Review of Literature and the Economics of Liberty

My The Freeman review of Literature and the Economics of Liberty is online!

Competing Our Way to Socialism

The Supreme Court is hearing testimony about the health insurance law that requires everyone to buy insurance. It would seem likely SCOTUS will strike the law down because it is completely unprecedented as federal law. However, other courts have upheld its constitutionality (may this be because most states require their residents to buy car insurance, meaning having a government require people to buy something is not entirely without precedent?), so it is hard to say what will happen.

But there are real consequences to the mandate being upheld. If SCOTUS upholds the mandate, the Congress can mandate people to buy anything (silly arguments that health insurance is a unique market notwithstanding -- all markets are unique). It is the consequences of that which nobody has really talked about, though.

One of the things the government has done is to offer its own health insurance as part of the law. Since the federal government can subsidize their insurance (with your tax money, of course), they can offer it cheaper than can private companies. Since the government is forcing everyone to buy insurance, this will be an attractive option.

More, since the government is forcing everyone to buy insurance, this will drive up insurance prices in the private industry. I know we have heard many argue that it will drive down prices, because the healthy, uninsured young will be paying in, thus subsidizing the older and sicker, but the fact is that prices are brought down by competition -- and insurance is having to compete against "nothing," which costs exactly $0. This keeps rates down. If you don't have to compete with "nothing," prices will go up.

As prices go up, the government-provided insurance will become even more attractive. Thus, more people will buy the government insurance, until we end up with everyone "choosing" a single-payer system. The federal government will have nationalized the entire industry by default.

It occurs to me that this may have been the plan all along. The American people will not put up with outright nationalization of an entire industry (we were wary of the government taking over GM and Chrysler, even with promises they were going to privatize them again once they were on their feet), but what if an industry were nationalized without anyone noticing? What if it were nationalized by people choosing the government option?

If SCOTUS upholds the mandate, there will then be a precedent for forcing the American people to buy something. As a result, you may rest assured that insurance won't be the last thing Congress forces us to buy. And you may equally rest assured that the government will be sure to provide their "cheaper" option for everyone to buy. The government could easily nationalize practically every industry this way, driving out competition with their lower prices, made lower through its own subsidies.

All in all, it's a rather brilliant, quite elegant idea. It's the only way our federal government could ever get the American people to agree to nationalize an industry -- by giving the appearance that the American people are voluntarily, individually choosing the government option, until there is nothing but that option left.

The Constructal Law

What connects network , chaos, bios, complexity, self-organization, and spontaneous order theory? The constructal law.

The constructal law describes how things flow. If you have slow and fast flow together, you get a branchy pattern (which looks like a tree, a river delta, lightning, lung bronchea, the brain's neural network, the neurons themselves, etc.) that facilitates both kinds of flows. The fast flows act as engines, the slow flows act as brakes. In a river, the water is the fast flow, the soil the slow flow. More, within the branchy pattern, the slow flows are short, the fast flows are long. Further, the slow flows are smooth, the fast flows are turbulent (herein comes the element of chaos theory). Slow, smooth, short streams flow into faster, more turbulent longer streams, which flow into faster, more turbulent, longer rivers. Areas flow into points, and points flow into areas. Roots flow into the trunk, the trunk flows into the limbs.

Further, the history of the evolution of flow is toward greater and greater freedom. This is true whether the flows are physical, biological, psychological, or social. This agrees with the work of J.T. Fraser and of Clare Graves. It agrees with my own ideas in Diaphysics. Little did I know I was always already writing about flows. The constructal law fills in the last little bit, clarifying why I have been obsessed with networks, chaos theory, bios theory, complexity, self-organization, and evolution. These are all about flows. Further, it explains why I am an Austrian economist -- it too is all about flows.

If you contribute to the improvement of flow, you are participating in the natural evolution of the universe. If you work to block flow, you are working against the natural evolution of the universe. But as with any other law of nature, you cannot violate it for long without consequences. Nature will have its way. You can either work with it and live a good life, or work against it and be crushed by it over time.

"Nature, to be commanded, must be obeyed." -- Francis Bacon

According to the constructal law, social orders are also nature. If you want to live in a good society, it must maps onto nature, being nature. Societies must be free to find their own improved flows. Damming a river won't improve its flow any more than restrictive regulations that act as barriers to entry improve the economy. The movement of water, the movement of people, the movement of ideas, the movement of money, the movement of goods -- all must be free to flow.

A Summary of the History of the Cosmological Evoluton of Complexity

Information gives rise to self-organization which gives rise to emergent properties. To have self-organization, you must have information communication, networks through which that information can flow, and paradoxical relations that create tensions which drive complex interactions.

1. Energy -- foundational information leading to self-organization and the emergence of structure

2. Quantum Physics
-- free particle-waves
-- atoms

3. Chemistry
-- fluid dynamics
-- solid-state
-- complex systems (interface of solid and fluid, giving rise to flows, networks, etc.)

4. Biology
-- monocellular (archaebacteria, eubacteria, eukaryotes)
-- polycellular
-- multicellular (combining features of monocellular and polycellular)
-- social (requiring interspecies and intraspecies communication)

5. Human Psychology/Sociology (Tier 1 in Gravesean psychology)
-- Tribal
-- Heroic
-- Authoritative
-- Entrepreneurial
-- Egalitarian

6. Metahuman Psychology/Sociology (Tier 2 in Gravesean psychology)
-- Integrative (view the world in an interdisciplinary way)
-- Holistic (view the world as fully integrated set of networks)
-- Transpersonal (begin to personally identify with the whole of creation)
-- ?
-- ?
-- ?

7. ?

etc.

As suggested, this evolution is an open ended process, with no given endpoint. However, we should be able to see patterns emerging. For example, each larger emergent process has a number of subprocesses that lead up to the next emergent process. As a level of complexity becomes "full," a new level of complexity emerges to create new environments in which to evolve.

Here I combine J.T. Fraser's umwelt theory of time with Clare Graves' psychosocial emergent complexity theory of mental/social evolution. Both thinkers argue paradox is what drives the emergence of new levels of complexity, with each new level of complexity creating its own paradoxes which then get "resolved" (but not really, as their maintenance is necessary to maintain the level of complexity supporting the one which resolves the paradoxes of that previous level) in the next level.

Political Evolution to Bleeding Heart Libertarianism

At a recent conference I attended, we were talking about people who were either conservatives or liberals and who later became libertarians. However, someone asked about whether or not there were a lot of “apostates” to the libertarian movement, and we were able to come up with several names of those who have moved to the left. I don’t want to name names (this isn’t a meeting of the Unlibertarian Activities Committee), but rather discuss the very phenomenon of moving from one ideology to another – and relate it to the idea of bleeding heart libertarianism. Specifically, I want to look at political ideology through the lens of Gravesean psychology.
Clare Graves, whose psychological theory was developed more by Don Beck and Christopher Cowan in their book Spiral Dynamics, advanced Piaget’s theory of psychological development into adult psychology. Graves noted that people seem to develop through different psychological levels – and that when a society has a large enough number of people with a given psychology, there is a change in society itself. His theory is that people’s psychological states change in response to changing social conditions, and that they alternate between individualist and collectivist world views as their psychologies become more complex. One can envision such a combination of alternation and increase as a spiral, which is why the theory is called “spiral dynamics.” Among the elements affected by one’s psychological level are epistemological beliefs (how one thinks people learn best), social ideology, political ideology, and economic ideology. As one can imagine, then, this affects one’s overall ideology, and how one’s ideologies evolve. First, though, let me summarize the theory.

