Righting the Ship of State

One of the most prominent critics of democracy was, of course, Plato, who along the way gave us the metaphor of "the ship of state." Democracy, he argued, was akin to a ship being steered and navigated by the passengers. Different potential captains would sell themselves to the passengers by pandering to their desires rather than based upon their seamanship. Such a voyage could not but end badly, Plato thought.

The argument for a mixed constitution flows pretty naturally from this metaphor, I think, although Plato did not pursue it in that direction. While it's true we don't want the passengers picking which channel to attempt or when to tack, we also don't fancy the notion of the captain essentially kidnapping the passengers and dragging them anywhere on the seven seas he wishes to go. A mixed constitution tries to balance sound seamanship and individual autonomy.

The Democratic Prejudice

Consider the following passage:

"[Some] Virginians... had openly conveyed their eagerness to alter the federal Constitution by pushing through amendments... to make the republic more democratic... Reducing U.S. senators' terms from six to two years would go far toward eliminating aristocratic pretense in that body. Direct election of the president would be an obvious improvement on the Electoral College. No longer giving judges lifetime appointments seemed a sensible move." -- Madison and Jefferson, p. 432

What is striking for me is not so much that any of these proposals are obviously wrong, but how the democratic prejudice of our age leads the authors to see them as obviously right, despite the weighty arguments put forward against pure democracy by a host of political thinkers, including many of the American founders, the latter being the very people in whose thought the authors are experts. Even someone as astute and well-read in the classics as our friend P.S. Huff rails against power of lifelong, unelected judges, without asking, if that were to be eliminated, what aristocratic element would be left in our constitution?

And this prejudice is all the more distressing once one realizes that the goal of democratic reformers is illusory: if there are no constitutional aristocratic elements in the government, there will simply be unconstitutional ones instead: think of the Soviet apparatchiks. All societies have elites; the trick is to balance the elite and democratic elements. Pretending the former does not exist is unlikely to do the trick!

The Genius of Dashiell Hammett

"'Plans are all right sometimes,' I said, 'and sometimes just stirring things up is all right - if you're tough enough to survive, and keep your eyes open so you'll see what you want when it comes to the top." -- Dashiell Hammett, Red Harvest

This was where Hammett broke with all previous detective fiction, at least what I know of it. C. Auguste Dupin, Sherlock Holmes, Hercule Poirot, Lord Peter Wimsey: they all carefully planned how they were to catch their criminals, proceeding according to rational schemes. Hammett's detectives had no such rational design to their actions: they merely agitated the situation and toughed it out until the truth became manifest. As such, they were pre-cursors of post-modernism.

Q: What Did the Spartan General Say...

To the Athenian tyrant?

A: Get your hippie ass out of town!

The People Know Best: A Dialogue

Eugenius meets his good friend Mundussomnium in the forum. They greet each other warmly, and agree to continue their discussion of Mundussomnium's plans for political reform.

Eugenius: So, what news of your plans for Ancapistium, Mundussomnium?

Mundussomnium: Ah, I have received a great portent of its success, Eugenius!

E: And what is that?

M: Well, you know how replacement referees had been hired for the gladitorial contests, Eugenius?

E: Certainly!

M: Well, it seems the people have risen up and demanded the original referees back! It turns out that they are very keen judges themselves of who doles out justice properly, and who does so shoddily and with favoritism.

E: But as I understood it, the replacement referees had done a pretty good job. But never mind that, let's assume you are correct: The people are very good judges of justice, you say?

M: Yes, this shows that they are indeed.

E: And your proposed regime of Ancapistium will be much more just than the current regime?

M: Yes it will.

E: Then can you explain why, of the people, not one in a thousand accepts your system as more just than the current regime?

M: [Stares up at the clouds for some time, and then gives a start.] Eugenius, I just realized I've left my garum fermenting for too long! I must run home and tend to it!

The Itsy-Marginal Spider, Climbs Up the Temperature Gradient

In my yard in Pennsylvania, there is a sudden explosion of spiders that are bright orange, bright yellow, and black. I have never seen such creatures in my yard before this year.

Why are they suddenly here? There are several possible answers, but among those I thought of was "Global warming: perhaps my yard was out of their range until just recently, but they have been moving north or up in elevation."

And then I wondered just how spiders would know that they could move north? Were they getting weather reports? Little arachno-capitalist real estate agents were pitching them space between my fence railings?

And then I realized the answer lies in marginalism: in whatever range the spiders can occupy, there must be some spiders who are just on the edge of making it: they are on marginal land, where they just scrape by. When they have their 247,000 babies or whatever enormous amount they have, those babies disperse and some of them wind up settling down between fence posts just outside of the range. They don't survive... until the weather gets a little warmer.

The interchange of concepts between biology and economics is fascinating. One day I'd like to write a book on that history.

For Want of a Nail

I went to pick up my paycheck today from my pigeon hole in the mail room. There was a large envelope from Sandy in there, but no check! This was the second time my check had been missing. I went to the woman who distributes the checks and asked if I should have received one yesterday. She said, "Yes: I put it in your box myself. I recall very clearly." (She was obviously remembering the previous incident.)

We went to take a look. This time I leaned over further to take a look into the nearby pigeon holes. When I did so, I saw the my check had been pushed up by the large envelope, so that it stood upright against the near wall of the pigeon hole. Until one leaned past the edge of the hole and looked back, which meant unnaturally squeezing past a large table, it was completely invisible.

We both chuckled with relief. Mystery solved! But as I walked away, I wondered: how would things now be different if, when I left the room the first time, the breeze caused by my closing the door had disturbed the upright check, causing it to fall over and lay flat on the floor of the pigeon hole? When my colleague and I walked back in the room, the check would have been laying there in plain sight, visible as soon as one opened the door. My current report of not finding it would be hard to explain, and the incident of my previous lost check would start to look suspicious.

My colleague would not have to be someone particularly prone to gossip to mention to an administrator, "Professor Callahan is acting even more strangely than usual!" This, perhaps, could be enough to tip a close decision on, say, a promotion, which might lead to who knows what?

So much can ride on such tiny things!

Where Are Aristotle's "Natural Slaves" Today?

Aristotle (in)famously held that certain people are natural slaves. But we must look closely at what he meant by that. My recollection is that he focused on those people's inability to direct their own efforts successfully.

My question: Would Aristotle have considered employment as an underling in a modern corporation simply an ingenious way of managing natural slaves so that they don't feel the yoke of their slavery as much? It seems to me that the key thing for him was not their being owned, but their being other-directed in their work. If that is so, than he might look at the position of a line cook at McDonald's and think, "Yes, just as I thought: some people can only work successfully when someone else plans all of their work for them."

I'm not wondering if you agree with that, I'm wondering is that what Aristotle would think today?

Free Market Keynesianism?

Let's say one admits that a general glut is possible. Furthermore, let's say one believes that prices are unlikely to fall fast enough to work off this problem swiftly, and one resists the idea that "the pain is good for us." Is the only answer government stimulus?

Consider the following passage:

"Unemployment develops, that is to say, because people want the moon; — men cannot be employed when the object of desire (i.e. money) is something which cannot be produced and the demand for which cannot be readily choked off. There is no remedy but to persuade the public that green cheese is practically the same thing and to have a green cheese factory (i.e. a central bank) under public control." -- J.M. Keynes, The General Theory of Employment, Interest and Money, Chapter 17

This, I think, is not quite right: money can be produced. Under free banking, it is produced by private banks, and their means of production is the careful management of their reserves, so that the paper they issue is widely believed to be good money. (And that is simply what it is for a money to be good: that it is widely believed to be good.) When there is a heightened demand for liquidity, free banks reserves will increase, and they will be able to issue more currency.

Will this be as effective as Keynes's recommended solution? That's a question for another day: the point of this post is merely that one can except Keynes's understanding of recessions, and want to do something to ameliorate the situation, without necessarily demanding the government do something about it.

Agricultural Improvement in Ancient Athens

In 594 BC, Solon tried to persuade the struggling farmers of Athens to switch from grain cultivation to growing olives. They refused, apparently mostly because they were set in their ways.

A few decades later, the tyrant Pisistratus (at the time, tyrant simply meant an unconstitutional ruler) forced the change on them, while also lending them money to tide them over until the trees would bear fruit.

The farmers stopped struggling and prospered. Athens became a major exporter of olive oil, and as a side effect the leading manufacturer of pottery. In a few decades its golden age would commence.

