Friday, 4 September 2015

Hello Sailor front-man Graham Brazier dies, age 63 [updating]

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Oh shit.

Hello Sailor front-man Graham Brazier dies, age 63

UPDATE: I fear the Herald had prepared their obituary for poor Graham ahead of time …

"First, foremost and always I am a songwriter.”

“As Dave McArtney once said of their respective roles: ‘I was the melody, Graham was the balls’."

Metro:

Again, there’s a tear in the singer’s eye.
“And he’ll never sing that live again because he’s brown bread.”

Martin Edmond:
”In later years he was like a ruined king of a ruined kingdom on a ruined throne; but the splendour was real.”

BBC:
“He was a star, he could sing like angel. He was a poet so he could write. He had that bad boy quality. He was a constant source of amusement, excitement and astonishment."

Audio Culture:
”The perception of Hello Sailor has changed over the years…”

His last-ever interview:
"Graham actually said to Alan Jansson 'Oh mate, can we hurry this album up because I don't want this album to be posthumous'. It obviously turned out to be prophetic. The new album, titled Left Turn at Midnight, would likely be released towards the end of the year...”

Grant Smithies:
”He was soft-spoken, erudite, articulate and funny, and had no intention of thumping me in the dunnies at some future awards dinner, so long as I did him a favour. Rather than ‘getting in the ring together,’ he was prepared to let me off the hook if I wrote something nice about his mum.”

Don McGlashan:
”He breathed music & literature; meant every note he sang, & walked a tough path with grace. Dominion Rd will be emptier now.”

What Raymond Chandler wrote about his hero Philip Marlowe seems to fit Graham like one of his many leather jackets:

Down these mean streets a man must go who is not himself mean, who is neither tarnished nor afraid. [He is] a complete man and a common man and yet an unusual man. He [is], to use a rather weathered phrase, a man of honour. He talks as the man of his age [should] talk, that is, with rude wit, a lively sense of the grotesque, a disgust for sham, and a contempt for pettiness.

 

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And now they’ve both gone, Dave & Graham both, both of these two fabulous fuckers …

Robyn Gallagher @5000ways: “A good way to remember Graham Brazier - starts with a poem, then the video for ‘In Your Company’ (feat. his mum)”:

Friday Morning Ramble–04.09.15

“The human flood to Europe hit bloody depths over the last week.”
They're all human beings – Toby Manhire & Toby Morris, RADIO NZ
Talking refugee “quotas” – NOT PC
The drowned Syrian boy photo is viral social media at its most hollow and hypocritical – VOX
Sharing a photo of a dead Syrian child isn’t compassionate, it’s narcissistic – Brendan O’Neill, SPECTATOR
Take Action – AMNESTY NZ

“Many of Europe's young worry about xenophobia more than they do about their own future.”
What Europe means to the young – ECONOMIST

“The country's government is only obliged to take in 50 asylum seekers a year, according to a humanitarian quota.”
More than 11,000 families in Iceland have offered to open their homes to Syrian refugees – INDEPENDENT (UK)

Australian Senate Committee delivers another damning report into conditions in Nauru detention.
Kids in Detention: Nauru – ASYLUM SEEKER RESOURCE CENTRE

“Oliver Hartwich leaves behind rose-tinted accounts of the history of European integration with a more realistic view of how they wandered into a dead end.”
Why Europe failed, part II – Oliver Hartwich, INTEREST.CO.NZ

The Greens’s Climate plan: no new petrol cars within 15 years.
The Greens's climate plan – David Farrar, KIWIBLOG

“Peeni Henare and Kelvin Davis have great mana. Hopefully the rest of Labour will come 'round to giving Partnership Schools a chance to prove themselves at helping kids, which so far the schools are succeeding at nicely.”
Labour's charter school division – Patrick Gower, 3 NEWS

“The Fonterra monopoly came from a conjunction of  dairy politics with the instincts of a leftist Clarke Cabinet, at a time when they needed to rebuild trust with business.”
Leave Fonterra to sort itself (or not) – STEPHEN FRANKS

“I have said from day one that Nick Smith’s Special Housing Areas cannot work as they defy development logic.”
Why (Greenfield) Special Housing Areas Won’t Work – Ben Ross, TALKING SOUTHERN AUCKLAND

"These sorts of costs arise from dull legislative details written in Parliament's committee rooms where only the Greens may be awake. They probably have no idea of the perverse consequences they create."
Red tape gives more headaches than liquor – NZ HERALD

Idiocracy arrives a few centuries early.
Donald Trump says he wants Oprah Winfrey as his running mate – MAIL ONLINE

“County clerk Kim Davis has a right to observe and adhere to her religious beliefs, but she does not have a right to her job as county clerk.”
Justice Scalia Explained Why Kim Davis Should Issue Marriage Licenses or Find a New Job – Jonathan Adler, ANYTHING THAT’S PEACEFUL.

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Creative destruction and city planning, theory and practice, in one place.
A Long History of a Short Block: Four Centuries of Development Surprises on a Single Stretch of a New York City Street – GREENE STREET

“So resource availability has gone from what was available to humans just outside the cave to what is available to humans on Amazon. The possibilities are virtually infinite.”
Hooray, the Earth is Not Running out of ResourcesStephen Hicks, SAVVY STREET

Barriers to entry are barriers from ending poverty. “It's time to end occupational licensing and revive the freedom to work.”
Government Permission to Work – Doug Bandow, F.E.E.
Obama's Econ Advisers: Occupational Licensing Is a Disaster – Mikayla Noval, ANYTHING PEACEFUL

“Ignorance of basic economics is so widespread that we ought to have a specific word for it, like we have for illiteracy or innumeracy.” Nice chart too.
Why Economics Matters – Jeff Deist, MISES DAILY

Just add town planning, stand back, and …

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The Koch Brothers, who are hated for the "sins" of refining oil and promoting liberty, speak out.
Charles Koch blasts Obama – POLITICO

