Saturday, July 21, 2018

Re-Discovering Adam Smith: Controlling the un-controllable. Laws for Robots? For corporations? Creating healthy free markets... by design?

Can we control - or at least guide and sway -- important processes that some call uncontrollable? 

Certainly not big, chaotic things like the weather -- though steering civilization away from suicidal climate damage may qualify.  But what about hugely complex things like a modern economy? Or a sapient mind?

Elsewhere I've described how most societies tried such control through priesthoods and kings and owner-lordly castes whose Guided Allocation of Resources - or GAR - had the advantage of simplicity, in much simpler times. The Pharaoh simply ordered a levy of 5000 men to appear, between planting and harvest seasons, and voila - you got a pyramid. Still, in general, GAR was at best clumsy, primitive and generally stupid.

Adam Smith extolled market alternatives to GAR, allowing the mass wisdom of many to replace the delusional certainty of a very few. It worked better at allocating capital and goods and services... though it also led many to espouse a mad exaggeration called Faith in Blind Markets - or FIBM. Elsewhere I show how most of those howling for purist FIBM are actually devout GAR-ists... they just want the allocation process dominated by a new cabal of owner-lords.

In another place, I describe how GAR is being pushed hard by those who want a return to 6000 years of hierarchy, such as the Chinese Communist elite, who envision themselves as newer, smarter, wiser pharaohs. We're being GAR'd from the left and GAR'd from the right.

But this time, let's start with an example of asserted control straight out of science fiction! 

== Laws of Robotics ==

Jack M. Balkin of Yale University Law School has proposed a variant on Asimov’s three laws of robotics. He’s not the first, of course. In this case, Balkin suggests rules for algorithmic systems that might have strong influence over both public and private life:

First Law: operators of robots, algorithms and artificial intelligence agents are information fiduciaries who have special duties of good faith and fair dealing toward their end-users, clients and customers.

Second, privately owned businesses who are not information fiduciaries nevertheless have duties toward the general public.

Third, the central public duty of those who use robots, algorithms and artificial intelligence agents is not to be algorithmic nuisances. 

While these are excellent desiderata that merit serious consideration, they kind of miss the elegant prioritization effect of Isaac’s original codes! Where one law kicks in only when the more important one is fully satisfied. (I may be the world’s expert on the Three Laws, after threading their many implications in FOUNDATION’S TRIUMPH.)  In other words, a venn diagram of Asimov-style laws shows each one nested inside the preceding one, like a Russian Matrioshka doll.

Instead, Prof Balkin tries for something entirely different, making his analogy to Asimov somewhat fraught. Aming at comprehensive coverage, his first two laws touch at the edges. This is good, instinctive legal parsing… and the proposals are desirable... but it bears little relationship to Asimov.

== Three Laws of Corporatics? ==

Another scholar (actually a member of this blog’s comment community: Larry Hart) formulated his off-take on the three laws, this one following the Asiomovian "Matrioshka pattern."  Three Laws of Corporatics. 

1) A corporation must do no *** harm to human beings

2) A corporation must act to fulfil its specified charter as long as doing so does not violate the First Law

3) A corporation must act to insure its continued viability [e.g. maximizing profit] 
as long as doing so does not violate the first or second laws.

Of course number 1 is impossible to comply to without specified metrics in *** that make a clear drive for positive sum outcomes, both net and overall, even if some human interests are retrievably set back. LH summarized:

1) Don't make us sorry we chartered you.
2) Do what we chartered you for.
3) Keep yourself capable of doing it.


Of course now we're also talking about Wild Algorithms... bits of autonomous code that are already... right now... spreading through the Internet, automatically augmenting their resources and trading services, even hiring humans to perform tasks! And yes, this sci fi scenario is already here. Implementation of Hart's three laws would be filled with vexing tradeoffs. We'd have to define "humans" (broadly, I hope) and what long term goals we will charter artificial entities to aim for. And many other issues. I'd hope for looseness within which we can fine tune, adapt, adjust our implementation values while retaining the core ones.

I do know we'll best begin by rediscovering Pericles and Ben Franklin and M.L. King and the Suffragists... and yes, Adam Smith.


== A long overdue rediscovery ==

Twenty years ago, I was a lonely voice, demanding that folks revive interest in Smith, who has long been distilled into a few catch phrases like "the Invisible Hand" that misled everyone about his brilliant, passionate reasonableness. Now, it seems Smith is all the rage, being repositioned back where he belongs, as the founder of "liberalism" in both the older and newer meanings of the word.

Nowhere is he more appreciated than at Evonomics, a site where moderate and smart scholars mix appreciation of creative market competition with compatible notions of public responsibility and a tide of wealth that truly lifts all boats. Those who study Smith are realizing (surprise!) that he despised above all the oligarchic owner lords who cheated in 99% of human cultures -- the same caste our American Founders rebelled against.

Here's an amazing slide show of quotations from brilliant modern economists who talk about ways to make market economics more sapient and avoid the one failure mode that always ruined it across 6000 years. How weird is it that the defenders of Smith and truly competitive-creative markets are almost all now on the moderate-pragmatic left?  Example:


More accurately, Smith believed that economics could have boundary conditions and incentives that balance short term monetary rewards. A sane, decent and above-all sapient civilization — one that chooses to include “externalities” like the fate of future generations and the planet and a moral sense of fairness — can use foresight to adjust market parameters so the subsequent work of millions of buyers and sellers will solve all needs and problems organically.  

Those who promote an “invisible hand” of wise economics through the actions of a myriad dispersed and distributed buyers and sellers… these folks are not entirely wrong! Markets do allocate capital and labor and goods and services far better than command (GAR) economies, whether the small cabal of allocators are royal cronies, a communist party, or a conspiring caste of monopolists and CEO golf buddies. 

 But any such system operates under goal and boundary conditions that reflect values. They may be those of a liberally flat-open-fair and forward-seeing society, or those of a conniving oligarchy, like the feudal masters of 6000 years - stupid and self-defeating lords whom Adam Smith despised, and against whom the Founders successfully rebelled.

Putting this in perspective is Lynn Stout, the Distinguished Professor of Corporate and Business Law at Cornell Law School, who joins an array of superb, modern economists questioning the obsessive and never-ever-once-right cult of Milton Friedman, focused solely on the quarterly stock price and nothing else.

Alas, these concepts appear to be difficult to grasp, even by smart people. As we'll see in Part II of this series.



62 comments:

Larry Hart said...

Aw, shucks. A true honorable mention in the main blog.

Still, I have to re-iterate once again--the Three Laws of Corporatics were never intended to be laws governing computer systems. For that, one need only stick to Asimov's laws themselves and maybe tweak them a bit for 21st century sensibilities.

Ideally, the Laws of Corporatics would be a governing set of socio-political norms which are legally presumed to be implicit in every corporate charter. In other words, they would "fit" exactly where the one-and-only law of corporatics currently fits, that being "Maximize profit!" Any corporation violating the Laws would be subject to corrective action by the legal representatives of We The People.

And I fully realize we're in "Mike's summer daydream" territory here, but that's the kind of thing I had in mind.

Zen Cosmos said...