Often, private initiative achieves the best economic results. Sometimes, government economic schemes do better.

One-Sidedness

Most famous, false ideas in philosophy and social theory are not completely false, but are one-sided exaggerations of the truth. Take Marx's theory of history, for instance: there is a germ of truth in it, as class struggle often has been an large factor in the course of events, and the material forces of production are important. Where the theory goes wrong is in blowing these truths out of all proportion, and treating them as if they were the only truths about history, as if regional conflict and ethnic clashes and ideological struggles and just plain old personal factors meant nothing or next-to-nothing.

The Holy, Catholic, and Apostolic NFL

Steve Young thinks of the NFL as "revered," and apparently regards replacement refs as roughly equivalent to priests having sex with altar boys:

It's Tough to Get a Brit to Speak American

When I was in the UK, I quickly learned to say "loo" or "gents" instead of "bathroom," "skip" instead of "dumpster," "lift" instead of "elevator," "shop" instead of "store," and even learned to ask for tomAHtoes on my sandwich instead of tomAYtoes.

But I was just trying to convince a British professor who has been lecturing in the US for many years that designating "grain" as "corn" when lecturing to an American audience was not a good idea, since Americans would almost all interpret "corn" as meaning "maize," and would think that the, say, ancient Romans had lots of maize kicking around. He wasn't buying it: apparently all English speakers can speak British, but Americans insist on using their silly "Americanisms" despite understanding proper English quite well. A colleague of mine reported something similar: a British colleague who insisted on talking about uRYEnals despite having been in the US for 25 years.

I don't think they've quite accepted the result of that little contretemps in 1776 quite yet.

An Order: Read Sowell on Say's Law

I am re-reading Sowell's wonderful book, Say's Law: An Historical Analysis. If you want to read a fascinating history and understand the theoretical issues at play more clearly, do pick it up. In any case, a will, as usual, comment occasionally as I read, starting here.

The first thing of note is, come on, this is Thomas Sowell. He is a fairly market friendly, "right-wing" economist, and no "born again Keynesian," as I was recently accused of being. So if he says that Say came to agree with Malthus, well, perhaps he is wrong, but it's not because he wants to throw the decision to the opponents of Say's Law; he is just being honest.

And when he writes, in his very first sentence, "The idea that supply creates its own demand -- Says' Law..." he is not trying to back Keynes, he is letting us know that is a pretty darned good way to summarize Say's Law.

He also shows that the case made by the general glut theorists was often misinterpreted by defenders of Say's Law. For instance, he writes, "Despite the advances in mutual understanding finally achieved by some of the main participants in the general glut controversy, John Stuart Mill... in 1848 proceeded with precisely the same arguments -- and precisely the same misinterpretations of the general glut theories -- that the supporters of Say's Law had put forth... nearly three decades earlier." As Sowell describes the situation, Mill essentially granted the case of the general glut theorists without acknowledging as much, while also holding that Say, Mill's own father, and Ricardo had won a crushing victory in their intellectual debate against them.

Over a century later we can find Henry Hazlitt doing the same thing. He tries to show how "devastating" the response of the defenders of Say's Law was to the general glut theorists by claiming the general glut theorists forgot the following "qualifications" to Say's Law:

1) The can be a temporary period of "crisis of confidence" where everyone thinks prices will continue to drop and so won't buy goods at current prices, and inventories pile up;
2) There can a "sectoral imbalance" between money and all other goods for a temporary period, so that people prefer money to other goods until that imbalance works itself off; and
3) It may be the case that goods cannot be sold at prices that cover their costs of production.

Well, those three points simply are the case made by the general glut theorists! It is as if a defense attorney tried to defeat the prosecution by declaring, "Given we admit our client committed the murder, what is left of the prosecution's case?"

Hazlitt at least had the excuse that Sowell's book hadn't been written yet when he wrote the aforementioned passages. I don't know what excuse people have for taking these views today, except that they can't be bothered to0 actually read up on something before they call others "ignorant" on the topic!

What a Nice Friend of Liberty Tom Was!

"But when queried about the U.S. response to a French military expedition to [Haiti], Jefferson gave the impression that he would support an occupation and that he wished to see an unofficial alliance involving France, England, and the United States. All three would come together to crush the island republic... Jefferson agreed that they would 'reduce [Haitian leader] Toussaint to starvation.'" -- Madison and Jefferson, p. 375

This was due to Jefferson's fears that freed Haitian slaves would inspire revolt amongst American slaves. So he was willing to crush and starve these newly liberated, republican slaves, living in their own country, just so his own (and those of his neighbors) wouldn't get uppity.

Sometimes this stuff gets really ugly.

Our Unhealthy Political Life

Scott Sumner makes two sound, non-partisan proposals that would greatly improve our tax system. The fact neither has any chance of being enacted demonstrates how bad our politics have gotten: it's special interests all the way down.

The Nature of the Anarcho-Capitalist State

Fortuitously, I was reading Bob's material on the stability of anarcho-capitalism at the same time I was reading Bosanquet's The Philosophical Theory of the State. The happy coincidence led me to realize that it is not really correct to call the anarcho-capitalist system proposed by Murphy or, say, David Friedman, "stateless." The state governing a territory in their systems is a federation of defense agencies. National politics occurs in whatever sort of assembly, board, congress or what have you that sets the inter-agency rules (laws). If any agency refuses to join the federation or at least abide its decisions it will find the interests of its clients continually suborned to the interests of the clients of agencies in the federation. (Murphy acknowledges as much when he writes, "Why wouldn’t the vast bulk of reasonable customers patronize defense agencies that had interlocking arbitration agreements...?")

The biggest change from the current system is the elimination of all those without much property from any say in political arrangements. (Of course, the wealthy have a huge voice in the current system, but when you only get justice when you can pay, property becomes that much more important.) We have seen systems like this before: they produce laws setting the penalty for killing a wealthy man as twenty cows, while the penalty for killing a poor one at one pig. (See the Anglo-Saxon law code before the common law, for instance.)

UPDATE: David Friedman notes in the comments that the above does not describe his system. And you know, I was on the verge of writing, "Caveat: I read The Machinery of Freedom about fifteen years ago, and I'm not sure if I remember it correctly." Well, it appears I certainly should have done so.

Two Intelligent Philosophers Discuss God, and Then...

Here.

When two intelligent philosophers, one a theist and one an atheist, try to discuss the idea of God and naturalism intelligently, one of the atheist ideologues chimes in to chastise the atheist philosopher for even attempting the intelligent discussion.

What Is Wrong with People?

At a local restaurant, I go to the loo. Despite the fact that there is a sit-down toilet two feet to the left, and a trash can one foot behind, someone has chucked a huge wad of toilet paper in the urinal. What is on the mind of someone who acts like this? I struggle to comprehend it.

Just to Be Clear...

The understanding of "Say's Law" being propounded here in a number of posts does not imply some particular view on good economic policy, as Silas and B-Murph have noted in the comments. One could admit that Say's Law, if viewed as an empirical rather than a tautological statement, has exceptions, and think:

1) So what? The government will just make things worse if it tries to intervene.

2) The government might be able to improve things, but the means it uses would be immoral, e.g., inflation or taxation (needed to pay back money for stimulus later).

3) The government can and should intervene to shorten or prevent downturns.

Here's What Is Wrong with Obama...

as far as I can detect from Fox News and the New York Post:

1) Obama was cowardly and dumb not to give the Arab spring far more support when those brave freedom fighters were struggling against dictatorships last year.

2) Obama was an idiot to have given those angry, anti-American crowds of thugs any support at all during the Arab spring last year.

Hume: Better Than Locke on Property

I think Samuel Goldman gets this right. Hat tip to Marty Browne.

One Can Certainly Formulate Say's Law So That It Always Holds

1) Say's Law was not, in the early 1800s, any specific idea. Say never gave us one sentence that states "his" law. The idea that there was a law here only coalesced slowly, and it did so around a cluster of ideas, not a single idea. (I believe Thomas Sowell counted nine different notions related to "Say's Law.") So anybody who tells you "Say's Law means X, and if you think otherwise you are ignorant"... is ignorant.

2) Given the above, there is nothing suspect about formulating Say's Law in this way or that way. Some ways of formulating it will hold no matter what. For instance, if, in this example, one could say, "As I formulate Say's Law, this conforms to it: Bob, Silas, and you overproduced fish, and underproduced leisure, so that's a sectoral imbalance!"