“The deficiencies of Libertarianism.”
Q&A on Objectivism – Will Thomas, ATLAS SOCIETY

A big chunk of the so-called "green" activists are younger than 18 years and 8 months. And none of them has seen warming in their lifetime.
A New Record ‘Pause’: No Global Warming For 18 Years 8 Months! – CLIMATE CHANGE DISPATCH

“The technology behind plastic grocery bags is so useful it won a Nobel Prize. Employing an unimaginably small amount of base material, manufacturers can create tools of surprising strength and durability. Far from being the environmental threat activists make them out to be, plastic bags are not particularly to blame for clogged sewers, choked rivers, asphyxiated sea animals, or global warming. Instead, they are likely our best bet for carrying all of our junk in a responsible manner.”
Slaying the Myths about Plastic Bags – David Henderson, ECON LIB

“If there is one health myth that will not die, it is this: You should drink eight glasses of water a day. It’s just not true. There is no science behind it…. Many people believe that the source of this myth was a 1945 U.S. Food and Nutrition Board recommendation that said people need about 2.5 liters of water a day. But they ignored the sentence that followed closely behind. It read, ‘Most of this quantity is contained in prepared foods’.”
No, You Do Not Have to Drink 8 Glasses of Water a Day – N.Y. TIMES

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“The rising number of equations per paper shows the increasing mathematisation of economics.”
The use of mathematics in economics and its effect on a scholar's academic career – M.P.R.A.

“In 1942, economist Joseph Schumpeter described “creative destruction” as a “process of industrial mutation that incessantly revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one.” There probably hasn’t been a better example of Schumpeterian creative destruction in the last decade or more than the recent ascendance of app-based ride-sharing services like Uber …”
Schumpeterian creative destruction — the rise of Uber and the great taxicab collapse – Mark Perry, A.E.I.

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“The Fed can force the rate to zero, but it cannot change economic law.
”They miss the real harm of zero interest.”
Move Over Entrepreneurs, Make Way for Speculation! – Keith Weiner, CAPITALISM MAGAZINE

“’Bond King’ Bill Gross thinks global financial markets are ‘out of whack. He blames the Federal Reserve’s easy money policies for warping the economy. …
“With interest rates at effectively zero, borrowing money is virtually free. So nothing looks like a bad purchase … no business idea is too dumb to fund...no $120,000 car goes unsold to someone who can’t afford it…and no overpriced house sits on the market for more than a month.
“The old question of ‘Does it make sense to borrow this much money?’ has been replaced with ‘How much can I get?’ …
“Cheap credit has stoked the economy, stocks, and the housing market. Zero interest rates have distorted prices so badly that we can’t even know what prices would be if interest rates were normal.
“We’re now Alice in Wonderland…where reality isn’t what it seems.”
Major world economies are slipping into recession… – CASEY DAILY DISPATCH

“It’s always hard to predict exactly when bubbles will peak and crash.”
4 Charts Show Why This Rally Will Become a Rout! – Harry Dent, CONTRA CORNER

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“Next year alone 10 new skyscrapers of at least 1,110 feet (338 meters) will be completed.”
The World’s 10 Tallest New Buildings of 2015 – ARCH DAILY
From London to China - Where is Today's Skyscraper Curse? – Mark Thornton, MARKET ORACLE

Yes, people have seen it coming.
Beware Of The 'CCC Aches' Bubbles – Jesse Colombo, SEEKING ALPHA, 2012

“One key characteristic of this fragility is that it invisibly accumulates beneath the surface stability until some minor disturbance cracks the thinning layer of apparent stability. At that point, the system rapidly destabilises …”
Massive Central Bank Intrusion Means Ever Increasing System Fragility – Charles High-Smith, CONTRA CORNER

New study:

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“’We were going to cut one of our big bills,’ says Kim. ‘We couldn’t cut the student loans—that’s permanent—so we got rid of the mortgage’.”
Honey, I Shrunk the House – MINDFUL.ORG

“The Google self-driving car may never actually happen.”
Driving in Circles – SLATE

““I haven’t heard of a human being who isn’t musical, or who doesn’t respond to music one way or another,” he told an audience at Columbia University in 2006. “I think we are an essentially, profoundly musical species. And I don’t know whether — for all I know, language piggybacked on music.” Oliver Sacks, neuroscientist.”
' A Legendary Neuroscientist Says “Goodbye” – Vinay Kolhatkar, SAVVY STREET

“Even civilities in appearance of otherwise sensible but unwitting Americans have regressed into outright primitivism in forms of self-mutilation like piercing and tattoos, turning bodies into billboards for so-called nonconformist “self expression” that is anything but self expression.
”It’s time to ponder this devolution.”
Group-Think Leads to Breakdown in Culture – Alexandra York, NEWSMAX

No. Insanity is not doing what you’ve always done and expecting different results. It’s this.
Teen Boy Will Be Charged As Adult For Having Naked Pics of a Minor: Himself – REASON

“Art is not absorption learning like other subjects taught in school, nor is it interactive like computer games, texting, and social media. It is a creative activity that encourages the growth of a whole person as an integrated individual: It educates the senses, the mind, and the emotions.”
Art Education Vital in Digital World – Alexandra York, NEWSMAX

“They were heading off into Saturday night by bicycle, as the fading sun threw long shadows across the street. Smartly dressed in a jacket and jeans (for him) and a dress and heels (for her), with nothing but carefully arranged hair adorning their heads.”
What the Dutch can teach us about cycling – Michael O’Reilly, EXECUTIVE STYLE

A Pandora’s box of scholarly microblogging.
The weird and wonderful world of academic Twitter – Glen Wright, TIMES

She was …

Too much?

