Egalitarianism is an attempt to either:
Egalitarianism is the passive and low-cost alternative to producing innovation, excellence and performing actions in real time.
Egalitarianism is an attempt to either:
Egalitarianism is the passive and low-cost alternative to producing innovation, excellence and performing actions in real time.
Reposted here for reference.
Social class IQ differences and university access By Bruce G Charlton A feature for the Times Higher Education – 23 May 2008 Since ‘the Laura Spence Affair’ in 2000, the UK government has spent a great deal of time and effort in asserting that universities, especially Oxford and Cambridge, are unfairly excluding people from low social class backgrounds and privileging those from higher social classes. Evidence to support the allegation of systematic unfairness has never been presented, nevertheless the accusation has been used to fuel a populist ‘class war’ agenda. Yet in all this debate a simple and vital fact has been missed: higher social classes have a significantly higher average IQ than lower social classes. The exact size of the measured IQ difference varies according to the precision of definitions of social class – but in all studies I have seen, the measured social class IQ difference is substantial and of significance and relevance to the issue of university admissions. The existence of substantial class differences in average IQ seems to be uncontroversial and widely accepted for many decades among those who have studied the scientific literature. And IQ is highly predictive of a wide range of positive outcomes in terms of educational duration and attainment, attained income levels, and social status (see Deary – Intelligence, 2001). This means that in a meritocratic university admissions system there will be a greater proportion of higher class students than lower class students admitted to university. What is less widely understood is that – on simple mathematical grounds – it is inevitable that the differential between upper and lower classes admitted to university will become greater the more selective is the university. *** There have been numerous studies of IQ according to occupational social class, stretching back over many decades. In the UK, average IQ is 100 and the standard deviation is 15 with a normal distribution curve. Social class is not an absolute measure, and the size of differences between social classes in biological variables (such as health or life expectancy) varies according to how socio-economic status is defined (eg. by job, income or education) and also by how precisely defined is the socio-economic status (for example, the number of categories of class, and the exactness of the measurement method – so that years of education or annual salary will generate bigger differentials than cruder measures such as job allocation, postcode deprivation ratings or state versus private education). In general, the more precise the definition of social class, the larger will be the measured social class differences in IQ and other biological variables. Typically, the average IQ of the highest occupational Social Class (SC) – mainly professional and senior managerial workers such as professors, doctors and bank managers – is 115 or more when social class is measured precisely, and about 110 when social class is measured less precisely (eg. mixing-in lower status groups such as teachers and middle managers). By comparison, the average IQ of the lowest social class of unskilled workers is about 90 when measured precisely, or about 95 when measured less precisely (eg. mixing-in higher social classes such as foremen and supervisors or jobs requiring some significant formal qualification or training). The non-symmetrical distribution of high and low social class around the average of 100 is probably due to the fact that some of the highest IQ people can be found doing unskilled jobs (such as catering or labouring) but the lowest IQ people are very unlikely to be found doing selective-education-type professional jobs (such as medicine, architecture, science or law). In round numbers, there are differences of nearly two standard deviations (or 25 IQ points) between the highest and lowest occupational social classes when class is measured precisely; and about one standard deviation (or 15 IQ points) difference when SC is measured less precisely. I will use these measured social class IQ differences of either one or nearly two standard deviations to give upper and lower bounds to estimates of the differential or ratio of upper and lower social classes we would expect to see at universities of varying degrees of selectivity. We can assume that there are three types of universities of differing selectivity roughly corresponding to some post-1992 ex-polytechnic universities; some of the pre-1992 Redbrick or Plateglass universities (eg. the less selective members of the Russell Group and 1994 Group), and Oxbridge. The ‘ex-poly’ university has a threshold minimum IQ of 100 for admissions (ie. the top half of the age cohort of 18 year olds in the population – given that about half the UK population now attend a higher education institution), the ‘Redbrick’ university has a minimum IQ of 115 (ie. the top 16 percent of the age cohort); while ‘Oxbridge’ is assumed to have a minimum IQ of about 130 (ie. the top 2 percent of the age cohort). *** Table 1: Precise measurement of Social Class (SC) – Approx proportion of 18 year old students eligible for admission to three universities of differing minimum IQ selectivity Ex-poly – IQ 100; Redbrick – IQ 115; Oxbridge IQ 130 Highest SC– av. IQ 115: 84 percent; 50 percent; 16 percent Lowest SC– av. IQ 90: 25 percent; 5 percent; ½ percent Expected SC diff: 3.3 fold; 10 fold; 32 fold Table 2: Imprecise measurement of Social Class (SC) – Approx proportion of 18 year old students eligible for admission to three universities of differing minimum IQ selectivity Ex-Poly – IQ 100; Redbrick – IQ 115; Oxbridge – IQ 130 Highest SC –av. IQ 110: 75 percent; 37 percent; 9 percent Lowest SC –av. IQ 95: 37 percent; 9 percent; 1 percent Expected SC diff: 2 fold; 4 fold; 9 fold *** When social class is measured precisely, it can be seen that the expected Highest SC to Lowest SC differential would probably be expected to increase from about three-fold (when the percentages at university are compared with the proportions in the national population) in relatively unselective universities to more than thirty-fold at highly selective universities. In other words, if this social class IQ difference is accurate, the average child from the highest social class is approximately thirty times more likely to qualify for admission to a highly selective university than the average child from the lowest social class. When using a more conservative assumption of just one standard deviation in average IQ between upper (IQ 110) and lower (IQ 95) social classes there will be significant differentials between Highest and Lowest social classes, increasing from two-fold at the ‘ex-poly’ through four-fold at the ‘Redbrick’ university to ninefold at ‘Oxbridge’. Naturally, this simple analysis is based on several assumptions, each of which could be challenged and adjusted; and further factors could be introduced. However, the take-home-message is simple. When admissions are assumed to be absolutely meritocratic, social class IQ differences of plausible magnitude lead to highly significant effects on the social class ratios of students at university when compared with the general population. Furthermore, the social class differentials inevitably become highly amplified at the most selective universities such as Oxbridge. Indeed, it can be predicted that around half of a random selection of kids whose parents are among the IQ 130 ‘cognitive elite’ (eg. with both parents and all grandparents successful in professions requiring high levels of highly selective education) would probably be eligible for admission to the most-selective universities or the most selective professional courses such as medicine, law and veterinary medicine; but only about one in two hundred of kids from the lowest social stratum would be eligible for admission on meritocratic grounds. In other words, with a fully-meritocratic admissions policy we should expect to see a differential in favour of the highest social classes relative to the lowest social classes at all universities, and this differential would become very large at a highly-selective university such as Oxford or Cambridge. The highly unequal class distributions seen in elite universities compared to the general population are unlikely to be due to prejudice or corruption in the admissions process. On the contrary, the observed pattern is a natural outcome of meritocracy. Indeed, anything other than very unequal outcomes would need to be a consequence of non-merit-based selection methods. Selected references for social class and IQ: Argyle, M. The psychology of social class. London: Routledge, 1994. (Page 153 contains tabulated summaries of several studies with social class I IQs estimated from 115-132 and lowest social classes IQ from 94-97). C.L. Hart et al. Scottish Mental Health Survey 1932 linked to the Midspan Studies: a prospective investigation of childhood intelligence and future health. Public Health. 2003; 117: 187-195. (Social class 1 IQ 115, Social class V IQ 90; Deprivation category 1 – IQ 110, deprivation category 7 – IQ 92). Nettle D. 2003. Intelligence and class mobility in the British population. British Journal of Psychology. 94: 551-561. (Estimates approx one standard deviation between lowest and highest social classes). Validity of IQ – See Deary IJ. Intelligence – A very short introduction. Oxford University Press 2001. Note – It is very likely that IQ is _mostly_ hereditary (I would favour the upper bound of the estimates of heredity, with a correlation of around 0.8), but because IQ is not _fully_ hereditary there is a ‘regression towards the mean’ such that the children of high IQ parents will average lower IQ than their parents (and vice versa). But the degree to which this regression happens will vary according to the genetic population from which the people are drawn – so that high IQ individuals from a high IQ population will exhibit less regression towards the mean, because the ancestral population mean IQ is higher. Because reproduction in modern societies is ‘assortative’ with respect to IQ (i.e. people tend to have children with other people of similar IQ), and because this assortative mating has been going on for several generations, the expected regression towards the mean will be different according to specific ancestry. Due to this complexity, I have omitted any discussion of regression to the mean IQ from parents to children in the above journalistic article which had a non-scientific target audience.
