Monday, January 31, 2011

The Fading Hope of Interdisciplinary Studies

The Fading Hope of Interdisciplinary Studies, my latest at The Pope Center.

Poverty Creates Wealth and Wealth Creates Poverty

Toward the end of Ch. 3, section II of The General Theory, Keynes brings up "the paradox of poverty in the midst of plenty" (30). This is hardly the beginning of the false belief that it is poverty rather than wealth which needs to be explained. It goes much farther back than that, farther back than Marx, even, for whom this was a concern. Yet, here it is in Keynes, driving in no small part his general theory. Well, if you start from false premises, where can you possibly go from there?

Among his immediate conclusions, we find the argument that "the richer the community, the wider will tend to be the gap between its actual and its potential production; and therefore the more obvious and outrageous the defects of the economic system." And why is this? Because

a poor community will be prone to consume by far the greater part of its output, so that a very modest measure of investment will be sufficient to provide full employment; whereas a wealthy community will have to discover much ampler opportunities for investment if the saving propensities of its wealthier members are to be comparible with the employment of its poorer members (31)
such that if the wealthy for some reason won't invest but, rather, save, we end up with an increase in poverty. He further argues that the wealthy have less of an incentive to invest. Why? Who knows? Apparently Keynes believes that the wealthy are happy resting on their laurels. This does not match reality in the least.

But more than this, look at what he has claimed. He has claimed that the richer a community, the worse the market economy works. He claims a "gap between its actual and its potential production." But how could he possibly know what its actual production is? Why would business owners not try to maximize production? Why would the rich just up and quit trying to make more money? And what are they doing with that money? If they are not investing it, they are saving it. Where are they saving it? Are they stuffing it into mattresses? If we assume that they are putting it into savings accounts, then Keynes' concern that "the opportunities for further investment are less attractive unless the rate of interest falls at a sufficiently rapid rate" makes little sense, for if there is a high level of savings, the interest rates will fall. And if interest rates fall, then of course investments will be more attractive. Of course, in either case you are going to have investment, for if the money is in the bank, it is available to be lent out by the bank for purchases, including the purchase of captial goods, and if the money is not in the bank, it is likely it is being invested (since any rate of interest is better than that one can gain under the mattress). So in either case, the money will be available for capital investment, either directly or indirectly.

But this doesn't even address his first claim that "the marginal propensity to consume [is] weaker in a wealthy community" than in a poor one, which results in the bizarre conclusion that poor communities are more likely to be at full employment and, thus, wealthier (in aggregate?) than are wealthy communities. Why? Because the rich aren't spending all their money. Now, if Keynes is merely implying that poor communities have a faster rate of growth than wealthy communities, then his conclusion that there is a problem with this doesn't make much sense beyond the typical complaints about the rich-poor gap that are based on no economic principles to speak of -- and typically do not address the fact that the poor have gotten richer as the rich have gotten richer. But this does not seem to be what he's arguing. No, he argues that the poor communities, because they spend all their money, create the conditions of full employment, while rich communities, because they don't spend all their money, are below the full employment equilibrium. Thus, there is more poverty in wealthy communities than in poor ones. He states that it's a paradox. Somehow the wealthier a community is, the poorer the poor in that community is. Wealth creates poverty. This isn't a paradox; it's a contradiction. Further, this contradicts the evidence, and violates the fact that the economy is not a zero sum game. So, why call it a paradox, then? Well, a paradox is a possibility; a contradiction is logically impossible. One has to reject logic itself to come to Keynes' conclusions in this section.

Thoughts on the Waxing and Waning of Unions

In an earlier post I ask about why it seems that one of the differences between monetarist and Keynesian approaches is the consequences on union membership. However, upon further reflection, the difference between the two historical episodes may have had less to do with monetary policy than with another distinction: Keynesian demand-side economics vs. Say's supply-side economics. Reagan (in)famously pursued what was known as "supply-side" economics, which was, before Keynes, simply known as economics. I still have little doubt that Keynesian monetary policy protects unions, but it occured to me that a focus on demand over supply also has this effect.

A focus on demand results in government policies which focus on demand, and supporting demand protects unions because they work in already-established businesses, while supporting supply results in support for new companies supplying new goods, which are too new to have been unionized.

High taxes, bailouts during recessions, and a focus on getting consumers to buy rather than save has the effect of government support for already-existing companies and their products (not to mention subsidies and any number of other government policies, such as various barriers to entry). These tend to be pro-business in the sense of supporting already-existing businesses and protecting them from competition, including the creation of replacement technologies. High taxes are prohibitive of upstarts. Any kinds of barriers to entry are pro-already-existing-businesses at the expense of upstarts. This contributes to the creation of marge corporations to overcome all of these expenses. Such large corporations also then are ripe targets for unionization. And, as already noted in the linked post, Keynesian policies protect the unions from wage drops during recessions.

Low taxes, incentives for venture capitalists, and a focus on getting people saving their money has the effect of creating the conditions for new products and upstart companies to dominate in the economy. Capital, in the form of money from venture captialists and money available from savings, is available for people to engage in new ventures. Such policies also tend to be pro-business, only they are pro-new business. The availablity of new products allows for the rapid growth of new companies which succeed in the marketplace. Innovation drives growth, following Say's law. There is rapid technological and even company turnover, which does not allow for easy unionization. A supply side approach, then, undermines the unions, which require a fair amount of firm stability to get established in a company.

This suggests that it is the fact of a government's pursuing either demand-side or supply-side policies that affects the strength of unions. Monetarist policies would likely support either one, while Keynesian stimulus, focused as it is on demand, would necessarily support union stability.