Graves identifies two tiers of psychological development, with six levels in the first, and two (so far) in the second. Let us start with the first tier.

The first level is the one humans share with chimpanzees, and is described by Frans de Waal’s Chimpanzee Politics. The second level is the first truly human level. It is the tribal level where safety, security, nepotism, and paternalism are most important. The politics of this level involve kinship and lineage and constitute clan councils. The economics at this level is barter and mutual reciprocity, with the chief distributing everything according to need.

The third level is the heroic level, typified by all of the male characters in The Iliad. Power, action, egocentrism, and exploitation are important values to this level. The politics is typified by powerful people who rule by whim, and the economy is one of feudal distribution in which rich elites get richer off the work of those under them. However, if you have a society that is dominated by this psychology, you do have a political system emerge that is able to allow all the powerful, egocentric individuals to have a say: democracy. Indeed, this is why Athenian democracy arose, and why it had the features it had.

The fourth level is the authoritative level. The values promoted by this level include stability, having a purposeful life, Truth, Beauty, and Good and Evil, and absolutism. Good must be rewarded and evil punished, and the good are those who follow the rules and traditions of society. Doing one’s duty gives life meaning. They prefer governments with one party rule (monarchy), and believe economic benefits should go to those who work hard, are disciplined, and save their money. If this sounds like conservatism, that’s because it is. This is the source of the values of social conservatives, including religious fundamentalists (of any religion). Medieval Europe is an example of a society in which this psychological level is dominant.

The fifth level is the entrepreneurial level. Material success, autonomy, competition, and reason are central values. With the dominance of this psychological level, we saw the Age of Reason, the development of modern science, and the development of capitalism. Politics at this level becomes pluralistic, with checks and balances, strategic alliances, and bills of rights. The economic system supported is, as already noted, free market capitalism. Your average libertarian – and Objectivist – will find all of this quite familiar.

The sixth and final level of tier one is the egalitarian level. Egalitarians are communitarian and support equality of outcome, equal rights, human rights, social justice, and redistribution and reciprocity. They are relativistic, sociocentric, and want to get along and feel accepted by their peers (meaning, other people who think exactly like they do). They believe sharing and participating is much more important than competing. Their politics tend toward consensus-building social democracy, and their economics are socialist, or at the very least supporting of a welfare state and community-based distribution.

This wraps up the first tier of human psychological development. I will note several things about each level. First, each level is exclusionary of the others – thus the tribalism inherent in our foundations are realized at each level. However, in reality higher levels contain lower levels, though some may be more suppressed than others. Someone who is at the egalitarian level, yet has a strong element of the heroic level may express a great deal of concern with victims and oppressed groups. One moves from one level into the next when life conditions change. One cannot skip levels, meaning we go through them all, and society will always have representatives of older levels. Psychological changes drive social changes, which drive psychological changes. This accelerates the more densely and interconnected societies – and the world – become(s).

We can now also make sense of many of the political divisions we see in this country. Conservatives like Pat Buchanan are solidly authoritative conservatives. The typical American conservative is a social authoritative and economic entrepreneurial. The typical American liberal is an egalitarian with a great deal of residual entrepreneurial level. Many of the left-libertarians would also fall into the latter group, though the emphases may be different.

So where does that put bleeding heart libertarians? In fact, I haven’t gotten to them yet, because I haven’t talked about the second tier yet.

Second tier psychology is exponentially more complex than those that came before. Tribalist thinking is rejected, and all of the component psychological levels are recognized and more fully integrated. There are to date two levels which have emerged in the second tier: the Integrative and the Holistic levels.
For the integrative level, systemic processes, quality, responsibility, and information are central values. They believe the world order consists of different realities of different complexities (quantum physics to chemical to biological to psychological to social; different psychosocial levels). Politically, they tend to be pragmatic, supporting whatever will work for whatever a given psychological or social level needs. Economically, they tend to support free markets as the system which best benefits everyone, regardless of level.

Holistic thinkers value broad synthesis, renewal, experiences, and spiritual bonds. They view the world in holistic terms, seeing universal forces permeating life and society. The world is a cosmos, full of complex whole-Earth networks. There is a renewed concern for eternal truths, the good, the beautiful, and meaning – though these are more cosmological, more natural classical (to use a term coined by Frederick Turner). Knowledge is a very important value, and much emphasis is put on ensuring information is well-distributed.

I would argue that bleeding heart libertarians are most likely to fall into one of these two levels. There is a recognition by those in the second tier that free markets are transformative complex adaptive systems – spontaneous orders – which cannot be controlled and should not be meddled with too much, except on the margins. The world is best understood from an interdisciplinary perspective. More, the world is understood as nested sets of self-organizing networks. This means information must be able to be communicated as easily and broadly as possible. This attitude may explain the difference between libertarian supporters of intellectual property rights (the entrepreneurial level) and opponents of intellectual property rights (the integrative and holistic levels) – and explain why neither group can really persuade the other.

If we understand that people evolve psychologically through these levels, we can make sense of many social problems and many of our political and economic differences. For those in the first tier, people with less complex psychologies are evil, while those with more complex psychologies are incomprehensible. For those in the second tier, all levels need to be integrated and made more harmonious. When I see those who recognize themselves as bleeding heart libertarians discuss practically anything, I see them trying to integrate and make harmonious, to try to understand the opposition and explain in their terms why they are wrong – thus helping guide them “up the spiral.” If we know what it is we are doing, if we are more conscious of what we are doing, we can be more successful. That’s why I think it’s important we understand Clare Graves’ contribution to psychology. It will help us reach our goals.

On the Different Kinds of Human Interactions and the Economies to Which They Give Rise

In “Creating a Culture of Gift” in Conversations on Philanthropy, vol. II, Frederick Turner argues that there are four basic kinds of human economies: market, gift, political, and divine. Each of these has evolved over time, with the market economy evolving through various kinds of systems up through varieties of serfdom to mercantilism to capitalism, the political economy evolving from tribal structures to empires to monarchies to democratic republics, the divine economy evolving from polytheism to monotheism (and for some, to deism and atheism), and the gift economy evolving from intertribal giving to potlatch to alms-giving to philanthropy to the welfare state. That there is an evolution is no indication that the last thing to evolve is the best thing to evolve. Rather, the different stages reflect the different stages of psychosocial development discovered by Clare Graves (and whose research was pursued by Don Beck and Christopher Cowan in their book Spiral Dynamics).

Each of these economies also reflects a different kind of human interactions –with themselves, with others, and with things. Love for the gift economy; sacrifice for the divine economy; master-slave for the political economy; economic exchange for the market economy. The first three have historically been vertical in nature, but each of these three has become increasingly horizontal due, in no small part, to the inherently horizontal nature of economic exchange.

