Posts Tagged ‘rational maximiser’

Why Government Cannot Solve Our Problems…

Monday, February 1st, 2016

Dear Friends,

It seems to me, government failures are so common they are common knowledge, and so are ignored and ridiculed, yet we give government more and more power over us every day, so that government can fix every problem. This is using that which doesn’t work to fix that which does work. What is most amazing however is, we all know government fails at everything, we laugh at it’s failures and they are so common we often don’t even notice them, but we give government more power and money over and over? Moreover, most of the political establishment the world over is dedicated to government solving the world’s problems. If most or at least a plurality of people disagreed with that philosophy such a paradigm couldn’t exist yet it does, so I have to wonder, what gives?

The reasons government fails at everything it put’s it’s hands to are numerous but one stands out. Government officials are never held to account. Despite the enormous amount of money bureaucrats make there is never accounting for the results only the process. Forget to put three staples in a document, signaling three copies need to be made and the consequences are immediate and drastic, release a million gallons of deadly toxic water into a watershed however, and get a raise. In the big things government failures are overlooked, or made fun of, but in the small insignificant things government is a well oiled machine.

If you or I started a series of events that lead to a negative outcome, like a practical joke, where someone removes a fence protecting pedestrians from a thousand foot cliff and jumping out as they pass… would lead to consequences, both for the unfortunate pedestrian and the jokester. Let government start a chain of circumstances that lead to a tragic death, and the victim is blamed, as in the recent death of Lavoy Finicum. There was no compelling reason to initiate the confrontation, the outcome was obvious, and the consequences for the police and bureaucrat who started it are non existent. That failure of government, both in using law to prevent terrorism against a rancher so the government can take his land, and the confrontation that clearly would lead to the needless death of a protester, will go unnoticed by the media and public at large.

Governments waste money on an epic scale. Hillary Clinton’s State department “lost” five billion dollars. No one was held to account, no charges were filed, the money just went missing. Of course, someone or some entity is five billion dollars richer, at your and my expense. Every year congresspeople have their wasteful spending lists. From five hundred dollar toilet seats to building a five hundred thousand dollar facility that melted in the rain, government wastes money that could be better used by the private sector, to create jobs, improve the economy and raise our standard of living. Pork barrel politics is the bread and butter of government.

So what is it about government that makes so many people believe it is the answer to every question? Perhaps it is the mistaken idea that throwing money at a problem will solve any problem. When I was a child in the first grade I read an article about how George McGovern believed more government spending would solve all our problems. At the time I thought that was insightful and intuitive because, as I thought then, spend enough money and any problem can be solved. Now that I have grown up, I realize more money thrown at a problem means more waste, graft and fraud… not a solution. In fact, more money creates the incentive NOT to solve the problem, else the gravy train would stop.

As I have shown, government only fails, and often fails spectacularly so why are so many people still tricked into giving government more power to solve all of our problems? Examples where government has succeeded are yet to be found, other than war, and war is not a strategy we should ever seek. Common sense dictates we limit government, take away it’s power to waste money, control our actions and hobble the economy. Elitists will use scare tactics, like claiming we will drink polluted water if not for the EPA, (who recently released millions of gallons of toxic water), fuel would be too expensive if not for the Energy department, (which has resided in the gutting of America’s energy infrastructure resulting in our dependence on foreign powers for energy), our children will get a poor education if not for the Education department, (which has presided over an education system that has to continually dumb down tests so our kids can pass the SAT), our farms will cease to exist unless government helps them with the Farm Bureau, (which has seen the evisceration of the family farm), etc… Only in government can failure be an advantage.


John Pepin

Why the Elite Do Such Absurd Things

Monday, November 30th, 2015

Dear Friends,

It seems to me, chaos, terrorism, crime and fear create conditions where tyranny is not only likely but inevitable, and so anyone who seeks tyranny or in other words, arbitrary rule, merely sow these things and their job is almost done. To argue that no one would want tyranny is to argue no one would want to eat. It is human nature to seek power over others, as evidenced by all of human history, just as it is human nature to eat. Moreover, those that seek political power do so usually to use that power, else why seek it? So, those in political power, not all that have or seek political power, but a large majority, actually want tyranny, (as long as they are the tyrant) and therefore will actively sow chaos, terrorism, crime and fear in society, as a means to that goal.

It was the ancient Greeks who actually admitted and debated the faction that favored arbitrary rule. Today our schools, colleges and universities avoid teaching about arbitrary rule and so most people educated by the new class have no concept of it, as a philosophy or even that there are always those who favor it. To understand the philosophy of arbitrary rule one has to read Plutarch’s Lives, Plato and Aristotle. Since few actually read them, and many are told what they said, few really know and many think they know. The philosophy of arbitrary rule is, that the people are better served when they are ruled by a person or group, that can pass laws arbitrarily. It is as simple as that. Those that favor arbitrary rule believe humanity is better off if we are controlled by our “betters.” That people are so ignorant of this philosophy is damning to our education system but even more telling of the intentions of the new class.