Fair enough, but that isn't what Say meant, since when Malthus presented examples like this, Say at first rejected them. Economists at that time thought of goods the way the ordinary person still thinks of goods, and production the way the ordinary person still thinks of production. Telling Say that the three of us had "underproduced" the "good" called leisure would have seemed bizarre to him, I think.

3) Similarly, one can protect a tautological version of Say's Law from monetary disequilibrium since, when too little money and too many goods to be sold for money exist, that can be called a sectoral imbalance. Once again, that is a matter of definition, but it is pretty clear that this was not the way Say was thinking of this at first: "Nor is he less anxious to dispose of the money he may get for it; for the value of money is also perishable." No sane businessman would want to build up cash balances: he wants to be rid of any money he gets ASAP. But Say did come to accept money hoarding, by at least 1829.

So if you want a version of Say's Law that is a tautology, that is OK by me. Just realize it will allow some situations that Say would not initially have understood as falling under "his law," for instance, everybody bringing goods to market but going home after having "purchased" unintended inventories of their own products with their production.

Why Do Economists Forget --

economists from both sides forget -- as soon as we start talking tax policy, that the legal incidence of a tax and its economic incidence are different?! Very bright economists who certainly know this write as if it makes no difference, and simply cite the legal incidence as if it is the economic incidence. Some discussions recognize this fact but pretend they have tracked the economic incidence: "Once these tax-induced changes in behavior throughout the economy are accounted for, the final distribution of the economic burden of taxes is called the 'economic incidence.'"

But to do this you'd have to know information about supply and demand schedules that no one knows. At best we have some vague guess as to what the shape of a curve is. And tax changes do not happen while all other things are being held constant.

Yeager on Say's Law

"Say's Law, or a crude version of it, rules out general overproduction: an excess supply of some things in relation to the demand for them necessarily constitutes an excess demand for some other things in relation to their supply... The catch is this: while an excess supply of some things necessarily mean an excess demand for others, those other things may, unhappily, be money. If so, depression in some industries no longer entails boom in others...

"[T]he quantity of money people desire to hold does not always just equal the quantity they possess. Equality of the two is an equilibrium condition, not an identity. Only in... monetary equilibrium are they equal. Only then are the total value of goods and labor supplied and demanded equal, so that a deficient demand for some kinds entails and excess demand for others.

 "Say's law overlooks monetary disequilibrium. If people on the whole are trying to add more money to their total cash balances than is being added to the total money stock (or are trying to maintain their cash balances when the money stock is shrinking), they are trying to sell more goods and labor than are being bought. If people on the whole are unwilling to add as much money to their total cash balances as is being added to the total money stock (or are trying to reduce their cash balances when the money stock is not shrinking), they are trying to buy more goods and labor than are being offered." -- The Fluttering Veil: Essays on Monetary Disequilibrium, p. 4-6

Never Argue the Classics with P.S. Huff!

Huff noted in a comment that Dracon of Athens only made most crimes punishable by death. I cited Professor Ian Worthington as my source for saying it was all crimes.

Well, today on my ride to work Professor Worthington recanted: in the lecture on Dracon itself he now says "most crimes" rather than "all crimes."

Oddly, while the penalty for, say, idleness was death, one crime that did not receive the death penalty was accidental homicide. That penalty was exile.

When Ja Provides Your House Cleaning

The place will look divine! Rastafari!

How to Handle This?

I think the thing to do is produce several years recycling in the next two weeks, to use this free service while I can.

Guess the Language

Womi o, luku aki. Te mi kai di fou de noo a ta-ko.

Double Negatives

It's funny how many people simply take it as a matter of course that a second negative in a sentence negates the first one, rather than intensifying it. That interpretation of a second negative seems unique to modern, pedantic English. Consider Bede:

"Ne con ic noht singan!" for thon ic naht singan ne cuthe.

Four negatives piled up in that one little sentence of Old English. And no one thought Bede was saying the guy could sing, but in a funny way.

A Brooklyn Moment

ME: So, you're calling me a liar? I just made up that the gutter leaks?

PROPERTY MANAGER: Who told you that? Cause I never friggin said that! I'm offended!

ME: You're offended! You're offended! It's me who's friggin offended! Why the frack would I make up that the gutter's leaking?

PM: I never friggin said you was making it up! This really offends me!

Once we settled who was more offended, we had a nice conversation about how to fix the gutter.

Storage? You Call That Storage?

As a guy who once paid $500 for a 10MB hard drive, it makes me... laugh? cry? -- I'm not sure which -- to find a 16GB iPod tossed aside on the shelf as if it were a 512KB floppy... which, of course, to Wabulon, in his programming youth, would have been an enormous data store.

A Puzzle

As a percentage of their total population, roughly eight times as many blacks in the U.S. marry whites as do whites marry blacks. Is this evidence of racism or white privilege?

Discuss.

Lost History

Aristotle and his students collected extensive (book length) data on the history and structure of the constitutions of 158 Greek city-states. Do you know how many of those we have available today?

One.

The amount of material from the ancient world that we no longer have with us is staggering.

Say's Law, the Dance Party and the Picnic

In the midst of my macro class today, I came up with two ideal types to help the class picture one economy in which Say's Law holds, and one in which it does not. Let's look at each.

First we imagine a class dance party. We stipulate that people are only allowed to enter the dance hall in pairs, and that they agree to dance with any available partner at any point they are in the hall, and then they all leave at the same time.

In that situation, no general glut is possible. Every person by entering the room is simultaneously supplying and demanding a dance partner, surely the proper way to understand Keynes's formulation of Say's Law as "supply creates its own demand." So long as there is an even number of people in the room, no one can overproduce a supply of dance partners. Say's Law holds.

The dance was such a success that we plan a class picnic. Everyone is going to make a small dish, the right size for a single meal, with the idea that everyone can take small portions of five or ten of the dishes and thus sample a wide variety of foods without overeating. But, independently, everyone privately thinks, "There will probably be others who forget to bring anything, and besides, I want to appear generous in the eyes of my classmates." So each person actually makes a dish large enough to provide five meals. Four-fifths of the food brought to the picnic winds up going uneaten.

We experienced a general glut at the picnic. The market still equilibrated, in a sense: We did not get what we intended, as we were not able to "sell" all of the food we produced. (We could understand the food as being exchanged for the admiration of one's classmates.) But we did get something for it: We got inventory. This is much like what Keynes claims happens during a typical recession: investment, instead of resulting in sales, results in the buildup of inventory.

Thus the validity of Say's Law is not a matter of pure economic logic. There is nothing illogical or contrary to economic reason about either of the above scenarios. The question is, "Is real economy X more like the dance party or the picnic?" We might also ask, "Is X sometimes like the dance party and sometimes like the picnic? If it is sometimes more like one and sometimes more like the other, why? If it is more like the picnic, but we could make it more like the dance party, should we? What would the costs of doing so be?"

Finally, it is interesting to note how the two scenarios above are both coordination problems, the first successfully solved, the second not.

"We've Cracked the Code"

"But we don't know what it means."

I was watching White Collar the other day, and one of the FBI agents said the above. It struck me as odd: what exactly would this mean? I suppose if the reversal of the algorithm you've guessed generates the code produces English words, but of obscure import, you might say the above. But their obscurity might also be taken to indicate you have the wrong algorithm, couldn't it? I suppose once you were getting grammatical English sentences for a time, your confidence that you had the right algorithm would be pretty high, but I could envision creating an algorithm that generated decoy patterns in the encoded string. (Query: Are their codes that do this?)

But I wouldn't really feel certain I had "cracked the code" until I knew what it meant. Silas, what's your take on this?

I Thought I Was Doing Work on Social Cycles

These people have totally topped me:

More on Why Real Conservatives Ought to Vote for Obama

Andrew Sullivan does a great job describing the utterly radical nature of the Netanyahu-Romney foreign policy regime-that-would-be. That regime is simply neo-Trotskyite world revolution ideology updated for the 21st century.

I have lots of complaints about Obama. And I have no doubt that Romney himself is no radical: he is simply hungry for power. But to get it, he is perfectly willing to sell his soul to these radicals.

New Yorkers at the Curb

I love New York, and I love New Yorkers. It doesn't mean I don't see their (our? Am I a New Yorker yet?) faults.

