Wednesday, December 24, 2014

Cuba, the drug war, and sick addictions that never work

This week’s political riff is about letting go of really bad obsessions and habits. We are Homo sapiens -- the animal who rationalizes, insisting that our favorite dogmas are immune to evidence. Delusion is our greatest talent, which explains most of our gruesomely awful human history. 

Remember the popular definition of insanity?

    Doing the same thing over and over, while expecting different results.”

One choice example of repetitive-delusional craziness is the wretched-endless War on Drugs, a lunacy that should have been rejected by our parents and grandparents who recalled the great ‘success’ of Prohibition. Yet, for seventy years the U.S. – and every nation we could bully into going along – has spent trillions trying to cure chemical dependency and addiction with prisons.

This drives up the price and profitability of illicit substances, feeding vast, spectacularly-wealthy criminal cartels that enriched the very worst humans while spreading infection and violence, sucking life out of local economies.

Should we battle against addiction, a common human failure mode? Sure! I’d replace prohibition with strong diversion programs, with coerced-conservatorship rights for loving relatives. Ending one failed approach does not mean having to go full-monty libertarian. Some European nations have experimented with methods that work far better than our own absurd approach.

But what’s fascinating is how long it takes for millions of people to blink, stare at actual outcomes, and admit, at last: “Okay, that’s not working. Let’s stop listening to puritan demagogues. Does anyone have ideas to try next?” 

That's the pragmatic, problem solving attitude Americans were once famous-for. Alas.

Now, at long last, the Drug War’s spell is breaking. Marijuana is legal in Washington and Colorado. A dozen other states are liberal with medical-pot. All are wrestling with how to handle the inevitable problems, but with science, not a sledge hammer. Indeed, last week the Obama Administration pulled all federal enforcement dealing with small-time pot users, in states that request it. 

(Libertarians take note: this has only happened in “blue states.”  Not one red or confederate state has even sniffed at the trend. Given that Republicans are not supporters of "economic freedom," will a day come when libertarians draw the correct conclusion? Nope, that is one addictive mistake they'll cling to, forever.)

== The Cuban Insanity ==

Likewise, President Obama’s recent decision to restore diplomatic relations with the last purely communist dictatorship on Earth – Cuba – while retracting some (not all) of the sanctions against trade and commerce and travel: what does it mean?  

Fifty years, and not once have the Castros or their partisans showed the slightest inclination to knuckle under. Indeed, the U.S. trade embargo gave them an excuse for their economic and political management. Depriving them of that scapegoat is one of many reasons why this move is overdue. Let Cubans aim resentment at their own inept rulers. Also, increased flow of human contact will only undermine the Castros’ grip.

(Both the Castros and the American right are completely loony to claim the U.S. embargo ever mattered much. Not while the entire rest of the world was trading openly with Cuba. Only broad embargoes work. Seriously Marco Rubio? How stupid do you think your supporters… oh, never mind.)

Back to the topic at-hand. Addictions that never worked. We’ve looked at seventy years of an insane, counter-productive Drug War… plus fifty years of a stupid foreign policy that did no good. Are there other examples?

== Supply Side ==

How about Supply Side (Voodoo) Economics or SSVE. For a decade I’ve demanded that its supporters trot out ONE example of this blatant idiocy ever having predicted actual outcomes.

The theory's simple: lavish tax gifts to the rich will be invested in industrial productive capital or R&D that would boost the supply of new goods and services. Cuts in tax rates would be more than compensated by vastly increased taxable incomes, erasing all government red ink. Reduce income in order to increase it! What could possibly go wrong?

This dogma, clutched by the American Right, does a logical flip on what we do know to be true, from Keynsian Economics, that money in the pockets of the middle class (especially the working poor) is immediately spent, making it “high velocity cash” which stimulates via “Demand Side Economics” or DSE. 

For example, had Congress passed the Infrastructure Bill, setting 100,000 workers fixing our decaying bridges, most of that money would have come back as taxes in a quick-stimulated economy, building recovery momentum much quicker while giving us safe bridges and roads. GOP congressmen have been quite open over their reasons for blocking the bill. Precisely because (they admit) it would have worked.

(Note, while not all Keynsian trips are valid (!) it works most of the time. Yet more proof is seen in this month's apparent economic takeoff into rapid U.S. economic growth, which was inarguably stimulated by the spending power of the middle class, including the sudden cash infusion from low gas prices, aided by rising auto fuel efficiency. Not a scintilla of it came from "supply side.")

That works, so why not Supply Side? Ah, but just because SSVE is a flip of the proved DSE, that does not mean the incantation works.  In science we learn a habit.  If predictions fail, the theory has been “falsified.” 

Maybe not completely, but it loses credibility and its proponents should back off. Go back to the drawing board. SSVE has failed even once to predict outcomes successfully. Let me reiterate the dare: find one example.

Moreover, most economists – even Adam Smith – would quickly tell you why.  

Because the rich mostly do not invest added wealth in R&D or risky productive capital.

Oh, some do. We have Angel investors and Venture Capitalists and Warren Buffett and tech geniuses like Gates and Bezos and Musk etc… a majority of whom (by my rough poll) appear to be democrats.  But Adam Smith wrote 250 years ago about how most aristocrats who gain a bit more wealth plonk it swiftly into passive “rent-seeking” properties.  Real estate or equities bubbles – exactly what we saw happen after those giant Bush Tax Cuts.  Bubbles that do nothing to increase productive capacity or introduce new goods or services.

And yet, these folks keep expecting different results! Just recently, radical Tea Party Governor Sam Brownback rammed through the biggest tax cut for the rich in Kansas history, confidently forecasting that his state would soon lead the nation in growth, putting the state budget soundly in the black and allowing more to be spent on education. Instead, Kansas has plunged into a sea of red ink. Brownback is “borrowing” from pensions and schools and highway maintenance to fill chasms, and the state lags behind the nation in jobs and economic recovery.

Here, at least, we can see a reason for the persistence of an insane dogma. There are powerful people who benefited from SSVE. Yes, Warren Buffett and Bill Gates are saying “raise our taxes!  But many in the aristocracy want a return to feudal pyramids of privilege. They will pay apologists to keep pushing catechisms and incantations, knowing that – in some regions of the nation and the world – there are people who will believe anything, if you just repeat it enough times.

== Is the Left any better? ==

Does it seem I am picking on just one “side?” Dogmatism is a disease of the mind. It can take root wherever brains are fertile with passion, while low in logic. 

Take Marxism. Let me be clear that Old Karl was a pretty bright fellow, an incisive critic of his times and a generator of very interesting hypotheses about the processes of capital formation, some of which are proved standards in economics, today.  But his passion took charge at some point and he became… instead… a science fiction author, writing just-so stories about possible futures.  Even that would have been okay… if he had done what good SF authors do – admit that “it’s just a plausibility, not a prediction.”

Alas, he began taking his stories seriously, as forecasts and not warnings. And he became... a guru.

Across a hundred years, many of those Marxian auguries were tested. Time and again, they proved mistaken or off-target. But Lenin and Mao and others kept finding excuses! For example, it was not in the most developed proletariats (in England and Germany) but among the least developed (Russia and China) that socialist revolutions burgeoned.  And Marx never imagined that the west might reform itself to include and share power with a vast and empowered middle. He certainly never envisioned Franklin Delano Roosevelt.

We who recall the obstinate insanity of the Soviet Union can tell you, this syndrome – in science it is called confirmation bias, or else hallucinatory delusion -- exists in all directions, including the so-called “left.” Indeed, that side of the insipid spectrum contains some cargo cults, to this day. For example romantic-nostalgic attitudes of suspicion toward science and technology, which have been the average person’s greatest-ever friend. Certainly the hostility we see toward science fiction in almost every university literature department, the boldest and most useful form of narrative, is evidence of some kind of mental derangement.

As I’ve long held, it is not that one side has a monopoly on political craziness. All zealotries are infested with this sickness. It’s that one end of the American political spectrum is currently owned and operated by its lunatics. That is our current crisis, in this phase of the re-ignited American Civil War. The resurgent Confederacy’s insanity must be faced down, yet again…

… but never assume there is zero danger from other directions. Be capable of turning your head.

== Where the delusions truly fester ==


Alas, there is no comparison.  The Neo-Confederacy is where incantation after utterly disproved incantation still throttle minds into endless repetition of mistakes. 

Want one more? John Mauldin takes on the Mighty SVM. That’s Shareholder Value Maximization, for you newbies. “The world’s dumbest idea” Mauldin calls it, in which Milton Friedman — Saint Milton to the right — in 1970,wrote, “There is one and only one social responsibility of business – to use its resources and engage in activities designed to increase its profits...”

Ah, but then John M asks the question: “How to get corporate executives to focus on maximizing the wealth of shareholders? The solution: pay them a s***load of money (but not just cash – stock and options now constitute about two-thirds of total CEO compensation).”

Now note this. John Mauldin is an economist with very conservative political leanings though sane, which causes him real dissonance on that Fox-lobotomized part of the spectrum. We argue over some of the rationalizations that he comes up with, for the way the right has veered into worship of oligarchy. Which is why this most recent missive of his — assailing one of the central premises of republican economics — left me gasping.