Rationally self interested people, rational maximizers as economists label us, and self interested rightly understood as Tocqueville put it, struggle with those who favor arbitrary rule. We believe that humanity is better off when we the people have a say in our laws, customs and economy. We believe that people in the aggregate are better equipped to understand what society needs than a group of “superior men.” We understand that it is only through the protection of individual liberties that society can flourish… and our philosophy is born out by empirical testing. The period since the invention of Constitutional rule, a form of government that intentionally limits the elite and explicitly forbids arbitrary rule, has seen the greatest advancement in the human condition since the first man and woman walked upright. Those times where arbitrary rule has reasserted itself have seen famine, slaughter and suffering, without exception.

If you listen to the rhetoric of the elite, every solution they offer, is always more power in the hands of the few. Each time a problem pops up, a new regulation, law or form of surveillance is the only answer the elite allow us to debate. It is logical to conclude that due to their default position, of more government power and their favorite economic system socialism, that the elite favor arbitrary rule. It would be absurd to claim someone who always and everywhere seek more power in the hands of fewer and fewer people, favors individual liberty and eschews arbitrary rule! So since they favor and seek arbitrary rule it follows that they will do what it takes to create the conditions favorable to establishing arbitrary rule, for the good of humanity as they see it.

Perhaps that is why the political establishment goes to such lengths to create chaos in society. The elite have been undermining those institutions that create stability for over a century. The nuclear family is the most stabilizing force and is increasingly under attack by the elite. From the welfare state to gay marriage the elite have launched an all out war against the family. Christian religious institutions also create stability and so have been cowed by the elite. No church is willing to give up it’s religious tax exemption and so is unwilling to speak out, afraid to offend those who have the power to remove it, and so they have made themselves irrelevant. The list of stabilizing institutions is far too long to go into here but I am sure if you try you can think of many that are under attack or no longer exist.

Maybe the elite’s drive to tyranny is why the elite seek more terrorism instead of less. No one in their right mind believes that mass migration of Muslims will not create more terrorism in Europe and the US. To argue that it won’t is to argue up is down and down is up. Moreover, flooding a country will people who despise the culture and the people, then giving the invaders free everything is a terrifically destabilizing force, and can only lead to resentment, violence, backlash and more violence. Smashing the stable tyrants in the Middle East intentionally sowed the seeds of the migration which will inevitably lead to violence in Europe and the US on a wide scale, that violence can only lead to fear.

It is possible that the people who want to establish themselves as arbitrary rulers create the conditions for crime to flourish. More law doesn’t prevent crime, it only makes more people criminals, moreover, more regulations makes it harder to start a business or make a profit in an established business. This leads to less employment opportunities, lower wages and more crime because of it. History shows that periods of rapid economic expansion see very low crime rates and periods of low economic expansion and recession see rising crime, social strife and hate groups. All of which makes the people afraid, of their economic outlook, their property and their very lives.

Fear is the uniting element that makes the others so effective. Terrorism, chaos and crime all create fear, and a human being who is blinded by fear will run into the arms of anyone claiming they can put that fear at rest. Since we have been carefully conditioned to believe that more government power is always the answer to every question and all exigencies, most people will turn to a strongman who will “get them” and “fix it.” Like Germans did after Wiemar. Fear limits the mind and terror shrivels the soul, making people little more than animals, willing to burn another at the stake for causing the plague, behead a Virgin to restore the crops, and wipe out a race of human kind. Fear that will answer all the dreams of those that seek arbitrary rule, because the end justifies the means, and in the end, they believe arbitrary rule is in all of our best interests, especially theirs.


John Pepin

Foolishness and Wisdom

Monday, November 23rd, 2015

Dear Friends,

It seems to me, the more ignorant and foolish a person is, the more secure they are in their beliefs. Where a reasoning man or woman questions their assumptions and biases, a fool never burns a calorie in their mind at all, they see no need. The foolish and ignorant are the first to resort to anger and violence if their beliefs are questioned. Being foolish, they would rather fight than think, and that quality of the foolish is fundamental. Ignorance is a condition that can be repaired, but the foolish will see knowledge, especially knowledge that questions their world view, as heretical. So sure are they in their beliefs that they need not learn. All of which make the foolish and ignorant easy to pick out, they refuse to listen to argument, instead making personal attacks, are quick to anger, resort to force rather than reason, have religious like faith in mankind and government, and most of all they are certain about that which cannot be known.

Young people have little life experience and so are more foolish than someone with a great deal of life experience. This is both a benefit and a curse to them. It is beneficial because they are willing to innovate in the face of almost certain failure. This is often the source of human advancement and is why most advancement comes from the youth. It is a curse however since most tyrannies have been ushered in by the youth. They foolishly follow some charismatic villain and find they have forged their own chains. The foolish youth are quick to resort to violence and that tendency has been put to good use by many despots. Che Guevara lauded that tendency of the youth to engage in violence. Once they grow up however most people loose their foolishness in the passage of time.