Take the gift economy, for example. In the gift economy, one pursues the true, the good, and/or the beautiful. One does so out of love. There can be love of oneself, love of another, or love of some object or process. Love makes you want to dedicate yourself to the object of one’s love. Of course, in an economy, what is at issue is exchange, meaning there needs to be another involved. There cannot be an economy of oneself. But I love my wife, and I love writing poetry and plays – thus is there an economy set up between my wife and I and between my creative writing and I. In the latter case, part of the purpose of creating art is to share it with others. The artist is bestowing a gift on humanity. So, too, the scientist who, out of love of knowledge, bestows a gift of knowledge on humanity through his discoveries. So, too, the ethicist who, out of love of virtue, bestows a gift of clarifying or expanding ethical principles on humanity. Each is a kind of philanthropist. And the philanthropist commonly understood too is doing what he does out of love of humanities – philanthropy literally means “love of man.”

The love one feels for one’s wife, parents, children, family and friends are all a sort of horizontal exchange – the love flows bidirectionally. Philanthropy, though, is typically unidirectional. There is the giver and the recipient. This creates a vertical exchange. With horizontal love, the point of love given is love received. With vertical love, however, the point is to develop a reputation. The scientist, to continue to work as a scientist, has to have a good reputation as a scientist. The same, too, for an artist. And would you donate to any philanthropic organization that did not have a good reputation? Of course not. Reputation is central to the gift economy. However, this is also its danger. Reputation-seeking can get out of control, as it did in the potlatches held by the Native Americans in the Northwest. In the potlatches, the more one gave, the stronger one’s reputation, and the more status one had. Indeed, one can see each of these economies as different kinds of status-seeking behavior. A result, though, was that chiefs would give away so much they would impoverish themselves just to have higher status. This of course was harmful to both themselves and their tribes’ well-being.

In the divine economy, the form of interaction is sacrifice. This is how we trade with the divine. Almost by definition, this is a vertical exchange. Most religious traditions, though, do see this as a mutual kind of exchange. We sacrifice to the divine in order to receive gifts from the divine. If you want God’s blessings, you have to tithe. The kinds of sacrifice have evolved over time, from human sacrifice to animal sacrifice to other kinds of property, including money. The story of Abraham being asked to sacrifice Isaac is a story of the replacement of human sacrifice with a combination of animal sacrifice and circumcision. The story of Jesus on the cross is a story of a one-time return to human sacrifice (or, technically, divine sacrifice) in order to replace animal sacrifice and circumcision with the sacrifice of nonliving material goods. Sacrifices are done to things one considers to be “higher” than oneself. Thus people sacrifice themselves to ideals, such as liberty or nationalism. Of course, those who sacrifice the most end up having the highest status. Thus the high status of Abraham and Jesus, or of people like Mother Theresa, Martin Luther King, Jr., etc. In the last two, their high status is also due to their participation in the gift economy, in their pursuit of the good.

In the political economy, the form of interaction is master-slave. Even elected officials have power positions over those who elected them (in many ways, the bureaucrats even more so), and that is a master-slave relationship. In Western Culture at the American Crossroads (2011), Pontynen and Miller summarize Hegel’s (Phenomenology of Mind, 1807) master and slave mentalities as “The master lives off the slave’s labor, but it is the slave who transforms reality vial labor. The master, who consumes, destroys, whereas the slave, in working, creates. He slave fears death at the hands of the master, and that fear of death results in creative production, which constitutes civilization” (197). This sums up the political economy quite well, no matter what form it takes. This also sums up the postmodernist view of all human interactions as power relations. If you have a power relation, you have a master-slave interaction. This is why everything in our postmodern age is politicized. For the postmodernist, everything is politics. This is also what drives the increasing centralization and government takeover of every aspect of life. If you believe everything is power relations, meaning every interaction is master-slave, then everything is always already politicized.

Finally, there is the market economy, in which economic exchange is how humans interact. All economic interactions are mutual, or else both parties would not agree to the exchange. As such, economic exchanges (facilitated by money), are the most radically egalitarian of any of these forms of interaction. There are scale free network effects in market exchange, though, such that those who engage in these forms of exchange the most accumulate the most money, in a rich-get-richer effect. However, just because the rich get richer, that does not mean the poor get poorer. Quite the contrary. Both parties in an economic exchange are better off, meaning the poor get richer too. The difference between a rich and a poor person in the market economy is the number of economic exchanges one has participated in. But money is always circulating, and both parties are better off for having engaged in economic exchange. The same cannot be said of other forms of exchange. One hopes the divine reciprocates; one has to be wealthy to give; in the master-slave relationship, money moves one way only, meaning the rich get richer while the poor get poorer.

It is important to understand these differences and distinctions, because muddling them has caused a lot of terrible problems in our world.

Marx (and other postmodernists) mistakenly believed the master-slave interaction to represent the market economy as well as the political economy, which is one reason Marx rejected the market as well as the political economy (he does call for political anarchy, after all), thinking both could be turned into some sort of rationally constructed gift economy. However, it is the market economy in which egalitarian relationships truly exist, not the gift economy. More, the “anarchy of production” Marx so hated was and is anything but – complex self-organization is the rule in/of the market. So it is not surprising Hegel’s dialectic results in the state as its endpoint – which is also why Nietzsche rejected Hegel’s teleology and argued the tensions never disappeared, as those tensions are what drives processes.

The politician asks us to sacrifice (divine economy) to help others (gift economy). But they never outright ask you to give them power over you (political economy), even though that is really what they want. At the same time, businesses and the rich (market economy) are often vilified by both left and right. As pointed out above, the divine, political, and gift economies are typically vertical relationships, while the market economy is a horizontal relationship. A politician wants to hide the power/master-slave interaction they desire to have behind the rhetoric and masks of the non-power-based vertical divine and gift economies. The gift economy is vertical to the extent that there is a giver and a recipient – the exchange is not mutually beneficent in the same way as is an economic exchange. However, gifts can be exchanged, so the giver-recipient hierarchy is reversible in a way divine and political exchange cannot be. I will note, though, that with increasing democratization, political exchange becomes increasingly horizontal.

Let us next look at some of the implications of these divisions.

We have divided human interactions into love, sacrifice, master-slave, and economic exchanges. Sex plus love is romance; sex plus sacrifice can still be found in various cults (in ancient times, the temple prostitutes); sex plus slavery to one’s desires is promiscuity (sex plus slavery is, well, sex slavery); sex plus economic exchange is prostitution. With love one aims to benefit the other; with economic exchange one benefits the other as one benefits oneself; with sacrifice one trades with the divine; with slavery, one benefits oneself at the expense of another.

Philanthropy is done out of love. Alms are given in divine sacrifice to help the poor. In government welfare programs, you have a combination of economic exchange (bureaucrats) and slavery (taxpayers), facilitated by legislators (masters) using the language of sacrifice. Elected officials do what they do to maintain power, and a power-relationship (vs. a love of economic relationship) is essentially a master-slave relationship.

If one paints out of love, one is an artist. Medieval churches are full of art made as sacrifice by the artists; the ancient Greek idea of being visited by the Muses makes artistic creation a divine exchange. Is one an artist if one paints due to compulsive behavior (to which one is a slave), or if one is forced by a government to include certain content and censor other content? Is one an artist if one paints only for money, but would immediately stop painting if the money stopped rolling in? We should not be surprised if the last two are so rare as to sound absurd. They indeed sound perverse to us. Why is this? It is because the arts are naturally part of the gift economy, perhaps even of the divine economy, and do not belong in the political or market economies (in regards to the latter, why then sell your paintings? – the patron pays to show appreciation, while the artist sells because, after all, one does have to have a place to live and to eat and to have the supplies to make more art!). The artist creates out of love of beauty; the scientist works out of love of truth; the ethicist works out of love of the good; the philanthropist works out of a love of any of these, or some combination of all three. To politicize these things is to pervert them. To turn them into economic changes is to (ironically) devalue them. But we can turn this around, too, as what ought to be part of the market economy is destroyed or devalued by politicization and/or trying to make it a part of the gift economy.

