Curt Doolittle

Theme: Incentives

  • DWEEB ALERT : A COMMISSION SYSTEM THAT COULD EVEN SATISFY JIM BEEBE 🙂 My friend

    DWEEB ALERT : A COMMISSION SYSTEM THAT COULD EVEN SATISFY JIM BEEBE 🙂

    My friend Jim is notorious for concocting elaborate commission schemes in an effort to provide just the right incentives. Unfortunately, human beings have to actually calculate these formula manually. If they cant understand it, then they can’t be incentivized by it. And worse, complexity and lack of transparency create doubt about management’s honesty in the sales organization.

    So, twenty years of working with him and I finally got the chance to design something insane enough to accomodate his creativity, while maintaining transparency. It took me all day. And it turns out, it’s pretty easy to use, override, and just plain old play with. It can even call custom rules if there’s something I haven’t thought of.

    Maybe the next CEO won’t have to look into the eyes of a sales guy and say “I love to pay commissions. They represent success. And everyone here is honest. I’m pretty sure it’s right. And if it isn’t. We’ll fix it. I promise.” or to your board “I can’t even figure out how to calculate this myself. How the hell will one of the sales guys?”

    </Tech Geek Off>

    Source date (UTC): 2012-11-17 14:53:00 UTC

  • FROM ELSEWHERE: BUILDING A LIBERTARIAN COMPANY (Saved here for future reference

    FROM ELSEWHERE: BUILDING A LIBERTARIAN COMPANY

    (Saved here for future reference on my timeline.)

    As someone who built a sizeable company specifically with the intent of experimenting with libertarian management principles, I can argue that not only does it lead to a high growth company because of transparency and meritocracy, but it’s also a more pleasant place to work because people are empowered – they feel sovereign.

    HOWEVER HERE ARE SOME OBSERVATIONS

    1) CLASS

    libertarianism is a meritocratic, and therefore middle and upper middle class philosophy. If you want to have day laborers, it’s going to be less successful than if you have engineers because the former are less comfortable problem solving than the latter because the former are more open to cheating then the latter (this isn’t necessary that’s just how it works out due to class sorting and peer association).

    While we libertarians feel that liberty is the desire of all, it is not. It is the desire of those of us who have an intellectual advantage. The vast majority of people want only enough liberty to choose who directs them. They do not want to master the information necessary to be fully directed.

    In that sense, liberty is classically defined as consisting of multiple levels:

    1) Freedom of life, property and relationships (liberty)

    2) Freedom to form organizations (association)

    3) Freedom to choose leadership (corporation)

    4) Freedom to ostracize (nationalism)

    5) Freedom to convert or expand (imperialism)

    We libertarians agree with the first three, conservatives and some conservative libertarians with the first four, and neo-conservatives with all five.

    So one cannot easily create a libertarian organization across class lines, unless the majority of control is in the hands of those who wish to preserve that libertarian ordere, and its constant state of variation, meritocracy and competition.

    2) EXPOSE EVERYONE TO PRICES AND PROFIT

    Libertarianism and meritocracy require all people are exposed to the pricing system and its affects. Prices and profit are truths. Opinions are not. Bureaucracy is a synonym for insulation from the pricing system. Engineering this into many companies is extremely difficult. This is because many administrative disciplines are security rather than merit oriented (accounting for example).

    3) ELIMINATE ALL DEDICATED MANAGEMENT

    Middle management provides little if any value in almost all organizations. Knowledge exists at the bottom, and the knowledge to concentrate scarce capital at the top. Design your company to have no pure management. Everyone is responsible for profit. If they are not then you do not need them, and should organize your people differently. Usually it is better to compensate someone very dedicated to produce less profit and split time between leadership/mentoring and productivity/profitability. But if they are not themselves materially productive it is just a countdown before they become valueless. This is counter to human behavior because we all seek to avoid work and subsist upon rents. Management that does not either sell something or produce something is rent seeking.

    4) REORGANIZE YOUR COMPANY FREQUENTLY – EVERY SIX MONTHS

    Try to get your top talent to know more of the business by rotating them through different positions in the company. This will prevent your organization from calcifying in an attempt to be ‘efficient’ at delivering a fixed business model rather than ‘responsive’ and therefore efficient at delivering whatever business model is necessary to satisfy the needs of the market. (Note that it is possible to be a market follower and emphasize efficiency, but libertarianism is an effort to spur innovation. Leave it to liberals to live under the illusion that any commercial model represents a steady state.) Liberty is the source of innovation through competition. But competition creates multiple opportunity for loss.

