Economics (6) Good Capitalism & Bad

Good reasonning requires precise language. While capitalism seems (to me) to have been what has enabled almost all advancement by humans around the world, I still hear people attack it as if it were their bane. People learn much of their vocabulary by observing uses by other people, which works imperfectly. Thus, many expect that capitalism is about everything that goes wrong instead of it being about everything (both good and bad). (This kind of confusion occurs with great regularity: “socialism” is where government controls the means of production, regardless of the political ideology; this feature is almost as prevalent as capitalism: I have never met a person who has dealt with any government that was not in some way socialist.)

I offer here a attempt to clear up some of the confusion by suggesting that capitalism can be practiced in either of two forms: “proper capitalism” (good) and “criminal capitalism”. This dichotomy is not as clean and absolute as I would like. I offer here some common examples of criminal capitalism:

  • when your gangsters show up and force people to work in your factory or mine
  • when you load a contract with fine print that significantly affects the exchange
  • when you lie about significant aspects of the deal, like who owns what you are selling or what attributes the product actually has
  • when you use insider information to disadvantage your trading partners
  • when you loot and pollute the environment, aka. the commons that is really owned by all of society

I suggest a simple litmus test for proper capitalism: you must be able to envision how every participant in your deal(s) can profit, that is, the value realised by the participant at the completion of the deal is seen by the participant as greater than it was at the beginning. Fools will deny that this is possible because they believe that life is a zero-sum game. But capitalism has generated great wealth for all of society by exploiting the win-win scenarios.

The primary mechanism by which capitalism generates wealth is the “free market” where the defining freedom is the freedom to decline (to not participate, to walk away). In a free market, people participate only if they see a profit for themselves. A properly regulated free market, with support from the legal system, generates so much wealth over time for all the participants (and, oddly enough, even the onlookers) as to affect the courses of nations.

Politics (5) Machiavelli Ideals

A reliable source suggested I check out a thread of postings on web site by an author and scholar, starting with this on Ex Urbe.  As was predicted I was strongly ambivalent about it.  The series presents a view of Machiavelli as a person worthy of study, with sizable portion of praise.

Long ago, I abandonned any view of Machiavelli as real person.  I now see him as an ideal.  And I an easy enraged by people quoting “the end justifies the means”.  Most who use that line appear to have not the slightest inkling of what it means.  Maybe, the translator responsible for English version of his masterpiece distorted it, but I equate that phrase with the Biblical admonishment “You will know them by the fruits of their labours”.

As I understand it (and preach it), your objective in any course of action cannot of itself provide any moral justification for your actions.  As a learned, rational person (as might have learned from the master Machiavelli), you are to look to the historical record for an outcome or outcomes that match your objective.  If such an outcome exists, then clearly you are to use one or other of the methods that produced the desired outcome.  Absent that outcome being actually achieved at some point in history, then look to the outcomes that resulted from each method you consider to know which to avoid more strongly.  You have no justification for expecting a result that never happenned from the application of any method.

The ideal Machiavelli was a champion of empiricism.  We study the master in his ideal form that we may become more like that ideal.  The evidence of history is always more compelling than any model derived from it.  Models (mathematical, algorithmic, narrative, analogue, etc.) that do not match historic outcomes are trash, while the great ones go beyond matching to accurately predicting outcomes.  Such models are the sources of human power.


Politics (4) Political Correctness

In the lead-up to the climax of the 2016 US general election (for the president et al.), I heard far too much about the issue of ‘political correctness’ (PC) and especially how it would no longer be needed if the right man won.  I have calmed down enough to be able express the absurdity of such claims.

The need for and practice of political correctness has been with us since before the recording of history.  It springs up as one of two possible methods for avoiding the rathe-full expressions coming from a community one is stuck in.  Communities do not tolerate the intolerable, regardless of it being innate (like hair color — try being a “ginger”) or being a mutable behavior.  The offending person must hide the offense.  In the case of immutable characteristics (such as skin color), the only recourse is to avoid being noticed (even to the extent of exile).  Beliefs and other behaviors, can be hidden by diligently guarding against words or actions that reveal what the community will not tolerate.  Or the person can effect a change of personality to not speak or act in a manner that offends.

Persons with intelligence and persons with education have a tiny advantage vis-à-vis the average person, and in modern societies the accumulation of these advantages result in such persons influencing the societal norms.  For example, science has produced overwhelming evidence that homosexuality is innate and not a “matter of choice”; thus, we are abandonning the practice of punishing homosexuality, as it serves no benefit to either the individuals or the community.  Science has contributed to better understanding of not just economics, human development, education, and law enforcement, every aspect of society, with commensurate reformulation of norms and practices.

