marxist book, and I wasted two hours reading it. The chinese solved it with the one child policy, and it was a good policy and successful. Rather than redistribute ourselves into mutual poverty and regale the thought leaders of the past, you could simply write a book on the value of the one child policy, or at least, pay men and women to sterilize themselves. Capitalism makes poverty a choice of reproduction.
Author: Curt Doolittle
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Contradicting Bruce Bartlett’s Fantasy Of American Exceptionalism And Good Government
Bruce Bartlett, who is a well known conservative, tried to pitch tolerance to conservatives, and in doing so proved he fails to understand conservatism. I left this comment on his web site:
Bruce, I want to let it pass, but I simply have to contradict this column of yours, even if I agree with it’s sentiments. You (and Boaz) are confusing language with content. (This is the same mistake religious fundamentalists and their critics make. It’s an endemic human error.) Slavery was not the reason for the civil war, the fact that the south paid for the government and could block the north’s initiatives was the reason. Lincoln only changed to ‘slavery’ to get popular support. Slavery is a bad economic model and was in decline, and would continue to decline. Every economist in the world knows this. It’s not about airbrushing slavery. It’s about social status, political power, costs, and ‘the long run’. Denmark is a small homogenous society that has imported a labor class and has yet to experience the degree of friction that empires face when they merge cultures. Denmark literally pays a third of the poulation to stay home so that they wont disrupt the real people, and so that you can talk to an educated person in train station. They pay their poor and ignorant to go away. Homogenous societies are more generous and egalitarian. They can afford to be because political power is something that they have a grip over. The same is true for small societies. Comparing small communities of protestant nordics to the vast body of the world populace is either disengenuous or simply stupidity. The italians in the south are a corrupt and lazy people. THe north know this. They hate supporting them. The north chinese rule the prosperous Southern Chinese. The south hates this. American conservatives don’t like it for the same reason. And, we aren’t nordics. We’re romans. Freedom expands elsewhere? You mean capitalism spreads because it is a superior social technology. However, the vast body of the world is in the process both as an intellectual movement, an as a material political force, to totalitarian capitalism. We may live in the illusion that democracy is meaningful, but it’s actually property rights and fiat money that make a nation. Our ability to expand has been under the force of arms. Not under our graces. Democracy if it persists another century, will be an oddity of northern european civilization. And there is no record in history of democracy enduring, and there is no rational reason that it should. It’s a bad system of government for anything other than a city state. Freedom is maintained by a freedom seeking minority of the population that is willing to use violence to perpetuate those freedoms. That is the source of freedom. It has been the source. It always will be the source. Most people want the fruits of freedom. But freedom has always been and always will be a desire of the creative minority. You are confusing FREDOM FROM nature, and FREEDOM TO act. I’ve written a longer posting to you about this, because it warrants it. But freedom is a specific term that has to do with human political organization and the use of property (life and property). The other ‘freedoms’ allude to are ***ANALOGIES*** to freedom. They are forms of security, safety, and reinsurance. They are not freedom. They are the RESULT OF THE PROSPERITY GENERATED BY FREEDOM. In this comment, and in my posting, I have tried to correct each of your points as erroneous attributions of causality, in an attempt to provide a better understanding of conservative sentiments, and to express those sentiments as a rational economic philosophy. “Conservatism is an economic strategy for group persistence on a longer time frame by a military class using sentiments that represent material economic costs.” This is a long article, but it is a topic that requires explaining a number of issues that are poorly understood for historical reasons. Conservatives need a language to express their complexity. That language is in economics and sociology. The problem for any intellectual is to create a system of thought that can be expressed by people who can only understand those sentiments, people who are more critical of them, and those that an completely articulate them. Conservatives need to understand themselves in something other than metaphorical language in order to compete with short term thinking secular humanists. And even with well meaning but erroneous conservatives who only serve to make the problem worse with their acquiescense and justification. Four thousand words is the best I could do. http://www.capitalismv3.com/index.php/2010/04/contradicting-bruce-bartletts-fantasy-of-american-exceptionalism-and-good-government/
Bruce, I want to let it pass, but I simply have to contradict this column of yours. This is a long article, but it is a topic that requires explaining a number of issues that are poorly understood for historical reasons. While you might attempt to say ‘government has more goods than bads, Conservatives have material objections that, in the end, they feel will result in the elimination of the ability for government to deliver ‘goods’. 1) The accumulation of political power by the state in opposition to the civic republican tradition of denying the state power. 2) Using immigration to disempower the ‘group’ as they perceive it out of political power 3) Giving others extraordinary rights at our expense in violation of the civic republican tradition’s mandate for equality. 4) education biases against us, in violation of the civic republican tradition of meritocratic outcomes. (“Why can jews take over harvard but we have to be restricted by quotas”, for example.) 5) job biases against us 6) abuse and derision by public intellectuals – who have disempowered the churches in favor of the religion of democratic secular humanism and are now mandating their religion as the new social order. 7) redistributing our wealth, in particular, favoring immigration over retirement schemes. The state undermined another pillar of civilization: the mandate to save rather than consume. By liquidity and taxation we are permanently impoverished in old age. Income taxes should be instead be based upon balance sheet wealth so that men can be independent in retirement. 8 ) asking us to sacrifice our productivity to pay for what we don’t believe in. This is the definition of oppression. Democracy is not a vehicle for justifying oppression. It’s a means of peaceful transfer of power, and a means by which peers can choose among opportunities for mutual benefit. When it becomes a means of oppressing one group for the benefit of another, and in doing so empowering government, then it’s simply oppression and no amount of ‘common good’ changes that oppression. 9) undermining the family structure which is the basis for our entire society. Giving people property rights and access to capital is one thing. But undermining the family, and effectively, enslaving men through divorce and child care law is not equality. It’s oppression, and it has made it too easy to enter a marriage, and too costly to exit it. (and yes I can debate the statistics on this with the best of them.) We reward malcontents at the expense of people who have discipline. THis is offensive to conservatives who only want a level playing field. 