Each of these economies are based on different kinds of human interactions. These different economies – which can and do have different kinds of spontaneous orders within them – have different roles, different purposes. They are not entirely separable at times, but when we confuse them, or try to make everything part of one kind of economy, we create problems. It may be that we want to combine the gift economy with the political economy for certain things, such as in the creation of the welfare state. Or perhaps, doing so was a mistake. I think the arguments will be improved if we understand, in any case, these different kinds of human interactions, and the implications behind them and the consequences of them.

Prostitution and the Alienation of Wage Labor

Do most people only ever do things out of love? Must that be the immediate cause of everything we do?

I have been trying to figure out the Marxist arguments against wage employment, which they claim alienates a person from their work and what that work produces. With this as their ultimate argument, this is what has to be addressed -- economic arguments are ultimately irrelevant to them.

I think I have figured out the answer. It came a few nights ago in a discussion my wife and I were having about prostitution after watching John Stossel on Fox News. The issue was not whether or not prostitution should be legal -- we both agree it should -- but rather whether or not it should be considered acceptable. My argument was that if one considers having sex without love acceptable, then whether or not there is a money transaction is irrelevant. Anyone who believes one should never have sex without love is being consistent in their opposition to prostitution; anyone who believes sex without love is acceptable is being inconsistent if they then persist in opposing prostitution. Why is having sex with a different person every night for free better than having sex with a person every night for money? Is it because we consider sex to be a gift?

A startling conclusion! Yet, it fits into our attitudes regarding gifts and the gift economy. Suppose you offered someone a gift, and they offered to pay you for it? Would you not feel offended? The person who does something out of love -- who creates gifts -- feels morally superior to those who do something out of a profit motive. We consider the gift-giver to have higher status than the profit-maker ; the gift-giver, too, is in fact doing what they are doing for status. This is inherent in the fact that the gift economy is precisely about gaining status; this is its currency -- and its danger. The danger lies in the development of the potlatch, where the participants try to outdo each other, even at their own detriment. Promiscuous men and women have high status -- they are popular -- and are participants in a kind of sexual potlatch. This occurs when the gift-giving is separated from love. Yet, that original motivation is often assumed, so the gift-giver gains status despite the lack of love.

We see this attitude at work in all areas of the gift economy. We respect poets who publish for free in literary journals, but not those who work for Hallmark. We respect (and trust) university scientists over corporate scientists. The philanthropic organization (or even the government in its role in the gift economy) is considered purer in purpose than corporate givers. Those who (at least appear to) create and give out of love are believed superior to those who create and give out of a desire for profit. Many consider charity-givers to be better than job-givers, though it is only the latter that creation wealth.

This brings me back to the alienation argument. The Marxist believes all work out to be in the gift economy. All work ought to be out of love. And if it's not, it's alienating. To the Marxist, all age labor is prostitution, and ought to have the same stigma attached to it. Thus they declare wage labor to be immoral and something which ought to be prohibited -- for the wage laborer's own good. Indeed, this is the most common justification for keeping prostitution illegal: that it is for the prostitutes' own good. Further, you often hear arguments that prostitution is "alienating," etc. for the prostitutes -- the same arguments Marxists make against wage labor, prostitution opponents make against prostitution.

Ultimately, if you agree that prostitution is "alienating" for the prostitute, you agree with the Marxist analysis of wage labor. But if wage labor is not alienating, then neither is prostitution. Ultimately, those who oppose prostitution believe sex should be freely given away, as though that transaction is good in and of itself, but making it a money transaction sullies it. The question those who oppose prostitution and/or wage labor need to answer is: what is it about money that makes its use (in making transactions easier and more rational) immoral? With the understanding that the first preference is a loving relationship, if that's an option, why would people prefer their daughters (or sons) to be poor sluts rather than rich prostitutes? Why is it better to not be paid to do what I love than to be paid? And why should I not be allowed to be paid to do things I don't love?

The ultimate question, then, is: must everything we do necessarily be done out of love? Is that the only legitimate motivation? Or, specifically, the only legitimate immediate motivation? I think mistaking the immediate for the ultimate is where the problems lie.

I write poems and plays and do scholarly work because I do have an immediate love for doing those things; however, I want a job in which I earn a wage because I have an ultimate love for my wife and children, and I care for their (and my own) material comforts. My love for my family and for myself (self-preservation) drives my desire for working for a wage so I can provide for those I love. I do not need to love everything I do to earn that wage (it would probably be best if I did not hate what I do; but I could be neutral, which would include some balance of liking and not liking) for me to have a fulfilling life. My life and work is alienated only if I work only (or primarily) for unknown others rather than for my loved ones. If most of my wages are taxed away so others may benefit, that would cause me to feel alienated from my wage labor. The same is not true if I reap all the benefits for my loved ones. Ironically, then, Marx's heavily graduated income tax (in The Communist Manifesto) would in fact create alienation among the workers, not their wage labor.

It is a lovely idea to think that everyone ought to be able to do only what they love. But that is what those in the gift economy do. And not everyone could or should be in the gift economy. Even in the poorest places, gift economies exist -- but it is only when there is widespread wealth that the gift economy can come into full fruition and spread its benefits. Science, the arts, and philanthropy find their fullest fruition in wealthy countries. And the wealthiest countries are those with the freest economies. Wealth-creating profit-making is the foundation for a healthy, robust gift economy. But the two are not the same thing, and should not be considered the same thing. Wage labor is not alienating just because it's not in the gift economy. It's not supposed to be. We are judging market activities with foreign values, and when we judge one system with the values of another, we are prone to make mistakes in judgment.

In the end, Marxists want people to have nothing but personal, loving relationships, to all be as close as we all, as a species, once were in primitive tribal conditions. But that's not a realistic option in such a complex society as ours. Thus, spontaneous orders emerge which allow us to interact with a wide variety of unknown others in such a way that we are able to coordinate, cooperate, and otherwise get along. Those who hate the market in fact hate the social relationships which both cause and emerge in spontaneous orders. We cannot all love each other; sometimes, we just have to tolerate each other. Not all of our relationships can be personal; sometimes we have to cooperate on a single project, then part. The Marxist dream that we will all know each other in a personal fashion is impossible.

The Last 1 1/2 Weeks

As one can probably imagine from my last posting, I have been too busy to post much of late. It did not help that I attended, last weekend, a Fund for the Study of Spontaneous Orders conference on higher education.

Having three children is chaos. Utter chaos. Daniel is having a hard time of it. I had to take him out on a father-son date to help him feel better. A little time, just him and me, at Starbucks, playing with cars on a table. It seemed to raise his spirits for a few days.

At the FSSO conference, we basically concluded that revolutionary change is both unlikely and counterproductive, that any changes will likely be marginal, and that probably most students are getting what they want, anyway. This is what happens when you believe in social change on the margins, keeping tradition in consideration at all times. Of course, not all traditions are good, and that is why change is sometimes necessary. But what happens when the professors have a different concept of what education is than most of the students? And what if many professors prefer the students' attitudes, because that means far less work for them?