“But, alas, there is pretty good research to suggest that larger incentives actually translate to lower performance. To make matters worse, both the average tenure of a corporate CEO and the average lifetime of an S&P 500 company have plummeted since the 1970s. Bottom line: SVM has pretty well laid the kingdom to waste. Our newsletter focuses on three areas of damage: (1) declining and low rates of business investment, (2) rising inequality, and (3) a low labor share of GDP.”

One more theory that "ought to work!" And indeed, I do not blame Milton Friedman for posing it. It might even have been worth trying! The culpable idiots are those who can ignore 40 years of 100% negative outcomes and persist in what has become solely a method for vampires to suck the rest of us dry, and to demolish real, flat-fair-open market competition.  They are the parasites described by Adam Smith.  The truest enemies of enterprise capitalism.

But ignoring outcomes has become the utter reflex of members of the outright cult that has hijacked the once-intellectual movement of William F. Buckley and Barry Goldwater.

== The insipid axis ==
        
Do you doubt that I could go on and on, listing relentless, reflexive obstinacies? I go into a number of them here, where I show that a disparity of OUTCOMES -- with 100% negative results from the last two Republican administrations (find one counter-example, I dare you)  would make any thinking conservative wonder if - perhaps - he or she should be fighting to save the movement from monsters. Except for misplaced loyalty.  And habit.

But it goes far beyond that. Beyond mere politics.

You’ve heard me say it before.  Some of our vilest habits and addictions are the simplest. Metaphors like the hoary and lobotomizing so-called left-right political axis. Admit it. You could not give a simple and clear definition of that awful thing, if your life depended on it!  Certainly if you did, it would have little in common with the definition offered by the next person you meet, or the next.

Even worse than metaphorical addictions are those based on mental states, like the recurring allure of outrage. Sanctimony and self-righteous indignation are unbeatable, luscious highs that cannot be matched by any drug.  And they are catered to by pushers in mass media, who pound incessant drum-beats of cynicism, anger and fear.

So many actual metrics of national and world health getting better every year (with notable and worrisome exceptions), that humanity ought to feel confident in our ability to solve more problems, and yet more! 

Hence, what can we make of this plague of incited rage and despair? It deeply undermines our can-do conviction that we can take on challenges, overcome obstacles, and make continued progress.

In that respect, there is only one word for the merchants of anger and doom, whose incantatory sermons keep enticing us into simplistic insanities.  

They are traitors.

The real world is complicated. Yes, there are some elegant, underlying laws of physics and nature.  But we learned those – and how to grasp complexity – by paying attention to experimental results. By willingly letting go of beautiful theories that have proved –just-plain-wrong. 

Not by frantically clinging to comforting tenets and mantras fed to us by biased media and “think tanks” that answer to puppet-master elites.

Stop preaching to others about their addictions, when you haven’t looked in a mirror to deal with your own.



90 comments:

Treebeard said...

Traitors, Dr. Brin? Nice rhetoric, but of course, as free men beneath the stars, we always have the right to work toward whatever society we see fit, whether it conforms to your or anyone else's abstract scheme.

You say you're not ideological, but clearly there is a rather dogmatic ideology underlying your propaganda -- one which has produced a long series of imperial wars against civilizations based on different ideas. The Islamic world, Russia and perhaps China appear to be next up on the Enlightenment Imperialists' hit list, so we can look forward to more major wars in our progressive future. Evangelical liberalism has become the most ambitious and aggressive imperial project on the planet, but it's OK, 'cuz we're the Good Guys, and everybody wants to be just like us (except a few pesky terrorists, traitors and Neo-Confederate ignoramuses).

The paradox of your brand of liberalism is that it presents itself as tolerant, pragmatic, in favor of all sorts of nice-sounding values, but should anyone seriously try to implement another scheme, they quickly find themselves on the receiving end of propaganda, sanctions and then bombs. And house intellectuals for this regime will jump to justify this aggression as "progress", "liberty", etc., and to vilify those who oppose it as "traitors". It's a good show, but of course no empire or regime of magicians lasts forever, even the Atlanticist Enlightenment cult. As they say in China, "this too, shall pass."

Treebeard said...

Just to prove that I'm not always against you, I think you're onto something with this "outrage as drug addiction" idea. I think everyone wants passion, and would rather hate and feel outrage that live a passionless existence. That's one of the problems with secular, rationalist societies: they offer limited outlets for the passions. Can legalized drugs provide another substitute, as in Huxley's dystopia? Perhaps, but I have my doubts.

LarryHart said...

Dr Brin in the main post:

Go back to the drawing board. [Supply Side] has failed even once to predict outcomes successfully. Let me reiterate the dar: find one example.

Moreover, most economists – even Adam Smith – would quickly tell you why.

Because the rich mostly do not invest added wealth in R&D or risky productive capital.


The proponents of Supply Side Economics would themselves explain why the theory doesn't work if it were put to them a different way.

"Giving poor people a welfare check would encourage them to work." No, no, they'd argue back, if you pay them for not working, then they have no incentive to work. They'll only work if work is a necessary condition to their earning money in the first place.

Well, Supply Side is the same thing--giving the owners of capital the benefit of investment (profit) without the attendant risk of investing. So they have no incentive to actually invest that money in useful endeavors. They'll only invest if investment is a necessary condition to their earning more money in the first place.

LarryHart said...

Treebeard:

Evangelical liberalism has become the most ambitious and aggressive imperial project on the planet,


The whole world, including the EU and Canada, are swinging to the right, and yet somehow you see a 1960s hippie hegemony? As comics writer Dave Sim once said, "Strange effing planet." Although he didn't say "effing".

Alex Tolley said...

Re: Maximizing Shareholder Wealth
Don't be too quick decrying it. It was a reaction to the managers who squandered wealth when they had no skin in the game. The problem isn't that aligning the incentives is wrong, but rather that the process got hijacked in the 1980's. Arguably this is just a return to the earlier "self-dealing" but exercised via a different route.

Alex Tolley said...

There is a strong Puritanical streak in the US. Alcohol, drugs, gambling are all "vices" that are disproved of by the religious, so it is no wonder that useless ideas have not been abandoned, but rather maintained for emotional reasons. The retention of the death penalty is another example, even though most of the rest of the industrialized world has abandoned it.

Jim Satterfield said...

One thing I've noticed is the insistence on extremely simplistic identities on the part of what passes for the self identified conservatives. Even as they decry what they view as identity politics they practice their own strict version of it. They view themselves as believers in capitalism. If you do not agree with their version of capitalism they identify you as a socialist or communist. Their version thinks that government regulation of business is inherently anti-capitalist rather than a recognition of the flaws in the system. Apparently in their worldview human flaws lead to government power being bad but the same can't be said of corporate power. The same thing happens with religion. If you criticize their desire to pass laws governing people's private lives based on their particular interpretation of the Bible you are not simply a liberal (Which is bad enough in their eyes.) but you are anti-Christian and hate God.

Jim Satterfield said...

Am I the only one who reads Treebeard as claiming that ISIS is A-OK, Russia invading Ukraine and pretty much any action taken by any non-Western country should be immune to criticism?

David Brin said...

If our visiting maniacal were even slightly intelligent, he’d parsed his accusations so they would at least aim vaguely in the general direction of where I actually stand. What’s sadly-hilarious is that he can only think in terms of Spartan like aggression, and hence can only see liberal resistance to that 6000 year nastiness in such terms.

If he had three neurons to rub together, he would step back and realize the irony, that underneath it all he accepts the liberal notion of fairness and evenhandedness. Else he would not whine so.

Were he true to his spartan values, he would especially not moan that the liberal west is imposing its tolerance values on everyone, and admit that the strong should be able to do anything they damn well please! Under what he CLAIMS to be his own value system

Alex: “Alcohol, drugs, gambling are all "vices" that are disproved of by the religious…”

Alex this is not today’s religious, who Defend alcohol and gambling or at least have no truck with doing a scintilla about those vices.

Tacitus2 said...

Cuba - I think a strong case can be made for recognizing the Castro government. They are the de facto government there and the de jure aspects of Revolution become a bit silly after a half century or so.

Recognition, but for the moment, little more. No embassy gets opened in Havana until we have assurances that the customary protections of such places will be honored. Tehran, Benghazi, too many examples of modern savages not heeding ancient customs.

I doubt that the US companies that had assets nationalized will see a centavo in return. Risk of doing business. I think we need some understanding of what we will do with the ten mile long column of people at the door of our Embassy looking for visas. And can we make shipping the bad element among the Marielitas back a condition? I have met a few of them. Of course the honest ones who have had no legal scrapes are another matter.

Diplomatic recognition can be useful if only as a nice soap box from which to tell a regime how much you disapprove of them.

Drug legalization. uh. Well, I always advocate for letting states be the experimental labs, make it so for a few years.

Your suggestion to have "forced conservatorship" is impractical and disturbing. Having spent more than a little time and money in the legal system on such matters I can assure you it is a fetid, nasty, expensive swamp. You would soon have an entire block of society entirely under the loose and fumbling thumb of the dysfunctional Social Services agencies.