Unlike religious faith, which is based on rational self interest, the foolish have faith in that which has proven itself unworthy of faith. To digress for a moment, Religious faith is based on rational self interest for a host of reasons, those who have faith in God lead happier lives, live longer, live healthier, have more success in life, have stronger family ties and the retirement benefits are much better than the alternative. Religious like faith in some person, system or idea is the path to catastrophe. Get enough zealots to follow a villain and tyranny results, blind faith in an economic system like socialism and the economic future of the people is forever lowered, unquestioned belief in an idea is how entire cultures are destroyed.

A recent poll of generation x concluded that as many as 40% of them are in favor of government restricting speech that might be offensive. The real number is probably lower, (I hope), but the vehemence of those that see no problem with government deciding what speech is acceptable, are so sure of their position they need not question themselves or their assumptions. Disagree with them and they immediately attack you as a hater. They can’t be bothered with reason, like the slippery slope argument, the history of such movements or that innovation requires free thought which flows from free speech. They are willingly forging their own (and our) chains, and are helped along by professors who never grew up and dropped their foolishness, because they never left the coddling cradle of academia.

A person need not be young to be foolish and some who are foolish are not ignorant but the two go together like chocolate and milk. Ignorance is not only a lack of knowledge, but the inability to apply knowledge, which is in itself a form of foolishness. There are people who don’t have a great deal of knowledge, but are wise, which again shows that knowledge is not proof against foolishness, and ignorance is not proof of foolishness. To be foolish is to be willfully ignorant, self inflicted and self directed. To be wise is to be open minded and willing to question assumptions, but not to abandon those concepts that have been tested in the crucible of time, to do so is to be foolish.


John Pepin

The Lesson of the Twentieth Century

Thursday, November 19th, 2015

Dear Friends,

It seems to me, the fall of the Berlin wall was the period on the sentence of socialism, yet the elite have go all in for socialism. When the Berlin wall fell it was final proof that socialism was a failed economic system. The Soviets had tried for decades to make it work yet it failed. That failure of socialism was the end of a century of failure. Every time socialism was tried it ended in catastrophe for those who tried it. From the United Soviet States of Russia to Cambodia, socialism failed and failed spectacularly. The end of a century of failure was the fall of the Berlin wall, the final capitulation that even a nation with unbounded natural resources, huge population, committed socialists, powerful education system and was a superpower, failed. Yet today, the democratic party of the US is full blown socialist, Europe is run by socialists, and Canada recently voted in a socialist, it would seem that the world want to try socialism again. Of course it will fail again, but the elite are so in love with the system, they care not how many people will die of famine again, the deep level of suffering it will bring on, nor do they care about the tyranny socialism always brings with it, they are willing to inflict all these disasters on humanity so they can try it once again.

Socialism has built within it the seeds of it’s failure. The incentive to work is non existent in a socialist system. The socialist system, where everyone gets the same amount of money, no matter how hard they work or even if they work, can only undermine the work ethic. In those places where the work ethic is very strong, socialism can last longer, but in the end, the people will realize they don’t have to work to get the same as those who don’t. This is a pernicious effect that cannot be mitigated. Sure, some have argued the lash can be sufficient substitute for the incentive to get ahead, but in the end the lash only further alienates the people and lowers the quality of their work, even if it improves the quantity. The incentives of socialism corrode it from within.

Planning an economy isn’t like planning a wedding, there are simply too many moving parts. Imagine all the information that must be garnered, categorized and understood. The mass of information is simply too large for any bureaucracy, even equipped with quantum computers to effectively gather let alone understand. How many socks to manufacture for example. The market system has the price feedback so a manufacturer knows, by the price he is getting for his socks, whether to make more or less, but in a socialist, planned economy, the number must be set by a bureaucrat. No matter how smart, well meaning or committed to socialism the bureaucrat is, she will never get the number, of even a simple commodity like socks correct. Now consider the style of socks people might want. The level of information about how much to produce quickly becomes impossible to assess, and so there are always huge gluts and shortages. Moreover, the style of what is produced is never what the people actually want.

The drive to advance efficiency is destroyed in a socialist system. If you come up with an innovation in a socialist system, is there any incentive to implement it, is there an incentive for a bureaucrat to implement it either? No, there is not, innovation is a pain in the butt for the central planner, it is simply too much trouble. Implementing innovation is hard work, if you cannot get ahead for your innovation, will you struggle to push it through? No of course not. If you push in a socialist system you are labeled a troublemaker and no one wants to be labeled a troublemaker in a socialist system! That can get you sent to reeducation or worse. Innovation, and the advancement of efficiency that comes with it is frowned upon in a socialist system.

