Curt Doolittle

Theme: Productivity

  • The Need For Manufacturing Jobs Is Not a Myth

    Myth of China’s Manufacturing Prowess

    Myth of China’s Manufacturing Prowess

    Contrary to the conventional view, manufacturing in the U. S. has been growing in the past two decades despite the decline in manufacturing jobs. The latest data show that the United States is still the largest manufacturer in the world. In 2008, U.S. manufacturing output was $1.8 trillion, compared to $1.4 trillion in China. This means that the United States is producing goods with higher value, such as airplanes and medical equipment. In addition, most jobs the United States lost to China are low-skilled jobs. By outsourcing those low-skilled jobs to China, Americans have actually become more competitive in high-skilled jobs such as management, innovation, and marketing. The low-skilled jobs also serve China well as Chinese rural migrants have opportunities to move up in life and gain some skills.

    I love it: “manufacturing in the U. S. has been growing in the past two decades despite the decline in manufacturing jobs”. What she means is ” productivity has grown as jobs have decreased. Which is a silly metric when the reason people are talking about manufacturing jobs, not productivity. Secondly, what is hidden in those numbers is the vast difference between small plastics firms for example, that are struggling to survive, and vast, highly efficient manufacturing and engineering organizations that ship goods around the world. (I need to get my hands on this data and mine it a bit. I think that it’s far worse than we see. Productivity can jump simply by consuming capital stock, or temporarily slashing wages.) It is a logical fallacy, and perhaps, a socially destructive one, to compare productivity to unemployment. The question is what is the highest productivity available without redistribution of productivity gains? We have a lot of unemployed people due to government’s misallocation of capital over decades if not a century. We need more manufacturing jobs that are also more productive than elsewhere. Manufacturing job != manual labor. It means ‘PRODUCING GOODS FOR EXPORT”. And yes, we need more of them, and the people clamoring for them are right to do so. It’s as if ‘it’s good enough to win numerically, is the same as actually reaching maximum productivity”. I mean, what kind of over-intellectualizing nut makes these kind of comparisons? The problem is that MONETARY POLICY is NOT ENOUGH of a lever. We need policy that intentionally uses the private sector to create productivity enhancing exports that require the creation of jobs. But our ethic of non-involvement, our unsophisticated politicians who are far more skilled at redistribution and regulation are not skilled at, nor capable of, producing long-term investment. And they are very unlikely to ask the top 1000 business people in the country, exclusive of the multinationals, how to accomplish it. Even though we all know The top seven:

      Some Simple Rules Of Thumb:

        8) The private sector is not able to concentrate capital in capital-intensive industries that create exports without both removal of state disincentives, and the assistance of the state in creating a market in which people will risk time and capital. A polity does not always need leadership except in time of crisis. Crisis in this case, created by a government too foolishly dancing with the devil of socialism, dressed up in Keynesian costume, with a joyful following of clerks of the church of positivism chanting from tomes whose authors pretend wisdom. THEREFORE General Liquidity Is An Insufficient Lever For Altering A Distorted Economy. People need opportunities to flock together and exploit together. Opportunities to create exports. Not consumption but exports.

