Ian Welsh

The horizon is not so far as we can see, but as far as we can imagine

Category: Prosperity Book Page 1 of 2

How Our Everyday Life Creates Our Character and Our Destiny

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On October 19, 2017

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We are what we do. What we experience during our daily lives creates our habits, both of action and thought and those habitual actions and thoughts are our character. The character of men and women, and the shared character of a society is destiny. It determines how we respond to what happens, it is as close to fate as exists in a world awash in choice, where we make the choices we are expected to.

The defining characteristic of growing up in the modern world is school. In school, we are taught to sit still, speak only when we are allowed to by an authority figure, and do meaningless work that is not suited to us. For the bright kids, school is stultifying. They sit there, bored out of their skulls by how slowly the class proceeds. For the active child, school is stultifyingly boring because they are told to sit on their butt for most of the day, when they’d rather be doing something physical. For the creative child (which is all children, till they have it schooled out of them), school is, yes, stultifyingly boring, as it is all doing what someone else tells  you to.

Outside of class, school is about nasty peer pressure and fitting in. Even if you aren’t a loser or a loner, even if you belong to a clique, you quickly understand what happens to someone who doesn’t fit in, who doesn’t do whatever it takes to belong to an in-group. Our society is rife with comments about how something is “high school all over again,” and we don’t mean anything good by that, we mean a horrible game of cool kids and jocks and geeks and fitting in or getting ostracized at best, or possibly beaten down, or worse for the truly unlucky.

By the time we get out of school, most of us have been trained to do what authority figures tell us, had the creativity taken out of us, lost all real intellectual curiosity (because intellectual pursuits are associated with the horrors of school), learned that nothing is more important than fitting in and that popularity matters more than virtually everything else. We have come to accept that we don’t make choices except those on offer to us: “You may write an essay from the following list of topics/you may select from the following list of electives.”

Our adult life is little different. We have some more choices, but most of us will work for someone else, and that someone else will tell us what to do, how do it, where to do it (at their workplace), and when to do it. Our consumer existence, in which we appear to have choices, mostly involves choices between Brands X,Y, and Z, and the choice between brands is almost always completely minor: The differences are not substantial. More importantly, again, we choose from choices offered us, we do not create our own choices.

This issue has arisen since most people have entered formal schooling as children and since people have moved into wage labor. Before the late 19th century, you did not see this type of conditioning (though they had their types) in the majority of the population. Mandatory regimented schooling, and wage labor, in which we do not decide what we do with our time, has made things very different from the previous society.

One of my uncles lived in, let’s call it, the pre-industrialization lifestyle. He was a farmer and a fisherman (and hunted on the side, for food for his plate). He had huge lists of work to do, but he chose when to do it and how to do it. He controlled his own life. This is how free farmers and artisans used to live. In the day-to-day detail of their lives, believe it or not, even many peasants had more freedom than most industrial and post-industrial workers do.

This has grown worse over the last three decades.

Free play time, as a child, was when we used to have choice. As a child, outside of school, I had to be home for meals and bedtime, otherwise I was my own boy. I had very few toys, and I and my friends made our games of make-believe. I created the rules to my own games, made my own pieces, and played them. I ran wild through the neighbourhood, living a hundred different imaginary lives from books and movies, but also ones I made up myself. My parents did not try to control the details of my life beyond making sure I got to school and got fed, so long as I didn’t cause (too much) trouble.

Oh, it was still a regimented life, but it was a much less regimented life than today’s helicopter children experience. The conformity of that late industrial society, oddly, was less than the conformity pushed on children for the last couple decades by their own parents.

The workforce has in some respects also become worse. The sort of micro-control that is commonplace in Amazon warehouses, with a supervisor electronically watching you every second, was almost impossible in the past. The sort of micro-measurement of productivity was also impossible in most jobs, though certainly, assembly lines were hell. In most jobs, your boss had to give you the work and check in later to see if it was done and how well. As long as it got done, you were fine.

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Again, to be sure, there were micro-supervised jobs even then, but technology has made it possible to micro-supervise the sort of work which simply could not be supervised then.

And when you left work, there were no cell phones, no pagers, no laptops. For the vast majority of workers, once they left work, work was done for the day. They were not, for all intents and purposes, on call 24-7.

High surveillance societies produce conformity, because we are what we do. What we do forms our habits, our habits form our character. If you are constantly under your boss’s thumb, you learn to act reflexively in ways that will satisfy your boss. Of course, we all rebel where we can, but the margins for rebellion are growing smaller and smaller.

We have created a society where people live regimented lives, doing what they are told, choosing from choices given to them, learning that nothing matters more than popularity, and constantly under supervision or at the beck and call of their teachers, bosses, and other lords and masters (including their parents; sorry parents).

This is not a society that makes people happy. There is good reason to believe (Diener) that rates of depression are about ten times higher than they were one hundred years ago. But more to the point, it is a society that creates people with the type of character that does not produce better futures, because they are conditioned to choose only from what is offered them, to sit down, shut up, and do what they are told, and to play popularity games. If you don’t, well, no good job for you, or no job at all, and in this society having very little money is very unpleasant. We do not think up our own options, create our own politics, choose options outside of the limited ones offered by our lords and masters.

We have been created this way, conditioned this way, trained this way, by the everyday experience of our lives, starting from a very young age. To be sure, this is far from the only reason our societies are dysfunctional and careening from disaster to disaster; there are very real material constraints on what people can do in this society, largely through control of who is given money and credit, but it is a major reason for our problems. We have been shaped into people our lords and masters sincerely hope are not fitted to freedom, not able to make choices outside what they offer, not able to challenge them effectively, and well suited to the trivial jobs they want us to perform, mostly by fighting over which billionaire is the richest.