Claude Fischer is a sociologist at UC Berkeley who published a piece entitled “Angry Old White Men” in which he categorizes the Tea Party movement as a rural movement of old white men. Mark Thoma, a left-leaning economist picked up the article and posted it on his blog The Economist’s View, where he adds: “Rural America senses that he represents a major shift in the political landscape, one that will no longer put the white male farmer at the center of the American political landscape.” As if its a rural cause rather than a white cause. To which others add:
“What we’ve got here is a real warning sign that something in our society just isn’t working. It’s not just hand-wringing liberals and right-wing Christians anymore; when your educated upper-middle classes start lashing out, you know the regime’s days are numbered.”
and
“The hate directed at “white men” by so many members of leftist establishment(s) borders on blood lust. At their deep core is a burning anger that they focus on the “white man” taking delight in belittling, marginalizing, and taunting that demographic. Perhaps the “delicious irony” is that many of these folks proudly flaunt their fake “tolerance” and calls for “peace” while obviously unable to control their desire to stoke division and strife.”
and this:
“Did these [old white guys, especially affluent, Protestant ones] give ground or was it an enlightened choice? … My guess is the shift had more to do with U.S. government based public education, by mostly female primary school teachers, which gave children a sense of respect for all. It still took many generations.
The last of which is actually the structural answer: our schools teach democratic secular humanism in an effort to replace our traditions and cultures with a state religion. We do not have a separation of church and state. We have a state religion and we send most of our children to the theocracy for education. White Protestants lost political power, status and their culture due to “enlightened choice”. There was no material reason why they HAD to lose power. They chose to be ‘Christian’, which was the sentiment needed to unify a fragmented europe. They could just as easily have chosen to keep slavery, to keep control of government, to forbid immigrants political power, to maintain the requirement of protestantism. In other words, they could have done what most civilizations have done. What most civilizations still do. In fact, the entire purpose of nationalism was to give racial groups their own sovereignty after centuries of tribal distribution across monarchic europe. It Wasn’t Political Power, It Was Economic Power Starting with the industrial revolution, the dominance of the HOUSEHOLD lost importance, and there for the dominance of the MALE waned. The decline has been not just among white men, but among men in particular. Women’s entry into the work place has not hurt high performing men, but since women have taken all the lower risk clerical functions in society, and seem to largely be better suited for it, this has moved men toward the edges – into the riskier professions. They Gave Up Power Voluntarily These voluntary abdicators of male political power were Christians. They tried the experiment. It was a heady debate. We have just wrapped class, race and cultural preference in a deep cloak of secular language instead of religious language. But the underlying sentiments and logic are essentially the same. We have a religion of democratic, secular humanism rather than paternal christianity. The difference is that the political myth of the ‘white man’s burden’ of anglo exceptionalism in order to morally justify the empire, has become the myth of democratic secular humanism in order to justify the empire. The Experiment Failed What has happened is that these previously tolerant people believe that the experiment failed. That their conservative sentiments (the belief that humans have immutable behaviors), have returned to precedence over their liberal sentiments (people can aspire to utopian behavior in the right environment) have changed. White Men in particular tolerated man-hating feminism because they felt it was somewhat justified, but that society would ‘settle back’ because people have ‘natural tendencies’. White Men felt that because of slavery and WW2, that they were wrong in their fantasy of exceptionalism – that they had betrayed their christian sentiments, and so they tolerated criticism in the hope that society would settle down. White men today no longer believe those egalitarian myths. WHen you destroy a mythos you don’t destroy just the ‘bad parts’. You destroy the entire system of myths. They no longer believe in their guilt. They now feel equally wronged. The Levant Nassim Taleb in his book The Black Swan, describes how he and his fellow members of the levant thought that they had solved the problem of heterogeneity, and that they were more civilized than the rest of the world. But it was a myth. That small civilization is now dead and gone, and gone within his lifetime. People continue to murder each other in droves around the world. And while capitalism decreases costs and increases quality of life, and it because of the prosperity, decreases the incentive to devolve into violence, it is not a sufficient tool for altering the human perception of status, nor of the realities of cooperating in groups: tribes remain fixed in their cooperative networks even under capitalism. It’s just FRICTION that is less important because there is less scarcity of opportunity. What Happens Next The question becomes, a) whether white men will cease tolerating their denigration and become activists, – or b) whether they will do what men have in all other collapsed cultures, which is abandon the Fraternal Order, and become like byzantines, Mediterraneans, or africans, and simply pursue non-political localized self interest which will over time, simply erode the legitimacy of the state. There is another option c) which is violence. But that is always a minority position because it is so costly. And if history is a guide we will get all three of these factors. Western Protestant Culture Is An Anomaly The sentiments of white male culture are an anomaly. It is the product of the fraternal order of city-defending soldiers who treat the ‘market’ (which they don’t differentiate from ‘society’) as if they were shareholders. That sentiment is extremely rare. If that sentiment ceases, we will not get the civilization that utopians aspire to. We have a lot of historically similar situations. We might get something random. But history tells us what we will get will not likely be the ‘free society’ that we aspired to. Urbanization Affects Social Institutions By Increasing Anonymity And Decreasing Economic Conformity We are urbanizing, world wide. And we must. There are too many of us to return to farming. We no longer live where we are self sustaining yet produce excess in order to participate in the market for the purpose of getting money with which to buy what we cannot produce. Nearly all of us must participate in the market for our entire livelihood, trading our skills in manipulating someone else’s tools and materials for money so that we can buy ALL of our needs in the market. We live in a world of perceived risk, surrounded by plenty. But urbanization under market-centricity poses difficult problems. The problem of ‘social order’ (conformity to law or convention) occurs when any civilization sufficiently urbanizes. The human social tools of ostracization (economic exclusion) and fraternalism (economic inclusion) do not operate in dense populations where anonymity is common and therefore social ostracization alone cannot block people from opportunities. There is no evidence that these social tools operate in the dense urban environment. There is no evidence that Law or Religion can cause them to operate either. The Shift To A Racial Minority This is the last generation where white men will feel guilty about their position. They feel disempowered. They are soon to be a minority. They dislike being ridiculed and having their status trampled upon, and are rapidly considering it RACISM against them. (Which they believe will give them the right in turn, to be racist.) The question is what will they do. And if history is any indicator, most of them will do nothing but acquiesce. But like any racial group they will likely form a disenfranchised but radical minority who is activist. This is what is occurring today. If the minority gains traction it gains followers from those who perviously acquiesced – people follow a winning team. White men are also developing the sentiment of racial persecution, and with it, the egalitarian christian sentiments, and their historical guilt are waning. When a people are oppressed they revert to self serving behavior and abandon behaivors of social sacrifice. The Forgone Opportunity Economy Society is not paid for by taxes. We pay for bureaucrats and soldiers with taxes. Society, or social order, is paid for by refraining from seizing opportunities. We create property by not stealing. We create comfort and safety with manners. We create prosperity and frictionless trade by non-corruption and ethical behavior. We prevent ourselves from externalizing high costs to others, and often to ourselves by moral behavior. We take on the burden of truth-telling. We define the granularity of property, the rules of the market. Each of us does ten thousand things a day to pay the tax for social order. And that tax system of opportunity costs is what we call ‘culture’. it is the highest cost of human capital a group can invest in. Groups with different systems compete. They get angry with one another because they ‘sense’ theft or fraud, not of money, but of the sacrifices that they made for their group’s benefit. They get angry when their sacrifices (forgone opportunities) are wasted when another race or social class demeans them. In this way, human groups conduct forgone-opportunity-funded warfare, but they largely do it peacefully. This is the racial and cultural economy. Money, Status, Forgone Opportunity, Access to Opportunity, and