Posts Tagged ‘incentive’
Thursday, September 9th, 2010
Dear Friends,
It seems to me that the Chimerica analogy is apt but misses a critical point.
The Chimerica analogy is… That the growth we saw during the first decade of the 2000‘s was a result of China producing products, Americans purchasing those products and borrowing the money to buy those products from China. The collapse of the American home market translated into a collapse in the American appetite for Chinese products.
Where it misses the point is the part where China loans Americans money to buy Chinese made goods. The largest consumer of Chinese goods is the United States Government. In the form of debt. Take the US debt out of the equation and the American Chinese picture changes.
Today we hear rumors of sovereign insolvency. The news reports that Harrisburg Pennsylvania has gone insolvent. Another example of Sovereign insolvency. We find out Greece hasn’t come clean on it’s debt yet. Rumors abound, about the other countries in Europe teetering, even as Germany reaps huge profits from the devalued Euro.
Governments are spending money as fast as they can to “prop up“ their economies. Especially the American government. Spending to “Improve” the economy and drive up aggregate demand. Some are cheering the spending claiming that as long as the bond market keeps interest rates low government can keep spending. Ignoring the fact that most people thought Lehman Brothers was a good investment… until it wasn’t. So is government borrowing. There is a brick wall somewhere in the fog out there. No one knows where it is… So might it not be prudent to slow down?
Government borrowing also has the pernicious attribute of raising the expected level of government spending. People get more money from government and expect that money to never stop coming in. Look at the mohair subsidy. The US stopped putting mohair into military uniforms after the first world war.
The Obama administration believes, publicly, that there is a multiplier of .8 for government spending. So a dollar of government spending stimulates $1.80 in the private sector. If this were true then all spending should be channeled through the government. It would be a win win. This is exactly what some in the administration believe. That the government is in the best position to determine what should be bought and sold in the economy. Added a .8 multiplier and it makes it seem, to them, a no brainier.
Of course reality has to stick in it’s ugly head. Empirically, if that were true the 3 trillion dollars the US government spent on stimulus should have generated 5.4 trillion dollars in economic output. At a tax rate of 33% that aggregate demand should have generated 1.78 trillion in tax revenue. We clearly see that it did not. In fact government spending has a negative economic multiplier.
Now the money is spent, (on everything BUT infrastructure), and we nothing to show for it. The national debt load to foreign persons and nations has dramatically gone up. Driving up the aggregate balance of trade deficit, Soaking up capital for industry and creating fear of future taxation. All have a negative effect on any economy.
So the American economy is faltering. Due at least in part to the unrestrained spending. The US budget deficit is slated to be 100% of GDP this year. The last time this happened was during the FDR administration when we were fighting the Second World War. With no such existential threat the US government is spending like it is fighting an all out war.
Maybe it is… Against the American People, our children and our grandchildren…
Tags: capitalist, chimerica, economy, government, government borrowing, government spending, incentive, International Capitalist Party, keynsian economics, money, rational maximiser, redistribution, sophist, Sophistry
Posted in International Power, Mercy, economy, philosophy | No Comments »
Monday, September 6th, 2010
Dear Friends,
It seems to me, how can the government hold me to my word when they publicly don’t hold our highest office holders to theirs?
Everyone knows the example of Clinton and Lewinski. Regardless of what was lied about the fact is there was a lie said under oath and it was publicly known. More importantly the negative consequences amounted to a slap on the wrist. So if the President of the United States can lie under oath and have no real consequences then why should other far less important people bend the truth to serve their self interest?
In Vermont a Judge was caught with 35 marijuana plants and 2LBS of processed marijuana. The judge served no jail time, paid no fine, instead got diversion. Less then a year later 2 college students were caught with 2LBS of processed marijuana and the book was thrown at them. The Prosecutor made the statement that an example would be made of them.
Tim Giethner who is in charge of US Treasury was caught not paying income taxes. To the tune of not reporting over 100K dollars. No negative consequences were deemed appropriate. He simply paid the back taxes. No other years were looked into. Charlie Rangel is accused of not reporting hundreds of thousands of dollars over decades. Lets sit back and see what negative consequences are levied against one of the most powerful men in the Congress.
