Cultural Knowledge

Posted on May 26, 2011 by john

Dear Friends,

It seems to me that most economists are looking at the extrinsic facts and drawing conclusions that are in fact at odds with the intrinsic qualities of those very facts. Extrinsic facts are like “a blade of grass is green…” Intrinsic quality of that fact would be “… because it has chlorophyll in it.” Extrinsic qualities are what is immediately visible, felt, heard etc… Intrinsic qualities are what the extrinsic qualities are from.

The example that immediately comes to mind is the personal spending of the American citizen. Economists are surprised at the resilience of the American spender. While the savings rate has gone up slightly the rate of spending, a major factor in economic output, has remained remarkably stable despite the high energy prices. -These are extrinsic facts.

Economists then draw their multitude of reactions to these extrinsic facts. They wax poetic on Bloomberg radio every day. Their conclusions have one flaw however… Few tunnel below this extrinsic layer to plumb the intrinsic qualities of those facts. Then plug the intrinsic qualities of those facts into their theories to see how they hold up.

Something that effects the way we, the masses, think is cultural knowledge. This cultural knowledge is sometimes urban legends, common knowledge, streetwise or any number of names connoting cultural knowledge. American cultural knowledge is based in a capitalistic ethos. An ethos that weighs benefits against liabilities.

The Elite have been trying for generations to erase our capitalistic ethos and replace it with egoism. Egoists are as stupid as they are self centered. As such they are easily manipulated and led. They vote regularly against their own self interest out of ignorance and hubris. But I digress…

Part of the American cultural knowledge is that the level of spending in the US capital is actually unsustainable. We know this in our guts. No one is ignorant despite those that claim otherwise. This gut feeling leads us to the inevitable fear of hyper inflation. This fear of hyper inflation is a powerful motivator.

If we know our money may be worthless in a few years then why put money away? It is not in our self interest to work hard for money and stash it away, knowing that if we do, the government’s policies will erase it completely. To do so would be stupid. It makes more sense, if hyper inflation is actually around the corner, to “stock up.”

When things become too expensive to buy, or food becomes so expensive, it squeezes out any discretionary spending, if we bought new durable goods, they will last long enough that we might weather the hyper inflation. Once the economy resets we can resume our lives.

The huge inflation we are seeing in food and energy only feed into this thought process. Especially when the government denies the obvious. If inflation were measured today the way it was prior to 1980 it would be pushing 9-10%. This is not hyper inflation but it is certainly not the placid 2-4% the government would have us believe.

Another extrinsic fact is the small business outlook. Basically a survey of the attitudes of small business owners about their near term prospects. It has been low since the crash of ‘08. It has gone up and down but has remained suppressed as compared to it’s historical average.

Cultural knowledge comes into play here too. Small business owners are integral parts of the community. They contribute to, pass along and keep safe, cultural knowledge. Lately the US government has been vilifying business. This vilification has been against the profit motive, that businessmen won’t put “community” interests ahead of their business interests, even the vilification of Wall Street has spillover effects in the arena of cultural knowledge.

No one likes to be vilified. It makes people feel insecure. Couple this with the rash of regulation that creates much more work for the small business owner and the intendant profit reductions that always hitch a ride with any new regulation… and voila, you have diminished attitudes.

There are many ways cultural knowledge influence the extrinsic facts of economics. All economics being, in large part, the large scale emergence of the effects of cultural knowledge on the behaviors of the masses. To consider the outwardly only is to ignore the underlying reasons.

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Causality

Posted on May 22, 2011 by john

Dear Friends,

It seems to me that if a person, (the originator), points a gun at another, aims at the victim’s heart, pulls the trigger, the mechanism of the gun operates, the hammer drives the pin into the primer, the primer’s explosive goes off, fire is ejected through the touch hole into the cartridge, the powder in the cartridge is ignited, the deflagrating powder and the resulting pressure pushes the bullet from the cartridge at great velocity, the bullet interacts with the barrel and the rifling in the barrel, imparting a spin, thus a gyroscopic effect to the speeding bullet, the bullet flies unerringly to the target, penetrating the victim’s chest, passing through the heart, exiting the back, flying erratically until it impacts some object and comes to a rest…  that person is responsible for the effects of his or her original cause, ie, shooting the gun at someone, and the precognition of the events, that would probably take place from his or her original cause, has relevance to their guilt.