Access To Mates. Money is the least of them. Political power is simply the means by which to control the economy. Not just the money economy. But the status, opportunity and mating economy. Institutions (self-perpetuating social habits) are the highest cost development for any civilization. The people in the civilization know the costs. They know the opportunities that they spent on building that cost. They know the taxes that they paid. THey know what property is theirs that they earned. And egalitarianism and charity are happily given as long as they are FRACTIONAL and do not allow one group to steal its institutional costs from another. People are not having a simple emotional reaction. They see usurpation of political power as THEFT. They are ACTING like they see it as theft. The Implications For everyone else who is not a white male, it becomes the question how a society can be managed, or how it will operate without those sentiments of fraternalism. We never get what we think we will. The French and Russian revolutions were horrific both in process and outcome. But most if not all civilizations simply decay once they urbanize, and their expansionist class of males surrenders to the sense of impotence, or the luxury of hedonism, by exporting the effort needed to maintain the social order to the bureaucracy. The general assumption is that the democratic process will solve this problem of social integration and power distribution. But there is no evidence in history that such a thing occurs but rarely, and almost exclusively in England. Politics is a market, and people will circumvent the market when it no longer serves them. No Longer A Nation But An Empire The USA, thanks to Teddy Roosevelt and his ilk, is an empire in imitation the european model. Empires consist of factions. Factions are geographic (trade routes), racial (genetic), cultural (normative), and religious (legal). But an empire over whom half the population feels oppressed and stolen from is simply fragile. We are no longer a country contentiously dealing with a problem of integration caused by our need for population to complete the westward expansion of the continent. Instead we are an empire over some number of smaller nations yearning to be free, and a disenfranchised geographic ex-majority that appears to be developing a new sentiment (acquiescence to failure), a political movement (tea party), and a radical movement (militias). At least, that is where this appears to be going, if history is any indicator. And men who no longer see the existing order as beneficial to them may not work to overthrow it, but they will not work to maintain it. And that may be worse. The Difference Between Methods The difference between conservatives and progressives lies in the different assumptions we have of human nature. Progressives are utopians that believe we are free to build whatever world we choose to – they err on the side of people ‘doing good’ which is why progressivism is a movement of the industrial period. Conservatives err on the side of people ‘pursuing self interest’ which is why conservatism is an ancient sentiment, although conservatism as a political movement is a reaction to the english and french revolutions and the rise of socialism and communism. It is a contemporary reaction to progressivism. And like all conservative movements it is a reaction to the perception of theft of one’s assets by political means (even if those assets were unjustly acquired as in mercantilism or predatory banking or slavery). Conservatives believe that human beings have innate sensibilities, biases and preferences that are immutable. And because they are immutable we should develop institutions that take these immutable differences into account. We should expect people to act with racial preferences because people almost always do act with racial preferences. They do so because intra-racial status is more beneficial for the majority than is extra-racial status. And status controls access to mates. Except at the extremes where status can be increased by breaking racial barriers, status determines access to mates, determines access to opportunities, access to networks, in general, access to a better life. The Economics Of Race And The Impact On Politics So the question is, what will happen in a world where we have a white minority whose traditions create the opportunity for democracy and rotation of the elites, and most people have racial preferences, where there is no method of organization urban conformity, but we have a political system that allows democratic rotation of elites? In general, at least in history, people tend to vote in what is called “Bonapartism” or a totalitarian who can forcibly resolve differences. Bonapartism is democratic totalitarianism. Our systemic answer to urbanization was credit. Credit is more useful than laws because with record keeping it produces both positive and negative incentives. We are likely going to continue to build the credit society instead of the religious and legal societies. In fact, law is so technical it is largely immaterial, and most people are both isolated from it and ignorant of it. We actually operate by credit and exchange instead of legal or religious conformity. We live in the credit society. But while credit solves the problem of anonymity and ostracization, it does not solve the problem of tribal and cultural sovereignty, which is a code-phrase for the system of status signals among people with racial and cultural similarities. In a world of economic plenty and cheap debt and fiat money there is an inflationary impact upon status perceptions that like a tide floats all boats and reduces class and race friction. But in a world of unemployment, which may be structural, permanent, and wherein opportunities are more scarce, and therefore racial status more advantageous, and in a society where there is a very large and disenfranchised minority that is government by an activist political system that they see as tyrannical and against their interest, it seems unlikely that people will support that government, that way of life, or even the assumption that the government and way of life are ‘goods’. Race matters. Race matters because ENOUGH people act with racial preferences, and MORE of them act with racial preferences under economic duress, because acting within racial preferences is economically rewarding for the majority of its members. It’s just simple economics.
The humble libertarian makes an argument for flat taxes in order to quell the state’s tendency to foster class warfare.
with a flat tax, they can’t just pick on the winners anymore. In order to get more revenue, their best tactic would be to incentivize overall growth. Lower trade barriers. Lower the costs of doing business. Encourage real growth.
Exactly. Flat taxes are superior in a democratic government for two reasons 1) they must be kept small, and the lower half of society will make sure that they are kept small. 2) the government must foster growth in order to increase revenues. Secondly, our rhetoric treats people as if they are in permanent classes, yet we tax income which is highly variable. If we are to tax anything progressively, it should not be income, but balance sheets. Lastly, there is a point at which one’s possession of and use of capital is a distortion of the market (The Silver Debacle, or George Soros’s Abuses). This appears, at least in round numbers, to occur at its lowest, somewhere near 1000 times the median income, and accelerates from there. Above that position, people are no longer participating in the market. They are governing it. (This debate is a bit complicated for a comment on a blog post.) So, if our taxes are to include those that are progressive, they should be against balance sheets, with the purpose of getting as many people into the capitalist class late in life as possible. At least, unless you want private capitalist government rather than a market run by market participants for the benefit of market participants. Large capital concentrations in combination with individual knowledge cannot be applied to ‘the market’ as we understand it, and justify it in the classical liberal sense, as a ‘social good’.
People do not seek freedom. They seek the security that is provided by the prosperity of the creative class in a free society. But they do not seek freedom. They seek security.
[callout]the classical liberal fantasy that rhetorical debate can convince a majority to favor freedom over security is simply a conservative utopian fantasy. It will never occur. Ever. Period.[/callout]
And the classical liberal fantasy that rhetorical debate can convince a majority to favor freedom over security is simply a conservative utopian fantasy. It will never occur. Ever. Period. Once an argument is understood — in that it possesses explanatory power, is non-contradictory, and solves a pertinent practical political problem — one can seek consensus. And as long as that consensus appeals to a majority, then a democratic polity can adopt the policies that support the argument. However, the classical liberal ideal of freedom cannot be supported within a democracy, and no such rational arguments can prevail, for the sole reason that freedom is the desire of the minority – the creative class. And instead, safety is the objective of the majority. And the majority will always pursue safety rather than liberty. If the freedom-desiring minority loses it’s willingness to use violence to preserve it’s freedom, it will possess neither freedom, nor prosperity. And the rest of the civilization will calcify upon being deprived of the mental fertility of its creative, and therefore, most productive classes. This is the history of civilization. Fertility followed by calcification, followed by conquest and poverty. The answer is not violence, nor is the answer argument. The answer is sufficient argument so that the creative classes will apply violence, for the purpose of obtaining and maintaining the political power needed to secure the minority liberty against the predatory majority’s exploitation of the creative class in order to obtain security.