Time to head downstairs and collect my annual lumps of coal from Stasi Claus...

Tacitus

Paul Shen-Brown said...

Larry Hart,
I somehow knew you would be a Cerebus fan, but to those who are familiar with his work, quoting Dave Sim might not be such a good idea. He was innovative, brilliant and hysterical in the 70's and 80's, but went sadly out of his mind later.

Alex & Dr. Brin,
I have seen enough variety in the American religious landscape to shy away from too many generalizations. Our puritanical heritage is alive and well in many parts of the country, primarily in red states, but there are much more progressive institutions out there (and look what is going on in Catholicism with this Latin American Pope!) I once read a paper by the linguist Edward Sapir who claimed that the written language utterly changed things for religion. In pre-literate societies, religious specialists could reinterpret their customary beliefs as needed, but once the dogma was in print it could no longer be changed. It was a point I didn't entirely agree with. Look at how many people who consider themselves to be Biblical literalists today still eat shrimp and pepperoni pizza, even though these are abominations punishable by death, then there's the issue of slavery. Perhaps if the book were a whole lot shorter there would be less of this hypocrisy. With just a few watts running through our brains, we literally cannot keep up with our own dogmas. Everything gets reinterpreted to keep our religions on the positive side of our cognitive dissonance walls, whatever the conditions are in any one era.

Here's a funny book that kind of illustrates what I mean:
http://www.amazon.com/Awkward-Moments-found-average-Childrens-ebook/dp/B00G1744GM/ref=sr_1_1?s=books&ie=UTF8&qid=1419518616&sr=1-1&keywords=awkward+moments+childrens+bible

Dr. Brin, that cartoon guide to vaccination you linked to on Facebook the other day is great! I will be teaching the immune system after the vacation, which makes me wonder if there is some divine hand at work here (I shall have to make sacrifice to the God of Coincidence in gratitude). That and the couple fallacies you mention above also gave me an idea to create a cartoon guide to fallacious reasoning - though I'll have to pay my daughter to do the cartooning.

Salutations & satisfactions for the winter holidays!

LarryHart said...

Paul Shen-Brown:

I somehow knew you would be a Cerebus fan, but to those who are familiar with his work, quoting Dave Sim might not be such a good idea. He was innovative, brilliant and hysterical in the 70's and 80's, but went sadly out of his mind later.


For many years, I was a presence on the Yahoo group dedicated to discussing Dave Sim and his "Cerebus" comic. When I talk about previous discussions with conservatives, those took place over on that message board.

I've also met Dave personally a few times at signings and conventions. I'm not going to get on the "Dave Sim is insane" bandwagon, but it's easy to understand those who feel that way. I personally had to stop caring what Dave thinks after it became obvious that anything "liberal" equates to "evil" in the worldview he came to embrace after falling in love with Scripture.

LarryHart said...

Paul Shen-Brown:

quoting Dave Sim might not be such a good idea...


The thing I miss most about being a regular on the Cerebus message board is being able to toss out lines like "Sometimes, you can get what you want and still not be very happy", or "Something fell!", and have the meaning instantly recognized without further explanation.

Now, I've got all these in-jokes and nothing to do with them.

LarryHart said...

Alex Tolley:

Re: Maximizing Shareholder Wealth
Don't be too quick decrying it. It was a reaction to the managers who squandered wealth when they had no skin in the game.


Well, "value" is a vague term which allows conflation of many different concepts.

Maximizing the value of the company probably makes sense.

Maximizing the value that shareholders are able to "monteize" and then suck out of the company seems to be very short-sighted, eventually killing the goose that lays the golden eggs.

And maximizing the value that shareholders get by selling their stock seems to be a perverse directive. That maximizes the value to ex- shareholders at the expense of current shareholders.

LarryHart said...

Jim Satterfield:

Am I the only one who reads Treebeard as claiming that ISIS is A-OK, Russia invading Ukraine and pretty much any action taken by any non-Western country should be immune to criticism?


I'm not sure "non-Western" has anything to do with it. I see his point as admiration of anyone with the power and will to run roughshod over anyone else. Think of a perverse reimagining of "Revenge of the Nerds" with the jocks as the protagonists.

Howard Brazee said...

When an idea become an ideology, the labels stop having their original meanings. We can use the No True Scotsman argument about democracy, communism, capitalism, etc, without finding real world examples.

And we certainly see people loudly espousing their "Christian" values that are opposite of those of Jesus Christ as shown in the Bible.

Labels seem to win over substance,

Alex Tolley said...

@LarryHart - Maximizing shareholder value is very explicit - monetary value. It is quite easy to show that this is also maximizes long term shareholder value, at least in simplistic monetary terms. If shareholders suck money out of the company (how do they do that without being self dealing insiders?) then they are voting against their own long term interests if the company is making high returns.

This is all basic finance as taught in most anglo-speaking business and MBA courses.


Where one can argue with it are:
1. Maximizing shareholder value may come at the expense of society as a whole, so other stakeholders should be included. We use laws to constrain actions, but as we have seen, these tend to lag events and are corrupted by money too.
2. The issue of agency - as DB would put it - "cheaters". They are not there to maximize shareholder wealth, just their own. They are acting against the interests of the wider shareholders. If a company is constructed to deliberately bilk lenders/shareholders, this is clearly a crime.

As I said before, I see the agency problem as paramount, not the algorithm to build business. Any algorithm is pervertable by the players, and it is that which must be prevented. For example Sarbanes-Oxley was enacted to specifically prevent the types of fraud perpetrated by Enron that allowed executives to hide behind the "corporate veil" unless an outright fraud was directly attributable to them. (Smart execs know how to avoid this via various forms of plausible deniability").

@DB "(...) today’s religious, who Defend alcohol and gambling or at least have no truck with doing a scintilla about those vices."
I think we are talking about religion differently. I am talking about religious fundamentalists, not mainstream churches. The fundamentalists are the inheritors of the Puritan's ideas, who let us not forget made England miserable under Cromwell's reign. England was lucky to get rid of them.
Just Google "religious fundamentalism and [alcohol|gambling|vice of choice]" and you will clearly see that fundamentalists are very anti these "vices". The similarity is remarkable to extreme Islam and even secular totalitarian regimes, e.g. Khmer Rouge.
It is a start that some US states have legalized marijuana, although note that other states are trying to sue them to stop. Lawsuit over Colorado marijuana legalization takes rare legal path So much for allowing states to experiment.

David Brin said...


LH: "I'm not sure "non-Western" has anything to do with it. I see his point as admiration of anyone with the power and will to run roughshod over anyone else. Think of a perverse reimagining of "Revenge of the Nerds" with the jocks as the protagonists."

But the hilarious part is if you parse it out.

"You... you LIBERALS are constantly trying to STOP bold and strong spartan types from doing what they are born to do, bullying and dominating others. You're imposing your value system of tolerance and diversity on others, just because you're strong enough to do it...

"...you BULLIES!"

Doug S. said...

The problem is that executives are being paid for, essentially, short-term rises in the stock price. People who own "privately" held corporations make their money through dividends - if the executives only got paid by dividends, things might be better for other people who own the stock...

LarryHart said...

Alex Tolley:

@LarryHart - Maximizing shareholder value is very explicit - monetary value. It is quite easy to show that this is also maximizes long term shareholder value, at least in simplistic monetary terms. If shareholders suck money out of the company (how do they do that without being self dealing insiders?) then they are voting against their own long term interests if the company is making high returns.


"How they do it" is to demand high dividends at the expense of needed investment in infrastructure.

LarryHart said...

Howard Brazee:

Labels seem to win over substance,


Exactly, because labels become tribal identifiers first and anything else a distant second. Thus, someone who thinks that (for example) "pro-American" and "conservative" are synonyms will proudly support Ted Cruz shutting down the American government on the grounds that he's a conservative, and therefore pro-American.

Those who most loudly proclaim that America is a "Christian nation" seem to want a nation in which full citizenship only applies to Christians, and all others are second-class citizens or "guest workers" who exist here at the sufferance of Christian-Americans. Which, in and of itself is one of the most anti-American ideas I can imagine.

LarryHart said...

re, Maximizing shareholder value...

A corporation can "make money" in the Ayn Rand sense, but producing value that would not otherwise exist. In that model, maximizing value means producing as much value as possible.

But many modern corporations exist to "extract" already-existing value from its owners or from the commons. In that model, the company maximizes shareholder value by impoverishing the surrounding society. While the behavior of the corporation itself is understandable, it is not clear to me why such corporations are chartered in the first place.

There is yet a third model I alluded to before, in which "maximizing value" seems to mean artificially driving up the stock price so that the current shareholders can sell to suckers and make their money that way. To me, that is the most perverse, because what is being called "maximizing shareholder value" is a euphamism for "maximizing ex-shareholder value" at the expense of actual shareholders.

Alex Tolley said...

"How they do it" is to demand high dividends at the expense of needed investment in infrastructure

They don't, although it isn't much less subtle if the idea is to loot the company. It's usually much cleverer that that, although it can amount to the same thing.