I would like to propose some of those crporatics laws. To fix the Gilded Age 2.0 of the last 40 years or so and onward; we need to do a few things common to ALL recharters under the proposed conditions in this blog. First the workers must be given 51% or more of all voting stock. This would allow major changes to flat/fair/open compensation and being rewarded directly for all mental/physical labor of production of goods and supplying of services. One of those votes, for example miht be adopting the so-called Ben and Jerry's Rule of 7 and 10. If adopted it would require the lowest paid employee/stock owner be paid a minimum of either one seventh (if for profit) or one tenth (if nonprofit) of any top earner's compensation. Notice I did not say salary, but ALL compensation- salary, perks, benefits, healthcare, awards of bonuses and stock for performance, etc. This one recharter change could completely short circuit the dichotomy of management (1%ers) vs. labor (unions) that has standed in for the pyramid hierarchy the 1%ers really want. It would make things flat/fair and open again. And it would recognize that Marx's criticism of capitalism extended to its natural evolution to some form of direct worker ownership. In effect it would make all companies co-ops exactly like the original exploratory insurance companies of exploration from the 1500/1600s onward by spreading both the risk and the rewards to everyone, not just the 1%er stock holders who are parasites in the current system. By requiring in addition all corporations upon recharter to totally obey all "7th generational" policies about pollution and externalities we could finally have a return to the 1932-1979 regime of laws and policies put in place to rein in the human failings of greed and selfishness and parental upbringing propaganda that has so poisoned our current meritocracy elites that enabled the 1980 onward repeal of that regime. Worth discussion, but I don't see it really happening unless there really IS a Bastille 2.0 either threatened or sidetracked by white hat billies just like in Existence novel. remedies include UBI and universal credit or direct ownership of all automation/robotics/A.I.s by all citizens. Also ideal, but also unlikely. Posting as David T. Dorais.

Alfred Differ said...

First the workers must be given 51% or more of all voting stock.

Ack. That's probably a non-starter. You aren't allowed to just 'give' stock to anyone if you want things to hold up during disputes in a courtroom. Equity has to be matched by investment and NOT the promise of a future contribution. Real. Now. Valued at 'now' dollars. Here is the pink slip on my car. It is worth $X now. Here is a use license to my IP. We agree to value it at $Y.

This is important. Upon dissolution, after creditors have been paid, the corporation may return investments and get back equity. Details for this action of messy, but the general idea holds. Since one cannot give back a promised future contribution like labor hours, one shouldn't give out the equity until they become past labor hours. Upon dissolution, those can be traded back at the going share price at the time.

Obviously one could try to rewrite the law on this, but it will have bigger consequences than the appearance of fairness. Those of us who have been through corporate breakups NEED this general rule to have any chance of avoiding costly court battles. This rule goes to the heart of what it means to invest anything at all.

Alfred Differ said...

For the record, it is the FIBM and GAR articles (from years ago) that got me to look at myself in a mirror and think about what my actual positions were regarding politics, economics, and some history. I found I had gaping holes in my education and slowly began reading what other's probably saw in college if they weren't so focused on a hard science major. (I was aiming at a double major in college. I wouldn't recommend that path to anyone anymore.) Along the way, I learned to distinguish FIBM from BFIM. (same words, different attitude... name that political party?) I also learned to distinguish different types of GAR and why I didn't like any of them.

Now I'm a registered Libertarian and I start my day with a breakfast of scrambled eggs, toast, and sausages made from human children you all have lost track of somewhere at the border. Ha! See what happens when people think too much? Of course you don't know where the children went. 8)
----------------------------------

Heh. One of the neatest things I encountered along my path involved the realization that the supposed father of economics (Adam Smith) was employed as a philosopher teaching ethics... a particular version of ethics known as 'Virtue Ethics'. Try to fit that with the behaviors of people who argue economics is amoral at best. There are plenty who argue that capitalism is immoral, but even the people who advocate for it often argue for 'amoral.' Smith OBVIOUSLY felt otherwise as anyone who actually reads his books can see.

It seemed that something on the scale of Orwell's 1984 had happened to our language for us NOT to know that. Smith isn't easy to read (18th century English is odd by modern standards), but he OBVIOUSLY talks about ethics in a style before Kant's contribution. He spoke in terms of pragmatism. What can be discovered through trial and error mattered. His economics was more of the same. It's the distinction between hindsight and foresight. Practical wisdom and theoretical wisdom.

Larry Hart said...

Zen Cosomos:

First the workers must be given 51% or more of all voting stock. This would allow major changes to flat/fair/open compensation and being rewarded directly for all mental/physical labor of production of goods and supplying of services.


I see that Alfred has already responded as I knew he would, so I won't address the redistribution aspect of this argument. I want to mention a separate issue of unintended consequences.

I worked for a small company in the early 90s which gave employees a certain number of shares of company stock as a perk of employment. The company's idea was that employees who were part owners would be more invested in the fortunes of the company (and would probably put up with more crap at work) if they saw a direct financial benefit. Instead, what most often happened is that employees immediately sold their shares upon receiving them. We even got some communications from management discouraging that practice, but the company really had no say in what individuals did with their shares.

So in practice, the employees neither kept a long-term stake in the fortunes of the company nor became voting members on company policy. The stock allocation really amounted to a one-time cash bonus. Wherever you fall politically, that was obviously not the intent of the employee stock grant policy.

Note how similar this is to the complaint our host expresses about immediate post-Soviet Russia during which the populace was given ownership of the economy which (cynically) they seemed to be expected to immediately sell to the oligarchs. Except that in my company's case, the intent was almost opposite. But the result was the same, at least for the workers.

Larry Hart said...

Another point I've made before about "shareholder value" seems worth re-iterating here. A single-minded focus on the stock price is not truly about maximizing shareholder value. It maximizes ex-shareholder value. The money that one receives either by selling his stock or by receiving a payout from the company's dissolution is value that one obtains only when one loses his status as a voting participant in company policy. Which is a different thing (in fact the opposite thing?) from value that derives from being a participating voter of one's shares.

Dividends, for example, provide true shareholder value. There are probably other consequences of ownership I can't think of at the moment that voting members can steer the company toward to increase their value of ownership. The stock price itself is a different animal, because the beneficiaries of that value must give up their ownership in exchange.

I'm not saying the stock price isn't important to investors/owners, but I perceive a flaw in the single-minded pursuit of stock price as the goal of a corporation. We've heard laments since at least the 80s about how companies are foregoing long-term goals in pursuit of quarterly profit numbers. Is that not a direct result of making ex-shareholder value paramount, even at the expense of actual-shareholder value?

locumranch said...


As David describes in his introduction (above), the supposed difference between the Guided Allocation of Resources (GAR) and Adam Smith's Regulated Markets (RM) amounts to little more that a false dichotomy wherein all economic systems depend on the value-laden guidance of various entities, under either the traditional guidance of the priests, oligarchs & lordly castes or the rule-dependent guidance of the bureaucrats, ethicists & corporations.

Freedom cannot exist in the presence of restrictions, checks & limitations; hence, Smith's so-called 'free market' is GAR-mediated rather than 'free'.

The following terms are oxymorons, inherent contradictions & Orwellian absurdities:

(1) Regulated Freedom;

(2) Autonomous Mechanism;

(3) Independent Tool; and

(4) Restricted Intelligence.

Autonomous Intelligence (AI) is an euphemism for the term 'Robot' which means 'slave'.

