Month: May 2014

Henry George Revisited

henrygeorge

“What has destroyed every previous civilization has been the tendency to the unequal distribution of wealth and power.”

-Henry George

Progress and Poverty has been praised by Tolstoy, Einstein and Milton Friedman. Friedman, predictably, was the least effusive of three.  He said the “least bad tax is the property tax on the unimproved value of land, the Henry George argument of many, many years ago.” George disagreed with Thomas Malthus’s gloomy forecasts of widespread of famine; geometric population growth did not seem likely to him. While it is beyond the scope of this blog, in a future post I will explain why neither man was right.

Whereas the contemporaneous textbooks authored by Walras and Menger were strictly academic tomes about the theory of political economy, Progress and Poverty is succinct and accessible. The clarity of its arguments  made it such a success with the men listed above, but its rallying cry for equality is what endeared its author to people from all walks of life.  His thesis is simple: a land tax would encourage people to make use of their property while allowing those without land to keep all of their income. Also, and this should not even need to be said, his thoughts on real estate speculation are more pertinent now than when the book was published.

Henry George, like C.S Peirce, was an autodidact who had no ties to the ivory tower. Unlike Peirce, George became famous in his lifetime. Milton Friedman, though he is despised by the left for defending the unrestrained market and defamed by the likes of Mises for his “socialist” views on monetary policy, was an outstanding economist. He sits on the opposite end of the fence of the types commonly associate with modern Georgism, which is unfairly pegged as a populist movement composed of agrarian class warriors.  Nothing could be farther from the truth about the man or his followers.  An observer of the industrial revolution, George understood there are a myriad of benefits to capitalism, innovation and urbanization.  What troubled him was not private ownership or competition, but the level of inequality he observed in terms of material wealth and opportunities to advance one’s self. Unlike Piketty, what George saw was deplorable by the standards of any era. What he decried was reality, not his own dire predictions.

Slavery in antiquity was not a humane institution, but before the advent of labor laws (preceded and largely made possible by rises in the marginal productivity of capital) one can say it was abolished in name alone. One would have to be incredibly dense to think the formal renunciation of human chattel did anything to improve the lot of the freed or the already free. One only need to read The Condition of the Working Class in England or other period pieces to understand that a slave by any other name is still a slave. Even today English and Americans happily import mountains of consumer goods made by the “free” citizens of India, Cambodia, Vietnam and Malaysia without the slightest twinge of guilt. Nothing makes a sweater feel better than knowing the 8 year old who made it is not legally anyone’s property. He or she has chosen to forego childhood and education to work sixteen hour days without anything remotely resembling fair compensation, but they have the right to starve to death. In civilization’s brief history dreadful working conditions are the rule, not the exception. Urbanization, positions demanding specialized knowledge and the concentration of wealth into smaller geographic areas, along with political activism, are what changed this situation.

To me George’s genius does not necessarily lie with his advocacy of the land tax but with his realization that capitalism, in spite of all its triumphs, has flaws. I do not entirely agree with his thesis, but I believe Progress and Poverty is worth reading for the clarity of its exposition and its historical value. I wonder what he would have thought of Keynes, robots and all the other wonders and oddities that came after his death in 1897. One can only guess.

Advertisements

Three Books with the Mind in Mind: Brainwashing, Gestalt Therapy and Daoist Meditation

Image                  “I distrust the incommunicable; it is the source of all violence”

 -Jean Paul Sartre

“These ideologies, Nazi, Soviet, Chinese, and Cambodian Communist, were lethal at least in part because their ideas were ethereal, not because those ideas were ‘atheist’ or ‘religious’. The same argument applies to politics. Those ideologies (groups, individuals) which rely on ethereal ideas, and hence facilitate totalitarian thinking, are more dangerous than those which do not.”

“In contrast, Bourke notes that love for one’s comrades was an excellent motivation, ‘widely regarded as the strongest incentive for murderous aggression against a foe identified as threatening that relationship’. Analogies of fraternal, paternal, or even sexual love were used to describe the ‘buddy system’ between soldiers.”