10) building a victim society instead of a meritocratic society which is against the principles of the Civic Republican Tradition under which it is assumed that we give authority to the state in exchange for not TAKING that authority ourselves. And that is what conservatives DO. They give their authority to the state. (Authority is a proxy word for VIOLENCE.) Why? Because conservatives are Pareto’s ‘Residues’ of the military social class – the last remnants of nobility at the top, and of the soldiery and craftsman class at the bottom. THey operate by the concepts of duty, which they see as indirect payment for the social order. They are the remnants of the Civic Republican Tradition. The one cultural advantage of the west is it’s prohibition on corruption, and this class is the originator of that tradition. If all nations are organized by corruption, then the most wealthy are those with the least of it. The military class is what obtains and maintains trade routes, and what obtains and maintains land, and therefore what obtains and maintains resources . Trade routes and land are the source of prosperity. Not everyone can be switzerland so to speak, and switzerland and singapore are outliers. Essentially conservatives object to profiteering by government at our expense while demonizing our objection to their abuses. Government is the equivalent of a priestly class that lives under the protection of conservatives and by their effort and labors while deriding them and encouraging the beggars to steal from them. I can enumerate these causes of government abuse ad-infinitum. Even if most conservatives cannot articulate their positions in the temporal language of secular humanism, I can. Conservatives have not had enough time or worked in sufficient numbers to develop a competing political language to that of the religion of secular humanism. In fact, to some degree, doing so is antithetical to their dictum of “actions not words, since words are deception”. As such they are trapped in historical metaphor at the top, and religious metaphor at the bottom. These metaphors can be restated rationally, even if most conservatives lack the ability to do so. That doesn’t mean that such a language cannot be developed, despite Mises, Hayek, Popper, Parsons and many others having failed. It just means that as a group that seeks “group-persistence-over-time”, the language that they must employ is necessarily historical and strategic rather than temporal and tactical. Simply because our academic understanding of politics and economics is lagging so far behind our scientific language, and our history, literature, religion and myths are all an impediment to correcting that deficiency. Our wealth, and the ‘goodness’ of government that you casually attribute to the state, is not from the state, but from the freedoms FROM the state. In contrast to your correlations, I’ll enumerate the causations: The real sources of American Prosperity? 1) English Common Law, which facilitates individual property rights, which facilitates human calculation of opportunities. Wide spread use of accounting technology that facilitates calculation of opportunities and costs. Wide spread contract dispute resolution. This law was not made. It evolved. The king could not write laws as we mean them, until recently. He had to rely upon common law. 2) The civic republican tradition awakened in germany as a reaction to the search for freedom from the dominance of Mediterranean civilization, it’s culture of corruption, and it’s trade routes. That german awakening was then distributed by way of english naval dominance. 3) The movement of trade to the atlantic so that we could exploit the newly discovered continent, and the increase in wealth given to the northern european naval nations over the more sedentary competing civilizations of the east. And in particular, the militarization of the entire english nation into what we call Merchantilism, or the corporate state. Ths allowed officers to move into business and expand business under state sponshorship. This mobilizes the vast amount of ‘individual computing power’ when combined with sound money and granular property rights. 4) Plentiful money so that we are not constrained by the availability of money. Contrary to most libertarians who want to expropriate money into the capitalist class, the military is what makes trade possible, and money is borrowed from the citizenry – else we have what libertarians desire, privatized wins and socialized losses – expressly against the civic republican tradition, as well as that of all other civilizations. (this is what we have been doing by the way – privatizing wins and socializing losses. Instead, we should bypass the capitalist class the way the swiss have but that’s another topic althogether.) 5) the importation of vast numbers of people as we sold off this newly discovered continent while giving them political power before they were self sufficient. This is the real reason why the property qualification was valuable. It prevented the importation of people who could empower the political class and allow it to extort money from producers. 6) the concentration of capital made possible by selling off the continent. This has been the greatest land grab in history. 7) the funding of a military bought cheaply and at a discount after the world wars, by the profits earned by selling off a continent. 8) the use of that military network to take over and expand trade routes, banking and the ‘international financial system’ that made american ‘currency’ a necessary commodity for world trade. 9) This export of ‘money’ has been our fee for creating and exploiting that world trade system. it is the source of all our wealth since the great depression. THe imbalance of power has led to an imbalance of wealth that has been in our favor. THAT IS THE SOURCE OF OUR GOOD LIFE. PERIOD. The ENTIRE world knows this. They understand the myth of american exceptionalism even if we don’t. “The west dominates the world because it westerners are simply better at war, not because they are more virtuous.” You can find this statement or an equivalent in the literature of every civilization. In particular, in the literature, worldwide, for the past decade, has been coalescing an argument against western democracy as something peculiarly western. They do not take it to the full conclusion. THat we have a democracy because we are wealthy enough to have one, but that is a temporary phenomenon. We americans are wealthy because in the act of discovering a continent the wealth generated and the freedom of individuals to act, outpaced the ability for the european governments to appropriate that wealth. This led to local concentration of wealth in the hands of local ‘business people’ who then took political power and profited from westward expansion. THe increase in productivity by the late 1800’s along with the after effects of napoleon’s chaos collapsed the european economy in the first great depression and led to the franco-prussian problem, and eventually to the first world war. The further concentration of capital allowed the US to capture english trade routes and military bases and buy that empire’s trade routes at a discount. England has been a client state ever since. And the dollar the world currency instead of the pound. We are in our position of wealth not out of national character, or our system of government, or any myth of american exceptionalism, but out of english heritage and the act of selling off a continent. Conservatives, who are historical and traditional by nature, and whom have a long view of time, will take pride in any civilization wherein their status as the progenitors, and maintainers of that society are acknowledged. Conservatives seek to maintain group persistence by maintaining group advantage. This is a masculine strategy as old as mankind. LIberals seek to distribute resources for current good, rather than capitalize resources for future stress. This is a feminine strategy as old as mankind. Together they generally balance one another whether in tribal cave, clannish village, or chieftain state. The problem becomes epistemological when we get to empires. We have trouble ‘knowing’ if we’re storing or distributing enough. WE haven’t had the political technology to solve that problem yet. The first time mankind had this problem we developed writing, numbers and counting systems. The second time we developed Accounting, contracts, interest and banking. Now we need to understand that our political system has to catch up with technology. We have an antiquated political system in this country for the size of empire that we have