It occured to me as I wrote this that my father, who was a member of the United Mine Workers of America when the coal mines were dominated by the unions, would be pleased that I am making this analysis as he has repeatedly, over the years, expressed a desire for me to figure out why unions strengthen and weaken. Out of necessity, he had to work in non-union mines the past 20+ years, but he would have happily gone back to work in union mines if he could have.

Sunday, January 30, 2011

On the Non-Neutrality of Money

A thought occured to me that I want to investigate here, but which I would like some input on, since these are only preliminary thoughts. Perhaps this idea has already been investigated. If so, let me know.

The thought involves the consequence of changes in money's value on investments and capital good creation, leading to consumer goods. It seems to me that under inflation, past investments will appear to be cheaper than present-day investments (and are in a monetary sense). Entrepreneurs will thus become convinced that more risks are worth taking, because the prices are trending upwards. Borrowing in particular will be attractive, because then you have set the price at the past price and, while there is inflation, the prices of consumer goods will be going up. This means that more profit is possible, since the past costs are less than they would be now, and the costs of capital were cheaper than they are now. Each step in the production process is more expensive as time passes, but one is encouraged to produce each step precisely because the capital good produced is worth more in monetary terms than its constituent parts (or even that good was in the past). Thus, entrepreneurs are encouraged to make more in the belief that they can at the very least get rid of the capital goods at a profit. All of this is doomed if deflation occurs.

Under deflationary conditions, each step is worth less than those before. Who would want to invest or create new products under those conditions? Certainly no borrowing would occur. The logic then seems to be to follow monetarist policies of steady money growth. However, there are a variety of ways that inflation can come about, and monetarist approaches may just contributed to excess inflation that distorts things further and can make a reduction in the inflation rate act like deflation (creating relative deflation in a particular company or set of related businesses).

What, then, is the real solution? Inflationary policies result in bubble economies poised to burst at the smallest fluctuation in the wrong (deflationary) direction, and deflation seems to discourage investment and the creation of a series of capital goods, as one knows the final product will be cheaper than the moeny spent to make it. More, there are going to be differences from business to business and sector to sector. The solution would then seem to be whatever system of finance that could create general stability and which would be able to respond to local conditions. There may be times and places where money demand is high, in others where it is low -- and thus the money supply will have to adjust to those local conditions. That cannot happen with a central bank. Is the solution decentralized free banking?

Of course, this conclusion may in part depend on whether or not I am right about the above, more or less. Which doesn't mean it's the only argument for free banking, to be sure. What I am more interested in, though, is whether my above analysis of what happens to decisions to invest and create capital goods is in fact affected by deflation and inflation, as I discuss above. Thoughts?

The Complex Experiences of Complex Phenomena

Why are aggregates in economics necessarily misleading? Why do statistical methods in economics tell us nothing about what is happening now, and what will happen in the future in an economy, but can only tell us something about economics history? Why methodological individualism? Because we know

that external phenomena affect different people in different ways, that the reactions of the same people to the same external events vary, and that it is not possible to assign individuals to classes of men reacting in the same way. (Mises, Human Action, 351)
In other words, "Experience of economic history is always experience of complex phenomena" (351). Statistics cannot describe such phenomena. Aggregates explain nothing about such phenomena. You can only ever watch what actual people actually do in response to actual situations in actual complex situations. The underlying rules by which we conduct ourselves have to be worked out, with the understanding that each of those rule's outcomes changes in relation to the outcomes produced by our following yet other rules. That is why it is important to understand human action as Mises tries to do. Only then can one understand what is going on in an economy -- or in any social system.

It is no coincidence, by the way, that Hayek attempted to demonstrate that and explain why our brains do exactly what Mises claims in the long quote above. If the brain works like this, then Mises is right. Of course, we have an overwhelming amount of evidence from the brain sciences that the brain does indeed work exactly as Hayek said. What, then, does that say about Mises' insights?

Saturday, January 29, 2011

Keynes, Wages, Inflation

In Ch. 2 of The General Theory, Keynes makes a distinction between money-wages and real wages. The money-wage is the amount of money a worker is making at his job per hour, week, or month. A reduction in one's wages from $10/hr to $9/hr. would be a money-wage reduction. It is not surprising that people resist such reductions in wages, as they see that as a reduction in purchasing power -- which is not true of prices are going down, of course. Which brings us to real wages. If prices go down, our real wages go up; if prices go up, our real wages go down. Keynes argues that workers resist reductions in money-wages, but are less resistant to real wage reductions. Workers, he argues

resist reductions of money-wages, which are seldom or never of an all-round character, even though the existing real equivalent of these wages exceeds the marginal disutility of the existing employment; whereas they do not resist reductions of real wages, which are associated with increases in aggregate employment and leave relative money-wages unchanged, unless the reduction proceeds so far as to threaten a rduction of the real wage below the marginal disutility of the existing volume of employment. Every trade union will put up some resistance to a cut in money-wages, however small. But since no trade union would dream of striking on every occasion of a rise in the cost of living, they do not raise the obstacle to any increase in aggregate employment which is attributed to them by the classical school. (14-15)
It should be clear where he is going with this. Under conditions of falling prices, workers resist falling wages. For some reason this is a problem, though it has yet to be explained. Now, he hasn't made it clear why prices are falling, which is bound to make a difference.

If wages are high because the workers were participating in a bubble economy, and the bubble bursts, causing prices to drop precipitously, then such money-wage resistance is a problem for those participating in the bubble economy. The only way to maintain the number of workers employed in the bubble economy is for wages to drop. Because there is money-wage resistance, the solution is to lay off workers. This is of course backed up by the fact that, once the bubble bursts, you aren't making nearly as many units of produced goods as you were, and don't need as many workers. Keyne's argument seems to point to somehow increasing prices to overcome money-wage stickiness, thus reducing real wages. Of course, the only "somehow" possible would be to have a central bank print more money, resulting in monetary inflation which drives up prices relative to wages, thus driving down the real wage. This of course only addresses wage stickiness and not the fact that when a bubble bursts, you still don't need as many workers as before. The consequence of that should be clear: unemployment with inflation. We saw this consequence in the 1970's; if we did not see it before, it was only because the market recovered and workers were hired in other jobs before the inflation came online. Money does not enter the economy in all sectors equally, after all, and neither does it enter it right away.

