Monday, May 27, 2013

A Briefing on Bitcoin

Among many fun, anti-authoritarian ideas operating right now at the behest of the new generation of internet anarchists is Bitcoin, a virtual currency that's the focus of some serious discussion, particularly if you happen to live in a country without a stable currency, or if you live in a society where you don't trust the government or the federal reserve. In other words, lots and lots of people are into Bitcoin right now. It's the chosen currency of the kind of people who like the idea of 3D-printable guns. Pretty sweet.

Understanding this can be a little difficult, because for those of us with only a basic practical-use grasp of how computers and the internet work, it seems really absurd to leave something as important as money up to code. We can barely use a credit card on the net without some jackass stealing our identity, and it would seem that someone, somewhere, would be able to figure out how to highlight a Bitcoin, right-click, and scroll down to 'copy'.

Believe me, it's not that easy. It's a crypto-currency, meaning that Bitcoin generation relies on breaking cryptographic codes in a process called Bitcoin mining. You can't replicate them without supreme effort. The actual source code is open, and anyone can take a stab at hacking it, but despite values running around $120 per Bitcoin right now, no one has been able to pull it off. Instead, entrepreneurial computer types are better off throwing resources behind Bitcoin farms and pools, which do the mining. What that means is, non-simply, lots of specialized computers wired into networks hash out, piece by piece, an algorithm-generated block of code with the correct leading bits to work within the Bitcoin system. There's an intense, and intensely competitive, level of computing power going into that right now, with enough natural resources being used to piss off Bloomberg news.

In fact, the entire system is meant to resemble gold mining in its operation. Mining production starts off fast, with coin being easy to come by, and then decelerates. The amount of Bitcoins in circulation is designed to be cut off at 21 million, with only about half that having been produced thus far. And while one expects the mining process to increase the number being produced by sheer effort and resources expended, the algorithms have been designed to adapt to this, with increasing difficulty of mining with every tranche of coin rising in complexity. The anonymous creator of Bitcoin knew what he was doing; there is no way that this currency will be over-produced, and we won't hit that 21 million mark until 2140.

Further reading on some pros and cons of the idea can be found here. The most obvious concern - is Bitcoin a bubble? - is stated with a resounding yes, but there are plenty of reasons not to be so sure, none the least of which is the broad support the currency has in the digital realm, and the ability of it to be subdivided down to eight decimal places; Bitcoin can become much more valuable and still be useable as a currency. The list of supporters for Bitcoin reads almost like a list of cyber-power players, some of whom have invested their entire net worth in it. So long as these people provide services of value, one can expect the currency they prefer to have some strength.

Tears of impotent whining from lefty economist Paul Krugman can be found here. I particularly like the part where a high-profile economist is complaining about the lack of traceability and Big Brother-ish watchfulness that can be imposed on Bitcoin; valuing such a feature, to him, is akin to being "anti-social". Krugman's always been too happy-faced and empathetic to be taken seriously as a thinker; other parts of the article, like about how gold has "non-monetary" uses which justify its value while Bitcoin does not, are complete garbage. No one is putting their money in gold so they can use it for fillings, and it isn't valued at over $1500 an ounce because the jewelry you can make with it is really, really pretty. It's valued because it's rare, finite, and traditionally, it retains its value. In other words, it's valued for its usability as a currency. One must remember that Krugman has explicitly stated his belief in the welfare state, which translates into an disdain for the idea that economic power be granted to those who provide something of value to others. Bitcoin lovers, without a doubt, do not support such ideas.

Half-way into the article, he says that Bitcoins are the ultimate in fiat currency, with "value conjured out of thin air", valuable only because of the self-fulfilling prophesy that people will accept them. In one of the last paragraphs, he then takes all these supposed weaknesses and accurately reports them as facets of all currency while making fun of both gold backers and Bitcoin aficionados who want currency "untouched by human frailty". That's ridiculous, as they want no such thing. What they want is currency not managed by the hands of institutional authority. The pros and cons article up there makes a big deal out of the trust issue, as well, associating Bitcoin with a lack of trust. Well, this is a society that runs perpetual budget deficits and is democratically hog-tied to providing support to unproductive people.

Funny how the media will pounce on every possibly failure coming from authority figures, from cops to corporations to parents to universities to religious institutions, then wonder why people would be unwilling to trust authority, as if their brains were Jell-O and they needed someone to perpetually tell them what they should do.

They need to relax. Bitcoin users are spending their coins, and doing so with tremendous faith in the soundness of the programming associated with it, along with faith in other people that operate in their circle. There's a difference between having trust and blowing off accountability. Bitcoin users are perfectly capable of trust. They just don't trust your people, and I don't blame them.

I'm pro-authority and pro-institution, so you might think I would be on the other side. I'm not. When I say I'm pro-authority, that means that I want authority to have the support of a strong and capable people, not that I want authority to have to support those people. I don't want an authority to have to justify itself to the public through services rendered, creating loyalty through bribery; I want an authority where the people accept and respect standards created by that authority, systematically, to run a smoother, more intelligent, more powerful social machine that they know themselves to be a part of. How pathetic do you have to be to so closely associate trust with dependency?

I don't want an authority that's always watching you. I want an authority that's justifiably confident enough not to care about watching you. I want an authority that presides over a trustworthy society.

There are lots of businesses that seem to like Bitcoin, as can be seen with this list of retailers which accepts them. But the issue of acceptance is still the primary one; Bitcoin value still moves all over the place compared to other, established currencies. If there's any significant problem here, that's it; I expect prices to continue to move with some drama. The hoarding temptation is too strong when Bitcoin value is rising and prices stated in the currency are dropping, although this situation has its pros as well as its cons. Price stability could probably be created by a single act, though, which seems unlikely but which holds very little risk: Wal-Mart or Amazon needs to start accepting it. Even with, say, a 2% premium for exchange cost, it would make the entire Bitcoin love affair more legitimate if one of the major retailers, particularly one selling something as fundamental as groceries, would take the stuff. They're probably just not going to, because right now, it looks a little shadier than it actually is. Perception is everything with currency.

The establishment of a wider network that accepts Bitcoin would, I think, also leave open the possibility of another "run" of Bitcoin after it hits the 21-million mark, not the exact same thing, but a similar currency using the same principles, a silver to the Bitcoin gold, if you will. Simply ceasing to make more currency beyond a certain point very clearly does stifle economic growth by making investment more comparatively expensive, but that in itself is bad only to the point where we associate increasing quality of life with growthsmanship in economics. Such behavior is already catching up to us. Using a currency with serious built-in scarcity seems destined to encourage saving and reduce bubbles elsewhere, like in commodities, which would probably make for a more sustainable system. What exactly would be so wrong with a currency that creates incentives for spending less? Investments in this context would require more care, as the yield might fall short of the increasing value that the currency might have yielded, but is that actually a problem? Are we really so attached to the idea of constantly expanding consumption that we have to have an inflationary currency just to promote it?

Let me put it this way: Bitcoin is a good idea for smart people. Its biggest weakness in becoming a mainstream currency is that people are not smart. Will it ever supplant government-backed money? Probably not, and that's fine. It doesn't need to. Multiple currencies can exist at the same time, obviously, but this might become a specialized one with a broader acceptability than just underground, web-based exchanges. To the degree that it makes tracking and taxing so difficult, the concept will always have a draw, and to the degree that people are getting tired of the government's omnipresence, that draw will likely only grow in strength. The government would have a bitch of a time trying to suppress it, so the odds are against them trying.

I like the idea. Anarchists are still absurd, but at least they're creatively absurd.

Saturday, May 25, 2013


Today, I'm going to address one of the few explicitly moral principles of economics: rent-seeking. This term is used to damn those who use their assets to gain advantage in a way that doesn't create new wealth. The preferred axiomatic element of public choice theory, rent-seeking is, in essence, the closest thing to a genuine, normative moral concept the modern profession of economics has produced. It is the economist's answer to what should be, as opposed to what is.

Beginning and Ending

What this term basically means is that powerful people leverage their power to benefit themselves without productive action. This is usually related to monopoly and politics; the Soviet economy, particularly, was an economy based entirely on rent-seeking, not profit-seeking. Do you leverage your position for more power, by squeezing out competitors using a superior distribution network and cash reserves? Do you know of any market where people take advantage of something other than raw efficiency, or in any way support any attempt to cut back on competition? That's a rent-seeking attitude. Withholding something to gain competitive advantage is rent-seeking, and as such, the people truly engaged in rent-seeking are the ones who keep other products off the market or who cooperate with a situation in which this is the case. Preventing competition is bad... but how far can we take this?

Sometimes it's difficult to tell the difference between rent-seeking and profit-seeking. Where does one end and the other begin? Sometimes, rent-seeking just looks like normal, highly competitive economic activity, almost indistinguishable from market power, which is normal in markets without perfect competition.

You will find rent-seeking wherever there is genuine profit as opposed to accounting profit in line with opportunity costs, although this looks an awful lot like the maximizing attitude that drives the entire system. Should businesses with geographic monopolies, out in the sticks, charge only tiny margins for their goods? If there was no high level of profit opportunity, would new competitors come in? That's an idea fundamental to economics. If Coca-Cola uses its unique and mysterious formula to give it market power, is that a problem? The most popular examples of rent-seeking these days come from government, in reference to the idea of rent-seeking taxation; the government is a geographic monopoly. Of course, for other people, the legitimacy of the government to require taxes in order to "improve" society is perfectly acceptable because voting, and it's corporate power that they take issue with. Those corporations are coalitions of people that work for the sake of improving the company's performance, and therefore the company's wherewithal to pay them more, so working for a big corporation is tantamount to rent-seeking. The notion holds particularly negative opinions of structure for the sake of structure, instead of for the sake of maximizing individual welfare, to include the opportunity costs of corporate power. Hell, unions are openly talked about as organizations that exploit a business' economic rent to benefit their members who work in those industries. Then there are patents; plenty of people seem to think it's practically evil to want to benefit from innovation using government to prevent the "theft" of an idea. Actually, how about we not take the concept of rent-seeking and apply it to information here? It gets ugly, and it really requires its own post, because information asymmetry is a fact of life. The line between wanting to get what you deserve for your actions and rent-seeking can get very, very fuzzy.