What about if a person had personal knowledge that the ice on a lake was thin. Checked the ice and verified that it was thin. Then gathered a group of people and urged them onto the ice. Some people would complain that the ice was too thin and no one should go onto it. Then the original person called for the complainers and conspiracy theorists to be shut up. The group then taped the complainers mouths shut. Then the group, (except the originator) go out onto the ice, the limit of the ice’s ability to support weight is exceeded and the ice catastrophically fails. The whole group falls into frigid water, many necessarily die. The only person who is safe, is the person who has stayed on the shore, the originator. Is that person not equally as responsible as the person who shoots the gun at another? In every way?

Consider the example of the man who knows the end result of initially “democratic” uprisings, has researched the outcomes of historical events and their ramifications to World history and the effects on Mankind, then urge a group of people to gather and stage a “democratic” uprising, they fire the group up with rhetoric and stories of “democracy.” Some people complain, however, that uprisings are dangerous. Most have not resulted in more liberty they have resulted in less liberty. The originator calls to have the complainers shut up! They are beaten into submission some are gang raped. The originator stays in a “safe” country and keeps his or her assets safe with hard assets like gold and a basket of international currencies. Then when the uprising inevitably kill thousands and results in less liberty, is this originator any less guilty… or more?

How about the originator who has personal knowledge that anti capitalist philosophies such as Communism result in famine, tyranny, despotism and an ever diminishing standard of living, researched the subject to find there were no examples in history where communism resulted in prosperity, then convinced a powerful Elite it was a good idea to force communism, not on the people of one country or nation only, but upon the entire World. Some people would complain that this path led to universal poverty. The originator calls for the complainer to be shut up! Calls the complainer selfish, greedy and counter-revolutionary. His or her followers call the complainer a kook, insane, and dangerous. The complainers are effectively suppressed and ignored. When the World goes out on the thin ice, that is communism, in a one great World government… is the person or group of people, as guilty, for the resulting deaths through famine, torture, political suppression, maintenance of oligarchy, and protection of the Elite… or more guilty?

In every one of these examples we have an originator and the victims. In each case the victims died and in each case the originator had foreknowledge and therefore was guilty for all the deaths…Is the perpetrator evil or good? In the first and second examples the perpetrator would be hunted down, arrested, prosecuted and sentenced to jail and possibly executed. In the third example the perpetrator would be reviled in some circles but have no meaningful negative consequences in his or her life. In the fourth example the perpetrator would be set up as the king of the World. But under a different name… President (for life), Great Leader, Prime Minister, or by whatever name he or she would go by, but they will be, in fact, Caesar.

Now that we have a template lets do a thought experiment… Take a person who urges a group of people to change the borders of their nation, such that it guarantees the extermination of that people, by neighbors who daily say genocide is their goal. Then, predictably, the people are exterminated. Is the originator guilty of genocide? What if he has a Nobel Prize? And what does that say about what the Nobel Prize will have become?

In any case, it is not relevant how long the chain of event, the predictable outcome is what determines guilt. As in the case of the drunken driver not being prosecuted for intentions but for actions and probable outcomes…

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Diversity in Ability

Posted on May 19, 2011 by john

Dear Friends,

It seems to me that all people are capable. You are a capable person, he is capable, she is capable and even I have some small capacity. That is a fundamental theme of the International Capitalist Party’s ethos. All people are capable human beings. The capacity of each individual is diverse and unique. It is that very diversity of capacity and uniqueness that gives rise to people’s ability to fill the miscellaneous needs of society and even to explore new possibilities.

A perfect government therefore would allow all people to employ their divers talents in whatever way they saw fit. This would lead to zero unemployment because everyone would work. It would also lead to an explosion in the GDP of a country that achieved it because everyone would contribute to it. But is not an easy task.

In a system that is increasingly regulated the diverse capabilities of mankind cannot be effectively harnessed. Regulation does not allow for diversity. This inevitably leads to some people’s abilities not being marketable. The primary benefit of the diversity of abilities is lost to society. This is because regulation is a top down approach to control a complex system, i.e. the diverse abilities of mankind within the market system.