    5) TALENT

    Marginally competitive companies possess superior talent in key roles. I devote at least a third of my time to recruiting talent.

    7) PROCESSES

    Processes calcify and compensate for stupidity and ignorance. Processes attempt to be efficient in order to minimize the need for interpersonal problem solving. However, this also means that processes are inhibitors to innovation and collaboration. Therefore all processes in your organization may be overridden if a) increase profitability without negative externalities. b) increase customer customer loyalty. (loyalty is meaningful. satisfaction is not. know the difference. satisfaction is only expressed meaningfully as loyalty.) c) increase the chance of opportunity generation without increasing the cost of opportunity generation. You must instill this culture in people so that the understand. Economics is the study, largely, of externalities, since internal exchanges are trivial, and externalities are complicated.

    8) SALES

    My experience is that companies under-invest in sales, and over-invest in fear. The people who generate sales are the most valuable people in your company. There are no exceptions. However, people who can generate sales are contextually dependent. Second, the good ones will only come to places where they are adequately rewarded. So when you are small you cannot generally hire talent that is worth what you pay them. Expect a 60-60% failure rate.

    9) EVERYONE IS A POTENTIAL CUSTOMER

    Every single person you meed is a potential customer. Just like actors and politicians lose their freedom because some paparazzi might catch them at an inopportune moment, an entrepreneur loses the freedom of self expression. (I chose expressly to break this rule because of my intellectual interests, but largely this worked to my advantage as self brand promotion. It turns out that if you will say really controversial things in public and try to defend them, then customers will assume you will give them the same unfiltered advice. It worked for me. In general though, I do not recommend it.)

    10) MANAGEMENT STRATEGY

    As a CEO, you can act as an investor, accountant, operator, salesman or craftsman. Or some combination. Because of personality differences it is unlikely that you will be even moderately successful at more than two. Know your strengths and hire the people who compensate for your weaknesses, but possess your strengths in some minor capacity. (I am a salesman, investor, and craftsman. I hire people who are operators and accountants to actually run the details of the business. Jack Welsh is different, Steve Jobs was different, Bill Gates is different, and Warren Buffett is different. And the guys who turnaround companies that are in trouble are different still. If you are entrepreneurial you are best off being sales and craftsman, because this means you master your industry and its customers. if you are a talented executive in a larger bureaucracy it is better to be operational and financial.

    11) PEER REVIEWS

    Conduct stack ranking peer reviews, with written comments at least once per year and exit the bottom ten percent of the company. (I usually was only able to exit the bottom 4% because the community building within the company was so strong that people would fight hard for underperformers if they thought that they could help them improve. This then creates passionate employees out of both the mentors and those people who were given help in succeeding.

    12) PITCHING AND DESIGNING

    Create some venue where employees suggest new uses for products, or new products, or new services, or pitches for customers. WE were always suprised at how many quiet people from the bottom of the company turned out to be our best idea poeople. It also makes it impossible for others to take credit for someone’s idea.

    13) CREATE PARTIES AND AFTER-PARTIES

    If you can find an excuse to spend a few hundred dollars taking people to a club, restaurant or entertainment venue where they can play, then do it. Every possible time. Have a big event at least once a year that requires formal dress, and is not in competition with some other holiday, just to celebrate each other. Terminate people who do not participate in social events.

    14) HIRE FAMILY AND FRIENDS IF THEY HAVE THE TALENT – NEPOTISM IS THE BEST LOYALTY YOU CAN BUY

    Loyalty is the willingness to absorb losses of opportunity for one’s self in order to create opportunity for the group to whom you are a member. Families do this by nature. Never hire ANY family member who cannot perform, or any friend, and never sacrifice your hiring process. But never discount a friend or family. They will work much harder at group cohesion than outsiders.

    EXPENSIVE?

    If any of this sounds either inefficient or expensive then you should do something other than go into business. People are tribal animals. they calculate all sorts of things with and against one another every day, every hour, every second.

    Make sure that they are calculating something that binds them together to create products and services for your company, in the service of customers, that can be delivered to them at a profit. Because profit is our only way of knowing that we have made use of the world’s resources to serve others, in a manner that they demonstrate by their dear actions rather than their cheap words.