We all seem to have an obsession with being valuable in the labor market. We know that the successful people are the most skilled, and the high pay they can command stems from the scarcity of what they have to offer. Isn't demanding a higher wage due to a scarce skill set a form of rent-seeking? Would more people put in the work to become engineers if they made the same income as Wal-Mart clerks? Of course not, but their power is a form of rent-seeking exploitation, just one that we intuitively like more than, say, the taxing power of government or the wealth-allocation power of big business. People can relate to it, and such behavior appeals to our cultural sense of justice; we put in time to get skills, and then they pay off. But it is rent-seeking: the skill is scarce, which is what gives it its value, and we exploit this scarcity to draw higher pay. If more people had the skill, we would be forced to accept less or not do the job. The only way to get around this is to say that skill is part of the individual and that treating skills as material assets is to treat people as assets, whereas we see it as different rules applying to labor and to material. But that's not the case, nor is there any reason to think that it is; people treat one another exactly as they treat material in the labor market. They do not buy labor, but due to the legal banishment of slavery, they rent it. The difference between a rent-seeker and a rightly valuable citizen is one of the perception of usefulness and has to do with how we feel about some particular action or actor; it has to do with values.

So where do you draw the line between rational payoff for investment and exploitative, rent-seeking behavior? Wherever it is, it's a subjective matter and I bet your opinion will be grounded in your experiences and the intuition you now have as to what's fair and what isn't. You won't agree with the person next to you. Now, if you want to be rationally consistent, then you will probably have to admit that every element that gives one person advantage in the labor market is a result of genetics, good background, parents who taught particularly good life lessons or who cultivated the right interests, or some other roll of the dice that's merely being in the right place at the right time. Exploiting such opportunities to your benefit is rent-seeking behavior; egalitarians have been saying this for years.

Indeed, if you're against rent-seeking and willing to take it to its furthest extent, a rational dream would be for every skill to be so commonplace that no one would be able to command a wage significantly higher than anyone else's, making every job a matter of preference and not incentives. This would, of course, put everyone at a similar wage but with different numbers of hours worked, in accordance with the individual's preference (see income effect versus substitution effect). That wage wouldn't be very high, given how many people there are and how intense the competition would be in the labor market.

That's a dream world, but being a celebrity means being a monopoly here in the real world. Some people would like to change that, but consumers really seem to like it. Given that so many valued skills work something like this on a smaller scale, we have a certain problem with the quest for wage equalization in employment.

And a word on investment and retirement accounts: money is an asset you can rent-seek with, too. If you invest your money anywhere except where the maximum possible ROI is, then you're acting irrationally, because your preferences are taking precedence over the preferences of the market, as shown by returns. Why would you do that? Because you prefer one kind of investment over another? That's just your personal taste, and meanwhile you're using your ownership of your retirement account to manipulate economic expansion, favoring one side over another despite superior possible returns. You're exercising your power, to the detriment of what others obviously prefer, you rent-seeking asshole!

And what were you doing with all that money, anyway, in a world where rent-seeking wage differentials and rent-seeking on assets is supposedly bad?

Really, anytime you want to be able to sit back and take some time in your life without constant cutthroat competition, you have to use some form of rent-seeking to get it. Most of what we call success is based on that idea. Going against rent-seeking requires perpetually increasing the intensity of competition.

Stability Through Market Power

Let's fuck with this a bit. If you buy into the narrative of two people getting into a relationship and expecting that relationship to be exclusive, is this not rent-seeking behavior? Is monogamy rent-seeking? Notice the similar prefix compared to monopoly... Marriage, actually, is the worst sinner; a spouse holds a monopoly over some dimension of the other spouse's affection in perpetuity. Free love advocates have known this for years.

Hell, are property rights themselves rent-seeking? Commies clearly think so. Wouldn't that be something: the fundamental legal element that makes capitalism possible is also a problem by the basic tenets of public choice theory...

Be honest: the term's intuitive origins are the same as the origins responsible for Marx' labor theory of value. The average person, for most of history, has done tangible work. You can look at them and see that what they're doing is work. It's hard. It sucks. It's fucking work. So we empathize with them and justify calling what they do morally right, while the activities of those we find less attractive we do not so endorse. What's the final stated goal, from the perspective of Nietzsche's slave morality? Greater equality, of course.

It's a moral idea. And the basis of this idea is some form of Judeo-Christian ethic. It hates empowerment, and by that standard, there is no difference between just desserts and exploitation. And if you assume different values than materialistic-but-rational self-interest, everything goes to hell.

So, try questioning it. Do empowered organizations provide anything of value by nature of simply having power? Most people would probably say no, but I'm not buying that. I think that the organizational elements of the privileges of ownership are the most important part of the entire equation. It's the basis of leadership, particularly the humane and predictable institutional leadership we know today. If there is a difference between what is commonly called rent-seeking and sharp business practices, one can simply call it a matter of honor: one avoids competition, and one embraces it. That's nice, very Nietzschean master morality at work, all about honorable struggle. But the competitor also rationally wants to win, and if there is no possibility for enough of a victory to enjoy it, how many would participate in the contest?

The government is the most obvious example; there are obvious benefits to having the government hold the monopoly on violence. And now, government redistributes wealth, regulates business, and squashes monopolies when a tasty opportunity comes up, too. Is this good? Well, we're certainly used to it.

And really, the answer is yes if you want maximum consumer welfare. By acknowledging that rent-seeking happens and that you believe the purpose of the system is maximum welfare, you admit it. The government is breaking up rent-seeking behavior. It's a clumsy but necessary process where merit and fuzzy notions of social justice interact and often oppose each other. It's also a form of institutional competition creating this situation - the government not wanting other institutions to mess with its turf while showing its legitimacy - but it works to do the most basic necessary thing, which is force opportunists to back off and play by the consumerist rules they establish. Those rules aren't perfect, but if you think rent-seeking would happen less without a pro-active government, then you've been drinking the Kool-Aid, and forgotten about things like, you know, the entire Gilded Age. Progressives have been saying this for years.

Theoretically, monopoly operating should be incredibly difficult, because people won't stand for it. Substitutes are created, consumers get put off by price manipulation, whatever. And that may be, to some extent, true, but monopolies have existed. They weren't always in cahoots with the government. Rockefeller's genius did not require that particular form of corruption.

From one perspective, the story of civilization is the story of rent-seeking: again, the state is known for having a monopoly on violence. Such was the development of superior force laying down its market power. This monopoly didn't entirely stop violence from happening, of course, and plenty of people think that it took violence and projected it outwards, against other states, which is certainly true. I hope we never become a one world government, but admit it: the stability that made civilized relations between people consistently reasonable to expect is the product of having empowered people creating consequences for uncivilized behavior. Stability results from inequality, and the tools - namely religion and family obligation - used to legitimize it. All those anarcho-whatevers praying for greater equality and the destruction of the state, wanting market utopias, they don't want maximum possible welfare. This species doesn't work that way; it's not possible. They're pursuing chaos, and that's just... wasteful.

The Need for Structure

Obviously, I think that government anti-monopoly action increases consumer welfare, but I still side with libertarians. The idea of rent-seeking, with how it falls into the Judeo-Christian line of moral thought, supports a certain continued loathing for corporations that hold market power. This promotes government intervention against businesses that hold that power.

But what if we made the perfectly rational decision that it's worth some reduction in consumer welfare for the stability provided by corporations with market power? Union men, who benefit from working for a successful corporation, should understand this line of thinking; the boss might not automatically give you a raise if he's making windfall profits, but he probably won't fire you, either.

I, for one, would be interested to see what would have happened if corporations became as empowered as feasible, as social institutions. I only want to see the state dis-empowered so that some new aristocracy can take its place. If that aristocracy was a true corporate aristocracy, would it be so bad? Forget the sad, ass-kissing modern corporation as an example of what that would be like; if corporations owned huge amounts of land, if they ran their own education, if those in charge saw themselves as true social leaders with responsibilities and not "service providers", and could try to establish truly stable power, how bad would it be? Western society, I will remind you, got very far with family-based aristocratic landowners working with the Catholic church. With institutional power being distributed by ownership of stock, and some minimal government power left just to assure a baseline freedom of movement and universal checks on violence, would a corporate society be so bad? As it stands, business ostensibly exists so consumers can make as many choices as possible, which works poorly when consumers are so lethargic about using this power constructively. Maybe a nation with a few dozen strong corporate institutions with arrangements among one another - similar to Japan's keiretsu system - would establish some more concrete set of privileges and responsibilities and work better, allowing for corporations to have enough power to be held legitimately accountable. Structure requires power to be stable, to draw commitments from people.

I don't side with libertarians because I want a more consumerist world. I don't. I side with libertarians because big business could theoretically gain enough power to become more than business, if it plays its cards right, and I want good businesses to have the opportunity to try. Same with families and religions, with any number of possible hybrids. I want the structural market to be allowed to evolve into something other than the hyper-individualism of the modern world, which requires government to stop subsidizing that hyper-individualism. People care about community and ideals when they need them.

Monopolistic behavior is impossible over the long run? That's only true if you define the long run as very, very long. All institutions fall in the long run. The house of Hapsburg fell over the long run. But in the more moderate long run, corporations could have become ridiculously powerful, and some may have matured into reasonably secure institutions for their employees that used their market power for social good, at least in a parochial sense. Certainly they would have tried to create stability and satisfaction, as opposed to modern democratic leanings that love finding something new to hate about its institutions and authorities now. Maybe corporations could have become "the nations of the world today", and that state of affairs might be preferable to the modern, geographically-divided one. Who knows? We don't, because we're evidently so afraid of pain that we don't even think about experimenting. Some freedom-loving people we are.