If you want a free people, you must free your minds, but free minds come from the exercise of practical everyday freedom.

Originally Published November 11, 2013.

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Free Trade Is Elites Betraying Their Own Populations

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On October 5, 2015

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The odd thing about free trade is that it is both meaningless and vastly important. Comparative advantage, which is supposed to be a straight win for both trading partners, is a rounding error even when it works–if you don’t have full employment; it’s essentially meaningless. However, the ways in which free trade (and the free capital flows that are part of what we call “free” trade) is used to systematically undercut wages and working conditions and destroy environmental safeguards, make trade, as we practice it, vastly important.

(In light of the Trans-Pacific Partnership Trade Deal, I have put this back to the top–originally published Nov. 23, 2013.)

The classic case for trade is comparative advantage: You do what you’re best at, I do what I’m best at, we trade, and we both wind up with more stuff. The math on this is impeccable, but it works in the real world only under very specific conditions. The most important part is this: If I have the extra resources (both material and labor), I’m better off producing the goods myself, rather than trading with you–even if my production methods are less efficient than yours. I’ll still wind up with more stuff. In short, if I don’t have full employment, then free trade is a rounding error.

This is related to Ricardo’s Caveat, where the economist noted that, in his time, capital was not mobile. If it was not being used to do one thing in Britain or France, it would be redeployed to do something else in its own country. It would not be used to create  jobs in another country. In our system, with mobile capital, there is no reason to employ either capital or people in the country of origin if higher profits can be made elsewhere. In this case, free trade can lead to an actual loss of jobs.

One standard argument made for free trade is that it produces cheaper consumer goods, and that makes people in a country better off, even if jobs are being off-shored. This  is only marginally true. Most of the reduced cost of foreign goods is taken as profits, not passed on to consumers. The loss of jobs means that some people lose outright and completely: those who can’t find jobs or can only find low-paying, service jobs. But even those who keep their jobs are disadvantaged if trade means the labor market is not tight, because if the labor market is not tight, labor has no pricing power and gets almost no raises (this is why there have been no significant median wage raises since the mid-70s or so.)

The renunciation of tariffs and trade controls is a form of betrayal by in-country elites who have capital to deploy outside the country against everyone else in the country. If a foreign country has lower wages, worse environmental standards, horribly unsafe or coerced labor conditions, this is a comparative advantage. It is a comparative advantage even within countries, mind you.

If I pay less, or I work my workers like dogs, or I dump effluent into rivers, or I don’t bother to pay for fire escapes and sprinklers, I have an advantage over anyone who does these things. The standard solution to this is to legally mandate that I must pay a decent wage, not dump effluent, and pay for a safe work space. If everyone is forced to do so, no one is at a disadvantage.

This can only be done if there is a legal mandate over a territory and an enforcement mechanism. That means, usually, it can only be done within a single country.

Anyone outside the country can betray and can do any of these noxious things which increase their productivity at the cost of the environment or the people.

The standard response to this is to say: “Sure, you can do that, but if you do, we’ll just add it to the price of any goods you sell to us.”

Free trade agreements take the ability to do that off the table and force roundabout methods (like currency manipulation) which don’t work as well and instead of earning a government income, cost the government money. Alternatively, though it costs money, one can subsidize one’s own industry, but most free trade agreements make that illegal as well.

Free trade is harmful to the economy of nations. It is also not necessary for industrialization–rather, the reverse is true. Every nation larger than a city-state, other than Russia, has industrialized behind trade barriers of some kind and that includes the United States, Japan, Britain, and China. (There is an argument that mercantilism requires one party to have trade barriers and another party to have no barriers. However, a country with full employment can allow free trade for things it doesn’t produce itself, thus allowing foreign mercantilism.)

As long as the capital of a country is deployed within that country and the country has some access to markets, protected trade works. Sub-Saharan African countries had higher GDP growth in the 50s and 60s, under managed trade, than they did when their markets were forced open.

Often, the practical effect of free trade and free capital flows is to allow foreigners to buy out large parts of a nation’s economy, as when NAFTA was used to buy out Mexico’s major food producers. Foreign goods from other countries flood into whatever country is forced to, or agrees to, open its borders, destroying the local economy. This is most dangerous when food is involved. In Mexico, millions of farmers were forced off the land because of US subsidized agricultural products, post-NAFTA. African and Latin American countries forced their own farmers off the land so they could agglomerate agricultural land for cash crops, leading to food insufficiency, and because everyone was selling the same cash crops, they didn’t even get very much hard currency for it.

Once your country can’t feed itself, you are at the complete mercy of other countries and you have lost significant sovereignty–especially if you don’t generate sufficient hard currency to pay those who are selling you food (see Greece or Egypt).

Internal elites are often happy to sign destructive trade agreements because they win, even if their country loses. They get to skim off money from the loans, they are the ones who run the cash-crop farms, they are the ones who are able to sell whatever it is that foreigners want to buy, in exchange for hard currency.

If you want a country that’s self-sufficient and which is also heading towards economic prosperity, you must have elites and a population which do not want foreign luxuries, or who are at least willing to forgo them. When Korea was modernizing, foreign cigarettes, for example, were demonized. Every bit of foreign exchange was used not for luxuries, but to buy capital goods which could be bought only with hard currency. If your elites want a Mercedes-Benz, a vacation on the Riviera, a flat in London, to see shows on Broadway–if they want things which can only be bought in hard currency, they will sell you out and you will not industrialize or modernize. The tastes of the elites and the population must be for whatever your country produces or whatever can be bought in your currency from partners with whom you do not have a significant trade deficit.