One of them is a ridiculous level of impatience. If you are turning and stop your car for a family crossing the side street (legally, with the walk sign!) the guy behind you will honk. "Hey, I'm in a hurry! Run that family over so I can go."

Another symptom of this is that New Yorkers don't wait on the sidewalk to cross the street. Instead, they wait three feet off of the curb. That's bad enough -- it definitely makes turns more difficult -- but the worst is when they do this with their baby in the stroller in front of them. The baby is another two feet in the street past them. It's like they are using the baby as a canary in the coal mine: "Well, if the baby gets hit, I guess I should step back a little."

I Post Nothing, Nothing

Since "dropping the charges" didn't work, and others from... somewhere not to be named have started to show up and make very nasty comments and threats, from now on the policy of this blog will be to never mention... well, someone... or... well, something, again.

Sincerely,
Gene "Anti-troll" Callahan

Now, That Really Is Draconic!

Our word "draconic" comes from the law system established by Dracon of Athens around 620 BC. In that penal code, every single crime received the same penalty: death!

OK, that's pretty harsh.

Thomas Schelling: Circles Are Not the Norm

"There was time when wise people thought the planets should revolve in circles. When observations showed incontrovertibly that they did not, the question was asked, "Why not?" People tried to figure what kept the planets from displaying perfect circles. In the end it was realized that, in accordance with the laws of motion and gravitation, there never had been any reason to expect circles. Circles were not the norm; ellipses were.

"When we ask why the 'free market' in [giving] Christmas cards doesn't lead to optimal exchange, the answer is that it is not a market and there was no reason to expect optimal results in the first place. The free market, when it works, is that special case of knowledgeable voluntary exchange of alienable commodities. Only some ellipses are circles." -- Micromotives and Macrobehavior, p. 33

He's My Troll, My Troll, My Troll...

talkin' bout, my troll. My troll!

(To be sung to the tune of The Temptations "My Girl.")

Keynes Thinks That Markets Work

One often sees people contending that "Keynes thinks that markets don't work."

Reading Schelling has clarified something for me here. That "markets work" usually means "markets equilibrate." But Schelling notes that "equilibrium" is a state of affairs where things have settled down, and not a normative appraisal: I could bring you to a state of equilibrium real quick by shooting you, but most of us would not say this has positive welfare implications.

Keynes clearly thinks that markets equilibrate investment and savings. But there are two ways markets can do this if savings goes up: intended investment can go up as well, or intended investment can remain where it was, and inventories can rise. The latter process shows markets working to produce an equilibrium. It's just that it is an unpleasant equilibrium.

The Third Largest City in the US?

Since Chicago is contracting, pretty soon it should be Brooklyn. (I never accepted the "Great Mistake of 1898.")

Obama Is the Actual Conservative Candidate in This Race

I am not in love with Obama as our president. But I want him to win, and I want him to win because he is the more conservative candidate. Of course, by "conservative" I mean conservative in the original sense of the term: more prudent, less prone to over-reaction, more deliberative, more respectful of precedent. (Yes, there are problems with him in this regard: think the contraception hub-bub. But it is another conservative trait not to make the perfect the enemy of the good.) By my criteria of being conservative, most of today's modern "conservatives" like Hannity and Limbaugh are revealed as angry, radical populists. And Romney is willing to cater to them in order to win office.

Obama: the conservative choice.

Arachno-Capitalism Is Stupid

(Hat tip Keven Vallier.)

Schelling (Indirectly) on Rothbard

Murray Rothbard, in his most famous paper, argued, essentially, that because human beings acting in a free market optimize, there is no possibility of an intervention from "outside" improving the outcome of that optimizing for everyone.

Here is Schelling: "How well each does for himself in adapting to his social environment is not the same thing as how satisfactory a social environment they collectively create for themselves." -- Micromotives and Macrobehavior, p. 19

On a bad road, every driver will optimize his driving, given his preferences. But if the road provider offers a better road, the overall driving environment will improve.

This does not prove that governments are capable of providing such improved environments. But it does illustrate a second flaw in Rothbard's argument. (I will not rehearse the first one here: it is well known, and easy to spot.)

How Cults Self-Perpetuate

Check out this thread. When a Mises Institute initiate has the temerity to ask what non-Austrian economic books he should read, some posters mock him for thinking of doing anything so pointless. He defends himself by saying he only reads them to be able to refute them.

No sense whatsoever that there is the least possibility he might discover some of his earlier views are wrong. In order to remain a member in good standing, you must swear that you are not reading books from outside the cult-approved list to learn anything new, but only to know how to attack them.

What Do You Say: Say Changed His Mind

One of the most remarkable things about the modern debate on the validity of "Say's Law" -- the key topic in macroeconomics, says me -- is that the defenders of the law never seem to address or even acknowledge the fact that, in the debate between Malthus and Say, Say acknowledged that Malthus was right. That is right, folks, by in the end, J.B. Say was no longer an advocate of Say's Law:

"Yet Say changed his mind. By 1829, in his analysis of the British financial panic and recession of 1825-6, Jean-Baptiste Say was writing that there could indeed be such a thing as a general glut of commodities after all..."

Even a conservative economist like Thomas Sowell points out that, per Say, Malthus won their debate. But then John Stuart Mill came along and wrote up the history of this argument as if sensible economists like his father, Ricardo, and Say had crushed the cranky argument of Malthus. Mill's towering reputation made this false history accepted truth, and the ideas of Sismondi and Malthus were lost for several generations.

And history repeats itself. One day, a future Sowell will write a book noting, "In the end, Callahan convinced Murphy that a general glut is possible, but this fact was neglected for decades."

Are You, Too, Lacking Access to Roses?

I came across a paper in an academic setting -- I'm not going to say where, because my goal is not to embarrass an individual but to comment on just how nutty things can get in academia -- that contends that white, heterosexual women have privileged "access" to roses compared to homosexuals and non-white women, and that this is a symptom of patriarchy and exclusion.

Color me baffled. Can't pretty much everyone "access" roses by walking into a florist and paying for them? Are there really florists out there checking on the sexual orientation of their potential clients? If lesbian women aren't getting enough roses, shouldn't they be complaining to their lovers? How is "patriarchy" stopping black guys from buying black women roses?

Is the author's point, perhaps, that white guys should be paying for roses for everyone, regardless of whether or not we are dating them? What would the lesbian couple next door to me make of it if I start buying... one? both?... of them roses?

And anyway, isn't it white women who are getting roses? You know who really lacks "access" to roses -- well, not in that "access" means actually being able to access them, but in whatever mysterious sense of "access" the author meant: me! Never once in my life have I been given roses! What kind of stinking patriarchy is this where I get to pay for the roses instead of being given the roses?

Methodological Subjectivism

All of the special sciences are free to try out postulates and see how they work out for developing that science. It is not, however, the job of philosophy to blindly accept such postulates, but instead to interrogate them. For instance, while physicists may decide to consider only physically quantifiable aspects of the world as real for their purposes, that decision in no way obligates philosophers to accept that as a philosophical principle.

Similarly, when an economist says "all value is subjective," that may or may not be a good postulate for economics. But social philosophy is not bound to accept this postulate merely because it works in economics. And, in fact, the social philosopher must reject it, because, while it may be a useful assumption for the economist, once it is examined without arrest or reservation, i.e., philosophically, it is seen to be plainly false.

First of all, nothing at all is purely subjective, for this would mean an experience that is all subject and no object, i.e., it would be an experience of nothing whatsoever.

Secondly, we obviously do talk about what we value all the time, defending our valuations or persuading others they should value things similarly. If value were "purely subjective," all of that talk would be impossible. We could not even talk to ourselves internally about our values if that were true: as Wittgenstein showed us, a private language is an incoherent concept.

Thirdly, much of what we value is shaped for us by factors over which we had no choice: did you really think it was a coincidence that you like the same television program 18 million other people like? If the very same you had lived in 18th-century France, or 10th-century Arabia, or 2nd-century China, you would have valued very different things then you do today. To a great extent, your values are not "your own" at all, but have been handed to you by your culture.

UPDATE: Does that final sentence raise your hackles? Then think about this one: To object to the idea that one's values are not mostly self-chosen is something you do because of the culture in which you live. Most of the people in most of the times and most of the places of history would hear that statement and respond, "Well, of course."