It seems nice with only minimal imagination, but the vision of a world without market power is one of a roiling cauldron of business, rising and falling constantly, spending just enough time outside of the state of perfect competition to create disparities that let investors know where the opportunities are. That's the vision of perfection offered by a world without rent-seeking. It would never be stable. All institutions would exist for the consumer's service only, and be perpetually bound by intense competition from having even the power to reward themselves with inspired folly and expansion; it would choke large-scale innovation badly to pursue this. And for employees, if you ban rent-seeking from employment, then you would be banning much of what makes the labor market function. Without the market power of scarcity behind their labor, the most difficult professions would have a very hard time finding new blood to invest themselves into the rigors of extreme dedication necessary to be truly good at tough jobs. Maybe the fantasy really is that of Marx' labor theory of value: cut down the exploitative power until everything is truly cheap.

So maybe we should take a more balanced view on our economic ideals. Maybe market power, or simply power, is the incentive behind everything. Maybe seeking enough inequality to be able to think you accomplished something gives us more of our motivation than we think it does. Maybe our attempts to be a unique person are attempts to hold market power and do some rent-seeking; we're interesting because it benefits us in the marketplace of personalities to be interesting. How much of our constructive behavior comes from wanting to be valued by others, and valued unequally? And while I take issue with much of Western moral sentiment, that we even have similar enough morals and expectations that we can get along and relate to each other can be traced back to religion and powerful people, using their power to encourage a shared morality, increasing cooperation among their subjects and empowering themselves through the efficiency gains. In the marketplace of ideas, Judeo-Christian ideas won; too bad those ideas so often hate their own power. I think this through, and after I dismiss the spoiled utopianism and trade it in for appreciation, the conclusion seems obvious:

Thank God for rent-seeking!

Thursday, May 16, 2013

Scandalgate and Disappointment

It's official: Obama is a president just like any other. So what else is new? Here comes the new boss, same as the old boss...

Really, when was the last time we had an administration free of these sorts of problems? Of course the bureaucrats have their biases. Of course one hand of the government wasn't talking to the other. Of course Obama seems more interested in damage control than truth. What planet are you on? The press now finds itself back in the vulture seat, circling an authority who's credibility is gushing away like a barely-slowed arterial bleed.

But that article shows that the press is still fighting for Obama. The media now charges forward with fervor to reveal corruption, because it exists to acquire and direct all the attention it can get; scandal is a source of attention as food is a source of nourishment. They devour it indiscriminately, but in Obama's case, there's still a certain restraint. In the above article, notice how it says Carney is right to insist on balance, and how absolutists miss the practical realities of governing. Notice the demeaning of Republicans and the hope for "perspective" from un-spun facts. If this were the Bush administration, such an even keel wouldn't exist. And the new trend to lump two or more scandals under the same umbrella, ostensibly due to the timing: the Tea Party tax assault and the AP records grab fall under the auspices of "scandalgate" now, and if something were to come forward about Benghazi or Medicare fraud, that will be thrown into the same label. It is less damaging to public perception if people can softly be given the impression that Obama is having a bad week, instead of allowing fuck-ups on multiple occasions.

The media is still on his side. The exception, naturally, is Fox News, an organization so jingoistic that no one should take it seriously.

I'm tempted to defend the president. The press will do it regardless, but I know full well that running a massive organization and holding it to standards of ethics which are fundamentally near-impossible for real people to follow is hard, and it's true that too few people recognize this. Obama's people, and federal employees generally, lean liberal; only a fool would expect them not to defend the interests of the government. When they act, they act on their values. Their values make them suspicious of anyone who doesn't trust them, like the Tea Party movement. This is a bias as real as anything cops have against young black males when on patrol. That's another bias that, distasteful as it may be, I understand and expect, knowing there's no easy solution.

Liberals say as much as anyone that absolute power corrupts absolutely, although they're usually talking about corporations or law enforcement. The fact that such people are blind to the reality that government is a power entity itself gets trammeled under the assertion that government is beholden to the people because of the vote. Bill Maher's panel recently talked about gun control, demeaned the second amendment, and said that the freedom of people is assured at the ballot box. Bullshit. Manipulating voters is just as easy as manipulating consumers. The press is doing it right now.

Anyway, if you were looking for something to lift your spirits in these troubled times, you came to the wrong place. I talk about economics; the entire field holds a reputation for being "the dismal science" and I'm more dismal than most. Would you really come here for something uplifting?

It's come to my attention recently that some people read my blog and come away depressed. I didn't really start it out with the intention of doing this... but in a way, I guess I did. I loathe uninformed optimism, especially the kind where people purposefully ignore reality so they can maintain a sunny disposition. I certainly don't think that people like that should have power. A society needs to be realistic about what it is, and only cautiously grasp onto hope when it has an achievable goal. So as the hope and change of the Obama era gives way to regular cynicism, let me remind America that you created this situation yourself, by basing your ideals on expectations that had nothing to do with reality. The field of economics, verified by statistics beyond question, works because it reflects what people are: self-interested, limited in their horizons, passionately gullible, and at times, thoroughly ridiculous. Eternal optimism is for the young and the stupid.

That's okay. There's a reason I push Nietzsche, too. For most, the struggles today are economic; they are struggles of establishing yourself according to the norms of the system. That's okay; such uncomfortable struggles have always existed. Today there's just more math, and you can learn to enjoy struggle by the numbers; I will teach you. You will always want to fight against it, at least certain elements of it. That's okay; we need people to learn how to lose with character. You will make constant mistakes, serious mistakes where someone, be they your friends, family, or some office worker in a government administration using other people's money, will help you and be in a position of power because of it; that's okay, because we can deal with you eventually. The system will eventually wake up and defend itself from those with flawed integrity and everyone will learn a valuable lesson through pain. That's not a tragedy. That's being alive. We can deal with it. We have tremendous advantages, tremendous resources, and tremendous reasons to be appreciative of the situation we have here. In a couple of years, no one will remember the disappointment of these recent displays of humanity. The media will make sure of it.

Tuesday, May 14, 2013

Hierarchy and Inflation

The same reasons that produce the increasing smallness of man drive the stronger and rarer individuals up to greatness.                       -Nietzsche, The Will to Power, A. 109

Warning, January 2016: this is a long blog and I probably went into too much detail here. The ideas can be stated more simply, and I will probably rewrite and republish in the near future. If you are really into the philosophy of economics and economic history, you can still get a lot from this, but I would recommend blocking off a half hour or forty-five minutes to it, depending on how fast and how well you read.

The ups and downs of inflation mystify plenty of economists. Right now, for example, some of them - usually monetarists - can't quite believe that all the expansion of the money supply the Fed is doing isn't raising prices to ridiculous heights. Others of a more Keynesian bent know perfectly well why that hasn't happened, namely consumers don't have enough money to buy more stuff and increase demand, due to their shitty job situations. But they can't figure out why the stimulus the government has been doing isn't working better.

None of these economists look at the economy in terms of hierarchy, so their perspectives are off. Some concepts are too obvious, like market power, which some people now understand is very much linked to inflation. (decent article here: I'm going to try and explain some of this accessibly, so I'm going to have to simplify the hell out of some things.

Money and Relativity

Despite what this guy and many like him might say, it is indeed possible to print off truckloads of dollars and still have the dollar be worth something. All that has to happen is, the people making up the bulk of your consumer base must have very little power in the economy, so they can't get that money, which is what has been happening since 2007 and really, since the Reagan administration. To put it in a way few people think about, let me say it like this: the shape of the hierarchy, and the level of power that certain classes have in comparison to others, directly affects inflation.

Let's get basic into economic theory here. To understand both why inflation happens and why the economy works the way it does generally, you have to understand one basic concept even to begin: the real value of money is determined only in relation of what people are willing to pay for something, and therefore in relation to how much of it people have. Those who have more money and less of a budget constraint will be willing to pay more for something. Money, therefore, is relative. How much you print off isn't the point. Any amount will distribute itself among the population in accordance with the relative power of the individual or group. If new money gravitates towards the financially weak - in societies where redistribution is expected for ideological reasons, or in cases like Castilian Spain where the government spends the money on armies, projects, and whatever else, empowering labor with extreme demand - there will be inflation. The rest of the time, the money will move toward the powerful: nobility, investor class, whatever.

To understand it, let's model it without the input of money, in a simple manner. You have two people who have the ability to provide goods or services, so they are both consumer and producer. In making a trade, there is some understanding that one person's contribution is more or less valuable that another's; one has food in a place where food is scarce, while the other has something nice like beads but not as critical to survival as food. The person who provides the more valuable service has choices; he can acquire a greater quantity of the service that the other provides, basically putting them to work in their service in exchange for less effort of his own, or he can reject the trade altogether, whereas the other person realistically cannot without taking a tremendous risk. Viewed from this angle, the money is merely a convenience where the unequal distribution of it reflects the power of the more important producer. The inequality of the distribution of money, in other words, represents the unequal level of market power that agents have in the economy. That unequal level of market power is drawn from unequal levels of elasticity for the goods and services we provide. The ones providing what is most important use their importance to draw more from the rest.

This relative hierarchy is clear in cases like the Roy model as applied to immigration, which focuses not on the absolute wage of the workers immigrating or emigrating, but on the wage gap.

The money does not cause inequality; it just represents it in numerical form. Some people are absolutely going to require certain things, like food and shelter and utilities and gas for the car; those products have low price elasticity because of their importance and how inflexible people are in having to buy them. The competitive nature of this is unmistakable, but its relationship to inflation is evidently fairly easy to miss.

Reduced competition among providers and low price elasticity generate inflation. We're familiar with this whenever there is collusive behavior and prices rise because of it; OPEC and unions work the same way, using a lack of competition to control the market. Of course, this really just means that more or less competition creates similar responses in price elasticity. Price elasticity is the primary metric that affects market power, at least according to the Cournot model that the Justice Department uses when determining whether a business is engaging in monopolistic behavior.

The other element of price besides demand - supply - is also related to all of this because of wages. If wages and prices both rise, it doesn't really matter for the constant-level exchanges between wages and goods; instead it matters only for the value of savings and debt and is irrelevant for those who do not invest. But if prices rise faster than wages at the bottom, then the products made with bottom-end labor (just about everything in manufacturing) will be relatively cheaper to make; profits will increase. The point of all this is, what makes money matter is its hierarchical distribution and the motivation people have for more; the more egalitarian its distribution, the more of a tendency towards inflation there will be.