Today the government is hiring thousands of IRS agents to look into your income tax records. They want to make sure you are not chiseling a few dollars here or there. If a discrepancy is found you will be punished, fined and punitive interest levied.
We can clearly see from these very few examples the tip of a much larger iceberg in society. That is the Elite need a peaceful society to enjoy their power in. But they themselves want to live as Thrasymachus claimed. They don’t want to live to the laws they seek to force the rest of society to live up to. So with this fundamental tension going on they must resort to ever more punitive measures to keep the populace in line.
Right out of Confucius. He pointed out this very problem 2500 years ago. But being Confucius he also pointed out the cause and the solution. Ancient Chinese Philosophers were all about causality and the chain of causality.
Confucius pointed out that Dukes and Barons in his day lived by rapine and averous. They lusted and fulfilled those lusts. Yet detested their very own actions when they saw them in others. As did Tonnies. They were and are hypocrites. But that hypocrisy is not lost on the population.
When the people see their leaders lusting after money, luxury and sex they naturally lust after these things themselves. But when all people behave as Dukes and Barons who have no respect for the persons, property or family of others societal advantages break down and society collapses. There is no longer a stable society for the Elite to enjoy their power and wealth.
So the Elite must resort to some means to keep the population virtuous. The answer is always in increasing punitive measures. In fact I believe there is a correlation to the level of punishment meted out in society for infractions to the level of corruption in the upper ranks of that society.
Confucius answer too this intractable problem was as elegant as it was simple. Eliminate the fundamental tension. That is to force the Dukes and Barons to be as virtuous as they need the population to be.
Simple, elegant and next to impossible to do…
Tags: baron, confucius, corruption, duke, elite, government, incentive, International Capitalist Party, rational maximiser, Sophistry
Posted in Law, Mercy, philosophy, polictics of class envy | No Comments »
Thursday, September 2nd, 2010
Dear Friends,
It seems to me that the reason Americans don’t save money and the stock market is not a good investment is because the system is loaded.
American’s are self-interested people rightly understood (rational maximizers). We will roll dice all day long. But, as soon as we see the dice are loaded, we pick up our money and we stop playing that game. The dice are clearly loaded in the stock market.
The personal investor is barred from using money gained as a result of a stock trade for 5 business days. But the investment firm is not barred from charging $60.00 to transfer $112.00. Does that seem like regulation that is written to protect the consumer?
No it benefit’s the institution. Regulation and regulators always get into bed with the industry they are tasked to regulate. There is even a term. (If the phenomenon was rare there wouldn’t be a term in the lexicon). That term is ‘regulatory capture‘.
How is it efficient for a firm doing financial business to be so large their net income surpasses 50% of the countries of the world’s GDP? To control such a behemoth requires gobs of bureaucracy. The only advantage a giant would have over an ad hoc group of smaller leaner firms… is regulation.
What about blatant price fixing? When financial firms bring an IPO to market they have agreed before hand on a price floor! Imagine if sofa dealers agreed on a price floor. Someone would go to jail. But no matter the consequences to society the outright corruption of giants is overlooked. But when it is so egregious something has to be done… Government punishes the investors, not the culprits! No one who made the decision to break the law ever has to face negative consequences. They keep their jobs and their bonuses. The investor gets charged. Who is paying the price for the BP disaster? Management or the investor? What incentive does this give to potential investor? What incentive to management?
Government regulation punishes investment and rewards corruption in the people who handle money. FANNIE MAE and FREDDIE MAC are examples of institutions that were intricately involved in the recent economic meltdown. But the regulator didn’t see fit to saddle them with any new requirements. In fact the regulators rewarded them with more money and new powers.
The reason that firms grow too big to fail is that regulation favors that outcome. Why would regulation, that is supposedly there to protect the consumer, be an incentive for businesses to grow to huge scales making supernatural profits, even in a down turn? Because the people at the table when regulation is written are the industries that are being regulated.
That has to be done to get sane regulation. The problem is that the total lack of oversight of government and it’s action results in corrupt officials. If there was no oversight in the business you work for, would the level of corruption go up, or would it go down? Further, add to that, when corruption that will inevitably lead to the diminishing of our standard of living is discovered… people laugh! We laugh at our own funerals.