    CLOSING

    I have spent too much time on this post already, but perhaps it will do one person some good. And if so, then I’ve passed it on, and done the moral thing. 🙂

    Cheers

    Source date (UTC): 2012-11-17 05:48:00 UTC

  • As someone who built a sizeable company specifically with the intent of experime

    As someone who built a sizeable company specifically with the intent of experimenting with libertarian management principles, I can argue that not only does it lead to a high growth company because of transparency and meritocracy, but it’s also a more pleasant place to work because people are empowered – they feel sovereign.

    HOWEVER HERE ARE SOME OBSERVATIONS

    1) CLASS

    libertarianism is a meritocratic, and therefore middle and upper middle class philosophy. If you want to have day laborers, it’s going to be less successful than if you have engineers because the former are less comfortable problem solving than the latter because the former are more open to cheating then the latter (this isn’t necessary that’s just how it works out due to class sorting and peer association).

    While we libertarians feel that liberty is the desire of all, it is not. It is the desire of those of us who have an intellectual advantage. The vast majority of people want only enough liberty to choose who directs them. They do not want to master the information necessary to be fully directed.

    In that sense, liberty is classically defined as consisting of multiple levels:

    1) Freedom of life, property and relationships (liberty)

    2) Freedom to form organizations (association)

    3) Freedom to choose leadership (corporation)

    4) Freedom to ostracize (nationalism)

    5) Freedom to convert or expand (imperialism)

    We libertarians agree with the first three, conservatives and some conservative libertarians with the first four, and neo-conservatives with all five.

    So one cannot easily create a libertarian organization across class lines, unless the majority of control is in the hands of those who wish to preserve that libertarian ordere, and its constant state of variation, meritocracy and competition.

    2) EXPOSE EVERYONE TO PRICES AND PROFIT

    Libertarianism and meritocracy require all people are exposed to the pricing system and its affects. Prices and profit are truths. Opinions are not. Bureaucracy is a synonym for insulation from the pricing system. Engineering this into many companies is extremely difficult. This is because many administrative disciplines are security rather than merit oriented (accounting for example).

    3) ELIMINATE ALL DEDICATED MANAGEMENT

    Middle management provides little if any value in almost all organizations. Knowledge exists at the bottom, and the knowledge to concentrate scarce capital at the top. Design your company to have no pure management. Everyone is responsible for profit. If they are not then you do not need them, and should organize your people differently. Usually it is better to compensate someone very dedicated to produce less profit and split time between leadership/mentoring and productivity/profitability. But if they are not themselves materially productive it is just a countdown before they become valueless. This is counter to human behavior because we all seek to avoid work and subsist upon rents. Management that does not either sell something or produce something is rent seeking.

    4) REORGANIZE YOUR COMPANY FREQUENTLY – EVERY SIX MONTHS

    Try to get your top talent to know more of the business by rotating them through different positions in the company. This will prevent your organization from calcifying in an attempt to be ‘efficient’ at delivering a fixed business model rather than ‘responsive’ and therefore efficient at delivering whatever business model is necessary to satisfy the needs of the market. (Note that it is possible to be a market follower and emphasize efficiency, but libertarianism is an effort to spur innovation. Leave it to liberals to live under the illusion that any commercial model represents a steady state.) Liberty is the source of innovation through competition. But competition creates multiple opportunity for loss.

    5) TALENT

    Marginally competitive companies possess superior talent in key roles. I devote at least a third of my time to recruiting talent.

    7) PROCESSES

    Processes calcify and compensate for stupidity and ignorance. Processes attempt to be efficient in order to minimize the need for interpersonal problem solving. However, this also means that processes are inhibitors to innovation and collaboration. Therefore all processes in your organization may be overridden if a) increase profitability without negative externalities. b) increase customer customer loyalty. (loyalty is meaningful. satisfaction is not. know the difference. satisfaction is only expressed meaningfully as loyalty.) c) increase the chance of opportunity generation without increasing the cost of opportunity generation. You must instill this culture in people so that the understand. Economics is the study, largely, of externalities, since internal exchanges are trivial, and externalities are complicated.

    8) SALES

    My experience is that companies under-invest in sales, and over-invest in fear. The people who generate sales are the most valuable people in your company. There are no exceptions. However, people who can generate sales are contextually dependent. Second, the good ones will only come to places where they are adequately rewarded. So when you are small you cannot generally hire talent that is worth what you pay them. Expect a 60-60% failure rate.