Paul451 said...

Alex Trolley,
"It is quite easy to show that this is also maximizes long term shareholder value,"

I recall reading studies showing that the growth rate is higher in non-listed than listed companies. The theory was that listing a company causes the company to value short term value over long term growth.

[At a guess I'd say because if your job was to maximise the calories available to your village, the long term plan would be to plant seeds and grow more food. But if you're being judged each day, the optimum strategy is to feed them the seed-corn.]

So again if theory repeatedly predicts the opposite of result, then that theory is, at the very least, non-predictive.

Prakash said...

Treebeard,

I guess you don't read much of David Brin. He has clearly laid out that visions of space exploration and uplift of animals are where the secular, rationalist societies find their outlet for passion. Academia that belittles science fiction is essentially sabotaging the enlightenment project. You may agree or disagree with him, but he is not inconsistent in this matter.

Dr. Brin,

Speaking about inconsistencies, I have got a sense that you're not overwhelmingly in favour of research into life extension technology. Is my idea correct? If you think strategically, what can enlightenment societies offer a religious society that is better than the promise of eternity in heaven - The promise of 300 years of healthy life right here on Earth, with everyone you know and love.
Healthspan extension would be the trump card of a techno-commercial society over all traditional societies. So, why aren't you enthusiastic for it? Even if humans get more heartbeats than other animals, do you really feel that the marginal dollar spent on SENS is less worthy than the marginal dollar going into say, conventional cancer research?

David Brin said...

Prakash, I do not oppose life-extension research. But I am skeptical of it achieving some sudden and simple breakthrough. We are already the methuselahs of mammals, having already plucked the low hanging longevity fruit. See:

http://www.davidbrin.com/immortality.html

Alex Tolley said...

@Paul451

I recall reading studies showing that the growth rate is higher in non-listed than listed companies. The theory was that listing a company causes the company to value short term value over long term growth.

I'd like to read that article, as I have not read anything like it. I'd want to check that correctly matched groups were compared.

[At a guess I'd say because if your job was to maximise the calories available to your village, the long term plan would be to plant seeds and grow more food. But if you're being judged each day, the optimum strategy is to feed them the seed-corn.]

There seems to be a misconception about what maximizing shareholder wealth is and how CEOs can manipulate it. The stock price is the sum of future discounted dividend flows, so you cannot increase it by destroying future dividends.

For every CEO trying to raise the stock price by artificial means, there are legions of analysts taking apart the company's books and operations to uncover those games. It just isn't likely that CEOs can fool everybody all the time.

CEOs can legitimately raise stock prices and also the value of companies (to a point) by stock buybacks that increase leverage due to the differential taxes on debt and equity. It also has a disproportionate effect on their stock option valuations.

The main advantage CEOs have for personal wealth maximization is insider knowledge of future events, allowing them to buy and sell their stock at more opportune times, which the analysts don't get to see immediately. This is limited though by restrictions on insider trading. If the CEO is powerful and is Chairman, he can influence his remuneration through the compensation committee. This often results in packages that guarantee rewards irrespective of the overall performance of the company, as well as setting the stock option strike price (remember the back dating scandals in the 1990's?). When every CEO is rewarded as "above average" then we get an up escalator in remuneration size.

having said that, there are countervailing behaviors that can offset careful value analysis and that support short term gaming of the system. And of course there is the ongoing issue of the legally cooked books with the support of the auditors and also outright fraud, but this is relatively rare today. The cult of excellent business leaders is magnified by the business press that is usually fairly uncritical, allowing a short term window of opportunity to profit handsomely from temporary value misperceptions.

@DB - can you change the reCaptcha - I cannot read the letters at this point.

LarryHart said...

Alex Tolley:

DB - can you change the reCaptcha - I cannot read the letters at this point.


Do you have pop-up blocking enabled? That might be part of the problem. Or not (caveat emptor).

Some recent posts on this site have been unreadable to me using the IE browser. I finally switched to FireFox, and have had no problem since.

LarryHart said...

re: corporations

A few years back, some of us here started coming up with "Three laws of corporatics", imitating Asmiov's laws of robotics. The idea was that a corporation, like a robot, is a tool, and there should be safeguards in place to keep the tool from being dangerous.

For myself, anyway, I was not being sarcastic, nor was I suggesting "laws" which would put corporations out of business. I really believe that the Three Laws should be a part of every corporate charter and, within those constraints, let them have at it.

The First Law was stated as "A corporation may not cause harm, nor by inaction...", but in practice, such a "law" is unworkable, much as it turns out to be for robots (If someone 1000 miles away trips down the stairs, has a robot "caused harm through inaction"?).

I think this version of the First Law works better. With that stated, and with the caveat that this is still a work in progress (and "maximizing profit" in implicitly part of the Third Law...

First Law: A corporation may not impose externalities on the outside world without due compensation and/or restitution to those harmed.

Second Law: A corporation must fulfil its chartered mission statement to the extent that doing so does not conflict with the First Law.

Third Law: A corporation must maintain its ability to continue functioning to the extent that doing so does not conflict with the First and Second Laws

Alex Tolley said...

@LarryHart - I like those 3 laws. Of course US corporations would just reincorporate out of the US if forced to adhere to those rules. In fairness, assessing what is an acceptable externality is problematic. As we've seen, there has been industry push back against even market friendly tradeable pollution permits.

The Captcha problem is that I just find that mix of backgrounds makes the letters next to unreadable and I have to try 6 or more times to prove I'm not a robot. It seems to have gone from hard to ridiculously easy to ridiculously hard. I use Firefox and I did try turning off the AdBlock, but it makes no difference.

Anonymous said...

Dr. Brin,

This is my first time on your blog, and I found this debut entry in my reading of your prose to be quite engaging. Much of the time I found myself nodding in response to your points. However, I must say that the tone of your response here disappoints me. Its emotionality and use of wit as a cleverly constructed scaffolding for your obvious intent to offend the recipient is in many ways the most serious attack anyone could have leveled on the credibility of your arguments. We are, after all, to take you as a credible source of common sense, are we not? Can we be expected to do so if your fiery indignation is the most salient characteristic of your dialogue? Help me take you more seriously, please. From what I can tell, you have much to say that people really should hear.

David Brin said...

I have always liked Larry's Laws and will post about them with his name, some time. This version is better.

Captcha has backed off wrt me. But tell me what to click and I can try to back it off further.

My biggest grievance is (as described before) I can no longer navigate among the open windows and text files that are open on my two computer screens, as easily as I used to. For years, I would just move the cursor from one screen and program and file to hover and click on a different file/program on my other screen... and that was it. I would be "in" that other file/program screen.

Now I swear it takes three clicks ALWAYS to make the switch! Has anyone else with a Mac noticed this happening?

David Brin said...

Anonymous I appreciate your criticism of my tone, but I think you are too reflexive and insufficiently contingent. This visitor to whom I was responding has come here lately with the openly declared intent to toss bombs. Moreover, he promotes the notion that the strong should dominate over the weak...

...while simultaneously (and hilariously) whining that the weak are using their greater strength to bully the strong and stymie them from their rightful role... as bullies!

It is dumb beyond all ranges of dumbitudinousness... and deserves no courtesy because it is also evil.

Jumper said...

I see a large difference in "maximizing shareholder value" if sought over short vs long terms. Short term investors see a rational option of cashing out immediately and placing their investment elsewhere. I find most debates don't cover this. It leads to odd strategies: start a restaurant chain, provide great quality, build reputation. Hide expenses via continual expansion. At peak, reduce costs heavily, screw the customers who keep returning thinking it's anomalous, show a huge profit for a year or so, and sell that company fast! Use the very-real recent profits as bait.

LarryHart said...

@Alex Tolley:

I like those 3 laws. Of course US corporations would just reincorporate out of the US if forced to adhere to those rules. In fairness, assessing what is an acceptable externality is problematic...


Well, for now, I'm still describing fantasy-land, so in my fantasy, this is not a matter of US law or particular state law. Rather, I'm trying to get back to basics on just what a corporation is for in the first place.

Everyone now acts as if a corporation exists in nature, and has rights equal (or superior) to those of actual humans. In fact, corporations are creations of state law, and are chartered for a reason that has something to do with a benefit to society (building cars, transporting food, printing comic books, etc.). The idea that the only goal is maximizing profit puts the Third Law above all others. I'm trying to demonstrate the order in which those laws apply, which in truth is probably more important than trying to explicitly state the laws themselves.

LarryHart said...

Speaking (as I was, anyway) of Asimov, does it strike anyone else as it does me, that Vladimir Putin is being undone on the world stage, not by a successful attack from an enemy, but by forces of psychohistorical inevitability, much as General Bel Riose was in "Foundation and Empire"?

LarryHart said...

Alex Tolley:

The Captcha problem is that I just find that mix of backgrounds makes the letters next to unreadable and I have to try 6 or more times to prove I'm not a robot. It seems to have gone from hard to ridiculously easy to ridiculously hard


Weird, because for me, it has become easier to read than ever before, lately. I wonder if there are specific browser settings that need to be tweaked.

Paul451 said...