Thanks for reading.
Have a great weekend!
PC

[Hat tips Gus Van Horn, BdB, Sand Longfield, ATHEISTPOWER/Kriz, Danyl Mclauchlan, Jon Holbrook, Jesse Colombo, TimesHigherEducation, David Stockman, Rudolf E. Havenstein, Julia Campbell, Chelsea Roffey, Jim May, Jeff Deist, Emma Hogan, Jim Rose, Monica Beth, Felix Mueller, Asylum Seeker Resource Centre (ASRC), David Seymour, Jim Matzger, Vicky Bogle]

PS: This weekend, make mine a Hop Federation Red IPA, thanks.

Friday morning physics joke

Heisenberg and Schrödinger get pulled over for speeding.
The cop asks Heisenberg "Do you know how fast you were going?"
Heisenberg replies, "No, but we know exactly where we are!"
The officer looks at him confused and says "you were going 108 miles per hour!"
Heisenberg throws his arms up and cries, "Great! Now we're lost!"
The officer looks over the car and asks Schrödinger if the two men have anything in the trunk.
"A cat," Schrödinger replies.
The cop opens the trunk and yells "Hey! This cat is dead."
Schrödinger angrily replies, "Well he is now."

[Hat tip Falafulu Fisi]

Thursday, 3 September 2015

Game-theory garbage [updated]

Much of so-called microeconomics at major universities these days involves being examined in something called “Game Theory,” which [as Wikipedia succinctly explains] “attempts to mathematically capture behaviour in strategic situations, in which an individual's success in making choices depends on the choices of others."

Unfortunately for its enthusiasts, nobody in business actually uses the strategies explained by game theory—sorry all you folk with MBAs who’ve had to learn that stuff--and the actions of actual purposeful economic agents (i.e., entrepreneurs, who are really game changers) are barely if at all taken into account. (Game changers, by definition, being difficult to predict when writing these games’ rules.)

Also, as with the classic prisoner’s dilemma, the “strategising” will often ignore one very important question: as in this one, i.e., are the prisoners guilty? (Which, by the way, is a more fundamental point than it might appear.) And, of course, there’s nothing stopping real actors actually talking to each other either. And as far as playing the “game,” it turns out when tested even actual prisoner’s don’t conform to the theory of the prisoner’s dilemma.  And, with the recent discovery of a winning strategy for the allegedly unwinnable Dilemma, instead of abandoning their theory the “theorists” instead simply decided that winning isn’t everything.

Ah well. Just another bunch of time-wasting stuff economics students have to study for when they could be studying economics.

Teachers of this garbage argue that since economics is a “science of choice,” so therefore “all human choices are economic choices: whether one is choosing between guns or butter, or between this potential lover and that one.”* So they both insist on the garbage being taught instead of teaching economics, and they insist on this garbage then being used to advance economics into fields in which it has no right to be.

Because calling economics a “science of choice” simply allows them to blur the distinction between what is part of the science of economics, and what is properly part of other fields of study. And since modern mainstream economics can’t even get the most basic questions about its own science right – just witness the fumbling and folderol when asked about the causes of the financial crisis the economics profession helped so signally to cause—I would suggest it most urgently stick to its own knitting (or even learn about the fundamentals of how to knit properly) before choosing to comment on the crochet patterns of other professions.

Economist Jim Rose however argues that game theory tells us many things we don’t already know, and he links to a whole long list of them—from jumping cats to taking soccer penalty kicks -- many of them no doubt eminently useful in their own fields (especially if you’re a cat prone to lumping), closer examination of which reveals however that none of them involve anything about actual economics.

So rather than spending time on this garbage, students wanting to really learn about their actual subject would be better spent learning economics instead of this latest fashionable bolt-on. They might for example read about how prices are formed based on individuals’ differing values (which, if so-called “microeconomics” were to mean anything would surely begin here). In this vein for example they would be reading such books as Eugen Von Böhm-Bawerk’s masterful Basic Principles of Economic Value, a full grasp of which will give any student more micro muscle than any number of exams based on prisoners’ alleged and irrelevant dilemmas.

Bohm-Bawerk’s small book was a landmark of the theory of price formation.

Böhm-Bawerk considered the supply-and-demand formulation as all well and good, but he discovered that prices are determined more directly by something else.

They are determined almost directly by each individual’s differing valuations.

Böhm-Bawerk developed a theory of price formation that was based exclusively on the subjective [i..e, individual] valuations of buyers and sellers.  In Böhm-Bawerk’s theory, prices are determined within the limits set by the “the marginal pairs” of buyers and sellers.  

What is a “marginal pair”?

In any given market for a good, there will always be four people whose valuations put them in a special position. Böhm-Bawerk called these four people the "marginal pairs." It is these marginal pairs that directly determine prices.

Essentially, these “marginal pairs” are the folk who either just miss out in the market by valuing the purchase slightly too little, and those for whom the purchase price was only just worth less to them than the thing being purchased.

These pairs set the lower and upper limits respectively of the final price—that price being set in the end by the exchange of goods for money: the goods going to those who value the goods more than the agreed final price; the money to those who at that price value the money more than the goods; the range of that price being set by the market’s “marginal pairs.” (More here about “the mystery of the marginal pairs” about which too few of today’s economists even know.)

This, explained Mises years later, can be considered the essence of “the pricing process.” And in giving the upper and lower limits of the purchase price, that is all that economics can ever do. Even knowing the range of market participants valuations, all that can be deduced from them is the range of final prices that might eventuate. The range may be deduced from economic theory, and after that all is higgling – and economics must remain silent. Within that range, explained Bohm-Bawerk, there

is room for any amount of "higgling." According as in the conduct of the transaction the buyer or the seller shows the greater dexterity, cunning, obstinacy, power of persuasion, or such-like, will the price be forced either to its lower or to its upper limit.

And here then there may be room for game theory, to explain the process of higgling within the range of final prices that may be deduced from economic theory.  It may have some small use in that context. But that is only a very small room within a very vast field of price theory, about which today’s students are unfortunately taught far too little. And to confuse the small room for the field would surely be the height of strategic foolishness.