    9) EVERYONE IS A POTENTIAL CUSTOMER

    Every single person you meed is a potential customer. Just like actors and politicians lose their freedom because some paparazzi might catch them at an inopportune moment, an entrepreneur loses the freedom of self expression. (I chose expressly to break this rule because of my intellectual interests, but largely this worked to my advantage as self brand promotion. It turns out that if you will say really controversial things in public and try to defend them, then customers will assume you will give them the same unfiltered advice. It worked for me. In general though, I do not recommend it.)

    10) MANAGEMENT STRATEGY

    As a CEO, you can act as an investor, accountant, operator, salesman or craftsman. Or some combination. Because of personality differences it is unlikely that you will be even moderately successful at more than two. Know your strengths and hire the people who compensate for your weaknesses, but possess your strengths in some minor capacity. (I am a salesman, investor, and craftsman. I hire people who are operators and accountants to actually run the details of the business. Jack Welsh is different, Steve Jobs was different, Bill Gates is different, and Warren Buffett is different. And the guys who turnaround companies that are in trouble are different still. If you are entrepreneurial you are best off being sales and craftsman, because this means you master your industry and its customers. if you are a talented executive in a larger bureaucracy it is better to be operational and financial.

    11) PEER REVIEWS

    Conduct stack ranking peer reviews, with written comments at least once per year and exit the bottom ten percent of the company. (I usually was only able to exit the bottom 4% because the community building within the company was so strong that people would fight hard for underperformers if they thought that they could help them improve. This then creates passionate employees out of both the mentors and those people who were given help in succeeding.

    12) PITCHING AND DESIGNING

    Create some venue where employees suggest new uses for products, or new products, or new services, or pitches for customers. WE were always suprised at how many quiet people from the bottom of the company turned out to be our best idea poeople. It also makes it impossible for others to take credit for someone’s idea.

    13) CREATE PARTIES AND AFTER-PARTIES

    If you can find an excuse to spend a few hundred dollars taking people to a club, restaurant or entertainment venue where they can play, then do it. Every possible time. Have a big event at least once a year that requires formal dress, and is not in competition with some other holiday, just to celebrate each other. Terminate people who do not participate in social events.

    14) HIRE FAMILY AND FRIENDS IF THEY HAVE THE TALENT – NEPOTISM IS THE BEST LOYALTY YOU CAN BUY

    Loyalty is the willingness to absorb losses of opportunity for one’s self in order to create opportunity for the group to whom you are a member. Families do this by nature. Never hire ANY family member who cannot perform, or any friend, and never sacrifice your hiring process. But never discount a friend or family. They will work much harder at group cohesion than outsiders.

    EXPENSIVE?

    If any of this sounds either inefficient or expensive then you should do something other than go into business. People are tribal animals. they calculate all sorts of things with and against one another every day, every hour, every second.

    Make sure that they are calculating something that binds them together to create products and services for your company, in the service of customers, that can be delivered to them at a profit. Because profit is our only way of knowing that we have made use of the world’s resources to serve others, in a manner that they demonstrate by their dear actions rather than their cheap words.

    CLOSING

    I have spent too much time on this post already, but perhaps it will do one person some good. And if so, then I’ve passed it on, and done the moral thing. 🙂

    Cheers

    Source date (UTC): 2012-11-17 05:47:00 UTC

  • THE ERROR IN ROTHBARDS PRAXEOLOGY TO INTRANITIVE PREFERENCES Priceless post. Pre

    http://fensel.net/2012/11/16/intransitive-preferences-and-the-money-pump-argument/TYING THE ERROR IN ROTHBARDS PRAXEOLOGY TO INTRANITIVE PREFERENCES

    Priceless post.

    Preferences are a network – a map, a graph – not a hierarchy or a stack.

    Moreover, when preferences are cleared, the network is satisfied, not the node. Even though we only have visibility into the preference exposed by the physical exchange.

    This is the fundamental problem with praxeological thought that equates the simplicity of commodities for which the network consists of little more than price, with consumer goods that at least within any price range consist largely of signals. And signals consist in no small part, of contributions both supportive and competitive to norms.

    Preferences are not linear, they are sets of values on a graph. And as such, those that appear intransitive are so only because the label that we give to them represents only one item in the (large) set. We make a logical error when we attribute linearity to the label or name, which is only a subset of the values of the set of values that constitute any preference. This confuses the convenience of the label with the inconvenient and often opaque contents of the set.