A story, pretty and sad, which is as it should be: http://www.shimmerzine.com/the-one-they-took-before-by-kelly-sandoval/

Paul451 said...

reCaptcha,

Lately, I've been getting a pop-up box, triggered by an "I am not a robot" check-box, with black text on white. I find it interesting that everyone seems to be describing different things.

Re: Mac,

Have you tried asking in the Apple community forums? [Pro-tip, ignore the first, quickest responses. They are the "turn it off and turn it on again" reflex. Don't get angry at them, just ignore them. They never help.]

Treebeard said...

I think I can explain that Anonymous. You see, Dr. Brin is really a romantic, an artist, and a deeply religious person who has chosen to make science, the Star Trek future, democracy, etc. into his religion. He is an Enlightenment Crusader. This is a cult that has brought mass destruction and conquest to most other cultures on the planet, and called it "Progress". And their jihad is far from complete.

Dr. Brin, it’s not that I’m complaining about liberals being bullies, so much as being hypocrites who have swallowed their own propaganda. Obviously might is right, I don’t deny that. Liberal civilization has scored a long series of victories, so they currently define what is right, just and good -- that’s normal. If you admit this, then we’re in agreement. But if you claim that I’m evil and you’re not, you’re going to have to be precise about what you mean by evil in a universe made of atoms and the void. My claim is that a godless universe is essentially a fascist universe, in which if the Nazis or ISIL or the Borg win, they become the good guys, and there’s no higher authority we can appeal to for arbitration. Who or what are you appealing to for your moral judgement, except some arbitrary values you’ve decided are the best ones?

So what I’m challenging is the moral delusions of your Enlightenment Cult; the idea that a few Western philosophers rescued humanity from a hundred thousand years of darkness, as if they or you could ever have an objective view of the matter. This is really just a new form of evangelical Abrahamic religion, and like them, it is engaged in a global crusade to propagate its narrative and convert the world. So the wars will go on, until history ends and there’s a Brave New World Order, or civilization is destroyed in the attempt to bring about the Star Trek utopia. It’s a very old delusion, and like Christian Millennialism or Marxism which sprang from the same soil, just as doomed to failure.

Paul451 said...

LarryHart,
"Vladimir Putin is being undone on the world stage, not by a successful attack from an enemy, but by forces of psychohistorical inevitability"

Not inevitable. Saudi Arabia sharply increased it's production quota (ignoring OPEC) when Russia was vulnerable. More an example of the danger in assuming that your enemy will stand still while you attack him, than some subtle force of inevitability.

Speculation (**) is whether Saudi Arabia was trying to target Russia as a favour to the US, trying to target the US fracking boom to undermine energy independence (for fear of the US abandoning them), or merely responding to a drop in their own global market share.

(If enough Russians believe the first explanation, then they'll stay loyal to Putin out of spite, and more loyal the more aggressive he responds.)

[** Personally I think all of the above. Saudi Arabia wanted to undermine the US fracking boom and punish Russia for supporting Iran/Syria. Sensing Russia's vulnerability to the falling Ruble, itself due to Russain aggression in Ukraine, they acted. The size of the effect on Russia allows the Saudi diplomats to tell the US diplomats that they were doing it as a favour to the US, not as a way of undermine the US too. Multiple wins. Attack US energy independence, and reduce Russian power, all while making the US think they owe Saudi Arabia a favour.]

Paul451 said...

Treebeard,
Errr, you know ISIL points to a "higher authority" for their "values"?

And yet they are completely and arbitrarily different from your "higher authority"-derived values.

Almost like the system of gaining values from "higher authorities" is itself completely arbitrary.

Almost as if what those "high authorities" value is merely whatever the leaders in your arbitrary faction want.

All secularism does is strip away the pretence of "high authority" and reveal that behind the curtain is just the whims of a man. And then makes him justify his preferred values.

Robert said...

Anon, sadly Dr. Brin has been succumbing to his own addiction to outrage of late through his increasing vitriolic attacks on those he considers "unworthy of civilized dialogue" (ie, people who are trolling the site for the specific reason to cause people to start foaming at the mouth over their actions). I've called him repeatedly on it and he brushes off my concerns and those of others repeatedly. At the same time he continues to feed these trolls and they have increased in population much like tribbles that feed off of hate.

I suspect the only thing that will help alleviate this is for Dr. Brin to take time off from responding to comments on the blog (and letting the discussions continue without his input) and focusing on his own fiction or research. But he is reluctant to do so seeing some supporters of his voiced immense dissatisfaction when I suggested this course of action in the past and because of this accidental addiction to sneering down at these trolls who dare insult his message.

Then again, I'm no better as I'm still here as well.

Rob H.

Jumper said...

Rationality as religion? Only to the irrational.
Determinism is what is irrational, and those who cling to it will never get the power of freedom. Power which relegates those who pursue deterministic power as relics. Poor livestock, if you want to look at it that way.

Jumper said...

6:37 EST
The ISS passed right over my head 4 minutes ago, and the city lights didn't stop my viewing. That sucker is big and reflective. Sweet!

LarryHart said...

Paul451:

"Vladimir Putin is being undone on the world stage, not by a successful attack from an enemy, but by forces of psychohistorical inevitability"

Not inevitable. Saudi Arabia sharply increased it's production quota (ignoring OPEC) when Russia was vulnerable. More an example of the danger in assuming that your enemy will stand still while you attack him, than some subtle force of inevitability.


The way I read Asimov's books, that's the way psychohistorical laws "worked". They predicted outcomes based upon aggregate human actions and reactions, even though the individual humans weren't necessarily trying to bring those outcomes about. In the middle book of the first trilogy, Bel Riose was a strong general who worked under a strong emperor. Psychohistory predicted that such a man would inevitably make his strong emperor feel threatened by his strong general and betray him. Psychohistory also predicted that no other set of circumstances threatened the Foundation at all, as a weak general was no threat, while a strong general with a weak emperor would be setting his sites internally and not bother with outside conquests.

So "Saudi Arabia increased its production quota while Russia was down" might be the kind of thing that psychohistory would say was inevitable, even if no one saw it coming.

Tacitus2 said...

Isaac did like to crib from history. Oh, and he did it delightfully.

But Bel Riose as a retelling of Belisarius? A bit lazy.

Belisarius was a fascinating figure in history. Justinian was too. But things did not turn out the way they did from the dead hand of inevitable psychohistory. A plague here, a riding accident there....alt hist and real history sometimes brush wings as they pass each other...

Tacitus

LarryHart said...

Treebeard:

...Abrahamic religion...
It’s a very old delusion, and like Christian Millennialism or Marxism which sprang from the same soil, just as doomed to failure.


So finally, it's all about old-fashioned anti-Semitism, huh?

Which, by the way, is just as old a delusion, and just as doomed to failure, as anything you are blaming the Jews for.

Paul451 said...

LarryHart,
Re: Bel Riose.

The point of the Bel Riose situation was that it was inevitable even if the general and the emperor realised the trap, simply because they couldn't trust the other not to blink. Prisoner's dilemma. Knowing there's a trap just increases the paranoia and therefore reinforces the trap. [It's crap, of course. There's plenty of examples of strong leaders with strong generals. Strong leaders typically have the respect (and therefore loyalty) of their strong generals. The few examples of strong leaders recalling strong generals, as Hitler with the Dunkirk "halt order" and betraying Rommel, the "strong leader" was already pretty mental.]

Back in the real world, there was no fundamental reason why Saudi Arabia had to act. They benefit more from high oil prices and Russia wasn't specifically a threat against them. Their choosing to act against Russia is more like the Mule's actions. Stuff that psychohistory specifically couldn't predict.

Robert said...

Not really. You have to look at the geopolitical situation of the region. Saudi Arabia sees one primary enemy which, if war was declared, could result in significant damage to the Saudi infrastructure: Iran. Indeed, Iran poses a military and a religious threat to Saudi Arabia's dominance.

Now who are the two largest allies of Iran? Russia and China.

Saudi Arabia can't really do much to China. High oil prices do harm China somewhat, but China has made it a point for their adventurism to be economic in nature instead of military. Further, their backing of Iran is not as much on the military front as Russia... and seeing China is busy trying to expand its foreign oil holdings, its actions do indirectly impact on China's efforts to gain in energy security by making it less economical to drill oil wells.

Russia, on the other hand, is a major supporter of Iran. It has offered to help Iran build up its nuclear infrastructure which could result in nuclear weapons in theory. They sell military hardware to the Iranians. They are increasingly into military adventurism (ie, the Crimea and eastern Ukraine). And through corruption and kleptocracy, Russia has driven out most of its foreign investors for non-oil-related industries.

The two things Russia exports are military hardware and oil. And the vast majority of their funding comes from oil and gas sales.

Next, you have Iran. Iran has been working to reintegrate itself into the world. If it succeeds, it will become an oil exporter, and further they have been trying to expand on their non-petroleum abilities. Should Iran enter into the world market and be accepted, it would be a blow to Saudi dominance.

