Category: How to think Page 19 of 22

The Endless Apologia

On April 1, 2014

Enough.

I have heard enough.

Those of us in the West live in democracies. Those democracies are not perfect, but they admit the possibility of organized change.

There are three levels to this.

The first, and most superficial, is voting on election day from a slate of candidates chosen for you by other people. Though superficial, it is not meaningless. Electing Nixon mattered. Electing Reagan twice, mattered. Electing Bush in 2004 and having the election close enough to steal in 2000, mattered. This also matters in local elections, in the Senate and the House or whatever your legislative body is. Fairly consistently, for almost 40 years, the more conservative candidates have been more likely to win.

The second level is the first level of production: the primaries. You can join a party, and vote for which candidate is placed before the public. Again, consistently, the more conservative candidates have won. In 2008 Obama was the right most of the major candidates. The truly liberal candidates weren’t even considered “viable” and never stood a chance, even though 2008 was the year that almost anyone could have won as a Democrat.

The third level is creating the candidates, taking over an existing party, or creating a new party. All of these are possible, all of them can be done.

In theory.

Also, in practice, if enough people really wanted to do it, wanted it enough to do it.

They don’t.

We are consumers. We are a consumer society. Consumer are not producers. We choose from the options presented to us, we do not make our own options. Whoever controls the menu, controls a consumer society utterly. You can choose between Neoliberals 1,2 & 3.

But even as consumers, Westerners have failed. Again, we have very often chosen the rightmost candidate of those offered to us. Our political parties, the primary voters, are even worse. Fairly often general voters choose the leftmost candidate (even if he’s only left within the context of the same neoliberal policies); primary voters have often been given the choice of real liberals, real left-wingers, and have virtually never put them up as candidate, certainly not for the top slot.

The abject refusal to accept any responsibility as a group or as individuals is at the heart of the problem. Accepting responsibility means accepting power: people without any power, slaves, have little to no responsibility. They could not, can not, make a difference.

Refusing responsibility is a way of saying “we have no power to change this.” If that’s so, you are subjects, slaves, not citizens.

America is what it is, the West is what is, the world is what is, because of Americans, Westerners, and all of us, respectively. It cannot be any other way.

Those of us who live in democracies, in particular, bear more responsibility. We were given Republics and Democracies, if we could keep them. We either have, in which case we are responsible for what they do, or we have lost them, in which case we are responsible for losing them.

We have choices, and we can make new choices. If we, again, as a group, fail to do so, then as a group we are responsible for our fate.

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Your Theory of Human Nature Predicts Your Policies

By Ian Welsh

On March 12, 2014

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Conservatives were right when they said that ideas have consequences.

What you believe, what we believe, determines much of how we act.

Every economic theory, every political theory, is ultimately a theory about human nature.

If you believe that humans are selfish and greedy, you will believe that the best way to get them to do what you want is through monetary incentives and you will provide those incentives. This includes, in the modern context, not taxing people, because taxes are seen as reducing the incentive to work.

Combine this with a belief that the system is meritocratic, that those who have more money have it because they deserve it and are “value creators” and “job creators” and you logically should reduce high-end taxes, because the most productive people in the economy should not be discouraged from working more.

You come to this web site, and you may think that these ideas are mistaken at best, and more likely ludicrous.

They are widely held. Every time someone attacks a rich person, some fool can be counted on to pipe up and say: “He earned that money, he should keep it!”

Ideas have consequences.

Economic ideas, have consequences. Your conception of human nature determines your economic philosophy, and that economic philosophy will have an effect on actual policy. If you believe, as did those who lived through the Roaring ’20s and the Great Depression, that markets do not distribute goods or wealth fairly, or to those who deserve them, or in a way that is either sustainable or wise, you will make different policy decisions. You will tax high incomes at 90 percent or so, you will engage in policies which distribute income, you will work to keep wages and prices high, you will implement a safety net, and so on.

If you believe that human personality and abilities are not the result of some sort of metaphysical willpower, but a matter of genetic Russian roulette and upbringing, neither of which anyone chooses for themselves, you will not believe that even those who genuinely do contribute more (a very distinctly different thing from “get more money”) necessarily deserve more, since there is little merit in winning the lucky sperm lottery.