None of this is to say that trade is always bad, it is important and necessary. But trade must always be managed. Just as you don’t want resource prices to increase your currency to the point where your manufactured products are uncompetitive (thus destroying your manufacturing base), you don’t want trade to destroy your sufficiency in food or to lock you into a low tier of production forever. Comparative advantage screams, “Do what you’re good at,” but if what you’re good at is growing soybeans, you may not want to do that for eternity. You may want to do what you’re not good at and get better at it. If Korea or Japan had taken Western economists’ advice, as Ha-Joon Chang has pointed out, they’d still be growing silk and rice, which is where they had an advantage, instead of making some of the best cars in the world, which is where the US had a comparative advantage.

No country can do everything and every country will need to trade for the resources it cannot obtain otherwise, but trade should be rationally managed so that a country has a manufacturing sector and enough self-sufficiency that it doesn’t absolutely require another country’s goods, if that can at all be avoided. (It can’t always, we don’t all have oil.) At the very least, a country should be as close to able to feed itself as possible, something which was long understood by statesmen as an absolute priority.

Internally, free trade is used to create betrayals. Trade deals do not allow environmental protections, do not allow high wages, and do not allow fair treatment of workers. Otherwise, you aren’t competitive and the usual remedies, like tariffs and subsidies, are not allowed by those same trade deals. This allows oligarchs in every country involved in the deal to put downward pressure on wages, regulations, benefits, and even standards of humane treatment, in the name of “competitiveness.”

A wise society, including a global society, takes certain types of behavior “off the table,” by just forbidding them. Absent that, they make it so that those who do such things are not rewarded. Fail to do either of these things and you find yourself in a race to the bottom.

Note, again, that this is in oligarchs’ best interest EVEN if their country loses. Greek oligarchs, post-crash, are doing just fine. African potentates walk away with multi-million dollar bank accounts even as their own citizens starve to death. Business owners want to push down wages and costs, no matter where they are. This devastates countries and even the citizenry of many of the winning countries (like the US), but it benefits the few a great deal in relative terms. They’d be better off, as a class, in absolute terms if they took this behaviour off the table, but they wouldn’t be as rich relative to everyone else, or as powerful, and they value that relative wealth and power more than absolute wealth and power. It isn’t enough that they win, their own populations must be poor and weak, too.

Free trade is a bad idea. Free capital flows are a worse idea. Managed trade is a good idea and slow capital flows are a better idea (there is no evidence that foreign capital develops countries, as an aside, see Ha-Joon Chang on that).

Free trade, as we practice it, is about our country’s elites betraying their own populations.

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Extinction or Whole World Totalitarianism Events

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On January 4, 2015

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It’s time to talk technology, and the catastrophic futures it makes possible—and how to avoid them.  This isn’t just about climate change, which, if it goes really wrong, could wipe out humanity (if, for example, the oxygen cycle gets screwed up: entirely possible.)  It is about a wild variety of technologies, from ubiquitous surveillance to genetic engineering, to nanotechnology.  It is not hard to forsee the possibility of creating a totalitarian state in which revolt is impossible.  The new neuroscience, which is becoming more and more reliable at telling when people are lying and seeing decision points before we are consciously aware of them, combined with implants and surveillance, makes it possible to envision a society in which revolt not only couldn’t succeed, it couldn’t even be thought about, or not for long enough to do anything about it.

(Kicked back to the top as it’s important and timely given the work that I will be doing over the next few months.)

Likewise, the Galts may one day decide, with improved methods of production, that 99% of humanity is superfluous to requirements, and get rid of the useless eaters.

We can also imagine a world of tailored humans: through genetic engineering, nanotech, cybertech and so on, in which some people are really are so superior to the rest of humanity that the mass are ants.  We forget that in much of history it was so.  The old Punch comics, with the small, twisted, deformed poor people were not caricature, that’s what people who worked hard and had inadequate nutrition all their lives looked like.  They were weaker, stupider and uglier than the nobility.   This wasn’t innate, but it was real.  The nobility saw themselves as better than their inferiors because they were.

That superiority was environmental, but if we decide to ration transhuman technologies based on who can pay, well, it will be more than environmental, especially after multiple generation of artificial selection.

All of these technologies  are vastly dangerous, and all of them suggest the possibility of the creation of catastrophic end states: the complete end of humanity, the creation of totalitarian states, the creation of a new untouchable aristocracy; surveillance societies in which the very possibility of even mental privacy does not exist.

We could turn away from them; we could reject them.  Those who say that is impossible are wrong.  A world state could probably pull it off, in the same way that the Tokugawa Shogunate was able to control key technologies for centuries; a system which ended only because it was upset from the outside.  Absent the possibility of an outside shock, a world state could run for a very long time.

But these technologies also offer the ability to create radically better ways of living: truly affluent societies with what amount to replicators; humans who suffer far less from pain, disease and mental infirmity; an end to aging; and wondrous possibilities for creation of artifacts and life forms we can’t even imagine today.  There are those who feel that anything “unnatural” is to be avoided: I say that the historical and pre-historical record is one of mass rape, mass murder and mass extinctions, of violence and cruelty and want.  I am not willing to put aside transhuman technologies from fear, because the human condition is suffering and fear, and I want that to end.

So we come to points of failure.  While we all live on Earth, to these technologies, we are one society, no matter what our apparent divisions.  We are going to move towards something much closer to world government in the next century, not because we want to, but because without it we are not going to be able to mitigate and reverse climate change, and if we don’t do that, well, we could have an extinction event.  No individual country can manage  the earth’s ecosphere, there will be international organizations capable of using force to ensure compliance, or we will lose billions of people.

Earth is a bad place to experiment.  Changes spread too easily, too uncontrollably.  Nanotech in the wild, genetic changes on a mass scale, neuro-monitoring technology, and so on, cannot be contained to one society, one geographic region, not least because if one group does obtain a decisive advantage they WILL use it to subjugate others.