    Source date (UTC): 2012-11-16 00:46:00 UTC

  • REVIEW OF “23 Things They Don’t Tell You About Capitalism (Paperback)” This topi

    REVIEW OF “23 Things They Don’t Tell You About Capitalism (Paperback)”

    This topic deserves better treatment.

    Others have listed some of the glaring faults in the book.

    1) The most obvious one which is a restatement of Marx’s patently false labor theory of value.

    2) The next most obvious is the patently false argument that labor is a constant price independent of local costs.

    3) The next most obvious is the false claim that advocates argue that free markets are frictionless – when they argue instead only that bureaucrats are even worse than the market is at making decisions.

    Realistically, the MORAL complaints he raises about the social and political difficulties created by inequality, may have some merit, but his economic and philosophical arguments are, in a word, adolescent. Any third first year graduate student in economics should be able to refute most of the ‘points’ in this book. And it’s unfortunate that such criticisms of capitalism are made on absurd grounds, rather than those that would actually help lead us to a better understanding of what markets do for us, and how we can best make use of them.

    CRITICISMS OF CAPITALISM

    1) capitalism simply states that the market will do a less bad job than humans who try to control it. Despite our desires to the contrary, history has proven this, logic demands it, and mathematics confirms it.

    2) The market does not provide sufficient protections against ‘cheating’, fraud, theft and violence. This is why we have regulations: to force people to use ONLY fully informed competition in the market as a means of fulfilling their interests and the interests of others. Furthermore, constant innovation in technology, products and services requires constant innovation in regulation against new means of cheating, fraud, theft and violence.

    3) The market does not provide sufficient protections against the concentration of capital that allows large capital holders to circumvent the market by either temporary monopolistic practices, or abuse of the government to obtain regulatory privileges – including collective bargaining privileges.

    4) The market does provide all people with declining prices, but it is arguable that this is an insufficient benefit, and that they are due redistribution of some sort, of the profits from the market that their government and taxes create.

    HOWEVER

    1) Democratic Governments demonstrably make the problem worse through corruption, privilege and abuse because the election process is so expensive and lobbyists and interest groups so effective.

    2) Government employees are unjustly protected from lawsuits by citizens. And our laws do not articulate the limits on legislative action.

    3) Redistribution schemes are not tied to profitability or the economy, and result in fixed costs, rather than proportional rewards – this provides everyone with the wrong incentives.

    4) The commons is insufficiently converted to property and corporations with shares, so that it is too open to political exploitation, since regulation is too imprecise and expensive compared to the ease and permanence of shareholder agreements. The government instead creates either privileged monopolies (radio spectra), or corrupt exploitation of the commons (strip mines).

    For these reasons and dozens more, governments are more often the source of the problem than the cure for it. It’s these failures of the government that must be addressed if we are to take advantage of the extraordinary benefits of the market, while preventing its abuses by both the private and public sectors. The market cannot be corrupt. It is like gravity. Only government can over, or under regulate it. The market is not natural. It was invented as we know it, and evolved like any other technology. And it is the most complicated technology man has invented. And he barely understands it.

    5) If our courts allowed us to more easily sue companies for fraud and ‘cheating’ (profiting from asymmetry of information) or privatization of the commons the way that it did in the english common law, then regulation would not be necessary, and citizens wold be able to regulate company behavior through urgent dynamic legal action rather than slow bureaucratic and privilege seeking legislation. this is the argument conservatives and libertarians make: the that government pretends that it does good, when in fact, the regulatory process is only necessary because the government grants businesses legal protection to commit fraud and cheating. ie: government is the problem, not the solution. All any country needs is sufficiently articulated property rights and free access to courts, and the people will directly regulate businesses themselves — WITHOUT the need for legislation.

    SUMMARY

    I view this book as an EXAMPLE of the abuse of capitalism: personal profiteering by selling popular nonsense containing false claims, for the purpose of taking avantage of the emotional sentiments of those without the knowledge to defend themselves from such folly. In this sense, if the government did it’s job, this book would be prevented by regulation from being published. When, in fact, we tolerate in the market, and in our grant of free speech to one another, such abuses, because the attempt at eliminating these abuses would be more damaging than the abuses themselves. This is true of almost all attempts to regulate the market. We must tolerate some things we do not like (like ridiculous books) so that we may have things that we do not like but need (Darwin’s evolutionary treaties). This is the true conflict of both the market and its regulation: the market is a process of trial and error in constant motion and our attempts at regulation are

    Curt Doolittle – The Propertarian Institute

    Source date (UTC): 2012-11-06 03:04:00 UTC

  • STRATEGY ON WALL STREET Conservatives and republicans seek to protect wall stree

    http://www.nextnewdeal.net/rortybomb/what-explains-wall-streets-shift-away-obama-fat-cat-comments-or-dodd-frankCONSERVATIVE STRATEGY ON WALL STREET

    Conservatives and republicans seek to protect wall street as a defense against the socialist state.