The fact is this: Incentives work.

The second fact is this: Using strong incentives is usually idiocy, because they do work.

What happens with incentives is that people’s behaviour is warped by them. A normal doctor who does not get paid more per test he orders, orders fewer tests. A doctor who owns the facility which does the testing, does more tests. Management has a saying: “What gets measured, gets managed”. Yeah—and nothing else does.

Paying people enough, and trusting their own judgment about what is important, tends to produce better results, because then people don’t ignore everything else to leap for the incentives and to meet the measurements some doofus is managing. And they don’t go out of their way to manipulate the measurements, which is what happens when reward and punishment are linked to metrics.

But saying “trust people” comes from another model of human nature, one which says, “Most people will do the right thing–as long as they’re not given a good reason to do the wrong thing.” (This doesn’t mean all people will, just most people.)

The bigger problem is the push towards tying all human behaviour into one rule. “We just want to spread our genes.” “Everyone looks out for number one first.” “Everyone is selfish and greedy.” “Humans are inherently sinful due to the fall.” “Everyone seeks to increase their power.”

No. Humans have multiple drives, and how much of what drive is expressed in each of us is different and changes based on the context. Put people in a world where people are cruel to them, and they will become cruel. Put them in a world where people are kind, and most of them will become kind.

None of us is just one thing; each of us changes and changes quickly, from day to day, year to year, sometimes even minute to minute. We are capable of expressing cruelty sufficient to make demons weep and kindness that would awe an angel. Which we will do and when, depends so much on who we believe we are, how we are treated, and what we are told our nature is.

If we want the better angels of our nature to soar, we have to admit that they exist. If we insist that we are all devils, all selfish bastards, we will build our societies based on that expectation, and we will make our prophecies come true.

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Economic Theories are Prescriptive, not Descriptive

By Ian Welsh

On March 10, 2014

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One of the advantages of studying anthropology, sociology and archeology is that you know that while there’s probably such a thing as “human nature” it has a vast range of expression. Some societies are cooperative, sharing and kind, with virtually no hierarchy. Others are hierarchical, cruel, domineering and full of people who ruthlessly compete with each other, and screw the hindmost. And still others are in-between, with a vast spectrum of possibilities.

These societies have different ways of distributing goods. In many hunter-gatherer societies, for example, they decide who gets the animal killed by looking at whose arrow killed it. Seems very “screw the hindmost” until you find out that the hunters freely share the arrows they make. The arrow that killed the animal probably didn’t come from the person who made the arrow. And, in any case, they share much of the kill.

Every economic system, every way of distributing goods and services, requires a different ethic and it elevates a different ethic. While merchants might have been wealthy, in many agricultural societies, including China and Japan through much of their history, they were considered parasites: they created nothing, after all. Peasants might be poorer, but they were given higher status, including legally, than merchants. In the European Middle Ages money made from trade was considered dirty, and strictly speaking, if a noble engaged in mercantile activities or took up a trade, they would lose their noble status. Perhaps this honored more often in the breach, but history is full of nobles who did lose their status through working with their hands, or engaging in trade too openly. (This was also true of Roman Patricians, by the way.) Honorable wealth came from land, war or gifts from other nobles for service.

Modern economics is famous for believing in the rational economic actor, almost entirely concerned with his or her own utility. (In normal parlance, a selfish bastard). This is a model of how people behave, but it’s an oversimplification of human nature so severe as to be wrong. Most people don’t behave like that most of the time: they cooperate, and they share and most of them don’t free ride.

There is an exception, however: economics students. Multiple studies have found that economics students act as economic theory would predict far more than people not trained in economics.

Economics is, thus, prescriptive. It tells people how they should behave.

Who else behaves that way? Senior executives in large corporations and rich people. The people who control the economy, act as economic theory says they should.

Be clear, all elites in all places and times have not acted this way: chieftains in status societies do not act like this. Potlach giving native Americans did not act this way. The elders of hunter-gatherer tribes do not act this way. Roman Patricians, Chinese Mandarins, and Medieval European nobles did not act this way—at least, not nearly as much as our modern economic leaders do.