World’s Poor: “We Want Capitalism”

Guest post by Iain Murray

In the forests of India, something exciting is going on. Villagers are finally regaining property taken from them when the British colonial authorities nationalised their forests. Just as exciting, in urban Kenya and elsewhere, people are doing away with the need for banks by exchanging and saving their money digitally. All over the world, poor people are discovering the blessings of bottom-up capitalism.

Sadly, though, developed country governments and anti-poverty activists ignore this fact and insist that developing nations need a paternalistic hand up. Both are missing an opportunity, because there are billions of capitalists in waiting at the bottom of the pyramid.

Next month, the United Nations will formally announce the successors to its Millennium Development Goals, the global body’s approach to poverty alleviation since the year 2000. These new goals will be touted as “sustainable.” The event will coincide with a visit by the pope, at which he is expected to concentrate on climate change and materialism as the greatest threats to the welfare of the people of the developing world.

Don’t expect to hear much on the way people in the Western world lifted themselves out of poverty: free-market capitalism.

The phrase “the fortune at the bottom of the pyramid” was coined by the late C.K. Prahalad, building on the work of Nobel laureate Amartya Sen. In his groundbreaking 1999 work, Development as Freedom, Sen pointed out that one of the most important aspects of development is freedom of opportunity, a vital part of which is access to capital and credit. Capital and credit, however, appear nowhere in the draft UN goals.

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When capital is sufficiently available, would-be entrepreneurs at the bottom of the pyramid have demonstrated a willingness to launch new ventures and invest in their futures — that is, to embrace free-market capitalism to the benefit of all concerned.

There are several ways to ensure access to capital in the developing world, but the most important approach is to unlock the productive potential of the capital already available there.

Land Titling

In many countries, people could possess access to capital by virtue of the real estate they already occupy, but they are unable to prove ownership of the land due to inadequate land-titling systems or because of traditional forms of property ownership where everything belongs to the village chief. As Hernando de Soto explained in his book, The Mystery of Capital, land-titling reforms significantly benefit the poor, enabling

such opportunities as access to credit, the establishment of systems of identification, the creation of systems for credit and insurance information, the provision for housing and infrastructure, the issue of shares, the mortgage of property and a host of other economic activities that drive a modern market economy.

De Soto estimates that up to $10 trillion of capital worldwide is locked away unused because of inadequate titling systems. A recent study by the Peru-based Institute for Liberal Democracy (ILD), which De Soto heads, estimated Egyptian workers’ real estate holdings to be worth around $360 billion, “eight times more than all the foreign direct investment in Egypt since Napoleon’s invasion.”

Similarly, many local assets around the world remain in “common ownership” — in reality, owned by no one. Initiatives such as India’s privatisation of forest resources seek to address this problem by enabling the titling of assets by indigenous peoples, who can then tap into those resources for access to credit to open up new opportunities. Estimates suggest that similar initiatives could be extended to 900 million plots of land across the developing world.

There are also exciting opportunities that could arise for the public recording and utilisation of such capital through the distributed public-ledger system known as the blockchain, best known for its role in the development of bitcoin. Development of the blockchain for property recording and titling would significantly reduce both the transaction costs and the widespread corruption  associated with government-controlled titling systems. Significantly, De Soto’s ILD is promoting these initiatives.

Microfinance

Recent innovations have enabled the development of microfinance — access to small amounts of credit for specific purposes. Today, microfinance institutions all over the developing world provide small loans, access to savings, and micro-insurance to families or small businesses.

By giving them access to proper investment capital and affordable financial institutions, microfinance providers help small- and medium-sized enterprises in developing countries to grow. Often, these businesses are so small that they can neither afford the interest rates on bank loans nor come up with the capital they need on the their own. When implemented correctly, microfinance loans empower their customers to invest, grow, and be productive, all of which contribute to diminishing poverty within communities.

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One of the most prominent examples of microfinance is Muhammad Yunus’s Grameen Bank, first established in Bangladesh. According to a RAND Corporation study, areas where Grameen Bank offers programs saw unemployment rates drop from 31 percent to 11 percent in their first year. Occupational mobility improved, with many people moving up from low-wage positions to more entrepreneurial ones. There is evidence of increased wage rates for local farmers. Women’s participation in income-generating activities also rose significantly.

The Consumers at the Bottom of the Pyramid

Access to capital and credit enable new markets to spring up where none existed before. Entrepreneurial activity is unleashed. Consider one of Prahalad’s case studies of Nirmal, a small Indian firm that sold detergent products designed for rural village uses, such as in rivers. The products came in small packages at low prices suitable for Indian villagers’ daily cash flow. The company soon found itself with a market share equal to that of consumer-goods giant Unilever’s Indian subsidiary. Unilever responded by introducing similar products, thereby growing this new market. In the process, more environmentally friendly products were invented and sold, too.

As Prahalad points out, over four billion people in the world lived on an annual income of $1,500 or less (in 2002 dollars), with one billion living on less than a dollar a day. Nevertheless, based on purchasing power parity, this market represents an economy of $13 trillion or more, not that far off from the entire developed world.

The underdeveloped world is ripe for capitalism. The “unemployed” protestors of the Arab Spring were, in fact, small businessmen who were pushed to the breaking point by continually having their capital and profits expropriated by corrupt government officials, as De Soto points out. So, while the Western media portrayed the protests as being mostly about politics and freedom of expression, they were as much — if not more — about the freedom to do business.

Kenya: Mobile Phones and Payments

Despite corruption and bureaucracy, strong markets have grown up in developing countries. Kenya is a case in point. It leapfrogged the Western world’s development process for mobile communications technology. Kenyans went from having few telephones to virtually everyone having a mobile phonewithout needing the stage of landline infrastructure in between. A similar process is now taking place in personal finance.