Another way prices can fall is for the economy to grow. If the economy is growing faster than the population is growing, meaning more products are being made relative to the number of people available to buy said products, you could also have price deflation. Another way is to improve efficiency, thus making it cheaper to make more goods. We see the latter quite clearly in computer technology, where prices for a particular computer or similar device drops very quickly after its initial release. If prices are dropping because there are more goods available relative to population growth, then it is difficult to see why money-wages should go down. These prices are after all going down with the prevailing wages. Nevertheless, monetarists, who are apparently persuaded by Keynes' observations above, argue that the money supply ought to grow at more or less the same rate as the economy. If there is a 3% growth in GDP, then the money should grow 3%. This prevents whatever problems they imagine will occur because of money-wage resistance. But as just noted, it seems quite unlikely that under this scenario anyone would want to decrease wages (any more than a business owner would like to reduce wages to increase profits, of course -- an entirely irrelevant point, since obviously the business owners figured out what wages they had to pay to get the workers the needed in the first place).

Keynes (and the monetarists to a lesser degree) are concerned, then, with the fact that wages don't go down when they think they should. The way to reduce real wages, then, is through inflation. Inflation hits prices first, and then wages follow. If inflation drives up prices, it makes sense to borrow now to purchase now, and wait for wages to rise in response to inflation, thus making your past purchase cheaper (since your loan payments do not increase with inflation). The goal for each is, of course, full employment. Both seem to imply that without inflation, unemployment would slowly rise and rise. This seems a strange claim. It would mean that unemployed people would refuse to work except at the money-wages they used to make. This ignores the fact that over time people become more and more willing to work for less and less. And if there is a firm that has unionized workers who are resistant to a decrease in wages, then you can expect a nonunion company to emerge and hire those laid-off skilled people to work for them at the lower wage they are now willing to work at.

The only thing, then, that an inflationist policy seems designed to do is protect union workers from competition against nonunion companies and workers. Indeed, the so-called Keynesian period of U.S. political economy, between the end of WWII and the election of Ronald Reagan in 1980, was a period of strong unions. When the switch was made to supply-side economics, the unions collapsed. Is it any surprise, then, that President Obama, who has (and whose Federal Reserve has) been pursuing more or less Keynesian policies, is also pro-union?

One has to distinguish between the Keynesian and monetarist policies, though, because Keynes did at least seem to have enough sense (from what I have read about his ideas -- I haven't gotten that far yet myself in The General Theory) to argue that inflationist policies like deficit spending and printing money should only occur during recessions; the monetarists argue for printing money at the same rate every year, with the result of a continual downward pressure on real wages. Reagan, of course, added to this with high deficit spending during a non-recessionary economy. As observed above, the Keynesian policy, though, seems to protect unions, while the monetarist-Reaganomics approach proved to not protect unions in the least. The reasons for this difference would make for an interesting economics paper (assuming, of course, I'm right about everything I just said above).

Reading Keynes

I have read quite a bit about Keynesian economics -- including quite a bit from some Keynesian economists, like Paul Krugman -- but I haven't read the man himself. So I'm embarking on The General Theory of Employment, Interest and Money. Everything I have read about Keynesian economics, including by its supporters, suggests that it's an approach that turns economics on its head, is inflationist, prefers mercantilism over free markets, and mathematizes folk economics and borderline magical thinking. Indeed, Paul Krugman's otherwise excellent book The Self-Organizing Economy includes a chapter on Keynesianism that doesn't match the rest of the book in its uneconomic thinking and bizarre conclusions.

Nevertheless, it could simply be said that it is not the fault of Keynes that his followers have transformed his work into so much unscientific nonsense. Marx himself declared he wasn't a Marxist. So I am reading Keynes himself. I'm sure I'll be making comments here as I do. As of the moment of writing this, I have gotten through pg. 13 -- all introductory material, explaining the problems with classical economics in regards to understanding wages. Assuming he is correct about these problems (which is unfortunately a huge assumption considering his purposeful distortion of Say's law), one cannot disagree with the analysis of the problems. Of course, being able to recognize problems doesn't mean one can solve them. But we shall see what Keynes himself has to say.

Monday, January 24, 2011

The Task of the Social Scientist

The market process is coherent and indivisible. It is an indissoluble intertwinement of actions and reactions, of moves and countermoves. But the insufficiency of our mental abilities enjoins upon us the necessity of dividing it into parts and analyzing each of these parts separately. In resorting to such artificial cleavages we must never forget that the seemingly autonomous existence of these parts is an imaginart makeshift of our minds. These are only parts, that is, they cannot even be thought of as existing outside the structure of which they are parts. (Ludwig von Mises, Human Action, 333)
While all of this is true of market processes as well as other complex processes -- whether brains, bodies, ecosystems, or other spontaneous social orders, such as the arts, science, or religion -- Mises fails to make yet another distinction that I think is necessary in making divisions, a distinction Plato makes in the Phaedrus: that the divisions must be made in the proper places. Like a good butcher, the cuts must be made at the joins, and not just willy-nilly.

This of course only begs the question of where the proper divisions are to be made.

A living cell is, on the one hand, indivisible and, on the other hand, full of distinct parts. One can identify a nucleus, endoplasmic reticulum, mitochondria, ribosomes, chromosomes, etc. Various processes can also be distinguished in a cell, from regulatory networks to protein-creation processes to metabolic cycles. All of these interact to create a self-organized and self-organizing network.