“Part of the fear inherent in the word brainwashing, alongside the terrors of losing control and losing one’s very identity, is that the processes, whatever they may be, are overwhelming; that no one is safe. As far as individual influence attempts go, we are all vulnerable to the persuasion of advertising, but that power is by no means irresistible”

“Both the amygdala and the hypothalamus are connected with the picturesquely named periaqueductal grey (PAG). This area sends direct signals to circuitry in the brainstem which controls many body functions: it is the output station for neural information going to the body. Stimulation of the PAG in human patients undergoing brain surgery (which is often done on conscious patients) results in feelings of intense fear and distress and the dread of imminent death, emotions which are not simply due to the experience of undergoing brain surgery.” Yikes.

“(This may be one reason why Pratkanis and Aronson’s list of eight sales-boosting words includes ‘quick’ and ‘easy’.) Scarce = valuable; likeable = trustworthy; said-by-expert = true; these and many other heuristics keep us from drowning in the complexities of today’s information-rich world. However, they are also exploited every day by retailers, politicians, and other influence technicians who would prefer us not to think carefully about their claims.”

“Life in black and white can look so easy to an observer overwhelmed by shades of grey. Why not just take up the creed and give your long-suffering cortex a well-deserved rest? ‘Because you are not terminally brain-lazy, grossly self-indulgent, or nauseously stupid’ is part of why not, but only part. Some people are driven to simplicity not just by laziness, selfishness, or idiocy, but by fear, fury, or frustration, negative emotions provoked by a threatening world. Natural, or social, disasters can be good for church attendance; weak government can leave space for a popular uprising; economic problems bolster support for extremists. When the environment is unstable, whether politically, economically, or physically, the lure of simplicity.”

“These features of emotions—their tendency to linger, their ambiguity, and the pressure they exert—are what give them their manipulative power. Certainly no competent brainwasher would want to be without them. Linked to ethereal ideas, whose abstract and ambiguous nature cushions them against discomfiting contradiction from the world beyond the brain, emotions can be devastating, overriding all contrary ideas, ignoring or suppressing any evidence which does not fit, distorting reality to match the contours of cogwebs massively strengthened by the energies flowing through them.”

“Successful brainwashing leaves victims unaware of their new-found slavery; they still regard themselves as free, responsible agents.”

                                                  Image

“Whereas other therapies and philosophies see self as a separate structure or existence, there is no such split in gestalt’s view of self. In gestalt we do not believe that there is a self that resides exclusively inside me, only a self that is created in the process of me making contact with the environment…Our selves emerge in the act of reaching out to our world at our respective contact boundaries in the present in an on-going, ever-changing dynamic process.”

“People who habitually introject lack a sense of self and consequently are often on the lookout as to how they ‘ should ’ be and what they ‘ ought ’ to be doing.”

“Through her research she discovered that unfinished business resulted in tension that in turn tends to motivate us towards completion. Her research showed that incomplete tasks take up more psychological space than completed tasks. She discovered that waiters with incomplete orders would readily recall those orders whereas as soon as the orders were completed they were forgotten.”

“A hiker has been on a challenging walk acutely aware of his empty water bottle, a constant reminder of his thirst. He happens upon a rushing freshwater river and with relief gulps down some of the fast flowing water. On the opposite bank a fisherman is casting his fly and watching the river intently for the possible bite of a salmon. An ecologist is measuring the depth and flow of the river to assess whether the water level has dropped and the feasibility of harnessing its energy, whilst a canoeist rushes by on those same currents. Two young children splash playfully in the shallows of the riverbank, watched by their mother grateful for a few minutes respite from their energetic demands. The same river perceived in radically different ways according to the person’s needs.”

“Through experimentation we can vividly bring alive past experience to re-assess the usefulness of behaviours in the current field.In essence we re-evaluate our narrative self , the story we tell our-selves about who we are in the world made up from the creative adjustments made to this point in our life.”

 

“There is an old Chinese proverb, ‘ Fish don’t know that they are wet ’ illustrating that contrast is needed. Light needs dark to exist just as shadow qualities are needed for their polar opposites to exist.”