It is not even the case that executives in the 50s and 60s acted this way. When John Kenneth Galbraith investigated why executives back then didn’t pay themselves more, he came to the conclusion that they didn’t because they believed, as a group, that doing so would be wrong, and they took out anyone who tried to pay themselves more than they considered appropriate.

So why do executives act that way now?

Ideas lead culture and policy produces the outcomes one would expect. Thatcher and Reagan and intellectuals like Dawkins made being greed and taking whatever you could get, screw the hindmost, acceptable. “Greed was good” in the 80s, and has become better since. We were told this is how humans are; and this is how humans should be; and that doing this would produce better outcomes for everyone. This was legislated into law: the removal of protections from financial abuse put in place in the 30s, the lowering of top tax rates; the emphasis on consumption taxes over wealth taxes, the dropping of corporate tax rates; the “free trade” movement which allowed elites to avoid taxes and make goods in sweatshop nations.

The previous generation, those who experienced the Great Depression as adults, and who remembered the 20s and what the last great unregulated economy had wrought, were old, and out of power. Those who believed; who knew; that economic success had nothing to do with any sort of virtue, were gone. The new generations accepted a premise they desperately wanted to believe: that they could be selfish assholes, acting in their own interest and not caring about other people, and that it would all work out for the best.

This was twofold: it was the result of a concerted intellectual effort by people like Dawkins and Milton Friedman, pushed by business interests; and it was the result of a population who wanted to believe it; who wanted to be ethically lazy and stop helping other people and still feel good about themselves.

Ethics are socially bound, and are created and recreated by each generation. To be sure, they are related to the means of production and the incentive system; but we create the incentive system. The executives of the 50s and 60s, by and large, chose something different than the executives of the 80s through today.

What has been chosen, can be changed. If we want an economy which works for everyone, we can have it.

But we have to choose it, and we have convince or crush those who would chose otherwise. And for those who wince at the word crush, remember, inequality means death and illness for many people. The crushing has already happened, the class war occurred, and the rich won. And the casualties are piling up.

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Rational People Sell Out: WhatsApp Edition

By Ian Welsh

On February 21, 2014

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A while back I wrote something which made a number of people angry:

Any new social structure must throw off surplus that people can live on, and that surplus must not be able to be bought up by the old system, which will seek to do so. The ban against selling out/being bought out must be irrational and ideological. Rational people sell out.

As you’ve probably heard, WhatsApp (the largest messaging system outside North America) was just bought out by Facebook, for 19 billion. A normal enough story, but Robert Myers pointed me to this article on WhatsApp’s ethics:

He had just three rules as he experimented with the early iterations: his service would defiantly not carry advertising, an experience satisfyingly absent from his Soviet upbringing; it would not store messages and thus imperil individual citizens’ privacy; and it would maintain a relentless focus on delivering a gimmickless, reliable, friction-free user experience.

Now that Facebook owns it, how long will it be before all information is stored, the NSA has a backdoor and there are ads?

Rational people sell out. When there are bad actors (and Facebook is a bad actor), who have so much money that they can make you filthy rich overnight, it is rational to sell out. (Assuming they don’t have you already because they funded you with a very nasty contract).

This is a supremely important point. People are very confused about rationality. Rational is not a synonym for “good”. It is often rational to be a complete scumbag and to act in ways which will hurt other people (or at least not help them.) This is true even in the long run, because you don’t have to deal with most people. Betray millions of people, who cares? There are millions more who will be happy to give you whatever you want when you are a billionaire.

The response to that, of course, would be “it’s only an app company.” True, but it’s also a way of communicating without it being so easy to be spied on, and soon that will be gone. You can’t create anything good in tech, without it being bought out. It cannot be done. People will always sell. Only open source offers the possibility of it, but open source projects, once they get big, almost always take money from dubious sources, because only dubious sources have a lot of money right now, and even a small team of developers still costs hundreds of thousands or millions a year to support.