Socialism always and everywhere must institute a tyranny. In order to plan an economy the natural rights of the people must be taken by force, the good of the society always comes before the good of the individual, and so your inborn natural rights are eliminated. Of course, the good of society is always in line with the personal good of the leaders. Under socialism everyone is a slave to the state except those who run the state, so in other words, the leaders of a socialist country own everyone within that country. Socialism is the modern equivalent of arbitrary rule. If the beloved leader believes your death will serve the society he will expect it of you. You have no right in a socialist system to the products of your labor, you are in deed and fact a slave, in a socialist country tyranny is the norm and must be the norm.

The twentieth century was a century that proved, over and over again, that socialism cannot work. The fall of the Berlin wall was the period to that sentence. All the arguments against socialism I have put forth are made moot, because the lesson of the twentieth century was that socialism must fail. Yet here in the twenty first century the elite are intent on creating a world government based on socialism. In their hubris they believe they can make the unworkable work, they are wise enough to fix the incentives, they believe themselves virtuous enough to prevent tyranny, they believe themselves to be gods. Our hope is that people will remember the fall of the Berlin wall, and the lessons of the twentieth century and forestall the insane plans of the global elite. God help us of we don’t, in a world government that is socialist there will be no escaping it, and the more it fails the more insane the leaders will get.


John Pepin

Pragmatism, The American Philosophy

Monday, November 9th, 2015

Dear Friends,

It seems to me, pragmatism is the quintessential American philosophy, it embodies everything our founders believed. The US founding was based on a market system… of ideas, economics, politics and philosophy. In a marketplace, ideas, products, and even philosophy are tested. Pragmatism as a method of thought and inquiry tests ideas and weighs them on an empirical scale. In a market, if a product gives value then it will be successful, if however, it is of no value, it fails. Marketing a product then can be said to require pragmatism, if it fails losses need to be cut, so the product is discontinued. Philosophy requires pragmatism to test its results, if the results are good then the philosophy can be said to be good, and if the results of it’s implementation are bad, then the philosophy itself can be said to be bad. In a marketplace, the measure of anything is how it sells, where there is no marketplace however, without pragmatic consideration, there is no viable test on the value of a product, idea, system or philosophy. Moreover, we see empirically that where pragmatism is used the standard of living improves and where pragmatism is eschewed, the standard of living declines. Your standard of living and that of your children is dependent on our leaders, teachers, executives and even ourselves, to be pragmatic and use pragmatism to weigh our decisions.

Pragmatism as a body of philosophy is normative, or in other words, it harmonizes that which we believe and think, with that which is real. People believe in all sorts of things, from communism to relativity, but how can we discern what beliefs are true and which are false? That is where normative philosophy comes in. Pragmatism tests the social theories, philosophical ideas and organizational attempts not strictly scientific questions, while science tests physical theories not complex ones. This is a mistake that many in the sciences have made, they seek to apply the scientific method to questions of society and social philosophy, (complex systems) because the scientific method has been so successful in discerning what water is, how fast a rock will fall, and other purely scientific problems. In complexity theory, strictly scientific questions would be called mount Fuji questions, where questions of society and social interaction are a changing landscape. Therefore, to apply the scientific method to questions of social philosophy, is like driving a nail with a screwdriver.

How pragmatism is used, is it observes the results of an action, then rates those results as good or bad. The rating is then used to predict the outcome of other similar actions. For example, if government puts a limit on the price of rental housing, for even the most noble of reasons, the result is a lack of housing. Pragmatically then, rent control has a negative outcome, even though the motivation might have been altruistic. Pragmatism looks at results not motivations. When the scientific method is used however, it always takes into account the motivation, like a chemical reaction, all the inputs need to be measured, quantified and the method of combining them weighed. In a chemical reaction this is necessary and fits the requirements well, but in complex systems this level of measure is impossible, and so the scientific method fails to predict the results… where pragmatism succeeds.

The founding fathers looked at the results of all the civilizations that came before them. They were very learned men who knew history. They weighed the results of all the governmental systems that had come before, and using pragmatism, they settled on a system of government that combined the best of what history had to offer and discarding the worst. In that way the very founding of the United States was based on pragmatism. The founders pragmatically looked at the results of various systems and if they produced good results, they were considered good and were incorporated, and if they produced bad results, they were considered bad and were discarded. The founders didn’t consider the motivations of the framers of past nations, civilizations and economic systems, they only looked at the results of those systems.

The United States was founded with limited government so those in power couldn’t contaminate the system. The founders had seen the results of powerful governments and so enacted limited government to protect their new nation from those results. While the leaders of powerful governments might be virtuous, have only the most noble of motivations and honest, the results always were and are the same. The system becomes more and more despotic until the tyranny is open for everyone to see. Once that happens the people understand they are victims and loose their perceived stake in that society and the society collapses. The founders recognized that it is the nature of government to seek ever more power over the people, and pragmatically tried to check that tendency, with pragmatic Constitutional limits on the power of government.