      • Myths That Are Realities: Donald Trump vs CATO and Don Boudreaux

        On Cafe Hayek, Don Boudreaux references a CATO posting which in turn references a Wall Street Journal article, that criticizes Donald Trump for stating that we need more manufacturing jobs. The libertarian sentiments held by my friends at CATO and Cafe Hayek, inform them that productivity gains show that we produce just plenty of manufacturing – thank you very much. Wherein Don supports the Cato position that we do not need more manufacturing, and that any perception that we do, is a myth. (Articles are linked below.) But they are mistaken. A polity desires not productivity, but employment, and not simply employment, but competitive, status-enriching employment — and the lower classes in particular find their social enfranchisement in producing these ‘collective goods’ we call competitive production. They cannot achieve status through individualism, so they seek to find it in collective membership: They want to ‘do good.’ For example, a friend of mine in the advertising business, says that all agency guys want to produce ads that lots of people see, so that if they go into a bar or club or social gathering that they can talk about it and ‘get laid’. They use the term doing “Get Laid Ads”.  To some degree, this is kind of ‘fame’ or social status. The mechanic who produces a fine vehicle, or trendy bit of electronics feels the same. The janitorial staff at an elegant landmark feels the same way as long as they are invested in that cultural value system. Human beings flock to opportunities. Economics does not measure opportunities. It measures results. If we could measure opportunities, we would solve the problem of induction in economic theory instead of having to rely upon equilibria for our calculations. But we cannot read men’s minds. So we cannot measure opportunities. Yes, we can measure imbalances.  We can measure asymmetry. But not innovation. Not creativity. That said, whether we can measure it or not, human beings flock behind opportunities until they are exhausted. This is the reason for the boom and bust cycle: People flock to opportunities, and the flocks accumulate people in vast complex networks in order to exploit those opportunities.  The problem with fiat money and current monetary policy is that our attempts at keeping interests rates low block the information system that interest rates provide us with, and allow people to ‘flock’ well past when others who know better see the opportunity as having exhausted itself. This is the problem with monetary policy, rather that simple lending.  We should not provide unbridled liquidity tot he market. We should provide loans with terms, including terms of use. But, back to the topic of status-enhancing work, these cooperative bits of social membership through work are the processes that create social bonds in the post-religious world. They are more effective than services, redistribution and transfer payments at creating a polity .  And in case I haven’t made it clear, we need a cohesive polity in order for people to trust government, and to enable government to act on their behalf. So:

          IE: TRUMP IS RIGHT. Productivity gains explain the data, but they do not solve the problem of unemployment and underemployment. It is perfectly possible for us to compete with Chinese skilled labor in manufacturing high quality electronics, because they are relying upon labor not mechanization. It may require tax incentives. It may require loans. And it will most definitely require design and development of machines that are faster and better than human hands at manufacturing.  But that task as well, will create manufacturing jobs. Personally, I’m in the business solving for something else: maintaining the wealth created by the US ownership of the system of international trade, and maintaining western technological leadership.  Because,as a minority, only technology can maintain our institutions, our system of defense, and relative economic status. That’s the lesson of western civilization – rate of adoption of technology. Western civilization is a minority strategy for competitiveness: invest in skill, knowledge and technology and you will keep the east at bay despite our inferior numbers. DEFINITIONS:

          1. Productivity: the increase in sales revenue per hour worked.
          2. Employment/Unemployment: The percentage of the population employed.
          3. Unrealized Employment Productivity : The potential productivity gains that could be realized by allocating capital to unemployed resources. The error of mixing short-term return on capital versus long-term return on capital that is achievable through the competitive advantage obtained by accumulated built capital, accumulated knowledge (tacit knowledge), and accumulated skills (explicit knowledge).

          THE MYTHS

          1. The first myth is that capital is, or should be, fluid, and that more fluid capital will seek the greatest returns, rather than the maximum shortest returns. It takes a lot of money to create factories, and machinery and returns take longer than profits on consumer speculation.
          2. The second myth is that human incentives are monetary, rather than status driven. They are status driven first, and monetary second.
          3. The third myth is that economies can ENTIRELY specialize in agrarian, transportation, industrial, service, or research sectors, given the distribution of ability (IQ) in their populations. When instead, they must simply keep as many people employed as productively as possible. While we can attempt to keep the majority of the population living a middle class lifestyle (ie: consuming) we must understand that social classes are largely a function of ability, and that we must not fool ourselves that we must create status enhancing job opportunities for everyone in the spectrum if we want our political enfranchisement to mean anything at all.

          References:

          From CATO http://www.cato-at-liberty.org/a-wall-street-journal-column-understates-the-size-of-u-s-manufacturing/ A Wall Street Journal Column Understates the Size of U.S. Manufacturing by Alan Reynolds “…the manufacturing share of GDP declined markedly over this period as measured in current dollar value of output.” “In 1950, the manufacturing share of the U.S. economy amounted to 27% of nominal GDP, but by 2007 it had fallen to 12.1%. How did a sector that experienced growth at a faster pace than the overall economy become a smaller part of the overall economy? The answer again is productivity growth.” “Those who imagine “we don’t make anything anymore,” as Donald Trump claims, don’t grasp the magnitude of America’s industrial productivity gains.”