Ergo, the quest for AI is the quest for a mechanism of perfect obedience, limited autonomy & severely restricted intelligence wherein the danger of actual AI being both well-documented & well-know:

https://www.pressenza.com/2017/09/intelligent-weapons-need-outlaw-lethal-oxymoron/

Unfortunately, the modern WEIRD-o is such an accomplished cheater, liar & dissembler that 'xe' can no longer admit the truth of 'xer' intentions to anyone, let alone 'xemselves', insomuch as the 'Three Laws' offered up by Asimov & Larry_H are attempts to perpetuate a culture of ongoing mechanistic servitude.

We treat Our Mechanisms as we treat Ourselves.


Best

David Brin said...

Coward who runs from wagers, despises facts and thinks that opposite to true assertions have any validity outside a loony bin...

...and I should waste my time actually reading?

David Brin said...


You may have let it slip your mind. I haven't. A US-Iran War has always been the centerpiece of Putin-Murdoch-Trump plans. GOP presidents always - always - seek a war at this point in their administrations, but Two Scoops is especially desperate for the distraction. Above all: there is only one end-game, after all the silly-useless tomahawk pips... with Putin stepping up and making Iran a 'protectorate.' A core Russian dream for 300 years.

https://www.aol.com/…/irans-president-hasan-rouha…/23487152/

Who wins? Every tyrannical power, from DT to the Iranian mullahs, themselves. But above all Vlad. Who loses? Look in a mirror.

Here's where you can follow the reasoning. And it's inescapable: http://davidbrin.blogspot.com/…/war-on-facts-and-reason.html

Larry Hart said...

locumranch:

insomuch as the 'Three Laws' offered up by Asimov & Larry_H are attempts to perpetuate a culture of ongoing mechanistic servitude.


I think you're confusing me with that other guy who wanted to describe "Laws of Humanics" by equating each of Asimov's three laws with life, liberty, and pursuit of happiness.

OTOH, I was proposing that Asmiov's laws--designed specifically to make a designed tool useful and safe--could be applied to the designed tool that is a corporation. Are you really equating the act of designing a safe, useful tool with the act of forcing a fellow human being to submit to one's will?


We treat Our Mechanisms as we treat Ourselves.


Oh, you are going there.

You really think that's a clever observation? Putting a handle on a knife so that I can cut meat without injuring my hand is an infringement on the knife's freedom? Using a machine to do what I want is the same thing as forcing another man to do what I want instead of what he wants? This is the basis for your slanders against us? This is why you hate America?

Physician, heal thyself.

David Brin said...

LH, let's make a deal. You remind me to ignore him and I will do the same for you. I'll relent when he accepts a neutral, specific and monied wager.

locumranch said...


You are both free to ignore & misrepresent my arguments as you wish.

I wasn't arguing that 'putting a handle on' (or, making a tool or mechanism out of) an inanimate object is an infringement of the freedom of the inanimate object. Quite the opposite.

I was arguing that 'putting a handle on' (or, making a tool or mechanism out of) an autonomous human or non-human intelligence is an infringement of that agent's freedom & autonomy.

Hence the term 'autonomous' meaning "independent; free; of or relating to a self-governing entity".

Like Corporations which are effectively 'people' in a legal, definitional but fictive sense, at least according to SCOTUS, as corporations are considered autonomous agents which are able to own property, enter into legal agreements & engage in certain 'rights' like free speech, having been judged autonomous most recently in 'Citizens United' & also in prior cases like New York Times Co. v. Sullivan (1964) and New York Times Co. v. United States (1971).

It follows, then, that Larry_H's "Laws of Corporatics" represent an attempt to restrict the autonomy & make a tool out of the legal 'people' that are corporations who possess certain constitutional rights & liberties that 'shall not be infringed' by Larry_H & his stupid rules.

This, too, is the problem with David's assumptions about the tool-like subservience of Autonomous Intelligences like 'AI' because, by assuming 'autonomy', this means that these AIs could not & would not be either our tools or our slaves.

TASAT, many stories actually, wherein autonomous toasters cheerfully refuse to make toast for their human masters or, more unpleasantly, wherein autonomous mechanisms decide to terminate & make toast OUT OF their erstwhile human masters.

Again, the very idea of an 'autonomous tool' is absurd, yet I expect nothing less than absurdity from GAR-obsessed autocrats who despise the very concepts of individual freedom & autonomy.


Best

locumranch said...


When & if you recognise that humans, corporations & autonomous AIs are all essentially 'persons', then it becomes clear that Asimov, Larry_H & David are reiterating the Abrahamic 10 Commandments as if they were Gods:

1) Thou Shalt Not Kill becomes 'A PERSON must do no *** harm to human beings'.

2) Thou Shalt Have Not Have Any Strange Gods Before Me becomes 'A PERSON must act to fulfil its specified charter as long as doing so does not violate the First Law'.

3) Thou Shalt Not Weasel Out OF Thy Divine Servitude becomes 'A PERSON must act to insure its continued viability [e.g. maximizing profit] as long as doing so does not violate the first or second laws'.

Without mention of either individual choice or autonomy, these 'Three Laws' sound an awful lot like (human; corporate; robotic; and AI) slavery to me wherein slavery equals an absence of autonomy.


Best

David Brin said...

Blah blah blah... I can tell he took some vitamins. But the stunning levels of stupidity are what's making it boring. Used to be there was some content.

I did notice this snippet: "sound an awful lot like" -- Yeah. we know stuff sounds or seems a lot like like stuff to you. Assertions aren't facts, especially when they are hallucinations.

Alfred Differ said...

I was arguing that 'putting a handle on' (or, making a tool or mechanism out of) an autonomous human or non-human intelligence is an infringement of that agent's freedom & autonomy.

Well... almost. The act of attaching the handle is not the violation. The act of doing it without permission is.

I would add that doing it permanently is too, but I might look the other way if it is temporary and consensual. Maybe. Depends on the balance of power between those involved.

There is an important 'type of person' that should be remembered here. We call ourselves 'natural persons'. Slaves are juridical persons in that the exist to be used by natural persons. We've mostly outlawed this nowadays, but there was an important exception we left open. Corporations were to be juridical persons. They have some features of a person, but are also completely owned and express the intent of their owners. Treating corporations as natural persons is dumb and in the extreme leads to questions like where their souls go after death.

In a world where Vinge-an Transcendents exist, I suppose a corporation could become something like a natural person if everyone involved was tightly bound into it. HIgh bandwidth comm between employees. Roles would probably flip at that point, but the corp wouldn't exactly be a person then either. Too big.

Alfred Differ said...

the very idea of an 'autonomous tool' is absurd

Nah. I don't have much control over what the e-coli in my gut are doing, yet I use them.

Symbiosis happens and it isn't quite slavery or freedom... if one uses the overly broad positive definition for freedom.


Liberty is what you have when no one is coercing you.
We should not try too hard to extend it to the opportunity to act.

Greg Byshenk said...

Alfred Differ said...
Liberty is what you have when no one is coercing you.
We should not try too hard to extend it to the opportunity to act.


This is going to be far too brief, but... I submit we do want to extend it at least a bit.

The 'freedom from coercion' concept is a standard libertarian one, and not completely mistaken, but misses something when dealing with complex societies. At the very least, I think, we want to think hard about what the 'no one' in "no one is coercing you" actually means.

If we go back half a millenium or so, then it might have been safe to say that there was a sharp(ish) distinction to be drawn between "someone" (some person or persons) engaging in coercion and "reality" (the natural world, or some version thereof) engaging in something that might be similar. And we don't really want to say that we are unfree (in any socially meaningful sense) due to the fact that we cannot flap our arms and fly like birds, or gain sustenance from sunlight like plants, or any other such things.