Ethics which are negotiable for cash, aren’t ethics you can build a society on. Rational people betray. Systems that work take betrayal off the table by simply forbidding it, and backing it up with an irrational attachment to norms. “We don’t spy on people, period. We don’t torture. We don’t allow pharma companies to price their drugs so high that people can’t afford them. We don’t allow vote suppression.”

As I wrote on rationality and ideology in the past:

Note, finally, the use of the word irrational. We think of irrationality as bad, but rational decision making leads to betrayal. If someone’s going to offer me more than I can otherwise earn to betray the rest of my people, a lot of folks are going to take that deal unless they have the irrational belief that it’s wrong, and a rational belief that if they do it, those who have an irrational belief in the system will hurt them, or even kill them.

Irrational people don’t sell out. Rational people do: unless they know that irrational people will find them, and hurt them, if they do.

You cannot have a prosperous, free society without irrational attachment to social norms which are not always in the interest of individuals. You must take various forms of betrayal and race to the bottom off the table. It will always be in someone’s interest to exploit people, to pollute, to spy, to torture. Rationality does not stop such behavior in individuals.

Our Choices

By Ian Welsh

On February 2, 2014

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We are all born into the world destined to die. Our reality is one in which pain is far greater than pleasure: you can scream for days in pain, but not ecstasy: the heights of pain far surpass those of please, and have far more endurance.

If there is meaning in this world it is not obvious, and the multitude of religions and philosophies, with their myriad different answers to “why are we here?” that we just don’t know. The message of religion and philosophy is “find meaning”, not “there is meaning” because their very multiplicity states clearly “we don’t actually know.”

All around us there is degradation, cruelty, misery and hopelessness. People living lives they hate, working all week for a few hours, desperately waitng on the weekend when they can be themselves. TGIF, and the near-universal hatred of Monday speak to what work is like in our society. A few, vastly privileged in the way that matters most, love their work, but that’s not the world most of us live in.

Illness and suffering stalk us, everything we care about will eventually pass away, the victim of the world’s cruelest joke of all: time.

In this world, a world which exalts suffering, we seem to go out of our way to make the world worse for each other. We live in chains we ourselves have forged: societies which are far crueler than they need be. Societies where most of us spend our days doing work that doesn’t need to be done, that helps no one, and in many cases which harms other people. We are stuck in a cycle of abuse, where we hurt each other, and then go on to hurt others. We writhe in fear at the meaninglessness of life, and if we find our bit of meaning in religion, philosophy or our tribe, we are happy to hurt as many other people as necessary to cling to our single spark of light.

One response to this is to say, “and so it is” and to be brutal and heartless and care only for a few around us, if even them. Live life, take what you can, enjoy it while possible, and when you die, at least you lived. Life is nothing but endless cycles of eating and being eaten, so make sure you eat, till the inevitable day you die.

Another is to simply accept what is: it is ordained by nature or God, or Karma, and so be it.

Another is to seek transcendence through mysticism, a path those who have not followed should not readily write off. Perhaps there is something beyond, and perhaps it can be found through esoteric discipline. Billions and billions have thought so, many have enlightened, and they were no stupider than we are.

Another is to embrace kindness: to scream against Nature and God, to say “just because it is so does not mean I have to accept it.” If violence and rape and greed are part of human nature, endless selected for by mindless evolution, why then so are kindness and compassion, and we can choose the latter and strive to make our time in the world as good as it can be for as many of us as possible. We do not need to be complicit in cruelty and suffering, but can make a choice otherwise.

This can be taken further, “nature made us thus but we do not have to accept it.” There is nothing divine, or sacred about physical processes or evolution, and if there is a God who made this vale of suffering, to hell with it. As our mastery of science and reality continues, why accept suffering, why accept death, why accept loss? Oh, eventually the universe will end, but why not seek to change ourselves such that we rarely die, we are not cruel, and we suffer less? The cry of the naturalist that we should accept our nature is not convincing to me. Why? To accept is to be complicit in all the evils of our nature.

However it happened, we have the ability to choose. What we are, what our world is, does not ultimately define us. Our choices to be complicit in suffering and cruelty, or to work for kindness and compassion: those define us.