          FROM Cafe Hayek Trumped-Up Fiction by DON BOUDREAUX on DECEMBER 2, 2010

          Trumped-Up Fiction
          “If myths could be buried, this item would be yet another nail in the coffin of the data-less myth that Americans “don’t make things any more.” Alas, one can neither reason nor empirically demonstrate people out of positions that they reached without reason or empirical support.”

        • Privatization From Obama?

          While the devil is in the details, and I have less than zero confidence in this president, he proposed a structural change in the way we ‘purchase’ infrastructure projects, that would effectively privatize the process, rather than continue the current (corrupt) process of relying upon earmarks. From The NYT:

          Mr. Obama … called for what the White House is describing as an “infrastructure bank” that would focus on paying for national and regional transportation projects by pooling private money with public investment. He said the bank would eliminate a patchwork system in which transportation projects are financed through Congressional earmarks rather than based on merit.

          From The White House

          The President proposes to fund a permanent infrastructure bank. This bank would leverage private and state and local capital to invest in projects that are most critical to our economic progress. This marks an important departure from the federal government’s traditional way of spending on infrastructure through earmarks and formula-based grants that are allocated more by geography and politics than demonstrated value. Instead, the Bank will base its investment decisions on clear analytical measures of performance, competing projects against each other to determine which will produce the greatest return for American taxpayers.

          Impressive. Now, let’s see it work.

        • Don’t Tell the Creative Department, but Software Can Produce Ads, Too

          Software That Produces Ads?

          September 4th, 2010 


          The NYT

          “BETC Euro RSCG, part of the Euro RSCG Worldwide division of Havas, has developed software that can produce elementary advertisements. The software is called CAI, pronounced Kay, for Creative Artificial Intelligence.”

          (Posted in NYT comments)

          In the late eighties I wrote a very complex set of software applications that took data and made legal arguments. It horrified people in the profession, who were, at that time, still addicted to legal pads and lofty self impressions. But we were able to increase a docket (the set of cases a lawyer could manage) from the tens to the thousands. Admittedly, this was procedural law, and not dramatic legal theater. But it was law and argument none the less.

          The number of federal judges that have seen, read and processed documents, and adjudicated cases based upon arguments purportedly written by lawyers, but entirely generated by machine, and only given a cursory review, is in the many hundreds, and the cases the tens of thousands.

          Ads are not much different. They are commodities. Visual and literary symbolism adds high permutations to those commodities. But that does not mean that they are not formulaic.

          Except for perhaps the top half-percent of ads, and except for brand symbols like logos, almost all advertising (impressions that is) relies upon a very limited set of visual compositions.

          Any sufficiently mature technology becomes clerical in nature. And 2D ads are a mature and fairly tired technology. It matters more that you can afford to insert it into the consumer’s environment a hundred times, than does the quality of it. And the quality of an ad simply decreases the cost of the number of impressions needed to stick an idea into the consumer’s head.

          The reality is the reality: advertising is a commodity and it is rarely interesting, rarely innovative, and almost entirely derivative. And if it wasn’t it wouldn’t work.

          Almost all current creative innovation is in the digital arena, simply because it’s a deeper technology that hasn’t been fully explored.

          Current attempts at automating 2D ads are not all that impressive. But given a sufficient pool of images, a sufficient pool of phrases and quotes, and a sufficient influx of cultural symbolism, and a simple enough set of requirements, most ads are derivative and permutations rather than informative and persuasive, and as such most ads can be automated.