Now we have a huge amount of regulation flowing down the aqueduct into our investments and our employers investments. Can we trust that our officials are clean and wrote those new regulations with an eye to fairness and without bias? Of course not! What fool would actually believe that? A willing suspension of disbelief would be required.
The amount of shady things institutions can do with our investments is the reason people don’t invest. As soon as you put your toe in you are bombarded with caveats and gotchas that ensure that unless you are extremely luck or somehow navigate around the gotchas you cannot make a profit. Even tough your stocks may rise in value the fees, hidden charges and outright gotchas winnow down the profit to nothing. (Loading the dice). And nothing stops commerce in it’s tracks like a rigged game. No one willingly plays when they know they are being played. Only a fool.
So why go without to invest? The institution you invest in will get the profit and the investor gets the bills. Unless there is a giant catastrophe and the investment houses loose money… then the taxpayer covers the investment houses, the investor takes a bath and is looking at inevitably higher taxes to pay for the bailout. So the investment houses can keep playing the people…
Here’s an idea… Tie the profit of the investment firms (and their employees) to the profits of their clients. Force the alignment of the two party’s interest. Then lay off thousands of government CPAs…
Tags: Americans saving, disincentive, economy, incentive, International Capitalist Party, investment, poor saving rate, rational maximiser, regulation, Sophistry
Posted in Group Politics, Law, Mercy, economy, philosophy | No Comments »
Sunday, August 29th, 2010
Dear Friends,
It seems to me that money flowing through an economy is like blood flowing in a human being. Ergo it can be compared with fluid dynamics or electricity.
Instead of looking at volume or amperage, economists should keep in mind demand vs. supply, (pressure or voltage). As well as the (resistance, pipe diameter) or regulatory friction expressed as some factor.
Modern economists are like the doctors at the birth of the modern age in medicine. They look at the body (macro economy) and see too much blood (money). Too much blood must cause ailments like inflation and unemployment. So the answer is clear. Keynes said to open a wound and drain some blood from the economy. Not too much… just enough to get the economy healthy again.
Because that is exactly what most government spending amounts to… Draining money from the economy. When did a government program ever do its job and finish? Really. Isn’t that the measure of success? To complete a job. Imagine if Ford Motor company never actually finished a car. They started millions but never actually finished one. How long would the market economy reward such incompetence?
Some economists claim that some money needs to be taken to keep inflation in check. That if the government wastes some money oh well. It keeps demand in check. (A UVM economist told me this once). Recognizing that much of government taxation and spending is a waste of money. Again, an example of, draining the body economic of “excess” money.
Others argue that money the government spends today drives demand today. Even if the money is wasted as far as the actual intentions go the money goes into someone’s paycheck. They then spend that money etc… The problem with that reasoning is in proportion. The very few who will receive and spend the largess at cost to the rest putting the money to productive use is miniscule. Especially when compared to the cost.
Not only in money taken from producers but in governmental corruption that is generated by access to money. Bureaucracy is very good at adsorbing money. Growing the corrupt bureaucracy which then require more and more from the producers. There is no end to the demand for tax money from a government that seeks to do everything. It’s like a tool that will do everything… It will, but it will do nothing well.
If these factors (volume, pressure of resistance) get too far off in the human body the circulatory system shuts down. Economies work the same way. Lately the Hindenburg effect has shown itself in the stock market twice. It is an ecclectic theory that when certain criteria are met the economy has built up tension. That tension will be relieved by a correction in the market. It has been shown to be “statistically” accurate. We’ll see if it holds this time.
Regulation and the threat of regulation have the effect of constricting the demand for money. People make good bets on things they have a good read on. That is why they always tell you to read the prospectus. The more you know about a given situation the better you can profit from it. But if there are changing or potentially changing parameters the amount that can be known shrinks. If that which can be known shrinks beyond a certain amount it becomes no longer prudent to engage in the venture. Constricting the demand for money.
Today the government is spending money like never before in an effort to jump start the economy. While at the same time they are increasing regulation in every area of life. Corporate and personal.
Why do you suppose the macro economy is running on life support?
Tags: economy, government, group, incentive, International Capitalist Party, Medeival Doctors, regulation
Posted in economy, philosophy | No Comments »
Sunday, August 15th, 2010
Dear Friends,
It seems to me that the term, “nuanced view” is most often synonymous with dialectic defeating logic.