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Partial Transcript of My Talk

By Ian Welsh

On December 14, 2013

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On Hunter-Gatherers and the lessons for our own society and for improving our societies, courtesy of the Hipcrime Vocab, who has some smart thoughts you should read:

Jay Ackroyd: What it’s really coming down to is we’re discovering the carrying capacity of the earth is for humans under our…

Ian Welsh: Under our particular toolset…

JA: Under domestic [sic] agriculture…

IW: Under domestic agriculture, under industrialization. The carrying capacity varies. It’s not a fixed number, and people who say it is irritate me. But under the current way that we run things and under our current technology and social [organization], we’re past our carrying capacity.

JA: The history of this is that when we were hunter-gatherers up until about eight to ten-thousand years ago, the carrying capacity was much less at that agricultural technology. In fact, it wouldn’t even make sense to say agricultural technology; at that level of resource utilization. The densest population that I can think of are in the southeastern islands like New Guinea and around there where people were rubbing up against each other and quite violent conflict emerged even in a hunter-gatherer environment.

IW: Well, what you see in the late hunter-gatherers is actually a pile of violence. I mean, they’re very violent societies and about a third of all adult male deaths are by violence. If they’re not pushing up against their carrying capacity, then they’re not violent at all pretty much. It is a phase change that happens as they become close to it and it explodes.

JA: Right. There turns out to be not enough available resources for the population of two different subsectors of people and they brush up against each other and start killing each other, and New Guinea is a perfect example of that.

IW: Yeah, I mean, in general yes. Some societies are just more violent period. But again when we look at the archaeological record what we see is, as they reach the carrying capacity you start seeing a lot more violence. So, yeah, the New Guineas and so forth.

JA: And the triumph of domesticated agriculture is you get a lot more people per unit of land mass, so it’s going to be a bigger society, so they march their way through.

IW: Well, it looks like a couple of factors. One is the population. The population is only a small part, because you see nomadic cultures that are 1/100th the size of civilized cultures and they just roll over civilized cultures until firearms, and until fairly late firearms at that. One major thing in the early part also seems to be, and this is something Stirling [Newberry] noticed, or at least brought to my attention, is disease pools. Because, to put it simply, agriculturalists shit where they eat.

JA: Unavoidably, because the population density is so high.

IW: Yeah, so you start getting parasites, you know, that’s when you start needing cats, that’s when you start having rats follow you around. So they basically become these huge disease pools, and what you see from the evidence is that the hunter-gatherers try and stay away from them, right?

JA: Well, as the Native Americans said about the arriving Europeans, they just smell bad.

IW: They smell bad, yeah, the milk smell. They smell and they’re diseased. And because you don’t live that way, because you don’t live near parasites, because you don’t shit where you eat, you don’t have the resistance, you haven’t gained the resistance. So you go near these people and from their point-of-view, bad spirits attack you and you get sick and die, right? So you get these taboos against being near them. And as they expand themselves, they just keep pushing the hunter-gatherers back. Hunter-gatherers do tend to lose the violent confrontations, but part of it is that they get weakened by the disease as well. And again, what happened in North America is primarily that ninety percent of the population gets wiped out by disease. If that doesn’t happen, we, the Europeans, don’t conquer North America.

Again the main thing about hunter-gatherers that I emphasize in a separate post, is that for most of history…being a hunter gatherer is, until you reach the carrying capacity, is about the best it ever gets for human history. It’s far better than being an agriculturalist. I mean, you have a better lifestyle. You’re healthier. You live longer. It’s just, overall, unless you’re a noble in the agricultural society, you’d far rather be a hunter-gatherer.

Even in North America you see a lot of people running away to join the Indians. People talk about running away to join the Indians, even today. That was a thing, that was a big thing, because the Indians lived better. It was a more enjoyable thing to be an Indian that to be a dirt farmer in 17th century Pennsylvania.