[callout]We can be free, or we can be exploited, or we can be oppressed or we can be enslaved, or we can be murdered. Choose your position on that spectrum.[/callout]
We can be free, or we can be exploited, or we can be oppressed or we can be enslaved, or we can be murdered. Choose your position on that spectrum. Because your actions in the use of violence will determine it. Talk is cheap, and demonstrably ineffective.
Paul Krugman argues that envy and inequality pop the bubble. He asks “Correlation or Coincidence?” To which I reply: …. or completely unrelated causality. I don’t think you’re making any argument and I think you’re inventing a correlation, and hoping it sticks via the contrivance of sentimental association rather than reason. The cause isn’t income difference. It’s distortion of pricing and demand by irrational access to, and consumption of credit. And no small part of it is the recursive distortion of credit once it enters the system. Then, when Mom and Dad’s seven-eleven clerk talks about real estate investment, the average person starts to see irrational feedback and develops cautious sentiments. This effect undermines confidence, and after enough feedback from their network, mom and dad start retrenching. Shocks, like the spring oil crisis, confirm their sentiments, and the process accelerates. How about another feedback loop: once enough credit has been available that individuals exhaust their inventory of readily comprehensible wants (as determined by their class and peers), they must stop acting to consume until they can identify new status consumables. Something which means expanding beyond the familiar. This is a marginal illustration but an important one. There is a lot of saturation of the middle class’s consumption. They know it. This provides additional feedback on top of the dissociative feedback of the gas-pumping proletariat investor. Instead of this rational behavior due to the presence of overwhelmingly obvious-to-the-consumer information, you are arguing that **envy** by the lowest classes has a greater impact on confidence than does uncertainty due to omnipresent, obvious, sometimes absurd, irrational feedback. And for the lower proletariat, that sentiment is undoubtably persistent, doctrinal, and inherited. But everyone is just demonstrating observation and rational behavior. Or are you arguing that we can tell that there is a distortion of pricing in the economy because the differences between class consumption simply indicate that credit is out of hand? The question is instead, how much of this distortion remains after the bubbles burst? (Some, but losses are disproportionately allocated to those with paper wealth, and unemployment disproportionately allocated to those in least productive industries.) And the problem is, that the proletariat now foots the bill, with long term interest, for the expansionary credit, unless it is recovered through inflation. This is the damning critique, not that of inequality. The cause is not disparity or inequality. It is not envy. It is simple feedback from observations of irrational information. And that feedback occurs because the state has used credit and fostered consumption in lieu of investment that obtains increases in productivity, and the differences in instability are between thse resulting consumer and producer economies, and the rapidity with which they react to shocks. (Consumption is NOT STICKY when compared to production.) Furthemore, your efforts seem to think that there is an endless supply of entrepreneurial innovation availalbe that can yield increases in production. And that isn’t true. It is clear that you wish to ignore the reality of inequality, the reality of the unwillingness for people to redistribute to others who they feel disagree with or undermine their value system, and the reality of social status as a permanent, and *epistemically necessary* component of the system of human cooperation and coordination. Let alone the mating ritual. Envy isn’t the problem. General liquidity used for consumption rather than productivity is the problem. People have cognitive biases. Plenty of them. But they also are not oblivious to social economic and status signals that are irrational, and tell them ‘something just isn’t right here’. The shift to Friedman was the only one available to the conservatives who wished to reverse what they saw (accurately) as a decline in their civilization due to prior policies. That Friedman was partly wrong, as was Keynes partly wrong, is immaterial. Our problem is that we do not know the answer. The philosophers of the thirties failed. And so has everyone else since then. And they have failed largely due to the myth of equality. People simply do not, and will not act that way in a heterogeneous society. They do the opposite. The status economy with its class status demands, and its racial status preferences, and its group persistence preferences will not permit the purely economic homogenous model you fancy. In fact, research shows that people will gladly undergo hardship in order to ‘fund’ their social preferences, and in particular to preserve their status. And so you will never create the levers that you seek to manipulate. We are instead headed toward the south american model of geographically separated classes, and likely races, forming permanent classes in rings around urban centers, and systemic corruption necessary to preserve group solidarity. This demographic movement is already suggested in moving patterns. Be careful what you ask for. (PS: I swear. Left-Jewish egoism is a cultural if not genetic cognitive bias. Unbelievable. Krugman is just as out there as his conservative mirror image Paul Gottfried. )
Over on Economists View, where the left seems to hang on like dirty ruffians intent on downgrading the local bar, Mark Thoma posts a misleading article: “About That Mediterranean Work Ethic” Do Greeks work less than Germans?, which states that Greeks work a lot of hours, perhaps more than germans. Which is a pointless and false because it is intentionally misleading, because it assumes individuals are equally productive and the societies are collectively equally productive, when in fact, the term ‘productive’ means ‘the market price of stuff produced per human hour’. One of the people who leaves a comment sees through the veil and says: “These kind of statistics are not enough….”. Which is correct. They don’t tell us anything. Another who lives in Italy says “The problems here are political and cultural. It’s very frustrating to see…”. Which again is correct. Work is an individual expression. [callout] Productivity is an INSTITUTIONAL problem: people lack the institutions and habits by which to create productivity by forming capital alliances in GROUPS[/callout] Productivity is an INSTITUTIONAL problem: people lack the institutions and habits by which to create productivity by forming capital alliances in GROUPS. In Italy (like in southern california) business stay artificially small because of tax and benefit predation by the government, rather than encouraging competitive business, and taxing the very large corporations with whom the state must do business and support. Another says “Greece has crazy early retirement ages and a tax collection system that is pathetic?” Which is true. These are institutional problems. Largely political problems. But people in democracies CHOOSE their governments, now, don’t they. And Another (by a leftist sycophant who goes by the pseudonym of Paine) attempts to avoid the cultural and institutional predicament, as well as the problem of the productivity of the greek people, as well as the culture of corruption, by saying it’s all a problem of insufficient TAXATION. But WHAT KIND of taxation? Let’s look at this a bit. Yes, the chart is misleading (and so are Paine’s arguments, and in so many dimensions, per usual, that refutation is the process of tedious swatting of gnats who by virtue of their simplistic reproductive capacity put a drain on one’s energy simply by their volume.) First, the Greek problem is productivity not work hours: the market competitiveness of one’s goods and services in relation to one’s trading partners, divided by the number of human work hours necessary to produce the goods and services. The Greeks work longer hours to produce goods of lower value than that of their neighbors.
[callout]the Greek problem is productivity not work hours: the market competitiveness of one’s goods and services in relation to one’s trading partners, divided by the number of human work hours necessary to produce the goods and services. The Greeks work longer hours to produce goods of lower value than that of their neighbors.[/callout]
Second, the institutional reasons within the system that either encourage or enforce that behavior: lack of return on efforts due to a) silly cultural ideas, b) lack of education in productive information, c) lack of advanced institutions, d) private and political corruption and political impediment, e) political predation on the productivity is out of proportion to the marginal effort and risk needed to produce increases in productivity, f) cultural regression due to status impact of success on group cohesion (the urban african american versus the eastern orthodox ethos versus the jewish or protestant ethos. Third, the cooperative and competitive relationship between groups of different cultures: groups ‘fund’ shared objectives by forgoing opportunities. Forgone opportunities are a cost. Taking advantage of opportunities is a theft from those who forgo them. Since different cultures have different ambitions embedded in their habits, there is a forgone opportunity competition that permanently divides people with dissimilar interests. This is WHY people of different grope dimensions compete with one another: differences in forgone opportunity costs.