Top down or Command and Control economics is an attribute of oligarchal State capitalism as well as many other anti capitalist philosophies. These systems seek to limit mankind to a single mold. The mold the Elite anti capitalists find agreeable. The mold is for the named, like the bourgeoisie, proletariat, worker, immigrant, rich or poor. The Elite pretend to be members of them all but are a sort to themselves so they need not conform to the mold.

Lasses Fair capitalism meets the diverse abilities of mankind best but has it’s drawbacks. Those are all founded in people’s wanting to use unjust means to go around the market system. Means like, bribery to get contracts, privileges, licenses etc, pyramid schemes, snake oil salesmen, or mere scammers, in short, stupid capitalism. The World is full of those that will jump at the opportunity to take advantage of others who are trusting.

It is an actually legitimate role of government to protect the property and persons of those under it’s care. So it is a legitimate use of government power to protect people from fraud. This comes in the form of consumer protection and creates an ability in people to actually trust each other sufficiently to conduct business. Until the consumer protection grows into a kudzu vine, that overgrows it’s place, it allows the market to operate more smoothly then if there was no regulation at all.

So here regulation is helpful but earlier we claimed it was unhelpful. That is because we are talking about regulation that protects consumers from fraud and before we were talking about regulation that doesn’t set standards or protect consumers it protects, firms from competition, government granted monopolies, the legal oligarchy, the interests of a faction (or Elite) over the interests of society, or society from the complexity that is a functional market system.

It is exactly this complexity of the market system that fits like a hand in a warm glove with the diverse capabilities of mankind. To try to protect people from their very strength is to undermine that strength. Our diversity in abilities is what allows the market system to fit so well with humanities abilities and foibles. We shine in our diversity in abilities and we should celebrate them.

But the philosophy opposite ours, that people are NOT capable, not able, not diverse in our talents and need protection, not only from others but even from ourselves, this philosophy can only lead to tyranny and oppression. It is a poor lot for the children of those that let this pernicious ethic infect into the body politic or the corpus society.

Their children will suffer the tyranny bought for them by their parents…

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Class Warfare and the Anus

Posted on May 15, 2011 by john

Dear Friends,

It seems to me that calls for class warfare, snake oil that is still peddled even today, are like the old joke about the anus, but turned around a bit. The parts of the body get together and are talking and someone brings up how lazy the anus is. Another jokes about the smell. Then another chimes in that the anus has no discernable purpose only to exploit the working parts to amass wealth.

So they begin griping more and more. Some body parts say that it isn’t right to pick on the poor old anus so. Others defend it by saying it must have some use. The pro anus parts are demoted while the anti anus parts are promoted. The entire body comes to a consensus. Get rid of the anus!

So they kick the anus off the body. The blood flow immediately is increased to the rest of the body. But the flow is not really fairly distributed. The parts begin to face off again. But now they seem to be tired. The head begins to swoon the belly begins to ache and the heart grows faint. Amid the fighting they don’t to notice until it’s too late.

The anus is gone but no one can fill it’s function. Soon the body collapses and cries in grief at it’s impending death. How could this have happened? But the body expires anyway. The lesson of this foolish parable is, just because people in power think a certain way, and they tend to promote those that agree with them, doesn’t make their group think any more reliable, than that of our hapless body and anus. Especially in a dancing landscape like an economy or society, as opposed to a mount Fuji landscape.

So when anti capitalists call for the elimination of the “rich” and back it up with real threats of violence they are really threatening all of us. Because the people they call “rich” are not really those that are rich in a real sense of the term. The people the anti capitalists want to tax away are entrepreneurs. People trying to become rich. There is a big difference. The true rich pay no income taxes. Look at GE or the Ford foundation. More to the point look at powerful families like the Vanderbilt’s or Rockefellers.

They don’t pay income taxes they pay capital gains taxes. Their income stream is from investments not income. The rich start their taxes at 15% not any foolish 35% like the Elite claim. That rate is for the entrepreneur. The guy who hires people, builds things, concepts or services, the guy who improves the lot of Mankind, the guy who changes luxury into necessity, is the guy who should be taxed to death.