Those persons who have loudly resumed offending decent people because they imagined that their candidate would ‘reset’ the societal norms, merely show how little they understand of reality.  While a significant leader can have much more influence than the average person, the weight of public opinion exceeds that of any individual.

Moreover, there are two basic patterns of response to authorities.  Some people accept truth as it comes from authoritative sources (authority begets truth), others of us judge the merits of the source by the truths it presents (truth begets authority).  We in the second group are slow to accept new leaders, and equally slow to accept change that is not supported by long collected truth.  Thus the swings affecting PC are not symmetric.  Tough!

Politics (3) Colorado Cash

It does really seem that Marijuana is a gateway drug, although not in the sense that that claim was initially made.  In fact, as far as self-medication and recreational pharmaceuticals trends and causalities are concerned, it seems that cannabis in all its forms is as much of a gateway to other substances as is bubble gum.  The serious abuse gateways seem to be tobacco and alcohol.

My current claim about the gateway-ness of cannabis is more of a claim about behaviour patterns, especially as influenced by ill-considerred laws.  This was blatantly true back in the ’60s and ’70s, as so many of my cohorts mistakenly assumed that government lies (and make no mistake there — they were lies) about substance abuse were uniform.  To correct for the gross misinformation, we took to wearing buttons that said “Speed Kills” so that we were all warned that amphetamines were really and truly dangerous.  This warning also helped to establish a framework that substances being abused coverred a wide spectrum — experience with one was not a reliable indicator of how another might affect users.

Since cannabis was illegal, to get some one had to trade with people who might also traffic in other dangerous substances.  Thus marijuana openned the traffic gateway to other substances.

Today, the US federal government continues to force cannabis to maintain its role as a traffic gateway to illegal businesses even though it is legal to grow, trade, and consume in Colorado.

I suggest that it is time for Colorado to double down on its innovative policies.  I propose the formation of the Money Transfer Agency (MTA) of the State of Colorado.  The MTA would be in many ways like a bank, while being different enough to operate outside the federal banking laws.  It would operate like this:

  • Every account of the MTA must be owned by a single legal entity (person or corporation) established in the state, and have one or more registerred controllers who must have had a background check done.
  • Any entity (with or without an account) may deposit any amount of cash to any account.
  • An account controller may electronically effect transfer of funds to any other account.
  • An account controller may personally withdraw cash from the account.
  • The MTA may use money held in trust to acquire any sufficiently liquid bonds or notes issued by governments or their agencies within the state.

This arrangement would permit the following:

  • Cannabis consumers can open accounts, and make regular deposits.
  • Consumers can transfer money to retailers.
  • Retailers can transfer money to satisfy tax and regulatory demands at any level within the state.
  • Retailers, growers, and processors can transfer money to their respective suppliers.
  • Brokers can set up operations to receive money transfers, make cash withdrawals, and make payments to entities outside the state.

Such a system would simultaneously enhance growth of legitimate businesses while reducing exposure to both theft of the money and illegal transfers of product out of state.

Meta Thinking (4) Conspiracies

Given human nature and all the people who have ever lived, it seems likely that there have been millions of conspiracies spread unevenly over time, with most of them happenning recently. This means that we cannot issue a blanket dismissal of every claim to have discoverred one, even though it also seems that the majority of such claims are bogus. Thus the scorecard seems litterred with high counts of both false positives (bogus discoveries) and false negatives (undetected conspiracies).

Examining an example may provide illumination. Consider the claim that the moon landing in 1969 was faked. So many of the claims are focussed on the video images and some notion that producing fake images was some how easier than the actual effort could have been. While it is lots of fun to poke holes in these claims, it seems to be only a distraction with no hope of helping the poor fools who peddle them.

A much more complete rebuttal comes from going back to first principles. A conspiracy, by its very nature, is about secrecy, and not just at the time of the event, but forever. Secrecy is so very hard to maintain, and every additional person involved makes it harder. The moon landing event involved tens of thousands of people, regardless of whether it was real or faked; not quite enough to dump the claim yet.

Where the claim completely falls apart is in examining the audience for the event. Yes, the millions of viewers play a role, but most of them are just insignificant viewers. To understand, we need to look at the motivation for both the read event, if it happenned, and the illusion, if we were to suppose it was faked. The ordinary viewers in front of a family TV in the USA are a big part of the numbers but only a tiny part of that motivation. The principle target of the show was the masses of people around the world involved in the political competition between the USA and the International Communists. The family viewers may be easily duped (and are regularly), but the science and engineering communities around the world are much more discerning.