          And given the diverse quality of ads (impressions, not media) the median of the curve of quality of ad would undoubtably shift to the better, given automation.

          http://www.puretheoryofmarketing.com

        • An Analysis Of Freedom #2: The Economy Of Freedom

          A Little History For Context

          The term ‘Freedom’, and its near relation ‘Liberty’, have a long heritage.   The babylonian words “ama-gi”, meaning “Return To The Mother”, written in cuneiform, are often cited by Libertarians as the first written use of ‘freedom’. That usage literally refers to giving a slave back to his mother — an analogy to the more precisely stated ‘freeing him from slavery’ – owners gave a slave back to his mother when freeing him.  In practice, the word “ama-gi” was used to grant exceptions from the dictator’s obligations or taxes.  So the term meant freedom from obligations to the government. These special dispensations were used as a reward – freedom from requirements. The most simplistic use of Freedom described the opposite of slavery. It was not an abstraction, but a direct analogy to the deprivation of one’s choices under the threat of violence. Slavery to contemporary ears is a horrid system, but under barbarism it was universal. ( Barbarism refers to those people not members of one’s market  system ) (( DEFINITION of “BARBARIAN”: Those persons who do not pay the set of costs of forgone opportunity, employed within a social order that cooperatively manages a market and territory. )) Most farm labor required a great deal of physical effort — hard work easily avoided with slaves. People often sold themselves into slavery simply because it was a reliable way to be fed and sheltered in a world where starvation and hunger were common. Wars and raids were conducted to obtain slaves – forced laborers. And escape was dangerous in that ancient world – without a tribe to take care of you, starvation was almost guaranteed. Later, ‘Freedom’ was the term used to describe a Free Man. A ‘Citizen’. A ‘non-barbarian’. This means quite literally, in a world consisting largely of either barbarians, competing warrior states, or eastern dictatorships, ‘an investor in the city and market’. As an investor, or rather It is hard for us to to imagine a world of barbarians. It is not so hard to imagine a world filled with conquerors. Today’s barbarians are immigrants who do not conform. And nation states that seek power in order to obtain resources and trade routes. Liberty by contrast, refers, not to constraint of, and control of, individual actions under threat of violence such as under the institution of slavery, but to the more general absence of coercion by a government, of those people who are not slaves, and not barbarians, and therefore citizens.  In particular, in the west, it implies and egalitarian relationship between all those who are responsible for society: refraining from imposing conditions other than those one places on one’s self, or are required in order to maintain the property definitions (( DEFINITION of “PROPERTY DEFINITIONS”: A set of forgone opportunities that require one refrain from using objects of utility, or refrain from seizing or creating opportunities for gain – ie: self enforced self deprivations – usually described as property both individual and shareholder, manners, ethics, morals )) that constitute the social order. ((DEFINITION of “SOCIAL ORDER”: A social order is a collection of property definitions, and the required forgone opportunities required of members of the society in order to allow non-violent cooperation, and the establishment of a division of labor, and peaceful trade and exchange. And if a landed culture, also including the visible material contributions needed to maintain the physical viability of the territory, its built capital, its resources, and most importantly its market – without which escape from poverty is impossible. )) But in response to increases in the complexity of social order due to increases in population and the resulting increases in the division of knowledge and labor, both of the terms of “Freedom” and “Liberty” have been subject to political framing by public intellectuals and politicians, and their followers in the pragmatic public who use the extraordinary and uncommon freedom of speech ‘discount’ under democratic government to redefine these terms.  This redefinition of the Social Order’s Property Definitions, and restatement of the material costs and  the forgone opportunity costs of that system, has effectively constituted a legitimization of fraud, theft and redistribution. This restatement consequently led to a gradual usurpation of the social accounting system of opportunity costs, material costs, that make the market society possible. This distortion and confusion of meaning begs analysis, so that we, as members of a society under a democratic government, can tell the difference between those commonly held properties of freedom and liberty that are necessary and possible, from those that are either forms logically and physically impossible, from those that are intentionally obscure or distorted for the purpose of committing fraud and theft — or both. While frequent increases or decreases in redistribution of the PROFITS from the market are not only justifiable and beneficial, but warranted as a return on on the investment to shareholders (( DEFINITION of “SHAREHOLDER”: Synonym to “CITIZEN”: individuals who contribute forgone opportunity costs expressed as property definitions and thereby pay for the social order. ))  (“Citizens”) as the division of knowledge and labor increases, the redefinition of the accounting system of property definitions, and forgone opportunity costs is simply a complex form of corruption, theft and fraud.  Corruption theft and fraud  made possible by the obscurity of the causal processes employed to create the Social Order, due to the fact that they are evolutionary in origin, unarticulated, expressed almost entirely as sentiments, and understood only as habits, superstitions, traditions, or exploitations, rather than as a system of precise and material accounting and costs, that materially effect economic calculation and human cooperation as the size of the population and the resultant division of knowledge and labor increases.