Vodafone, along with its Kenyan subsidiary, Safaricom, developed m-pesa, a mobile payment and value storage system to be used on its phones. Transactions are capped at about $500, but crucially can be person-to-person, acting as digitized cash. Introduced in 2007, it had 9 million users — 40 percent of Kenya’s population — just two years later. By 2013, 17 million Kenyans were using it, with transactions valued at over $24 billion — over half of Kenya’s GDP.

M-pesa has in turn improved access to capital even more, and technology businesses are thriving all over Kenya as a result.

Kenya is not alone. The phenomenon is spreading to other African countries and to some South American countries such as Paraguay.

Environment, education, and health all benefit from wealth creation. Perhaps the real mystery of capitalism is that while neither the pope nor Helen Clark nor her minions at the United Nations recognise the benefits it can bring to four billion of the world’s poor, an Irish rock-singer can see it. Free enterprise and human welfare boom where governments allow new markets with access to capital and credit. That is all it takes to meet the UN’s development goals.


Iain Murray

Iain Murray is the Competitive Enterprise Institute's vice president of strategy, and author of several acclaimed books, including Stealing You Blind: How Government Fatcats Are Getting Rich Off of You and The Really Inconvenient Truths: Seven Environmental Catastrophes Liberals Won’t Tell You About – Because They Helped Cause Them.
A version of this post appeared at The Freeman.

RELATED POSTS:

Books & Films

There’s a sudden rash of quizzes about films and books “they” think you should have enjoyed (or at least endured) by now.

As it happens, I have—and clearly too often. How about you?

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Wednesday, 2 September 2015

The Economics of Bernie Sanders

Bernie Sanders is not a new Mao or Marx. He’s really just a modern New Dealer recycling old New Deal plans and rhetoric. And, just like the original, Sanders’s New Deal would do nothing to end the current economic malaise, and much to prolong it, says guest poster William L. Anderson.


As the political campaign of Hillary Clinton continues to run aground, Democrats are flocking to the campaign of Bernie Sanders, the self-described “socialist” US senator from Vermont who has been a fixture in that state for more than three decades. Not unlike the presidential campaign of Ron Paul, Sanders is drawing large, enthusiastic crowds, though to a very different message—one of increased state control of the US economy.

Obviously, when a person running a campaign based upon socialist principles is drawing attention and big crowds, we might ask just what does Sanders mean by “socialist,” and what would he do if he were elected president of the United States? To better answer those questions, I am taking a closer look at what we would call the “economics” of Bernie Sanders.

What Do We Mean by “Socialism”?

Before looking at Sanders’s platform, however, I believe it is important to note that when socialists speak of “victories” in the economy, they are not talking about actual results, but rather political achievements in the forms of laws being passed that mandate certain policies. Whether or not these policies actually achieve what socialists claim will be accomplished is another story altogether, but results themselves are irrelevant to socialists. Power is.

imageThis should surprise no one because, after all, socialism is based upon political control of the economy. From each according to his ability, said Marx, to each according to his need.  True (or at least original) socialists believe that state agents via the “magic” of their authority should assess the takings from those of ability, and allocate all resources to where there is the greatest need. Political representatives, not surprisingly, determine what constitutes the greatest need—and what products of ability should be taken. The state would take ownership of all factors of production, and then wisely determine the needs and how production of goods would fulfil them.

Ludwig von Mises in 1920 in his short work, Socialism (three years later expanded into a book), exploded the socialist myth by pointing out that in a world of scarce resources, economies needed private ownership, prices, profits and losses to determine where resources should be directed. The early years of the “experiment” of the Soviet Union proved Mises correct, and socialists then sought to redefine what socialism actually meant.

In the USSR, and later in China and North Korea, the state took ownership of factors of production, but tried to create a parallel economy by using shadow prices and production functions via the mechanisms championed by Polish communist Oskar Lange, who admitted that Mises had pointed out serious flaws in the original plans of socialists. We also know how that “experiment” turned out, which is why there no longer is a USSR, China has abandoned much of the economics of Mao, and North Korea is a failed state where most people live in grinding poverty.

But people like Bernie Sanders, while maybe not rejecting the old socialism spiritually, nonetheless have embraced a “socialism” in which government takes ownership of large portions of what has been produced by private enterprise and transfers wealth from one group of people to another. A look at the Sanders website spells out his brand of “socialism” that he says is based upon what Nordic countries like Sweden, Denmark, and Norway have done, levying high taxes with governments using that funding for social programs like medical care and other public welfare initiatives.

Secondary Socialism

A number of people have pointed out that the Sanders “programme” is not socialism per se, but rather is something based upon socialising the results of private enterprise, or what one might call secondary socialism. The Bernie Sanders regime would take control of some of the produce of private enterprise, as opposed to taking outright control of factors of production, which would remain in private hands. If this reminds one of the fascism of the 1930s, that is because Sanders is promoting a version of the governing models of Germany under Adolph Hitler and Italy under Benito Mussolini.

Of the two, Sanders certainly is closer to Mussolini. Like Sanders, Mussolini called himself a socialist and was a leader in the Italian Socialist Party. Like Sanders, Mussolini decried “profiteers” and the wealthy, and spoke out against political corruption. Like Sanders, Mussolini spoke of a larger “national purpose” and sought to harness nationalism as a political force. Like Sanders, Mussolini sought to impose more and more controls on Italian businesses in order to direct production in a way to satisfy political purposes. Like Sanders, Mussolini built political power by appealing to Italian voters by saying that other Italians were well-off because they had gained their wealth on the backs of the poor.

Having similar economic proposals to Hitler and Mussolini does not make Sanders either of those two men, and it is important to emphasise that while Sanders regularly employs the powerful political tool of appealing to voter resentment of others, he is not advocating the kind of genocide that ultimately helped to characterise the fascism of Central Europe in the 1930s and 40s. Bernie Sanders is an economic nationalist, and economic nationalism was at the heart of European fascism, but we do not want to make unwarranted accusations against Sanders, either.