Where does one make these divisions in an economy? Some obvious divisions would seem to be the individuals involved, firms (which have organizational network hierarchies similar to cellular regulatory networks), and various sectors, including the financial sector, etc. But we can see that these are in a real sense arbitrary, even as they make sense. The financial sector is impossible without firms to borrow, and firms don't need to borrow if they aren't going to make products, for which they need consumers. And it is individuals who are making these decisions.

More than this, we have a variety of spontaneous social orders which constitute what Hayek called The Great Society. These divisions seem logical -- who would confuse the artistic with the scientific order, after all? -- but upon closer inspection, we see a variety of ecotones, or overlapping areas. To what degree does a firm involved in the creation of technology need to be involved in the scientific order? Quite a bit, obviously. Does it need to be involved in the artistic order? Well, that order tells us something about how people respond to various aesthetic qualities, so the artistic order comes into play with things like advertising and design. Clearly the religious order overlaps the moral/common law order, which is involved in keeping scientists and CEOs (mostly) honest. There are overlaps everywhere.

Government is a tricky issue. Most governments are not spontaneous orders. Most are organizations, and are very often imposed by some one or group with enough power to impose their will on everyone else. The exception would be a democratic order, which can come in a variety of forms. Of course, either kind of government can provide the necessary protections for stabilizing the other orders, including property rights protections, contract enforcement, laws against the initiation of force or "bearing false witness," which are lies that benefit you at the expense of others. However, both can just as easily undermine these orders as well. If a democratic government voted for a common religion, that would all but destroy the religious social order, turning it into an organization (of that one religion). Whatever is left of the religious order would be driven underground and fragmented. This of course applies to other orders as well, whether it be censorship in the artistic orders, setting goals for the scientific order, or crony capitalism/interventionism or even outright socialism -- imposing organizational development onto the order, thus destroying it -- for the economy.

The divisions are necessary for understanding each, of course -- but these divisions are also necessary for understanding how each must relate to the other for the entire social system to be healthy. While the body is fully integrated, a doctor would be a fool to give you heart medicine for a liver ailment. He needs to know where the problem lies, and what are secondary effects on other organs. The social scientist then has two roles: that of biologist, trying to understand the system and its parts and those parts' relationships to each other to form a whole, and that of medical doctor, trying to understand where the illnesses are, to propose cures. Of course, for the social scientist, this job is practically impossible, as the system/process he studies is more complex than he is, while the system/process the biolgist/M.D. studies is less complex. As Hayek pointed out, we cannot fully understand any system as or more complex than ourselves. We can only understand the parts. Thus figuring out where the divisions lie, and why, is a far more difficult task, since we cannot even know what the entire organism could possibly look like.

Saturday, January 22, 2011

The Science Hall of Fame

According to Google's nGram, who is the most famous scientist of all time? And, if you are a scientist, how do you become famous yourself? Answers here.

Famous bloggers? Hmmm.

Friday, January 21, 2011

Between the Narrow and the Broad -- What Is Art?


My favorite part is the exchange that runs "These works are indisputably art." "It's not indisputable. I dispute it." I don't agree with either one; the truth is somewhere inbetween. But where?

Saturday, January 15, 2011

My Libertarianism

I feel myself being dragged back into politics. Lately I have been trying to avoid the explicitly political and focus, instead, on scholarly work. While it is true that that scholarly work could have political consequences if read, developed, used, etc., but it's not explicitly political. There are political consequences to what one believes about economics, and of course a strong indication of what one's politics are can be traced to one's beliefs about economics, but there is a difference between making the explicit connection and writing about, say how cities create far-from-equilibrium states and thus are more creative and create more wealth.

I would prefer to also write my poems and plays and perhaps even get back to a novel manuscript that's been sitting around, unfinished, for far too long. Now, there are political consequences to art as well, even when it is not explicitly political (and all the great works of art were never explicitly political -- a few satires being the exceptions). This doesn't prevent art from having that effect, though. Why else would tyrannical governments constantly and consistently engage in censorship. The excuse is always the same, that the work is inciting the people and distrupting society, but the fact is that, well, they are right. Great art does that by providing what-if scenarios that challenge the current cultural/social/political situation. That's why it's dangerous to tyrannies. If you want to know if you are living in a tyranny, look at the list of banned books. The longer it is . . .

But neither of these activities are explicitly political. I have also been writing pieces for the Pope Center on education, but those are about transforming education, which again is not explicitly political, even if it will have political consequences.

Somehow my pointing out the absurdity of connecting conservative political rhetoric to the left-leaning, conspiratorial likely-schizophrenic Jared Loughner has resulted in my engaging in more explicit political arguments. Fine. Let me lay it out, then.

I am essentially a classical liberal and, politically, a libertarian. I became a libertarian as I learned economics. The more I learned about economics, the more libertarian I became. But my goal for myself has been to develop a cohesive, coherent world view, no matter where it led me. So here is my basic world view, in a nutshell.

Everything is information. That is the fundamental "element" of the universe. Thus, I have an informational ontology. For something to be information, it has to be both orderly and disorderly, have elements of order and randomness. It must also have redundancy to be able to communicate well. As information becomes more dense and complex, it leads to the emergence of ever-greater complexity of form. (To inform is to give form to, thus information creates form.) This information is neither purely digital nor purely analog, but a combination of both simultaneously. Quantum elements are both particles and waves. Their particleness allows for physical autonomy; their waveness allows them to interact. They are thus interacting individual elements.