And you can see it in the skeletons. They’re taller, they’re healthier, they have less disease, they live longer up until, there’s a few peaks, but basically…Greek civilization for a brief period lives longer than hunter-gatherers and then it dies back down again; there are some other peaks… one thing for example is that the hip ratio on women has never recovered. Hunter-gatherer women have wider hips than even modern women do. And, of course, that’s actually a thing of health, especially when you have to have your kids. They have better dentition, et cetera, et cetera. And they have heck of lot more free time in most cases.

One of the problems that we have is that we look at modern hunter-gatherers, and they aren’t…you can’t just do that. You learn something from them, but the hunter-gatherers of the old days weren’t forced into marginal areas. They were living off the fat of the land in the best areas in the world, killing mammoths and so forth, even in the Ice Ages and so forth. So they were living in the highest carrying capacity areas in the world. I mean you read about the hunter-gatherers in the Nile. I mean, this is a good life, man! You go in there, and you gather, and there’s so many fish, and there’s so many birds, and there’s so many animals that they practically fall into your hands. People have no idea how lush the world used to be. You read about, um…

JA: The English arrival, the darkened skies of passenger pigeons, the enormous cod…

IW: …The Grand Banks. You drop a bucket into the water, pull it out, and it’s full of fish. I mean, the fat of the land, right? It’s just not that hard to live. Especially if you’re one of the groups living in one of the better areas. I mean, life for the Inuit was always pretty nasty, but if you’re living in one of the breadbaskets…

JA: The Pacific Northwest for instance. They competed by giving each other presents.

IW: Because they were so rich. I grew up in BC [British Columbia]. One of my uncles, and this is in the thirties, he used to in live in, oh I forget the town, but one of the towns in the Northwest. And to make money he would just grab a piece of fish line, put a hook on it, and go out and hook salmon. And he didn’t own a boat or anything, he just walked along the shore, threw it in, got himself some salmon, and took it back to town. And this is within living memory. You can’t do that anymore.

JA: Now there are farms. [intelligible] was making a common reply to this, and it says that low density populations, low specialization, it doesn’t really fit the way the world really works. And of course, that’s a mistake. I’m sorry Lou, but that’s a mistake. Because the time that we’ve spent in this extensive monoculture/agriculture is a very short time in human existence.

IW: The thing is, we can’t do that now. It’s a way of life that is gone, and we can’t live that way now. Clearly we can’t. But it’s worth looking at how people once did live because that’s what we grew up in as a species. And also to remind ourselves that life doesn’t have to be shit. And also that the winning technology…this is the key point I want to make, is that the winning technology and the winning social organization doesn’t have to be the society that is better for ordinary people. If you had to choose, you would rather be a hunter-gatherer than live in most agricultural societies. It’s a better life.

JA: For 90 percent of the population. The one percent still live much, much better.

IW: Oh, of course, if you’re a winner, right? But for most of the population, you’d really rather be one. But the problem is that they lose fights and they don’t handle disease. And so in the end they wind up losing out, and they get shoved into the margins of the world, right? So just because something is new, just because you have a new technology doesn’t mean that it’s going to make the world better. The stirrup did not make ordinary people better off. The stirrup made ordinary people far worse off because feudal knights are not who you want to be ruled by. People who can afford horses being able to beat up people who have to fight on foot is not a good position to be in. So just because a technology is new and superior doesn’t mean that it’s going to make the world a better place.

And also:

[21:44]:

IW: I do want to talk about there’s less violence and we live longer. There’s a lot of confusion over how long people lived in the historical stats because everybody talks about averages. The thing is, if you made it out of your childhood, the odds of making it to 60 or 70 weren’t all that bad. But you weren’t likely to make it out of your childhood. That’s part one.

JA: I’m sorry, when are you saying, what societies are you saying that’s true of? For example, France in 1780, you had a very, very small chance; you were 1 in 4, 1 in 5, getting out of childhood. Numbers like that.

IW: It was very bad. But if you were part of the elites, you know, your odds of making it to 60 or 70…take a look at the Founding Fathers of America. Except for the guy who got run through by a duel, they pretty much all made it didn’t they? Historical stats on aging are always a little deceptive. It’s just something I want to point out.