There once was an ancient Chinese sage, who made the argument that, a white horse is not a horse but a yellow or black horse is. Using dialectic Kung Sung Lung effectively proved that a white horse is not really a horse. (Knowing himself that a white horse is of course a horse). What he was really pointing out was that the deficiencies in language make it possible to prove that a white horse is not a horse. I.e. Prove the empirically impossible.
We all know that a white horse is a horse as is any other color horse. Because color is a subservient attribute to species. But in the language that Kung Sung Lung spoke it was possible to prove otherwise. He used language (dialectic) to defeat logic (or empirical reality).
It is taking advantage of these deficiencies in language that allow people to act, speak and think anti-Semitically but not be anti Semites. They have nuanced views on the subject. But people who have no opinion at all about Jews are anti Semitic, (There is no nuance in their view). Nuance allows a politician to claim that he didn’t realize doing personal business using company property, and premises, during working hours, is a bad thing. (Soliciting campaign contributions on government phones in his government office during working hours). Nuance is why an unborn baby is not a human being but in a matter of seconds it becomes a person. Nuance gives cover when a politician lobbies for a bank teetering on bankruptcy that her husband is a large stockholder in…
Twisting language to make the absurd seem plausible is the bailiwick of lawyers. (the modern incarnation of the ancient Greek sophists). That is why a sneak thief who cuts himself on a window, he broke, getting into a hose to rob it, gets millions of dollars from the lawsuit. But the guy’s legal bills, who invents delayed wipers, outweighs the settlement. Nuance is the side of the toast the butter is on… for lawyers. That butter is rendered from human flesh however.
For the rest of us it is a source of friction. A few examples include, higher taxes, more red tape, higher unemployment, lower wages, more off shoring of jobs and a generally higher stress level in society than would otherwise be. The extra costs associated with protecting a business, person or organization from lawyers is astounding. Much of the insurance industry is simply legal costs.
But to argue that this is a positive externality is spurious. As Bastiat said about the broken window. The economic stimulus from the broken window comes at a price. That price is, whatever other use that capital would have been put to, say… a new pair of shoes. So the window maker gets a windfall at the expense of the cobbler.
What incentive does the lawyers butter set up in society? The incentive to rob homes. If you get trapped in the garage and have to subsist on Gatorade, for a week, until you are rescued by your victims, they owe you millions. Legally… How about the incentive to improve the lot of Mankind?
This butter for lawyers is a pernicious incentive to inventors and entrepreneurs. The rise of the legal oligarchy coincides with the fall of the entrepreneurial ethos. Using nuance lawyers undermine the ability of entrepreneurs to bring dynamism to markets. Stability benefit’s the wealthy Elite. (Old money).
The very dynamism that has led to the largest increase in the standard of living of the human race ever. In only four hundred years, since the invention, of the market system Humanity has gone from a state of perpetual want to a state of constant surplus. The industrial revolution itself would not have been possible if not for the market system.
So while it is nice to have a segment of society that has means. It is not in societies best interest to have that segment’s means come at the cost to dynamism in our markets. That insures we go from growth to contraction. No matter to lawyers… They make money in growth or contraction. People can be induced to fight over an ever smaller pie easier than an ever growing pie.
Nuance, it has it’s place… in History.
Tags: Bastiat, elite, government, incentive, International Capitalist Party, kung sung lung, Law, nuance, poverty, regulation, sophist, Sophistry
Posted in Group Politics, International Power, Law, economy, media | No Comments »
Thursday, August 12th, 2010
Dear Friends,
It seems to me that In all matters it is best if government use incentives instead of regulation. Incentives work universally. Regulation is bypassed universally.
Take the new banking regulation. While I haven’t read the 2000+ page bill I am no less ignorant of it than most (If not all) the people who voted for it. It seeks to move power to the Fed to regulate certain actions. But it is no different than the SEC. Remember the SEC who’s employees were looking at porn while the banking system burned? I have heard (on Bloomberg radio) the SEC as the most captured unit of government.