We see this at each level of complexity, from the quantum physical to the atomic/chemical to the biological to the mental to the social. At each level we have interacting individual elements. The complexity of those elements allows for greater complexity of interactions, of course, but this is what it all basically boils down to. You cannot eliminate the individual elements and deal only with collectives or aggregates. No, each element interacts in its own way, as we see in spin glasses (at the atomic-interaction level), neurons in the brain, or humans in an economy. We see this kind of social individualism all the way from the quantum physical level to the human level. When social individuals interact on large scales, we get spontaneous orders. When there are only a few elements, one can have any number of simple, hierarchical interactions; but when there are a large number of elements, one has spontaneous orders of various kinds (also known as self-organizing systems or processes). This organization is of necessity bottom-up. The order does not have to be imposed from the outside. On the contrary, attempts to "help things along" only disrupt the process and keep the system simple.

Epistemology and Values.
It is impossible to have perfect knowledge. It is impossible to have good knowledge, especially of things far away. All knowledge is by necessity local. We do not understand things "as they are," because our brains necessarily abstract things and categorize them. Thus, all thinking is abstract. More, our brains create working theories of the world, which adapt to the world as information changes. A pile of data is exactly that unless there is a theory with which to make sense of it. We are thus natural theorizers. We are constantly testing.

Knowledge/information is transmitted most efficiently and quickly in scale-free networks. Spontaneous orders are scale-free networks. The further away one gets from a spontaneous order, the more rigidly hierarchical the system becomes, collapsing the network, necessarily simplifying it, as information/knowledge faces bottlenecks and information is lost as it goes up the hierarchy.

No one can know what is best for you better than you can know it. Each person has their own rankings of values. All anyone can do is impose their own values on others, or allow people to pursue their values as they see fit. You can judge what someone's values are by seeing what they do, but you cannot know what the person's value rankings, which may change from moment to moment, truly are. Knowledge is local and values are subjective. Thus economic/social planning is impossible and interventions will have unintended and very often unimaginable negative consequences.

Ethics allows us to interact with others peaceably. If one's ethics disrupt social order, then one's ethics are in fact unethical. We have become more ethical as a society the more we have extended our ethical behavior -- from family to tribe to city-state to region/fellow religious believers to anonymous others in the spontaneous order society and catallaxy. Do not murder. Do not steal. Do not covet (which is wanting the very things others have; to be contrasted with greed, which is wanting the kinds of things others have). Do not rape. Do not bear false witness (which is different from lying -- as there are lies which maintain social bonds). Each of these things strain or break social bonds. Thus, they are unethical. One cannot have an ethics which includes covetousness. Yet, those who advocate redistrubitionism in fact are using covetousness as the driving force behind their ethics. If covetousness is ethical, then stealing is ethical, as that is the only way to get the exact things others have. And if someone doesn't want their things stolen from them? Threaten them with murder. And be sure to murder a few people just to let everyone else know you're serious about it. The connection between ethics and politics should thus be obvious.

We can also thus see that the socialists are ironically named. Their policies are in fact anti-social. They break social bonds. The result is that people are increasingly atomized and desocialized. Welfare statists are less extreme versions, but the motives are the same. In what should be a complexly interacting spontaneous order, we get warring groups in the welfare state. There are those who find that one can gain political power from keeping various groups at war, and they then actively encourage such divisions. One with a collectivist world view sees not individuals, but groups. That group may be a small group, such as a race, a binary division, such as men and women, or "society", but the commonality is that the individual is dissolved, is not taken into consideration. Thus racism, fascism, socialism, and communism are all fundamentally the same in being collectivist. It is a very primitive world view, brought up to date.

The word "politics" comes from the Greek word "polis" meaning "city." Politics is thus the art of living together in a city. We have of course expanded it to mean the art of living together in a nation-state, but the essential principles are the same. We are forced to live in a society of unknown strangers. And we have to get along with them. And we do. Especially when we are left alone to get along.

There are two basic interactions among strangers: 1) if you do something good for me, I'll do something good for you, and 2) unless you do something good for me, I'll do something bad to you. The first is the principle of trade, where both people gain from the interaction. This is known as a positive sum game, and it is the very nature of all economic interactions. The second is the principle of theft, where one gains at the cost of another. This is known as a zero-sum game (it is in fact a negative sum game, as it breaks social bonds), and is the very nature of all criminal transactions. We see the first in the economy; we see the second in government when it oversteps its proper bounds.

And what are those proper bounds? To ensure that only interaction #1 takes place among its citizens and that interaction #2 does not take place. And that would include itself. The proper interaction of government with the citizen should be, 3) so long as you do nothing bad to others, we'll do nothing bad to you. Its role, then, is protection -- to protect us from individuals or groups, including other governments, who wish to murder, rob, rape, or cheat us. Thus its proper role is to maintain the conditions for society to emerge as a spontaneous order. Anything beyond that, and the government is acting as a criminal, no matter what the "intentions."

No government should be allowed to do anything the citizens of the country are not allowed to do. This is the essence of equality under the law -- the law must apply to all equally, whether they are in the government or not. No welfare state or socialist government can abide by this rule. They must of necessity treat people unequally. More, the government must be allowed to engage in what would be criminal activity if it were done by a private citizen in order to achieve the goals of those in government -- who are, after all, trying to impose their values on others. They thus oppose pluralism, because that means others are allowed to pursue their values in nonviolent, noncoercive ways. The welfare statist who wants to gain politically is bound to preach pluralism, but use it to divide people politically where, in the catallaxy, each would be able to achieve their goals. In government, there are winners and losers -- it is a zero sum game. In the catallaxy, there are winners and winners -- it is a positive sum game. But there are only winners if you are willing to provide another with what they want to achieve their goals. There are those who do not want to do that, but rather want to make people accept their values and help them realize their goals. These people are the ones who turn to government for subsidies, bailouts, or to achieve some personal vision.