 

 

Image

“Meditation can be defined as the inward focus of attention in a state of mind where ego-related concerns and critical evaluations are suspended in favor of perceiving a deeper, subtler, and possibly divine flow of consciousness. A method of communicating with deeper layers of the mind, it allows the sub-conscious to surface in memories, images  and thoughts while influencing it with quietude, openness, and suggestions.”

“Zuowang  is to sit and forget. What we forget is the thing we hold most dearly: self, with all its opinions, beliefs, and ideals. We can be so caughtup in the concept of self that we only see the world as a place to fulfill personal ambition and desire.” (2006, 11; see also Rinaldini 2009, 187)

“Attaining Dao means getting lighter and brighter; the higher one ascends, the purer the spirit becomes, the more light one will radiate. The world view that underlies this model is one of “becoming:” the universe is in a constant flux,and nothing stands ever still or stops for a moment.”

“Rather,concentrate spirit to a state of deep luminosity [like standing water] and wide radiance, making it vague and vacuous, and let it merge with the state before thoughts arise. Wisdom unfolds only after all knowledge is forgotten. Once one has seen this barrier, there is no more [perception of] good and bad fortune.”

 

 

Perspectives on Piketty

                                                   pikka

Thomas Piketty is today’s most discussed economist. Not just a pedantic treatise on economic theory, Capital in the Twentieth Century is a political manifesto in the tradition of Henry George and Karl Marx. His literary references and indulgences in simple algebra, however, conjure Keynes’s stylistic spectre. Paul Krugman defends him by noting the responses to his thesis have come primarily in the form of “name-calling.” Hardly a valid point as this is the most common response to anything. One example of a commentator repeating vague neoclassical platitudes is The Cato Institute’s James Dorn. There is truth in his article, even though it amounts to little more than redundant rhetoric for an audience that never tires of  the touting virtues of the unfettered market.

“Capital in Mr Piketty’s book includes forms of wealth, such as land, that would not figure in economists’ models of production; his rate of return is the pace at which such wealth grows rather than the benefit to firms of investing it. Mr Piketty’s data appear to justify this approach: in the past, at least, the rich have been able to shift resources into higher-yielding forms of wealth when over-investment slashes the return.”

-The Economist

“But how do you make that defense if the rich derive much of their income not from the work they do but from the assets they own? And what if great wealth comes increasingly not from enterprise but from inheritance?”

-Paul Krugman

“Gary Becker, the late Nobel laureate economist, showed the importance of human capital (i.e., the skills individuals acquire through education and training) for a person’s future income and economic growth. High marginal income tax rates and wealth taxes dampen incentives to invest in human and non-human capital—and when investment slows so will economic growth. ”

-James Dorn

The United States has anxiously awaited a scholarly treatment of the acutely felt and easily exploited socioeconomic divide between the very rich and the rest of the nation. Appealing to envy is a time honoured tradition among politicians of the far left, but we should not dismiss the book’s thesis because of its political overtones or its ludicrous taxation scheme.  Francois Hollande’s presidency has attempted to put Piketty’s policy recommendations into action. They didn’t work. Piketty himself admits to the problems posed by creative banking, which is why he envisions a global tax. A bit ridiculous, no? While other factors could  be taken into account, Monsieur Hollande now knows his appropriation schemes are not without consequences. The catastrophe in 2008 had a marked influence on the entire world, but not surprisingly, an 80% income tax is a powerful disincentive in both good times and bad. A person who makes 10 million dollars a year may want to keep more than 2 million. This sounds like a huge sum of money, especially to someone who subsists in 20 or 30 thousand a year, but human wants are unlimited.

“For instance, we have this talk about tax havens. Five years ago, people were saying that nothing would ever happen; Swiss banks would keep their accounts secret and would never accept having automatic transmission of information. And then suddenly there were U.S. sanctions against Swiss banks and things began to change. I think these general moves will continue.”