In this analysis, the video is actually relatively unimportant. The crux of the situation is the source of the radio (TV is just a special format of radio) transmission. Radio direction finding is technology that was already well understood in the 1930s. The spheroid shape of the earth, together with witnesses scatterred around the globe, means that faking the transmission would be detected immediately; do not doubt that the USSR would have pointed out such a glaring contradiction if the transmission had not been from the moon.

In summary, lunar landing deniers expect us to accept that tens of thousands of people worked for the USA to produce a fake video (along with the appearance of a functional rocket) that depends on a robot lander to get to the moon intact and operational, carrying either the video or a radio relay, in order to persuade the rest of the world that the USA is superior to USSR, and to reject International Communism. It seems so much more likely that the USA would risk scores of astronaut lives doing the real thing.

Politics (2) Democracy

Democracy is such a misunderstood term. Almost nobody in the world has experienced true democracy and almost never on a large scale. Many of us live in countries that have implemented representative democracies, specifically republics. Yet such a small proportion of those who live in republics understand how republics work, specifically how voting works in a republic.

An Unrestricted Analyst could debunk many of the popular misconceptions about voting in a republic. One such misconception is that a vote reveals what is wanted by the voter.

  1. Anyone who has ever held a paper ballot knows that there is no where near enough space on it to hold a complete and unambiguous express of what is wanted.
  2. Anyone who has ever tried to express any requirement or specification knows that the space to present it is the least of the problems (issues of completeness and ambiguity are overwhelming).
  3. One does not have to scratch deeply into the study of decision making by organisations to find that a huge portion of influence is exerted by the framer of the question(s) (as are being asked on the ballot).
  4. If the answer to the question is other than “yes” or “no”, then there is no general algorithm for combining answers from multiple ballots into a single answer from the election, referendum, or plebiscite — as in there are multiple algorithms where few if any give the same result as another.

Given these easily observed limitations (and there are plenty more beyond them), it is hard to justify the view held by so many that they should be able to express what they want on the ballot. Given their failure to understand the tool they are using, it is not hard to see why so many voters are so angry that the results of elections never seem to reflect what they want.  And for too many, the misconceptions about ballots and democracy is but the tip of the iceberg that is the failure of their education.

Random thoughts (1)

While this blog started as an alternative to missives sent to a mailing list, it is likely to suck away my attention to farceBook.  This posting is a symptom of it.

The announcement of a report out of UPenn about the impact of reading the Harry Potter series on attitudes about Donald Trump triggerred a lot jumbled connections in my mind.  First are the questions about causality in the basic result, then were all the assorted issues about how people derive their votes (expressed opinions).

The report claims to show that reading the JK Rowlings works lessens the appeal (or strengthens the rejection) The Donald (DT).  I can see several different models that could align with those observations.  The simplest of them being that since each HP installment is larger than the one before it, the series constitutes a scale of serious reading (the more serious a reader the further into the series the reader will go), and serious readers are likely to reject DT.  Another model, discussed in other announcements, is that there are thematic similarities between DT and Voldemort, and readers are more likely to reject the real world counterpart of the fictitious bad guy.

My currently preferred model is a variant of the later.  In the narratives, all the people are struggling, to varying extents, to reconcile their emotional reactions against their logical analyses.  Harry’s team seems to have made their planning processes largely logical with emotional feedback to reflect the outcomes, while their opponent seem to have done the exact opposite.  I see the groups of people that back DT (and the Tea Party as well) as being more like the villain; actually, the model suggests 4 different categories of people where DT backers are either of those that do not base their planning on logic.

Politics: US VP First Thoughts

I just finished watching and listenning to this video made in Miami , coverring the introduction of Tim Kaine as the VP candidate of the Democratic Party.

Midway through his speech, I was got a feeling that only got stronger as he went on.  Initially, I saw his bodily image as ho-hum, and then his voice was so much less than I had wanted.  However, instead of being underwhelmed by those superficial traits, I found they had not gotten in the way of the intellectual content he sought to present.

More than that, even as I found message behind his presentation, I found layers of message behind his message, in varying degrees of goodness.  I am very unsure that I can do justice to those messages, but they proved strongly reassuring.  What seemed the most significant to me was the return to sanity and the business of politics.  Sure, both Tim & Hil mentioned the opposition, complete with negative adjectives and adverbs, but they were mostly telling a coherent story addressed to the kind of mainstream America that I grew up with, in a way that showed that they both knew how to actually “walk the walk”.  The selection of Tim seems to be a practical choice that shifts the Dems only a tiny bit to the right while suggesting that the team is likely to deliver plenty.  A team that does not waste effort on fanatical ideologic battles but finds whatever possible cooperation in the pursuit of shared values will always get more done.