and it is this antiquity, this antiquarianism, this reliance upon metaphysical biases and residues that is preventing us from solving the problem of reinventing government. Socialism is not reinvention, it’s re-establishment of tribalism. Democracy is not advancement, it’s a temporary tool for increasing the scope of participants in problems solving. We are beyond the ability for politicians to comprehend our problems and provide solutions. Conservatives know this. They just don’t know how to change it. (I do.) But if history is true to form, the invested interests in government, and the money in the political chain, (just as conservatives warn) is such that these innovations will take a century to implement if even possible, unless there is a catastrophic failure of our ability to maintain trade routes and the global monetary system. Government broke the boundary of moral hazard when it created fixed benefit programs and sought full employment rather than variable benefit programs and productivity increases, and in doing so converted the society from saving so that the old could profit from lending to the young to the young supporting the old, when it had taken thousands of years of human history to adopt the established technology of saving and interest. This is was social hubris on a massive scale. Furthermore the government simply SPENT all that accumulated wealth in savings, as redistribution and social and infrastructure programs over a period of eighty years. The conservatives tried to counter it but could not, and now demographically have lost the opportunity. They have been out immigrated and out bred. Americans need to stop congratulating themselves on their perceived wisdom and the virtue of their religion of democratic secular humanism. That’s all nonsense. We are prosperous because we control resources, and levy a worldwide tax for our policing of the international system. While at the same time we undermine that system’s ability to function by undermining the political power of the people who made that system possible: the military class. Americans need to have an honest conversation about the source of their prosperity so that they can have an honest political debate. without that debate we cannot have a democracy or a republic because all else is superstition, religion, absurd metaphysics and outright fraud supported by outright violence. And that’s the danger. At some point, that military class and it’s newest iteration as the small business owner, has been so willfully undermined by the priestly class’s new iteration of public intellectuals and the new religion of secular humanism, will choose to return to it’s basic principles as a military class. Conservatives may be conservative but they are only non-violent by restraint, not by choice. (Aside from the jewish contingent in the libertarian movement that failed to learn the one lesson of the hebrew bible, and it’s story of the rise and fall of Israel – that jewish doctrine is not sufficiently self sacrificing to hold land, and therefore hold a state.) The conservative dislike of Clinton was almost entirely because of his failure to understand the importance of the military culture to conservatives. When he undermined that culture, he effectively stole the inheritance of the conservatives. That we only had a few incidents of domestic violence was surprising. If he had not done that one thing, he could have emerged as a great president. The trick in this country is to be both militaristic and socially tolerant, and fiscally responsible. But our leaders lie about the source of american prosperity. It is this primary lie that causes american political friction. The West’s success versus all other civilizations, despite it’s marginalism and distance from the beginnings of the centers of civilization, has been that the military class adopted individual tactics in battle. THis led to enfranchisement. Enfranchisement led to debate. DEbate led to reason and logic. Logic to science and technology. Science and technology to And our civilization’s locus changes, from athens, to rome, to florence and Venice, to Paris, to Holland to london to new york to washington, and now to the different cities that are capitals of ‘nine nations of north america’ that make up the Washington Empire. People do not possess the necessary information to make rational decisions about political and social ends. They rely on myths. (THe alternative would be to say “I simply don’t know” which is a sin in the religion of secular humanism. There are a few people who are aging now who are wise enough to say that but the religion is so pervasive that it’s become rare to hear someone say “I don’t knw enough about such things.”) People instead rely on metaphysical presumptions and biases instead of rational information. Because of the complexity in predicting the future during periods of dynamic change (as another generation of our economists are discovering yet again), makes prediction nearly impossible due to such extraordinary complexity, people in all social classes rely on their biases and assumptions. As such, metaphysical biases and therefore, all human decision making, are made according to class judgements – ‘residues and derivations’. And for complex reasons due to pedagogical content in our families, child rearing, language, and literature, THIS CANNOT CHANGE. Class memes are relatively permanent. Most voting patterns are not due to political changes in opinion but to redistricting and immigration and breeding rates. Even for neutral policies that do not affect them, people do not change their long term biases except to generally become more conservative as they age. This is why conservatives are annoyed. THey see their sacrifices in the name of group persistence used by the government to immigrate and empower the state, and they feel angry at the theft of their sacrifices. As such, conservatives and liberals simply hold class residues that together form a division of labor, with short term altruistic goods on the left, and long term group persistence on the right. The question is not whether one or the other is right, but whether each group’s preferences are fulfilled well enough and with sufficient compromise, that neither revolts. (even if revolting is ‘leaving the economy’) The problem in the USA is that the south has recovered from it’s slumber, and the rust belt and west coasts have immigrated vast populations. Second, that the industrial heartland is NOT on a coast, and faces the same problem as does germany – it must produce exceptional products in order to create an export economy that compensates for it’s geographic disadvantage, yet the ‘residues’ in that part of teh country do not promote german or japanese quality, because the rust belt/great lakes culture was developed for westward expansion and developed a culture of cheap simple goods, not for an export economy. This can only be fixed over a generation of policy, and a political ability to articulate that policy. Democracy is notoriously bad at accomplishing these kinds of change. And socialist totalitarianism is the opposite direction. it seeks to distribute normative gains not to increase production. Macchiavelli, Weber, Pareto, Michels, Hayek, Mises and Popper all understood these things to some degree. (I think rothbard distracted the libertarian movement despite his many insights he prescribed anarchism as a means of controlling the state, rather than developing tools by which we could maintain the system of social insurance created by fiat money and the state-bank, making the government insurer or last resort.) Yet these men were unable to develop a prescription for government that solved the problem faster than the state could appropriate power under the myths of socialism and secular humanism. That is because the problem of distributed government in the civic republican tradition is much more complicated than under the simplistic tribal metaphor of centralized states. Socialism succeeds because of SENTIMENTS not because of reason. Government empowerment succeeds because of incrementalism, and a failure of conservatives to articulate a sufficiently explanatory alternative. From my position, in hindsight, it turns out that some people in the thirties, during our