So this is, more or less, why I'm a libertarian. I am sure that there is much more that can be said, but this is but a blog post. Anyone who wants clarification or to argue any of these points, feel free to leave a comment.

One best discovers truth through dialogue.

Friday, January 14, 2011

Ann Coulter, Satirist

Even though I have not been particularly interested in this whole nonsense about the political rhetoric of the country and the almost certain fact that it affected Loughner in no way, shape, or form, I have managed to get dragged into it anyway. It's what I get for quoting Steve Horwitz on Facebook on why it's absurd to make the connection.

In the exchange, I ended up arguing with Gus Dizerega, who I know through the Fund for the Study of Spontaneous Orders conferences, who is a political scientist and Hayek scholar, and who is generally a Leftist. I at least learn a lot from arguing with him, at least, when it doesn't devolve into what I consider to be blind acceptance of the Left as good and conservatives as evil as well as accusations of my defending people I'm not actually defending. One can argue that the connection between Laughner and conservative political rhetoric is speceous at best and not support conservativism, or even the rhetoric.

The final straw, though, seems to have been my claim that Rush Limbaugh and Ann Coulter are satirists. On the discussion listed above, that claim caused him to stop arguing with me. (I hope this posting doesn't make that permanent -- I figure since the original discussion was public, it should be fine to continue it in a public forum.) You will note that Shawn Darling got me to agree that Limbaugh was about half-polemicist as well -- but I stick by my argument that Ann Coulter is a satirist.

Let me give an example. I could give plenty, but I want to give an example of where she in fact is arguing almost the opposite point she seems to be arguing. The piece I will be analyzing is "Bradley Manning: Poster Boy for 'Don't Ask, Don't Tell'.

She begins the article with a standard introduction which connects the two issues of the article: the discovery that Bradford Manning was the leaker to Wikileaks, and 'Don't Ask, Don't Tell.' She makes fun of the culture of sensitivity with the "who wants a hug?" comment, then launches into explaining what happened.

The first thing she does after this introduction is to make fun of the military for being unable (which probably really means, unwilling) to figure out that Bradford Manning is gay:

Bradley said he lifted the hundreds of thousands of classified documents by pretending to be listening to a CD labeled "Lady Gaga." Then he acted as if he were singing along with her hit song "Telephone" while frantically downloading classified documents.

I'm not a military man, but I think singing along to Lady Gaga would constitute "telling" under "don't ask, don't tell."

Do you have to actually wear a dress to be captured by the Army's "don't ask, don't tell" dragnet?
Her point here is that the military is hardly enforcing the DADT policy if they can't figure out that someone singing along to Lady Gaga is gay. Why even have it if they're not going to enforce it?

Coulter then goes on to point out that,

Maybe there's a reason gays have traditionally been kept out of the intelligence services, apart from the fact that closeted gay men are easy to blackmail. Gays have always been suspicious of that rationale and perhaps they're right.
She then goes on to tell the story of the Cambridge Five and the fact that "the Russians set Burgess up with a boyfriend as soon as he defected to the Soviet Union." Now, what is the point of this story? The story she tells of the Soviet spies takes place during a time when anyone who was gay was trying to hide it. They of course could be easily blackmailed. Now, however, the situation is radically different. Everyone is out and proud, and the only way that a soldier could be blackmailed would be due to . . . DADT! Without it, the last reason for blackmail would be eliminated. By telling this story, she is pointing out that the situation has in fact changed. There is little to no reason to fear blackmailing gays who would be out of the closet if it weren't for DADT. More than this, consider who is considered the "enemy" today. Is it likely that Islamic terrorists or the Taliban are going to set up a gay spy with a boyfriend in Afghanistan? What could be more absurd? One has to keep the current situation in mind as well.

Coulter next makes the argument that "Obviously, the vast majority of gays are loyal Americans -- and witty and stylish to boot! But a small percentage of gays are going to be narcissistic hothouse flowers like Bradley Manning." Of course, one could make the same statement about any group of people -- that the vast majority of them are loyal Americans, but a small percentage are going to be narcissistic and emotionally delicate. This should be obvious to anyone. Is it any more likely among gays? Even if it were twice as likely (just for the sake of argument), that would still be a smaller actual number than would exist in any other group one could come up with (other than perhaps Nauru-Americans).

Next Coulter asks:

Look at the disaster one gay created under our punishing "don't ask, don't tell" policy. What else awaits America with the overturning of a policy that was probably put there for a reason (apart from being the only thing Bill Clinton ever did that I agreed with)?
There is a lot going on in these two sentences. First, if we consider the context of her argument that DADT appeared to have no effect on Manning's life as a soldier, then she is obviously making fun of the idea that DADT had much of anything to do with it. However, to the extent that it did, isn't that really an argument for getting rid of it? Now, her next sentence is no doubt one that is going to be easily misinterpreted. She argues that DADT was "probably put there for a reason." Considering that she is a "conservative commentator," the natural instinct is to interpret this as, "to prevent Bradford Manning-type problems." But she then goes on to say that it's a policy she actually agreed with when Clinton implemented it. Now, many on the Left and among libertarians think of DADT as a terrible policy that needs to be overturned for the sake of gay rights. However, at the time, it was a policy which was intended as a move in the right direction. Prior to DADT, the military could ask, and if they found out you were gay, they culd kick you out. DADT made it so that the military could not actively go after gay soldiers. Thus, Coulter is here admitting that she was in favor of a gay rights policy -- but is doing it under the cover of current attitudes toward DADT by both sides.