The other thing is that in hunter-gather societies, you don’t get the massive genocides that we see. Now you do get them once you get up to agriculture; agriculture and nomads, right? But you don’t see them in the hunter-gatherer things, and they didn’t have the ability to destroy the world, which we do. So…

JA: Right, and destroy the world even as known. Somebody referred to Jared Diamond’s Guns, Germs, and Steel. But his later book that talks about collapse of civilizations – those are always civilizations. It’s not the bushmen of the Kalahari. They didn’t die of collapse and famine, they didn’t die by genocide, they simply got smaller.

IW: Well, they sort of got pushed out of the good areas…

And this part is particularly interesting considering what’s going on in China today: [45:45]:

IW: It’s worth noting for example that pre-World War Two most of the American population is still out on the farms. You have World War Two and they start moving into the cities, and they move in because they get a better life in the cities. So at that point, and this is a Stirling point, is that consumerism has to produce a better life than living on the farm produces or these people won’t come to the cities, and if they do come, they won’t stay. But once you lose the secondary option, once that option is no longer available, once you can no longer go back to the land or a different lifestyle, they don’t have to treat you well anymore.

JA: This is almost a microcosm of the hunter gather versus domesticated agriculture thing you’re talking about here.

IW: Well, one thing to bear in mind is that early agriculture is very different than hydraulic agriculture. And while there is a decline in health, they’re actually more egalitarian than late hunter-gatherers. So in certain respects there is an improvement in lifestyle. It’s still an overall down but there are some upsides. Whereas by the time you get to Pharaonic agriculture, I’m sorry, but being a peasant to the Pharaohs is worse in every single way. So once you can’t run away to the Indians, once you can’t go back to the farm, they don’t have to be nice to you anymore. Once they don’t need you to fight their ideological enemies anymore, a.k.a. the end of the Soviet Union.

JA: Or if you like, post Black Death Europe.

IW: Well post Black Death Europe is mostly about a population collapse. If you lose a third of the population, there just aren’t enough people to do all the work.

JA: The labor/capital bargaining situation changes.

IW: That’s the thing. If you want to have a good economy in this sort of economy, you just have to have a tight labor market. It doesn’t matter what else you do, everything comes down to the labor market must be tight. And they have done everything they can over the last thirty years to make sure the labor market has not been tight. I mean this has been deliberate Fed policy. Every time you hear “labor push inflation,” what you heard was, “we don’t want labor to get any raises.” Because one person’s inflation is another person’s pricing power, and for labor what pricing power means is, “raise.”

You can listen to the entire Ian Welsh interview with Jay Ackroyd here.

The Perversion and Senesence of Great Ideas

By Ian Welsh

On November 25, 2013

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

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

What?

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

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

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

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

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

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

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

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

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

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

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

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

How the structure of everyday life creates sociopathic corporate leaders

By Ian Welsh

On November 18, 2013

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We talked about how the structure of our upbringing teaches people to be passive and choose from choices offered from them, rather than creating their own, better choices.

But that’s only part of the equation. The other question is: How is our leadership created?

For this we must look at the structure that sorts out leaders from the rest of us. Today I’ll write about corporate leadership

A corporation exists to create a profit. It has no other innate purpose, this is embedded in the law. The corporation is structured so as to remove liability for criminal acts from its owners, and, in practical terms, it also somewhat shields those who control it (its executives and corporate officers) from liability for their actions.

A competitive market is one in which profits are steadily pushed towards zero. If anyone can do what you do (freedom of entry), if there are no information barriers (patents, copyright, secrets) and there are no scale advantages others cannot also achieve, there is no reason why any product or service you create cannot be copied by someone else, who then undercuts you if collusion is not allowed.

To make consistent profits higher, then, than inflation plus the rate of growth of the economy requires that you not be in a competitive market. This is explicitly recognized in strategic thinking, that in a fair market, there are no competitive advantages, and that therefore you need to create an unfair advantage.

Anything another company does which increases their profits, no matter how unethical, if not forbidden by effective law (as opposed to theoretical, aka. unenforced law) you must also do.