Industry capture is always an omnipresent pernicious force. It undermines the people’s trust in fairness of the financial system lowering GDP growth. Regulators, consciously or subconsciously, start to believe that their job is protecting the companies or industry they oversee, (an example of normalizing deviance), not protecting the consumer. This capture is especially prevalent where companies have access to huge amounts of capital and legal resources. They over awe the people who are tasked with keeping them honest.
But if the incentives are set up thoughtfully… I heard an excellent idea the other day. Unfortunately I don’t remember who said it but it was on Bloomberg Radio. He said that if banks or institutions grow beyond a certain size the amount of capital reserves would have to grow at a faster pace. Thus reducing the incentive to grow out of proportion. Basically like a transmission in a car.
In a transmission the ratio between the engine speed and the drive shaft speed changes given the gear ratio. In his idea the capital needed to be tied up unproductively as M1 money would change as the capital size of the corporation changed. An incentive like this would make growing too big to fail too expensive. The amount of capital needed to grow would make it more productive to spin off a division to handle a new opportunity. Reducing the risk to society if the new (or old) company fails.
Today there is no personal risk to management if a company were to fail that was too big to fail. The government would certainly step in to rescue them. In fact that in itself is a pernicious incentive to grow to be too big to fail. Once your company is too big to fail it will have a tacit free safety net. The precedent has been set on numerous occasions.
Regulation is always full of pernicious incentives. They are inevitable when extremely complex transactions are regulated. No person or group is omniscient. There will always be pernicious incentives when activity is regulated. No matter the activity.
The wise lawmaker keeps the law simple and thinks it through. A few years ago there was a spike in falls from aerial lift vehicles in the USA. The spike lasted a few months and the companies that were involved addressed the situation. (People not wearing their fall protection devices or lanyards). The Occupational Safety and Health Administration (OSHA) stepped in.
They did millions of dollars of taxpayer funded research and decided that the answer was to shorten the length of the lanyard and increase the fine to companies that didn‘t comply. The fine was the same whether the wrong lanyard was worn or not at all. The incentive for the person using the aerial lift vehicle was not to use the new shorter lanyards because they are far more restrictive. So the incentives the new rules set up were pernicious. They undermined the solution to the actual problem. Which was, people not wearing their lanyards while operating aerial lift vehicles. The result was lower productivity from the employees, higher operating costs to implement the new rules, (buying the new equipment) and I bet not one more lanyard was connected than had been done after the companies involved had addressed the situation in house.
Results are irrelevant when government is involved. It is good intentions that counts. Regulation that produce the worsening of a situation requires more government intervention. It’s obvious. If the result of the new government intervention make things even worse, then it requires a cabinet post in the Executive branch…
Government’s ineptitude and outright corruption coupled with good intentions always result in more government. Regulation is simply the road to it…
Tags: banking system, corruption, economy, elite, government, incentive, incentives, intentions, International Capitalist Party, politicians, porn, regulation, SEC, sophist, Sophistry
Posted in Law, economy, philosophy | No Comments »
Sunday, August 8th, 2010
Dear Friends,
It seems to me that If the nations of the world are stupid enough to give taxation rights to the UN they do not deserve to exist as nations… and soon will not.
Once the UN has the right to tax individuals in sovereign nations then the governments of those nations become redundant. The services and functions can be easily moved to the higher level of government. The power that the UN will gain will be an even more corrupting force on them.
The UN is already profoundly corrupt. To it’s core. The putrefaction drips from it’s every word. From the self serving Ban Ki Moon to the corrupt Kofi Annan the UN is a entity that exists to perpetuate the power of the corrupt Elite.
But why shouldn’t they be utterly corrupt? There is no oversight of them. They are not held to any standard of personal action. The list of infractions that UN diplomats have committed are enormous. They have been let off Scot free on the most heinous of charges. Diplomatic immunity.
To fight global warming is the reason given to tax us. Then the UN can pass climate legislation that will slow economic progress for the rest of our lives. Regulation that will require ever more taxation to enforce. Increasing the power of the bureaucrats at the UN. The Elite will argue that it is redundant for nation states to exist. The UN can handle the world’s problems. It only needs more money and more power.
For the UN to seize power under the guise of a hoax is elegant. Those that seek to lower the lot of Mankind have at their disposal a perfect hoax. Global warming. They are using it to move sovereignty from the individual in some States and the nation state in others to a world state. World tyranny.
