Wednesday, November 14, 2007

Capitalism Give Its Impartial Judgement on the Iraq War

I’m mostly reprinting stuff from other folks, for a while. But (picking up the slack) I’m pleased to say Russ Daggatt is back! So here’s a gem from him (plus a small item or two of my own):

RD: The past few days have ones for the record book. Is Bush to be the most intensely disliked president in US history? For the first time in the history of the Gallup Poll, 50% say they "strongly disapprove" of the president. Richard Nixon had reached the previous high, 48%, just before an impeachment inquiry was launched in 1974.
Not just majority disapproval. A majority strongly disapprove.

Yes, we can see some restoration of faith in Abraham Lincoln’s dictum that you cannot foll all of the people, all the time. And yet, ironically, this makes one MORE fearful of how delusionally crazy men may behave, during their last year of power.

MORE FROM RD: When George Bush invaded Iraq and overthrew its secular Baathist government, he ensured a strengthening of Iran's power in the region. And when Bush took the focus off stabilizing Afghanistan and pursuing al Qaeda in Afghanistan and Pakistan, he ensured the resurgence of the Taliban and other Islamist forces that are destabilizing both of those countries. With Iraq and Afghanistan both in chaos, and nuclear-armed Pakistan threatening to join them, what does the Bush crowd want to do for an encore? Open up another front with Iran. At the same time the only stable part of Iraq, the Kurdish north, faces the possibility of a border war with Turkey.

Right-wing warmongers robotically cite Neville Chamberlain and Munich any time someone questions the wisdom of rushing to war. But a better WWII analogy might be Hitler's attack on the Soviet Union. Even a dominant military power can overextend itself. Moreover, Bush has so fueled hatred of the US in the Muslim world (nowhere more so than in Pakistan), and Islamic radicalism generally, that any government in that part of the world that is seen as an ally of ours is imperiled. (see URL:

The legacy of George W. Bush could be regional war in the Middle East drawing in Iraq, Iran, Afghanistan, Pakistan and possibly even Turkey. Osama bin Laden (still in a secure, undisclosed location -- presumably in Pakistan) could not, in his wildest dreams, have imagined that 19 fanatics with boxcutters could have such an impact -- destabilizing the entire region. Of course, the real heavy lifting came from Bush. (One hornet can't bring down a barn. But it can sting a horse, who kicks down the barn.)

DB: Where I part company with Russ is this: I was fine with the idea of toppling Saddam! So were many people who hoped, at last, to make up for the astrounding Bush Family policy of propping up that monster, for two generations. Only, almost anyone on Earth, with an IQ above that of a slime mold, could have come up with a better plan to oust Saddam than the one that W chose -- to destroy our alliances, our social cohesion, our finances, our moral leadership and freedoms in the process.

Are any ostriches waking up? This from a dissenting republican site: “Realism must replace the utopianism of the neo-con philosphy. There can be no WWII style occupation of ‘conquered lands’ and that concept must be abandoned. No more utopian nation building and attempts at wholesale transformation of societies into 'our own image'; only destruction of the enemy and the immediate substitution of toppled governments with the best replacements available.” (I never thought I’d be delighted to see a return swing toward traditional GOP cynicism! But right wingers make SCARY utopians!)

On the lighter side see two wonderful “Goldwater Republican” women standing up and having fun while shivving the neocons.

Finally, now that Russ Daggatt is back at work, I can continue to fob much of the political work onto him. Like pointing out something that should have been obvious. That human beings are driven by subjective bias -- with opponents of the Iraq War perceiving all the strategic failures, while administration advocates zero in with tunnel-focus upon this or that apparent tactical success. (None of the “benchmarks” set out by the Bush Administration, last spring, are anywhere near fruition. But some Sunni militias in Anbar have been co-opted, huzzah.)

But, with passionate political partisans so biased, is there anyone to look to, who has a cold-eyed, pragmatic approach? Not the harried and oppressed CIA or the up-to-their-necks military.

RD: Let’s try good old-fashioned capitalists. An MIT economics professor came up with a good objective measure – the bond market. As the professor notes, bondholders, “aren’t politically motivated. They don’t have to rationalize their previous statements or justify their votes from years past. All they care about is whether there will be a functioning Iraq in the future such that they will receive their payments.”

[This is similar to the assessment of global warming on the part of insurance and reinsurance companies. Those – apolitical, impersonal – risk markets are speaking emphatically that the risks of global warming are real.]

“First, some background on the Iraqi bonds. After the United States helped Iraq renegotiate its leftover debt from the Saddam Hussein era, the Iraqi government issued about $3 billion of new bonds in January 2006. These dollar denominated bonds pay 2.9 percent twice a year and mature in 2028, paying the face value of $100. To say the least, the market for these bonds is not robust: as of last week, a bond with a face value of $100 was trading at around $60. Professor Greenstone calculated that, from the markets’ standpoint, the implied default risk over the life of the bond was about 80 percent.”