The US was founded as a market system because the market system had resulted in such a dramatic rise in the lot of humanity. Under a market system everyone is pragmatic. If you could make more money at another job you change jobs, if you can make more money building anther product or adding features to your existing product you do it, if it fails, you revert to what worked before. Everyone weights the results of their actions. Since we are pragmatic in our business dealings, as a matter of human nature, we apply pragmatism to other aspects of our lives. Our relationships, our housing situation, etc… our every decision is based on pragmatism. Pragmatism becomes ingrained.

Pragmatism therefore is the quintessential American philosophy. The US founding was based on pragmatism, the style of government is pragmatic, our market system is based on pragmatism, our people have been inculcated with pragmatism and our society itself is pragmatic. Tocqueville called attention to American pragmatism in his theory of self interest rightly understood. To be a rational maximizer is to be pragmatic. Everything about America and the American way is pragmatic. Unfortunately, today our leaders are not pragmatic but ideological, and seek to move us away from our founding, to a place that our founders looked at, weighed and rejected… for the results it produced. Our modern leaders care nothing about results and only consider motivations. They believe a system that has only resulted in human suffering on a massive scale, can be made to work, if only the “right” motivations are applied and the “right” people are in charge. Pragmatically speaking, their ideas can only fail, and fail big time, because they always have.


John Pepin

Self Interest or the Iron Fist

Monday, November 2nd, 2015

Dear friends,

It seems to me, the invisible hand is much preferable to the iron fist. The new class however, believe just the opposite, that self interest can be replaced with the lash to motivate the people. Arguments can be made for both sides, the one that poor performers will become good performers, when motivated by physical pain, and the other that the human want to get ahead will drive people to perform well. The new class, being trained by academia who’s motivations, world view and personal history is outside the norm. As such the new class sees the world through a very different lens than those not in the new class. Of course, not all members of the new class have incorporated the propaganda into their psyche, but most have. That is why so many, especially economists, (who’s science was invented by Adam Smith and therefore get their authorization from him), consider Adam Smith’s invisible hand to be fiction, to the detriment of humanity as a whole.

Those in academia that train the new class live in a different world than the rest of humanity. Their ideas don’t have to be tested in the crucible of reality, they need not give actual value for their labor and they live in a cloistered world. The result has been an academic class who’s ideas have become ever more disconnected from reality. Up to ninety percent of academics are socialists and the top echelon are outright Marxists and anarchists. When confronted with the real world results of socialism, they respond in one of two ways, real Marxism has never been tried, or the wrong people were in charge. Their ideas need not comport with history, reality or even humanity, their ideas are based in the logic of ideas, which as Hegel said, in logic, if a pen is held in the air and let go, it need not drop… that past experience doesn’t necessarily predict future results.

So the new class, is inculcated with ideas that need not necessarily rely on past experience to predict the results of their actions, and so, given their position in society as the executives of our corporations, media moguls, Presidents, Legislators, judges, lawyers and doctors, in short the leaders of our society, their personal views differ from the common man’s. They seek to use human labor to their own ends, be it corporate profit, maintaining political power, enhancing their pay, or simply continuing the status quo. Since the advancement of the human condition, as they see it, is their bailiwick, the rest of us are merely here to serve their wants. As such they believe that whatever motivation to labor is used, all that counts is that the unproductive be forced to be productive. Given their world view, hubris and power, the iron fist is far more effective than self interest.

I, however, as I said in my first sentence, am of the opinion that all people benefit when self interest is the primary motivation for human endeavor. While the lash is a powerful incentive to labor, it creates a strong resentment to the person holding the whip. That resentment then causes the labor to be undermined by the laborer. While it is true, a slave can be forced to work him or herself to death by the lash, (as has been proven throughout history), they will not willingly help their master improve the efficiency of the process, lower the input cost or improve the product. The resentment that builds up when the lash is used prevents that. Human nature being what it is. Moreover, the iron fist discounts the very real probability of societal, economic, cultural or technological advancement originating from those not in the new class.

Economists should know this as a matter of course. After all, it was Adam Smith, the founder of the science of economics that explained this paradigm far better than I could, hundreds of years ago. Their authority is based on his work, but the science of economics has moved away from empirical reality to the desires of the new class. Marx, Rousseau, John Maynard Keynes, Veblen and others gave the new class a theory that fed their egos and hubris. They taught that self interest as a motivator of humanity is flawed and that the new class can plan an economy far better. The planned economy only requires as a motivator, the iron fist, to bring even the lowest producers into production. Of course they couldn’t tell labor their true intentions, labor would have rebelled aught, so they usurped the motivations of labor to enslave it. That is why those who seek to use the lash as a motivator of men and women, always talk about equality and fairness, to fool the average woman and man into believing theirs is the cause for which the statist is fighting.