NY Daily News Joins the "Terrify Jews into Voting for Romney" Campaign

With this piece of nonsense. Not letting the Israeli Prime Minister dictate US policy is "breaking with Israel" only if you think Israel should be our master. And the News repeats the lie about Iran "trumpeting" their wish to destroy Israel.

The Reason Romney Must Go Down

Otherwise, liars like Jennifer Rubin will have won.

Rosetta Stone: How Can Something So Expensive Be So Buggy?

First of all, they force upgrades on you. If the software detects an available upgrade, you can choose between installing it and quitting. So you have no option but to go through the upgrade nightmare if you want to keep using the software.

Then, the upgrade process never works properly. This time, they didn't actually install the software like they said they would: every time I started up, they demanded I upgrade again. What I really had to do was manually run an install package, but the software didn't mention that.

Now that I have the new version actually installed, it notes my (optional) online subscription has elapsed, and asks if I want to renew it. Well, I don't, but the program simply won't progress past the point of asking about this.

Every single forced upgrade has been similarly awful.

Does Rosetta Stone not even run through the upgrade process themselves before they force it on us?!

The Fear of God

I was walking up the street in Carroll Gardens when I saw the mother of my friend, who we will call Johnny Vongole, on the sidewalk, upset. She was talking excitedly to a man on the sidewalk. Suddenly Johnny came bursting out of their brownstone. "What's up?" I can't hear everything his mother said, but it ended with "And he called me an animal!"

"Which one?"

"Black shirt and shorts?" Mrs. Vongole points to someone about a block down the street. Johnny takes off running.

I spun around and followed. As I was walking, Mrs. V. passed me, walking at a very fast clip. Meanwhile, Johnny was catching up to the fellow, and was shouting at him. I could now see the guy had half-a-foot in height on Johnny, and fifty pounds in heft. He turned around, expecting to have a shouting match and a little show of bluster, and then be on his way.

Johnny cold cocked him directly in the face. The guy backed up in shock. Johnny came at him again, but his mom had just arrived, and stepped between the two men. The guy got out his cell phone.

Johnny and his mom came swiftly back up the street. He stopped for a second and said, "Hey Gene! I gotta go: the guy is calling the cops, and I gotta be out of sight when they arrive."

Observations:

1) A very swift escalation into unexpected violence can make up for a lot of size disadvantage.

2) The mother's role was an integral part of the scenario. I described the event to my friend Frank, a neighborhood native, and he said, "Oh yeah, there's years of practice behind that. Her husband called it 'the fear of God.' The guy you hit has to believe you would kill him, except that some outside force intervened and saved your life. If Johnny's mother hadn't arrived, Johnny would have had no choice but to keep hitting the guy. The mother is needed to give him a way to stop without appearing rational."

Pete Leeson could probably write a nice paper on these tactics.

Did Keynes Mischaracterize Say's Law?

We've all seen statements like this floating around:

"Say's law did not posit that (as per the Keynesian formulation of Say's law) 'supply creates its own demand.'" -- Wikipedia

Now consider this quote from Say:

"It is worthwhile to remark that a product is no sooner created than it, from that instant, affords a market for other products to the full extent of its own value. When the producer has put the finishing hand to his product, he is most anxious to sell it immediately, lest its value should diminish in his hands. Nor is he less anxious to dispose of the money he may get for it; for the value of money is also perishable. But the only way of getting rid of money is in the purchase of some product or other. Thus the mere circumstance of creation of one product immediately opens a vent for other products." -- J.B. Say, A treatise on political economy

OK, break it down: "It is worthwhile to remark that a product is no sooner created than it..." -- SUPPLY

"from that instant [it] affords..." -- CREATES

"a market for other products to the full extent of its own value." -- ITS OWN DEMAND. (It is these other products that represent the effective demand for the first product.)

I'd say that is about as good a summary of what Say thought as one could coin in five words or less.

If Keynes somewhere wrote, "Just as the sky is blue..." you can be pretty sure that somewhere on the Internet, someone has written, "Despite having lived in England, Keynes was too dull to know the sky is often grey."

Bob Murphy on Why We Need a State

OK, I've gotten a chance to read Murphy's entire piece on why warlords won't take over ancapistan, and it does, indeed, have the problem I suspected it has: Murphy assumes an ancap society functioning the way he thinks it ought to, and then asks, "Would warlords take over that?" Well, perhaps they wouldn't, but that really just evades the more important issue, which is, "How in the world are you ever going to get to that society, given that all the evidence we have suggests warlords will take over long before we get there, in fact, the moment state authority breaks down?" This consideration is, I think, a defeasor for at least the "I would throw a switch today and shut down the state instantly if I could" crowd.

But what about a gradual transition? Well, that is interesting, and you'll find my surprise answer at the end. But first some remarks on particular points Murphy makes.

He writes, in reference to contractarian theories of government, "Second, there is the inconvenient fact that no such voluntary formation of a State ever occurred."

Um, yes... and no such voluntary network of market defense firms has ever existed. This is a very odd complaint coming from an ancap! And anyway, the best contract theorists, such as Hobbes, never thought there was such an historical arrangement: their argument was "It is as if people had formed such a compact, and we should so regard the state."

Sometimes, Murphy should be clearer as to whether he is endorsing pacifism or anarcho-capitalism: I see them as incompatible, and almost all anarcho-capitalists advocate the use of force to prevent what they see as rights violations. But Murphy equivocates here: "If, by hypothesis, the vast majority of people—although they have different conceptions of justice—can all agree that it is wrong to use violence to settle their honest disputes, then market forces would lead to peace among the private police agencies."

But, who thinks that it is always wrong to use violence to settle honest disputes? Only pacifists. What everyone else thinks is it is fine to use (an appropriate amount of) force against wrong-doers, whether they honestly think they are doing right or not. When someone very honestly says he doesn't believe in private property, and insists that he can stay in any house he chooses, what are Bob's private defense agencies going to do? They're going to pick the guy's arse up and chuck it out on the street. And if he resists? Well, they will use as much violence as necessary, up to killing the man, to enforce their client's property rights. Private property and pacifism are incompatible, except in the Never-Never Land where everyone is angelic.

But let's turn to the most important point in the essay:

"Why wouldn’t the vast bulk of reasonable customers patronize defense agencies that had interlocking arbitration agreements, and submitted their legitimate disputes to reputable, disinterested arbitrators?  Why wouldn’t the private, voluntary legal framework function as an orderly mechanism to settle matters of 'public policy'?"

Note that this system is only "voluntary" to those who like the way it works. If the system is Rothbardian, communists will find its imposition of strict private property rights an imposed abomination. And Rothbardians would find a similar, communist system involuntary for them. But that's not the real kicker in this paragraph, because now we get to the punch line:

Just what would call a system of interlocking institutions that have the final say on what is and isn't the just use of force in some territory, and that sets public policy for that territory?

Hmm, I think there is a name for an entity like that. If the system Murphy talks about gradually developed from our current situation, it would be a shift from one form of state to another. That form might be better than the one we have, and it might not. But it is certainly not "purely voluntary." It certainly will (and must) use force against those who have "honest disputes" with its laws. Such rhetoric is a way of winning recruits, not a way of seriously analyzing whatever merits the envisioned form of state might possess.

Austrian Business Cycle Theory

as a coordination problem.

My Favorite Part of Watching the TV Series White Collar?

That I get to see one of my favorite libertarians, Gene Healy:

Appear on screen under his alias as Tim DeKay:

Good work, Gene!

I Think I Have More Than One Left in Me

Listening to the news this morning, I thought I had the announcer say, "The presidential campaign is entering its final retch."

Speak for yourself, sir.

Durned Translators

Even when translating for students of a language in a dual-language book, presented with an obvious cognate, they do their damndest to avoid the cognate and reach for an more obscure alternative. For instance, given the Italian word "momentanee," Stanley Applebaum translates it as "ephemeral," rather than "momentary." Wouldn't seeing the cognate be a great aid to the student here? But the priority seems to fall to showing one's cleverness.

Talking to a Right Winger These Days

Typically it seems to go like this:

RW: Man, I got a bee sting. Really hurts!

ME: That's too bad.

RW: Yeah, friggin' Obama.

ME: Huh?

RW: Well, Obama is into the environment, isn't he?

ME: I guess.

RW: And bees are part of the environment, aren't they! There you have it: Friggin' Obama!

That's Not Fair!

My college e-mails me all sorts of important news every day. For instance, just last week I learned the rust had been flushed from the campus fire hydrants. What a relief getting that e-mail provided!