They defend manmade global warming like a religion. Because it is. Like the cigarette companies defending the healthy aspects of cigarette smoking. The fact that there are none is irrelevant. It is the same to global warming proponents. Self interest whether individualist or egoist trumps community interests. Look at the money trail. Who wants your money and to do they what to do with it.
To them the dishonorable means of gaining the world state is acceptable because the ends are so good. They honestly believe that the philosophical progress made in the last few centuries is a bad thing. They believe that the masses are living outside their station in life. Like the precedes of the modern Elite (aristocracy) arguing that such luxuries as sewing needles are too much for the average person to have. It only makes them want more.
Once government is moved farther away from the people it governs the less responsive it is to their concerns. Like all bureaucracy government has great moment of inertia. That moment of inertia protects the bureaucrats from having to actually do anything. They are busy all the time but accomplish nothing.
Because if government solved a problem there would be less need of government. It is not in bureaucrat’s interests to solve problems. It is in their interests to create problems for them to fix. The larger the government the greater the propensity.
The larger goal is to take capital from those that would use it to produce an ever expanding standard of living for the people of the world and squander it by redistributing it. Government projects and lavish vacations for the Elite will be commonplace . Bureaucrats will find more and more uses for money they did not earn. Don’t have the intelligence to earn, but have the hubris to want to control.
If this passes, the lot of the average person in the world will go down but, the lot of the Elite will go up… dramatically. If you think it is a good idea to lower your standard of living so the elite can raise theirs you simply have to back this proposal. But if you think that merit has some standing in the way money is spent you are adamantly against this proposal.
Either way the Elite back it one hundred percent. They are self interested. Does that make them individualists or egoists?
Tags: climate, corruption, economy, elite, government, incentive, International Capitalist Party, meritocracy, progressive, Sophistry, tax, tyranny, UN
Posted in International Power, Law, Mercy, economy, philosophy | No Comments »
Wednesday, August 4th, 2010
Dear Friends,
It seems to me that to hold another person to a higher standard of personal conduct than one holds himself is not human hearted. To be “not human hearted” in this way, historically, qualifies a person to hold public office.
For all of human history people in power have never been held to a standard of personal conduct that is close to the demands placed on the people. The ancient Greeks with the temporary ostracism, and Romans with the Censors made gestures in the direction of holding powerful people to standards. But those two systems were flawed in that they still hadn’t solved the problem of power of personality or cults of personality.
The ancient Greeks ostracism was a direct attack at charismatic power. If an aristocrat would get too powerful the people would call a vote. They would write yea or nay on a piece of pottery or ostrakon
and count the vote. If the ayes had it the person was sent away for a few years to let his partisans cool and his charismatic power to wane. His possessions were kept safe as were his family and slaves. When he returned he could participate in public life again. This practice visited any number of catastrophes on Athens. From Pericles (with the misshaped head) to Alcibiades the ostracism was a wash.
The Romans had the Censors. Powerful aristocrats that had draconian powers to look into the personal dealings of other aristocrats. Unfortunately with no effective public oversight the Censors used their offices to garner bribes and indulgences from the powerful people they were supposed to regulate. An early form of regulatory capture. Both pernicious and both inevitable if the conditions are right. Human nature being what it is.
Human nature is unchangeable. When faced with the choice of; Let someone burn you with a cigarette and they will give a million dollars, to charity the charity of your choice, for each hour of torture. No one would submit to it. Unless they were sadomasochistic. Despite the obvious societal good from the windfall to charity…. But give another that choice over someone else and the perspective is widened considerably. They would have no problem with this Faustian bargain. The fact that they feel no pain when the cigarette is applied is irrelevant. Or so they will say. It is universal and it is human nature.
To decry human nature is foolish as it is to decry gravity. Without it we could not exist as we are. The wise lawgiver looks human nature in the eye and works with it. Doesn’t try to change it in others while waxing his own.
That has been the problem with governments through the ages. The Elite try to force others to live as the Elite wish and the Elite live as they wish too. This sets up a fundamental tension in human governments. That tension is the underlying energy source for class struggle.