“Of course, it’s worth asking whether bond traders know anything more about Iraq than the pundits do. It’s impossible to say with certainty, but the collective wisdom of financial markets has proved remarkably adept at evaluating events and predicting the future, even the turning points of war.

"During the American Civil War, for example, when Confederate forces lost at Gettysburg , Confederate cotton bonds traded in England dropped by about 14 percent. During World War II, German government bonds fell 7 percent when the Russians started their counterattack at Stalingrad in 1942, and French government bonds rose 16 percent after the Allied invasion at Normandy in 1944. Many such examples of the prescience of financial markets have been documented by economic historians. Comparing the yields on Iraqi bonds from the start of the surge in February to late August, Professor Greenstone calculated that the bondholders implicitly raised the chances of an Iraqi bond default by 40 percent. Over that period, Iraqi bond prices fell about 14 percent — as much as the Confederate cotton bonds fell after the battle of Gettysburg .”

The key point is that this is capitalism speaking. Not kleptocracy, posturing as free enterprise, but the genuine article in the form of open and knowing markets.

Clearly, we should demand that every Republican candidate, who is urging us to “stay the course” in Iraq, should prove his confidence in great outcomes from this bizarre and ill-defined "utopian adventure in nation-building."

Each of these war-boosters now has a golden opportunity to display admirable honesty and committment, simply by putting his money where his mouth is. By staking his entire wealth upon the same bet that he wants us to make, with our nation, with our sons and daughters, and with our good name.

Tell Mitt and Rudy and Fred and all the rest that they can do this (and gain our respect) by investing all they have in Iraqi government bonds.



sociotard said...

Calling on the Hawks to put their money where their mouth is? Now that is an idea. I wish I had a camera. I'd send it in as a question to the Youtube debates. Or perhaps you could, Dr. Brin? CNN might just go for a famous name.

Anonymous said...

You really ought to site the source for the bonds story:

David Brin said...

Thanks anonymous.

Zechariah, do you know exactly how, when etc to submit such questions?

Anonymous said...

Dr. Brin,

Information on the YouTube Republican Debate is here:

Deadline Nov 25th.

Anonymous said...

Wouldn't a politician investing in Iraqi government bonds be inviting a cry of "conflict of interest"?

Anonymous said...

This reminds me of one article where they found members of the US congress were twice as successful in picking stocks as professional investors. Despite most of them having no financial expertise! Bottom line was that they had access to information that no one else has and were using it to enrich themselves.

The other thing we should realize is that the Nazis were highly successful in deceiving and intimidating the capitalist financial markets until 1943 when failure was obvious to everyone. So markets are no proof of actual values when the government controls the flow of information.

Anonymous said...

I have now heard the final proof that you David Brin know nothing about Libertarian Philosophy,
To wit, advocating starting a war, to remove Saddam Hussein.

The prime tenet of libertarianism is non aggression. I.e. the golden rule, do unto others as you would have done unto you.

Such arrant nonsense that some brilliant plan could export enlightenment through the barrel of a rifle.

That is a belief in Wilsonian foreign policy or Jacobinism of making the world safe for democracy
by forcing our world view on another country can actually succeed.

If anything this whole sad episode shows that the fools in Washington cannot be trusted with War powers, either the neocons or the Democrats.

We should realize that we cannot afford an interventionist foreign policy. The fall of the value of the dollar shows that we are bankrupting this country in trying to be the policeman or the humanitarian of the world.

The whole policy is illegal as well as immoral.

Anonymous said...

From Zorgon the Malevolent. Login now not working, go figure:

Libertarianism remains the least well-defined and most nebulous of all the major political philosophies in vogue today, so it seems unfair to accuse anyone of knowing nothing about libertariansim. Your libertarianism is my anarchy, his middle-of-the-road liberalism, and her classic moderate 50s Republicanism.

My concern lies with Dr. Brin's touchingly naive faith in markets. The title of this post clearly contradicts the observed facts: if there's anything markets aren't, it's impartial.

Markets are highly inefficient, they're prone to wild panics and bubbles, they typically reward crazy unproductive behavior while punishing some of the most productive behavior, and markets utterly fail to reward or even allow long-term planning.

Markets do some things well, and other poorly or not at all. Examples of things that markets do very well include: pounding down the cost of mass-market mfrd goods, rewarding lowest-common-denominator mass market pandering, and allowing monopolies or monopsonies to accumulate unlimited financial power. Examples of things markets can't do: universal public K-12 education, public health programs like vaccinations, universal free libraries, preventing corporate pollution, keeping food untainted and safe to eat, regulating big pharma, and preventing pyramid schemes and other MLM scams. These latter are examples of social policies that hugely benefit everyone, but which the market itself cannot provide -- a classic example of the "tragedy of the commons."