Today, I received this:

"When the weather cleared a bit, the winner of the both the men's 8K and the women's 5K was the United States Merchant Marine Academy. USMMA captured the first 12 finishers on the men's side..."

If these marines are allowed to actually capture racers, of course they will win!

Collingwood on God and the Future

"looking at history as a succession of detached events temporally distinct, [Christ] cannot know the future; future history, actions, events generally he cannot foretell. But this is simply because, taking history in this abstract way, the future is positively undetermined, non-existent as yet, unknowable; God himself cannot know it. On the other hand, if history means the discovery of absolute truth and the development of God's purposes, the divine man will stand at the centre of it and know it past and future, from within..." -- Religion and Philosophy, p. 157

How Do Bright People Fall into This Trap?

Pareto is a very interesting social theorist, but he commits an error so egregious that I am gobsmacked whenever I encounter it: he holds that all theories are "mere manifestations of psychic states."*

But that proposition is, of course, itself a theory, and by its own lights, must be a mere manifestation of Pareto's psychic state. How can obviuosly intelligent people miss this when they spout such nonsense?

* Pareto: Sociological Writings, p. 37

Bruno on Eternity

Sotto la comprensione de l'infinito non e' parte maggiore e parte minore, perché alla proporzione de l'infinito non si accosta più una parte quantosivoglia maggiore che un'altra quantosivoglia minore; e pero' ne l'infinita durazione non differisce la ora dal giorno, il giorno da l'anno, l'anno dal secolo, il secolo dal momento; perché non son più gli momenti e le ore che gli secoli, e non hanno minore proporzione quelli che questi a la eternità. -- De la causa, principio e uno

Romney Concedes!

Well, practically speaking.

Pareto Optimal?

Little Vilfredo
Loved his alfredo
Eating it every day
Until his doctor
Acting as proctor
Noted, "Not everyone feels the same way."

God and the Future

A very good post that basically agrees with what I wrote a few weeks ago: the author contends that God knows all possible futures, but that there is no THE future to be known.

The Sneakiest Part of the Sedition Act

"The Sedition Act was the most extreme manifestation of panic politics. Its unusual provision was to declare that publishing, or even verbalizing, 'scandalous and malicious' statements about the president or Congress would result in a stiff fine and imprisonment. The carefully worded statute did not, however, protect the vice president from libelous insults..." -- Madison and Jefferson, p. 334

The vice president was, of course, Jefferson, the arch-enemy of the Federalists who had passed the act.

Is This What We Have Come To?

I heard an ad on the radio this morning. Two women are riding the subway. They begin talking nervously about a man they see, looking around nervously, with his hands in his pockets. One of the gets out her phone. The other asks, "What are you up to?"

It turns out her friend is calling a terror alert hotline! "And I've got the number bookmarked," she adds. (I think she means on speed dial or something, because I'm not clear on how you "bookmark" a phone number.) So, she calls the terror alert hotline so often she has it in her favorites list!

Meanwhile, the guy across the car has no doubt taken out his phone to call the terror hotline as well. Why? Those two nervous looking women conspiratorily chatting across the way!

We can only be safe if we all call in terror alerts on each other all the time.

Yes, If We Can Achieve a Stable Version of Your System, Then That Will Be Stable

I really don't do web lectures. I either want to lay down on the couch and watch a DVD of a lecture, when I’m in passive mode, or be active on the web, where I can jump from task to task, skim a text, write when something hits me, etc. Web lectures just don’t do it for me.

So, although if I did watch web lectures, Bob's might be the first I watched, I don't. So all I have to go on from his lecture is the snippets I get in text form. But this remark struck me as significant:

"I think there are strong reasons to suppose that civil war would be much less likely in a region dominated by private defense and judicial agencies, rather than by a monopoly State."

Well, yes, a region "dominated" by ancap-style private defense agencies and judicial systems would not have civil wars, because, per the theory of these entities, they will be non-aggressive and will respect property rights. But what in the world makes one think we can get to such a world? Can anyone actually present any instances of a modern state breaking down, after which a whole bunch of "private defense agencies" simply hang their shingles up on Main Street and begin selling defense services? Bob apparently cites the civil wars of Colombia, Iraq, and Somalia as evidence for his thesis, but they seem to me to be counter-evidence: when these states lost sovereignty over their territories, what ensued was civil war, not a bunch of variations of "Lenihan, Slavitt, D'Antonio & Sons, Private Defense Agency."*

I understand perfectly well that ancaps envision a world of multiple private defense and private law businesses like the mom-and-pop ice-cream-shop down the street, all peacefully offering an array of defense and law services. It is a very lovely vision! I would happily live in such a world. Similarly, Marx's communist utopia is a lovely world, in which I would happily live. But when you actually try to achieve Marx's vision, you get the Soviet Union. And when the state actually breaks down, you get Somalia.

The Kingdom of God is not of this world. And attempts to create it here typically result in the Kingdom of Satan.

NOTE: I have asked Bob for a text version of this lecture. Perhaps all of my worries will be answered when I read the full talk. I fully admit that this post is just based on sketchy impressions.

__________________________________

* That's a little joke: in my home town, the perfect insurance or law firm had an Italian, an Irish, and a Jewish name on the door, because that was my town's basic ethnic composition. The town was also 15% black, but apparently the restrictions on the supply side of black lawyers were sufficient to ensure that black residents would find satisfactory whatever Irishman, Jew, or Italian with which they were matched.

The Division of Labor

An interesting NY Times article on the division of labor in the manufacture of high-end suits.

OK, Google, That's Not Bad, But...

Google Translate can (or it least can make a decent effort to) detect your "From" language when you do a translation. So you can find choose "Detect" as the "From" option and "English" as the "To" option, and see what it can make of some random bit of text from off of the Internet. I typed in some Welsh from my doctoral diploma, and the thing immediately detected it was Welsh, and got the translation largely correct.

Not bad. But what would really impress me is if Google Translate could detect the "To" language: I type in a bit of English, and it figures out which of the world's 6000 languages I want it translated to.

The Idea of America

Over at Voegelin View, I review Gordon Wood's new(ish) book.

Back When Politics Was Not So Divisive

1798: "In the House Vermont Republic Matthew Lyon responded to an insult he had received from Connecticut Federalist Roger Griswold by spitting in his face. A few days later Griswold clobbered Lyon with a cane." -- Madison and Jefferson, p. 328

Want politics that is not bitter and divisive? Get a hereditary aristocracy. (Even that is not a guarantee, but it helps.)

Conservatives for Obama

"Romney is the opposite of conservative, with a plan that is fiscally reckless and a foreign policy that is unnecessarily militant. Obama has done about the best that could have been done, considering the united GOP opposition in Congress. My questions about Obamacare and my disappointment that we are not already out of Afghanistan are not enough to make me embrace a candidacy that even George W. Bush would have been repelled by—and, having had time to reflect on his own record, perhaps is." -- Wick Allison, former publisher of National Review

That's pretty darned close to my own view.

Good Old Charles Sanders Paper Grinding Machines Peirce

Umberto Eco ran the phrase "Studies in the Logic of Charles Sanders Peirce" through Babelfish, from English to Italian to German to English, and wound up with the phrase, "Studies in the logic of the Charles of sanders paper grinding machines Peirce."

CK Hammer Strikes Again

Is there a more duplicitous columnist out there than Charles Krauhammer, one more inclined to say whatever makes his case with no regard for the truth? Take a look at this column., where he explains why deterrence will fail with Iran while it worked with the U.S.S.R.

First we find that Iran "routinely" employs suicide bombers, including the recent bomber in Bulgaria. Well, here is what the White House said about the Bulgarian bombing: 'White House Press Secretary Jay Carney stated, "It is certainly the case that Hezbollah and Iran have been bad actors, as a general matter, but we're not, at this point, in a position to make a statement about responsibility."'

But just because the White House doesn't know who was behind this yet, that doesn't mean Krauhammer doesn't know: he has super-secret insider information the White House doesn't. And in any case, how is this relevant: if Iran is using suicide bombers through proxy agents, that is evidence directly contrary to Krauthammer's case: it shows they are very afraid of retaliation, and wish to hide their trail.

To prove the opposite, he quotes... an Iranian official? No, he writes: 'The classic formulation comes from Tehran’s fellow (and rival Sunni) jihadist al-Qaeda: "You love life and we love death."'