So you strike at Russia, Iran's biggest ally. You make it so Russia can't afford to give away stuff like nuclear reactors at-cost, or military weapons. Further, if you destabilize Russia, the Islamists in Russia will rise up and strike at everyone... and Saudi Arabia is far enough away the Saudi government considers it an acceptable risk. Besides, if they support those Islamists in Russia, perhaps they'll go after Iran instead of them.

Saudi Arabia benefits on multiple levels by driving down oil prices.

#1 - They can regain market share, which will in theory improve profits when prices go up.
#2 - They can slow or even temporarily stop investment in the American oil shales, and in doing so hopefully regain American need for Saudi oil.
#3 - They can destabilize their greatest foe's largest ally (Russia) by destroying the Russian economy.
#4 - They can slow or stop Chinese efforts to gain energy independence by making it unprofitable to drill new oil wells owned by China.

In fact, when you look at the last three or so years of Saudi Arabian oil production, you can see they have been trying to do just this all along. They have been increasing production to "compensate" for disruptions in Libya, and then increased production because of other disruptions. They made a nice profit in doing so because buyers were so panicked at the thought of oil shortages they just kept buying and buying until inventories grew significantly.

And now? The dominoes are in place and are starting to fall.

Rob H.

David Brin said...

Robert, with sincere respect, your snip is showing.

As for our visiting hypocrite "spartan" I respond only out of amusement, for his whining just gets ever more desperate. He utterly cannot see the Enlightenment as different in "kind" rather than magnitude. even though all of its mores and methods are diametrically opposite. He started this bizarre lonny-toons fest by saying as much! Whimpering that "Athenians" were meanies who wouldn't let uber-men, like him, rape and pillage at will.

Athenians who have out performed Spartans at every single endeavor, including military feats... and he never pauses to ask: "how has my enemy done this?"

This is typical of zero-summers. They cannot parse positive sum games, no matter how carefully they are explained. The underlying concept is inconceivable and hence they dismiss it as a trick of propaganda.

Even though the advantages are blatant in all directions. Spartan praisers of competition HATE competition. They want a world dominated by "uber" men self-chosen and conniving so that there will be NO further competition from the vast majority of helots. The ulitmate cowards, feudalists dominated 99% of cultures across 6000 years...

... and the SUMM of their accomplishments across all that time don't match ours in the last 60.

Because the positive sum rule of Athenians is two parted. And none of it is religion. It is 100% pragmatic.

1) Stop wasting talent. Predetermined castes and sterotypes of sex, gender, race, class WASTE TALENT. Period. Guys who cannot see that deserve the term (sorry Robert) "idiots."

2) regulated competition that prevents winners from cheating can go on and on and on. AThenians are not Spartan cowards, who must rig the deck so no one can rise up to compete with them. Athenians welcome NEXT year's challengers, and the next and the next, from all directions.

I have written this for the rest of you. The chances that out visitor will comprehend any of this are nil. He has a voluptuous edifice of blame for WHY he isn't the Top Dog he feels he deserves to be! And blames the strongest civilization of all time...

...for being stronger than all of his admired dog-eat dog societies, combined.

Such irony. Were Athens to stop subsidizing and coddling him, but topple into chaos, he would be - of course -- (again) kibble.

Treebeard said...

If your claim is that American-style civilization wastes less talent and is more productive than any other in history, then you might be right. But if your claim is that it is therefore better and morally superior to all other civilizations in history (combined?!), then I have a doubt. How many inhabitants of other civilizations (dead or alive) have you consulted with on the matter? How many have you lived in? I might suspect that your position is somewhat self-serving, and possibly circular. If your rejoinder is that I would be kibble in my preferred non-Enlightenment civilization, so I should stop acting like a traitor and get with the program, or consider moving to another country, then I have to accuse you of sounding like a fascist. Which is fine, and one of the points I’m trying to make.

locumranch said...


So convinced of the 'Blue' egocentric worldview, David often makes absurd claims that are too easy to disprove:

First, he claims that Colorado (one of the two US States to legalise marijuana) is a Blue State, but this assertion is false because Colorado's 'Blue' areas are urban and miniscule while its 'Red' areas encompass almost 85% of the state's total geographical area, so to term Colorado 'Blue' is the equivalent saying that the population of Greater Los Angeles Basin occupies and owns the entire State of California.

Second, he argues that Supply Side (Voodoo) Economics does not work as intended even though it clearly does, its purpose being to 'Starve the Beast' of government so the government (in its 'best' form) will govern least, as it now does in a bankrupt Kansas, and liberate the Ownership Class (in part) from the 'Tyranny of the Masses', with its purported 'Trickle Down' goal being ad copy and disingenuous drivel.

Having dedicated multiple posts to the truth behind Blue State policies that OPPOSE Immigration even though they claim to support it, Red State policies that SUPPORT Immigration even though they claim to oppose it and the Drug War charade, David has been quick to separate disingenuous purpose from ulterior motive in the past.

Too bad, so sad, that he now appears unable to separate the wheat from the chaff (a metaphor), convinced of blue inevitability, urban dominance and the feminine agenda (perhaps as a ego defense), and is left blithely parroting the official Blue Party line, all while huddled in the human equivalent of John Calhoun's 'Behavioral Sink' (and/or 'Rat Utopia', so terrified of contradiction that he sticks his fingers in his ears and goes 'Ting A Ling A Loo'.


Best

raito said...

I'm seeing little insanity on the part of those holding the reins of power. For them, the policies have not failed.

Insanity in the rest of us, who keep letting them get away with it, on the other hand...

And I've always considered stock price to be a shared fantasy with regards to non-dividend stocks (and any stock that doesn't actually pay dividends is one). Once the stock is issued, why would the corporation care in the slightest what the price is (beyond the electoral makeup of its owners)? It's not as though any price on previously issued stock will bring capital to the corporation.

Tony Fisk said...

We realise that mantras like SSE achieve what is intended rather than what is claimed. So, one side appears to be barking. Where can its adherents turn? What can the opposing side do? Reason with the milder elements? So it is that the ratchet logic moves the Overton Window.
Looking at the state of politics in the Rup-er, Anglosphere, I see a fault in the two-party state being exploited.

With Abbott now PM, tea party politics has now come to Australia, but there's a difference. The rise of the Greens is causing a split on the 'left'. Over the next 10-20 years, it wouldn't surprise me if the ALP took over the role of conservative politics, and the Libs degenerated into the teapot right.

re:capcha, I mentioned at the tail end of an earlier thread that an Gunnerkrigg page had an amusing take on the issue.

Here endeth the lesson.
Blessed be the name of the Enlightenment, although I could be mistaken...

Tacitus2 said...

Regards matters of tone I continue to agree with Robert. But hey, its not my name on the masthead. Or as one of my co-workers is wont to say "Not my circus, not my monkeys".

For some reason I have been pondering the "metrics" by which one might judge the Colorado pot legalization experiment. Maybe this has all been thought through and those who have followed with greater interest can illuminate me.

THC is detectable in your system for a very long time. Amount of exposure and body mass are variables, but days to weeks. Unlike alcohol which is a matter of hours. Likewise we have established "levels" of alcohol at which point we decide someone is not able to operate a car, bulldozer, city bus or nuclear power plant.

In Colorado will people injured on the job give drug tests? Will they be fired if "positive" for a legal drug? Motor vehicle accidents, same question...how will it be determined if someone is positive from Cheech and Chong level toking versus one puff last Saturday?

In my experience there is a small subset of marijuana users who get psychotic. Admittedly in the ER we don't have the ready ability to screen for stuff that may have been added to the marijuana. How big a subset is this? We have never "discriminated" against ethnic groups who appear to have genetic disposition to problems with alcohol, I suppose we can't do much except arrest those upon whom either drug has a disproportionate impact. What really does happen to ambition and initiative in long time pot smokers. The forgetful Dorito muncher is a sterotype, but is it true? What happens to productivity in entry level jobs? What happens to unemployment levels as the imprudent are fired for sloth or positive drug tests on the job. Can you even make a failed drug test a cause for firing?

Wondering..

Tacitus

Jumper said...

Found some stuff on Marx's views of the U.S. Dunno what it proves, but interesting:
http://isreview.org/issue/80/karl-marx-and-american-civil-war

Also I had never heard of this guy, a slavery-expansion adventurer during the same period:
https://en.wikipedia.org/wiki/William_Walker_%28filibuster%29

locumranch said...



Tacitus2's question on marijuana legalization raises an excellent point, one that I will endeavour to answer as my recent experience in Colorado Emergency Rooms is as follows:

The Rise of Feminine User (and, by "feminine", I mean 'irresponsible and privileged' rather than 'female') who abuses this now protected substance by choice and (somehow) still considers themself to be a 'victim'.

These new users arrive in my ER by ambulance (usually after consuming a marijuana 'potable'), passive, intoxicated and (most importantly) ENTITLED, demanding to be 'cured' of their own ill-considered actions without consequence, even when the only medical intervention available for cannabis use is supportive care (most often referred to by medical professionals as 'baby-sitting').

We talked earlier about the difference a stated goal and an ulterior one, and this is the true nature of the Feminine Agenda, to be 'empowered', privileged and protected by & from others, but not to be 'equal', complicit or responsible for their own 'victim-hood', meaning that the so privileged get to behave like pampered infants because someone else (they insist) is required by law to take care of them and change their nappies.