The basic idea is simple: there is a direct trade-off between equality and efficiency, and it will show up through inflation when we try to hide it by printing more money. This has ALWAYS been a cause of inflation, an integral part of the equation. No math is necessary to explain it. The equality - efficiency trade-off is fact to some, but considered only conjecture by optimistic economists with leftist tendencies, like Andrew Glyn, who spent their careers fighting it.

Money is power, a coercive form of incentive. It just doesn't require a structure beyond a restraint of violence and the basic broad perception of value people see in it. This coercive tool is absolutely necessary, because to get anything done as a group, some people must have the prerogative to tell other people what to do. Were people actually all equal, no one would have the authority to compel or incentivize anyone to do anything; this condition would be called "anarchy" and would result in immediate reversion to another hierarchy. Imagine if everyone woke up tomorrow with equal distribution of wealth; what would happen? Simple: massive inflation, particularly for commodities, followed by a shaking out of power distribution until a new hierarchy forms. This is assuming the results wouldn't be violent.

On the other hand, authorities with an extreme amount of power can compel action in exchange for almost nothing. This is, in strict labor-productivity terms, incredibly efficient; the only way to get more efficient is to use some incentives to get much more action out of people with only a little bit more resources. Intelligent employers know that, when it comes to using an efficiency wage to get more work out of employees, the marginal increase in production had better be higher than the expense of the marginal increase in pay, or else it is literally, rationally, pointless. The competition will crush you on the margins by selling at a lower cost.

The US and the USSR: An Example

Let's dig into price just a bit more. When deciding how much to price a product at, the producer will want to draw the greatest number of consumers to his product, so the ones who are willing to pay the least for the product when produced at a profit will basically set the price, so long as there are a lot of those people. Everyone willing to pay more is gaining by only paying that low price. This is well known in economics; the benefit for those consumers willing to pay more, but who don't have to, is called consumer surplus. So when people in the economy generally make more money - if there's a general inflation where no one gets left out and prices and wages both rise - then the income of those at the bottom gets less scarce, they will be able to pay more, willing to pay more, and prices will rise.

Let me put this another way: The existence of large numbers of low-income people controls commodity prices. Their income is the most scarce and by necessity, they have to be the most tight with their money. And there have to be quite a few of them in order to seriously affect demand. In commodities particularly, raising everyone's income raises prices. On the other hand, if you raise the wages of only some people, the more valued workers - if wages become unevenly distributed - then those with the higher wages will still have low prices on commodities and their extra income will be a bonus, discretionary spending money. They attain greater consumer surplus. Their extra money results in new products, economic expansion, and greater incentives, not just to work, but to work in areas where you can earn more than the average. Consumer goods are, really, simply incentives to work, some more important than others. Economic growth and productivity relies on there being people poor enough to hold down prices. When general labor is scarce and valuable, one obvious result is the formation of unions and redistribution of economic power within the organizations that hold that power.

To put it yet another way, the more money/power the bottom sector of the economy gets, the more prices on commodities will rise, reducing everyone's discretionary spending. The distribution of wealth IS power in the economy; the more money you have in comparison to others - and only in comparison to others - the more you can do with it.

The most obvious and important example of this what happened to money in the US versus what happened in the Soviet Union when money supply growth exceeded productivity growth.

The USSR was basically organized like a giant corporation, one with ostensibly no internal competition. What this created was an economy that focused not on profit-seeking but on rent-seeking, preserving and using a static structure to monopolize power without concern for actual goods produced, made possible by a very lax attitude towards budgeting out of the government. If an enterprise in the USSR failed to produce a profit, then the central bureaucracy rarely allowed bankruptcy and they basically operated on perpetual bailouts. In practice, the system was the pinnacle of inefficiency: input demand from individual enterprises was upward-sloping. In a market system where an enterprise is on its own, that enterprise tries to minimize costs of inputs for fear of bankruptcy as they either price above the competition or take losses; hence, a downward-sloping demand curve, where they buy the least amount of inputs possible. In the USSR, enterprises spent as much as possible on inputs - often while using too little material on the actual product, as physical resources were genuinely scarce and there was no market competition and good products were sold on black markets or used for bribes - because higher input costs would allow the enterprises to claim more money from the bureaucracy as operating costs. Why not? The enterprises didn't even control the final prices of their goods. They had no control, and could claim that as a problem. Few bureaucrats would bother to claim that they were being defrauded to a higher echelon. There was only minimal pressure to perform, usually towards the end of the productive period, when enterprises would slam the operation into high gear and produce shoddy merchandise to the degree they could.

The biggest input, of course, was labor. And the Soviet Union operated a labor system where labor could move around as it pleased. Remember, upward-sloping demand curve. Employers still needed employees and has no reason to refuse anyone a job, as they were not responsible for maintaining labor efficiency. Soviet workers had an extensive bill of rights that was even followed occasionally. They made good "money", which the government printed with abandon. In essence, there was little or no pressure to perform for employees, too, and the paperwork padded over everything. Today, that labor situation is sorely missed in some former Soviet countries.

The downside? Obviously, the downside is in productivity. The Soviet Union was a workers' chill zone and a consumers' hell. Buying bread required standing in line for hours, bribery, maintaining connections with certain enterprising hoarders, or some combination of all of them. The Soviet worker made money, which they were unable to spend, because there were no goods to buy. The entire economy operated in a state of permanent shortage.

In a market economy, the result of all this money in consumers' hands and so few goods would have been massive increases in price - inflation - in accordance with price elasticity and budget limits. This didn't happen for the Soviets, because the government fixed most all prices. So people basically stuck the money under the mattress, waiting for that glorious day when scarcity would end. It never came, and when the USSR collapsed, the "ruble overhang" caused massive hyperinflation and all that cash hoarding, that forced saving, became pointless.

Both the US and the USSR have punted on their economic problems by printing excess currency. Because of the different nature of power distribution in those societies, the results were nearly opposite. With the printing of excess money in the US today, the people are getting their hands on little of it, because they have so little value to the system as workers. Instead, the money is being printed off by the Fed and exchanged for treasury bonds, which are then sold on the bond market, and that money stays in the rarefied air of the investor class. Around those parts, it causes huge bubbles to form and pop as those investors try to park their money somewhere that isn't volatile. They aren't going to invest it in productive assets when there is already so much crap being produced that no one can afford to buy. In the USSR, there was an excess of consumer funds doing nothing because they had nowhere to go. One system sucks because of the non-existent power of management, and results in shortages that over-value goods; the other sucks because of the non-existent power of labor, and the result is surpluses that devalue goods. One is a good place to be a worker, until you go to buy something; the other is a good place to be a consumer, until you go to try and make money.

About the Soviet Union, many people say that this was what happens in a top-down system, and it didn't work because freedomy-freedom. Those people are idiots. The rent-seeking in the Soviet economy benefited those at the bottom, in pure labor value terms. In a capitalist system, the power flows up, not down, as in a healthy hierarchy. The individual worker is compelled by threat of a pink-slip and bankruptcy to work hard. Labor is competitive here. The term "productivity" is quite simple to define: it's the highest amount of work an employer can get for the least amount of money. It's the purest "screw the labor" term in existence. The enterprise manager or owner pushing them to work hard is compelled by competition, success measured in numbers that do not lie for political reasons. A capitalist hierarchy is an actual, honest hierarchy; the people at the top are not ethically responsible for the people at the bottom, and therefore can exercise coercion to push them to be productive. It is precisely the opposite of every fantasy in the Western tradition of stupid utopias.

So the problem here should be obvious. Every organization is either at war with itself or at war with its outside competition, and the most effective firms are at war with both, ruthlessly acquiring market share while ruthlessly culling the fat from its own internal labor rolls, using massive profits to fund massive investment that continues to expand until its expansion outstrips the capacity of the market to bear it. In the late 19th century, the term "economics" came to supplant the old term for what it described: political economy. The old term was better.

To put it simply: it is precisely because the system puts tremendous pressure on the individual, precisely because it is a brutally hierarchical arrangement wielding an axe of doom over the heads of those of low station, and precisely because WE ACCEPT IT, that's why capitalism works.

Debtors and Savers, Workers and Investors: The Conflict


The general understanding of money supply management is this: if you keep the rate of money supply growth equal to the rate of economic growth, there will be no inflation or deflation. Prices will stay the same.

In essence, at any given period, if people value the goods (or services) produced by the economy 10% more at the end than they did at the beginning, and the money supply grows 10%, prices stay the same. That's if the value of production is exactly the same as before, and there is no shift in wealth.

First of all, that's not true if the shape of the hierarchy changes; if both rates of growth are the same but distribution flattens into more equal income, then prices will likely rise regardless of money supply policy. Second of all, just how the money supply grows makes a difference, too.

For those who know nothing of how we create money, it basically goes like this: banks get our money in deposits, and then from those deposits can loan out money; the amount they can loan out is greater than the amount they have, so every loan is a gamble. The loans ostensibly create economic growth through business development, which makes the economy bigger. Through this process, banks literally create money, and there are rates regulated by the Fed to determine the speed at which they can do it. The reserve ratio sets a limit on how much of a percentage of their held cash banks can loan out. There's the excess reserve rate and the federal funds rate, a system of rates designed to manipulate the discount rate, which determines much economic growth by changing the incentives surrounding loans. Through these mechanisms, and through the reliance the American investor has on loans, the Fed has a certain degree of control over the speed of economic growth.

We should probably divide the economy, for a bit, into the people who make investment and the people who are subject to it. I know, I know; investors make their investments to make things that appeal to consumers. But an investor has choices, while the consumer only has the choices presented to them by investors. You know the class divide, so don't be a libertarian and ignore it. Meet it straight on. There are psychological types, the offensive players and the defensive players. The offensive ones change the world, the defensive ones try to hold on for dear life.