Then he says, "The Soviets never proclaimed a desire to annihilate the American people." And Iran has never proclaimed a desire to annihilate the people of Israel, and Krauthammer knows this. This is classic Goebbels: just tell a big lie, and thenkeep repeating it until it is believed.

So Iran must be attacked, at a huge loss of life, because of something they never said and something someone from a rival group said.

This is sick stuff.

Paging Daniel Larison.

Whose Is to Blame for Saturday Night?

 Saturday we had some friends over. My buddy and I sat up on the porch a bit late, drinking beers and chatting.

This clearly was the fault of Obama's failed presidency. Why not? Everything else is.

How to "Test" Keynes Versus Hayek

Brad DeLong highlights a paper that appears to do this. The conclusion? We had a Hayekian problem, but we've dispensed with that. Now we are having a Keynesian problem.

Anyway, this makes the point I've been repeating: Hayek and Keynes both had sensible cycle theories, and their theories are not even contradictory. There is no reason we can't have structural maladjustments and aggregate demand shortfalls at the same time, or in succession.

The Invisible Obama

There is an Obama that only Republicans can see.

The Meaning of Paying...

is not obvious. Our friends' three-year-old daughter stayed over our house Saturday night (along with her mom and dad). In the morning, I said to her, "Who said you could sleep in my house?" (I used my most jocular voice, and I'm pretty sure she knew we were engaged in play.)

She thought for a moment, then picked up a quarter from the table next to me, and handed it to me.

I realized that, at her age "paying" appears to be a courteous gesture, like waving hi or shaking hands: if you want to eat someone's food or stay in their house, you hand them some money... the fact that it is their own money doesn't enter into consideration. "Paying" is not exchange yet, but a polite utterance, similar to, "May I please have some food?"

Economics for Real People...

is out in a large print edition.

Great Ideas of the Social Sciences

Daniel Kuehn adds some ideas to my list:

Division of labor and its social ramifications (Smith, Durkheim, Marx)

Externalities and the impact of property rights on social organization (Pigou? somebody had to have said this before him)

Law of one price (Cassel, Keynes, again there have to be other earlier examples)

Double consciousness (DuBois)

Non-neutrality of money (Keynes, Hayek, there have to be earlier examples)

Social construction of reality (Berger, Luckmann)

The State Is Like a Gang... to Some Extent

Every false doctrine contains a germ of truth, otherwise no one could ever come to believe it. I think Marx's postulate that value is based on labor (it was not a "labor theory of value": he explicitly postulated this) clearly falsifies reality, but its plausibility rests on the fact that labor clearly has some connection to value.

Realistic "statists" have always recognized that there is a similarity between the state and a dominant gang, but also that there are many differences as well. Consider the "statist" Augustine:

Regimes, including Rome for Augustine, can make at best a partial claim for justice, which makes his own claim that a just war is about punishing a transgressor questionable, or at best tentative, because the identity of the original transgressor, if such an entity can be said to exist, is unclear (something of course he realized, though did not always state explicitly) when political societies are so frequently founded in blood. 

 The state ain't great. But it's better than anarchy, and in the "city of man," that is all we can hope for.

Why Is It...

that the neighborhood health food shop has probiotics, but no amateur biotics?

Authentic Food

I just read a restaurant review complaining that dish X at place Y is not "authentic.". What an absurd criterion for judging food!

"Authentic" Irish cuisine is bland, boring and buttery. Should a restaurant be praised if it exactly duplicates the grim fare Irish peasants ate for centuries?

Language Interference

Man, I can't speak Spanish anymore without Italian words creeping in at every turn. At my local Mexican joint today, every time I wanted to say "is," I said "e'" instead of "esta." It is as though there is one slot in my brain for "Romance language version of 'is,'" and pushing a new item in that slot simply knocks the old one out.

Hey Boss

Do any of you outside of New York greet people in the above fashion? Here, it's very common in a setting where you know someone well by sight but not at all by name. So, for instance, when I walk into a local deli, the owner will greet me with, "Hey boss, what's up?"

I had never heard this before moving to the Big Apple.

Dan McCarthy Lets Us Know...

how Protestantism lost its mind.

This is vital stuff. One simply cannot understand the modern West without understanding the Reformation.

Examples (and Non-Examples) of Social Cycle Theories

Let us try to distinguish true social cycle theories from cycle theories involving humans but not representing true social cycles. Let us define a true social cycle as one in which both the initial disruption, the subsequent adjustments, the disruptions that follow them, the adjustments that follow on, and so on, are all primarily social in nature, i.e., they are driven by human action and the social environment that gives human action its setting. Let us offer a paradigmatic case of a true cycle that is not a social cycle: the spike in the sale of sunscreen in the summer, and its trough in the winter. This cycle clearly includes human action and social factors, but the primary driver of the cycle is the earth's rotation around the sun, a distinctly non-human, non-social phenomenon. That, we will say, is a genuine cycle, but not a social cycle. The fact that farmers en masse plant corn in the spring and harvest it in late summer is another such cycle: it is obviously true that they do so, so in saying that is not a true social cycle I am not disputing the facts on the ground, I am just saying that a major factor driving this cycle is not social in nature.

In the following list, we are not concerned with whether a cycle theory is true, but merely whether it is a genuinely social cycle theory.

Some social cycle theories:

1) The Aristotelean-Polybian theory of anacyclosis: Here, it is the weakness inherent in each form of good rule (monarchy, aristocracy, democracy) that drive the system into the next form in the cycle. These are all social factors.
2) The Malthusian theory of the population cycle: Abundance drives population increase, which creates scarcity, which drives population reduction. Query: Is this really a social cycle, or is it more of a biological cycle?
3) Marx's theory of the business cycle: The "anarchy of capitalist production" drives waves of high investment, which prove over-optimistic, and are followed by a wave of low investment, producing the slump.
4) Pareto's theory of alternation of the elites: Any elite class rules either mostly by guile or mostly by force. Whichever is the case, a group within the non-elite class gradually comes to have a decisive advantage in the other means, and then, by force or guile, it displaces the current elite.
5) The Mises-Hayek theory of the business cycle: Too-low interest rates prompt the boom, which threatens to turn into the "crack-up boom," and that threat prompts higher rates. Those higher rates expose malinvestments, producing the slump. The response to the slump by the central bank is a renewal of too-low interest rates.
6) The Keynesian theory of the business cycle: The animal spirits of investors are riding high, but get spooked, by the threat of war, by a supply-side shock, by a threat of high tariffs, and so on. As a result, they reduce investment spending. That causes cut-backs in consumption spending which further spook investors, causing further reductions in investment spending, and so on. This continues (absent government intervention) until the price of capital goods sinks low enough that profit opportunities again become obvious: mathematically, we can use IS/LM model and the multiplier (in its negative manifestation) to see where this might occur, but the problems in that approach were pointed out early on by Hicks.
7) Callahan's theory of fads as social cycles. (Yes, this is a rather trivial example, but I think it is a real one, and highlights the phenomenon in a situation relatively free of ideological conflict. By doing so, I hope to penetrate past the ideological disputes towards the real essence of social cycles.)

Questions: 

What about Kondratiev? Schumpeter? Lucas? Do they have genuine social cycle theories?

What/who should we be looking at that we are not? Are the social cycle theories in anthropology? Linguistics? In sociology, besides Pareto?

How Ideology Blocks Reality

One thing an ideology does is fill you full of pat answers. These are rolled out whenever something that threatens the ideology happens along. For instance, when a Marxist ideologue (there are people who study Marx who are not ideologues!) is presented with an extensive case justifying a return to capital, does he carefully consider the case, and see if he should alter his views? No, he tells the presenter that he is a mouthpiece for the capitalists, and thus the Marxist ideologue doesn't have to think about the argument at all.

This can take more subtle forms, one of which is to apparently address the argument being presented, while actually doing no such thing. But the ideologue and his junior followers can pull out this "response" whenever confronted by the original argument. For example, Rothbard apparently reviewed Karl Polanyi's The Great Transformation, a very dangerous book for him, since Polanyi knew his Mises and Hayek fairly well. But Rothbard actually did no such thing: what he did do was to rant at length about "primitivism," something that has nothing to do with Polanyi. There is no evidence in the "review" that he did any more than skim the book, and certainly no engagement with its arguments. Engagement was not the purpose of the review; instead, it is a way to avoid engaging with Polanyi. You can bet the farm that if you bring up K. Polanyi on any libertarian discussion thread, within a few comments someone will post, "Karl Polanyi? Haven't you read Rothbard destroying him?" Rothbard's piece serves as a bit of ideological rip-rap: the people who read it (and who swallowed it) have not come to understand Polanyi: their ideological abutments have been protected from his influence.