At the same time, I do not want to let Sanders totally off the hook. He promotes economic nationalism and has built his campaign upon resentment, the kind of which Henry Hazlitt wrote in 1966 in his famous, “Marxism in One Minute.” Hazlitt wrote:

The whole gospel of Karl Marx can be summed up in a single sentence: Hate the man who is better off than you are. Never under any circumstances admit that his success may be due to his own efforts, to the productive contribution he has made to the whole community. Always attribute his success to the exploitation, the cheating, the more or less open robbery of others. (Emphasis mine)

Fostering resentment breeds consequences that cannot really be called unexpected. As one moves through the website for the Sanders campaign, there is plenty of resentment for others. First, there is the ubiquitous “One-Percent” that is the main focus of the typical Sanders stump speech:

This campaign is sending a message to the billionaire class: “you can’t have it all.” You can’t get huge tax breaks while children in this country go hungry. You can’t continue sending our jobs to China while millions are looking for work. You can’t hide your profits in the Cayman Islands and other tax havens, while there are massive unmet needs on every corner of this nation. Your greed has got to end. You cannot take advantage of all the benefits of America, if you refuse to accept your responsibilities as Americans.

While I would agree wholeheartedly that the US economy is in serious trouble, it is not because of the “greed” of billionaires. It is because the US government, through the Federal Reserve System, has created what David Stockman has called the “casino economy” that has substituted trading of sovereign debt and monetary manipulation for a real economy with interest rates that reflect actual economic fundamentals. Like the Bush and Clinton administrations before it, the Obama administration has promoted political entrepreneurship and demonised market entrepreneurship.

Sanders’s List of Recycled Twentieth-Century “Solutions”

Americans are not jobless because some people are not paying “their fair share” of taxes; they are jobless because the US government insists on directing resources from higher-valued uses to lower-valued uses, as determined by consumer choice. They are jobless because Washington insists on remaking the economy in its own image. There is nothing in the entire Sanders campaign that would change any of the things that vex the US economy the most.

So, what does Sanders propose to “revitalise” the US economy? Here are some things listed on his website:

  • Raise taxes on US corporations (ironically, corporate tax rates in the Nordic countries are substantially lower than current corporate taxes in the USA, something that has escaped Sanders’s notice);
  • Raise the minimum wage to $15 an hour;
  • Expand the reach of labour unions and vastly expand their membership;
  • Make it illegal for US corporations to manufacture goods abroad, and then sell those goods in the USA;
  • Impose new taxes on financial transactions;
  • Spend at least a trillion dollars on building and repairing roads, bridges, and utilities;
  • Create a “youth jobs programme” in which unemployed young people are given government-sponsored jobs (Sanders sees no connection between high minimum wages and youth unemployment);
  • Enact “equity pay” that will “guarantee” that women are paid the same as men for comparable work;
  • Break up banks and financial institutions;
  • Enact a Canada-style single-payer healthcare system;
  • Provide free tuition for all public colleges and universities;
  • Expand Social Security benefits;
  • Require businesses to provide 12 weeks of paid family and medical leave, at least 10 days of paid vacation a year, and seven days per year of paid guaranteed sick leave.

Notice that there is nothing in the Sanders platform that calls for “nationalisation” of the means of production, nor does he propose to do away with the price system. In other words, Sanders’s vision of socialism is not what Mao or Trotsky or Lenin proposed, yet there is not one thing in the entire platform that would reverse the dangerous economic trends of the past decade.

Instead, Sanders proposes to direct huge amounts of resources in the direction of constructing something akin to a European welfare state. To put it another way, Sanders wishes to “turn back the clock” to create or promote social and economic structures that already have been undermined by the modern “sharing” economy.image

If one reads Sanders’s platform from another perspective, it would be the New Deal. Indeed, there is nothing Sanders has written or said from the stump that would not be reminiscent of a New Deal rally (with the possible exception in appealing to black Americans, which was not part of the Democratic Party agenda in the 1930s, as well as Sanders’s appeal to furthering the Sexual Revolution). Bernie Sanders pushes an economic agenda that is frozen in time.

The problem, economically speaking, is that Bernie Sanders proposes nothing that actually would enable entrepreneurs to help bring about a true economic recovery. In Sanders’s world, entrepreneurs are parasites and employers are oppressors who seek to harm their employees, and wealth is defined by how much governments have in their treasuries.

If I could put the economics of Bernie Sanders into a nutshell, it would be this: Burden private enterprise with one directive after another, and then demonise it when it ultimately falls down under the awful weight of taxes, higher costs, and mandates. While many people believe that instituting the Sanders economic agenda would help turn the USA into another Sweden or Denmark, the more likely outcome would be turning this country into another Venezuela.


Bill Anderson ProfileBill Anderson is a professor of economics at Frostburg State University in Frostburg, Maryland. His Ph.D. in economics is from Auburn University, and he serves as an associate scholar with the Mises Institute. He has published numerous articles and papers on economics and political economy, including articles in The Independent Review, Reason Magazine, The Free Market, The Freeman,Public Choice, The American Journal of Economics and Sociology,Quarterly Journal of Austrian Economics, and others.
This post first appeared at the Mises Daily.

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Why does Montessori matter?

Why does Montessori matter? Because your child’s success and happiness matters.

That’s the message of a recent book by Charlotte Cushman, Montessori: Why It Matters For Your Child's Success and Happiness, “an informational paperback explaining the benefits of a Montessori education for a child.”

The book grew, she says, out of independent pamphlets written to help parents understand the Montessori method.

And her explanations are clear, essentialised and replete with examples that make her points easily understood, says experienced Montessorian Dr. Michael Berliner.