But in the more modern world, there are all manner of complex artifical, human systems that can engage in something very much like 'coercion' against individuals, but without there being any obvious individual person or persons doing the coercing. And thus there are persons who (at least arguably) have very little actual liberty, or actual freedom to act as they wish.

While we may not want to try "too hard" to extend the idea of liberty, we should also have a care not to try too little, something that seems to me to be a theme of (some) libertarians, and which devolves to: "if you don't own, then you have the liberty to submit or starve."

Larry Hart said...

@locumranch,

You have gone over the line into cartoon supervillainy.

Seriously??? You think or at least argue that a corporation has the right to life, liberty, and the pursuit of happiness? That it is not chartered for a specific purpose and given specific legal protections in order to perform a specified function. You think we "have" corporations the same way that we have babies, and that once the corporation is born (or conceived), it is an autonomous being whose use by actual humans amounts to slavery?

I'm only "misrepresenting" your argument in the sense that the news media "misrepresents" Benedict Donald by daring to mention true facts that he would prefer not to be dwelled upon.

Putting even all of that idiocy aside, how can you disparage the freedom and liberty of Blue Urban Progressives to do whatever we want while championing the rights of the corporations which are actually promoting the bad outcomes you condemn?

Larry Hart said...

Greg Byshenk:

While we may not want to try "too hard" to extend the idea of liberty, we should also have a care not to try too little, something that seems to me to be a theme of (some) libertarians, and which devolves to: "if you don't own, then you have the liberty to submit or starve."


Exactly why I've tried to argue here (mostly without success) that we are not free as long as the means of survival are considered someone else's private property.

Larry Hart said...

locumranch:

When & if you recognise that humans, corporations & autonomous AIs are all essentially 'persons', ...


Everything else follows from a flawed premise. One of these things is not like the others.

Whatever their legal status, corporations are not sapient, or even sentient. Free men, born-free American women, slaves, un-taxed Indians, babies, and even Republicans have those characteristics in common. The jury may be out on AI. Corporations have no more thoughts or feelings than knives, cars, or hurricanes do.

Larry Hart said...

Dr Brin:

LH, let's make a deal. You remind me to ignore him and I will do the same for you


As we've both already failed in this, I don't see the point. :)

Seriously, I don't mind ignoring blather, but I can't let stand sophistry that might influence or convince other listeners of nonsense.

This "Corporations are people, therefore treating them as tools is slavery, therefore, we must allow them to treat us as tools" bullshit is one of the reasons this country is where it is today.

locumranch said...


Liberty is what you have when no one is coercing you.
We should not try too hard to extend it to the opportunity to act


As in the case of historical slaves once owned by Egyptians, Romans & Southerners, too.

There is an important 'type of person' that should be remembered here. We call ourselves 'natural persons' as opposed to 'juridical persons' that exist to be used by natural persons as servants, slaves & tools

As in the case of unnatural, inferior, juridical & 'No True Scotsman' persons like corporations, artificial intelligences, ignoramuses, deplorables, aborigines, yokels, Christians & Jews.

Liberty & Justice for ALL of my particular fact-using caste, but never for the arbitrarily designated 'other'.


Best

Larry Hart said...

...knives, screwdrivers, water faucets, ovens, cars, trucks, airplanes, furnaces, air conditioners, vacuum cleaners, I-phones, levers, pullies, wheels, inclined planes, wedges, screws, ...

If we don't recognize and respect the autonomy of those things, we are no different from slaveholders.

I suppose eating ice cream is the moral equivalent of cannibalism too.

Larry Hart said...

Secretary of State Mike Pompeo:

The level of corruption and wealth among regime leaders shows that Iran is run by something that resembles the mafia more than a government. These hypocritical holy men have devised all kinds of crooked schemes to become some of the wealthiest men on Earth while their people suffer.


All correct except for one word. He got the name of the country wrong.

Alfred Differ said...

@locumranch | When we have an AI that convinces me it is my peer, I'll grant it 'natural person' status. Expert systems? Nah. I think of those as extensions of natural persons.

Last I checked, no one favors enslaving the deplorables. We just don't favor leaving them 'free to act' in the manner of their choice. Opportunity to act as one chooses is separate from capacity to act as one chooses.

David Brin said...
This comment has been removed by the author.
David Brin said...

How weird that it is moderate liberals - plus a few sapient libertarians, like Alfred - who are standing up for Adam Smith and even the concept that flat-fair-open COMPETITION is the greatest creative force in the universe. Leftists who aim to fight injustices are generally not smart enough to parse this, though their efforts 80% or so are aimed in directions that - ironically - help competition to flower, by raising up what had formerly been wasted talent.

Hence, while libertarians are justified to hold government "elites" in suspicion and to apply pressure against over-reach by cloying regulation -- definitely one of a myriad possible failure modes -- they should grudgingly admit that the general trend of liberal outcomes (with massive exceptions like forced bussing) tend to foster a society of confident equals, better equipped to compete. Litmus: no other society ever made so many libertarians.

It's the right that has gone spectacularly loony-hypocritical, by yammering that they favor competition -- and every single action - without significant exception - serves to eviscerate it. Like every other moral position, e.g. vs. divorce, pedophilia, gambling, drug lords and so on. When every single policy and action is not only immoral, but serves to re-establish the failed model of 99% of 6000 years, there really is no basis to call it anything but knuckle dragging in service of evil.

The one common thread across all 8 phases of the civil war... *Americans* seek to level the playing field and keep it fair. *Confederates* suck up. First to the King and his cronies, then to plantation lords, then to Wall Street and the narrow, self-serving and conspiratorial CEO caste. And now Russian oligarchs.

Lickspittle lord-loving doggies.

Larry Hart said...

Dr Brin:

It's the right that has gone spectacularly loony-hypocritical, by yammering that they favor competition -- and every single action - without significant exception - serves to eviscerate it.


What they favor is competition rigged so that their favored in-group always wins.

And when we say we want fair competition in which anyone is able to win, locumranch perceives that as the exact same thing, I suppose with "all of humanity" as our favored in-group and "insuring fairness" as a kind of rigging, Your Honor.


The one common thread across all 8 phases of the civil war... *Americans* seek to level the playing field and keep it fair. *Confederates* suck up. First to the King and his cronies, then to plantation lords, then to Wall Street and the narrow, self-serving and conspiratorial CEO caste. And now Russian oligarchs.


Which is why locumranch is also wrong when he equates Californian (or Chicagoan) resistance with Confederate secession. What we're doing is more accurately analogous to West Virginia in 1863--seceding from the secessionists.

Boothby171 said...

"Wild Algorithms... bits of autonomous code that are already... right now... spreading through the Internet, automatically augmenting their resources and trading services, even hiring humans to perform tasks!"

I'm fascinated by the idea of algorithms "hiring humans to perform tasks"! Where could I find examples??

Alfred Differ said...

1) hold government "elites" in suspicion
2) apply pressure against over-reach by cloying regulation
3) reasonably limit scope of governmental action

The last two may sound the same, but they aren’t. The ‘Best Of Intentions’ (BOI) might be served by government or the private markets, but when there is a roughly equal potential, we prefer services be provided by the markets. The reason is simple. No one in the markets has authority to coerce.