When more currency is printed, a few things can happen. First, if it ends up in the hands of workers, they will usually spend it. There are more dollars competing for the same amount of goods, as nothing else has changed; seeing this, businesspeople raise their prices in the usual supply and demand fashion. That's when we get inflation. With the increase in prices, investors may do a couple of things. One possibility is to hoard their money in something like gold, but the action we want them to take is to put more money into investments, preferably productive investments. They will do this if they assume that the economy will continue to do well and people will be willing to buy the goods they produce. They have the added inducement of money in savings now losing value as it sits, so it behooves them to invest it in something that will gain value at the same rate, or higher, than the inflation rate and therefore protect the value of their money. This is why Keynesians pursue inflationary policy; it has a short-term stimulative effect, which expands everything when done right. The option - allow growth to slow, including in the money supply - causes the value of the money in savings to rise, encouraging those with cash to continue hoarding it. That hurts the consumer, and because of that, we get to hear politicians and pundits talking about "not enough consumer spending" whenever money starts getting parked.

Those people believe it necessary to help the majority with stimulus, and any argument for justice favoring the cautious falls on deaf ears when there's wants and needs being unmet. And you can't really say that recessions are certain justice on an individual basis; plenty of individuals deserve more or less than what the world gives them, by any standard. But the fact is clear: labor has little value, and the system moves towards this purposefully by encouraging efficiency. Our productivity is precisely the explanation why stuff like government make-work programs aren't stimulating much.And yet, morally, redistribution seems to be the only game in town.

This is why the left constantly wants more money for the government to spend on projects: that way, it stands a better chance of getting into the hands of people at the low end of the hierarchy. They'll take inflation, because the only downside for their constituency is getting used to prices changing. They don't save much. Meanwhile, the relative wealth of the investor drops; all savings, particularly in cash, is suddenly worth less when prices rise. Of course, investors know this, and choose to put their money into commodities like oil and gold to weather inflationary storms. Again, normal people don't mess with saving and investment much. The wealthy invariably invest most of their money, which is how they stay wealthy. So when profits end up being made, one way or another, they can make money off of it.

Wealthy investors do have serious power, albeit a power controlled by what the consumer is willing to buy. That's not saying much, because the consumer is usually an easily-manipulated jackass who thinks the entire situation is built so they can treat the world like Disneyland, but there is still an element of control. It's just never used well, not when deciding to buy foreign-made crap which costs other Americans jobs, not when continuing to buy houses to flip in a massive bubble market... there seems to be no limit to the stupidity of the American consumer.

But you see why egalitarians are pissed off. They see the fate of the majority controlled by people who are only playing games with obscene amounts of wealth. Morally, for them anyway, it's ugly.

I have considered the notion very seriously that there might need to be some sort of radical shift in the way that investment works, but there are huge problems with this. Most radically, the only source of alternative investment tactics is the government, and if there's anything more dysfunctional than the present-day economy, it's the present-day government. You can imagine that their investments will not be based on what people will buy at a profit, but on political image. You can bet that all the short-term thinking that plagues the stock market will look like a cakewalk compared to what politicians - with all their vaunted maturity, professionalism, and knowledge of how production works - end up doing to make it worse. I'll consider greater government economic control when the rest of society considers getting rid of democracy and establishing a more professional command class.

But this is not really an argument for capitalism, either. I'm not into growth economics as a panacea, I'm not a utilitarian, and that's not a standard of value I'm interested in. Money and economic power are relative, but so is welfare. Do you think that people 1700's were pissed because they didn't have a car and Justin Beiber MP3's? Of course not: what we want, and what we think we should have, is clearly a product of our cultural environment. Today, the speed of perception and desire has increased, with people wanting more, which prods more growth, and it cycles forward, on and on until there's a crash. The best thing that could be said about the various forms of capitalism prior to the death of God was that it was fairly stable, with wants and needs more subject to Malthusian growth limits than anything else. Today, economic "growthsmanship" runs at full speed because modern society rests its legitimacy on ever-increasing material welfare. But holy shit is that ever a shallow, sad way to live.

This argument is, however, an argument for hierarchy. It's unbeatable. Some people are simply more valuable than others, no matter what you want from them. That's a fact of power. Whether you want protection, or stuff, or entertainment, or some psychological effect like love or hope or vindication that people provide for one another, there is always an exchange at work, and the exchange never benefits both sides equally. We just don't bother with the integers and calculations in most cases, and really, that sloppiness benefits the ones who are doing the least.

Lots of libertarians try to basically pretend that there is no hierarchy, or at least they pretend that the question of hierarchy is irrelevant next to the choice and material welfare promised by capitalism. They do this, because openly admitting that inequality is a fact of capitalism - and that most people are invariably going to be closer to the bottom than to the top - is enraging to most people and therefore politically damaging. So they have to bullshit, and as a matter of perspective, that gets them into trouble. On The Daily Show a couple of years ago, Jon Stewart was making fun of the idea that Republicans told their constituency that taxes should be perpetually low so that growth could be encouraged and that, instead of punishing the rich, they were looking forward to a world where "everyone was rich". He rightly called this out as absurd, saying "That's not how a hierarchy works." Even Jon Fucking Stewart gets it. Liberal egalitarians often do, as they have fine-tuned perceptions to this sort of thing.

But fighting against hierarchy as a concept helps nothing; they'd just replace the crappy capitalist hierarchy with a crappier elected one if they had power, and the world is too oriented towards pedestrian ideas focused on minor questions of welfare now. I have to wonder just how much of culture, in the sense of art, metaphysical belief, custom and tradition, were developed to legitimize the hierarchy. I'm thinking, a lot of it. And I'm also thinking that it's time to figure out how to do that again.

Saturday, May 11, 2013

Rules and Values

You have all these RULES, and you think they'll save you!                                                       -The Joker, from The Dark Knight

Warning, January 2016: This is a long blog, and in some ways a pointless one. I tried to write it in a way that you could understand the terms and topics without prior critical thought on the subjects, but that is nearly impossible in a blog-length publication and the entire point of the discussion - the necessity of shared values over rules and the underlying cracking of the foundation of freedom - certainly can't be shoehorned in there after the fact. If you're going to read this, take your time.

When I was younger, I generally thought acting right was a fairly straightforward thing, and it hardly registered that there would be conflicts over what constituted being good. Of course, I also went to church and there simply were no public arguments over the subject that I knew of. But it also didn't strike me as a problem when I came around to the postmodernist notion that morality is a cultural thing and highly variable, and that there was no absolute, universal morality. The cultural relativism of morality has always made perfect sense to me. But there are problems, as I would eventually discover. Knowing your morality is actually cultural regulations, conditioned into you, changes the game. People must now come to grips with the notion that what they believe holds no intrinsic legitimacy, except in the egoistic sense.

Philosophers dealing with the new postmodern situation lean heavily on a past imbued with organized religion to create ethical systems that are both functional and attractive. The attraction part is more important than the functional part for creating popularity, necessary in a democracy, which has left us with some strange systems; I'm going to go over some basics here by dividing them up between the ethics based on rules and the ethics based on values, aka honor. The relationship between honor and values might take some explaining, because it gets little play today, and I've basically had to think that through myself.


What is the wellspring of moral behavior? Many philosophers roll with the notion of utilitarianism, or its more sophisticated, very close sibling, consequentialism. They split these two notions up, but that's vaguely ridiculous: you want a condition that you value to come into existence in both cases. Really, what's the difference? Consequentialists obviously value an end-state, and this is presumably because that state creates utility. Action is taken and creates results; whether you say those results create positive utility or positive consequences is a semantics question, so I think consequentialism and utilitarianism are too similar to be separated. There are lots of hokey interpretations here, so I'm boiling it down like this: if you endorse or condemn behavior because the results of it are more or less of what you value, then your ethics are based on values.

Many people deeply misunderstand the concept of utilitarianism by supposing that it relates to goals as vapid as increased material welfare, which is basically an insult to the process of economic thinking. Economics need not dictate values; the reason it often focuses on material welfare is because that's what people demonstrably want. Were people's goals to change, economics could easily continue to function, just with different priorities; the market system, or any system which takes values into account, can incorporate anything in the realm of the possible.What changes is currencies and concepts, but they all must be evaluated. Economic logic is, then, simply logic. Von Mises' Human Action, the fundamental text on praxeology, says more on this.

What's important is the value system and the use of currency to relate it. Language, which is a currency, allows this by allowing people who know the same language to exchange their ideas, providing a medium. But language is intrinsically attached to subjective ideas in the mind and all language use is open to interpretation. If you want to pare down evaluation to something directly communicable with no subjective baggage, then the best way to do it is to use numbers. Hence, money.

Let me explain. Take all the bullshit you know about freedom, rights, and good versus evil, and put it to the side. Don't start an analysis by making value judgments. Just know that people make those judgments.

People take certain things to have value and be worth pursuit with action, and what defines value is inequality. Some things are more valuable than others; if they weren't, then nothing would hold any actionable value at all, and decisions would be impossible because of perpetually confounding opportunity costs. I'd say that values which do not provoke action are not values; they're delusional beliefs, used mostly for rhetorical manipulation. People say things about what has value all the time; what they say is far less important than what they do.

Values are subjective and getting people onto the same page in regard to what values are "true" is a matter of exercising power. This means manipulating by means of force, incentive, or rhetoric. Money, along with other currencies like language, is a tool that represents value in number form. You value something, be it material or conceptual, and you place an integer on it. And we look at people with respect to their value as well.

Obviously, we have the makings of power struggle here. Individuals are constantly trying to increase their value among others, through perception and usefulness; every king wearing fine robes and every CEO driving a Mercedes is sending a message. People with similar values form groups which identify themselves by their values, those groups become powerful if their values, that which drives them to action, empower their group. The currencies at play are attention, language, and money, each building on the others at times. Holding those currencies gives a person or group leverage to use over others, because when they are exchanged for whatever that person or group values, the relative plenty or scarcity of that currency defines the degree of power, based on inequalities.

This is how societies have always worked.