Those wielding the whip never taste it’s bite, and so see no problem with it’s use, those who feel the sting however, understand the evil of it. The new class has no worry about the hoi polloi wielding the lash against them, the new class are the leaders and so only see the results second hand, in the labor that it inspires. The new class has no need of competition from the masses for their position in society, and the iron fist is the best means to both achieve good productivity from labor, while at the same time insuring their continued place. The new class seeks low cost, high efficiency and submission from those that work for them, while at the same time, high wages, power and prestige for themselves.

So there it is, one of the primary differences between a socialist and a capitalist, is the means to motivate people to work. The socialist believing the lash as the best motivator of people while the capitalist is of the opinion that self interest works best. Adam Smith, Mises, Hayak and many others fall into the latter category. Their philosophy however dis-empowers the new class, it teaches the planned economy itself is flawed, and therefore is an anathema to the new class. The new class is egoistically self interested, forswearing the good of mankind for their own narrow good, and so the iron fist is to them the ideal means to motivate people. What do you believe, is the iron fist the best motivator of people, or self interest? Your answer shows who you are.


John Pepin

The Defective Products of Our Governments

Monday, October 19th, 2015

Dear Friends,

It seems to me, a carpenter uses squares, levels and chalk lines to get satisfactory results, an accountant uses entries in a ledger to harmonize the income and outgo of a business’ expenses, and a CEO uses profit margins and return on investments to gauge their performance, those in politics however, have no such devices to insure the quality of their work, the effectiveness of their laws nor quantify the benefit of their actions. It would seem then, that the carpenter, accountant and executive is held to a higher standard than Senators, Congressmen, Judges or President of nations. The actions of a Judge has implications for the whole of the society, the economy balances on the laws passed by Senators and Congressmen, a President that refuses to equally administer the laws destroys civil society, yet there are no measures, gauges or regulations on them. The lack of which lowers, not only the quality of the work of government, but insures the sub par performance of everything government touches.

Imagine building a house without a level, square or chalk line. Such a house, no matter the expertise of the carpenter, would be shoddy. The walls wouldn’t be plumb, the floors wouldn’t be level and the framing wouldn’t be straight. Every part of that house would be terrible. Were a house built without the use of these tools it wouldn’t stand a year. If however, a house were built by an amateur, with the use of levels, squares and chalk line, even given the substantially lower skill level of the carpenter, it would be much better then a house built by an expert without the use of such quality enforcing tools. Quality work then requires the tools to ensure quality workmanship.

What if an accountant didn’t use ledgers to keep track of the expenditures of a business and instead kept all the figures in his head? That business would fail in short order. Money would be wasted, employees would get paid correctly, and inventory would be misallocated. No part of that business would function properly. No matter how intelligent or practiced the accountant, eschewing the use of books and ledgers would make her work terrible. Many businesses have no accountants at all however, but the owners themselves do the work with the use of ledgers and software t account for the expenditures and income and run just fine. It s obvious then that the use of ledgers are critical to running a business.

A CEO who didn’t allow the use of profit margins and return on investment would quickly find no one would buy shares of the company, and those who did would quickly loose their hard earned money. Such a corporation would be impossible to figure actual value, no one would know or could know, if it were profitable or not, or quantify the performance of the CEO. No matter how skilled in management that CEO was. The quality of his work could not be determined. Take an unskilled manager and let him used the tools of assessment of a company she runs however, and that company would be quantifiable, people would buy shares in it and the company would be able to function. If the company she runs is not profitable she will be replaced and if she does a good job the stock value will increase. The tools of return on investment and profitability are critical in running a corporation.

Politicians however have no tools to ensure the quality of their work, no tools to quantify the effect of their laws nor tools to understand the return to society of their regulations. Instead, government works in the dark, passing laws and regulations hither thither and yon. If a regulation backfires and makes the situation it was supposed to rectify worse, no problem, glom on another poorly thought out regulation. Which is like a carpenter not using a level to find plumb and so just nails on another board. If a law results in the lowering of a sector’s profitability, who can measure it, there are no ledgers to use to calculate the effect of a new law. If a decision of a judge has a pernicious incentive, who can evaluate it, there are no means of quantifying the societal impact of a judges ruling. Moreover, regulators, legislators, judges and presidents refuse to be bound by measures to improve the quality of their work, measure the effect of their labor or calculate the societal impact of their decisions.

What we have is a system where the person who labors with their hands produces high quality work, the person who accounts for the income and outgo of a business, calculates it to the penny, and the people running businesses performance is measured by the profitability of the enterprise, but our leaders have no such limits. Even the restraints of a Constitution are ignored and argued to the head of a pin. The result is that government, all governments, produce defective goods, deficient laws and inferior work. Such outcomes would be severely punished if a carpenter produced them, but they are accepted every day from our leaders. A Fourth Branch would provide the tools to measure, calculate the performance and quantify the societal effect of our leaders, unfortunately even the people most damaged by the defective products our government produces, recoil at the thought. Until we become as rational at gauging government, as we are about the quality of our homes, the profitability of our businesses and the return on our investments, we will continue to be damaged by the defective products of our governments.