second great depression stumbled across it. But that in that period of duress, the state sought the short term goal of FULL EMPLOYMENT instead of the long term goal of PRODUCTIVITY, and thus Keynesianism supported socialism, and we developed the welfare state, just as did the egyptians, Romans, the Mayans and just about everyone else who ever had to run an empire. We can have our cake and eat it too. We can do it without using politics as a tool of calculation. That’s what we do now. We calculate the future of our society using democracy’s political ‘wins and losses’. By trial and error. But we don’t have to race to the bottom like all other democracies in history. We can have our cake and eat it too. We just have to understand that our system of government is from an era of shipping and trading agrarian goods, and that laws are a remnant of slave society, and that the use of politics and government is of necessity an imprecise, and fraud-producing enterprise. As has been said, “We have simply swapped a culture of violence for a culture of fraud.” Conservatives by their nature, understand this. THey see government as fraud. And for reasons that are explained in the myth of the rational voter, it is only by fraud and later justification of failure, that politicians are empowered, and only those that seek power, who seek political office. When the entire western tribal tradition has been to ensure that no man obtains sufficient power to dominate others. Now, the underlying and unstated problem here is that conservatives, as the remnants of the military class are by definition, militant. They are not a rabble. They do not like rabblery. And they will shortly, if they have not already, choose to CEASE refraining from their use of VIOLENCE. I have stated this repeatedly : “men are not equally endowed with either violence or courage. Some are capable of interpersonal violence, some of rabblery and protest, adn some of revolution and civil war.” If I forgo my opportunity for violence, I pay a cost in doing so. If I forgo by opportunity for fraud, i pay a cost in doing so. If I work hard then I pay a cost for doing so. If I am self supporting then I pay a cost for doing so. This is how our civilization is paid for – not by money, but by forgone opportunity. This is the currency of human action that pays for a non-corrupt society, and for the institution of property. That’s how property is PAID for. Not by government, but by many, many millions of forgone opportunities every day. It is THIS that funds the development of the STATE, not the state that creates property. “We have laws because we have property, we do not have property because we have laws”. THe differences in cultural definitions of property have to do entirely with the degree of familial independence needed to keep a farm or craft a good. It is not that one civilization is more charitable than another. It’s that more advanced civilizations are more productive and as such require greater divisions of labor, and as such more granular definitions of property. You didn’t think property rights were FREE did you? Or granted by the government did you? Governments simply publicize property rights – when they interfere with them they disrupt the society. Property is a very complicated technology that must evolve along with the division of labor. It is very little different from the technology of numbers or language and is just as important as science. And it is paid for by forgone opportunity. So conservatives feel that sacrifice by sacrifice they pay into the ‘virtual wishing well’ that creates society. They do this, each of them, with a thousand micro-payments a day. Then, along comes the state and wants them to pay the RESULTS of those sacrifices to the state for reasons of mutual investment. Then the state shows up and wants them to pay the results of those sacrifices for charity. Then the state shows up and wants them to pay the results of those sacrifices to empower the government, and the government says it’s not a donation, but a duty, and then the conservative looks up and says, “hmmm….. I do all these things, and make these sacrifices so that others may jeer at me and ridicule me. ” Soldiers are the source of every civilization because they are the source of it’s ethic, it’s resources and it’s trade routes. Different civilizations’ social systems are largely a reflection of their ancient battle tactics. The west is unique because it adopted the wheel, horse, bronze and coordinated tactics, which required individual initiative, and that the warrior supplied his own instruments of war. That is the difference between western, byzantine, middle-eastern, and asian cultures. It is how you use them as a civilization that affects all other classes that come after it. Furthermore any civilization that loses it’s soldier class, and in particular their motivation to act as soldiers despite the sacrifice of doing so, rapidly becomes the victim of someone else’s soldiers. Conservatives are your soldiers. They carry the meme of heroic sacrifice. The question is, how do you want to use your soldiers? This is the core of conservatism. “Group Persistence and heroic sacrifice to maintain that persistence, and the individualism needed to maintain that ethic.” And as such it is not a silly believe or an absurd metaphysics or a religion. It is a strategy for maintaining land and trade routes. And as such, is the source of not only western but american prosperity. And none other. Everyone else is just along for the ride and complaining about the scenery.
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A Good Day. I wrote ten thousand words before lunch. That’s about three thousand
A Good Day. I wrote ten thousand words before lunch. That’s about three thousand words an hour or fifty words a minute. Sushi+2LitersOfWater+TenHoursOfSleep=Priceless. Water is better than caffeine if you’re rested.
Source date (UTC): 2010-04-13 17:34:00 UTC
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Density Is Not The Panacea Utopians Think It Is
What is it about an office that promotes so much illness? I know that offices where people interact frequently and move between locations lot, and have greater density are natural distribution centers for affection, and I know that the more time children spend in day care and in school, the more they become distributors, and I know that closed-ventilation buildings are better grounds for bacteria and viruses, but knowing that is not the same as having to lose so much time to illness. I mean, it just seems like between my son, the office and airports my immune system is exhausted. It reminds me of a conversation I had with a chinese national a few weeks ago. There is this wealthy Chinese urban activist whose name I don’t know, but he wants to design and build very dense housing for people. What I told him was that it has been thought about and tried over the past century. But the problem is that HUMAN BEINGS ARE TOXIC creatures, and second, that if you move shanty-dwelling-people to nicer circumstances, they just maintain their previous behavior and destroy it – inviting lots of relatives, and putting up sheet metal and cardboard. Now the counter argument is that chinese authorities can impose discipline that other nations can’t get away with. But Im skeptical. What bothers me as a political economist is that all civilizations to convert to urbanism die. (Jarred Diamond has it wrong. It’s an information problem not a resource problem. He has it backwards.) We don’t know how to run a largely urban society for very long because law, which is our primary social technology after religion, simply ceases to work in large cities without extraordinary costs of repression. Money and credit may change that but only if we change policy from taxation to credit the way we changed from religion to taxation as a means of maintaining social order. Human density is not the panacea our planners and utopians think it is. Density is toxicity, it decreases the disease gradient, and it leads to political tyranny and instability, and it becomes increasingly difficult to concentrate capital and therefore productivity. The problem is to balance birth rates and productivity. Not density. And no matter what we do, ‘He Who Breeds Wins.’