But even if the Elite actually did go after, and eliminate the actual rich, (which they would never actually do), the result would be collapse. No good could come of it. But the magnitude of penalizing those that provide our jobs, not only penalizing them but maligning them is downright wrong. The detrimental effect on the overall material welfare of all people is diminished. Not just the entrepreneur.

We see some of the result of vilifying the entrepreneur today in the low employment participation rate. The low participation rate masks the true unemployment rate. But one of the underlying causes of the low participation rate… is that entrepreneurs are now being vilified. Remember “Joe the Plumber?” He was told if he started a business he would be forced to “spread the wealth around.” Is this the best way to encourage job growth? Is Joe the Plumber more or less likely to start a plumbing business if the government will seize his profits and redistribute them to those that produce only crime?

No matter how you or I think of our bosses, or the people that own the firm we work for, they provide us with real benefits. They may actually be anuses, but even the anus has a vital role to play, even if they stink.

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Doctrine of Self Interest Rightly Understood

Posted on May 12, 2011 by john

Dear Friends,

It seems to me that most individuals practice the doctrine of self interest rightly understood but all States do not. The doctrine of self interest rightly understood is simply that behavior that comports with the betterment of Mankind is in ones own self interest. Many firms follow this doctrine because it is a form of smart capitalism. But all States do not.

The doctrine of self interest rightly understood was coined by De Tocqueville to explain the difference in the American ethos and the perception of the American ethos in Europe. In Europe the traditions did, (and in many cases still do), reign supreme. Cultural views of reality color the way people see themselves and others.

In Europe the perception of the American ethos was that of egoism. Egoism differing from the “doctrine” by egoism’s disregard for the consequences of meeting one’s needs, or wants, immediately. The egoist regards his or her self interest as trumping that of the rest of the world. This results in the Egoists not getting their needs met later. But the egoist sees not fault of his own. As such, when egoists are barred from total self interest by societal mores they go into politics.

Most people practice the doctrine in most places around the world. The prosperity of a region is a rough determiner of the percent of the population that actually practice this doctrine. Demonstrably so. In Japan despite governmental policies that create incentives for oligarchal capitalism, and the natural disasters that are endemic to that region, they maintain their economy.

But State entities never do. They practice naked egoism. States must do this because of the nature of government. Governments, even tyrannies, are political entities, (as we have argued before), as such they have forces within them that extinguish any altruistic notion and bend them to serve the interests of the Elite. If that leads to keeping a large firm from encountering competition, then that is the path, if altruism can be turned for a country to steal the extrinsic resources of another country, in the name of aid, then that will be the path, but what ever a State does, it is only in the naked self interest of it‘s Elite. As such it is egoist in nature and in action.

Take for example the capture of Osama Bin Laden. The US government at some point in time, we will never really know, discovered that it’s “ally” was harboring the US’s most wanted man within the Pakistani citadel of power. In the very neighborhood of retired generals and within sight of a prestigious military academy.

The Pakistani government claims ignorance but are indignant that the US government killed Osama on their territory without notifying the Pakistani government. Yet if the Pakistani government is so ignorant of the local whereabouts of such a powerful man in the Al Qaeda organization… How “safe” are the nuclear bombs in Pakistan’s nuclear arsenal?

Or on the other hand, large elements of the Pakistani government knew of the whereabouts of Osama but withheld the information, in naked self interest. They Kept him close at hand to keep him under control and pointed to the tribal region as the most likely hiding place. In many ways mealy mouthed and duplicitous. But in prolonging, intentionally, the conflict that threatens to spill over into a theological world war is utterly stupid. Naked egoism.

The US is no better. In what universe did it make sense to go in a take out Osama when they should have captured him, water boarded him for more info, taken all the info they could from the “mansion,” make sure everyone, (especially Osama’s family), were safely out, and burn the place to the ground, to keep what we know secret. Then have several operations ready, to move as soon as the new intel came in, to continue in a blitzkrieg fashion. Knock them off balance and keep on them until they fall. It isn’t rocket science.