-Thomas Piketty

Piketty views the uneven distribution of income and capital as the by-products of an unregulated economy.  This is incontestable; the point of contention here is when this becomes harmful and whether the government should intervene. In his analysis he ignores the various programs in place in nearly all developed nations: social security, Medicare, welfare, unemployment benefits and foodstamps. He also forgets about insurance packages many employers offer. This does not mean the underclass in America is living in a worker’s paradise, but to base a damning prediction based on one’s own “laws of capitalism” seems short-sighted, particularly when innovation in many fields is growing at an exponential rate. Who in 1850 could have imagined crude oil, nasty stuff with few uses, would become one of the most sought out commodities in the world?  Who could have foreseen the environmental and geopolitical ramifications of fossil fuels or the engines that created a tragically inelastic demand for them?

Like Steve Keen Piketty is critical of those who have tried to divorce economics from the other social sciences and use only simple mathematical models to “prove” their assertions. Yet his “laws of capitalism” seem to suffer from the same shortcomings as the neoclassical conceptions of employment, supply and demand Keen so deftly eviscerates in Debunking Economics. The entire palace this formerly obscure French economist is constructing relies strongly upon one equation: r > g. The rate of return on capital exceeds economic growth (and wages).  As any good Austrian can tell you this is not a bad thing. When investment is too high (artificially high in many cases) it results in the overvaluation of assets, a bubble. This would be fine and dandy if bubbles didn’t pop.

“But the fact that r exceeds g is simply a necessary condition for an efficient allocation of an economy’s investment over time, whether in a capitalist or a centrally planned economy (the former Soviet Union and, arguably, China are examples of countries that over-invested, so damaging their own consumption opportunities), and is consistent with any pattern of inequality, high or low, rising or falling. “

-Mervyn King

“In particular, the leap from r>g to the conclusion of a growing role of inheritance in society seems too large to me. Many capital owners consume much of the return on their capital, so wealth does not grow at rate r. This consumption ranges from fancy cars and luxurious vacations to generous charitable giving. In addition, unless mating is perfectly assortative, or we return to an era of primogeniture, wealth per family shrinks as it is split among children. “

-Greg Mankiw

Let us give the man himself the last word, one can all agree upon:

“Private property and the market system are good not only to promote innovation and to promote growth; private property and the market system are good for our personal freedom.”

-Thomas Piketty

 

 

Three Free Kindle Books Under 70 Pages

51iTimJDLgL._BO2,204,203,200_PIsitb-sticker-v3-big,TopRight,0,-55_SX278_SY278_PIkin4,BottomRight,1,22_AA300_SH20_OU01_

“Abstract verbalizations about personal liberty, freedom of the press and so on will not be convincing in most parts of the world. In many areas they will not even be comprehensible.”

Simple Sabotage Field Manual, Office of Strategic Services. The OSS was established in 1942. It would eventually evolve into the CIA. How did our government forget about this very important fact before it meddled in Vietnam and then again when it decided to wage a holy war against bands of extremists in the Middle East?

“Commit acts for which large numbers of people could be responsible.”

Simple Sabotage Field Manual. This is commonsense, right? Not really. Far fewer people would be so obviously guilty if they followed this principle.

“Anyone can break up a showing of an enemy propaganda film by putting two or three dozen large moths in a paperbag. Take the bag to the movies with you, put it on the floor in an empty section of the theater as you go in and leave it open. The moths will fly out and climb into the projector beam.”

Simple Sabotage Field Manual. Funny, but not as funny as what comes next.

“General Interference with Organizations and Production

(a) Organizations and Conferences

(1) Insist on doing everything through ‘channels.’ Never permit short-cuts to be taken in order to expedite decisions.

(2) Make ‘speeches.’ Talk as frequently as possible and at great length. Illustrate your “points” by long anecdotes and accounts of personal experiences. Never hesitate to make a few appropriate ‘patriotic’ comments.

(3) When possible, refer all matters to committees, for “further study and consideration.” Attempt to make the committees as large as possible — never less than five.

(4) Bring up irrelevant issues as frequently as possible.

(5) Haggle over precise wordings of communications, minutes, resolutions.

(6) Refer back to matters decided upon at the last meeting and attempt to re-open the question of the advisability of that decision.