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thinking about density. In the office. In cities. In civilizations. “Human densi
http://www.capitalismv3.com/I’m thinking about density. In the office. In cities. In civilizations.
http://www.capitalismv3.com/
“Human density is not the panacea our planners and utopians think it is. Density is toxicity, it decreases the disease gradient, and it leads to political tyranny and instability, and it becomes increasingly difficult to concentrate capital and therefore productivity.”
Source date (UTC): 2010-04-13 12:17:00 UTC
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Bruce Bartlett’s Optimism
Bartlett annoys me. I’m not sure why he annoys me so much. Perhaps it’s the political hack in him that I find offensive. Perhaps the pomposity? Perhaps the fact that he insults the suffering of the common man? Perhaps both. In this posting he states:
I’m rather astounded at all the ill-informed commentary I have read today in normally responsible places such as the Financial Times to the effect that the National Bureau of Economic Research is not sure that the recession is over. That is not at all the case. I am 100% certain that every member of the Business Cycle Dating Committee knows perfectly well that the recession ended some time ago. What the committee is unsure about is precisely when the recession ended.
Of course, according to the definition, it simply means that we are no longer falling. However, imbalances remain, and on a global scale. And unemployment will persist for a long time. In general, the period of contraction only constitutes one third to one quarter of the time span needed for recovery of employment. Unemployment will persist for four or more years. And global contractions are still possible in for multiple reasons in multiple areas. So early claims of recovery are cheerful only for speculative investors and political hacks. The common people have no reason to celebrate.
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Pooling Information Is Laundering Information – Governments Are Money Launderers
What’s the difference between money laundering, general accounting principles as they are currently practiced, the process of taxation, the use of fiat money to create general liquidity, the practice of monthly financial reporting, and the process of electing government officials as proxies for sovereign actions? Nothing. These are all examples of pooling. Pooling information so that causality is removed from that information. They are distortions of the human system of cooperation and coordination. They are an act of money laundering so that the causes and origins of that money can be attributed to mythical causes, rather than identified or deduced to the actual, rational ones. Truth is causality. We can have redistributive government. We can have safe monetary policy. We can disempower the governments ability to generate and foster class and group conflict. We just have to create a form of government that prevents pooling. Pooling is laundering. Laundering is the primary tool of those who commit fraud. Sound incomprehensible to you? It isn’t. It’s actionable. It’s not expensive. It will transform humanity as much as has industrialization. It will radically increase the rate at which humans solve problems together. It will concentrate capital for productive ends, and deliver the results to the populace. We developed libertarianism to stop state theft, and state dissolution of society, and the state’s empowerment of luddite systems of metaphysics like Marxism and Socialism. But in our ambition to do so we lost the purpose of property and trade. We lost our sense of community. Of the general costs of running society that are paid by all men. Of our need to cooperate in groups with others around the world. Libertarianism is a defensive posture. Like conservatism, we need an offensive posture. We need something to promise people in order to maintain our freedom to be the creative class, and to create a competitive society. The answer was laying there since Weber. We were so busy defending ourselves that we didn’t see that answer. Great minds like Hayek and Mises failed. Keynes failed and achieved the opposite of his intent. They were too enamored of the Civic Republican tradition and too optimistic about government. I know that answer. That answer is a program. It will empower conservatives with a message. It will retain a meritocratic society and the propensitiy for hard work, innovation, competitiveness, and retain the most important feature of any culture, it’s symbols of STATUS as those that are founded in the heroic tradition’s self sacrifice and competition for the common good. We can restructure government. We can do it in the USA with amendments. We can rid ourselves of the IRS and the specious justification of government interference in our lives. We can redistribute what is justly the wealth belonging to the people in need. We can. Capitalism 3.0. The Credit Society.
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You Do Not Engineer A Company. You Grow It.
This is a response to an article posted on An Entrepreneurial Mind. In that post the author, Dr Cornwall recommneds writeing a business plan. And the steps for doing so. And I’m of the opinion that that’s just silly. A plan is a tool for managing weak leaders. A plan is what oyu write when you have given control to investors. A plan is what you write so that a leader who lacks knowelgde, understanding and vision can give his consent. A plan is the myth that teachers instill in students as a substitute for the act of critical analysis. I write a plan every six months. It’s detailed deep and critical. From it I extract goals, an ignore the plan. Goals are just longer term opportunities that we work to exploit. They are rarely and end unto themselves. There is no end of history. And there is no end of business.