This is why I support, and have long supported, getting off the rock: spaceflight, and colonization.  Get out into space, into the Oort cloud: learn how to live not just on other planets but in space itself, and we can experiment to our heart’s content, separated from each other by the vast gulfs of vacuum.  If one society goes bad, it doesn’t have to take everyone else down with it.  Add (ideally) a caveat that societies can run themselves as they want, but can’t prevent emigration (they can prevent immigration) and you have a model which no longer has a single point of failure, has a frontier for the discontents to go to, and allows us to experiment with radical changes to who and what we are.

There are two tasks for the next cycle, the next ideological and technological age.  The first is to stabilize the earth, and provide a good living to everyone without destroying the ecosphere.  The second is to create workable space colonization so that humanity is no longer vulnerable to having a single point of failure, and can experiment to find the full possibilities of our new sciences and technologies, fully knowing that many of those societies will go bad, in horrible ways, but hoping that some of them will create radically better ways of living and of being human.

Perhaps we could do all this on Earth, but if we blow it the consequences are too high.  And anyone who has read or lived history knows that eventually we WILL blow it.  Run Earth, the storehouse of virtually all life, conservatively, let the experimentation take place of off-world.

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Matters of Character

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On June 19, 2014

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Over the past year I’ve written a large number of pieces on ideology, and quite a few have been about character: how it is created by experience, and how specific types of character (like sociopathy) are selected for amongst our leadership classes.

Let’s parse this out:

1) Character (personality), determines how people act.

2) While part of character is clearly genetic, much of it forms out of our experiences. Different experiences create different types of character. As a simple thought exercise, you would be a very different person if you had been born five hundred years ago in, say, Central Africa, than you are today.

3) As children, our primary experience is of school. We are a very schooled society, with the upper classes starting school at age 5 or so, and continuing into their mid twenties. Twenty years of schooling is not uncommon.  Fifteen to sixteen is completely normal.

4) This schooling takes place when we are forming much of our character, when we are most susceptible to having our character changed.

5) In addition to this, we are influenced by media of various kinds (including books), our parents, and our peer group.

6) Different time periods form different characters, as do different nations, because people born in those times and places have different experiences. The more synchronized events are, as Newberry has noted, the stronger this is.  In a mass media society, with relatively fast technological and social change, it makes sense to speak of generations. The character of people born 20 or 30 years apart in modern societies will be different, and within cohorts similar experiences will tend to create somewhat similar patterns of character.

7) Society is nothing except people and their creations and interactions over time. Walk around an old neighbourhood one day, and look at the buildings, the road, the trees and think about all the people who made everything you see, and all the people behind those people. Read the laws, and know that people made those, and enforce those.

8 ) Because society is just people, past and present, the nature of society is formed by our character.

9) If we want a different society, we must deal with matters of character.

10) Because we should be leery of engaging in eugenics, for reasons which should be obvious, changing society involves changing character through changing our lived experiences.

11) Everyone’s character matters, but some people’s character matters more than others. The more power someone has, whether that power comes from political position, charisma, force, or money, the more their character matters.

12) Leaders inform the character of people. People tend to act up, or down, to their leadership.

13) Money is permission. The more money you have, the more you get to decide what other people do. This can be directly through hiring them, or indirectly by buying the products of other people’s time. As the market society has spread to more and more of our lives, what we do is what gets paid for.

14) Who we give money to, and be clear that what banks, government and financial institutions do is decide who gets money, and what they get to spend it on, determines much of the lived experience of adults, and indeed of children outside school, and with the rise of for-profit schooling, inside school.

15) Money positions are of three main types. Elected (taxes); officers (CEOs and so on who control a lot of money that isn’t theirs); actually rich (the money is their own).

16) In all three cases who gets that money is a social choice. Billionaires are a social choice, created by government policy including tax policy, and the entire structure of how profits are booked. Multi-millionaire CEOs are a social choice, created by tax and other laws as well as social norms. And politicians are a social choice, especially in a democracy, but even in autocracies, though in such societies few people’s active and passive consent is needed.

17) If we select for positions of power, whether monetary, political, or charismatic, people whose character is such that they do not insist on good outcomes for the majority of people, then those outcomes will occur only by chance, if the happenstance of technology and environment aligns in what amounts to random fashion. Having not been planned, having not been understood, any such prosperity and freedom will not last.

18) If society is just us, and is a matter of our character combined with environment and technology, then we must consciously choose what we want our character to be. If we look at how we raise children and see that it is not creating the sort of people required for a happy, free, healthy, and prosperous society, then we need to change how we rear children. This is a social decision, not an individual one: we can choose a different type of learning (not necessarily schooling), we can choose a different type of media, we can choose to encourage different types of parenting (parenting styles have changed massively over the last 100 years, more than once).

19) We can also change how we select our leaders, both political and economic, to whom we give money, and for what purpose. We already do: Who makes money is a social choice, embedded in our tax code, laws (like “IP”), and monetary system. We can make other choices and create a system where people make money because they do good, not because they do evil (see “bankers”).

20) We can change our adult experience of the world, and when we change how goods and services are distributed (note that I did not use the word “money”), we will change our experience of the world, and in so doing we will change our character.

21) We can do so even if our current character is flawed. The politicians who ended Jim Crow were themselves mostly racists. They were racists who knew that racism was wrong. It is possible to look at one’s own character and know that it is simply a product of experience: to say “I am racist and sexist but I still know that is wrong.” It is possible to be involved in corruption (Kennedy Sr., the first SEC chairman) and decide to help clean it up, to end it. It is possible to have all the accoutrements of privilege (FDR) and turn around and change society mostly for the better.