At the same time, she possesses an ability to identify in clear terms the "why’s", i.e., the important ideas on which classroom practice is based. Not only is she philosophically astute, but her long experience as a Montessori teacher and her sensitivity enable her to provide a multitude of anecdotes, including conversations with children, that keep the discussion in "the real world". She also answers questions and doubts that parents have raised over the years and applies her knowledge of Montessori to matters (e.g., computer use) that postdate Maria Montessori. The result is that a Montessori parent - including me with four decades of hindsight - can say, "Oh, that's what's going on with my child" and "that's why he's doing that in class."
    But just as important, a parent who is considering sending a child to a Montessori school will learn the most important lesson from Charlotte Cushman's book: why Montessori matters for a child's success and happiness.

Sounds great!

So where can I buy a copy...

The Great Job-Creating Machine

As robots begin to do more and more of what humans did, cries are heard again from luddites that “machines are taking our jobs”—another “lump of labour” fallacy that just never seems to die.
The latest outburst comes as McDonalds workers lose jobs to robots; blowback it seems from unions making McDonalds a particular target in their campaign for a much-higher minimum wage, but the job replacement leading to more ludditery.
Guest poster Chelsea German looks at what the luddites don’t know about machines and jobs and the Great Job-Creating Machine …


As the Guardian recently reported, technology has created more jobs than it has destroyed, and the new jobs it has created have been of higher quality. Technology eliminated many difficult, tedious, and dangerous jobs, but this has been more than offset by a rise in the caring professions and in creative and knowledge-intensive jobs, resulting in a net increase in jobs.  The sectors to lose the most jobs have been agriculture and manufacturing, which are both difficult and dangerous, while work opportunities in medicine, education, welfare, and professional services have become more abundant. (For example, there are more teachers per student, improving student-teacher ratios, and there are also more physicians per person than in the past).

In 1980, almost a quarter of the world’s employment was still in agriculture. Now, only around 15% of the world’s workers are engaged in agricultural labour. Yet we are feeding more people, undernourishment is at an all-time low, and food is becoming less expensive.

Technological advances liberated humanity from toiling in fields by mechanizing many processes and boosting productivity, allowing more food to be produced per hectare of land, and freeing hundreds of millions of people to pursue less gruelling work.

The elimination of so many unsafe jobs in manufacturing and agriculture means fewer worker deaths. According to data from the International Labour Organization, from 2003 to 2013, the number of work fatalities in the world decreased by 61% (i.e., over 20,500 fewer deaths). This occurred even as the world population grew by over 700 million over the same time period.

If the most dangerous thing you have to face at work is the threat of a paper cut, you quite possibly have technological innovation to thank for that.

Even if in the future robots steal some jobs, advancing technology will likely make several higher-quality jobs available for every job lost. As the Guardian article cited earlier says, technology has proven to be a “great job-creating machine,” eliminating toilsome work but bringing into existence more—and better—opportunities than it takes away.

But note that behind every machine, there lurks human ingenuity. As Matt Ridley wrote in his book The Rational Optimist:

It is my proposition that the human race has become a collective problem-solving machine and it solves problems by changing its ways. It does so through innovation driven often by the market.

Learn more about what market-driven technological innovation has done to improve the state of humanity at HumanProgress.org.


Chelsea German is the managing editor of HumanProgress.org, and a researcher at the Cato Institute.

Follow her on Twitter.

Her post was reposted from the Cato at Liberty blog.

My thoughts on the flag debate

Frankly my dear, I don’t give a shit.

Anything else you’d like to know?

Tuesday, 1 September 2015

The United States of America and Islam Have Nothing Fundamental In Common

Guest post by Andy Clarkson

Five years ago, President Barack Obama delivered a speech in Cairo, Egypt, whose many errors are still widely embraced today. He declared “civilization's debt to Islam” and sought “common ground” between Islam and the United States, arguing “they overlap, and share common principles”. “Islam has a proud tradition of tolerance,” he said, and its culture and its many innovations have “given us majestic arches and soaring spires; timeless poetry and cherished music; elegant calligraphy and places of peaceful contemplation.”
Analysing the speech and its context five years later, this post
looks at some of the innovations and contributions and their ultimate source, and examines what is and what is not in common with the Arab world of 1000 years ago and the United States of America.

The post is based on Mr Clarkson’s notes written on that day.*


In A History of Knowledge (page 103), Charles van Doren writes:

It was in Alexandria that the Muslim Arabs first came into close contact with Greek culture. They immediately fell under its spell. They soon became noted mathematicians, astronomers, and physicists, and they continued the work begun even before the fall of Rome decoding and interpreting Greek scientific thought.

Note the use of Van Doren's term "Muslim Arabs". While these Arabs were Muslims, they adopted the Greek mind - at least to the degree to which they used Aristotelian logic. They were transformed by the reason of Aristotle. But, no doubt these were men of mixed premises

In A History of Philosophy (page 316), Wilhelm Windelband noted:

(W)e must not...overestimate the independent achievements in individual Arab medicine and natural sciences. Here, too, the science of the Middle Ages is essentially learned tradition. The knowledge which the Arabs were later to deliver to the West had its origin, in the main, in the books of the Greeks.
    Nor did even experimental knowledge experience an essential extension through the Arabs' own work; only in some fields, as, for example chemistry and mineralogy and in some parts of medicine, e.g. physiology, do they appear more independent. In their method, however, in their principles by which they apprehend the universe, and in their entire system of philosophical conceptions, they stand, so far as our information on the subject reaches, entirely under the combined influence of Aristotelianism and Neo-Platonism...

    The Arabs of that time do deserve praise for their translation of Aristotle's works. As a result of their support for the ideas of Aristotle, the Arab world flourished. The eventual result was that the writings of Aristotle spread to Paris and throughout Europe. This European expansion led to the decline of the mysticism of the Dark Ages, and to the emergence of the reason-based Renaissance and Enlightenment. This led to the science of Galileo and Newton and to Renaissance art. The Enlightenment provided the philosophical and cultural atmosphere for the political formation of the United States of America.