The ancient Chinese had it close. Despite their arguments and the internecine squabbles of the States the Chinese philosophers in classic times had it by the tail. That their governments ignored the good teachings and embraced the bad is just a function of human nature….
Perhaps, if some nation at some time held their leaders to the same standards they hold the people to, this fundamental tension would be relived. So maybe, to be not human hearted should disqualify a person from public office.
Tags: confucius, evil, good, government, Hsun Ching, Human Heartedness, incentive, International Capitalist Party, Law, meritocracy, society, Socrates, tyranny
Posted in Group Politics, Law, Mercy, Societal Myth, philosophy, polictics of class envy | No Comments »
Sunday, August 1st, 2010
Dear Friends,
It seems to me that the ultimate example of capitalism is nature. Does the flower address the bee’s charity? No… the flower addresses the bee’s self interest. In that way the bee gets a need met and the flower gets a need met. A basic capitalist exchange.
Nature is filled with other examples of capitalist exchanges throughout. From ants protecting a fig tree to people planting cucumbers that is the way the ecosystem has grown. One species of fauna eating a species of flora and thus spreads the seeds of it’s preferred food. Small Wins adding up to a great win for the ecosystem.
There are examples of fraud in the natural world, (corpse flowers and pitcher plants are a few) as there are examples of monopoly (miles of forest… all one aspen tree, duplicated over and over, monopolizing the habitat). The environment around us is rife with examples of the market economy complete with division of labor. (Our little self interested bee handle’s the pollinating segment of the tomato production process).
On a meta scale plants produce sugars and oxygen, and animals use those sugars and oxygen to produce locomotion to move plant‘s seeds and pollen. On a personal scale soy produces oil, sheep-wool, dogs-protection, apple trees-apples… the list is endless. The division of labor in nature is there for anyone to see… if they only open their eyes and look. Marx pointed out that capitalism (the market system) is dynamic. As is nature.
The term capitalist and markets are human words created to explain a phenomenon. There is nothing unnatural at all about exchanging one thing for another or specializing in a job. That is what separated cats from dogs millions of years ago. There is something unnatural about demanding charity from individuals in the form of slavery to government. Benign or otherwise.
I have never heard a complaint about how the flower exploit’s the bee‘s labor. In fact if someone did complain that the flowers were exploiting the bee’s labor and getting rich doing it I suspect people would give the argument the weight it deserves…. None. When we look at a phenomenon from a distance we have perspective. We can see the big picture. But an attribute of perspective is that the closer we get to something the less of it we can see. Like the story of the three blind men describing an elephant.
I can imagine a bee flying into a hive. Tired and frazzled. Birds tried to eat her all day. The flowers were picked over. Her wings are tired and her stinger is sore. She lands with a paltry amount of pollen and nectar for the receivers. They complain she must be slacking off to have so little nectar… It would be easy to convince her that the flowers were exploiting her labor. Then further to convince her the flowers need to be controlled and many would have to be killed in the revolution. In the long term… Would it be in the bee’s best interest to follow, and kill many of the flowers? Does it make a diffrence if the flowers trying to convince the worker bee that other flowers care nothing and do nothing to help the bee cope with, Verona mite, tracheal mite or even the dreaded colony collapse disease?
Today most people know what would happen if we allowed an open river of effluent to run down our streets. We also know what would happen if vermin lived too close to us… Black Plague. Or some other deadly disease. By not taking care to have a full waste cycle we open opportunities for the smallest players in the ecological market to exploit the niche. They will step in and use the nutrients available to them with devastating results for other larger players in the ecological market.
Government policies that restrict supply or demand for a service or thing forces inefficiency into the system. This drives capital into the streets so to speak. This inefficiency is like effluent running down the streets. The wasted capital (effluent) becomes a source of funding (nutrients) for the underground economy. Government policies directly incentivize the underground economy. With the negative externalities that all underground economies have.
Ironically in some countries people are more virtuous to each other in underground economies than they are in the open markets. Because in the underground economies participants are held to their actions. If someone lies or cheats, if they are not executed, they will be ostracized. In the open market they are protected by government policies. Unenlightened policies that are tantamount to flushing effluent into the open streets.
But as with Tracheal mites, it is better to keep the hive free, than to use menthol to control them.