Empower me, dammit. Empower me now. I want it, I want it, I want it.


Best

Jumper said...

David, I might as well also note this weirdness to you: a meeting of H.G. Wells and Stalin, discussing things.
http://www.newstatesman.com/politics/2014/04/h-g-wells-it-seems-me-i-am-more-left-you-mr-stalin

LarryHart said...

Treebeard:

ut if your claim is that it is therefore better and morally superior to all other civilizations in history (combined?!), then I have a doubt.


While I can't speak for Dr Brin, I know that I personally have very little concern in that direction. Enlightenment civilization is the only one (that I know of so far) that I'd want to live in.

Now here's where I possibly go in the direction you are asking about: I also think it's the one that you and that Tea Partiers and that neo-Reactionaries and that the Americans who gush over Putin would also prefer to live in, whether or not they (you?) believe it.

I realize how presumptuous that sounds, and I'll cop to "I may be wrong about this...". With that in mind, I think that if any of those folks actually woke up one morning to the sort of society they are agitating for, they would discover very quickly that Dave Sim was brilliant to write "Sometimes you can get what you want and still not be very happy."

LarryHart said...

Dr Brin:

Such irony. Were Athens to stop subsidizing and coddling him, but topple into chaos, he would be - of course -- (again) kibble.


I don't know if he was kidding or not, but if you take Mr Treebeard at his word that (paraphrasing) "I used to be a scrawny nerd, but then I got testosterone infusions", well, in what other society would such a thing have ever been possible.

Someone who lived through the origin of Captain America complaining about Enlightenment society strikes me as absurd as...well, as "Let's go back to the seventh century" Islamicists recruiting over the internet.

LarryHart said...

I previously said:

The idea that the only goal is maximizing profit puts the Third Law above all others. I'm trying to demonstrate the order in which those laws apply, which in truth is probably more important than trying to explicitly state the laws themselves.


It occurs to me that I should state my point explicitly. The laws of corporatics, designed to insure that corporations are useful and (relatively) harmless tools instead of Frankenstein's Monsters, are as follows, in the most general of terms and with credit to Asimov for applying such to robots:

First Law: Don't have a net-negative effect on the system or the world at large

Second Law: Perform your function

Third Law: Insure your continued viability

The most important point I am trying to make is the order in which those laws apply. Current thinking seems to put the Third Law uber alles, which to me is a perversion.

And obviously, stating the specific laws themselves is a work in progress, but I don't consider that as important as the general framework above.

LarryHart said...

And I final word (for now) on corporations, and especially on the implications of "Citizens United"...

I would dearly love to see a work of speculative fiction devoted to the full implications of a corporation actually becoming a sentient being with actual needs and desires, actual pain suffered when those needs and desires are not met, perhaps even empathy and a conscience. In other words, all of the things that humans have decided give on a right to participate in real-life society.

In other words, make the case for "Corporations are people" and show what it would really take for that assertion to have merit.

And before you say it's been done a hundred times already, no, I'm not talking about a computer system becoming sentient. I'm talking about the legal "person", the corporation itself as an entity, somehow taking on the traits of a being worthy of having the rights and responsibilities of actual citizens of a democracy.

I realize I don't fully understand what that means, which is why I'm saying I'd pay an author for the privilege of reading such a book instead of saying I plan to write such a book.

LarryHart said...

raito:

And I've always considered stock price to be a shared fantasy with regards to non-dividend stocks (and any stock that doesn't actually pay dividends is one). Once the stock is issued, why would the corporation care in the slightest what the price is (beyond the electoral makeup of its owners)? It's not as though any price on previously issued stock will bring capital to the corporation.


A fellow IT professional, no dummy by any stretch, once scared the snot out of me by arguing with a complete straight face (as if I was the idiot for not comprehending the point) that the reason a stock has value is because someone else will buy it for more than you paid for it. When I pressed the point "What would make that guy want to buy it from you", his response was...well, duh!...because someone else will buy it from him for even more money.

I've wanted to keep my retirement money in a mattress ever since (don't come to my house looking to steal it, because my wife won't let me do so).

To me, a company keeping its stock price high and not paying dividends is not so much increasing shareholder value as increasing ex-shareholder value.

LarryHart said...

@locumranch

The Rise of Feminine User (and, by "feminine", I mean 'irresponsible and privileged' rather than 'female')


If you're not already familiar, you really should find some trade paperbacks of the comic book "Cerebus", write to the Canadian PO box in the back of the book, and talk to Dave Sim. You'd hit it off nicely.

LarryHart said...

Jumper:

a meeting of H.G. Wells and Stalin, discussing things.
http://www.newstatesman.com/politics/2014/04/h-g-wells-it-seems-me-i-am-more-left-you-mr-stalin



From a few years later (1941), a George Orwell essay on why H.G.Wells misunderstands Nazi Germany:

http://orwell.ru/library/reviews/wells/english/e_whws

Jumper said...

Larry, H.G. Wells misunderstood a lot of things. As you might agree, he was a person of interest, though. Thanks for the link.

Jumper said...

Double thanks, Larry! That's a great essay and also had me laughing, as you introducing it in its current context had the inevitable effect of my juxtaposing locumranch as Orwell and David as Wells, which I should hasten to say is one cockeyed metaphor for lots of reasons, among which are that we could only wish locumranch as having Orwell's ability and that Brin is much better a thinker than Wells. But upon this thought I did laugh aloud.

Jumper said...

Again I forgot to include a bit, so must post yet again. Orwell recommended this, Jack London's The Iron Heel which is available here:
http://www.gutenberg.org/files/1164/1164-h/1164-h.htm

Alex Tolley said...

@raito Once the stock is issued, why would the corporation care in the slightest what the price is (beyond the electoral makeup of its owners)? It's not as though any price on previously issued stock will bring capital to the corporation.

How would you raise new equity without a price on the equity?

@locum Second, he argues that Supply Side (Voodoo) Economics does not work as intended even though it clearly does, its purpose being to 'Starve the Beast' of government so the government (in its 'best' form) will govern least, as it now does in a bankrupt Kansas, and liberate the Ownership Class (in part) from the 'Tyranny of the Masses', with its purported 'Trickle Down' goal being ad copy and disingenuous drivel.

So you are saying that SSE is just a con knowingly foisted on the public by conservatives?

@larryHart The most important point I am trying to make is the order in which those laws apply. Current thinking seems to put the Third Law uber alles, which to me is a perversion.


That is indeed the basic corporate finance lesson. As long as what you are doing is legal (and ethical - mostly) that is the ONLY responsibility a corporate executive has. Note that this is only in the anglo-speaking world. It is not paramount in other cultures. (Which may account for why inequality is re-established at the highest levels in the anglo world than elsewhere)

A fellow IT professional, no dummy by any stretch, once scared the snot out of me by arguing with a complete straight face (as if I was the idiot for not comprehending the point) that the reason a stock has value is because someone else will buy it for more than you paid for it. When I pressed the point "What would make that guy want to buy it from you", his response was...well, duh!...because someone else will buy it from him for even more money.

He's wrong. At it's simplest, the stock price would reflect the retained earning or book value of the company. These could be liberated by a takeover. If the stock price is too low, a takeover can be used to break up the company and sell the parts for a profit. Shareholders could also vote to have the retained earnings distributed.

This is what I see with the reCaptcha https://www.flickr.com/photos/38563808@N00/15935801657/
I cannot decipher it.



Alex Tolley said...

@locum These new users arrive in my ER by ambulance (usually after consuming a marijuana 'potable'), passive, intoxicated and (most importantly) ENTITLED, demanding to be 'cured' of their own ill-considered actions without consequence, even when the only medical intervention available for cannabis use is supportive care (most often referred to by medical professionals as 'baby-sitting').


So someone makes a mistake, turns to the only resource they have (and may well have paid insurance to have that service) and you want to teach them some morality lesson? Why is this any different from crashing a car, getting burned in a fire you started, or even getting hurt in a bad area of town?

In the case of THC ingestion, while you might know that there is no "cure", how is the non-medically trained to know that? After all, if the politicians keep equating THC with heroin, and heroin overdoses can be treated, why not THC in the public mind?

LarryHart said...

@Alex Tolley:

re: Captcha. Your image looks to me like "NythXvh nuknthr". However, I will admit that some of those are more guesswork than others."

What I find weird is that I used to see images that looked more like that in the past, but lately, I've been seeing a more reader-friendly presentation, certainly without the distorted background coloring. Again, I have to wonder if individual browser settings are involved.


He's wrong. At it's simplest, the stock price would reflect the retained earning or book value of the company.


I know that he's wrong, but what scares the snot out of me is that he's not a minority of one. Investments in some sense reflect the attitude of the investors, and if people who are investing non-insignificant sums of money are doing so in the belief that investment is a Ponzi scheme and that this fact is a good thing...it hardly left me with a great deal of confidence in the system.

Tacitus2 said...