But instead the US government went about the operation in the most mealy mouthed way possible. Killing him in cold blood and lying about it for days. Changing the story smacks of criminality especially when the government had real time knowledge of what went on in the raid. Saying we won’t “spike the ball” then visiting Ground Zero… Lying about how the information was gleaned is traditional spy craft but lying for political reasons is despicable…

Egoism was on display for us all to see. As it is in Libya as well.

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Politics and the Nature of Government

Posted on May 9, 2011 by john

Dear Friends,

It seems to me that there are a lot of people who are ignorant of the fact that everything that happens in government is politics. Politics is the nature of government and all governments over all time have been afflicted thus. Human nature and the nature of power precludes any exception.

Take the example of Xerxes king of Persia. As related by Herodotus, Xerxes had no interest in attacking Greece. He was content to luxuriate in his palaces and party. But politics got in the way of his will. He had to invade Greece to save face in a political power match. So he did…

So if even a king with absolute power must bend to politics can it reasonably be argued that politics is not the warp and the woof of government? The be all and all of every government action is politics. But politics is not moral despite all the calls for morality in political rhetoric. Rhetoric that is as empty of human heartedness as a piranha swimming in the Amazon.

Politics is an animal that is at it’s nature a carnivore. Eating anything it can and pretending to express that which it has consumed. No more than the shark is the whale that it has taken a bite from, is politics moral, because it has chomped down on some aspect of morality for it’s own ends… Power.

Because power is why politics exists. Power over other human beings. As Thrasymachus said in Plato’s Republic, Most people only wish ‘not’ to be tyrannized, so they consider a system of ‘justice,’ to hold those that would abuse them at bay. But as we all know Thrasymachus didn’t have the best interests of humanity in mind, he had power politics as a valid end.

Adam Smith said that most people, (or maybe all people I forget), would prefer the labor of a slave to negotiating with a free man for his free labor. Because people like to have power over others. This is self evident through out history. This is what politics is, the extension of Man’s ability to have power over his fellow man. For no end, other than that power itself, and how it serve‘s his ego.

So given the nature of politics and the fundamental drives that make it work… why would people think it would be a good idea to distribute the goods of society by it? How could that ever work out well? What could possibly be a worse means of distributive justice?

History shows that usually when politics has been the primary means of determining who gets the goods of society, society as a whole, has stagnated and declined. Those few examples of societies that used merit as the primary means of distributive justice, quickly rose to eminence and declined as quickly in decadence, when they turned back to politics as the means of distributive justice.

Just like a LC circuit (inductive/capacitive). The system oscillates from one state to another with reasonably discernable amplitude and frequency given the known input values. Do societies rise and fall. All due to the pernicious reality that once a society has become “wealthy,” by local standards, it becomes decadent by changing it’s societal myth to include political distributive justice, then turns the incentives that the original societal myth created, they are perverted to become disincentives and that society collapses.

The larger the amplitude the larger the eventual fall (if the path is followed). Historically, when societies have become more and more decadent but retain sufficient military power, they conquer other states and plunder their wealth into their decadent system of political distributive justice. This can stave of the collapse but increases the amplitude. Another way to stave off the collapse, but it still increases the amplitude, is to borrow money from other states. Then plow that money into the corrupt politically driven system of distributive justice and call it “social justice“.

This is one of the biggest reasons there should not be a “World Government.” Such a government, primarily made up of tyrants, would quickly succumb to political mishandling the World’s economy, by implementing political distributive justice (or social justice), world wide. No economy or people would have their property and persons safe from the naked power of political justice. To our mutual detriment…

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At the Gestapo… We Deal in RESULTS!

Posted on May 5, 2011 by john

Dear Friends,

It seems to me, that the modern incarnation of welfare state capitalism, punishes virtue and rewards vice, (in all things and in all ways). Then those very people, who have created such a system of incentives and disincentives, whine and complain that there is so much corruption in the world… it is apparent that people need more government to solve the problems in society. Those new policies mesh with the old, rewarding corruption and punishing virtue, and continue the slide.

Any time government takes away, intentionally or unintentionally, the negative consequences of negative behavior, government encourages that negative behavior. People are people you and I we all respond to encouragement. But for government to take on the role of protecting people from the consequences of their behavior government also takes on the responsibility for future negative behavior and the consequences.