    It is the only defense they have. They rely upon: small business, family conservatives, evangelicals, the military, and the financial sector.

    This is another example of how people will pay very high costs to punish ‘cheaters’.

    And it at least appears that the republicans have been successful in recruiting wall street.

    If this hypothesis is true, it will mean a watershed moment has occurred.

    Source date (UTC): 2012-11-02 03:37:00 UTC

  • CONSERVATIVE STRATEGY IS TO STARVE THE BEAST Linda doesn’t quite get it. I’ll ha

    http://www.angrybearblog.com/2012/10/starve-state-support-traditional.htmlTHE CONSERVATIVE STRATEGY IS TO STARVE THE BEAST

    Linda doesn’t quite get it. I’ll have to write a response. But finally some progressives understand the conservative strategy. No thtat they can do anything about it. Because the middle class is too moral to adopt the progressive philosophy.

    Source date (UTC): 2012-11-01 13:17:00 UTC

  • Why Should A Person Believe In Austrian Economics?

    It is not a question of ‘belief’. There are five or six different strategic economic biases in favor of a different set of levers for encouraging an economy. These different levers vary from the fastest and most redistributive and distorting to the slowest, least redistributive and distorting.   They are loosely Modern Monetary (fastest), Monetarism, Fiscal Policy, Industrial policy, and Human Capital policy (slowest – austrianism).

    The other criticisms of the ideas of these schools as consisting of ‘true’ or ‘false’ propositions are absurd. All schools are merely utilitarian, and reward one or more sectors of an economy and one or more social classes, asymmetrically. All have side effects that are positive or negative.   Austrianism trades slower growth for greater personal freedom, greater innovation, smaller boom and bust cycles, with greater development of a natural aristocracy, and natural intertemporal increases in the rate of expansion of the economy between the classes.

    The competition between the schools is merely a preference for one set of EXTERNALITIES over another set of externalities.  With austrianism preferring to cause the lowest redistribution of capital, and the greatest reward, and greatest incentive for entrepreneurship, and the least incentive for political actors, and the greatest diversity of wealth (inequality), in exchange for greater relative wealth for all.  It also has the best system of feedback for the expansion of positive norms – which conservatives feel (correctly) are more important for the expansion of an economy than any other property.

    Claims that austiranism is apodeicitcally certain are specious.  Any system so certain must be substantially complete, and praxeology as it is currently constructed is incomplete enough that it cannot render judgements of certainty except in the most reductio (absurd) cases. (I am trying to fix this problem but it will take me another year or so.)   Instead, praxeological analysis simply exposes the the incentives of individuals and illustrates their rational actions,  IN effect allowing us to judge whether our ascertations about human behavior are true or false.   This leads to exceptional insights about human nature in an economy.  However, a) this does not invalidate the other schools only opens the door for discussions of trade offs.  b) we have been wrong on a number of topics that appear to be rational to individual actors but in practice are false (stickiness of prices, and irrationality of actions.)  

    The central tenet of austiranism, is the business cycle theory, which states that any  intervention in an economy will pervert incentives and information and causes worse busts and booms.  This argument appears to be correct. It is just questionably useful in a democracy where voters will demand action from government.

    A wise man would say, that each of these sets of levers and externalities has value to moving an economy.  But that it appears to be impossible in our democratically structured politcal system, to use each lever for the purposes to which it is suited, and for the benefit of all.  Politics in democracy is a means of obtaining power to conduct rents.   And since each of the different schools and their levers allows a different kind of rent to be sought for a different class of citizens, we merely fight over the control of these levers for our sects.

    You will not likely hear this explanation elsewhere. You may not understand this explanation.  Because I cannot take the time, sitting in my hotel room, to write a twenty page essay on the topic.  However, it is most likely the only correct analysis of the different economic schools currently available.