There's obviously more to it, but that's a basic rundown. Values are the core of societies, and without them, you just have a bunch of people in a mess. Trust and respect come with consistently high evaluation of one individual by others. Thus, we have honor. To behave in an honorable fashion is to behave in a way that is concerned with how others evaluate you. People think about what kind of person you are based on your actions, and they create expectations for you based on your past action, establishing the trust and respect, how much they think you are worth to a society they consider legitimate, meaning a society which operates roughly within the framework of their values. To use a term we're all familiar with, honor is a credit rating, based on everything you do in the presence of others, well beyond the financial. Since only those who know you can be reasonably good judges of this, then honor is intrinsically parochial. Proximity and perception make all the difference.


Deontology operates on the assumption that moral behavior can be encapsulated by rules. Think Immanuel Kant. Obviously, some rules propose to create a sought-after end-state, and they combine rule and value, ie rule consequentialism. But raw deontology insinuates something else. Rules from the alternate perspective are intended to be metaphysically correct strictures and not simply means to the end-state; they are rules endorsed by a higher power. Deontology's prefix is, after all, "deo"; religion is strongly implied. Think about it for a second: does truly living by rules as anything more than a temporal convenience make any sense if there is nothing beyond the material world? Of course not, but still people today subscribe to certain rules being simply "right" and assigning terms like "evil" to those who violate - or even consider violating - them.

Rules have the tremendous advantage of being straightforward strictures that otherwise allow the individual to explore whatever avenues they like. Rules encumber only to the degree expressed by the rule; to the degree that an individual can imagine it, you can see an understanding here that, so long as people stay within them, one can be set free by rules instead of being limited by them. If you consider the rules to be blessed, metaphysically correct strictures against evil that good people shouldn't want to break, turning any desire for this evil on the self, then one can make rules and liberty compatible. That is, provided the rules are agreed on by all and enforced objectively, and that is also provided that the rules actually work to resolve conflicts of interest. With those notions taken care of, rules can expand creativity and promote healthy change.

On the other hand, rules are frequently too general, have poor comprehension of people's ways around them, and seem arbitrary or nakedly irrational under many circumstances because of their proposed universality. In the situation where rules and values are in sync - say, when we both grant privileges to veterans who we believe earned them, or where we arrest people of obviously low value who are breaking the law - the rules and values reinforce each other and the rule is a convenience. But they say nothing about people's value to one another, and this may result in what some people perceive as unfairness, like when a good person makes a single mistake and the law cuts no breaks. The statue of justice holding the scales with a blindfold is foolishness: how do you judge someone if you don't look at who they are, what they've done, what patterns their lives follow, how much others care about what happens to them? In real life, judges take information about character into account in the courtroom, and most people will readily agree that they should.

We know that inflexible, blanket rules don't work well, even the basics, and thus all our rules have exceptions of some kind:
Thou shalt not kill: what about in self defense?
Thou shalt not steal: what if they stole from you first? what if you have to steal to eat? what if you're the government and taking people's money without giving them a choice - taxation - is necessary?
Thou shalt not rape: Please describe the point at which drunken consensual sex turns into drunken non-consensual sex, and explain how to enforce it without "drunk fucking" laws as stringent as drunk driving laws.

So many rules are stupid and sloppy. According to the Robinson-Patman Act, the government has outlawed what is called "price discrimination". This means that a manufacturer cannot sell a large chain its product at a low price, while selling a small chain the product at a higher price; the law exists because such practices are anti-competitive. But it also outlaws buyer's groups, where individual consumers get together to negotiate low prices for bulk goods. Really, buyer's groups are a great idea for cooperative individuals, allowing people to take advantages of economies of scale. Why are those groups outlawed then? Because buyer's groups are "discriminatory" towards those not in the group. The difference between buyer's groups and anti-competitive practices by the manufacturer is somewhat difficult to define, basically one of intention; another word for a buyer's group might be a "store" and Sam's Club would be out if it weren't seeking a profit from individual consumers. Other examples of price discrimination - the senior citizens' discount at the movie theater, for example - are intuitively moral goods. This happens a lot; there are endless details to every rule where authorities must really hack down to the most probable and improbable possibilities of behavior and calculate pro and con to determine whether a rule is a good idea, and in the process, they must accept that the rule will make the ideal outcome just as unlikely as not having a rule.

Have you heard of the Supreme Court justice who said that he didn't know what the definition of pornography was, but he knew it when he saw it? If you know how to deconstruct language with the slightest bit of probing interest, you can end up in this situation very quickly. Language is not exact; it is really only intended to operate within the context of what culture has dealt with before. Evidently, Wittgenstein broke new ground by saying this, although one wonders how arrogant a philosopher has to be to have any other opinion of language. But anyway, this facet of rules holds problems for creativity; unprecedented situations can wreak havoc on law, and while a "good" and creative person is your society's best hope for progress, an "evil" and creative person is its worst nightmare. Thankfully, most people aren't nearly as original as they like to think they are.

When it comes to human action, it goes either according to accepted behavior, or not. It can be encapsulated by the experience of society, or not. Society can create strictures and traditional responses for expected behaviors; the status quo desires predictability. If this sounds unpleasant to you, like oppressive anti-freedom, then think deeper. What do you want in your life? Constant change that challenges without letting up? Extreme variation? Not being able to get used to anything, get comfortable, understand the sequence of events? Few people want that. Most people have an affinity for the familiar, right down to their preferred aesthetic styles that remind them fondly of the past. Right down to the desires for a career and relationships that conform to society's accepted vision of what is good. Change is disturbing, quite literally, in a social context, like wrenches thrown into smoothly functioning machine parts.

To reject accepted patterns of behavior and strike out on your own is not only a risk to you but a risk to all those affected by you. Now, change is a necessary response to shifting environmental conditions, and thus creativity is necessary. There is no society with the absolute power necessary to completely control its environment and bring about absolute predictability... and humans aren't meant for it anyway. So we like change, to a degree. Young people particularly like change. The old prefer stability. So the rules get updated as conditions change, and this pattern of shifting regulation can be seen as correct in its own right, or as a tool for creating incentives.

Today, rules are beloved by liberals because they support the government, elected and ostensibly reflective of everyone's values equally, as a bulwark of power management. The government creates strictures, the necessary ones, just the ones needed to hold back to assholes, and let's everyone else do as they may. Beyond this creation of rules, it does not judge people's value. And as people change, strictures can be loosened as feasible, so long as the government is beholden to the popular. The vision is one of eventual growth of personal freedom, as the individual internalizes rules and drops the tendency towards "evil" behavior; I question this vision, given that no action is intrinsically evil in my view.

Liberals generally do not want to evaluate people, subscribing to the notion of equal and infinite value for all. That's at the core a Christian idea. This makes sense if you view people as a product of their environment and do not place one value system above another. I'm not at all convinced that people do this, or can do it.

Evaluating Rules and Values

What supports rules? What gives them power?

There are two options: one is force. The government compels adherence to the rules with the monopoly on violence. The other option is the values of the people being regulated. People must value the state of affairs the law aims to bring about to consider the law legitimate.

We absolutely need both. The Rule of Law cannot exist without honor and values.

Authors like Malcolm Gladwell have emphasized in popular writing the academic perspective that societies based on the rule of law are superior to societies of honor, but this fundamentally misconstrues the situation. Social order based on rule of law has a further basis in honor. You are not choosing between one and the other; you are building the rule of law - a broad administrative convenience - on top of a foundation of honor.

It's easy to lose sight of this today, in a world where we are not nearly as close to each other, or as dependent on each other as individuals, than in past societies. Our evaluations of one another are brief and shallow, and we keep a degree of space from one another that interferes with good judgment of character. This is, I'm sure, one reason for the loss of social capital noted by researchers like Robert Putnam. But if you look at the values society instills on its members as being oppressive, then you're likely to see advantages to relying on rules instead of honor. Rules are clear, and can be constructed to create a minimum of stricture on the individual, just enough to prevent anarchy. Values require conformity; you must always be concerned with what others think, minding your reputation, willing to change who you are.

But are these difficulties something we can do without? Can society function as a system without us evaluating one another? Do those evaluations have a greater importance than simply preventing anarchy? Can a society, in other words, function without commonly held standards beyond law? Because the more law tries to step in for evaluation by peers, the more oppressive it seems to become. The failures of our criminal justice system, in particular, become particularly onerous under this condition.

Values are hierarchical; those who are valued more by others have higher status than those who are valued less. That's in the definition. How we behave socially, our work, our relationships all affect how we are evaluated by others, and not everyone is equal. And one reason why people might be ignoring the difficulties of a society built on something other than honor is the desire to be liberated from hierarchy.

The law treats those who have not broken it as equal; more and more of society seems to believe - despite a solid cynicism surrounding the government that creates the laws - that this state of affairs is truly right in some way, that people are equal until the law has been broken. But that's ridiculous: anyone who's done right by people knows better than to think that the law encapsulates the value of the individual. But the law starts with equality, and as the moral influence of law expands, no form of coercion - not reputation, nor economic desire, nor ostracism - can be used to bring the individual to cooperate with society as a body, with its standards and values. The incentives fade. This idea of equality strictly benefits those who are disliked, even reviled, by the general public, even with good reason. And by undercutting the evaluations of people and leaving those who have earned respect with no recourse to empowerment, such reliance on law kills the potential for order and harmony, for people to come together under a broadly accepted values structure that makes a culture a culture. It promotes alienation.

You've seen the Dark Knight? If, upon catching the Joker, Batman and Gordon had been entrusted to evaluate the situation, they could have at least had the choice to say that the Joker held negative social value, was perpetually dangerous, and executed the bastard on the spot, Judge Dredd-style. This is exactly what people fear out of law enforcement because they assume the worst out of law enforcers and assume the best out of the oppressed "victims", but in that situation (and situations where public safety have to be weighed against the value of the life or freedom of the criminal are the norm in law enforcement), executing the Joker would have saved lives. The entire movie is about the weaknesses and vulnerabilities that rigid rules create to hamstring those who keep order. And the Joker is often right. In a broader sense, one wonders what kinds of conflicts can be expected in a world where the law prevents evaluation - in the form of anti-discrimination laws - instead of working in concert with it.

Law Built on Value

People need to value the state of affairs created by law, which means de-valuing the actions that the law proscribes as punishable. Try to imagine a world where there was no connection at all between people's values and the laws which regulate their actions. Imagine people looking at the activities described by law and seeing them as something other than bad. The laws would have to be enforced against most people despite their values, and that's a recipe for the perception of illegitimacy. Can this work?