If we consider the whole of human society, as a great big complex entity, made up of individuals, diverse in many ways, interconnected and interdependent, but most of all… able to learn. Apply a negative incentive and some fraction of society will respond by engaging in more of that behavior or starting engaging in behavior that would otherwise seem out of the question. People will learn to engage in behavior that will be rewarded by the government.

As you continue to add negative incentives, in a hypothetical society, the negative behaviors multiply logarithmically. Individuals learn that the lack of self control gets rewarded by the State. Some see and learn by example and others are educated by the cultural medium, to lack self control, because the State will reward it.

But even welfare State capitalism requires someone who will work, to produce for the increasing many, who do not have the ability to engage in the market system. The results of government policies that reward negative behavior, (lack of self control), create people who, amazingly, have no self control. As such they are useless in the workplace. Where self control is the hallmark of a civilized man.

Because to maintain the productivity that allows so many to become unfit for labor, the market must grow productivity, at a rate that meets the needs of not only those that are still fit to engage in work, but for those that increasingly are unfit for work. With so many people unfit to interact in the market system, the apparent need for government programs that negate the consequences of negative behavior, grows exponentially.

Lets now consider government regulation that increasingly produces friction for the proper functioning of the market. This results in a slowing of market productivity. Slowing the growth of productivity, squeezes the resources in our hypothetical society, so that all of society comes into some form of low level conflict over the diminishing resources. This creates conditions that are ripe for stratification of a society. Similar to the stratification we see in the oligarchal capitalist societies in Latin America.

But wait a moment, government in a welfare State capitalist society, has the ability to borrow money, in the name of it’s citizens. Under this system even as government policies make more and more people unfit for work and slows productivity growth, through regulation, it can borrow money sufficient to mask the negative consequences of government’s negative behaviors.

Et cetera, et cetera…

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The Responsibility of the Media in a Liberal Society

Posted on May 1, 2011 by john

Dear Friends,

It seems to me that if there was a checkout person at a convenience store, who only checked out certain people, that person would loose his or her job. If there were a trash collector, who only worked the streets he liked, he would join the ranks of the unemployed, if there was a plumber who, when called in to fix pipes, only connected unimportant pipes leaving huge gushes of water when the water was turned back on, would not long be a plumber but we have a media that only reports that which serves it’s own agenda with hardly any consequences for it.

As the old saw goes, “If a dog bite a man that’s not news but if a man bites a dog… That’s news.” the media seem to have a new definition of what is news. One glaring example is the I.E.D. (Improvised Explosive Device) found on a Brownsville Texas highway overpass set with a timer on Easter Sunday. Now I would think this would come under the category of man bites dog, as in, a rare occurrence that people would find interesting, but apparently most of the US media filed it under the category of, dog bites man. If this is in fact the case then how many times does this happen and go unreported. Is it actually as common an occurrence as dog bites? Wouldn’t that in itself be news then?

Intentional misreporting on the reason energy prices are going up is another example. The energy sector is the most regulated sector of every economy around the World. Regulation by it’s very nature drives up costs of production and discovery. Most countries around the World actually enjoy State sponsored energy monopolies. We all know the built in efficiencies of monopoly and the saving to the public under them… sic. But the media blame the market mechanism that provides feedback from market conditions as a cause instead of the actual root of the price increase.

I find the steady stream of conspiracy theories on the unbiased media quite vexing. The most popular today is the theory that Tea party adherents are racists. The unbiased media claim that there is “coded” language, they (the evil people who want representation within their government), may not say it out loud, that can be recorded but you know they think it… the unbiased media has ridden that horse to death. To the point of animal cruelty but are at a full canter.

Other examples of the unbiased media’s conspiracy theories are, the unwinability of a given war, that more taxation could solve the spending problem in Washington, that the economic collapse of 2008 was due entirely to Wall street executives without even a nod that the people in charge might have had some culpability, the constant fiction that “green” energy can replace our need for carbon based energy any time soon (several laws of physics are confounding), anthropomorphic global warming (when there is much confounding evidence that any perceived warming is a solar system wide phenomenon not limited to Earth), and that “Democracy” (meaning liberty, equality, fraternity and toleration among the masses) can possibly exist without a functional market system as a prerequisite. These are actual conspiracy theories, they cannot be verified, they depend on innuendo, they impact our emotions instead of our reason and they promote a point of view that is anti capitalist.