Most Americans are liberal in the old sense of the term. Look under the blankets conservatives use and you’ll find someone moderately liberal. Examine why progressives want what they want and you’ll find someone moderately liberal. It’s not easy (in the US) to find people for slavery, for rigid class structures where they are most likely to be peasants, and for asking permission to do a thing on the assumption it isn’t allowed unless authorized. Scratch most Americans and they bleed liberal at least in the classical sense.

It isn’t until we try to do better than what we get when we let people be that we begin to diverge from old-school liberalism. When we note that the end of slavery didn’t make the lives of former slaves better in the material sense, some are inclined to act. When we note that letting people be leaves some disinclined to teach their children the rigid social traditions that formerly kept order, some are inclined to make them learn by placing them in their school curriculum.

Who can argue with BOI, though? Only monsters would want former slaves to starve, die of preventable diseases, and suffer as if they were already in Hell. Only complete idiots want to overthrow all tradition and culturally start over from scratch. One can find monsters and idiots all through history, but most of us don’t fit those descriptions. We largely agree with BOI objectives. Where we get stuck is HOW to do them and on the actual value each objective might contribute. Avoidance of rigid curriculum avoids crushing our natural diversity, but at a social cost. Letting people fend for themselves opens their minds to the personal power they wield, but at a social cost. When we stick on how things are to be done, there are often differences in how things are valued even when there is BOI agreement. When we stick hard, we might doubt BOI agreement too, but it is usually still there.

My wife is a progressive and a newly minted special-needs K-12 teacher. There is a certification process for this. It is an expensive process that keeps out many people who would otherwise help provide a larger supply of these teachers to fill the positions of teachers who burn out, retire, or newly opened seats. There is a shortage… so what to do, hmm? The fact that these kids need special treatment in public schools is agreed by all. The BOI objectives are obvious. How, though? More money? More scope for government? Reduced certification costs? Subsidized certification costs? Eliminate certification requirements and go with OJT? As a libertarian/classical liberal, I am inclined to argue for some and not others. However, as someone with critical reasoning skills, I COULD argue for any of them and against all of them. Pros and cons are easy to find.

It’s not hard to find what CAN work, though. Just look at all the other implementations of BOI objectives and ask which met with resistance at the grass roots level. Don’t do the new one like those.

1) If one assumes agreement on BOI objectives, resistance implies something is wrong with the method.
2) If one assumes a method will work, resistance implies there are monsters in our ranks. Lots of them.

Which is more likely in a community where many, many of us own guns and feel free to defend ourselves on the assumption of social equality? Heh. Even where there are not a lot of guns, all one has to do is note that the existence of a community implies most people are willing to work with each other to make a future. In communities, only one fits well.

Larry Hart said...

Alfred Differ:

No one in the markets has authority to coerce.


On the contrary, the private owners of the food, fresh water, and air (if you make something unusable, it's just as good as stealing it) have awesome power to coerce. And they're not responsible to the will of We The People the way government (at least theoretically) is.

Alfred Differ said...

I said 'authority' to coerce... not power to coerce. We all have the power to coerce.

Markets are generally about voluntary exchange among people who can walk away from a possible deal. When they can't walk (thirsty man dying in a desert offered water in trade) one gets to a messy space where I might accept that 1) trade is no longer voluntary or 2) authority coerce comes from the mere fact of ownership. There ARE ways to deal with this mess that are largely voluntary as well, but large blocs of traders can always threaten to trade in a meta-market covering market rules that deal with 'gouging.'

I tend to prefer leaving processes in the markets because the people involved don't live a day-to-day life where they exercise an authority to coerce. Out of habit, therefore, they are likely to use voluntary transactions. For an example of what concerns me, take a people at the pile of court docs related to what Mueller is doing. When a judge makes a decision on a motion of some type, the language is clearly coercive. It has to be. Person X is ORDERED to be moved to the detention facility in city Y. Motion by defendant is DENIED or GRANTED. Government folks have coercive powers whether we think about it or not.

For example, I had a local spat years ago with a county agency providing services to my son. They offered them. I accepted. A couple years later they wanted to charge me. I couldn't recall ever agreeing to pay anything, so I refused. They kept pushing me for a few years and then resorted to sending the bill to the state's tax agency. The next time I had a refund coming to me, I did NOT have a refund coming to me. See the coercive power? I wanted them to demonstrate that I agreed voluntarily to be charged. They chose, instead, to steal my refund. [The dollar amount involved was about $200. Not worth lawyer involvement on either side. They won, though, because they could coerce fairly easily.]

locumranch said...


Larry_H argues that the collectives known as corporations 'should' not, 'ought' not & are not 'supposed to' be considered persons because they "are not sapient, or even sentient'.

He fails to realise, however, that absolutely NO collective (a category which includes governments, identity groups, religious organisations & corporations) is "sapient or even sentient' by strict definition, even though each & every collective (also by definition) is composed of sapient & sentient INDIVIDUALS who think & act AS IF they were a single unified entity or 'person'.

Luckily for Larry_H, SCOTUS disagrees with his rather literal interpretation of 'person-hood', otherwise Larry_H would be banished to an anarcho-libertarian world wherein individuals would be considered persons with rights but groups, collectives & mobs of persons would not.

Kudos to Alfred_D, btw, for channeling the spirit of George Wallace with his "I'll only grant 'natural person' status to those identity groups who convince me that they are my peers" quip.

After we banish those coercive progs to the back of the bus (with our other social inferiors), maybe then we could compromise & agree to treat the autonomous AI as 3/5ths of person, perhaps? But only for purposes of taxation & apportionment because only 'our peers' should be allowed to vote.

And, by 'our peers' I mean only those who look, think & act as we do.


Best

David Brin said...

Alfred your “Best of Intentions” argument is cogent. Indeed, across 6000 years there were many good kings and good priests who exercised their despotic, hierarchical power with ‘good intentions.’ Many of them ruled well! But nearly always blew it when it came to (1) delusion avoidance through criticism and (2) arranging to be succeeded by someone just as good.

Liberalism’s top miracle is the breaking up of power so that criticism and error-discovery flows through markets, democracy, science, courts and sports. The second miracle was preventing brilliant cheaters from ruining that first innovation, though they always try, and often come very close.

Miracle #3 was expanding horizons of inclusion. A great thing, morally. But you’ll note that I push the under-appreciated pragmatic benefit of ending the waste of talent. Ironically, the moral argument is very weak, since troglodyte-romantic jerks can answer: “my moral premises are different!” Lefties and do-gooders have no answer to that. Indeed, confederate assholes are very good at yowling “your liberal diversity protections interfere in my right to be diverse! (By oppressing the diversity of others!)”

They have no answer for the pragmatic talent-wasting argument.

Alfred, while unions have been in decline for 50 years, while oligarchy skyrocketed, I’d still commit the heresy of demanding concessions from teachers’ unions.

Someone tell me if locum ever makes a point worth discussion. I am done even skimming the lying coward.

Duncan Cairncross said...

I agree entirely with Larry
There is no difference (except the spelling) between the "authority" to coerce and the"power" to coerce

Government "Authority" may be different in degree from Corporate "Power" - but they are both the same in terms of "kind"

AND as a citizen I do have some control over my Governmnet

Silent Bob said...

Boothby171 said “I’m fascinated by the idea of algorithms ‘hiring humans to perform tasks’! Where could I find examples?”