We are all products of our time and place. We are all products of our parents and our experiences; millions of small events which shaped our character, for good, for ill, for kicks.

All of us (except maybe a few enlightened sages).

The full realization of how shaped we are is one of the watersheds of any voyage worth having. If you cannot look at yourself, and see how shaped you were, then you are trapped by those experiences, an even more limited and finite being than  you need to be.

Once, however, you see the shaping, feel it, know it, and acknowledge it, then you are not free, but you have the potential to be more free, to change what you are and who you are, both individually, and as a group.

Character matters. It is destiny. Change your character, change your destiny. Change the character of nations; change their destiny.

Change the character of humanity; change our destiny.

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Why a Book On Economic Prosperity is still needed

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On June 2, 2014

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A number of books have been written what makes societies rich over the centuries, and a fair number of them recently. It’s not a topic which hasn’t drawn plenty of attention.

So why write another one?

Most recent books on prosperity tend to focus on one or a few factors.  If people have clear legal title to their property there will be prosperity.  If people are free to make enforceable contracts of their choice, there will be prosperity.  If we print money and use it to give everyone a job, there will be prosperity.  If most of the population shares in economic gains, there will be prosperity. If we tax the rich and spread the money around, there will be prosperity.

It’s not that simple.  That’s not to say these answers aren’t necessarily correct, it’s that they are massively incomplete.  Freedom to make enforceable contracts will not make a society prosperous absent many other conditions.  Having everyone share in economic gains is almost half the answer: but it’s both an end and a condition—to get to a society where everyone shares requires a multitude of political, social, educational and economic conditions.  Taxing the hell out of the rich is one very important thing to do, but it’s not enough by itself, and the question isn’t just should we tax the rich, but under what conditions will a society tax the rich, under what conditions won’t it, and how do we get the first state and avoid the second?

Non fiction books today, as a rule, are either over-long magazine articles: topics which should have been a 10,000 word essay; or they are very long missives intended to prove an obvious point in the face of massive ideological pressure to keep it in doubt.

The first category can usually be recognized by the magazine style writing, “Ian was a curly haired man with a ruddy complexion and a sardonic smile.”

In the second category are books like the Spirit Level, which proves that inequality is bad, even if poor people have more stuff than rich people used to have is some historical period; and Piketty’s Capital, which proves that if returns on money (Piketty’s capital is just money in its various forms) are higher than income gains for the majority, the rich will get richer.  (Um, yes.  If car A goes faster than Car B it will pull ahead).  The book doesn’t even adequately deal with the fact that most of the new rich are rich because of positional advantage: they made their money off salaries and bonuses; nor does it deal adequately with the fact that the returns on money being so high is a deliberate legislative, executive and judicial choice backed by central bank policy to make it so no matter how much money they had to invest.

The result of these trends in books is that there is no recent book on prosperity which deals with anywhere near the complete range of issues:

  • what human nature is like and how it can be and is deliberately shaped in character;
  • political coalitions;
  • how private and public decision makers are selected;
  • how policies create the people and power necessary for their continuation or fail to do so;
  • what the effect of generational change on character and thus politics and policy is;
  • what human nature is like and how it can be and is deliberately shaped into character;
  • how oligopolies and monopolies form and endure; how technology changes the shape of possible economies;
  • how violence is related to politics and economics, both within countries and in the global economy;
  • what money actually does;
  • how permission is given to do new things in an economy;
  • the actual physical constraints on prosperity and their relation to character, environment and technology;
  • how very different economies have been in the past; how goods are actually distributed and how they could be distributed differently;
  • the circumstances under which trade increases or decreases prosperity;
  • Bottlenecks on growth, sinks and renewable resources;
  • the circumstances under which we can just give people resources allowing them to create myriad of new livelihoods, products and services;
  • how ideologies are created, maintained, changed and destroyed and their real world effects on policy;
  • a whole slew of practical power considerations,

and far more.

The problem most people have is that they have relatively incomplete alternative worldview.  There is no single, relatively recent book, which will give you one.  To have one you must create it.  Most people will not read the thousands of books of necessary to winnow out the hundreds that deal with one or two of the issues above and deal with them in a useful way which can be made part of a coherent whole.  They don’t have the inclination, time or character, nor should most of them be expected to: they live different lives.

Without such a coherent worldview, presented in a relatively small book, most people will pick up bits and pieces here and there and plug it into the prevailing ideological worldview: in our case, neo-liberal capitalism; or they will fall back on an older ideology like Marxism; some form of anarchism substantially created 80 years ago or longer; some right wing variant on fascist thought; or one of the many hybrid forms of capitalist thought.

I don’t think any of those ideologies have a coherent world-view which can be made to work today, though that’s not to say that almost all of them don’t have something useful in them which we can learn from.

The only other approach which could work in theory is the extremely high level provision of principles.  “Do unto others as you would have them do unto you.”  “Do as though will, so thou hurt none” (a far harder proposition than most people realize.)  I have suggested that if we simply do the kind thing, the vast majority of the time it will be the right thing, and we can afford the remaining times: it will produce far more correct policies than our current ideological regime, or indeed any of the ideological regimes in power anywhere in the world today.

But such proscriptions require a way to create and choose leaders who have the wisdom and character to follow them, and a people who will select those leaders.  So you come back to “how do we get those leaders?”  Most people do not have faith in goodness or kindness: they don’t actually believe that being benevolent works.  For such people you have to, in essence, prove that it does work: you have to show the cases; and you have to do in a pragmatic and hard-headed way, acknowledging the times when coercion, force and violence will be required: those times are few, but they do exist.