Rules must change to adapt to circumstances; as an easy example, witness this year's rule changes in the NFL. Long-standing behaviors are having to be modified as evidence of brain damage and problematic play screws up the league; the changes must at once obey not only the principles of self-interested expedience for Chair Roger Goodell, but must also retain the facets of the game that are valued by others, and therefore, controversy over the changes exists. That's not surprising: in American law, Congress faces this every term.

So the people must trust those who create and modify the law. Likewise - even more importantly - the people must trust those who enforce the law, as the front line against chaos. By-the-numbers enforcement cannot work, as the law is so absurdly detailed and police power is so limited that cops regularly have to let some crimes slide and punish others. Every traffic cop knows this. So the cop must see to the spirit of the law, which is supposed to be a reflection of society's values. The image of the law as a systematic and entirely rational set of rules is absurd and easily dismissed by pointing out rules surrounding both drugs and child custody: the court preference for mothers, and the public opinion that drugs should be outlawed, are based on generalities that are not only poorly proven but based on popular and wrong conceptions of responsibility that, in a rational society, would be handled on a case-by-case basis.

I have to wonder if society would be better off with less law, less reliance on law, and more willingness to push their values through means other than government legislation. It might pull people back into their communities, and it might create greater incentives to be decent people.

Wednesday, May 8, 2013

Review: The Way of Men

If you hold the slightest interest in masculinity, you should read Jack Donovan's The Way of Men. This is the only book review I've written thus far, and this has to be the best way to start.

First of all, have a taste of Jack's writing:

Many of the ideas in that article find their way into the book, with a full chapter describing the "bonobo masturbation society". It goes fast. A movie review for Wedding Crashers summed up the difference between the humor of Owen Wilson and Vince Vaughn as being one of delivery; Wilson slides his jokes in with a smile, the crafty bastard, while Vaughn just hits line drives right up the middle, right in your face.

Jack Donovan subscribes to the Vince Vaughn school. Calling his writing "efficient" does it no justice, as the combination of speed and clarity slam his thoughts into your mind with the subtlety of getting hit by a Mack truck. It's brutally blunt in the best possible way, no apologies, and it makes for fantastic reading. The style bears witness to an author who is very aware of the close relationship between power and economy.

This lack of subtlety is one of The Way of Men's greatest strengths. The mission here was to pen a book that reflects a singular idea of what masculinity is, a book that gives life and purpose to the traits that are so frequently reviled in male behavior, placing man in his proper context. And it works.

He focuses his definition of masculinity on four key virtues: strength, courage, mastery, and honor. These notions go back to ancient times and form a groundwork for establishing the value of a man in the situation he was built for, that of survival. Such ideals do not describe what it means to be a good man; they describe what it means to be good at being a man.

Having described each virtue, much of the remaining book is expository on what exactly is wrong with the world today, through the lens of one who still prizes these virtues. The answer, obviously, is damned near everything, with the irrelevance and hedonism of modern life coming in as a target. Donovan goes up against the sanitized modern world and its sad ethics and attacks it with extreme prejudice. Every point made rings true, and many arguments are the kind I would have made myself, just more effectively than I can.

Donovan recognizes the importance of hierarchy to men, and knows the structural essence of the male mind very well. Not perfectly, but well. Men have evolved to operate in small, hierarchical groups, and Donovan thinks they should have stayed there. His criticism of globalism, of unity as a vision of the future, is spot-on and holds a psychological relevance that folds perfectly into the Nietzschean view of the will to power that cannot possibly be denied by any man with blood running through his veins.

Obviously, I enjoyed it. I've read it repeatedly and loaned it out to others who also loved it. If you look at the world as needing more love and kindness and general "niceness", then stay away. If you look at the modern world and immediately get bored, then this book will be pure inspiration.


I'm throwing these out there while acknowledging my own subjectivity; consider this nit-picking, and looking for faults. Other reviewers have simply heaped the praise, and I don't work that way. When it comes to mission accomplishment, The Way of Men unarguably accomplishes what it wants to accomplish, but I have to throw a more "academic" understanding into it. I tend to compete intellectually, and I have a couple of points I want to call out.

This is not a book of philosophy. There are a couple of references to Nietzsche and William James, and several to Thomas Hobbes, which creates a great baseline upon which to write, but Donovan leaves too many avenues of approach open to those who wish to tear the book apart analytically. Because of all this, the end result is very clearly a take-it-or-leave-it proposition. If you share Donovan's intuitions - and I do - then you will see the value here. If not, then he leaves ample room to assault the ideas.

Implied in his writing is Donovan's own worldview, which is still a product of liberal America. The basis of this work is that men have evolved in a certain fashion and returning to this state of affairs holds the greatest promise for living in a satisfactory way; these perspectives align with naturalism and an existential authenticity that is extremely familiar to exactly the people Donovan is assaulting. Those would be liberal feminists and their sympathizers. That said, there's just too much irony in arguing for a change in the state of affairs based on the emotional needs of men. I too think that there's something uniquely right about the small group of under 200, but the concept of growth beyond the level of Dunbar's number is given no credit. Donovan's individualism takes the first steps into integrating man into society as a system, then purposefully cuts it off at that size for the sake of the individual, psychological welfare of men? Really? That's basically arguing for bloody tribal competition for the same reason we eat sugary foods; it's what we've developed a taste for, what we're adapted to seek out, and therefore, obviously what we need.

Please. The problem isn't that life isn't dangerous enough. We can make it dangerous any time we want. The problem is that we have no meaningful reason to take the risks. Donovan acknowledges this, but there is no solution in burning the system when we could easily reconstitute it if we decided that hardships wasn't for us. Bullshit aside, the problem is that there's nothing worth fighting for, no empowerment or salvation the world demands we seek anymore. We have no NEED for a protective gang, and creating a need for one is like moving away from the middle of town and selling your car to force yourself to run five miles for a gallon of milk. People take the convenience for the sake of having more time for something else that's more meaningful. But there is nothing more meaningful to be had. Nothing is valuable enough to be worth pain. The overriding ideal today - freedom - turns out to be the problem. Donovan acknowledges as much when he refers to freedom as impunity, which is more true than any other definition, but what about all the other garbage interpretations of that word?

Something is missing here. Something that goes beyond the necessary pain of adapting to a new situation. We need a purpose to that pain.

Evidence is marshaled to show the absurdity of manhood today, but the deeper flaws of liberal thought do not come in for the thorough beating they deserve. That's not the focus of the book, not its mission, it's been done elsewhere and this is not really so much a demerit against it as a wish for a more aggressively articulated case against the ideological competition. But beyond this, there is concern that not much here goes deeper than the consumerist utilitarianism that Donovan is trying to subvert. No ideas for changing the structure beyond simply breaking it are considered. Aristocracy is not considered. Religion is not considered. ANY form of legitimacy beyond the welfare of the individual is not considered.

It's deeper than saying that the problem is power itself. The rot stinks more strongly than just stating that we've been victims of our own success. The fundamental principle of hierarchy is that power flows up, not down. The ideological inversion of this, and the focus on comfort and using technology to those ends, needs proper destruction beyond a preference for naturalism. One reviewer on Amazon stated the most glaring problem with the thesis of the book: Donovan is willing to destroy all the benefits of modern society for the sake of men's well-being. And it is a tough sell. Technology is power; it should be useful in expanding the reach of man and creating new challenges of all sorts, space exploration being the obvious example. The struggles of the modern world are not less good than the struggles of old ones. They're newer, so we aren't comfortable with them, but they can certainly have meaning if the old military and economic struggles ever had meaning. The first thing Donovan should have assaulted was institutionalized empathy, but he hits this only obliquely. The unwillingness to cull the herd, the kabuki theater of politics and business, the lack of a values system besides self-interest and whatever is pretty, these ideas need more meat. Donovan circles and shoots, almost nailing the bulls-eye dead-center, but stops short.

Maybe he's saving more for another book. I hope so. I am a masculinist, and when Donovan's on target, all cylinders firing, it's pure music. I'll be staying tuned.

Tuesday, May 7, 2013

The Golden Rule

"Do unto others as you would have them do unto you."     -paraphrasing the Bible, Matthew 7:12
"That's not very Smoochy-like behavior!"     -Danny Devito, Death to Smoochy

Warning, January 2016: this is a long blog, but I still like it if you have the time. There is more to say about the finite distribution of empathy within the reality of the attention economy, so there's a lot I didn't get to. 

In some form or another, the much-adored Golden Rule exists in most major religions and ideologies, including Christianity, Islam, Buddhism, Taoism, Confucianism, Hinduism, etcetera, etcetera. In philosophy, it has driven the creation of Kant's Categorical Imperative and the libertarian's Non-Aggression Principle, which are merely modifications to the same basic ethical position. It's everywhere.

Seems like a pretty good idea, doesn't it? And it would be, if everything went according to plan, which doesn't happen. In the real world, there's a different story. So, given that it's a Tuesday and I'm trying to procrastinate on real work, maybe it's a good time to throw a rock at one of the foundational ideas of all ethics. Why not? I'm feeling trollish.

There are two clear problems with the Golden Rule.

Values Incompatibility

It seems like a clear violation of the Golden Rule to tie someone up, beat them with whips, and publicly shame them, and for most people, there would be little argument. Then you find out that your girlfriend is into S&M and enjoys this sort of thing, and suddenly your relationship is over because you followed the Golden Rule. Go figure!

This is rather obvious, even to those who would otherwise buy into the GR. But in practical terms, it's a killer in a diverse society. How can you know what people value? What if some guy enjoys a good practical joke, including jokes played on himself, and pulls a whopper on someone who hates having jokes played on him? He followed the Golden Rule, right? What if some people like excitement more than those they interact with? What if they have totally different priorities when it comes to money? What if they hold opinions that others don't? Do you value wealth or affection more? War or peace? If you value wealth and war, are you then a problem for a society that assumes people want peace and affection? The more different people are, the harder it is to make something like this work. You have to assume that people are generally the same, which they clearly are not. Some of us like a challenge and loathe boredom more than discomfort. Some of us want to be left alone. Can all preferences be compatible? And those are just preferences, minor tastes: what about when we throw beliefs into the mix?