(7) Advocate ‘caution.’ Be ‘reasonable’ and urge your fellow-conferees to be “reasonable” and avoid haste which might result in embarrassments or difficulties later on.

(8) Be worried about the propriety of any decision — raise the question of whether such action as is contemplated lies within the jurisdiction of the group or whether it might conflict with the policy of some higher echelon.”

Simple Sabotage Manual.  Act like any other committee member. You’ll be fine.

 

51P-8lZuzmL._BO2,204,203,200_PIsitb-sticker-v3-big,TopRight,0,-55_SX278_SY278_PIkin4,BottomRight,1,22_AA300_SH20_OU01_

“I often became quite absorbed, and once, whilst returning to school on the summit of the old fortifications round Shrewsbury, which had been converted into a public foot-path with no parapet on one side, I walked off and fell to the ground, but the height was only seven or eight feet. Nevertheless the number of thoughts which passed through my mind during this very short, but sudden and wholly unexpected fall, was astonishing, and seem hardly compatible with what physiologists have, I believe, proved about each thought requiring quite an appreciable amount of time.

-Charles Darwin

 

“During the three years which I spent at Cambridge my time was wasted, as far as academical studies were concerned … I attempted mathematics, and even went during the summer of 1828 with a private tutor … but I got on very slowly. The work was repugnant to me, chiefly from my not being able to see any meaning in the early steps in algebra. This impatience was very foolish, and in after years I have deeply regretted that I did not proceed far enough at least to understand something of the great leading principles of mathematics, for men thus endowed seem to have an extra sense.

-Charles Darwin

 

“Therefore my success as a man of science, whatever this may have amounted to, has been determined, as far as I can judge, by complex and diversified mental qualities and conditions. Of these, the most important have been—the love of science—unbounded patience in long reflecting over any subject—industry in observing and collecting facts—and a fair share of invention as well as of common sense. With such moderate abilities as I possess, it is truly surprising that I should have influenced to a considerable extent the belief of scientific men on some important points.”

-Charles Darwin

 

 

forexfob

“2. Low Minimum Investment – The Forex market requires less capital to start trading
than most other markets. The initial investment could go very low, depending on the
leverage offered by the broker. This is a great advantage since Forex traders are able to
keep their risk investment to the lowest level. Online Forex brokers offer “mini” and
“micro” trading accounts with low minimum account deposit.
We’re not saying you should open an account with the bare minimum, but it does make
Forex trading much more accessible to the average individual who doesn’t have a lot of
start-up trading capital.
4. High Liquidity – Liquidity is the ability of an asset to be converted into cash quickly
and without any price discount. In Forex this means we can move large amounts of
money into and out of foreign currency with minimal price movement.
5. Low Transaction Cost – In Forex, typically the cost of a transaction is built into the
price. It is called the spread. The spread is the difference between the buying and
selling price.”

-James Stuart

“The fall of the British pound against the US dollar in the period from November to December 1992 constituted 25% (from 2.01 to 1.51 GBP/USD). The general reasons for this “sterling crisis” are said to be the participation of Great Britain in the European currency system with fixed exchange rate corridors; recently passed parliamentary elections; a reduction in the British industrial output; the Bank of England efforts to hold the parity rate for the Deutschemark, as well as a dramatic outflow of investors.”

-James Stuart

“Percentage in Point”. A pip is the smallest price movement of a traded currency. It is
also referred to as a “point”. It is very important that you understand what a pip is in the
Forex trading because you will be using pips in calculating your profits and losses.. For
most currencies a pip is 0.0001 or 1/100 of a cent.”

-James Stuart

“If you want to succeed in Forex you must take into consideration the maximum
percentage of the total trading money that you should risk in any one trade. Actually,
your ability to limit your losses is equally as critical (or even more critical) as your
success in managing winning trades.”

-James Stuart (maybe we should not, as Kipling urges us, “to risk it all on one turn of pitch and toss”).