In prediction markets these pathologies would manifest themselves as:
[1] Mostly short-term perdictions and few long-term predictions;
[2] Scammers who grow adept at gaming the system with vague predictions;
[3] The creation of increasingly elaborate derivative instruments whose behavior is so complex that the quant can claim "I predicted [X]" when s/he really didn't. See
this site for details:
[3] Lowest-common-denominator predictions rather than useful ones. I.e., any prediction market is likely to be overwhelmingly dominated by predictions of who will win the next World Wrestling championship, with so few people in the market for predictions about, say, whether we'll have a war with Iran that those predictions couldn't even be properly valued.

Americans' boundless faith in the mythical power of markets remains as naively touching as the mindless certainty of late 19th century cancer victims that coal tar would cure them of their ills. Esepcially when we consider that large blocks of the American economy have now been given over to entirely anti-market effectively communistic methods of organizing capital and labor (open source peer production like Ubuntu and Mozilla; muni power & water & sewage projects; rural electrifation; municipal broadband; free public libraries; public vaccinations; universal K-12 education; citizen's cimewatch committees; volunteer soup kitchens; and non-profit pulishers and food drives and community outreach programs of all kinds) that it's clear that capitalistic markets, while good for some aspects of society, certainly can't run all of society, and would be a disaster if we implemented 'em universally in American society.

So why anyone wouldn't expect a prediction market to turn into a giant Enron-style fiasco utterly baffles me. The magic of the markets, like the magic of the Tooth Fairy, doesn't exist.

BTW, 'twould prove trivial for Repubs to take your challenge and scam their way out of it. A nice butterfly straddle trade with highly leveraged put and call options straddling either side of the Iraqi bonds would enable any Repub to truthfully announce, "I put 90% of my money in Iraqi bonds!" while coming out a winner no matter what happened. Financial markets are giant scam machines, not magic mirrors for seeing into the future.

Don't believe me? FIne, believe the world's best bond trader, Bill Gross, and the scholarly research by Richard Bernstein on which he bases his conclusion:

"The problem is, as Peter Bernstein
points out in an August 2002 research piece entitled The Trouble With Earnings,
at least 50% of the earnings growth over the past 40 years has been earnings of
the "mystical" kind - pro forma, operating, phonied up. Those "earnings" didn't
flow through to dividends. In addition a goodly portion of [the traditional claim that the stock market over the long term accrues an annual percentage rate of return of] 8-9
percent - and the faster portion it turns out - has come from newly created
companies that are not even listed and available for purchase by outside
investors. The balance after subtracting 4 percent inflation… has been near the
.6% real growth of the past 100 years or the .8% of the past 50 years. You are
being hoodwinked America. You pays your money and you gets…you gets...a dividend
yield and a little bit of dividend growth: .6% real over the last 100 years."

Anonymous said...

Dang . . . NYC's Consolidated Edison electric company still had a DC electrical distribution service in operation until yesterday:

It's a holdover from the early years of electrical service, when Edison was still battling Tesla for current supremacy.

There were still a few buildings that used Edison-flavored juice for elevators and other equipment. (Well, actually they still use it, but now that have transformers.) I guess it just wasn't economical to ship Leyden Jars full of DC through Con-Ed's rickety pneumatic tube system.

I suppose it's only a matter of time before the New Amsterdam Academy of Elevator Operation stops issuing diplomas, and who knows how much longer the goat-carts of The Greater Chelsea Whale Oil & Coal Delivery Company will roam the streets of Gotham?


David Brin said...

ErnieG is clearly part of the idealist/romantic wing of libertarianism, typified by Rand and Rothbard.

Alas, all romantics are “definers”. They define others as “not us” at the drop of any excuse at all. Tolkien did it. Lucas. The confederates. The Nazis. It is far more common in human history than the alternative.

Take the mutant warping of libertarianism, away from focusing on gradual but steady enhancement of human opportunity, liberty and empowered reciprocal accountability, turning it instead into a purist and highly sanctimonious catechism of non-coercion. As if that catechism has ANY root or grounding in human evolution, biology, history, culture or pragmatic optimization. Or - indeed - in most religion!

Sanctimony is a marvelous drug high... and a distraction that allows these “pro market” "anti-coercion" libertarians not only to exile/banish/define-as-other anyone who doesn't fit the sancto-definition.

It also lets them utterly ignore what forces KILLED markets and freedom across most of human history. Take their obsession on “government bureaucrats” and hatred of Franklin Roosevelt. Almost comic book loony, given that 99% of nascent markets and democracies in the past were murdered by an entirely different enemy. One that LP groups like the Cato Institute now whore for.