    Cheers.
    Curt
    (Thank you for asking me to answer this question. Although I think only the most sophisticated of students will understand it.)

    https://www.quora.com/Why-should-a-person-believe-in-Austrian-economics

  • Why Should A Person Believe In Austrian Economics?

    It is not a question of ‘belief’. There are five or six different strategic economic biases in favor of a different set of levers for encouraging an economy. These different levers vary from the fastest and most redistributive and distorting to the slowest, least redistributive and distorting.   They are loosely Modern Monetary (fastest), Monetarism, Fiscal Policy, Industrial policy, and Human Capital policy (slowest – austrianism).

    The other criticisms of the ideas of these schools as consisting of ‘true’ or ‘false’ propositions are absurd. All schools are merely utilitarian, and reward one or more sectors of an economy and one or more social classes, asymmetrically. All have side effects that are positive or negative.   Austrianism trades slower growth for greater personal freedom, greater innovation, smaller boom and bust cycles, with greater development of a natural aristocracy, and natural intertemporal increases in the rate of expansion of the economy between the classes.

    The competition between the schools is merely a preference for one set of EXTERNALITIES over another set of externalities.  With austrianism preferring to cause the lowest redistribution of capital, and the greatest reward, and greatest incentive for entrepreneurship, and the least incentive for political actors, and the greatest diversity of wealth (inequality), in exchange for greater relative wealth for all.  It also has the best system of feedback for the expansion of positive norms – which conservatives feel (correctly) are more important for the expansion of an economy than any other property.

    Claims that austiranism is apodeicitcally certain are specious.  Any system so certain must be substantially complete, and praxeology as it is currently constructed is incomplete enough that it cannot render judgements of certainty except in the most reductio (absurd) cases. (I am trying to fix this problem but it will take me another year or so.)   Instead, praxeological analysis simply exposes the the incentives of individuals and illustrates their rational actions,  IN effect allowing us to judge whether our ascertations about human behavior are true or false.   This leads to exceptional insights about human nature in an economy.  However, a) this does not invalidate the other schools only opens the door for discussions of trade offs.  b) we have been wrong on a number of topics that appear to be rational to individual actors but in practice are false (stickiness of prices, and irrationality of actions.)  

    The central tenet of austiranism, is the business cycle theory, which states that any  intervention in an economy will pervert incentives and information and causes worse busts and booms.  This argument appears to be correct. It is just questionably useful in a democracy where voters will demand action from government.

    A wise man would say, that each of these sets of levers and externalities has value to moving an economy.  But that it appears to be impossible in our democratically structured politcal system, to use each lever for the purposes to which it is suited, and for the benefit of all.  Politics in democracy is a means of obtaining power to conduct rents.   And since each of the different schools and their levers allows a different kind of rent to be sought for a different class of citizens, we merely fight over the control of these levers for our sects.

    You will not likely hear this explanation elsewhere. You may not understand this explanation.  Because I cannot take the time, sitting in my hotel room, to write a twenty page essay on the topic.  However, it is most likely the only correct analysis of the different economic schools currently available.

    Cheers.
    Curt
    (Thank you for asking me to answer this question. Although I think only the most sophisticated of students will understand it.)

    https://www.quora.com/Why-should-a-person-believe-in-Austrian-economics

  • KIEV (KYIV) UKRAINE Well, everyone who gave me advice was right, and the interne

    KIEV (KYIV) UKRAINE

    Well, everyone who gave me advice was right, and the internet data was accurate. It is the wild west at a discount. Employees cost $400 (admin) – $2000 (dev lead) per month. An upper end apartment costs 2k per month. Dinner for four at the best restaurant in town is about $80 including alcohol. A 45 minute cab ride cost $25. Coffee and pastry at a good shop costs $8. The people seem intelligent, honest and capable, but risk averse – albiet less risk averse than your average working and lower class Brit. Overeducated but hopeful young people litter the streets. Everything is done by relationships. Micro entrepreneurship is everywhere, and trying to circumvent the corruption of the state. Yes, the government is openly corrupt, but it’s possible to circumvent it. Yes, the women really are beautiful, and they’re everywhere, but the careful eye will notice two things: they do not eat processed foods, and they believe women are women, men are men, and the femininity is beautiful. Of course, I am meeting my Fullbright friend’s circle, which is quite sophisticated, but it’s still a sampling none the less.

    This week: trial ads for staff, office space.

    Source date (UTC): 2012-10-07 10:18:00 UTC