The good news is that the new baby sleeps well, wakes up to eat every 3 hrs, like clockwork, and is not fussy at all. In other words, Anna and I can actually get some sleep. This differentiates Dylan considerably from both Melina and Daniel when they were his age. With them, we did not get sleep for about 8 weeks.

Now that the FSSO conference is over, on to the next round of projects. I have a book review to get done asap, and a paper on the Basic Income Guarantee vs. the Negative Income Tax, which is due in June. Those are of immediate importance. I also need to work on my paper "Why Economists Ought to Go to the Theater" and I am thinking about a paper on the relationship of higher education to the various spontaneous orders. The latter was, of course, inspired by the FSSO conference.

This is my life right now: alternating between domestic life and a life of the mind. I read philosophy, economics, and literature, and Dr. Seuss, Biscuit phonics, and princess stories. I attend conferences and play with trucks. All I need now is a job, and my life will be perfect.

Dylan Francisco Camplin

Today, at 1:30 pm, Dylan Francisco Camplin was born.

And there was much rejoicing. (Yea!)

He is #3, and he will be the last.

Thoughts on the Evolution of Social Complexity in Humans

Whenever I engage in discussions with people who object to evolutionary explanations of human behavior, I discover the same underlying misconceptions of evolution.

First, we need to realize that the presence of a trait does not mean it was necessarily selected for or 100% adaptive. Evolution is not teleological. You can have traits that are adaptive, traits that are neutral, and even traits that are slightly maladaptive, so long as it is not overly harmful. Those of the latter two kinds can act as sort of “preadaptations” for different future conditions, if they end up being neutral in the original environment, but adaptive in a later one. Also, one can have the evolution of a trait that is both adaptive and maladaptive. The dropping of the larynx, for example, is necessary for speech – but dropping it also makes human susceptible to choking. The latter is clearly maladaptive, especially since it does kill some people, but it is also clear that language was so beneficial, that it over-rode the slightly maladaptive element to the adaptation.

Another example of this is our having adapted a hypersensitivity to the presence of intentionality. Those who were able to detect intention – which is to say, those able to see an orderer behind any order – were more likely to survive in a world full of other tribes who were more likely to spear first, ask questions later. It was better to mistakenly see intention than to miss it, so those who overapplied the presence of intention were more likely to survive. Combine that with the unifying elements of ritual and storytelling, and you have religion. This too is adaptive insofar as it enhances social cohesion. Hypersensitivity to intentionality only becomes maladaptive if, once people reject religion, they continue to believe that for there to be order there must be an orderer, and they then go on to adopt socialist ideals. This indeed, was Marx’s objection to capitalism, that it was chaotic. He could not even see the order in it, though it is an exemplary example of self-organization and the patterns associated with such processes.

This sets us up to deal with the specific objection, which is that it makes no sense for people to be so social that they will accept others from other tribes into their own. As it turns out, Darwin himself dealt with this issue – and dealt with it in the way that most evolutionary moral theorists have come around to themselves – which is the “expanding tribe” theory of increasing moral behavior. Insofar as one is dealing with related individuals, altruism is pretty easy to explain. But how do you know who is related to you? This is easy enough if you are a member of a tribe – everyone in the tribe is your relative. However, chimpanzee females leave their troop for other troops once they reach sexual maturity. Humans do the same thing. Both are driven by the Westermarck effect – an evolutionary adaptation that reduces significantly incest. One of the results is that other troops/tribes end up having your relatives in them. For chimpanzees, this is not an issue – if you are a member of another troop, too bad for you. However, bonobos do not go to war with each other. Humans are about halfway in between in behavior. This, in combination with the presence of language, which can act as a marker for relatedness, can tie together a number of tribes. Especially those tribes that used to be united, but divided because of environmental conditions. Religion can also act as a social marker in this sense. Thus, those who speak the same language and practice the same religion could remain closely connected. This was strengthened by trade between such tribes. Bonobos engage in a primitive kind of trading, but human trade is much more complex. It is one of the main drivers of social cohesion, and can even override significant social differences, such as language and religion. In a species which over-applies behaviors, it should not be surprising to find trade being extended to even non-related tribes over time.

There are two things that are distinct to humans: language and trade. I believe both can be explained quite handily using evolutionary theory. One would have to argue that both language and trade are a divine dispensation – that God gave us both language and market activity – as both are sufficient to explain the expanding tribe theory. Social signaling is sufficient – if we can communicate with others we are members of the same expanded tribe, then we are accepted.

I do not believe any of this necessarily denies the existence of God. I would have to wonder at the kind of God who could not create a universe that did not need his constant intervention for things to go right. If you want to believe in that pathetic little moron, by all means do so -- it's just not a God for me. Further, it may be that we are all evolving toward God, emerging toward the ultimate emergence.

And that brings me to the problem of the concept of emergence. Too many people are still rejecting this concept, acting as though all scientific explanation is necessarily reductionist. That is an impoverished science. And it misses half the universe -- the evolving, complexifying half. What is the relation, then between the brain and mind (which is really what I've been talking about, above)? Well, to amino acids, the cell is an emergent phenomenon. And it is, in relation to its constituent biomolecules. It has emergent behaviors, and the existence of the cell affects the kinds of chemical activities that take place, when and where they take place, to a certain degree. Similarly, the (inter)actions of the neurons in the embodied brain in their minding processes give rise to the mind, an emergent process. This mental order in turn is able to affect the underlying neural activity to a certain degree. The economy, for example, is a complex emergent process created by the interactions of a variety of embodied minds. The mind is a complex emergent process created by the interactions of a variety of neurons. A cell is a complex emergent process created by the interactions of a variety of biomolecules. Atoms and their ability to engage in chemical reactions are complex emergent processes created by the interactions of a variety of subatomic particle-waves. You can call this reductionist if you want, but if you only engage in reductionism, and ignore emergent properties, you won’t have the foggiest idea what is really going on. In this sense, Darwinian evolution is not reductionist, and nobody is reducing a thing by invoking it as a proper explanation of biological activities.

Rationalities

Mario Rizzo on rationality. I recommend paying attention to Peter Lewin's first comment, too.

A few thoughts:

Reason is contextual.

Reason is not what you think the person should do, but has to do with the person in question having good reasons given what they know.

Reason cannot assume perfect knowledge.

A rational decision is not monological. For example, I may know that if I want to accomplish X, I must do Y. But I do not want to do Y for moral reasons. Thus, it is rational for me not to do Y, even if it will accomplish X for me, even if someone else does not find doing Y immoral.

Institutions matter. What is rational in one institutional context may be irrational in another.

Perhaps spontaneous order matter as well. That's an idea that needs to be developed more.

Beginning the Marginal Revolution (if I could)

I was asked what I would do if I could begin to make changes in the political economy of the United States. Of course, being a Hayekian and spontaneous order scholar, I understand that the changes that need to take place have to be marginal changes. You have to keep in mind the fact that all changes have to take place within the context of the rules that already exist.

Thus, one has to consider what the elimination of a given regulation will cause to happen. The last thing you want to do is deregulate in such a way that you end up with people demanding to reregulate, because other regulations on the books are now causing different problems. We have to remember that when the government "solves" a problem, it creates regulations that in turn cause their own problems, that the government then blames the market so they can put on more regulations, etc. in a vicious circle. That being the case, one has to be careful, because simply removing the last regulation put in place may result in the problems the layer of regulations preceding it caused. To the extent possible, an analysis of regulatory cause-and-effect would have to be done to figure out how to dismantle the regulations in such a way that few problems would occur.