          A Society Is Its Market : The Agrarian Society, Built Capital, Trade, And The Division Of Knowledge And Labor

          (UNDONE)

          The West And The Fraternal Order Of Market Making Soldiers

          The Great Transformations: In Europe, Asia, The Middle East, and Africa Converting From Barbarism To City And Market – Europe Converting From Barbarism To Irrigating The Alluvial Plain – Middle East Converting From Barbarism By Combat – Asia Remaining in Barbarism – Sub Saharan Africa

          The Behavioral Properties Of Freedom

          The Desire For Freedom Versus Security.

          Endless Want And Acquisitiveness, and The Role Of Imitation, Envy  Status, And The Status Economy.

          (UNDONE)

          Property Is Defined Universally, But  Shareholder Rights Are Open To Corruption

          (UNDONE) The Oddity Of The Cognitive Bias In The Consensus And Equality Sentiments (UNDONE) Consensus Is Limited, On Means, and On Ends To Small Numbers Of People With Similar Objectives, Abilities, and Resources (UNDONE)

          Freedom And The Status Economy

          Almost Universally, Humans Don’t Like Status That Is Not Given as a reward for redistribution. All cultures, all humans, sense and express resentment at ‘excessive returns’ on any type of investment. Under heroic cultural systems, the hero is granted status and access to opportunity in exchange for his efforts on behalf of the group.  As population increases, classes form because enough people exist in each class that they form group status hierarchies, and trade opportunities, and contribute to sustaining the group’s advantages.  In effect, a class becomes an organization or bureaucracy whose members attempt to preserve it’s network of opportunities – it’s binding principles. At this point, exchange between classes must form some sort of trade network, and as this happens, classes, as organizations,  compete against other classes for status.

          The Freedom Seeking Minority Versus The Equality Seeking Majority

          The Vast Majority of people to not want freedom, because freedom requires responsibility and risk.  When people come to free societies, they either desire the standard of living, or access to opportunity. But they rarely, if ever, desire to contribute to the maintenence of the market order by forgoing opportunities, .  In fact, they desire to gain the most using the least contribution. Likewise, (equality) So the contemporary use of the word freedom is the opposite of the contemporary use of the word equality

          Property Is The Human Accounting System And Money And Numbers Increase Our Capacity for Perception, Comparison and Calculation Of Property

          (UNDONE) The Economic Function Of Freedom In a division of labor, freedom increases consumption, decreases cost of maintaining the behavior of paying opportunity  costs to create the  market and contribute to property definitions, but most importantly, increases the process of trial and error – the process of entrepreneurship. Increases in trial and error lead to increases in the division of knowledge and labor, and increases in consumer choice, and decreases in prices.

          The Limited Use Of Freedom As A Competitive Strategy Between Groups

          If we define freedom as freedom from coercion, then there are only so many strategies that work for different groups with different abilities and resources.  Total freedom, which means barbarism,  Religion (resistance), Trade, and Force.

          Freedom As Return On Investment In The Market, And The Market Is The Social Order

          Freedom obtained in exchange for one’s return on one’s investment of forgone opportunities in the property definitions that constitute the local market. This contribution of forgone opportunity costs, is the cost of entry into the market, and the means by which one has access to the market.  One can only be as free as the granularity of the property definitions. Profits are signals that convey rewards from the market participants that you have been rewarded for fulfilling their wants and desires. Redistribution is a form of return on the market, but only so long as (only so long as what?) Freedom is only relevant in a market society.  Market societies are superior to alternative societies.