[callout]groups ‘fund’ shared objectives by forgoing opportunities. Forgone opportunities are a cost. Taking advantage of opportunities is a theft from those who forgo them. Since different cultures have different ambitions embedded in their habits, there is a forgone opportunity competition that permanently divides people with dissimilar interests. This is WHY people of different grope dimensions compete with one another: differences in forgone opportunity costs.[/callout]
Fourth, the status economy is material to people because they ACT as though it is material to them. Just as the race-preference is material to people because they ACT as thought it is material to them. Just as the creed-preference is material to people because they ACT as though it is material to them. And, precisely because of the forgone opportunity costs associated with those preferences. Most cultural differences have to do with the impact on social status of different forgone opportunity costs. People do not want to give upon their investments. Biases are NOT fanciful or meaningless: most often they directly impact mating choices, social status and therefore group-economic status. Ie: people stay in-group often because they are given better status signals in-group than extra-group. They transact across group, but they status-seek within group. Argument by emphasizing the material economy alone is a convenient way of distracting the argument from the forgone opportunity economy (discipline), and the opportunities, resources, financial, and labor costs that are required to create those institutions.
[callout]Argument by emphasizing the material economy alone is a convenient way of distracting the argument from the forgone opportunity economy (discipline), and the opportunities, resources, financial, and labor costs that are required to create those institutions.[/callout]
In the cast of Greece, it is a poor and corrupt culture that cannot create hard-working low-friction institutions that allow people to increase productivity by the process of constant creative destruction. It appears that Greek IQ is declining slightly probably due to poor urban education. And this has material impact on a society: assuming a broad enough population, people with IQ’s above 122 design machines, people with IQ above 105 repair machines, and people with IQ’s below 105 are limited to using machines. IQ distribution matters because it affects the general set of institutions that a body of people can develop. Education differences can depress IQ means by as much as twenty points. (Exactness of this is disputed but it’s certainly ten points). This mean limits the productivity of any nation, and in turn the appropriate institutions for any body of people. We are not equal in ability to comprehend abstractions, nor in our group ability to produce abstraction-producers and consumers in sufficient numbers to lather the group’s competitive advantage.
[callout]assuming a broad enough population, people with IQ’s above 122 design machines, people with IQ above 105 repair machines, and people with IQ’s below 105 are limited to using machines. IQ distribution matters because it affects the general set of institutions that a body of people can develop.[/callout]
Germany is a nearly land locked, oceanic temperate and continental temperate country of rivers and friction-able land transport that despite constant attempts of external containment has remained productively competitive for two millennia. This is accomplished by the discipline of forgone opportunity in order to create institutions that accumulate competitive advantage at a material cost to the citizens as individuals, but which is a cumulative investment of high returns for the group. Greece is a geographically advantaged, climate advantaged, port-rich country with limited agrarian potential, and a large urbanized population with few choices but to increase productivity. Institutional development costs are the HIGHEST productive cost paid by any civilization. That is why the non-corruption habits are so rarely developed in the world. (We do not yet know why some cultures have such a difficult time forgoing opportunities for gratification and developing longer (lower) time preferences. There are both biological and cultural and environmental hypothesis.)
[callout]Institutional development costs are the HIGHEST productive cost paid by any civilization. That is why the non-corruption habits are so rarely developed in the world.[/callout]
After forgone opportunity costs. The second highest cost is human capital: literacy, education and training. The third highest cost is the political institutions. The fourth highest cost is economic institutions (credit, banking, contract) And lastly comes the material cost of resources. These costs, when combined with the realities of group IQ differences, when combined with the realities of territorial resource availability, are the primary reason for development differences between cultures. We do know that Greece and spain were more productive cultures before Spain experienced new world gold, and before Greece was administered by the ottomans. So it would appear that these are not biological problems, but institutional (cultural and habitual, and political) problems. Greece is less productive because it’s institutions are poorly paid for by forgone opportunity, because their government is corrupt and bloated, because their people work in unproductive efforts, and because they have no group incentive to work otherwise – and so Greece is poorer because of its instutions. And since germans pay the forgone opportunity cost as well as the monetary cost, they are (rightfully) resentful of it. And the convenient myopia of quants is that they disregard REAL costs of action in preference for visible monetary costs simply because of the ease in which the data can be collected. A convent way of perpetuating leftist ideas – ignoring the majority set of costs in preference of the confirmation bias permitted by the data that’s easier to collect. As the right always says “we are not against taxes we are against bureaucracy”. The problem is not taxation. It’s the USE of taxes to steal the productive result of forgone opportunity costs : double taxation on the productive which only serves to limit the investment by the non-productive in the bank of forgone opportunity costs, which are, in reality, the primary cost any civilization must pay : behavioral costs. Property itself is a forgone opportunity cost. The more granular and abstract we make our definitions of property the more opportunity that people have to steal it. Objective truth telling is a forgone opportunity cost. Each forgone opportunity for deception and fraud is a high cost. One does not need to be materially wealthy to pay that cost. One simply needs to forgo opportunities to profit from deception. One does not need to be deprived of good pay as a bureaucrat, one needs only to forgo opportunities to charge for one’s services rather than render them at the lowest cost to the beneficiary.
[callout]This is the moral argument for redistribution of wealth: if you conform to forgone opportunity costs, you may receive redistribution from the results of productive ends. But ONLY if you pay your ‘taxes’ in forgone opportunity costs.[/callout]
Or put another way: the secret to the success of the pacifist monotheistic scriptural religions is that they undermine the forgone-opportunity-cost economy via redirection of opportunity costs toward the group-persistence costs of a new social institutions, and away from materially productive institutions. In other words, they are a non-participation rebellious movement, a form of economic tax evasion. (In case this isn’t clear, there are two forms of tax evasion: monetary and forgone opportunity, with the productive classes seeking to evade monetary taxation and the unproductive classes seeking to evade forgone opportunity costs.) This is the moral argument for redistribution of wealth: if you conform to forgone opportunity costs, you may receive redistribution from the results of productive ends. But ONLY if you pay your ‘taxes’ in forgone opportunity costs. In other words: conform or no redistribution. This effectively is the german argument against Greece. Or more precisely, monotheistic religions are resistance movements and they are what people like Paine advocate: the adoption of a lower cost forgone opportunity strategy that undermines the productivity of the more productive classes, making them subservient to the resistance movement. Greece needs an austerity program. It needs freedoms to compete disruptively internally, it needs to concentrate its capital on goods that are competitively productive, it needs to improve its infrastructure. It needs a broken window policy of zero tolerance (the place is a dump), it needs regulations on quality (which are underrated as a social institution), it needs better education. But most of all it needs the elimination of a predatory state whose members see their positions as personal property to be exploited rather than a public service to be rendered at the lowest cost to the population. Leftism is predation on the productive classes. Rightism is too often predation on the non-productive classes. (Productivity being different from labor hours). The issue for any culture is to reduce predation in favor of cooperation, maximizing the productivity of the group in response to other groups. Acknowledging inequality is only acknowledging rarity. we are vastly unequal in our abilities. Therefore we are vastly unequal in our productive capacities. However, we are equally productive in our ability to forgo opportunity from theft or fraud, especially theft by over breeding one’s self into permanent poverty. If you conform to these institutions, then you are PAYING for these institutions, and therefore you are EARNING some amount of redistribution. But if you are not willing to work regardless of the job (as are the Japanese and chinese) and if you are not willing to forgo drugs and violence and theft, and if you are not wiling to forgo the effort of manners and ethics and morals, then you are not worthy of redistribution of the productive gains because you have not PAID for the effort needed to create the institutions that make such productive gains POSSIBLE. We can all equally forgo opportunity. In this context, Universal egalitarianism is simply another means of predation on the productive classes. Which means predation on the society itself. Greece needs to pay it’s taxes. It needs to pay it’s forgone opportunity tax. It needs to pay it’s monetary tax on the result of productive efforts. The most important feature of taxes on productivity, is that it incentivizes the government to enforce forgone opportunity costs, for the purpose of increasing productivity. This creates cultural unity, class unity, and competitive advantage for the group.