Another example of the media not doing it’s job is in the Medicare and Medicaid debate. The budget shortfall is so close at hand that a good analogy is; ten people stranded in a cabin in the deep woods in winter. The food is limited. A few people count what is available and proclaim that there is enough if only people limit themselves everyone will make it to spring. But six of the ten refuse to limit themselves and gorge themselves everyday. When the food is gone and there are two more months to go, of subzero weather, the whole ten die of starvation, not just the foolish six of ten. This could be pointed out by the unbiased media but they are intent on changing the subject whenever this fact comes up.

As I have said before, most of the problems in societies can be traced to culture, often culture’s effects have been confused with capitalism’s, but it is culture that has the deciding vote in human affairs. Culture is controlled by the media, biased and unbiased. They set the stage for American thought, and thought in every nation and country on the planet. When we see a denigration of people’s attitudes, and less people practice, the doctrine of self interest rightly understood, then we only need blame the media and the Elite. They have led the people to the decadence we see around us. Yet the unbiased media vilifies seventy year olds setting in a lawn chair with an American flag duck taped to the seatback and laughing as they bounce their grand daughter on their knee, listening to a speech by a Constitutionalist as violent racist anti Americans who threaten everything we hold dear, while describing people chanting “Death to capitalism” burning police cars, gang raping passing women, smashing windows and painting vitriolic graffiti on everything they pass, as peaceful and democratic demonstrations, in the same vein as Martin Luther King. (A total slam of a truly great human being, a human hearted Man).

So I ask, are the media holding up their responsibilities… or not?

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Oligarchial Capitalism

Posted on April 28, 2011 by john

Dear Friends,

It seems to me that when government seeks to protect domestic industries with regulation, what government actually achieves, is oligarchal capitalism. Oligarchal capitalism is an example of what I call stupid capitalism, like all stupid capitalism, seeks to channel it‘s greed outside the normal market mechanism. It is where a few families or businesses, use their close connection with government, to protect themselves from competition, through the use of regulation.

Take for example Blockbuster. This company was a great company, they hired many people, they provided a needed service, better than any of their competitors and they earned a ton of money for their shareholders. Everything I like in a firm. But now they are on the ropes. Netflix and other new competitors are driving the movie rental business, Blockbuster’s core business, out of business.

This is resulting in Blockbuster’s demise and is an example of what Joseph Schumpeter called, “creative destruction.” The creation of a new business model destroys old business models. Blockbuster is the modern equivalent of a buggy whip maker. The product has been rendered outmoded by the advance of the Market’s dynamism.

Now consider this; What if the US government passed regulation protecting Blockbuster from competition? Blockbuster’s senior staff would argue that to do so would raise the wages in the country because with limited competition Blockbuster would raise wages for it’s employees. With the institution of regulations, protecting Blockbuster from any meaningful competition from domestic of foreign firms, Blockbuster would have a government granted monopoly and could charge monopoly prices… to increase the wages of it’s employees.

But Market dynamism would suffer. The material welfare of the people would suffer not only in the short term from lack of options in entertainment but in the long term the children will suffer from high unemployment, low wages, and a permanent underclass. Just as is in South America where oligarchal capitalism is rampant.

An example of how insidious oligarchal capitalism can be is when we look at General Electric. They made record profits but paid no income taxes at all. General Electric is in bed with the Obama administration and as such gets it’s back scratched as they scratch Obama’s. Regardless on your, or my, stance on corporate income taxes, this is treating different firms differently because of their politics. This type of government backed capitalism is a quick slide to oligarchal capitalism.

“But how can this be?” Someone might ask. “How can government protecting it’s industry be a bad thing?” To them I would say, Because the number and quality of jobs gets better with creative destruction and gets worse under “Apprehensive assistance,” that simply leads to oligarchal capitalism, it has spillover effects too.