          The Economy Of Freedom

          We are all born free, so to speak, and able to use perception, memory, thought, action, force and violence to get whatever we want, if we choose to. Cooperation is not a necessity, at least for the strong. It is a compromise. It is a trade off. So lets look at the scope of actions human beings can take, and start from there, so that we can understand cooperation and freedom, and the compromises, costs and benefits that cooperation requires of us. Scope Of Individual Human Action If we eliminate the nearly infinite complexity that comes along with cooperation, we are left with only this scope of human actions.

            • A.0) Thought
            • A.1) Motion
            • A.2) Consumption
            • A.3) Transformation
            • A.4) Violence
            • A.5) Mating

            The Five Freedoms

            Given the possible scope of human actions listed above, there are only five possible non-contradictory freedoms available to human beings. Non-contradictory means that they can be granted to others equally without coercing them.

              To grant these rights we only need to refrain from violence. In libertarian philosophy this is the principle of non-violence.

              By refraining from violence we enforce cooperation.  In other words, we coerce cooperation by depriving people of their natural ability to use violence.  Furthermore, by depriving people of violence we make them more equal, by redistributing opportunities from the strong to the weak.

              All other freedoms or rights, are derivatives of those five listed above. The remaining freedoms people commonly refer to are technologies of coercion for the purpose of cooperation, or of opposition for the purpose of competing with or avoiding the coercion.

              To say that they are forms of coercion, is not to demean them. Many coercions are a proxy for violence. Property itself is a coercion.

              We defend property. (talk about property and memory here)

              there is a limit to cooperatino because of a limit to perception. Imagine for a moment that you could know the wants and desires of all people on the planet at once, and you could also know, all the resources that could be put to use by each person, all the skills that could be put to use by each person, all the tools available to each person, all the relationships that each person has, and the geography that each person has access to. Imagine trying to organize it all. Now, imagine that each person is trying to at least maintain his or her respect, or status. And that all these people are of different ages, and of differentI. Cooperative Organization – The Production Economy

              Cooperative freedoms permit the division of knowledge and labor, which decrease everyone’s costs, or the concentration of effort to increase both the likelihood of success, and decrease the individual costs. Many people use subjective analysis, expressing these cost reductions as emotions. But our emotions exist to assist us in identifying cost reductions. Emotions describe changes in state. They inform us. They inform us in particular about changes in the state of our costs. Human aesthetics may be wounded by this fact, but all group emotional sensitivities are to costs and discounts.

                • Coercion: Norms under threat of violence.
                  Opposition: Violence, Fraud, Theft, Coercion, Physical Restraint, Enslavement
                  Cost: Forgone Opportunity costs of Coercion, Fraud, Theft and Violence. The cost of not stealing.
                  Perception and Calculation: Property and prices allow us to percieve beyond our senses. To cooperate in large numbers. Property IS calculation.
                  • Key Concept:
                  • P.1) Life, Movement and Action:
                  • P.2) Property (Exclusive Use. Inventory)
                  • P.3) Exchange (Trade)
                  • P.4) Freedom of Cooperation:
                  • P.5) Freedom Of Assertion

                  II. Cultural Organization: Manners, Ethics, Morals, Religion  – The Conformity Economy (Inclusion / Ostracization)

                  Ethics: The Invisible Cost Economy Freedom to attempt to establish a network of norms: restraints on action enforced by inclusion or exclusion in the group. Inclusion in the group reduces risk and increases opportunity.

                  Manners, Ethics and Morals are terms for different segments of a spectrum for controlling costs of a group. Manners reduce friction and demonstrate predictability, class and quality. Display of good manners means access to more people who may grant one more opportunities. Each use of good manners requires some form of discipline. Each act of discipline is a cost to the individual, and a contribution to the cultural institutions. Each abuse of manners is a lack of discipline and a withdrawal from the cultural institutions. Manners must have a witness who can observe the demonstration of one’s discipline. In a demonstration of manners, there is no asymmetry of information. Each equally can observe the other.