[callout]And “it is not taxes that are paid, but unpaid” is true. It is the unpaid tax of forgone opportunity cost which is the very ‘charge’ for entering the civilized market, and becoming a citizen rather than a barbarian.[/callout]
Ie: Paine is advocating thievery, economic and social destruction here on a daily basis, by simply replacing the absurd moral arguments of monotheistic scriptural religion with the one-sided absurd argument of economics and egalitarian redistribution of productive gains in order to fund his predation on the productive classes, so that he, and others, do not have to pay the forgone opportunity costs needed to create institutions that permit productivity. Yet another silly religion that is simply a rebellion movement that justifies tax evasion. And “it is not taxes that are paid, but unpaid” is true. It is the unpaid tax of forgone opportunity cost which is the very ‘charge’ for entering the civilized market, and becoming a citizen rather than a barbarian. Hayekian knowledge is economic knowledge: it’s an institution. And it’s the most expensive institution we have to pay for.
I read a number of the UK papers every day online. They are better than US papers for a variety of reasons. (( In the current ‘intelligence system’ it’s recommended that americans read Al Jazeera, Pravda, China News Daily, BBC News as well as the NYT. All are biased but the important issue is to know how biased our own papers are. )) US papers in general, formed to create homogeneity in the community. That community-centricity is why they’re going out of business in this post-community era. The web allows communities to have disparate voices (like normal people do) rather rather than having a self-centered referee edit, and dramatically bias their opinions toward the fantasy of democratic secular humanism. UK papers are more like the web: they represent factions. Our only ‘faction’ is the financial press. The rest, of the papers are almost universally are left-leaning along with our universities, that by and large, teach the religion of democratic secular humanism, as do our grade schools – a notion notion that has something to do with the fact that our children start to lose competitive ground in education about the time we start teaching them the religion of democratic secular humanism. If a religion has such a negative competitive impact can it be useful for any productive reason? Is not the measure of any philosophy the competitive standing of it’s practitioners? Of course, these ‘priests of democratic secular humanism’ attribute the a supposed american exeptionalism to their religion. But american exceptionalism is clearly false. Differences between US and european productivity are accounted for by differences in the number of working hours. While this productivity generates a lower cost of living in the united states, and while american government consumes less of the GDP than governments do in europe, and while americans live generally better lives, even if they live RISKIER lives, than do europeans, there is no exceptionalism to the culture that is caused by democratic secular humanism. American exceptionalism, which is almost entirely the product of selling off a continent, the military strength to do it, the system of private property rights that allows us to do it quickly and easily, and the use of those profits from selling off the continent being directed to the maintenance of the system of international money, defense and trade and the demand for our primary product: “dollars”, and the profits made by selling those dollars because of that militarily constructed system of money, trade, and soldiery. In other words, “property”, which is the prerequisite for trade, and the conversion of violent efforts at acquisition to peaceful efforts at production and trade, is created by vast military expenditure. The system is prolonged like any social system, by the promise of violence if it is broken. Unlike other systems, it is a system that increases production and makes the ‘pie bigger’ rather than decreases production by wealth transfer. Militarism for the purpose of ENFORCING PROPERTY RIGHTS is part of capitalism’s virtuous cycle of dividing labor, increasing granularity of property rights and types, increasing production and decreasing prices, instead of the use of violence to abuse the system of property rights. Militarism is, and can be, a good thing, depending upon how a culture defines it’s property rights. And the more granular the property rights and the better enforced, the more prosperity that people in a culture can generate by virtue of being ABLE to calculate USES of that property. People are not pacifist by nature. Humans are the most successful super predator that has ever occupied the planet. People are pacifist because they are weak. (( See Kagan in Power and Weakness, as well as Sorel in Reflections On Violence, as well as Keegan’s History Of Warfare )) They are predatory by nature when they are strong. Only by maintaining violence over this system do we make the system one where participation in the game of the virtuous cycle is the only possible solution to the improvement of one’s life and resources. And membership requires two payments: respecting property and control of, and responsibility for, your breeding. So, in today’s Times Online there is another article about the desire of the Taliban to start peace talks with americans. The reason for these talks is that Pakistan is no longer allowing the taliban safe haven, and that they are perfectly willing to wait until the Americans leave to reassert their power over their society. By giving the americans a reason for virtuous exit they buy themselves time to regroup, rebuild their numbers, rebuld the poppy and heroin trade, rebuild tehir finances, and retake social positions in the gangster state of afghanistan. America took over the British Empire, it’s trade routes, naval bases, currency position, after the first world war. Americas policy difficulties stem almost ENTIRELY from british and french colonial history – the foolish organization of territory by other than tribal boundaries, in the foolish presumption that humans do not act, and prefer to at, according to tribal preferences. If America STOPPED maintaining that system, does anyone live under the illusion that there would not be VAST and VIOLENT attempts at filling the vacuum of power? It would be the greatest commercial land grab in human history. It would be bloody. It would be violent. It would involve massive wars, starvation, trade interruption, an the only choice for those that choose not to participate would be to participate or be doomed to poverty and ignorance. As an island nation lacking the resources to support itself, with a culture of feminized men so comfortable in their weakness that they have lost the Civic Republican Tradition of the Fraternal Order Of Soldiers (where the British ‘mates’ cultural concept comes from) how would the UK fare in this new world? It would collapse into either switzerland or return to it’s historical position as a backwater. Just as there are plenty of silly americans in daily press, there are an almost unlimited of silly, ignorant, self deluding brits commenting as well. And these comments are important because they express popular sentiment. One of the comments left on this article is by a nobody named Peter Codner who aside from being a barrister and apparently confusing analytical psychology for something other than another post-christian cult of absurd metaphysics, states that “The semblance to Vietnam which was an humiliating defeat for the americans is uncanny. the yanks will run away.” While I understand that short time preference is a result of social class – meaning that we can educate people to use advanced tools and logic but not if we do not extend their time preference so that they can think beyond their experience, and learn that their experience and ability to comprehend that experience is profoundly limited – I fail to understand how one can live in today’s society and not grasp the problem of extending time preference so that we see all actions and outcomes in both their short, medium and long term contexts. Running from an unnecessary battle for political reasons is very different from both running away from your history, and your own failure as a nation, and your responsibility as a nation for the problems you created. The Yanks won almost every battle in Vietnam. The loss was political, because of home political tensions not a military or economic defeat. And it still achieved it’s strategic ends. As did subverting the soviets in Afghanistan. Democracies lack the stomach for sustaining war. And they do so because of people like you. Of course, such sentiment comes comfortably to Brits, who lost their entire empire trying to stop Germany from taking it from them. Frankly the world would be better off if we had let them. Certainly Americans would be – we would not have to become an empire and live under a government-of-empire, if we did not have to take over the British empire when Britain collapsed, like reed. We would not have to protect a world trade and financial system that only served to inflate our entablements. We would not have to deal with the after effects of poor British (and French) judgement that left behind a post colonial Network of violence and poverty around the world. Brits are a silly, petty, pointless people who inhabit little more than an empty client state living off it’s heritage, and propping up it’s ridiculous system by immigrating it’s way into a temporary fictitious prosperity, by fomenting consumption at the expense of it’s heritage and culture, at the expense of producing increases in productivity, where the government consumes 50% of GDP, the military is only slightly less of a Potemkin village than is the laughable Canadian. I expect this kind of behavior of the french, who ceased being a world power when the effects of killing off their aristocracy and descending into Bonapartism ( democratically justified totalitarianism ) and are happy today to simply rest on past glory, consume their accumulated historical investment in a single century, and who because of it are simply obstructionists – obstruction is the only political power they have – so it is the political power that they exercise. Brits are happily self-congratulatory to live under the US common man’s soldierly umbrella of protection, and his society’s necessary militarism while criticizing him on a daily basis. (( What will happen if the middle-american cultures who supply military talent ever figure out how much contempt that they are held in both by their coastal and international critics? )) A “thank you” might be more appropriate than your petty slander. But then again, while no man is a hero to his debtors, a decent man does not slander his debtors. Only an indecent one. False wisdom is the last refuge of the weak whose current technique is to hid behind the cloak of intellectual and moral fraud. But then, isn’t that the purpose of all religions?