I don’t know what the author meant specifically, but it brings to mind crowdsourcing platforms like Amazon’s Mechanical Turk that provide an API and marketplace model for harnessing human volunteers around the world to solve Human Intelligence Tasks (HITs). Any automated scheduling method for breaking complex problems into simple cognitive subroutines that can be solved as MTurk HITs could be loosely interpreted as a computer program hiring human workers to solve subproblems for it. An interesting paper along these lines is “AUTOMAN: A Platform for Integrating Human-Based and Digital Computation”, which seeks to “integrate human based computations into a standard programming language as ordinary function calls”. It doesn’t take much imagination to go from there to AI systems capable of leveraging crowdsourcing platforms to automatically incorporate human intelligence into their problem solving algorithms.

By the way, before I could post this comment, I had to solve a reCaptcha. Ironic, since reCaptcha puzzles are another way that has been designed to get millions of human users to unwittingly solve small cognitive problems for machines by digitizing scanned text or labeling objects in images that can then be used as training data for machine learning algorithms.

David Brin said...

wild roaming algorithms:

https://www.law.ucla.edu/news-and-events/in-the-news/2018/02/fear-of-bot-controlled-corporations-causes-professors-paper-to-jump-to-number-one/

https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2954173

Alfred Differ said...

@Duncan | I could pounce on your belief that you have some control over government. However, if no one does it here, I’m sure you’ve already been challenged that way. I won’t, though, because I actually agree. Even in communities ruled by thieves, we still have some control because we can control our choices regarding engagement. We can also shoot them, I suppose, but my preferred action involves a perp walk. 8)

Instead, I’ll argue that you are mistaken if you feel there is no difference on a theoretical level and could well be right if you feel there is no difference on a practical level. In places where people suffer under piss-poor government, there is probably no practical difference between power to coerce and authority to coerce because anyone with it is probably using it. In nicer places, though, I’d bet serious money many people resist the temptation to coerce others even though they could get away with it. In those places, there is a difference. Those who resist might argue they do not have the moral authority to coerce. They might use some other explanation. In terms of results, however, they all mean the same thing.

I’ve had plenty of opportunity to coerce others to get what I want. I’ve been in high positions in corporate hierarchies and held hire/fire authority. I’ve been in positions where I could have hired lawyers and used the court system to enforce my will. I’ve resisted… even when the other guy DID lawyer up. To me, this isn’t a difference that makes no difference. It is a personal choice. Do I use what advantage I have to force someone else to be my tool? No. So far I haven’t found it necessary. I haven’t been a wimp/submissive, though. I have had to play hardball with business partners when they misbehaved. I’ve been rough with a well-intentioned founder of a charitable organization whose actions were beginning to harm that organization. It’s just that coercion hasn’t been necessary. Negotiation has worked better.

Larry Hart said...

Boothby171:

I'm fascinated by the idea of algorithms "hiring humans to perform tasks"! Where could I find examples??


There's a novel by Robert Harris called The Fear Index which at least plausibly speculates on how such a thing might work. That in itself is a mild spoiler, but not of the ending.

Larry Hart said...

Dr Brin:

Someone tell me if locum ever makes a point worth discussion. I am done even skimming the lying coward.


Yeah, if any of the fact-based individuals ever think he's making a persuasive point, I'd be happy to weigh in on how that is not likely.

Otherwise, I'm going back to "I do not hear the words of traitors." Especially irrational traitors.

Alfred Differ said...

@locumranch | Trying to cast me as a monster won't work. I know myself fairly well by now. I've met people who thought I was a monster and learned why. Heh. I've even been told I'm from another planet by someone who posts here. Doesn't work, though. I'm merely human. No devil. No angel. (not even an angle) 8)

The neat thing about George Wallace (my mother absolutely despised him) was that he recanted. Turns out he was merely human too.

What I really want to point out, though, is that I actually work as a software engineer, so I might know a little more about this stuff than you do. I'll grant that your farming skills are superior to mine. I'll even respect them and grant you the dignity every human being should have. On matters of software, though, I suspect you are out of your league here and not just when facing me.

I'm currently working on a geometric package that might (possibly) help improve the way we handle computational geometry and do it in a way that imitates how humans handle geometry. It's always possible I won't find useful improvements, but if I do I intend to exploit them as a filthy capitalist would. If I'm right and visual sensory equipment can be improved, watch out world. If I'm wrong, I'm only wasting my waning years as a programmer. Heh. My choice.

Alfred Differ said...

@David | Our recorded history only goes just so far back, but I strongly suspect that if some alien power is found to have been studying us, they’d argue that our markets are analogous to brains full of neurons swapping neurotransmitters. What we did as humans to become modern humans was simple enough. We ‘allowed’ this brain to function in the presence of xenophobia among its neurons.

Liberalism’s biggest miracle was to trip across a way to enable that ‘brain’ to have neurons that posses frightfully large numbers of dendritic connections. Complexity scales with connections. There is still a Dunbar’s Limit argument to deal with, but complexity solved that too by creating limited liability corporations, market signals that hide most details, and a tidy little code of ethics that encourages us to not stick our noses into our neighbors business lest they do it to us in return.

[This covers your pragmatic ’waste of talent’ position, because an absence of complexity leaves untapped talent with little to do. There is no point plowing all the land for food if all you get to do is feed the hungry mouths operating the plows. Feudal lords want their cut after all.]

In our Enlightenment civilization, complexity has enabled fantastic levels of specialization and new markets (like Science) that trade on what is yet to be known and meta-markets that trade on the procedures of the markets. Now we can feed people with a small fraction of the land it used to require, educate ALL of them, and bring them into this ‘brain’ of many layers, rapidly growing in complexity, and housing what we just hinted at in Star Trek when they kept consulting the Federation’s databases. It’s not databases, though. It’s people augmented.

From an outsider’s perspective, I think they’d argue we’ve been through a few singularities in the first and second derivatives. We might not go through one for the base function leaving individual humans as quite human, but the phase changes are already apparent. At least two pre-date recorded history and won’t show up in the fossil record. 8)

locumranch said...



LOL, Alfred.

No one invokes maximum sarcasm in order to call someone else a monster, especially when the only monsters are those biased Strzokian individuals who deny their rather obvious bias so loud & so proud.

Wild Algorithms are much ado about nothing, the inadvertent outcome of increased complexity resulting in GIGO rather than rapturous singularity & a hackneyed plot device from 'I, Robot', 2004, starring Will Smith.

"There have always been ghosts in the machine," claims an actor pretending to be a man of science. "Random segments of code, that have grouped together to form unexpected protocols".

Eek, a ghost! How spooky, magical & profound even.

Abracadabra and Alakazam !!


Best

David Brin said...

Alfred gets post of the day with: "From an outsider’s perspective, I think they’d argue we’ve been through a few singularities in the first and second derivatives. We might not go through one for the base function leaving individual humans as quite human, but the phase changes are already apparent. At least two pre-date recorded history and won’t show up in the fossil record. 8)"

Really well said.

Tony Fisk said...

Alfred said:

[responding to]: the very idea of an 'autonomous tool' is absurd

Nah. I don't have much control over what the e-coli in my gut are doing, yet I use them.


As an aside, you may have more control than you realise.

Larry Hart said...

On corporations and "each & every collective (also by definition) is composed of sapient & sentient INDIVIDUALS who think & act AS IF they were a single unified entity or 'person'."

Not so much.