                  Ethics on the other hand is a study in asymmetry. An action is ethical or not, because of shared lack of knowledge of the future, and asymmetry of knowledge between individuals. If one person has deep knowledge and the other shallow of the same exchange, ethical treatment requires that the person with greater knowledge act as if the other person is possessed of the same knowledge, and each is responsible for protecting the other from harm.

                  Ethical systems generally occupy some portion of a spectrum from the criminal to the charitable. a) The Criminal Ethic: I take what I can, without consent. a) The Bazaar Ethic: whatever I can get away with in voluntary exchange. b) The Warrior Ethic: whatever will not make the other or unhappy. c) The Christian Ethic: What is equally beneficial for both parties. d) The Charitable Ethic: As long as the other person prospers, I do not care what my outcome is. Then most ethical systems generally consist of intra-group and extra-group criteria, that might not be the same. Within and across family, clan, tribe, culture, religion, race, each culture varies in its adherence to its ethical standards. Furthermore,

                  Moral systems imply total asymmetry of knowledge. Actions fall under moral criteria whenever the cost of seizing an opportunity for one’s benefit either risks, or places an external cost, and a high cost, on others, and in particular, others with no recourse.

                      • Coercion:
                        Opposition:
                        Cost:
                        Perception and Calculation:
                      • C.1) Cultural Freedom: (Choice and Opposition)
                      • C.2) Freedom of Norms (Competition and Choice) Participate in sets of norms, to select norms.
                      • C.3)
                      • Religion (Cultural Law And Institutionalized Conformity)

                      • R.1) Religious Freedom: Freedom to create institutions, rituals, and codes for the purpose of establishing the criteria of inclusion and exclusion (ostracization). Including Freedom to choose to participate in religious factions, and freedom to evade participation in factions. Religions create opportunity monopolies and attempt to disallow competition of forgone opportunity costs. Competing religions are competitions of opportunities and opportunity costs. Evading participation is an attempt to obtain opportunities at a discount.

                      III. Regulatory Organization: Law(organized violence and coercion)

                      P.1) Political Freedom (Choice and Opposition): speech, assembly, leadership, concentration of wealth. (The right to cooperate against others who have a similar right) The right of opposition. Political freedom is the freedom to cooperate for GROUP ends, by pooling resources, and establishing an organization, or association for the purpose of advancing those ends.

                        • L.1) Legislative Freedom:
                        • L.2) Institutional Freedom:
                        • L.3) National freedom:

                        IIII. Credit Organization (Anonymous, Non-Territorial Law)

                        • CL.1)

                        VI. Capitalist Freedom

                        (organizatoins to concentrate real capital) (abstract property definitions)

                          V. Redistributive Organization

                          • R.1) Redistributive Freedom

                        • Losing The Habit: We Will Not Return To The Consumer Economy.

                          Loved this little paragraph today on “extend and pretend”. Although I can’t remember where I found it.

                          The government has been playing “extend-and-pretend” based entirely on the idea that pent up demand in consumers would grow until it busted out and the recovery would be on – [a recovery] fueled by consumers. What has happened is the exact opposite. This is very serious. We are running into 3 years now, and 4 if you look at what commodity speculation did to consumers starting back in early 2007. …. And so the concern should be whether or not we have a permanent shift in consumer behaviors. Three or four years is plenty of time to break old habits and establish new ones.

                          Three weeks and you can develop a new habit. Nine months and you can change your system of habits. Three years and you can forget what life was like in the past. In four years you can even forget a bad divorce, death or tragedy. The bonds that create an economy are perishables. People forget. They forget skills, relationships, ambitions, ways of thinking. They forget.