You can’t engineer your company any longer. The reasons are complex, but they have a lot to do with the availability of capital. There is more of it. Raising money today, even in this environment, is very different from the 1980’s. Because of this, no one writes a business plan any longer. At least, It’s a sign of naivety in the business community. They are an artifact of the era of post war engineering. A myth held by the young and inexperienced. A device used to provide false confidence to failing management. A plan is what you write when you think you know something but don’t, and often cant. The truth is, that the reason young people don’t like to write business plans is because they don’t have the knowledge to. A business plan is a contract among participants, and it is the wrong type of contract for the wrong type of processes and goals. And entrepreneur who authors a contract does so in order to hand over his sovereignty to someone else. Or he uses it because he lacks the sovereignty to act as an entrepreneur. As such, a business plan is a sign of weakness. Of immaturity. Of lack of sovereignty. It is a contract for a false good. When instead, he should have a list of MBO’s, and a financial model – a set of tools that maintain his sovereignty – his ability to adapt to circumstances. The problem isn’t a plan it’s the research. It’s the knowledge. The problem with planning is that it does not reflect business, and hasn’t in half a century. Napoleon didn’t plan. Napoleon mastered his environment. He read everything he could. He hired spies. Read shipping records. Red mail. Read ship manifests. Read intercepted letters. He collected just about all the information that he could. Then he mobilized his forces to take advantage of opportunities that presented themselves. This is a very different way of looking at business strategy. (See Duggan and Keegan) Collect the information that you need to run your business. all of it. Take advantage of every opportunity. Build an INTELLIGENCE NETWORK first. Intelligence networks allow you to identify and exploit opportunities. How do you build your intelligence network? How will information get to you? What kind of non-quantitative intelligence can you and your people gather. The best sales teams meet weekly and review what they have LEARNED about their target accounts. THis process teaches everyone. The CEO should collect that information. But this is also true of marketing, of vendors, of distributors of partners, of the government. It is a vast information problem. I tend to ignore what competitors are doing except when directly competing with them. It is far easier for your staff to pay attention to competitors than it is for them to pay attention to consumers. But systematically collecting customer and consumer information is priceless. The best opportunities are those where someone larger than you are needs something that they cannot achieve for bureaucratic reasons. In those cases you build a company to sell to someone larger. I always start a company with a list of companies I would like to sell it to. The next best opportunities are those where the existing people in an industry are enamored of their value chain, and you can innovate and take their business because of it. THe next best opportunities are those where you can collect either better talent, or better capital than competitors. In most cases, it is easier to steal talent from a bigger and stronger competitor if you have ‘seats at the table’ in your company available. The next best opportunities are those where you have a technological innovation that you can put to practice and patent. This is far harder than it would seem. The next best is where you arbitrage rather than create value: where you have lower costs. This is almost always a bridge strategy. Lower costs are not a sustainable market position. They simply assist in some other market position. Many people are trapped in being small because their only advantage is low cost. Low cost usually means low talent, and talent is what makes your business competitive. It is better to look for increased value and higher cost that people are willing to pay for. Write short definition of a one-year success criteria. If you made these things happen your first year, then would you be successful? Do this every year. I do mine every six months. I hang them on the wall behind my office door. Plans that are longer than that are questionable. Goals may be valuable. Plans are not. Largely, size, number of employees, number of customers, amount of revenue is all good. The rest is just self aggrandizement. Write a one page description of your product, products, or services. If you cannot sell it in one page, then you cannot sell it. Get market research on every competitor, large and small. Take greater interest in why people failed than in why people succeeded in your industry. Most of the time it’s simply tactical. Make a list of all your customers that you can think of. try to understand why they make a purchasing decision. It is very often not intuitive. It is often counter to the reasons you think your product or service has value. One man tried to sell a software system to a bank. But it would have eliminated the department. The VP would ave no one to manage. He poisoned the sale. People in bureaucracies are not entrepreneurs. You have to create a value proposition that appeals to them. Map our your supply chain. Who will you need things from? Why will they give you attention? What will it cost to maintain them? Map out your distribution chain. Who will you distribute your goods and services through? will you rely on yourself alone? a large sales org? channel partners? Alliances are almost universally meaningless. they are a waste of time. Create a very complex, detailed operational spreadsheet. It should be as close to an accurate version of your chart of accounts, balance sheet, income statement, and all costs and cash flows as is possible. Be paranoid and conservative. Mine are usually good enough to run the business on, and I mandate that accounting systems and management reports mimic them. Usually 10-15 pages of spreadsheets. Create a list of the people you know of or think that you can recruit into your organization who will put extraordinary effort into the business. I have started eight companies and I care more about my people than I do about any other factor. good people make a business. Start recruiting them. If you cannot interest them, then you are not going to interest a customer, banker or investor. It takes nine months to do anything. Make a baby. Forget a bad memory. Lose confidence in a market. Develop new relationships where trust is involved. Work for 9 months testing your theory and trying to prove out your ideas. To do that you need nine months of money. During this time take advantage of every opportunity that you can as long as it either gives you cash to fund your business, or it advances your relationships, customers and employees. Write a ‘Book’, for investors on how you expect to use your business to make them money. They do not care about your idea. They care wether you sound like you know what you’re talking about, whether you and your team have experience, and whether you have any ‘advantages’ that they can understand. WHile investors claim knowledge, most of them are in their jobs not because of business experience but because of relationships and luck. Your job is to make them feel comfortable that you are going to make them money. Emphasize that you have an ‘in’, like a major customer, a larger company that you provide a service for or an off-book-r&D effort you’re going to speculate on. And be willing to fail. It is far harder to be an entrepreneur than to work for someone else. You work far harder for less money but more joy and more control over your life. Entrepreneurship is a lottery. You can win. But you have to understand that luck is a very important factor in your success, because you cannot know enough going in to be sure you will succeed. In general, plans are silly. Goals and models are not. Make a model. Revise it constantly based on new knowledge. Stick to nothing. The purpose of goals is simply to provide yourself with decision making criteria when there are many decisions to be made and most of them seem ambiguous. A plan commits you to something and forces you to organize your business rigidly. A business does not execute a plan. It is a large number of people who identify create and exploit opportunities. Your job is to fund an intelligence network that will give you the largest number of opportunities that you can continuously reorganize your company to exploit. And continuous reorganization is far harder than most people think. but it is far more durable. GIve your people six month MBO’s. Even quarterly. Yearly for very top people. Realize that you must learn and that the only way to know anything is by experience. Entrepreneurship cannot be taught. It can only be learned. Because you must learn to run a business in real time. Education can simply give you the tools. But you can sit and ponder things during your education that must be made at risk and peril in real life. If you are craftsman, you ply your trade. You seek opportunities. You learn your skill well enough to compete. If you get to be an entrepreneur, you will have sacrificed all your time, all your thoughts, and devoted more of your life than common people to your job and will become effectively a machine that takes in information compares it against a model and decides if it can be used to achieve goals. The more information you have, the earlier, the more opportunity you can wring for your business. If successful, at some point you will hand over this duty to someone else, who will, not as well as you, do the same opportunity sifting. You will instead, move to longer term opportunities, like relationship and capital management. This is when you get to take your rewards. Whether you get there or not depends on whether you are enough of a mentor and teacher so that your job can be done well enough by others while still paying you well enough that you can afford to compensate someone talented enough. There are a lot of hard working ceo’s that can’t grow their companies. The reason is that they are not paternal enough. They are working a job rather than raising a family. They try to add value by doing something themselves – which is a convenient distraction from building your business. Execution is a staff function, not an entrepreneurial one. Instead, if you’re doing hard work, you should only do it long enough to understand it well enough so that you can intelligently hire someone to do that job, so that you can move onto the next opportunity that needs creating or exploiting. Working hard is good as long as you’re working on the right things. People need different kinds of fitness. Physical fitness is obvious. Scientific fitness is something else. Oratory fitness something else again. An entrepreneur’s fitness is his ability to create an organization that identifies and exploits opportunities. It’s a knowledge problem. FItness is your ability to process information. To judge people. To make decisions in real time. To make them faster and better than your competitors. Evolve your company. Don’t plan it. Parent and Grow it. Don’t engineer it. If what you mean by planning is modeling then that’s a useful tool that gives you understanding. But if planning is the act of mandating self ignorance so that you do not invest in the act of building an intelligence network that you can exploit for opportunities, then planning is just an excuse to bury your head in the sand, or an admission that you lack the intellect to process the information needed to act as an entrepreneur. Very little than men produce today other than biological research is complex. Almost all business problems are not those of production, but those of opportunity identification and exploitation given the fact that resources and production, like technology itself, a temporary and limited advantage. An entrepreneur is a maker, identifier, calculator and exploiter of opportunities. Everyone else is just a clerk. Curt
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The State’s Moral Hazard, The States Immoral Mandate, and The Solution To Both
Rafe Champion on The Austrian/Keynesian Marriage from The Coordination Problem.