 

The Humility of Futurism

futur

Civilization operates as if its troubles and their solutions will be as relevant tomorrow as they are today. Likely they were obsolete yesterday. How preposterous do the worries and aspirations of yesteryear seem now? What has not been refined since its conception? Our means of subsistence, entertainment, expression and enlightenment continue to change, although, at least unconsciously, they are accepted as stable. Change, once gradual, now quickens exponentially. Countless professions have been created and destroyed by advances; old orders have been destroyed, new ones have arisen; our world outlooks have been revolutionized by new discoveries over and over, although a sizeable portion of the world is unwilling or unable to understand a man like Aubrey De Grey and an equally sizeable portion of the population is still struggling with Copernicus. A Futurist accepts himself and his ideas as incomplete, therefore he actively works to improve upon them. Futurism is the first ideology that explicitly accepts the necessity and desirability of change.

It is a mistake to think we have reached the final stage of our journey. Plateaus are mirages conjured by the shortsighted; human evolution is a mountain without a peak. If a man has eyes, let him see all we have done and all we have yet to do. Let him gain the humility religion and liberalism have failed to inculcate into him and so many others. Each generation repeats this mistake. There is no evidence to suggest we are complete or are doomed now only to regress. Naysayers seem motivated to dismiss the triumphs of others out of fear they will appear even less significant. Historically the distant future has received little attention compared to such pressing questions as the number of angels on the head of a pin or the labor theory of value. This may be thanks to a fondness for the apocalyptic, a fascination which certainly has not faded with time, but it is also attributable to the egotistical need to stand out. All epochs are transitions. The advances of this decade have failed to restore popular faith in progress, yet the very word is misleading. Faith does rest not upon an empirical foundation. There are scores of popular beliefs founded upon little or no evidence. Yet the proof of progress is all around us. Death wishes and earth annihilating misanthropy aside, we can trace the modern disdain for the march forward to the fashionable nonsense of academia.


Speculations and prophecies, even conservative estimates based on careful analysis, are treated with derision by the public. To say one has faith in technology is misleading. To compare the singularity to the rapture is like comparing planetary motion to Santa Clause. One is rooted in scripture, the other in observation. The doomsayers, secular and religious alike, enjoy forecasting our demise. The essential corruption critics charge Western civilization with is common to all; it is called human nature. It is meant to be transcended, not through critiques of immaterial “cultural entities,” but by improving our bodies and our minds through bioengineering. No belief is needed here. We do not rely upon a outworn holy book or the absurd dialectic of the Marxists. We change and adapt because we must. This is a point of pride, not one of shame. We do not worship the past; we have shrugged it off. Compared to the ridiculous claims circulating in the cesspool collectively referred to as “the humanities” this is a sane position, yet it is treated with nothing by scorn by those who, wishing so ardently to distance themselves from Western civilization, bite the hands that feed them, clothes them and shelters them. While they navigate by GPS, post their inane tangents on social media sites and try with all their might to discredit the culture to which they owe their lives and livelihoods, others push forward. Self-proclaimed critics of Western civilization should consider trading their general practitioner for an Angolan witch doctor. It is hard to respect someone who does not practice what they preach.

Postmodernism and cultural relativism, though they have pretensions of completeness and delusions of permanence, are but passing fads. Something devoid of usefulness or, for that matter, a coherent hypothesis, cannot last long when technology is generating so much benefit to so many people. A meme will continue to propagate itself long after it has served its purpose, to the detriment of competitors and to society at large. It is the duty of Futurists and Transhumanists to demolish the acceptability of rubbish in academia and in the media. The Luddites are more dangerous than the Creationists. Hubris is barely acceptable in the hard sciences, but in an absolutely unempirical discipline like philosophy, it is deplorable. Our first priority should not be political or religious; it should be scientific. To whom do we owe our prosperity and to whom do we owe our future? To whom do we owe our lives and the lives of our children? How many of us would not be here today were it not for the men and women of modern medicine? This is not the end. Forget the weary and the overwhelmed, they are weak. Forget the ones who have no desire to climb higher, they are unfit. Cast aside the ones who pray fervently for the undoing of their own species, they are the most vile of all. This is not the end. This is our beginning.