At the very least, it seems to me that we need to do away with socializing loss. This allows companies to justify taking much greater risks than they would otherwise take, since the profit will be theirs, but the loss will be spread out among the citizens of the country. I suspect a lot of regulations can go once we do this.

Another thing we could do right away is get rid of corporate welfare. There should be no subsidies. Subsidies distort the market, and they go to the already-established as it is.

Remove barriers to entry to allow competition. All federal barriers to entry could be removed, and the states would then be in a position of either adopting them themselves or letting the barriers go away. With competition among the states, there would likely be fewer barriers over time. Indeed, simply de-federalizing most legislation would allow for spontaneous order marginal changes to take place, since competition among the states for both businesses and workers would likely encourage moves toward market reforms, since free markets are most productive.

I would implement a simple flat tax. That would reduce the tax bureaucracy considerably and release a lot of tax lawyers and accountants to do something that creates economic wealth and value.

I would replace all welfare programs, including social security, with a basic income guarantee.

I would begin procedures to decentralize our banking system with the goal of the creation of a free banking system. With local banking responding to local conditions, monetary recessions and depressions would become a thing of the past (except insofar as the rest of the world continues to have central monetary planning, that is -- still, much of that would be considerably moderated by the ability of local banks to react to local conditions).

Cutting military spending and getting us out of everyplace on earth would go a long way to paying down the debt, as would the economic boom that would take place as people were freed to pursue their economic interests and create more new businesses and, thus, jobs. This would help bring interest rates in line with the natural interest rate of interest, too. Having true free trade with the rest of the world (regardless of what they do) would also benefit our economy considerably, as lower prices benefit everyone.

I would also defederalize the drug war.

This all seems like a lot, but in fact much of it really is just tinkering around the edges. There is much more that would have to be done. But simply de-federalizing much of what we do would make a huge difference. Our government should have a power-law distribution of power, like every other natural self-organizing process. The more we move away from such a distribution, the less natural our government and economy become -- and the weaker and less wealthy we all become.

DISD Violates a Teacher's Civil Rights

The Dallas Independent School District (DISD) has recently been shutting down exemplary schools (while keeping open the worst ones) and has also decided to extend teachers' work days by 45 minutes (not to provide 45 minutes more education for students, but rather for more pointless meetings that accomplish nothing and from which nobody learns anything -- if my experiences are typical), which has had teacher's protesting the actions. In Texas, it is illegal for teachers to go on strike, so protests, letters and emails are all teachers are really left with.

Now, in the U.S., one of our rights as citizens is the right to petition our government for a redress of grievances (Amendment I of the U.S. Constitution). This includes not only federal officials, but all elected officials. It should thus concern us that a DISD teacher, Joseph Drake, was put on "administrative leave" an hour after sending a critical email to Edwin Flores, a school board member. In other words, it appears that Drake was punished for expressing his opinion as a citizen to a board member. That is retaliation, and an abuse of power. Everyone involved in the decision should be removed from office and imprisoned for corruption and violating Drake's civil rights. Yes, imprisoned. Unless we treat people like this as the criminals they are when they violate citizens' civil rights, we can only expect more of this sort of corrupt behavior to occur. Our elected officials should be too scared to even think about such violations, and treating them like the criminals they are is the only way to do that.

More, it should not be illegal, as it is in Texas, to protest government working conditions. Certainly teachers make a pretty good living here in Texas -- better than do most teachers in most other states -- and that is probably in no small part because of the weakness of the teachers' union, but that's really not the point. A strike is a form of protest (typically against working conditions, unfair treatment, etc.), and by prohibiting striking by their own employees, the Texas government is violating the 1st Amendment. (If the state of Texas does not like teachers to be able to strike, they should privatize all the public schools, and then the private schools can prohibit striking by firing anyone who does.) We should thus not be surprised that Flores and the DISD board thinks they can violate Drake's civil rights at will, since such violation is already law in Texas. But that hardly means any of the guilty parties should be allowed to get away with it.

Perverse Incentives and Education in Dallas

The Dallas Independent School District (DISD) has recently decided to shut down several schools to save money. This could be a great opportunity to shut down the worst schools and get rid of all the bad teachers who help make those schools so bad. Instead, DISD has decided to shut down their exemplary schools, meaning they will be getting rid of their best teachers.

What corporation in the market economy would act like this, shutting down their best performing companies and keeping open their worst? If you saw this happening, you would know there were perverse incentives afoot. No company keeps an unprofitable sector of their business around unless there was something in it for them -- unless they were getting subsidies or tax breaks -- or both. And this is what we should expect when we see a school district shutting down their best schools and keeping open their worse.

Of course, it is the state and federal government which is providing the perverse incentives. If there is a low performing school, their solution is to throw more money at it. High performing schools get less money, because it is perceived that they don't "need" it. There is a mistaken belief in government that if something is not working, it is because not enough money is being spent. Thus, there is a financial incentive to shut down good schools and keep bad schools, since the latter get more money. Of course, most of that extra money goes to bureaucrats who are only going to make matters worse, and to utterly useless technology (not all technology is useless, of course -- but my experience is that much of it bought for our schools is utterly useless, especially after, say, a bulb goes out on a $1000 piece of equipment, and the money is not available to buy new bulbs, which are not as sexy as new equipment, even if it is the new bulbs which are actually needed!).

The federal and state governments consistently make our educational system worse and worse -- and then they turn around and blame the teachers, who are doing the best they can in the institutions created by ignorant legislators and selfish bureaucrats. Teacher pay is cut, but not a single bureaucrat's pay -- or job -- is under threat, even though letting go a few of those useless, value-destroying parasites would probably solve most budget problems.

Humility is Arrogance

One of the trademarks of Austrian Economics is that it argued that the economy is too complex to fully comprehend. The conclusion, therefore, is that we should approach understanding it with humility, and we should beware of anyone who says they know how to make it behave as they would wish it to behave. This is always my argument against those who think they know how the economy will or ought to behave, those who believe this or that regulation will have this or that definite outcome -- interventionists and socialists of all stripes. My argument is always that we cannot know what the outcome will be, that the system is too complex to fully comprehend -- particularly since we are elements within that system, meaning the economic system is more complex than we are. I argue that we are necessarily ignorant of what we can do to make the economy behave exactly as we want it to behave -- even as we can understand how people will typically behave given the right conditions, the right incentives, etc. We can make pattern predictions, but not outcome predictions.

I preach humility-- that we have to be honest about our ignorance. Yet when I do, I get accused of arrogance. How is it that the one who argues for humility in the face of our necessary ignorance is the one who is arrogant, while those who argue that we can in fact know everything such that we can plan the economy or, at least, knowingly regulate it, are not? By definition, it is the latter who are arrogant. Basically, I love that the one who says we should have humility when it comes to the economy because it is too complex to control is called arrogant by those so arrogant they think they can understand and control things more complex than they are.

It is amazing how much of a NewSpeak world we live in:

Humility is arrogance; arrogance is humility.

Wisdom is Foolishness

Ignorance is Knowledge.