John Pepin

Meritocracy… The Justice of Class Mobility.

Monday, October 12th, 2015

Dear Friends,

It seems to me, the real measure of justice in any society is the ability to get ahead, to move out of the social strata one is born into, and either up or down depending on the merit of the individual, and not because of their political favor. That used to be the case in the US for example, so much so that back in the late 19th century the lack of interest of Americans for socialism was explained by the socialist “economist” Thorstein Veblen, Americans don’t want to damage the interests of the rich, because every American knows he or she could become the rich, and no one wants to damage their own interests… Of course many did become rich and many more did not. Yet everyone understood the path was open for them. Opportunity has been the draw for people the world over to immigrate to the US. People would come so they could just have a chance to get ahead if they worked hard and were smart. Many did get rich and many did not but the opportunity was there. During that time, the standard of living of the American citizen rose in a way that has never been seen before, not only elevating the lot of Americans but spilling over into the rest of the world. Today that distinctly American dream, meritocracy, has been effectively crushed by our education system, regulations and cronyism.

Joseph Schumpeter said that as soon as someone becomes rich their first order of business is to close the door behind them, so no one else can come through that door and become rich. The reason is that the newly wealthy don’t want to have to face competition. Competition that lowers profits, makes one work harder for those lower profits and worst of all, creates the potential the wealthy could slide back into the middle class. The means at their disposal to close that door is regulations. Cronies use the straw dog of public safety to get regulations passed the create a barrier to entry. While an established company, with all the accouterments, can easily meet even draconian regulations, someone trying to get a business off the ground cannot. The door has effectively been closed.

Cronyism is an offshoot of closing the door. The wealthy have the money and connections to effect laws and regulations and so they use them to make easy profits. In his famous film series, Free To Choose… Milton Friedman said, if someone opens a business that sells it’s product at a lower price and has better quality, the old business owner has two options, they can lower their price and raise the quality of their product, or they could go to government and get the competitor shut down. The first option is out of the question as it requires hard work and smarts, while the second option is a no brainer. When they can they use government to ensure your profits and crush competition. Moreover, those same government connections that were formed by crushing competition can be used to get direct government money in the forms of grants and subsidies. What nation wants to loose it’s steel industry? Since every industry must corrode from within, whenever cronyism is used, it needs more and more “assistance” to stay in business, else that industry will be lost.

Regulations are the means to cronyism. Since regulations are made by unelected bureaucrats, they bypass the normal system for making laws, and can be wielded with impunity and with great effect. In addition, the cost to the economy and class mobility is irrelevant. A law is publicly debated and is subject to public scrutiny, but a regulation is passed in the dark of night, the only ones with input are the cronies who stand to gain or loose by that regulation. Examples abound, especially recently, like the new rules for the Internet, most of which are still secret, the new Pacific trade agreement, etc… the most pernicious effect of regulation however, is to limit the mobility of the population to rise above, or drop below the position they are born into. The intent and effect of regulations is to stifle class mobility.

The government monopoly education system limits our children, instead of teaching them anything is possible, it teaches them to be robots. Everyone needs to get the same education, go to the best college they can get into, take on so much debt they have to get a job and closes off both their motivation and ability to become entrepreneurs. Common core is the perfect example of this in action. Imagine trying to figure the yardage of concrete needed for a basement using common core math? It teaches the wonders of socialism where there is no possibility of class mobility, class under a socialist state is decided by political favor. The history of mankind is perverted to equate individual liberty with atrocities, when the direct opposite is true, overly powerful governments commit atrocities, while limited government is limited in it’s ability to commit atrocities. The education system has become a way for the state to remove the people’s belief in class mobility, and so make us willing to do damage to politically disfavored groups, because we have been taught… we can never become rich ourselves.

Class, caste, position, social strata, etc… are mere artificial constructs to pidgin hole people and limit them. It should be obvious to anyone with an open mind, therefore, in a society where you are stuck in the caste, class, position or social strata you are born into, regardless of your individual merits, is unjust. Justice by definition, is the equal treatment of people, where people are treated unequally, depending on some artificial construct of the elite, trapping people in the circumstances of their birth, is therefore by definition unjust. Those institutions that enforce class immobility then are damaging to the lot on mankind. Cronyism, regulations, personally limiting monopoly education system, unlimited government, socialism, etc… are by design, created to limit class mobility, and must be eliminated if we are to advance to a place where there is real justice, actual opportunity and a rising standard of living. You know in your heart this is true… speak the truth for others to hear, act so that others may follow and vote with your rightly understood interests at heart, and not out of envy or hate, and together we could restore opportunity to our kids.