I dont like to criticize postings at the Mises Institute, of whom I have been a member and supporter for almost a decade. It is far less work to improve on small errors than to solve catastrophic ones. And therefore less work, and more reward, to criticize your friends in the hope of making progress, rather than undertake the vast effort of correcting your enemies in a vain attempt at altering their desires, when their arguments justify their desires rather than their desires being the outcome of good argument. There was another recent posting on the MI blog regarding the use of private property. It proposes unlimited permission to use private property for private ends. And, I simply don’t like this facet of libertarianism. I don’t think it helps our cause. It’s not that I have sentiments against these kind of arguments. Its that I know that these arguments are not only false, but they’re fraud – theft. And if property and freedom are the underlying principle of libertarianism, then theft is the opposite of libertarianism. And the article by David Albin entitled Historic Preservation VS Private Property Rights is an example of how libertarian thought has incorporated the justification of fraud and theft into it’s doctrine by defining property to PERMIT fraud and theft. And, I see it as my duty, and that of any other seeker of freedom, to undermine any such doctrines so that we can continue our efforts to correctly identify the scope of powers that we must endow to the minimal state so that we may preserve our freedom (juridical defense), our property (registries of opportunity that permit economic calculation), and our prosperity (hours gained and prices decreased by dividing knowledge, labor, and and time.) The reason I have a problem with these errors, is that they have consequences. In particular, such errors as Mises and Rothbard (and Rand) have inserted into the discourse, have tainted the school of thought we call Austrian, such that some members of the libertarian movement are abandoning the term Austrian and adopting the general “libertarian” label, in an attempt at creating distance from the Rothbardians who are trying to legitimiza themselves by adopting the historical label of “Austrians”. In this broader context, the article, as as an example of the errors in the movement, is a proponent of fraud, is counter intuitive to the civic republican tradition to the extent that it appears to freedom seekers as either immoral or criminal, resulting in decreasing adoption of the principles of freedom. It weakens the insight that Hoppe has given us into democracy, monarchy and their corollary the coordination and calculation problem, deprecates the good Austrian thought of Hayek, Popper and Parsons, discounts the valuable part of Rothbard’s analysis of property and incentive, and taints Mises accumulated scholarship and wisdom by emphasizing a failed system of logic (Praxeology) — which failed because of it’s erroneous definition of property and limited definition of action, the logical necessity of which it purports to rely as an observational science in an effort to justify it’s conclusions and therefore act as a functional abilty to persuade people to adopt policy and political ends. This error is both a moral hazard and an intellectual one. intellectual because it advocates something that the movement specifically exists to support, and Moral because it does not facilitate the preservation and advancement of freedom. I have taken on the labor of rewriting a number of chapters of Human Action by Mises such that the statements are positive and do not incorporate the errors caused by Misesian limitations on action, and Rothbardian limitations on property. Hayek likewise could be corrected for his use of sensory order rather than calculative order, and thereby making the sentiments in traditional knowledge as he defines it, articulable in Rothbardian language. Approaching the works of these authors with these corrections is useful for both my self education, but also for revising the vast doctrine of examples and a priori language that have been build up in the field. This is a heroic effort, and I may not, partly because of the age at which I started working full time on the problem, be able to complete it. If I make a dump on my property next to yours have I not stolen from you? If a man wishes to use violence against you, is that not because he feels his property has been stolen? Isn’t this the entire premise of libertarian property rights, which is, that the state has allowed violation of property rights (by pollution in particular) in the name of ‘social good’? What’s the difference in going to a city council and asking to resolve disputes and going to a judge to resolve disputes and going to a sheriff, or priest, or tribal elder to resolve disputes? The answer is just the different criteria that the judge uses to determine his ruling. A city council who asks you to absorb losses is different from the city council who prevents you from speculating (in this case, that’s what’s going on, speculating.) Speculating is a risk. Quite unhappily for my friends here, individual property as a conceptual institution and it’s political institution of juridical defense (what we called freedom) is an outgrowth of the european system of fraternal defense, and in particular, fraternal defense of cities. While there were origins in greece’s fraternal order, the egalitarianism of the Civic Republican tradition is a european artifact – and a Germanic one at that. People ‘pay’ for property rights by restraint: by forgone opportunity. They pay for the political institutions by forgone opportunity. These costs are more substantial costs for the strong than for the weak. The ongoing justification for property rights is a) production increases in the division of labor and the decreased consumption of time, and the resulting reduction in prices, b) the conversion from a tax to a credit society allows a development of a code of laws for different social classes who are more productive or less productive than one another, and as such the cost of administration of a populace is distributed across the population. c) the decline in violence between groups who would otherwise resort to violence. d) the virtuous cycle resulting in the fulfillment of wants and needs. If I act to decrease the value of your property either directly or indirectly, why are you not simply STEALING from the pool of forgone opportunity investment? In other words, if other people who are affected by secondary costs REFRAIN from attempts at development they are paying an opportunity cost. If they codify this cost as a PROPERTY RIGHT by registering that loss with a property registry (the council) then anyone’s attempt to circumvent those registries is simply an act of fraud and theft, using the ruse of property rights to steal. That is the correct application of libertarian (hoppian) property rights, because those are the set of both the ACTIONS (costs) and RESTRAINTS (costs) that people take in order to make use of hte institution of private property. The attempts by certain sects of libertarianism to undermine this process of property rights is NOT the defense of property rights but a SCHEME for organized THEFT. This ‘sect’ of libertarianism is very easy to identify once we use the Misesian Doctrine that you can ACT by acting and ACT by not acting. You can also pay costs by ACTING and pay cost by NOT acting. There is no difference between a joint stock company and a city council as long as teh council is taking deposits on forgone opportunities RATHER than exploiting forgone opportunities. There are many types of property registry. It is the transformation of these institutions from property registries to political forces by which property can be extracted from forgone opportunities, rather than registries are a collection of forgone opportunities, a joint stock company, by which people can use micro payments of forgone opportunity to capitalize their efforts. To capitalize wealth by INACTION rather than action. To capitalize opportunity costs. This may be a big leap, but it is the missing part of Mises->Hayek->Rothbard->Hoppe, and the theory of human action embodied in Mises work, and personally, I find it a convenient means of attempting to STEAL from the wishing-well of deposits made over time by various people of all strata in an attempt to privatize wins and socialize losses. Mises made a mistake because he had too narrow a view of social cooperation, possibly because of his upbringing. (which Hayek noted.) Hayek was not able to correct mises, largely because he was distracted by his concepts of Sensory Order (because of his upbringing), and to turn his observations on common knowledge into action statements as did Mises. Rothbard continued to make progress but relied upon natural law, either as a means of avoiding the underlying problem or simply because he could not see the underlying problem. I see it eitehr as avoiding the problem, or a distraction resulting from egoism. Hoppe has almost corrected Rothbard’s bias. But these systems of thought all focus on visible actions and costs rather than the less visible forgone actions and costs. They justify ignoring them because they are hard to measure, then happily justify their desire to expropriate from the common man precisely BECAUSE they ignored these forgone opportunity costs. I am unable to fathom whether it is by malice or error that these ideas persist. However, failings aside, the anarchic research