War is Peace

More Regulation is Deregulation

Corporatism (fascism) is Free Markets

Power is Virtue

Hate is Love

"We are only threatening to kill you for your own good."

The solution to the problems created by power is more power.

The State of the Union 2012

Last night in the State of the Union address, President Obama said he wanted the government to drive up prices for consumers, treat the symptoms rather than the disease of higher education costs, and decrease charitable giving.

With his proposed "Trade Enforcement Unit," Obama is actually proposing to punish countries for selling cheap goods to the U.S. The argument is that subsidizing businesses so they can sell to us cheaper is unfair. However, such actions are actually harmful not to Americans, but to the countries, like China, that are doing it. Americans are benefited by lower prices, because lower prices increase our standard of living. But when you subsidize a company, you have to do so by taking money from the economy -- from your own consumers and from other companies in the country -- to allow a few companies to sell at a lower price. This harms China over the long run and makes their companies less competitive, their economy weaker, and their consumers less wealthy and with a lower standard of living than they would have otherwise had. If China wants to do that to their economy to sell cheaper goods to the U.S., who cares? To point out that we do the same thing is no argument, either -- it only shows our government is just as stupid as the Chinese government on this issue. And what about our companies? We don't have to make those things the Chinese are making -- in fact, comparative advantage suggests we shouldn't try to do so anyway.

Higher education costs so much because cheap money in the form of student loans -- made cheap by government subsidies (at least, until the federal government took over that aspect of the program) and by the fact that 18 year olds do not think about the fact that they will have to pay all this money back -- drives up the price of higher education the same way cheap money created the housing bubble. But instead of addressing the cause of ever-increasing higher prices in higher education, Obama of course only focused on the result. His solution, then, is to use the federal government to bully universities into lowering their prices. Of course, since much of the increasing cost of higher education is due to the development of a massive administrative bureaucracy to in no small part deal with federal requirements, loans, etc., meaning the bureaucracy can't go anywhere, the places where costs will be cut will be in faculty -- especially faculty in areas not considered to be "important," such as the arts, literature, philosophy, history, and languages. Thus higher education will get worse, meaning high school education will get worse (since there will be even less pressure on high schools to teach anything for anyone to get in college).

With the so-called "Buffett Rule," Obama would decrease charitable giving by millionaires, since

Anyone making over $1 million will be required to pay an effective tax rate of at least 30%. At the same time, deductions would be eliminated on Americans earning more than $1 million. In tandem, the proposals would mean a substantial tax hike for the wealthiest Americans. (CNN)

If you eliminate deductions, you eliminate one of the reasons people give money to charities. This is certainly not the only reason people give, of course, but incentives do matter. If you eliminate deductions, you eliminate a reason to give money away -- and you should not be surprised then when people don't give as much. Of course, with less private charity giving, charities will have less money to do their work, and government will "have" to take up the slack. The real result will be that the Left will get to talk about how stingy the rich are and point to how "charitable" government is.

One of the few economically sensible things he said was that we should extend the payroll tax (yes, please, let's not pull more money out of a bad economy!), and that we shouldn't give tax breaks for companies to relocate overseas. Of course, he then went on to say that we should give tax breaks to this, that, and the other company -- when the federal government needs to stop trying to pick winners and losers. It doesn't do a good job of that, as a few scandals of late along those lines shows.

I found the following to be particularly hilarious:

"I will oppose any effort to return to the very same policies that brought on this economic crisis in the first place."

This is hilarious because from day one he engaged in exactly the same policies that brought on this economic crisis. Obama is the kind of doctor who, seeing a man bleeding to death, calls for the leeches! Of course, Obama hasn't the foggiest idea what caused the economic collapse, so he certainly cannot know that what he thinks will help was the cause of the problem in the first place. Among the reasons to support a separation of economy and state is precisely because those who go into government know nothing at all about the economy and how it works. Of course, those who do so understand the economy would have enough sense to call for a separation of economy and state too.

And now for the audacious:

"Let's never forget: Millions of Americans who work hard and play by the rules every day deserve a government and a financial system that does the same. It's time to apply the same rules from top to bottom: No bailouts, no handouts, and no copouts. An America built to last insists on responsibility from everybody."

The bailout, handout, cop-out king has the audacity to make this argument? He says "no bailouts" in the same speech in which he praises himself for the GM and Chrysler bailouts? He says "no handouts" when he wants government to subsidize highly unprofitable green energy companies? He says "no cop-outs" in the same speech in which he continues to blame Bush for the bad economy? (Bush deserves all the blame one can heap on him, but after a while, this economy became Obama's fault for continuing on as long as it has.) I would love to have an economy in which there were in fact rule of law, equality under the law, and no bailouts, no handouts, and cop-outs from our government. But Obama violates these things on a daily basis (and by daily, I think I am being overly generous to him).

And then there is the rhetoric. The following sounds like something I would agree with:

"We can either settle for a country where a shrinking number of people do really well, while a growing number of Americans barely get by. Or we can restore an economy where everyone gets a fair shot, everyone does their fair share, and everyone plays by the same set of rules. What's at stake are not Democratic values or Republican values, but American values. We have to reclaim them."

But wait, the bailouts Obama supported allowed "a shrinking number of people to do really well," at the expense of the well-being of the rest of us. And every one of Obama's subsidies, special loans, cronyist activities, etc. are different rules for people he prefers over others. He doesn't believe in equality under the law. He believes in special treatment of some vs. others under the law. His every action shows he in fact opposes equality under the law and supports special laws for certain groups and individuals.

In other words, this was yet another State of the Union in which the President of the United States was allowed to demonstrate his overwhelming economic ignorance. It's an annual tradition we have gotten accustomed to decades ago -- but we shouldn't let ourselves get used to it.

The Wisdom of Watching Waves

Watching waves roll in can tell you a lot about the world.

On the weekend of the 13th, I was in Hermosa Beach, on the pier, watching the waves roll in . The waves moved in smooth, almost unnoticeable, until they approach the shore, where resistance changes the wave's shape, eventually turning it into much more complex foam as it breaks. Still, the energy of the wave drive the foam to shore.

Energy plus resistance creates work and more complexity.

The waves came in in predictable patterns. Small waves gave way to lager waves and larger waves, until the largest wave of the series came, then the waves would come in smaller and smaller. After I saw the waves get bigger, I would predict that a new wave of waves was coming. But I could not predict which wave (the next? or the next?) was the first of the new series, or the last of the old. After I saw the next wave was smaller, I could predict the next wave after it would be smaller, and that they would get small for a while, but I could not predict which one was in fact the peak wave. That is, it was possible to predict the pattern, but not the nature of each wave.

As with an economy, perfect prediction was impossible, even as pattern prediction was possible.

I believe Hayek made a similar observation in regards to the economy, in fact. Nothing a little wave-watching couldn't tell you. And that's a pretty simple system.

Open Source Legislation?

Gus diZerega argues that democracy is a spontaneous order. In the broadest sense of political action, it certainly is. In the sense of government as a set of organizations, it is not. Of course, the first requires the existence of institutions and organizations, so in a real sense, if democracy is the first, it is also necessarily the second as well. One can argue about whether or not protests are part of a democracy proper, but if they are not, then you probably believe government is necessarily an organization and cannot be a spontaneous order.