John Pepin

Human Heartedness

Thursday, October 1st, 2015

Dear Friends,

It seems to me, the Confucian ideal of Human Heartedness, is one we all should emulate. It has been translated into many English words and phrases, but I prefer human heartedness, because it sums up most all of what Confucius wanted to say, as evidenced by his teachings. Those who should emulate human heartedness the most are our leaders since Confucius had the most to say to them. Unfortunately, most people in the West, when they hear “Confucius…” they turn off. The name has been so diminished from it’s rightful stature, from Charlie Chan movies, where the name Confucius became a punch line. Others cannot fathom how anything someone said in 550 BC, could have any relevance to today. They turn their backs on ageless wisdom to their own and our detriment. The human condition and indeed humans themselves have changed very little since then. We still strive for pleasure and avoid pain, we still fall into traps and snares and it is egoistic self interest that baits those pitfalls. Yes, Confucius and his human heartedness have a great deal to say to us today, to ignore such wisdom is to see the pit and yet step into it anyway.

A large component of human heartedness is the Golden Rule… Do unto others as you would have them do unto you. Every one of us could benefit from following the golden rule. Better even to double down and hold others to a lower standard then we hold ourselves. It is in our animal nature to hold others to a much higher standard than we hold ourselves and in our civilized nature to hold ourselves to a higher standard. We would benefit by living in a civilization where there can be less laws, less draconian punishments and less government, because we control ourselves from within instead of needing to be controlled from without. Prosperity would increase, since regulations, laws and ordinances are friction to the economy, but become more and more needed the more barbaric the people become. We should all incorporate human heartedness, the golden rule, into our lives.

Human heartedness is all about compassion and empathy. The golden rule is also explicitly about empathy. As I wrote in my last article, compassion and empathy are paramount human attributes, that lead to civilization and away from barbarism. The barbarian has no compassion and no empathy. When an Italian city state was being attacked by the Gauls, Roman dignitaries were called to mediate. One of the Romans asked the Gaul general, “By what right do you lay siege to this city?” The Gaul answered back, “Natural law, that the strong must take from the weak, so the strong can survive and the weak die out…” But what the Gaul didn’t understand is that there are many forms of strength and a multitude of forms of weakness. His was marshal strength, a strength that always has it’s better, he lacked wisdom. We must have compassion and empathy else we become like the Gaul general, strong in might but weak in wisdom.

One of Confucius’ disciples asked, “Does the human hearted man love all?” I suppose referring to Mo Ti’s all embracing love. Confucius said, “No! The human hearted man loves the good and despises the bad.” Clearly Confucius didn’t want good men to turn their faces from evil and so allow it to grow. To be human hearted is to lift up that which is good, in other words… pragmatically benefits individuals, society and culture, while attacking the bad, that which lowers people, harms society and rots the culture. It is obvious that embracing evil as well as good gives evil a leg up, since the good will be fair and honest while evil will use good’s virtues against it. To have a prosperous society where crime is low we need to be human hearted and embrace good while fighting evil.

When talking about leaders Confucius liked to refer to the Sage Kings of “old.” The sage kings led, as Confucius would argue, “by force of personality,” or to put it in modern terms, they led by example. If they wanted the people to be more honest in their business dealings, they would be more honest themselves, and if they wanted the people to stop lusting after each others wives, he would forswear it himself. In that way the leaders of the great society would convince the people to be virtuous. The Duke of Lu asked Confucius one time, how he could get the people to stop lusting after ill gotten profits, women and luxury. Confucius told him to stop doing those things himself and the people would follow. Confucius had to flee Lu state shortly after. The leaders of society want the people to be virtuous, but can hold to the virtue the demand in another, for a single day. If we want our children to live in a safe, prosperous and civil country we must only elect human hearted leaders, who will lead by example.

When Confucius was asked what he would do if he were made emperor, Confucius replied, “I would rectify terms…” or put another way, he would set standards. Standards apply to everyone equally, they create systems where commerce can flourish and they level the playing field for everyone. Today standards are eschewed for regulations, ordinances and laws. Instead of everyone on the same level, regulations are specifically designed so some politically favored group, can get a leg up on an otherwise free exchange. Where a standard is what it is, no matter how politically favored a person is, application of a law is dependent on who the person is. Look at Hillary Clinton’s wiping a subpoenaed email server before turning it in. If you or I did that, what was on it would instantly become irrelevant and we would be charged with a felony, tampering with states evidence. She however was not. A standard is the antithesis of arbitrary rule. For any country to flourish the leaders have to be human hearted, setting and holding everyone, including themselves, to a standard.

There is no question, we are no different than the people who lived before us, oh we might drive cars, talk to people on the other side of the planet, and have put a man on the Moon, but essentially we are the same. We have the same desires, wants and needs. Therefore, wisdom that applied to human beings in 550BC still apply to us today, perhaps more so since we have grown arrogant, egoistic and self aggrandizing, not for our achievements, but for the achievements of those who have come before us. How many among us could create a gasoline engine, having never seen nor heard of one before, yet most of us take them for granted, and look down our noses at those who didn’t have them. Yes, our society, civilization and personal lives would benefit greatly from following the wisdom of Confucius, and becoming more human hearted.


John Pepin