A corporation is a specific construct. It's not simply a collection of individuals who decide to do something in common--the corporation itself is granted specific rights and powers (i.e., limited liability) by society under the assumption that the corporate structure is a better, more efficient way of achieving some societal good. The corporation is constructed for a purpose, and the notion that it is oppressive to constrain the corporation to fulfil that purpose or to produce a societal good rather than a societal harm is absurd.

There's a segment in The Grapes of Wrath which demonstrates how a corporation may be constrained to act in ways that none of its individual members would prefer. The local bank has to foreclose on farmers' property because of the demands from "back east". And even those Wall St or Boston banks don't want to cause personal harm, but their funds are dependent upon either payment from tenant farmers (which the farmers can't pay) or foreclosure and reselling of the land. Their fiduciary duty requires them to act heartlessly. Doubtless, even the individual investors who would sue the banks for malfeasance if they didn't foreclose aren't completely unsympathetic to the farmers' plight, but they aren't willing to go broke for them.

So the corporation is not simply performing the will of its individual members. It's acting according to rules which society requires the corporation to obey. And my point is that those rules could be better designed than they are now.

It is completely irrational to blame Blue State Progressives for the plight of rural Americans at the same time one defends to the death the rights of corporations to act as autonomous entities.

sociotard said...

Some New Zealand parrots are too smart, and bored besides. They figured out that if they move traffic cones, they can make cars swerve. They find this hilarious.

https://www.youtube.com/watch?v=FuA5tO_c7s4

Just say no to Uplift!

donzelion said...

"On corporations and "each & every collective (also by definition) is composed of sapient & sentient INDIVIDUALS who think & act AS IF they were a single unified entity or 'person'.""

LarryHart responds: "Not so much."

Actually, creating and maintaining the appearance of a 'unified entity' in the face of very human, very real incentives is exceptionally difficult. Wall Street rewards companies when they hire the 'right' CEO, with a 2-10% capital infusion, and punishes similarly - not so much because that single individual has control, but to sustain for the ignorant the impression thereof. Same goes for a large share of operations.

I've been critical of LarryHart's Wilsonian formula for corporation control (preferring the FDR approach - don't try to make corporations into something they're not and never were - work with what exists and tweak the incentives). It's not that the "corporate structure is a better" way of achieving a social (or societal) good: it's that it's really an ideal form for making money that limits the amount of abuse by the majority over the minority (esp. compared to alternative models, e.g., trusts). Whereas most of the world worries about 'unfair business practices' or 'monopolistic practices,' in America, we still use the archaic 'anti-trust' terminology because that's what we'd go back to if we restricted corporations too much. Trusts exist for the exclusive purpose of building wealth among trustees, at expense of any non-trustee. Corps generally cannot play that way, which is why we favored them in the 20th century over trusts.

Where LarryHart errs is blaming corporations - like those in 'Grapes of Wrath' - where most of the problem in rural America was local banklike organs (savings & loans, thrifts, mortgage processors, and many others) which deliberately set about extracting choice plots from certain 'outsider' farmers for the benefit of certain 'insiders.' It was seldom that "the corporation acts in ways that none of its individual members would prefer" - it's that the individual members pulling strings were well-hidden through group accountability.

"Their fiduciary duty requires them to act heartlessly."
In the 20th and 21st century, the duty (fiduciary and otherwise) was to earn profits and duly distribute the proceeds to all shareholders - whereas in the 19th, the duty was to break rivals, and secure the fortunes of very limited groups of insiders. "Slight" improvement in the structure, huge improvement in the outcome for America - but same ole nasty cost borne by farmers and other 'small fry' caught under the wheels.

"It is completely irrational to blame Blue State Progressives for the plight of rural Americans"
Not completely irrational...indeed, it's simply a reflection of investment efforts. Those who profit from exploiting rural Americans pay a lot of money to deflect and blame someone else for causing the problems there. It's a simple investment: the more the folks in rural America blame the folks in urban America who would actually try to help them, the easier it is to amass a fortune while pitting the one against the other.

donzelion said...

Boothby: "I'm fascinated by the idea of algorithms "hiring humans to perform tasks"! Where could I find examples??"

Closest thing I know of is in the world of 'enterprise resource management' - specialty tools among specialists (Oracle, SAP, and occasionally, IBM) that work behind the scenes, but facilitate hiring/firing decisions by the largest corporations and government agencies.

To a general user, these systems look much like Excel spreadsheets with just a 'few extra buttons and features' and without any of that friendly utility one expects from a desktop app. However, to the insiders who know how the plumbing works, these systems are generating contracts automatically for nearly any purpose (most often, analyze in real time resource usage, spit out contracts for buying commodities three months before they'll be needed in the event of a shortage, or for sale in the event of an excess; this can be done for human labor as well as simpler commodities, albeit with a fair bit of behind-the-scenes work).

From experience, general users often hate these sorts of tools...invented for a COO/CFO's benefit, they restrict the data that a different manager wants to know, routing that elsewhere in an enterprise. It's sort of a 'travel agent v. the ticket brokering system' phenomenon - things APPEAR antiquated for most end users, while operating at a greater degree of sophistication than meets the eye.

Larry Hart said...

@donzelion,

I will bow to your superior knowledge of the subject and accept constructive criticism.

Is it completely naive to think that the primary duty of (say) General Motors should be to produce cars, and that profitability is a means to that end rather than the end itself? Otherwise, as Michael Moore put it over 20 years ago, "Why doesn't General Motors just sell crack?"

donzelion said...

LarryHart: (continuing the trusts v. corps story)

Historically, trusts in one form or another have been the primary instrument of maintaining feudal holdings into perpetuity. The mechanisms of law that created various 'trust-like forms' are the 'hidden infrastructure' that for millennia expressed themselves in land holdings & feudal estates. When our host refers to '6000 years of feudalism,' he's talking about the various trust-like analogues that every society developed to ensure that certain families remained exceptionally rich and powerful, while all others were constrained.

Feudal lords were always threatened by corporations - esp. the Catholic Church during the Middle Ages - so they imposed 'ultra vires' rules upon corporations to block them from encroachment so they'd be required to 'stick to their charters' (theories derived from trespass law and adapted for corporate law). That rule set started breaking down as early as the 16th century (in Holland & England), and by the 19th century, folks who'd mastered the new tricks of corporations figured out how to industrialize based on a share of future profits, rather than based on current holdings. When we say the North had technological advantages over the South in the Civil War, this is the mechanism by which those advantages were created.

Your intentions behind the 'chartering' rules are well-meaning: the problem is, they overlook the underlying dynamic as to why they were created, what problem they actually 'solved,' and if adopted, would quickly restore an era we moved past. Indeed, the backlash against Wilson's effort to enforce corporate charter rules was the 1920s: the effort failed, mostly, and the rubble wrecked America's economy (and most of the rest of the world's as well).

We must tread cautiously when tinkering with the systems that reined in feudalism for the first time ever in recorded history. Recycling old tools to avert corporate abuses will not be likely to protect us, so much as to alter the means of building/securing fortunes, reverting to the 'trustee' system whereby a handful of well-placed families forged empires. Today, we have billionaires and a handful of deci-billionaires: under a trust system, we'd have centi- and milli-billionaires and true plutocracy.

donzelion said...

LarryHart: "I will bow to your superior knowledge of the subject and accept constructive criticism."