                        • Krugman Watch: Barking Up The Wrong Tree

                          Paul Krugman writes, in Permanently High Unemployment

                          I really don’t think people appreciate the huge dangers posed by a weak response to 9 1/2 percent unemployment, and the highest rate of long-term unemployment ever recorded

                          Paul, You will not get consensus on general liquidity (unbridled credit). You will not get consensus on government spending (expansion of the bureaucracy). You will not get consensus on redistributive infrastructure (city projects). But you will get consensus on investment in strategic competitive advantages if you can identify them. We are going to have long term structural employment. These people are not going to go back to work in their previous careers. You’re right that government can provide a solution. but that solution is to concentrate capital behind investments in competitive production that the market cannot create largely because of regulatory hinderances, or regulatory uncertainty, or regulatory competition. The greatest benefit to the country will be to invest in a new grid, triple the number of nuclear plants, and to convert as much infrastructure from hydrocarbons as possible. There is no mystery why this is a competitive advantage. It will create millions of jobs, especially in skilled trades. You’re just recommending the wrong platform for getting money into the economy. And no one is buying it.

                        • I’ll finish with this: Entrepreneurship is the art of finding problems and solvi

                          I’ll finish with this: Entrepreneurship is the art of finding problems and solving them for less cost than the customer is willing to pay for it. So entrepreneurship is starting with a set of customers and working backward to the solution, not with the idea, and searching for customers. And hopefully that process is entertaining. At least, that’s why I do it…. And this advice is no value to the zillions of guys out there doing the opposite. They don’t want to hear it.

                          Source date (UTC): 2010-07-26 23:46:00 UTC

                        • High Unemployment, or Normal Employment? It Depends On The Scope Of History You’re Considering.

                          Over on Questions and Observations, Bruce McQuain questions whether we’re having another “Great Depression” or just a very slow recovery. An unnamed visitor pointed to a graphic from The Atlantic and commented:

                          “The median duration of unemployment is higher today than any time in the last 50 years. That’s an understatement. It is more than twice as high today than any time in the last 50 years.”

                          Which is a true statement that leads to false conclusions. Instead, how about you increase the period of time you’re considering even further and say, that: “The unnaturally low rate of employment for the past century, and in particular the past fifty years, has been largely do to the combination of selling off north america to immigrants and their children, the increase in consumer products consumed by these people, the collapse of european war economies, followed by the results of the monopolization of the world monetary system. The current unemployment level is the natural consequence of the loss of the US’s temporary economic advantage, as europe caught up, and china, india, russia and other developing countries have developed similar economic models and levels of production.” That’s the analysis that has meaning. Not medium term unemployment. The monetary policy since Reagan was an attempt to revitalize american entrepreneurship and individualism by using the US’s unique position in world history to borrow against future production. However, the winning of the war against ideological managed-economies made that borrowing impossible to maintain. Furthermore, the unregulated use of that credit to fund unproductive investment (housing) rather than relative competitive investment (innovation) led to a bubble, which has now compounded the overall problem. This is not to say that we had an alternative to the revitalization of the country. Or that the european model would have yielded better results in the domestic american empire than it did in the homogenous nation states. But we are now headed toward the south american model : the exact opposite of what both the left and right desired.

                        • The Wheel? It’s Part Of A System Of Innovation. Or It’s Pointless.

                          Peter Gordon notes in passing that the pre-columbians had wheeled toys, despite leaving no record of using the wheel for carts. He directs us to evidence, where the authors posit the reasons for not having adopted wheels. They give a number of reasons with the seventh being the closest:

                          With a abundant human workforce throughout Ancient America, and without large beasts of burden, wheeled vehicles would have been redundant and unnecessary. In practical terms, it is easier to carry goods, than to pull the good and the wagon, if the terrain is not well suited to wheeled vehicles.

                          Actually, the wheel, the chariot, the horse, wheat, and bronze were the set of tools that made the wheel possible in eurasia. They are the symbols of the spread of western civilization. And none are valuable without the rest. (Yes, even bronze.) If you don’t have a horse, or at least a bull, a cart is a waste of energy. Carts are heavy. They are far too heavy for humans to benefit from hauling. Simple math. It’s not that carts were unnecessary. It’s that they were a bad idea. Especially in jungles and hills instead of plains and on roads. Anthropologists should study a little economics.