Like making it harder to start any business, even ones that don’t actually compete with entrenched industry. Regulation is a wide brush, that when it is used, always drips where it wasn’t supposed to. That is the ever present danger of using regulation to control an economy. Regulation protecting one firm has a chilling effect on other small firms that only come under the regulation tangentially.

To me however, the most pernicious thing about oligarchal capitalism, is that it undermines the people’s faith in the market system to improve their material wants. It does this by stopping class mobility. The real danger to the Elite from an unfettered market system. Class mobility is the most hated effect of a free fair market system but without it society stagnates.

Some of the ways governments create a system of oligarchal capitalism is by, high fees for licensing, corrupt permitting, bribery by civil servants, allowing organized crime to shake down merchants, corrupt policing, holding the elite to a different standard than the people, as well as the main themes of this blog. Oligarchal capitalism is simply another way the Elite use to distribute the goods of society through political favor instead of ownership merit. All thoughtful lawmakers should beware of this evil that is an omnipresent threat to their economies…

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Free Will

Posted on April 24, 2011 by john

Happy Easter Everyone!

Dear Friends,

It seems to me that it is the clear desire of God that Mankind have free will. It is obvious that free will is a quality that God has endowed upon Mankind and is supported by not only scripture but nature and the phenomenon of civilization. As something endowed by God it must have a purpose.

Even in the Garden Adam and Eve were given free will to eat or not to eat of the fruit. God must have known they would eat of the fruit, and so it was his will that they eat of it, against his “say so” and of their own free will.

The State of Nature, as stated by philosophers for ages, is nothing but a state of unfettered free will. This absolute state of free will is also called chaos or anarchy. In a total state of free will it has been argued that this is analogous to a state of total warfare man against man.

But it is from this state of anarchy and chaos that emerges the phenomenon of civilization. Even though there is a Law of the universe (Chemistry), that states, “The universe tends towards entropy.” This means things tend to become less uniform over time not more. Civilization flies in the face of this fundamental law… As does Life.

From a state of chaos emerges civilization by a feedback loop that is inherent in free will. If a person seeks his or her own good, and that person has eaten of the tree of knowledge, then they have foresight and foreknowledge of causality. With this foreknowledge and knowledge of causality a rational self maximizer must acknowledge that civilization is preferable to anarchy.

It is when the feed back from action to consequences is broken does free will becomes problematic. Just as when government regulation seeks to eliminate the feed backs for prices through price controls and rent controls is the market distorted, when government mitigates, or especially when government eliminates, the negative consequences for negative behaviors does rational self maximization run afoul.

To say, for example, the “haves” should “help” the “havenots” is sophistry, because it is the job of the “havenots” to start businesses or get jobs and become the “haves,” In a free capitalist society. To make the “haves” support the “havenots” takes away both or their free wills. The “haves” free will is violated by taking their property and the “havenots” free will is violated by indefinitely prolonging their state of poverty through dependency.

In a total state of nature, before civilization emerges, individuals have as a primary example that the most corrupt get the best results. To lie when lying is acceptable is in one’s best interest. In a total state of nature the man or woman who is willing to be the most despicable gets a decided advantage. It is when self interested people realize this principle and band together freely, to suppress these qualities in all, that creates the conditions for civilization to emerge.

In a state of civilization however, when a legal system, ethos, moral norm, etc… is set up, or more likely evolves into such a system, one where the despicable have the upper hand, then chaos emerges from civilization. Societies that allow civil servants to take bribes or allow powerful politicians to lie under oath motivate people, freely, to become less civilized and left unchecked by self interested individuals, can lead to the emergence of anarchy from civilization.

Adam Smith said that people prefer to command another to do something rather than persuade a free man to acquiesce of his free will. This is more a problem of the Elite than of the people. It is a driving motivator to become one of the Elite. That is, to control people by coercion, instead of freely persuading them.

Anarchy however can be looked at like the melting of a metal. That is always the first step to forming something totally different from the metal. If a faction wanted to eliminate free will the furnace of chaos would be the first step to truly reorganize and fundamentally change our civilization. Too bad free will is a dog hair in the Elite’s mashed potatoes. But to the rest of use it is a gift from God to be cherished, protected and used for the betterment of all Mankind.

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