What, then, do we make of the ending, where she argues that "Liberals don't care. Their approach is to rip out society's foundations without asking if they serve any purpose." Further, she argues that, "For liberals, gays in the military is a win-win proposition. Either gays in the military works, or it wrecks the military, both of which outcomes they enthusiastically support." Which is probably true for many liberals. Perhaps people might be willing to consider allowing gays to openly serve in the military if the main proponents of the idea didn't want to "wreck the military." What, then, is Coulter really criticizing here? The idea of gays in the military, or of liberals wanting to wreck the military? More than that, if liberals think that gays in the military would wreck the military, what does that say about those liberals who think that? Aren't they the ones who are in fact homophobic?

Finally, Coulter ends with, "Any discussion of "don't ask, don't tell" should begin with Bradley Manning. Live by the sad anecdote, die by the sad anecdote." Perhaps it should. Perhaps it would create an argument for repealing DADT in the direction of allowing gays to openly serve in the military (a point which is now moot, since the recent repeal of DADT).

Of course, the final sentence is a slam on politicians' tendency to use "sad anecdotes" to win over listeners. The exception does not negate the rule. Yet such sad anecdotes are highly effective. They tap into our emotions, overriding good sense or proveable facts or statistic which prove the opposite of the anecdote. Whic doesn't prevent an anecdote from being used to teach a lesson. But it has to be the right one.

Thus we can see that Coulter's argument is in fact much more complex than it at first glance appears. One has to take into consideration her use of irony -- sarcasm being an extreme version of irony -- to understand her actual message. I have little doubt that there will be those literalists out there who insist that she means what she says -- but my question to them is: what is it that she actually says? Why does she use the stories she uses? What do they prove?

The problem with satire is that it is so easily misunderstood, even when the person is so obviously a satirist. Swift's essay "A Modest Proposal" actually got people riled up and actually discussing it as though it were an actual proposal. The arguments are often hidden by irony and sarcasm. Irony makes works difficult. It is not surprising, then, that Coulter is so often misunderstood.

Tuesday, January 11, 2011

Libertarians are Not Conservatives

I am annoyed that libertarians keep getting grouped with conservatives/Republicans. Quite frankly, the Republicans and Democrats have far, far, far more in common with each other than Libertarians have with either Republicans or Democrats, both of which espouse pro-government, collectivist ideologies, both of which are thus equally unethical.

To a libertarian, limited government does not mean more efficient government and it does not mean less government for the sake of less government -- limited government is desired because government is force, it is not reason; it is desired ...because government is corrupting (as power tends to corrupt, and absolute power corrupts absolutely); it is desired because government cannot do what it claims to be able to do beyond killing people and breaking things. Indeed, that is it's solution to everything. To be truly anti-government is to be anti-force; those who are pro-government support force, coercion, and violence in human interactions. That's what it means to be a libertarian -- and why the right and the left are identical.

Sunday, January 09, 2011

Some Thoughts on Jared Loughner's World View

I wouldn't otherwise write about the Ariz. Democratic Rep. Gabrielle Giffords shooting by Jared Loughner if it weren't for some of the things that have been said about his world view. This has been ascertained mostly from his YouTube page, where he talks about government mind control through grammar and lists his favorite books. The list is very telling:

Animal Farm, Brave New World, The Wizard Of OZ, Aesop Fables, The Odyssey, Alice Adventures Into Wonderland, Fahrenheit 451, Peter Pan, To Kill A Mockingbird, We The Living, Phantom Toll Booth, One Flew Over The Cuckoo's Nest, Pulp,Through The Looking Glass, The Communist Manifesto, Siddhartha, The Old Man And The Sea, Gulliver's Travels, Mein Kampf, The Republic, and Meno.

Several of these books are dystopian novels: Animal Farm, Brave New World, Fahrenheit 451, and We The Living, all of which fit into a general theme of novels which deal with social themes, including The Wizard Of OZ, To Kill A Mockingbird, One Flew Over The Cuckoo's Nest, and Gulliver's Travels.

Of course, there are a few texts that should be of immediate interest: Mein Kampf, The Republic, and The Communist Manifesto. Plato's Republic influenced both Nazism and Communism, and it is likely that Loughner read The Republic as primarily a political piece (rather than as a model of the soul). Many people have expressed surprise that he lists Mein Kampf and The Communist Manifesto. I'm not in the least bit surprised, as both national socialism and international socialism are both, well, socialism, and are both collectivist ideologies. So he seems consistent in his support for collectivism.

What seems to have many people confused is his obsession with grammar, and his claim that the government is engaging in mind control through grammar. I'm not going to argue that he's not crazy for believing this, especially with as far as he seems to have taken it, but at the same time, this in fact reflects some ideas developed by some very not-crazy people -- one being George Orwell (who is, of course, the author of Animal Farm, which he listed). Orwell of course argued that one has to be careful because our thoughts can be controlled through the manipulation of language. Nietzsche (who deals directly with the issue of grammar), the Nazi philosopher Martin Heidegger and the leftist linguist George Lakoff each argued the same thing -- but the latter two at least are very much in favor of such manipulations. I won't pretend that Loughner read Nietzsche, Heidegger or Lakoff -- though Lakoff's ideas on this is widely available through his Huffington Post articles, such as his one on framing. I only mention them to point out that such ideas are not entirely crazy, or even uncommonly held. Further, they may be more coherent than most people know or understand. I see a consistent interest in collectivism, dystopian ideas, and the manipulation of people (consistent with his interests in collectivism, the themes of dystopian literature, and his thoughts on grammar/language). People want him to be crazy because it is too frightening to think that he actually may not be. Of course, this articleciting his postings makes the argument that he is crazy. And perhaps he is (though the author of the article is wrong about the incoherence of the books selected, as observed above). The stuff he rambles on about on years makes no sense, but rest sounds like the kinds of arguments I read from altogether too many of my Freshman composition students. I wish I were exaggerating when I say that.