program has made it possible to undermine the assumed “calculative” necessity for government as we have envisioned it for millennia and to replace that error with a superior “calculative” tool of cooperation – capitalism. But the continued attempt to ignore the forgone opportunity costs and focus only on money costs, is simply an attempt at the deceptive theft, by fraud, not trade. Let me repeat that: A statement that relies upon property rights rights, but is SELECTIVE in the definition of PROPERTY, and specifically to apply infinite DISCOUNT to forgone opportunity costs, is FRAUD. Period. Either all costs are opportunity costs or they are not. Selective attribution of costs is simply FRAUD. This statement will have, or should have, as much an impact on libertarian thought as did natural rights. And if it does not, then there will cease to be a movement. Because the reason that conservatives and libertarians fail to achieve significant political success is that they have failed be able to articulate those elements of their framework such that they can provide a POSITIVE solution for humanity, rather than a resistive one. And in particular, the argument that says we must rely on the MORAL position of libertarianism is simply a TRAP so that we can further ignore the forgone opportunity costs paid by all people in a society. Instead of a specious moral mandate, the problem is one of coordination, and as a problem of coordination among large numbers of people, where there senses are inadequate to provide needed information for decision making, the answer, rather than moral, is ‘calculation’. Because ‘calculation’ is the only means of extending our perceptions such that we can make increasingly complex decisions. Even if the ‘number system ‘ we use consists of time and property, and the numerical system we use is to gain efficiencies in perception on the use of time and property. From this standpoint, Mises and Hayek are not opposed. They are both inadequate with Mises solving the individual cost problem, and Hayek solving the opportunity cost problem – albeit in terrible and ineffective terms. Rothbard is inadequate as was Mises. Hoppe took us farther and compensated for some of rothbard, almost breaking out of the Rothbardian limits and simply returning to the problem of incentives and knowledge. We have spent a century trying to use money as our sensory system and means of analysis. Mises created or at least elaborated on a theory of action, while missing the underlying economy of forgone opportunity. Hayek and Popper dealt with the problem of ignorance. Pareto and Weber dealt with the problem of knowledge and bias. Parsons did his part as well. But these men all failed. Instead, the answer was sitting there in the socialist calculation debate. What surprises me is despite the obvious nature of that answer, and the predominance of misesian thought, that the history of human political operation has not be rewritten to accommodate it. “The greatest forgone opportunity cost is by the strong, who do not simply conquer the weak, but instead demand tribute for their institution of property rights as their lowest cost means of profiting by handling exceptions.” Individual property is the result of the defensive tactics of the fraternal order of soldiers and the need to enfranchise the population. This is the very opposite of the religious dictums proposed by all to many libertarians. Peace and property are the result of the use of and organization of violence. The state is the application of organized violence. It is the abuse of that violence by members of the state to steal from the forgone opportunities for violence that have been paid into the wishing well, and paid for, by constant recapitalization, the institutions and habits we call freedom, and it’s calculative tool, property rights. The question is not what happens with one man on an island. It is, should a thousand of us be put on an island, what happens? Island myth is false at it’s outset, and therefore all that follows is false as well. Again, since I learned more from these people than anywhere else, and I believe desperately in their mission, and I respect them immensely and call a number of these people friends, I am not criticizing any intention or character. I want to advance that mission. But to do so I think that the Misesian-Rothbardian error needs to be corrected for libertarianism to provide the intellectual leadership that conservatism needs, and to finally offer a positive solution to compete with the utopianism of the socialists. Curt Doolittle
I was listening to a lecture by Roderick Long this morning, entitled “The Moral Standpoint” which is part of the series “Foundations of Libertarian Ethics: A Philosophy Seminar” (Available from Mises.org). In this lecture, Dr Long (who I enjoy and admire, not the least of which because he is very funny and charming in person) attempts to analyze the reasons for the popular rejection of libertarian solutions to political problems. And while I agree with Long’s arguments, as far as they go, I also understand, that the resistance to libertarian solutions, of which there are many, is the preservation of status that comes from the fog of our current, ambiguous, and unclear political order. In general, libertarian solutions propose fact-generating, and evidentiary solutions that expose causality. I tend to talk about these category of solutions as ‘calculable’ in the sense that they provide sufficient information to assist us in making decisions, and they do not permit the ‘laundering’ of causailty by the pooling of accounting information. THe problem with the clarity of libertarian solutions is that people enjoy the ‘fog of reality’. THe same way we all believe we are in the upper ten percent of our fields, we all believe we are contributing members of society, when in fact, we cannot all be in the upper ten percent of our fields, and it’s quite demonstrable that the only contribution most people make to society is to cause work for others, to provide local clerical or manual labor, to refrain from stealing so that we can create the institution of property, and to fill land so that others don’t take the earth’s potential from us. We do not want a clear mirror in which to see our true reflection, but a foggy one, that preserves our self-illusions – illusions that help us exist in a division of labor where indeed we may have little importance or relevance to one another, while at the same time, benefiting from the vast decreases in costs that such a division provides for us. We trade our ability to perceive causality for our mutual prosperity. Our status, which is, effectively, our access to mates, and often access to social groups, is more important for the political and lower classes than it is for the high performance (merchant and finance) sectors, who achieve that status by causal means in a division of labor, under the institutions of trade and exchange. My argument, which is contrary to general libertarian propositions, is that redistribution of profits from interest are the only means of resolving this status conflict – we have to pay other classes. And that the libertarian political strategy is effectively to propagate it’s value system, under the guise of moral or religious traditions, which it cannot, because it is against the status advantage of the less meritocratic classes. And while the libertarian position is to return to the gold standard, or some variation of it, the problem with that position is that, as the division of labor and knowledge increases, and especially as we urbanize, credit is the only means of preserving the social order – which means respecting property – as well as an identity for encouraging cooperation that was perviously created by nation, religion, village, tribe and family. Just as laws are a punitive system that apply to all equally (hopefully), credit is an incentive system that is more effective than law, because it does not require policing, just recording. And incentives under credit, are positive, and under law, negative. Furthermore, we need insurance provided through fiat money, or at least common money. Otherwise we are privatizing wins and socializing losses. The problem with the Rothbardian concept of banking and money is that in the end, it privatizes wins and socializes losses. This is justified in that model under a number of guises. however, what Rothbards model (and Mises as well) ignores, is that in order to create the institution of property people must forego their opportunity to employ violence. This redistributes violence across people who DO respect property. And therefore, any group of people who deny violence in order to create property, redistribute their violence and thereby pay opportunity costs. As such, a failure of profits from credit to be redistributed are a theft, and redistribution is mandated. By avoiding this conversation (or not understanding it) Mises and Rothbard, as well as libertarians in general, circumvent the problem of maintaining land, and creating the institutions of property. The poor, as long as they are not immigrants (who under this model are thieves – explaining peoples reaction to immigration) by respecting property, and denying violence, are due redistribution, which explains their use of violence (their repossession of their contributions). And a failure to redistribute a portion of profits is simply theft from them. CRedit and interest are the means by which we can do so, if, in the end, we are borrowing from them.