Here is another way of accomplishing the same thing: Upon encountering an objection to one's ideology, divert the discussion into something that is related to the objection but actually does not respond to it at all. Make a valid point about that side-topic. From then on, whenever someone raises that objection, note the valid point made on the side-topic, and then say, "So that is handled in the literature: I can't believe you don't know that!"

Let us consider the case against libertarians absolute view of property rights. The libertarian argument for them runs (yes, I'm am presenting the short version!) "So long as property has been justly acquired, anyone interfering with the owner's absolute and unfettered control of that property (except uses of it that violate the property rights of others) is committing a criminal act."

The non-libertarian responds (let us call this response DPT, for 'dirty property titles'), "Well, even suppose I grant you that? So what? Essentially no property today has absolutely pristine title; in fact, most of it is very dirty. If it wasn't outright stolen from someone in the past, it was acquired using the profits from something that was stolen, or profits from slave labor, or profits from things acquired with slave labor: almost all titles today are very dirty, in fact."

The libertarian answers: "This is dealt with in so many places in the literature that it's hard to know whether you are joking or trying to be a pot-shot pedant without a point."

"As Rothbard wrote: 'Overthrow of existing property title only becomes legitimate if the victims or their heirs can present an authenticated, demonstrable, and specific claim to the property. Failing such conditions, existing landowners possess a fully moral right to their property.'"

What the non-libertarian probably should do here is just walk away. But some of us are stubborn, and we might respond: "That's all very nice, but what you've done is simply changed the subject. We were not talking about Grandpa Smith and Uncle Ned disputing who owns the apple orchard. Instead, you predicated your entire defense of absolute property rights on pristine original acquisition. But we noted that, in the real world, we can never really be sure of pristine original acquisition, and overwhelmingly we know it was not pristine at all. So perhaps in a world where it was, we ought to be anarcho-capitalists, but why in this world ought we to be?"

Libertarian: "Don't you understand that that is thoroughly handled in the literature?!"

Non-libertarian jumps off of cliff.

Rothbard has "handled" this topic by ignoring it and taking up a tangential one: how should disputes about true ownership be resolved? Perhaps Rothbard is right in his answer to that question: I'm not sure. But he certainly has not handled the DPT argument at all. Instead, he gives his followers some boilerplate to quote so that they can avoid listening to the DPT argument, and can call those who introduce it names.

Was the 1972 Gold Medal in Basketabll Stolen from the US?

OK, first watch this:


This is certainly a massively snafu'ed ending. Don't think for a second that I would claim the officials did a good job here! But here's what I see happening:

1) A Bulgarian official calls a foul on a Soviet player with three seconds left, giving the Americans a shot. So here's the first thing: If there were a concerted plot to steal the game from the U.S. involving all of the officials, the Bulgarian just wouldn't have called this fall. Game over, U.S.S.R. wins. Too obvious, you say? Less obvious than resetting the clock, I say! In fact, the ref could easily have called a charge on Collins there.

2) After Collins made his first free throw, the Soviet coaches try to get a timeout. They are ignored until the ball is in Collins's hands, by which time it is too late: timeouts are not permitted once the shooter has the ball in his hand. If the time out had been granted earlier, Collins might have tightened up and not hit the go-ahead free throw. (I am assuming international rules are like current college and NBA rules in this respect, but I am not sure!)

3) When Collins hits, the U.S.S.R. gets the ball out of bounds. The Soviet coaches are still trying to get a timeout.The ball gets thrown in, and play is finally stopped with one second left. A discussion ensues, and it is decided that the U.S.S.R. should have three seconds, the thinking being, I suppose, that it is not their fault their calls for a timeout were ignored.

Some British international basketball official, William Jones, got himself involved at that point, running around by the scorer's table insisting that there ought to be three seconds on the clock. At about 5:38 into the video, Kenny Davis claims that Jones had said he would try to throw the game to the Soviets. Right, Kenny, because high officials who conspire to throw games often also just baldly tell others they are going to do so.

4) While the scorer's table officials try to reset the clock back to three seconds, a referee brings the ball down and gives it to a Soviet player to throw in-bounds. He does so, and the buzzer sounds immediately. The Americans think they have won.

5) More discussion ensues. The decision seems to be reached that the inbound play was invalid, since the timekeeper hadn't yet reset the clock. The U.S.S.R. gets to inbound with three seconds on the clock. They score, and win.

What a mess! You can understand why the Americans felt cheated, but were they? If the U.S. had won, the Soviets certainly would have felt cheated themselves: after all, their attempts to call timeout had been repeatedly ignored, and then a ref re-started play before the timekeeper was ready.

But a deliberate attempt to rob the US of a medal? That claim looks to me like someone claiming, say: "My enemy Bill has been out to get me. Only yesterday, he crashed his car into a tree in front of my house. That caused a squirrel to jump off the tree, which excited my cat. She leaped to the window, knocking over the goldfish bowl, which fell on my electric blanket and shocked me. So, you see how Bill was plotting to electrocute me, don't you?"

If this was a plot, it may have been the worst plot that ever actually turned out as the plotters wished.

Pareto on Ideology

"This is why [Pareto] preferred the practical wisdom of the man of affairs to the predictions of the social scientists. For he had little faith in the predictive value of any sociology, including his own. To make a successful kill on the Stock Exchange, it was better to trust the hunch of the successful stock broker than the skills of the academic economist, for the same reason that the experienced traveller with no map is more likely to be able to traverse the Peloponnese than a clever fellow with a poor topographical map. Pareto emerges, not as the opponent of the use of reason in society, and still less as the fatalistic exponent of a biological determinism, but as the opponent of ideology and all its claims to be scientifically true..." -- p. 47, Introduction to Pareto: Sociological Writings

Ideological Closure

Sitting at my cafe yesterday, I heard the woman at the next table complaining about Obama. At one point, she said: "Hillary is retiring. It's because she can't take Obama anymore."

The idea that that is the reason Clinton is retiring is incredibly implausible. However, this woman probably heard someone say this on Fox News, and now it is a "fact." It is similar to the "facts" that Obama is a Muslim or that he wasn't born in the U.S. These "facts" are components of an ideological barricade. They are immune to refutation by logical arguments or evidence, since their very purpose is to block out reality, as Eric Voegelin explained:

The restriction of vocabulary and meanings: an ideological language has the purpose of interrupting the contact with reality, and on the other hand to admit as "reality" in quotation marks only the phantasy of the ideology. This restriction now pertains not only to words and meanings, but to whole bodies of propositions in philosophy or to facts of history that could interfere with the ideological "truth" by showing it to be a falsehood... 

If one translates the Orwellian issue into more adequate terminology, one would have to speak of the "obsessive language" of ideologues–which has the double purpose of repetitious, mechanical iteration of the phantasy [e.g., "Obama hates America!"] and of killing off, at the same time, any conflicting reality ["That's just the liberal media's lies!"].

Suppose I had leaned over to the woman and said: "Your idea is absurd: Clinton and Obama are both centrist Democrats who have essentially the same policy positions. Besides, if the problem were Obama, why would she be ruling out a presidential run in 2016? He won't be around then."

Her response probably would have been something along the lines of, "What are you talking about? Obama is a socialist! And Hillary is just saying she won't run in 2016 to avoid embarrassing him."

Similarly, when a commenter at this blog asks, "Why doesn't Gene present any evidence to the effect that the modern state is not identical to a gang?" it would be stupid and futile for me to try to present such evidence. The differences are massive and obvious, but they are being blocked out by an ideology that would similarly block anything at all I could say on the topic. It would be like trying to argue with someone who insists there is no such thing as the earth and we are just floating in space: if his own senses can't see that this is nonsense, there is no discussion of the matter that will solve his problem.

Socrates addressed this issue in Gorgias: The ideologue is closed to rational argument. The only possible method of cracking the ideological armor is emotion: the ideologue is still a human being, and the only hope of opening him to reality is to somehow penetrate to the common human core the philosopher and the ideologue share, and then use that emotional connection as a lifeline to draw the ideologue back to reality.