Saturday, January 08, 2011

Some Thoughts on Mythology

Myth is a vital part of the human experience. One cannot subject myth to scientific/historical fact. Those who wish to do so think science and history are superior to myth. I, however, think myth is more important than history and science, that the meaningful truths of myth are more important to human life than are the meaingless facts of science and history. I think meaning is more important than meaninglessness. That is why I respect the Bible for its meaning and wisdom without the least concern with its historcal, scientific, and mathematical inaccuracies.

However, let me give a non-Biblical (and thus less volatile) example.

In his poem "On First Looking Into Chapman's Homer," John Keats says that reading Chapman's translation of Homer made him feel

" some watcher of the skies
When a new planet swims into his ken;
Or like stout Cortez when with eagle eyes
He star'd at the Pacific -- and all his men
Look'd at each other with a wild surmise --"

The note at the back of the book with this poem says that "Cortez was one of the first Europeans to see Mexico CIty; Keats confuses him here with Balboa, the first European to see the Pacific."

The point is not that it was either Cortez or Balboa who saw the Pacific for the first time. Here Keats clearly gets the facts wrong. If we were to subject this poem to the rigours of historical fact, we would have to disregard it. It is ironically the defenders of Biblical facticity who are its greatest enemies in this respect -- it is they who insist that the Bible does not contain truth if it is not factual in all ways, in all manners. (The enemies of the Bible, by the way, love the fact that so many Christians make this mistake.)

It ultimately does not matter that it was Balboa, not Cortez, who saw the Pacific. What matters is that we understand this feeling -- it is the truth of the sense of awe, the truth that Chapman's Homer, that reading Homer, is as great and wondrous a discovery as the Pacific Ocean.

Homer, too, presented myth. Yet Homer gives as much detail about his characters and the situations they are in as anything in the Bible (in fact, if you read Auerbach's book "Mimesis," you will see that it is much more detailed than is the Bible). Or take any good novel. Like "War and Peace". In it we learn the lineages of the families, the ages of those people and how long many of them lived. There is a lot of "unecessary" detail that helps to create the appearance of something having actually happened that way. These are more than just parables, which acknowledge up front they are morality tales. But a good novel or an epic poem is also a morality tale, among other things. Take, again, "War and Peace". In this novel we can find all sorts of historically accurate facts about the French invasion of Russia. But if we go try to learn historically accurate information about the families, we will be disappointed. The point is not the historical accuracy of the novel, but the meaningful wisdom-truth of the novel. That is the only truth that matters in myth -- not historical-scientific facts.

You cannot ever extract truth from history. All you can ever do is extract facts. History is about facts. It says how things were. It has no opinion about ethics. It has no opinion about God. Only mythological truth, not historical-scientific facts, can possibly address all the why questions, including what my prupose is, how I should live, if I am accountable to anyone for my actions, and to whom, what will happen when I die, what the future holds (questions of right and wrong may lie in both camps). These questions will evade you only if you think that truth lies in history and science. In fact, every scientist will tell you that all these questions cannot be answered by science, that science does not ask them at all. So will any historian. It is only the mythologists and those who study mythology (theologians) who even care to ask these questions, let alone answer them.

Mythology is not falsehood and deception. Those who believe it is is an enemy to mythology. Which means that you are an enemy to religion, including the Bible. You expect something from the Bible that it never intended. And when you do that, all it takes is just the smallest disproof of a fact-claim in the Bible to make one an atheist. In fact, it is precisely this attitude that has created all the atheists I have ever known. The anti-mythology attitude is and has been killing Christianity since the end of the Renaissance. And so long as people continue to have an anti-mythology attitude, it will continue to die.

Of course, the drive to mythologize can never die. It is the source of our stories, whether in poems, short stories, novels, epics, romances, plays, television, or film. We will find our truths and wisdom there, if we cannot find them anyplace else.

Friday, January 07, 2011

Comparing Blogs

I now run three blogs. This one, of course, as well as Evolution and Literature and Austrian Economics and Literature. I have had the latter two up since Sept. 12 and Sept. 14th, respectively. I have three co-bloggers at each of the blogs. As far as topics go, Evolution and Literature is a much older, more established topic than is Austrian Economics and Literature, which was given strong footing with Cantor and Cox's Literature and the Economics of Liberty, released in 2009.

So what explains the fact that Evolution and Literature has had less than 900 hits to date, and has one follower, while Austrian Economics and Literature has had almost 3700 hits to date, and 13 followers -- one more follower than I have on this blog, my first blog, which I have had since August 9, 2004, and which shows only about 13,400 hits.

Certainly I'm not complaining. I'm excited at the success of Austrian Economics and Literature. Very. I just find it interesting that it's taken off as it has, while Evolution and Literature has attracted far less traffic.

Any thoughts?

Sunday, January 02, 2011

Far-From-Equilibrium State Between Equilibria

The far-from-equilibrium state exists between the solid-equilibrium state and the chaos-equilibrium state. Life, for example, exists between crystal and liquid; the weather exist between the relative-to-gases "solid" liquid and gases (gases are at equilibirum under constant pressure and temperature).

If growing, dynamic economies are in far-from-equilibrium states, then this suggests that it lies between two equilibria -- a "solid" state and a "chaotic" state. If arbitrage entrepreneurs are aiming at moving prices toward equilibrium, as Kirzner suggests (and I've noted previously), then toward which equilibrium are prices being moved? This of course begs the question of how we would define "solid-state equilibrium" and "chaotic-state equilibrium" in relation to the economy. And that is the question.

Saturday, January 01, 2011

I Need a Job

I need a job. I need a job. I need a job. I need a job. I need a job.

Something that uses one of my degrees. I don't even care which one anymore.

Since before I graduated with my Ph.D., in 2004, I have been looking for a job. I have gotten nothing that requires a Ph.D. Seriously, this is getting ridiculous.