Our current system is not set up to provide such a book. Our academics are primarily specialists without the wide spread of learning required for it.  Our public intellectuals are selected primarily for obeisance to power, and cannot write such a radical volume.  And, I fear, by and large, most publishers are not interested in such a book: it does not fall into any of the neat categories they favor, and cannot be written by a member of the club.

Such a book also cannot be like Piketty’s book, it cannot prove every case in exhaustive detail: if it was, it would be between 25,000 50,000 pages and no one would actually read it.  But a small book will be easily criticized even if accurate.

Though more detailed that Machiavelli’s “The Prince”, the book must be similar in making its argument then moving on to the next point, because it must actually be read, and be read by many people.  The lack of detailed argument and exhaustive data is not entirely a flaw, however, for within all the holes such a book must have are entire lifetimes of work for more specialized academics and intellectuals and any ideology must create work for the ideological classes, or they will not adopt it.

This, then, is the book I’m trying to write.

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The Four Principles of Prosperity

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On January 28, 2014

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All economic theories are statements about what sort of people we are, or rather, what sort of people we should be. Economics has homo economicus, economic man, the rational utility maximizer who always acts in his or her own interest. We know that humans aren’t rational and we know that we don’t always do what is best for us, or even know what it is, but economics stands, nonetheless.

Economic man is prescriptive: it is about how we believe we should act. In ordinary terms a rational utility maximizer is a greedy, selfish bastard: a functional sociopath. They are concerned with other people’s well-being precisely and only to the extent that that affects their own. That we strive to realize this philosophy in our society is obvious from a perfunctory look at how we run our primary economic institutions: corporations. Our society insists and has put into law that corporations be concerned only with profit and nothing else(x). Our culture celebrates greed, we declare that “greed is good”. We believe that if everyone acts selfishly, for themselves, in freely agreed upon contracts, no matter how unequal the power of the people entering into them “freely”, that maximum well-being will result.

It took a great deal of intellectual labor to make being a greedy selfish bastard intellectually respectable:

To a survival machine, another survival machine (which is not its own child or another close relative) is part of its environment, like a rock or a river or a lump of food. It is something that gets in the way, or something that can be exploited. It differs from a rock or a river in one important respect: it is inclined to hit back. — Richard Dawkins, “The Selfish Gene”, pg 66 (30th ann. edition)

If any civilization is to survive, it is the morality of altruism that men have to reject.
— Ayn Rand(x)

Well first of all, tell me: Is there some society you know that doesn’t run on greed? You think Russia doesn’t run on greed? You think China doesn’t run on greed? What is greed? Of course, none of us are greedy, it’s only the other fellow who’s greedy. The world runs on individuals pursuing their separate interests. — Milton Friedman

And the theory has been put to the test. In Russia after the collapse of the Soviet Union western economists and development experts instituted it as shock therapy and the Russian population collapsed, the life span of Russians dropped, and happiness cratered for over a decade.(x) One of the harshest totalitarian states in history, and people were happier in it than what our free market apostles wrought.

Since the 70s or 80s, in most developed countries we have been slashing taxes, cutting social benefits, and extolling the benefits of free markets, by which we mean not free markets, but markets which the government does not work to keep either free or fair. The results are in: wages have stagnated, the rich have become the richest rich in world history, exceeding even those of the Gilded Age, and the developed world is in semi-permanent crisis, with Europe a shambles and America unable to produce good jobs and running record deficits. Food prices are soaring, energy prices are through the roof and the Middle East is in flames.

By their fruits you shall judge them and the idea that greedy people operating completely selfishly will lead to everyone being better off has produced its bitter harvest. This is not the first time it has done so. The famous economist of the Great Depression, John Maynard Keynes acidly quipped that “Capitalism is the extraordinary belief that the nastiest of men for the nastiest of motives will somehow work for the benefit of all. “*

The idea is absurd, and it has proved so in practice. The market, even the free market, properly understood, is powerful and prosperity requires it. But allowing unalloyed greed to be the principle that rules us, by which we run our societies, has proved disastrous, not just to our prosperity but to our liberty and to our democracy.

If we want more prosperous societies, which is to say, societies where affluence is widespread, we need to align our private morals and our public ethics. We cannot expect to exalt selfishness and greed and to always put ourselves and the few people we love first, second and last, and expect that miraculously, our worst of motives will lead to the best of results for people we don’t care about. We cannot put functional sociopaths in charge of our economic and political organizations and expect them to produce results which are good for anybody but themselves and the few people they need to keep happy in order to make themselves richer. We can’t expect widespread affluence when we tell ourselves that people are bastards who do, and should, look out only for themselves.

A society which creates widespread affluence must be based on four principles, and must elevate and honor people who embody those four principles.

Fairness. Everyone must be treated equally within the requirements of their needs. This does not mean being treated the same, a child with learning disabilities should not be treated the same as one who is gifted, but both should go to the same school system, and be treated no differently regardless of who their parents are or how much money they have. The wealthy and powerful must use the same institutions as the middle class and the poor for no system will work if it is not in the interests of the rich, powerful and influential that it does so.

Kindness. Instead of asking “What’s in it for me?”, we must ask that oldest of moral questions: “How would I want to be treated if I were them?” Kindness is not weakness, it is a refusal to allow yourself to become an evil person in response to evil. Finland, which treats its prisoners with kindness that astounds Americans, has ex-convicts who re-offend at half the rate of American prisoners(x). As justice must always be tempered with mercy, and mercy always tempered with justice, so kindness must be tempered with fairness. Being kind does not mean being a mark, it means giving people a chance, and treating them first with compassion.

Generosity. Greatness is not measured by what you have taken, by what you have hoarded, or by who dies with the most. It is measured by who has given the most and by who has made the most people’s lives better. The resources we have created are meant to be used; the more we share them, the more we make others’ lives better and the more they, in turn, can make our lives better. Happier, healthier, more affluent people are better for the economy and more fun besides. Economic cripples, unable to participate fully in society are in no one’s interest. Generosity, combined with the compassion which asks “what do they need?” helps everyone.