…the problem of regime uncertainty which the Keynesians address by saying you will get all the certainty you need from our helpful interventions. But we have long ago reached the point where most of the interventions are the problem, not the solution. Uncertainty is a fact of life and maybe the role of good policy is to provide political and legal stability – not certainty but a reasonably stable institional framework where people can plan for the future with some expectation that they will not be shafted by the next political or administrative decision. If the institional framework is badly broken it need to be fixed but as Roger likes to remind us, that can only be done by piecemeal, experimental steps to handle unintended consequences.
(Note “Regime Uncertainty” is a term meaning “uncertainty created by fear of government intervention”.) Pietro Follows
#1: monetary policy is a cost-socializing technology which reduces the costs and risks of investment, causes bubbles and pushes for a type of overconsumption called “equity extraction”: consumption out of unreal wealth, i.e., capital consumption (Machlup described the same process). #2: moral hazard makes irresponsibility and recklessness privately rational, and the bubble economy is the result. This is the transmission mechanism in its most abstract form: cost socialization begets coordination problems in terms of bad incentives and false information. #3: at the certain moment either (3a) the monetary drug is no longer available or insufficient, maybe because of inflationary fears (exogenous credit crunch), (3b) the financial structure is no longer capable of transmitting monetary stimuli because it is broke (endogenous credit crunch, which, as the famous rapper Freddie H sang “That credit crunch ain’t a liquidity trap, just a broke banking system”), or (3c) the economic structure is no longer capable of sustaining overconsumption (real resource crunch, whose result is normally a scarcity of circulating capital, like raw materials, that in fact have skyrocketed the first 12 months of the recession, and are rising now that someone ventures to talk of a recovery). In ABCT there is (3a) (the Fed takes away the punch bowl) and (3c) (the economy collapses because of capital structure problems), but there is no explicit analysis of (3b), i.e., systemic risk. I think that a breakdown of the financial system due to an unsustainable financial structure, such as excessive leverage, monetary multipliers, reliance on foreign credit, reliance on liquidity, maturity mismatch (30y mortgages vs 3m commercial paper!) is a more apt description of the recent crisis than problems in the capital structure. … An unsustainable financial structure is not an aggregate demand problem: it’s the legacy of a past moral hazard problem which causes a dearth of capital and a crisis. There is no path to a new equilibrium which does not pass through a credit crunch, the repayment of debts, massive deleveraging, exposure to maturity mismatch, and thus a reduction in investment levels.
The question then, becomes one of quantity. How do we know how much social insurance and risk reduction is maximal? The moral hazard then exceeds risk taking on the part of individuals, and in turn becomes risk-mandating, when all participants in the bubble economy must not only forgo opportunity for gain, but instead, will be driven out of business if they fail to participate in the risk. This is what happened to bankers who need to keep clients, and employees, buliders who need to keep banking relationships, and subcontractors, business owners who see competitors using low priced capital to compete rather than superior products, services and prices, and the general public who fears missing an opportunity for gain, and losing both status material opportunity. That is the definition of a bubble: the point at which social-insured capital is being consumed as a defense against opportunity loss, rather than as an offense for the purpose of increasing production, increasing choice, and reducing prices. The problem for economists and policy makers is either knowing when this inflection point happens. Or knowing when it must occur. This knowledge cannot be achieved by monetary policy – it is a WEAK LEVER for managing an economy. That weakness is well known, and well understood. Our desired ends can only be achieved by LENDING, not monetary policy. The difference is the knowledge one has of MONEY IN THE AGGREGATE , which is zero, and the knowledge one has of his LOANS, which by is greater than zero. While it may not approach ONE, it is far greater than zero. Instead, we print money at public expense and give the proceeds (interest) to the people who do the WORK of the state: large capital firms, and they determine it’s use. The state should make loans to private industry and the state should collect the interest as earnings by the citizens for the purposes of redistribution. The government needs to become a bank that makes loans into an economy for the purposes of increasing production, competitiveness and therefore employment, not a re-distributor in the economy for the purposes of increasing consumption and achieving full employment by MANDATING the LOSS of competitive production. Fundamentally, we must transform elements of the physical world for human consumption. Fundamentally, money is a store of human effort. Borrowed money, or printed money, is a borrowing against future human effort. And future effort is lower if we invested in production increases. This is sensible borrowing. And future effort is higher if we increase consumption by borrowing against the future, but do not increase production by the act of borrowing. That is NOT sensible borrowing, it is simply self deception and over consumption. Property is an institutional tool for divinding up the labor of human interacdtion with the physical world into digestible and managable pieces by our limited and somewhat frail human minds. Loans are a type of property. They help us break up the world into estimable bits and pieces. Property solves a KNOWLEDGE PROBLEM. Property makes things CALCULABLE. Money is a means of making PROPERTY commensurable. (Money is a unit of measure, a method of account) But money is a PROXY for property. You cannot measure money itself in a meaningful way. YOu can only measure the objects that it represents. By putting unmeasured, chaotic money, into an economy, you have no control over whether that money goes to consumption (negative redistribution) or production (positive redistribution). The confusion over the nature and purpose of government’s monetary dictatorship is a KNOWLEDGE PROBLEM. Loans are a way of atomizing borrowing against the future so that the results are knowable, or at least estimable and calculable. Instead of investing in nuclear power plants, a new power grid, and perhaps electric vehicles, or new roads, all of which would produce vast wealth, we invested in speculations and gambling on the tech boom, then in houses, then in commercial real estate, all without increasing production (houses are consumption not production because external groups cannot compete to produce them) or decreasing prices (we increased prices). Without increased production we cannot increase redistribution. The goal of policy