Tags: capitalist, ecology, economy, environment, government, incentive, International Capitalist Party, market, market economy
Posted in Group Politics, Law, Societal Myth, economy, philosophy | No Comments »
Thursday, July 29th, 2010
Dear Friends,
It seems to me that when a millionaire ten times over says he or she will hurt the rich and help me… I know I am being lied to. Because for a rich person to hurt the rich violates human nature. They would have to hurt themselves. No one hurts themselves… No one. Unless they are mentally deranged. I hope not many of our lawmakers are mentally deranged… but their actions an the other hand…
John Kerry is a perfect example. He went to New Zealand to buy a 7 million dollar yacht. (Apparently he doesn’t like union workers in Massachusetts). Then he moored it in Rhode Island to avoid paying the five hundred thousand dollar sales tax bill and the seventy thousand dollar a year excise (luxury) tax, (that Kerry supports). Here is an example of a man who claims to help the poor by hurting the rich. I.e. Raising taxes on the rich. Apparently he doesn’t believe himself rich… People who have exponentially less money then him are rich. Their taxes are going up. But the billionaire is not.
The best part of this story is that a reporter asked Kerry; if he docked the boat in Massachusetts would he have to pay the Massachusetts tax then. Kerry responded, “It depends on who owns the boat.” [A very rare example of honesty in a lawgiver.]
The premise of this statement is that some people are subject to taxation and others are not. I ask you… What incentive does this set up in society? Where the people who set tax law are not held to that law? Is it likely, self interested, human beings will keep tax law fair if they are not subject to it? Of course not.
It is not human nature to hold the interests of others as high as one hold’s his or her own. In this instance Hsun Ching is correct that the congenital nature of Man is evil… Self centered. Philosophies that hold human nature to be wrong and force whatever the Elite believe, today, is “virtue” are flawed. To have at the core of a philosophy of ruling people a premise that is diametrically opposed to human nature is like building a gasoline motor and trying to run water in it. It is flawed. Not the motor… or the water… just that they will not work together.
Over and over we have examples of why people cannot self police yet we staunchly believe that the Elite will violate human nature. I.e. be un-self-interested. Even when we have grievous examples like the one above before us many say; “so what.” To them tomorrow is a white fog. Impossible to predict and mysterious as a Stephen King novel. I dare say too many people are of this persuasion. When the fruit of their nonchalance is visited on them they will lament that it was unforeseeable.
“How could this possibly have happened? I voted for the same people over and over but things never got better. They only got worse and worse.” is the lament of the willfully ignorant.
Another sophist argument that I hear and am dumbfounded at is that I personally have it ok now so why worry about the future. To make this argument and believe it a person must live in a one dimensional world. A point in time with no past no future, and no other possibilities then what is.
I love the way de Tocqueville called American individualism as opposed to egoism; “The doctrine of self interest rightly understood.” What a beautiful way to explain the truly civilized person. Someone who understands that sometimes we have to subordinate immediate gratification for long term gratification. To understand that self interest is intricately tied to societal interest. And that safe streets are in our own best interests. Of course the progressives are working to undermine this character trait in the American ethos.
The Elite are not held to the law in most places and times on the Earth. Their self interest need not be rightly understood. If they are not subject to a law will they give it the same scrutiny that they would if they were subject to it?
The modern Elite (progressives) seek to change people from individualists to egoists. Then the egoists will willingly forge the chains for the Elite and even bind themselves with them. Egoism is stupid self interest. It requires that one not think critically about our leaders. An egoist lives in a singularity. Egoism makes a person think a job flipping burgers is beneath him but being on the public dole is honorable. An egoist believes that the world owes him or her. An egoist calls another greedy because he doesn’t want to give more of his hard earned money to the lazy egoist but the egoist will scream like a scalded cat if a dollar of his money is missing.
By the way… did you hear about Barney Frank flipping out over not getting a senior citizens discount that he was not entitled to?
It cost him an extra dollar for the ride.
Tags: corruption, de Tocqueville, egoism, elite, evil, government, Hsun Ching, incentive, individualism, International Capitalist Party, Law, marx, progressive, socialist, sophist
Posted in Group Politics, Law, Mercy, philosophy | No Comments »