Future Oriented. The past gave birth to the present, which midwifes the future. The winners of the past, those who built the past, have their rewards in their time, but cannot be allowed to postpone the future till they can control it. Every society changes, or it dies. Every economic model must be modified in time. The old cannot insist that the world they grew up in is the world their grown children will live in.

These four principles can be embodied both by individuals and societies They are the characteristics of a generous dynamic society, in which everyone contributes, everyone cares and is cared for and everyone works to build the future. And they are not schizophrenic attributes: people can act this way in their individual lives. It is not required that people be kind and loving and generous to their family and friends, but ruthless and greedy in their business or political life.

We’ve given greed and selfishness a fair shot. More than a fair shot. More than a fair shot. We’ve destroyed uncounted lives and driven our own economies to the brink of disaster and then beyond. It is time to stop expecting that acting horribly will lead to good. It hasn’t worked and it won’t work. Instead it is time to try acting generously, kindly, and fairly. It is time to make sure that everyone shares in the wealth our societies are capable of creating. We should do this not just because the vast majority of us will do better, but because it is the right thing to do. It would be one thing if being bastards really did lead to the greater good and was a regrettable evil, but it isn’t. So, having exhausted every other option, perhaps it is time to, with a weary sigh, return to being good, to do unto our neighbors as they would have us do unto them.

It is time to be better people and to reap the rewards of doing so. It is time to correct those who prefer to be greedy, selfish bastards. It is time to return to affluence for all, rather than riches for a few. And it is time to end the rein of the greedy, selfish bastards.

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Living in a rich society

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On December 20, 2013

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We, in the West, live in scarcity economies.  The key bottleneck resources are scarce, and the decision has been made to keep them scarce.  Our entire economic policy from about 1979 can be summarized as follows: ordinary people cannot be allowed to have a real raise which translates into spending on oil.

When Bush screwed up the second part of that, and oil went to 150, it was one of the major causes of the financial collapse.

In a rich society, like the one we had in the 60s and 70s, big projects get completed.  The interstate freeway system; the moon shot; the huge build-out of the university system.  Artists and musicians sprout everywhere, good jobs exist in abundance, it’s not hard to make a living, so you can do what you want most of the rest of the time, and you can tell your Boss to go screw himself if he treats you badly.  (Even in the mid eighties, I could do this.  I knew I’d be employed the next day, and I had no special skills, NONE.)

When you live in a scarcity society, it’s almost impossible to receive permission to do anything real, and you have to put up with how your boss treats you, unless you have a very in-demand skillset, because the next job isn’t a sure thing.  Infrastructure isn’t maintained, new institutions aren’t built, and every old institution tries to create a rental stream (thus the huge increases in tuition and the huge decreases in grants.)  You can’t build high-speed rail, heck you can’t even maintain the freeways properly.  Bridges start collapsing, and so on.

(I am fundraising to determine how much I’ll write this year. If you value my writing, and want more of it, please consider donating.)

This isn’t just about resource shortages.  A resource shortage may start the sequence, but it is the deliberate refusal to deal with the resource shortage which turns it from a challenge into an era, which turns a rich society into a scarcity society.

When America and the West turned away from Carter (as flawed as he was) and turned towards Reagan (a disciple of Thatcher), they made a choice not to deal with the oil bottleneck except through scarcity rationing.  The deliberate policy of the 80s and 90s all centered around NAIRU – the non accelerating inflation rate of unemployment.  The idea was that if the unemployment rate was too tight, wages would increase, spiking inflation.  So unemployment had to be kept high enough so that inflation would not occur.  This is one form of inflation – so-called wage push inflation.

So whenever ordinary people started to get raises higher than the rate of inflation, the Fed would say “this rate of unemployment is lower than the NAIRU” and crush the economy and wages.

This is because wages went to doing things which increased oil prices, and Fed wanted oil prices crushed and inflation in general crushed.

The unemployment rate is, thus, not a measure of how many people are out of work, it is a measure of how close the labor market is to being tight enough to allow ordinary people to get a raise that is higher than the inflation rate.

There are a bunch of concomitants to this policy, too many to go into, but just note that is part and parcel of creating the richest rich the world has ever seen and creating asset bubbles.  Money can only be created IF it won’t do anything that really matters, because anything that matters will cause oil prices to spike.

(It is also for this reason that despite all the problems fracking causes, your Lords and Masters will despoil as much of the country as necessary to continue to do so, it’s another way around the oil bottleneck.)

Note that there were other choices: massive investment in renewable energy; massive investment in energy conservation; massive investment in public transit, and a move from the suburbs back to the cities, with walkable cities.  In the 90s the move should have been to telecommuting.  A national income which pays people not to drive to work every day, insistent carpooling and so on, could have mitigated this problem extremely.  Call the early parts of this the “super analog future that never happened.”

If you do all those things, though, the rich don’t get insanely rich, and the middle class doesn’t get to run away from black people to the suburbs.  Americans voted for suburbia and against black people (and don’t tell me otherwise, I remember Reagan’s campaign, and it was based on racism).  The people who made those votes, the Reagan Democrats, mostly won their bet: their house prices went up, they didn’t have to live near people with melanin, and they retired wealthy and went to live in the south, where brown people wiped their butts.

But the price of this was the end of the rich society.  The end of a society where you could tell your boss to go screw himself.  And it was the end of a society in which big projects were regularly undertaken.  Oil is wonderful energy: it is highly dense and easily transportable, and lets you do what you want, where you want. Using oil to make plastics, to enable suburbia, to be incredibly wasteful, meant that all the big things could no longer be done.