should be productivity increases, not employment. We can have our cake and eat it too. But we have to get away from the myth of democratic and socialist government, and the tools of law and monetary policy. And instead we need to move most of government into the banking sector, and treat our government as the bank that we wish it to be, using the technology of bankers and insurance companies, not the technology of ancient tyrants, who were, to the letter, to a man, tyrants because they used law and tax, because that is the only technology available to them We do not need laws and taxes. We need loans, credit and interest. There is only one law, and that is property. We can have our redistribution and we can measure it. We just need to deprive our government of the ability to issue laws and levy taxes, and print irresponsible money, and instead, constrain it to the use of money EARNED by investment on behalf of the citizenry in productive increases. All of which would be calculable. All of which would enable and encourage freedom. And all of which would help social classes work together rather than at odds. What I cannot understand is why so few people have come to this conclusion in human history. Why the great economists were so enamored of the state and the republican tradition, why some others so enamored of individual rebellion against the state that they failed to see it. Why a few people during the Great Depression managed to figure it out, but failed to compete against the socialists. We need to replace our system of government so that it embraces the use of fiat money for the purposes of insurance, governance, social order, and redistribution. We live in the credit society, not the law society. Now we need a government of the credit society.
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Laments For Attention On Environmental Economics
On Environmental Economics, the authors take note that Krugman appears to be reading their blog. They then state that the market will fail to protect the environment. Not that the government literally, by reserving powers to itself, FORCES the failure to protect the environment. As soon as something that is useful becomes a scarcity, it needs market PROTECTION. Not market consumption, but market PROTECTION. What does that mean? Lets start with their erroneous complaint:
But what if a deal between consenting adults imposes costs on people who are not part of the exchange? What if you manufacture a widget and I buy it, to our mutual benefit, but the process of producing that widget involves dumping toxic sludge into other people’s drinking water? When there are “negative externalities” — costs that economic actors impose on others without paying a price for their actions — any presumption that the market economy, left to its own devices, will do the right thing goes out the window.
This is only because we allow the violation of property rights. If rivers, oceans and air were ‘owned’ then we could . Ownership need not include infinite rights to use. We do not have infinite rights to use flammable things, nor even infinite rights to play music or engage in speech. So it is possible to regulate the use of rivers, oceans, forests and air, as well as endangered species, so that people have the incentive for responsible protection of resources. It is the enforced-ignorance that the state places upon men by denying them the ownership of resources and with it the construct and protections of property. Ownership is a necessary part of the division of knowledge and labor. The state mandates knowledge-incompetence by reserving to itself administration of the ‘property’ we call commons, instead of defining the limits on the use of that property and putting it in private hands, so that individuals have the knowledge and incentive to protect it. Privatize stewardship of air, water, nature. The market will correctly distribute costs of doing so. And the owners of these resources will vehemently protect their ‘interests’ while protecting ours. Otherwise, there will continue to be the ongoing illusion that political forces who compete for government attention are the same as commercial forces who seek to avoid it, and our bureaucracy will continue to be a self-aggrandizing waste of the efforts of the citizens, while our resources continue to be ruined. While the market has weaknesses: in particular, it cannot CREATE property without state intervention (as in determining the rules by which property is used), and it cannot PRESERVE objects without state intervention (as in determining the conditions by which the property is transferred, or the limits on it’s use), the market is far superior at protecting those interests and making use of scarce monetary resources to do so without the waste of government. Since government employees can have special consideration because they are outside the market, they gain special rights that the market would not endow them with. In particular, protection against risks that we call unemployment (the drop in demand for our skills and labor). As such, this is the driving factor behind all political organizations. Whereas, the market would protect the long term resource over the short term desires of government employees. In other words, failing to make ‘public goods’ or ‘commons’ into ‘property’ is simply the willful and mandated theft and redistribution of those goods and the redistribution of those goods to government employees. The commons is the theft of resources by the state so that individuals may profit by the use of ‘commons’ to fund their political advocates. The tragedy of the commons is that ownership leads to over-consumption. But there is another tragedy of the commons, and that is the state-ownership tragedy of the commons, wherein the state uses it’s assets to reward or create advocates. Instead we should avoid the over-consumption tragedy of the commons as well as the bureaucratic tragedy of the commons, and eliminate the commons as a form of property and stewardship, and instead, make it a market matter of the regulated use of and transfer of property, thus enabling individuals and organizations to protect and use it without the participation of the state except as an enforcer. Sell off the air, seas, rivers, lakes, forests, preserves. Directly redistribute money to these ‘owners’ in order to subsidize any ‘common use’. But leave protection of the resource to the owners, who will, universally, do better than the state at doing so. Regulate the use of those ‘goods’. The division of labor, knowledge and incentive is humanity’s greatest accomplishment, because it is the method and means by which we break the universe up into knowable entities. The market is the means by which we allocate the use of those resources. And the state is the organization that creates the ENVIRONMENT that is the market, as well as the means of resolution of differences in property. The state is CREATING THE WRONG ENVIRONMENT when it manages something, rather than when it defines the rules for something, and leaves it to the market to actually do the labor. And thinking otherwise, is to attribute to human beings, knowledge and incentive that they cannot have in a division of knowledge and labor of any degree of complexity. And therefore a fools errand.