Western society has been fighting about what the "correct" values are for centuries, and that problem isn't going anywhere. In fact, given multiculturalism, it's getting worse every day. Ethicists know about the values incompatibility problem, and have suggested a variety of changes, including the "platinum rule", but from a practical standpoint, it is extremely unworkable. You DON'T know other people all that well. You can say that people should care enough about each other to know what they like and what they don't, but this can't work for everyone; the scarcity of attention screws it up. You can only know so many people so deeply that you can understand or predict what they would like. With the random person on the street, for lack of binding norms, your best bet is to mind your business if you want to be considerate, and there goes your social capital.

The problem of diverse values becomes much more acute if you have children, and you want those children to share your values. This isn't simply selfishness. We aren't talking about kids being denied the prerogative to become "who they are" here; when you're raising children, you are molding who they are to a great degree. Of course parents want their children to share their values; they need their children to understand them and relate to them to have a decent chance of a relationship built on trust. And of course, the parents are going to think their values are correct; they wouldn't be valued otherwise, so should we deny them the prerogative to raise their kids their way? This goes beyond the parent-child relationship and into the way that the child handles life in a the community.

Norms and cultural values need to exist, and among the most popular ways of creating a community with shared values is organized religion. And the Golden Rule desperately needs a God to work, which brings up the second point.


It doesn't get any more obvious that this: What happens when someone breaks the rule?

Living among people who take the Golden Rule seriously means living around people who do not practice any sort of revenge, who do not inflict harm, and who do not return pain for pain with the same veracity of their returning pleasure for pleasure. In this moral environment, the bigger your failures become, the more society is bound to try to "kill you with kindness" or blame themselves. They expect reciprocity, but have no recourse when it fails to come about unless they violate their own morality. So, what incentive does one who feels no intrinsic desire to conform have to keep from taking advantage of every possible liberty?

None. If everyone else is following the Golden Rule, then the last asshole in the village becomes a god.

At the very least, if there is no possibility of negative consequences, then what the hell makes you think that some people wouldn't cheat? Even just a little, subtly, keeping it low-key enough not to ruin the easy meal ticket? You know what a free-rider looks like, and free-riding is perfectly rational behavior. The one guy not playing the game by the rule ends up being the one guy not constrained into effective slavery.

I've become convinced that there are certain dissonant elements in our psychology that refuse to admit the degree to which economic reality and Golden Rule-style morality are incompatible. Because you cannot follow the Golden Rule and operate on economic motivations simultaneously unless you seriously water down both. They are not quite opposites, but damn, they're close.

The issue can be further whargarbled by pointing out that values, subjective and unique to the individual, are by definition self-interested. They are your values. Economics, the description of behavior in accordance with values, is therefore destined to be self-interested. Think your values should be brought into the world because they are good? That's just, like, your opinion, man. Economic behavior works to order the world. The Golden Rule does not; the Golden Rule would turn everyone in the world into a non-confrontational serf, ripe for domination by those who remember empowerment. Vulnerability invites exploitation. Should the vulnerable blame the empowered soul who merely gives in to the temptation created by those who make unthinking vulnerability a lifestyle?

Why, sure! Blame was always the point: you can blame the strong for your troubles, for their incompetence in the game of power, taking a self-righteous stance because you never pretended to be competent, which gives you the moral upper hand.

We already live in this kind of world, one where the buyer expects protection and need not beware. People are tremendously vulnerable, and believe that they have the right to live in a world where vulnerability is never taken advantage of. They cry when anything from a computer virus to a stock market plunge fucks up their day. And they don't just want someone to protect them; they NEED someone to protect them.

Thus, the perpetual requirement that societies have authority. The authority protects, and to do so requires empowerment. Authority finds ways - like a mandate from God - to justify setting themselves apart from the crowd, and that's by necessity, because the authority cannot order society without becoming a hypocrite. The Golden Rule is egalitarian; authority must break its code in order to create incentives for those tempted to exploit not to do so. The authority takes the blood on their hands to protect the rest from bloodying their own. In Christian theology, God punishing the wicked after death was supposedly enough, but for this particular metaphysical realm, kings still claimed divine right as the enforcer of God's will on earth, and they needed this legitimacy.

Some have claimed that the problem with the death of God will be a lack of compassion. Bullshit. Feeling compassion towards those you relate to is a natural, community-building reaction, as is the absolute demand that said compassion NOT be distributed equally. In trying to distribute it equally, we've turned compassion into a business. It's everywhere today; we spend billions on charity and government policy to soothe the savage ego using compassion. It doesn't help, because it becomes valueless when it's an entitlement that people can take for granted; if anything, we need less. No, the real problem with the death of God is the lack of legitimacy for any given authority. And this shows up in the constant hatred this society has towards those in charge.

Today, democracy - dumb as a post when it comes to creating systematic incentives - is the only legitimacy authority can draw from. The authority now represents the people, painful when you realize the pain authority must inflict on rule-breakers, and therefore, the stain on a society's self-image whenever coercion is exercised. According to the Golden Rule, punishers are always hypocrites, and therefore are loathsome creatures trying to control good people when it's unnecessary to do so. The preferred vision of leadership offered is one of the powerful also being the good, of setting examples to follow.

This is impractical; just for organizational and inspirational purposes, leadership requires a different kind of person than the subordinate. The leadership must still spend more time in decision-making and information gathering than doing hard labor, and laborers emulating them will not be doing their jobs. Specialization always kills the simple herd axioms.

Believe it or not, most cops, judges, businessmen, and fathers have known throughout history that most of the people they discipline are not truly evil, including those that buy into the concept of evil generally. They understand that people end up in bad positions and do stupid things, and they didn't necessarily mean any harm. But still, they must enforce. The people who talk about punishment not working are the people who have been so well-protected by authorities that they can convince themselves that Golden Rule goodness is natural, intrinsic, and that humanity has been domesticated so fully that freedom and order have no conflict anymore. They want more liberties for everyone, from children to criminals, on the assumption that a sign of faith from society will bring the rebels right back into the fold. Please. If it worked that way, the most lenient societies would certainly have become the most successful by now, and they clearly have not. On a long enough timeline, permissiveness undermines social order.

People really want a Superman, endlessly good and self-sacrificing, with perfect integrity and judgment, to wield power for their sake. The movies can't get enough of them. But we don't have any of those. People with power don't generally get there by accident, they do generally deserve respect, but they will never be perfect, especially in a society with no coherent vision of perfection. It's certainly a quality idea that the powerful should be held to a standard higher than normal people, but we will likely never be able to enjoy faith in them in our lifetime, as media has every incentive to show them in the worst possible light. People just enjoy watching the powerful fall too much.

Well, enough of this; the Golden Rule isn't going anywhere, although applying it equally and universally is an idea that needs to be dumped with all the other garbage from the deontological Good Idea Fairy. Let's talk, instead, about what the Golden Rule gets right that is not cited enough even by its advocates.

In the Context of a Healthy Society

The strictures of religions like Christianity constitute a social model. Imagine yourself surrounded by true Christians all the time, and it has serious advantages; you share a code of values, you are willing to sacrifice for one another, trust one another, take a chance on one another, bow to others. Taking care of one another seems to work out wonderfully. If they are doing this while you're doing this, things work out, frankly, better than they would if we were just minding our own self-interest.

Think about it: how well do you know yourself? You probably have a decent understanding of your own personality, but not a great one. You are blind to your own faults, or at least avoid thinking about them sometimes, and you repeat your mistakes cyclically. You don't work on your weaknesses and continue to get blindsided when they come up. Admit it: you're a dumbass. Totally normal. Now think about how well your closest friends and family know you. If you were to bow to what they thought was best for you, if you took their advice and recognized that they see you more clearly than you see yourself, communicated clearly, and could absolutely trust that they wanted what was best for you, wouldn't this be a plus from a utility standpoint?

Yeah, even if you don't realize it, even if you fetishize maximum autonomy, you don't want to be alone and it would be good. You can do better in an intimate group than by yourself, meaning that if you really trust people and they really know you, living in a group increases welfare in many ways. It makes perfect economic sense, so long as the trust is there.

I know, I know, I've been hammering away on the trust thing for a while. The repetition could piss you off like Top 40 radio any time now, but it matters, so deal with it.

To some degree, this is how good relationships always work, and you can do this if you live in a truly Christian community. The vision relies on people having a very similar worldview, maybe not in every detail and priority, but in generally having the same moral template and broad sense of right and wrong action. When this condition is met, then you have a moral ecosystem that works, sustainably, creating expectations and meeting them, granting an assumed trust to those who live within the strictures. Confucian societies take this to the extreme: in Japan, if you're the nail that sticks up above the rest, you will get hammered down. But you have to admit, Confucian culture runs like well-designed clockwork almost all the time, and has granted East Asian societies a level of cultural stability unimaginable in the West. China, in particular, is ethically nearly the same society as was envisioned by Confucius during the Axial Age and put into practice by the Ch'in in 221 BC. Christianity has known touches of this peace here and there, particularly before the Protestant Reformation; now, shit is so culturally unstable that we'll damn each other over miniscule cultural questions like marriage and drugs that were simply not on the table for discussion in earlier generations.

The trust and strength of bonds, arranged in waves spreading from every individual as they confront society and find those worthy, make a society formidable. When practiced with open eyes and a respect for structure and specialization, the Golden Rule needs no metaphysics to give it value. But it does need a willingness to say "no": do unto trustworthy others... Economics isn't quite incompatible with it, because exchanges are predicated on trust and there is nothing more beneficial and nothing that expresses understanding better than honorable arrangements between those that respect one another. This is not always the case with trade, particularly in a big economy where people don't know each other and rely on enforcement to give them peace of mind, but the idea of mutually beneficial specialization should not come under fire merely because of its modern incarnation. In some form, the Golden Rule holds value, albeit not in its egalitarian configuration.