The concomitant of this policy was the creation of the super-rich, and that meant the destruction of real Western democracy, as country after country found its politicians more and more controlled by the rich.  The rich do not want change unless they control the change.  Any change that already rich people can’t figure out how to control and monetize is not allowed.  The state is turned into a machine for giving money and preferments to the already rich and powerful, its oversight role is hollowed out and its taxation ability is scuppered.

The great projects of the past, even when done by private enterprise, were underwritten by government.  Poor governments (and yes, despite the trillions, the US government is poor) cannot engage in these huge projects.

With money printing and low interest rate borrowing monopolized by the financial sector, and within the financial sector,  by a rather small number of institutions, and with demanded rates of return at least in the teens, most new businesses and projects were not, and are not, viable, in the sense that they will not be funded.  Can you compete with the returns of the housing market pre 2007 (leveraged) or the leveraged returns of the stock market in the past 30 years, a stock market backed up by the Bernanke and Greenspan Puts (the knowledge that if the market goes down, the government will step in to make sure it goes back up?)

You can’t.  So money floods to the highest returns, which are financial paper returns, bubbling way off the surface of the economy, and instead of building a high speed rail system, or making every building in your country energy neutral, or going to Mars, or crashing solar technology much sooner and harder, or…. anything else you want, pretty much, you get financial bubbles and history’s richest rich.

Living in a rich society is different from living in a scarcity society. There is money to create big projects.  There is money to tell your boss where to go.  There are jobs.  Ordinary people have pricing power in a tight labor market and can get their share of productivity gains.

No society is rich in everything, there are always limitations.  But being rich, personally or as a society, is about freedom.  When you have money you can do what you want, when you want.

We could create a rich society again. It is possible.  The necessary technology is there.  What is not there are the social determinants.  As long as the public and private sphere are controlled by oligarchs, there will be no rich society.

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The Perversion and Senesence of Great Ideas

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On November 25, 2013

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If you’re in the idea game, you notice three things really fast: there are very few great new ideas, the form of ideas lose their power, and a truly great idea will be torn from its moorings and used in perverse ways.

Marx, famously, said that he was not a Marxist and predicted the withering away of the State.  He said that Communism couldn’t happen before Capitalism, but those who called themselves Communists and obtained power came from peasant societies which had never gone through Capitalism and created some of the most powerful and despotic states in all of human history.

What?

It is hard to imagine the historical Jesus (if he existed), who hung out with whores, told people to give away all the possessions, leave their families and who thought that tending to the poor and afflicted was so vastly important that if you didn’t do it God would turn from you, would be happy with so many of those who follow him today, who follow none of his teachings.  Jesus was not a Christian.

Adam Smith believed in public goods, public education, that humans were driven by fellow feeling more than selfishness and that  businessmen were constantly conspiring against the public.  Yet he is known for a single line about the invisible hand, the rest of his writing ignored by those who claim to be his disciples.  One imagines that he, too, might say something like “I am not a Smithian.’

A powerful idea, a great idea, will be misused.  Disciples will seize on that which seems useful to whatever they want to do, and ignore both the essence of the idea (Communism MUST come after Capitalism), and the caveats (Capitalism cannot produce public goods) without which the system will fail.

It is, thus, instructive to seek out ideas which have been little perverted (none have not been perverted.)  Amidst ideas that have worked, and worked, and worked, and done far more good than evil, one stands out: Buddhism. Oh, to be sure, you can find Buddhist bigotry and even the occasional riot (Burma, I’m looking at you); you can find Buddhist monks chopping off people’s heads and playing palace politics, and so on.  Yet, a history of Buddhism shows a belief system which has proved remarkably resistant to perversion.  It is simple, and powerful.

I will suggest that it is because Buddhism is a practice.  To be a Buddhist you must do certain things, with a specific end (removing suffering).  If you do not, you are not a Buddhist.  These practices work, you can measure the effect on people who practice on the brain with modern imaging technologies, you can see them when you interact with dedicated Monks or laypeople who take meditation seriously.  Meditate, send your compassion out to the four quarters of the world, and you become a certain type of person.

A great idea, then, let me suggest, must require something of its adherents.  A philosophy which is empty of practice may be great, but it will be perverted if it does not have a practice which creates the sort of people who are able to live by the idea.

The great sociologist Max Weber looked at how ideas would form people: how the idea of predestination made people work like dogs so that they would have proof they were saved, for example.

Whatever your idea requires people to do is what that idea will become.  If it does not require of them practice which makes them suitable to the idea, the idea will not succeed.

Of course, even if it succeeds, most ideas will eventually be perverted. It’s (relatively) easy to create a great idea that a generation or two lives by, it’s hard to create an idea which is capable of replicating itself down through the Ages.  What is mighty about Buddhism is its sheer longevity.  Twenty-fix hundred years, and it’s still doing more good than evil.  Early Christianity was pretty much perverted five centuries after Christ’s death, and one can argue for earlier than that.  Marxism was going bad even before Marx died.  Smith’s ideas were being used as justification for the very mercantalist policies he argued against within a century of his death.

Pity the great moral philosopher, then (and economics is just a branch of moral philosophy). Most will fail, their greatness destroyed by their disciples, their ideas perverted, their warnings ignored.  Look to the great ideas and ask yourself, “to make this work what sort of people are needed?  Can those people be created?  What would it take to create them?  Are they being created?”

In the answers to those questions you will discern much of the failure or success of any great idea, and will see not just that it will fail, but in what horrible, twisted debased form it will come live, a mockery of the hopes of its creator.

Or perhaps, just perhaps, you will see a bright shining idea, able to create a better world for however long it lives in a form capable of creating followers who can carry it.

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