If you are trying to evaluate the impact of legalizing marijuana it is certainly fair game to look at emergency room visits for same. Of course when I was posing the question of what impact legalization would have I was trying to see how it would differ from the legal, but also problematic, alcohol that is our societal baseline.

A dumb kid who ingests THC imprudently is just that, a dumb kid. Not different really from a dumb kid who hammers down a bunch of jello shots.

Both are dumb. Being young involves a bit of that. Are they different in some other way? Alcohol intoxication is also managed conservatively.

Any other comparisons or metrics to be thinking on?

Tacitus

Duncan Cairncross said...

Hi Guys
"The stock price would reflect the retained earning or book value of the company"

In a rational world that is possibly true,

In the real world the idea that the stock price simply reflects what somebody else will pay for it is much much closer to the truth

The stock market does its "job" with an initial stock offer being used to finance a new company

Then it simply becomes a casino

On a related note I remember when I used to look at things my company made in terms of the cost of manufacture plus a percentage
Before I was "corrected"
The "price" of something is only set by "what you can get for it"
The actual "cost" is completely irrelevant (except if the margin is to low (or negative) then you don't sell that item)

Alex Tolley said...

@Duncan - when I got my MBA in the mid-1980's in the UK, the teaching was transitioning from cost plus pricing to "what the market will bear". This was pretty much driven by the marketing profs who it turned out were making the most consulting on the side. The US has pretty much completely accepted this as the de facto means of pricing, except in large government contracts where cost plus encourages bloated costs.

AFAICS, costs are only used to determine marketing and financing strategies - break even, leverage, etc. In econ (micro) we still have average and marginal costs as theoretical anchors.

You still can't do what you want, for example reducing prices below costs to drive out competitors as that is illegal "predatory pricing". Although interestingly, early semi-conductor manufacturers did something similar based on experience costs - i.e. pricing based on the lower costs future volume would bring due to improved manufacturing experience.

Today this "market will bear" scenario results in pricing changing to reflect demand. Taxi company Uber is [in]famous for jacking up rates several fold during peak demand, resulting in lots of complaints about price gouging. I recall Coca Cola thinking about demand pricing with their vending machines, although I haven't seen any indication that this occurred.

Back in the late 1980's during that period's stock market fever, a friend was thinking about opening a pub where drinks would be priced based on demand to cater to market traders who could try to play the "drinks market" and even buy futures to hedge their drinking costs! Complicated but interesting for market players.

Alex Tolley said...
This comment has been removed by the author.
Alex Tolley said...

This is cool. I can just ignore the reCaptcha and post. How bizarre.

David Brin said...

Locum, last I heard, we measured a state of population by PEOPLE, not acreage. Well. Cogent locum was good while he lasted.

Alex said: “So you are saying that SSE is just a con knowingly foisted on the public by conservatives?”

Come on Alex. Locum specializes in this. Restate something that I said in his own words, make it his own, then rave that “Brin believes the opposite of this!”

Tacitus… you ask the questions a true/sane conservative would ask. Prior to negotiating practical measures to reduce the worst harms from ending prohibition, while generously funding lots of research. (e.g. I predict that “edible” marijuana will be made illegal outside the kitchen and home where it was made. Note: that prohibition would not re-empower the Drug gangs.

Alas that “true/sane conservatives” like you are so rare we should construct Life Arks to keep the species extant.

Jumper nice Marx link. Thanks. And didn’t Lenin also meet Wells?

Eeep.wasn’t Walker a real piece of work? We’ve had our Hitlers.

Jumper said...

Alex, the THC overdoses were bad because they happened to slimy girls.

David Brin said...

Ah, as for “Treebeard.” Instead of grappling with ANY of the tangible facts I raise… like the fact that Athenians have proved to be vastly stronger in every category that HE (as a “Spartan”) claims to admire… our visitor veers attention in another direction and picks one I never raised:

“better and morally superior to all other civilizations in history (combined?!)”

Find for me where I asserted moral superiority? I was having too much fun showing that Spartans are deeply inferior by their OWN standards! Cowards who use Feudalism tricks like inherited status to avoid competition, instead of facing it joyfully, year after year, which accomplished Athenians do.

Cowards, militarily inferior, talent wasters and very very very bad rulers. Um, is there ANY category they aren’t inferior bums?

But yes, it is also hilarious that this guy, who has whined “b-b-b-but your no FAIR!” in every posting, falls back on “morality.” Indeed, this is one area where the classic Athenians weren’t so hot. Only a thousand times better than Spartans, and not the million times they could have been. They were sometimes real meanies to their neighbors… and Americans have blood on their hands re Native Peoples, Allende and many other crimes… that are balanced by tons and tons of good.
See: http://www.davidbrin.com/paxamericana.html
And: http://davidbrin.blogspot.com/2013/10/pondering-pax-americana-and-government.html

But note the fun part. He calls the enlightenment immoral BY ENLIGHTENMENT STANDARDS! “How many inhabitants of other civilizations (dead or alive) have you consulted with on the matter?”

Say whaaaaa? Didjer “Spartans” ever “consult?” It is only by enlightenment standards that the strong would ever feel guilt pangs for lack of consultation! What a sell-out!

In fact though, every decade sees the West trying a little harder to live up to the consultation standard, from Woodrow Wilson’s League of Nations, onward… and just go to the campus of any western university, count the foreign students and the ethnic studies programs. The PROPAGANDA that pours from western media in tolerance messages, above all the archetype image of what civilization will be like, if the Athenians prevail…

…Star Trek.

David Brin said...

onward to new posting

Anonymous said...

I do occasionally wonder about the Cuba embargo, not how it was a failed effort, but that people seem to forget it was never about trying to affect a regime. The deal cut over Cuba and Turkey/Italy between the US and Russia was about basing. Both countries agreed to remove missiles and leave only conventional forces. The US agreed never to invade Cuba. The embargo was about isolating the persistent communist presence just south of the US. So, was it a failed policy? No, it did just what it was supposed to do, prevent the Cold War from becoming hot. It could have been dropped when the USSR fell, perhaps, but I wouldn't call it a sick addiction. I'd call it a policy that has run its course.

Anonymous said...

"Fifty years, and not once have the Castros or their partisans showed the slightest inclination to knuckle under. Indeed, the U.S. trade embargo gave them an excuse for their economic and political management."

It appears that Dr. Brin both forgets that North Korea exists, and now blames the US economic and political sanctions for the crimes against individuals, families, dissidents, and humanity committed by the Castro brothers and their henchmen.

He's free to attempt to gain libertarian adherents to Leftism, but I don't hold out much hope for his political version of gender-bending.

Kenneth Nichols said...

"traitors" Apostates! Unbelievers! Outcast! Unclean!

Fan of murderous Castro and his cronies. Blaming the US for what two brothers with absolute power did over fifty years...

Talk about a degenerate, unreconstructed old TwenCen Leftist.

I don't think I've ever read an author who became his own stories' antagonist.

As always, Brin is original.

Kenneth Nichols said...
This comment has been removed by the author.
Kenneth Nichols said...

Fondness for strongman dictatorships, murdering people, taking and holding political prisoners for decades, human rights violations so awful that Cuba even earned its way onto the United Nations Human Rights Council - alongside Iran and pre-2003 Iraq?

No indication, Doctor Brin, that these two brothers are human rights violators, and that giving an inland-wide mafia the dignity of nation recognition might be a bad idea?

No?

Kenneth Nichols said...

"...has produced a long series of imperial wars against civilizations based on different ideas. The Islamic world, Russia and perhaps China appear to be next up on the Enlightenment Imperialists' hit list..."

Don't credit yourself that much. Given recent history your "victim pathology foreign policy" BS has resulted in the Islamic State, Russia invading Ukraine, and China encroaching on islands not in contention in 20 years.

Your outdated pathetic cry of imperialism is a clear order of magnitude older and more out of date than is Brin's war against Voodoo Economics (or VE, lol).

You may be comforted by the fact that they're both similarly pathetic.

Joe D said...

"[T]he hostility we see toward science fiction in almost every university literature department... ." Citation? All I have is anecdote, but four out of four colleges and universities I've had reasonably close knowledge of teach SF.

Condescension, perhaps, but I don't see hostility.

raito said...

Since we've already moved to the next topic, I won't post in any great detail here, except to say that if stock price actually reflected book value, there would be nearly no need to differentiate between book value and market value.

And to add that the current stock market is much more focused on arbitrage than dividends. Historically, there's more return in it.

Joseph Shaughnessy said...

In response to questions about stock valuation I had heard of the Bigger Fool Theory, which explains mainly the market for Art and Collectibles like Baseball cards and Beany Babies. I offer this quote from Wikipedia.
"The greater fool theory states that the price of an object is determined not by its intrinsic value, but rather by irrational beliefs and expectations of market participants.[1] A price can be justified by a rational buyer under the belief that another party is willing to pay an even higher price.[2][3] Or one may rationally have the expectation that the item can be resold to a "greater fool" later."

Many people subscribe to the popular "Efficient Market Theory", which basically says that the market price is what the price should be if all market variables are known and then says the market does know. Kind of circular reasoning but comforting to people are uncomfortable with placing their money in a casino.