Writes Dr. Leonard Peikoff in his book Objectivism: The Philosophy of Ayn Rand:

    ...(T)he United States with its unique system of government could not
    have been founded in any philosophically different period. The new
    nation would have been inconceivable in the seventeenth century, under
    the Puritans, to say nothing of the twelfth -- just as, the power of
    tradition apart, its selfish, absolutist individualism would never survive
    a vote today (which is why a second Constitutional convention would be
    a calamity). America required what the Enlightenment alone offered:
    enlightenment.
(The Duel between Plato and Aristotle, Objectivism:
    The Philosophy of Ayn Rand
, p 453).

*That* is the common ground between the Arab world of a thousand years ago and the United States of America. The common ground is the transfer of Greek thought (reason) taken from idea to action.

And for this, we must admire certain Arabs of that time period. We must especially admire Aristotelian Arab philosophers such as Averroes (Ibn Rushd). From Windelband, (p. 317):

    But the most important and independent among Arabian thinkers was
    Averroes. He treated in paraphrases and longer or shorter commentaries,
    which were printed in the older editions of Aristotle, almost all the didactic
    writings of Aristotle, who was esteemed by him as the highest teacher of truth.

So while Greek thought had a great influence upon Arab culture of the Dark Ages, it was not entirely Aristotelian. Burgess Laughlin wrote in the The Aristotle Adventure (p 112):

Aristotle's logic entered the Arabic-Islamic cultural stream beginning c. 850. Conflicts appeared quickly between theologians who disavowed all philosophy, and the theologians who wanted both revelation and reason. The struggle between them continued for centuries.

It was clearly a culture of mixed premises. And today we can see the real impact of Islam on the Arab world. Continues Laughlin (pp 117-119): "For 200 years after the introduction of ancient Greek philosophy into Arabic culture, c. 850, Islamic theologians reacted against it. Their strength grew slowly and steadily like an avalanche of mud.

At the peak of that reaction, Al-Ghazali of Khurasan...began his scholarly career by studying philosophy and logic...To attack philosophy, Al-Ghazali picked three targets. His first target was Aristotle (the master of philosophy)...Al-Ghazali's and other scholars' persistent attacks on philosophy (and on philosophy's tool, logic) weakened support for philosophy in Arabic culture in the east for the next 200 years...For Arabic culture in the east, Islam (that is, submission to God) not philosophy (with logic as its tool), was to be man's guide in this world.

Windelband provides additional evidence of the struggle between Aristotelian and Islamic thinkers. (Page 317):

Avicenna (Ibn Sina)...whose 'Canon' became the fundamental book of mediaeval medicine in the West, as well as in the East, and who also exercised a powerful influence by his extremely numerous philosophical writings, especially his Metaphysics and Logic. His doctrine comes nearer again to pure Aristotelianism, and perhaps the nearest among all the Arabians. But the extension of these philosophical views was regarded with jealous eyes by Mohammedan orthodoxy, and the scientific movement experienced so violent persecutions in the tenth century that it took refuge in the secret league of the "Pure Brothers". Avicenna himself was also persecuted.

Is this "tolerance" Mr. President? "Violent persecutions" by Mohammedan orthodoxy? This is not "peaceful contemplation" Mr. President.

Burgess Laughlin describes the conclusion of Aristotelian influence (that is of reason -- the foundation of medicine, science, mathematics, and everything good) in Arab-Islamic culture on page 124 of The Aristotle Adventure:

    After the two contemporaries, Ibn Rushd (Averroes) and
    Ibn Maimun (Maimonides), no significant Arabic
    philosophers (Aristotelian or otherwise) appeared in
    Islamic culture -- ever. In Islamic-Spain, the study of logic
    and philosophy (as parts of 'alien learning') became
    extinct, extinguished by popular and theological hostility to
    non-Islamic culture."

The result of all this is the total absence of progress in the Arab world for the past eight-hundred years!

With the extinction of Aristotelian logic and the rise of Islamic ideology and theocracy, most of the Arab world remains in a primitive state. The only progress in the Arab world since then, which has taken place in the past 50 to 100 years, is due to the Aristotelian logic of Western engineering in the oil fields made productive by American and European corporations.

Those recent achievements, just as the achievements of a thousand years ago, are the result of Greek thought. And all those achievements are possible, not because of, but in spite of Islam. Civilisation owes nothing to Islam. It owes everything to the Greek philosophy that by an accident of history was once incubated in Islamic countries.

In short,

It was Arabs qua Aristotelians and not Arabs qua Islamists who are responsible for the accomplishments of Arab Muslims.

Barack Obama denies the reality of medieval Arab culture by praising Islam itself as a tool of modern progress. To deny the fact that Islam is the consistent killer of human thought and action is a disgrace. It is a disgrace because Obama attacks not only the true instrument of human progress, but because he also attacks the philosophical and historical roots of the country in which he is president. That instrument of human progress and the philosophical root of the US are one and the same -- the faculty of reason.

There are not many larger philosophically fundamental frauds ever committed by an American president than the one committed by President Barack Obama five years ago.

The United States of America is at war, not only on the battlefield, but also in the realm of ideas. We are in an on-going cultural war between reason and faith. This US president sided with the enemy.

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Andy Clarkson is the convenor of the Facebook Group The Impact of Aristotle Upon Christian, Islamic & Jewish Cultures, where this post first appeared, and which you should join.

image

* Andy Clarkson would like to thank Boaz Arad-Erder for reclaiming these notes. “The original English version disappeared off the websites where they were published -- nothing sinister, but not worth repeating here. Fortunately, Boaz on that day in 2009 translated them into Hebrew and published on various sites in Israel. This summer he provided me the Hebrew version and using Google Translate, I was able to get most of it back. And then with some tweaking, they are very close to their original version. I hope you enjoy.”