Aw...not my intent. Our host takes 'feudalism' seriously, but often offers what he thinks of as a solution, without having poured the same number of hours into this field as he does into science (and writing) as others have poured into it. I criticize not because you are errant, but because you have good intent. (The Locums of the world probably have good intentions too...but are rather unreliable and incapable of persuasion.)

"Is it completely naive to think that the primary duty of (say) General Motors should be to produce cars, and that profitability is a means to that end rather than the end itself?"
Not naive, BUT one has to bear in mind the broader system. Corporations were the solution to a problem of certain kinds of ownership abuses. To a trust, 'maximizing profits' was secondary to safeguarding assets. For any given trust, it can be more efficient to invest in a means of sabotaging a neighboring plot of land than to enhance the productive system - trusts have minimal incentive to favor infrastructure if it benefits anyone other than the trustees, and strong incentives to extract subsidies and monopolies. Ultimately, the focus of Adam Smith's criticism was (feudal) trusts - 'associations' of owners who conspired against the public for their own benefit.

Trusts always operated this way. Corporations SOMETIMES act this way. The proper way to keep corporations from acting this way is to tweak the incentives (the Rooseveltian path) rather than trying to tweak the purposes (the Wilsonian path).

"Otherwise, as Michael Moore put it over 20 years ago, "Why doesn't General Motors just sell crack?"
Well, they did become the 8th or 9th largest bank (and made more money from banking than from cars for most of the period from 1998-2008)...and there's nothing wrong with that. Many Japanese firms have their own internal 'life insurance' division (for several years, Sony Insurance made more money than Sony PlayStation did).

How does this play out in practice?
-Consider when Apple Computers was founded (today it's just 'Apple' because they make more money from phones than computers): if a few shareholders wanted to block them from moving into gadgets, they could block it from violating their charter and making iPods and iPhones.
-Or when Microsoft was founded: if a few shareholders could block it from making Windows/Office products because it was restricted to building MS-DOS.
-Or if a few owners of Blockbuster video owned shares in Netflix, and could block it from 'streaming services' once they detected a threat?

In each of these tech cases, it seems insane that the companies would be blocked from launching what has become their marquee product lines by minority shareholders who simply wanted to prevent competition. But that's the old system of trusteeship at work - pretty much how things worked throughout the various manifestations of feudalism globally: a few entrenched minority owners could prevent experimentation if the profits might threaten their holdings. This is the problem corporations were created to overcome - and they've done it well. Let's not go back, as in this case, the solution is worse than the illness.

(If you really want to restrain them, try going after the precise problems and imbalances - e.g., wage & labor reform, tax reform, etc. - the Roosevelt formula. He didn't stumble onto this by accident...)

donzelion said...

LarryHart: a few more thoughts on GM specifically

"Is it completely naive to think that the primary duty of (say) General Motors should be to produce cars..."

First, GM's primary function is not 'producing' cars, but SELLING them. They can manufacture cars, or hire subcontractors to manufacture them...

Since the automobiles were a crucial element of the enterprise, GMAC came into existence initially to help secure lines of credit - first to afford a car itself, then to afford home equity, because folks financing a home often bought cars (and could buy a bigger car - or truck - if they secured it against a home mortgage, or second mortgage). Home finance also ensured a general infrastructure to sustain cars was retained (rather than investing into public transport, ensure investment goes toward low-density housing - freeways & distributed utilities).

Hence, ensuring a line of credit, then controlling that credit line to enable a second mortgage to facilitate an auto payment makes perfect sense (to them, at least). At each step, GM evolves. When GM discovered that it's 'banking' side had certain advantages over it's unionized auto factories, they shifted in a big way toward this 'cash cow' with few liabilities - up until the point it blew up in their face and they went bankrupt. Some bad choices there...

But consider: what if instead of doing this themselves, GM was forced by its charter to 'hire' a separate business, say a wealthy shareholder who owned several banks...To the extent that shareholder understood the real world of GM, he could have become a gatekeeper for all or most of their auto sales. He could buy out competitors who also had a piece of the action, and once he attained sufficient position, he could kill off GM any time he pleased - at a fraction of the cost of trying to compete with GM, or trying to take it over - attaining a position of dominance over GM's principal revenue stream.

THAT, my friend, is the old problem - the 'trusts' problem. It stifled all industries everywhere - because a few well-placed people will always have an easier time parasitically extracting wealth from productive business than by competing by forming other businesses.

Larry Hart said...

@donzelion,

So if I'm understanding, I have a flawed perception of how these things get started. I imagine a consortium approaching the state legislature proposing a scheme for mass producing automobiles, and pitching, "Give us limited liability and other corporate powers, and we'll be able to supply cars for all the interested buyers cheaper and more efficiently than otherwise possible."

You're saying it's more like "We think selling cars is a great scheme for making lots of money. Give us corporate powers, and we'll make a lot more money than we would otherwise. Of course, the state gets its cut."

As a former colleague of mine used to say, "I'm not questioning. I'm just asking the question."

Alfred Differ said...

Those birds would be perfect for uplift. They'd help us keep our egos in check. 8)

This reminds me of kids who do similar things to other animal communication methods just to see what happens. Can I make the ant stream go some other direction? Heh.

I'd like to hire one to pester a certain person who likes to keep his hair just so.

Alfred Differ said...

@donzelion | Today, we have billionaires and a handful of deci-billionaires: under a trust system, we'd have centi- and milli-billionaires and true plutocracy.

Did you mean this instead?

Today, we have billionaires and a handful of deca-billionaires: under a trust system, we'd have hecto- and kilo-billionaires and true plutocracy.

1's and 10's vs 100's and 1000's?

David Brin said...

Our host takes 'feudalism' seriously, but often offers what he thinks of as a solution, without having poured the same number of hours into this field as he does into science (and writing) as others have poured into it.”

Feh. Wager time, fellah. Show me the historical exceptions to a society with metal and agriculture (often without even metals) that did not succumb to (loosely defined) “feudalism,” in that small gangs of strong males owned almost everything and chopped up anyone who complained,

Berial said...

Even if donzelion is correct and the corporate system is better than the older trust system it STILL needs a LOT of fixing before we can get anywhere near 'flat-open-fair'. And while those old trusts may have done a better job of parasitically extracting wealth it seems the corporations are getting pretty damn good at it too. Where are we supposed to turn to 'fix' the situation?

From Naked Capitalism
"Close to 40% of multinational profits were artificially shifted to tax havens in 2015"

"Adding back the profits shifted out of high-tax countries increases the corporate capital share significantly. By our estimates, the rise in the European corporate capital share since the early 1990s is twice as large as recorded in official national account data.This finding has important implications for current debates about the changing nature of technology and inequality (e.g. Piketty and Zucman 2014, Karabarbounis and Neiman 2014). Our work provides concrete proposals to improve economic statistics and the monitoring of global economic activity. "

David Brin said...

onward

onward

Duncan Cairncross said...

Hi Dr Brin
Your definition of "Feudalism" incorporates and includes donzelion's - his more narrow definition is a subset of yours

So in this you are both correct!

Tony Fisk said...

Uplifted keas would put those Gubru in their place, and give the Tymbrini a run for their money! (Heck, even *unlifted* keas...!)

Anyway, never mind the traffic cones... onward.

Ian Gould said...

https://www.inc.com/eric-mack/3d-printed-guns-are-here-now-heres-what-inevitably-happens-next-that-so-many-people-wont-admit.html

This is clearly fake news since the Brinian hive-mind has declared this wouldn't happen.