What is important about this is that the drive for profits above all and the requirement to gain an unfair advantage as dictated by modern strategic thinking (there are other ways to create an advantage that aren’t unfair, but that’s not what most companies concentrate on) means that you have to do evil. If your competitors use cheap conflict metals from the Congo, the control of which is gained by mass campaigns of rape, you must do so. If an insurance company denies healthcare to people who are desperately sick, it makes more money. If a power company doesn’t spend money on anti-pollution equipment, or dumps untreated effluents rather than treated ones, it makes more money. If a clothing manufacturer doesn’t spend money on safety equipment for its highly flammable factories, it makes more money.

It is also in the interest of corporations to create barriers to entry: to enforce stringent patents and copyrights; to ask regulators to say that only some banks get access to the Fed window, giving them a massive advantage over others; to buy politicians who can use public money to subsidize them or bail them out; to insist that money go to them for bailouts rather than to ordinary householders, and so on.

At the lower executive level, the more you can get out of your employees, no matter how you do it, the more likely you are to be promoted. And fear, terror and cost-cutting, while they aren’t the only way to do this, are easier to sell to higher management and pay back faster. When they backfire in the long run, as is often the case, well, you’ll be gone, because you’ll have been promoted.

This leads to the common observation that corporate life is about the next quarter or year, not the next decade. What matters is how much profit you’re making now and next quarter, especially to your chances of promotion, not what will happen in the future. Corporate capitalism is largely incapable of planning more than a few years out, certainly not decades (there are exceptions, but even those exceptions, like insurance companies, have been losing that ability.)

High compensation is also an issue. Once you ascend to the senior corporate ranks, your bonuses are based on short term performance and are large enough that after a few years, and sometimes just one, you have enough money you’ll never have to work again. So you don’t care about the long term, because you don’t need the company to be there long term, only to make as much money as fast as possible.

As a low ranked boss, you terrorize your employees, treat them badly in whatever way is required to make short term profits and are promoted upwards. As a high level executive you make strategic decisions that require you to hurt people you’ve never met through pollution, failing to invest in safety, or political corruption.

The summary of all this is that the structure of your life, of incentives, in the corporate world, sorts out people who are willing to hurt other people, now and in the future, for their own benefit and to corrupt their own system of government and law for short term advantage. If you aren’t willing to do these things, you are unlikely to rise far in a modern corporation, and almost certain not to make it to the CEO level.

It is not that there are no other ways to run economic organizations, and it is not even that these things are necessary to gain a sustained economic advantage, but these appear to our current corporate leadership to be the easiest and quickest ways to make money. It’s simple to make the argument “if we cut wages and make people work like dogs, our profits will go up.” It is hard to make the argument “if we raise wages and treat our people well, our profits will go up”, even though the second is true. And much of modern economic life is a hostage situation: if company A is using metals created through the terror of mass rape, well, you’re at a disadvantage if you don’t too.

Strong and ethical government takes those hostage situations off the table, but when you’ve bought out government, that’s no longer possible, so you feel compelled to do evil.

People with strong ethical foundations will eventually balk. There will come a point where they will say “no, I’m not doing that, I’m not rewarding people who rape hundreds of thousands of people by buying their blood-drenched minerals”, and that’s the end of their promotions.

Even people with weak ethical foundations may eventually say “that’s just too much, I know these employees and they’ve been loyal to me and I’m not laying them off.” End of that person’s career.

The end result of this is Jamie Dimon. You wind up with people who, if they aren’t clinical sociopaths and psychopaths, act like them. At best they care for a few people close to them, their family and friends, and they hurt everyone and anyone else around them as necessary to get ahead. People who get off on it are probably at an advantage, taking joy in your work is a competitive advantage after all: love what you do!

This isn’t necessary, in an economy where we decide to take certain behaviours off the table by agreement, legislative or ethical. It isn’t necessary from an ideological point of view, since there’s plenty of evidence that happy employees are more productive, and it isn’t necessary even from a theoretical point of view because even very light protection of works plus happy employees allows you to create a sustained economic advantage by just creating teams of people who are better than the opposition rather than winning because they have a positional advantage.

But it is how we’ve chosen to do things. Our society elevates functional sociopaths and psychopaths because that is not just the behaviour we reward, it is the behaviour we demand.