But what if citizens participated in the creation of legislation. Rarely does a government actually contribute to a spontaneous order developing into more of a spontaneous order as opposed to trying to develop it into an organization. Certainly things like SOPA, PIPA, the ongoing concentration of power in the hands of the Presidency, etc. are strong indications of a move away from spontaneous order and toward government becoming more of an organization. However, there is also the OPEN Act, which is an alternative to SOPA and PIPA, and may or may not be much better. Why, then, bring it up? Because of the way the legislation is being created: democratically. If you go to the OPEN website, you "can annotate the bill with comments and suggestions for its author, much like they would a Wikipedia document. There's a field where you can submit your e-mail address to receive updates about changes to the bill and its path through the maze that is our legislative process." Truly democratic bill creation? So it seems. Of course, the final arbiter of what does in fact go in is the sponsor, meaning the legislation is not truly a spontaneous order. But there is at least some possibility of ideas coming up the sponsor would not have otherwise come up with.

I am not going to argue that such a process will come up with better bills. Maybe it will, maybe it won't. Maybe it will be a mixed bag. But if all bills were created this way -- and were required to be created this way -- we would have a much more open process. We would see what is in the bills before they were voted on, we would see their creation, and we would have a hand in that creation. It is not quite common law, which does not require legislation, but it is no longer "experts" designing laws for the rest of us.

Knitting Together the Humanities and the Sciences

What do the humanities study? Beauty, ethics, language, the arts, history, epistemology, ontology, meaning, values, etc.

For a long time now, the sciences and the humanities have been divided. The sciences were understood to be sciences because of their ability to be mathematized and to give predictions. The humanities could not be mathematized nor made predictable, so they were shuttled off into their own area. And ignored by science. Though there was some effort at turning the humanities into science, the favor was mostly returned.

However, what if reductionist science is only half of the equation? What if complexity and emergence -- aspects studied by the humanities -- are legitimate areas of study for science? How does that change the relationship between the humanities and the sciences?

Many in the humanities have studied the impact of the economy and society on the humanities and artistic production -- mostly through Marxist lenses. Many in the humanities have used anthropological and cultural studies to study the humanities and artistic production. Many in the humanities have used psychological theories to study the humanities and artistic production. And they are right to do so, because the mind/brain, culture, and society are important elements to understand the humanities, and the production, appreciation, and understanding of the arts. But psychology, anthropology, and economics and sociology are all sciences. They are just complex sciences. They cannot be reduced to physics. They have their own emergent properties. Out of our psychological, culture, and sociological interactions -- out of this milieu -- come the arts and humanities. We are already in a situation to use science to understand the arts and humanities -- so long as we are using the right science, and not the wrong ones (mathematized sciences, like physics), which are far, far, far too simple.

Chaos theory, self-organization (including spontaneous order) theory, bios theory, complexity, emergence, information theory, network theory, etc. are all part of the new science of emergent complexity that is central to reconnecting the sciences with the humanities. More, it will help us to stop doing bad science in the complex sciences, particularly the social sciences, which are between the sciences of psychology (broadly understood) and the humanities. This suggests that the mathematical approaches so popular in economics in particular can do little more than mislead us. More appropriate to understanding self-organizing social networks are the methods of the humanities. Spontaneous orders are the stories of our lives we are living with others. We need to understand them as such. That is a very different approach than the attempt to turn economics into something akin to mathematical physics.

Why I Am For "Corporate Raiding," and Why You Should Be Too

Mitt Romney has gotten a lot of flak for being in Bain Capital, a venture capital company that has been described as "vulture capital." Others simply call some of what they do "corporate raiding," which is generally considered to be a bad thing.

But why is it considered to be a bad thing? Let us take a look at what corporate raiders do, paying particular attention to the "seen" and the "unseen."

Before I begin, let us acknowledge that the entire reason Bain Capital does anything is to make money. That is the purpose of business. Thus, it is no argument whatsoever against what it's doing. It is irrelevant as to whether or not what it does is ethical or unethical, whether we should support it or not.

SEEN

When a company like Bain Capital takes over a company, what we typically see is a strong company taking over a weak one, people getting fired, benefits getting cut, etc. Finding someone who doesn't like what a corporate raider does in the aftermath is like finding a fundamentalist Christian in the South: it's nearly impossible not to do it.

UNSEEN

But what social benefits may there be to corporate raiding? Well, let's begin with the fact that a business, in order to be taken over, must be in a weak condition. It is most likely unprofitable, if not actually losing money. Should it continue on in this way, it is likely to go out of business, which would result in the elimination of its product from the market (reducing competition, reducing consumer choice, etc.) and every single employee in the company losing their jobs (and, needless to say, benefits). Often management won't want to do what is necessary to keep the company afloat, whether it be because of nepotism, unwillingness to fire anyone (which is often exacerbated by a variety of laws that allow fired or laid-off workers to sue the company for "discrimination," even when no discrimination has occurred; such lawsuits could bankrupt the company, leading to everyone being laid off), mismanagement, etc. Further, workers are often resistant to reductions in pay and benefits, which puts the company in a difficult position financially. They may need the workers, but can't afford what they are being paid (directly or indirectly, through benefits). Sometimes it takes an outside perspective to make a company profitable once again. That is what companies like Bain Capital do. They come in, assess the situation, take over, and make all the hard decisions. The result is the creation of a newly profitable company that can continue to make its product, and perhaps expand once again in the future. A variety of painful cuts occur, but they are necessary to save the patient.

The characterization of this process as "vulture capital," intended as an insult, is actually an accurate description of what is taking place. Vultures provide a valuable service in the ecosystem. Without them and other carrion-eaters, dead bodies would take longer to break down, with the result that there would be far more disease. As disease spread, more animals would get sick and die, resulting in more rotting corpses, with more disease. Vultures, by eating the corpse, thus helps keep the ecosystem healthy. So, too, corporate raiders. By taking weak companies and making them strong, they actually strengthen the economy. It's not a pretty sight to see, but one has to look at the benefits to the overall system. It is not a sign of virtue to sacrifice the well-being of everyone else with the maintenance of a weak economy with weak growth so a few people can keep this or that particular job or set of benefits.

Companies like Bain Capital thus, through such activities, create value by making underperforming companies (more) profitable. In doing so, they help keep the economy healthy.

I will note, though, that this is not the same thing as a government bailout or takeover. There are a variety of reasons for this. For one, a private company like Bain is going to be concerned with transforming the company to make it more profitable, more efficient, and healthy. If they cannot do so, they break the company up and sell off the parts, to reallocate the capital in the company to more valuable uses. Were a government to do the same thing and take over a company, there would be pressures to keep everyone on and maintain the benefits. Since the government does not have its own money, but instead has a supply of public funds from taxes and borrowing, they further not only have no incentive to make the company lean and competitive, but rather can keep everyone in place and, more, even expand, making the company more bureaucratized. Such companies can lose efficiency, since there are no market pressures on them to be more efficient and wealth-creating. Further, there will be public choice issues, where others within the industry will want to get involved in the company in order to ensure it remains unthreatening to others in the industry. Many people with wealth and power will get more wealth and power, all at public expense. In other words, with a government takeover:

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Everyone keeps their jobs and benefits.

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The economy is weakened by having a wasteful company in the market, surviving on taxes and borrowing that remove money from the economy and direct it toward the maintenance of such an increasingly wasteful company.

It should then be obvious which one the public will support. But it should also now be obvious which one you should now support.