There are some libertarians who have the modernist-pragmatic personality trait of the Enlightenment. Those who can actually negotiate with others instead of seeing all disagreement as a deep flaw of idealism or character. The notion of gradual enhancement of freedom through the empowerment of citizenship and dispersal of accountability is not anathema to those who have the humility to admit they do not have all answers. Only a dedication to the goal.

As for Saddam, he was an utter monster. Decent people are obliged to fight monsters. Without the heroes who fought OTHER monsters, like Hitler, Ernie would be in no safe comfy position to theorize idealistically about perfect non-aggression. I consider his existence and freedom to spout nonsense to be proof that those heroes were right.

Zorgon’s ingratitude is less purely silly. But it’s still ingratitude. Markets and democracy and courts and science gave him the tools he is using right now. They are profoundly imperfect and corruptible... but the key point is they are inherently ABOUT reciprocal accountability. Hence nearly all of their faults have to do with failures of RA and all their successes happen whjen RA functions well.

FIND a failure of markets and it is usually when RA was stymied. Try looking at it that way and a lot will make sense. Markets aren't an enemy. They are a liberal enlightenment tool that is always, always attacked by the enemies of freedom. The way they always fight democracy and justice and science.

In fact, I agree that most investment wealth today is generated by collusion or “magic”. Capitalism is in deep, deep trouble. The right is killing it. Aristocratism, the great enemy of markets, it on the loose.

Anonymous said...

Dr. Brin asserted:
Zorgon’s ingratitude is less purely silly. But it’s still ingratitude.

Why does saying "Markets do some things well, but not other things" constitute ingratitude? That sounds like a commonsense fair-minded and balanced assessment, doesn't it?

Incidentally, in making this statement of alleged "ingratitude" I'm merely pointing out what Lester Thurow, dean of the Sloan School of Management, Thorstein Veblen, Ludwig von Mises, Kahneman and Tversky, and many other highly esteemed economists have pointed out long since.

Are all these highly lauded economists guilty of "ingratitude"? Or are they instead merely stating the well-documented fact that markets aren't a magic wand, a one-size-fits-all universal cure for all of society's ills?

Dr. Brin went on to claim:
Markets and democracy and courts and science gave him the tools he is using right now.

Democracy and courts and science certainly gave many of the tools I'm using right now to state my dissent, but markets...not so much. I would caution Dr. Brin to recall that the internet arose from DARPANET -- a federally-funded essentially communistic project, like the interstate highway program, which would never ever ever have been started if it had been left to big business. Just imagine proposing building the internet to the board of directors of, say, ITT, back in 1969:

"Okay, here's what we'll do -- we'll spend tens of billions of dollars to build a distributed packet-switched nationwide data network that will be open to everyone, and that charges nothing for transferring data. We probably won't make a dime until around 1993. Also, most of the bandwidth of our new digital network will be used for porn and phony penis-extension scam advertisments called "spam" and pirated music and movies."

The board of directors would pitch the VP who offered up that business plan right out the nearest window.

So Dr. Brin's own example destroys itself and proves my point even more firmly. Giant projects like the internet or the Human Genome Project, or the interstate highway system, or the National Institutde of Health, or the CDC, or the initial deployment of integrated circuits in Minuteman missiles, are impossible for markets to undertake. They're impossible because although the benefits to society are fabulous, the payoff is very uncertain, it takes an insanely long time to see the payoff (typically at least a generation, or around 30 years!), and immense amounts of capital must be sunk into projects like DARPANET with absolutely no return on investment (ROI) for most of that time. Markets simply cannot work that way. A board of directors, when faced with a business plan which required tens or hundreds of billions of up-front investment, 30 years before the company expected to see a dime of profit out of the project, and an expectation that perhaps 60% to 80% of the investment will represent pure sunk costs that will wind up going bust (although the remaining 20% to 40% of such long-term investments will produce fabulous wealth beyond the wildest dreams of Croesus himself)...why, that board of directors would rebel. If they didn't, they'd be sued into obvlivion by the shareholders. And rightly so.

Please note that I have repeatedly said that markets do some things well. That's praising the markets, isn't it? Why am I guilty of "ingratitude" for praising capital markets? That doesn't make sense to me.

I think Dr. Brin's lack of knowledge of economics is showing here when he goes on to assert that "They are profoundly imperfect and corruptible... but the key point is they are inherently ABOUT reciprocal accountability."

It's certainly true that democracy and the courts and science are about reciprocal accountablity -- but markets...not so much. In fact, corporations are inherently totalitarian structures in which there is zero accountability at the top to the people at the bottom. Also, there's very little accountability to shareholders, except in the broadest sense -- big shareholders who don't like a corporation's policies basically have only one realistic option: sell their stock. That's not accountability in any meaningful sense.

Compare with a politician. Suppose your Senator refused to take any phone calls and receive any letters or ever see any of his constituents and said to the people who voted for him, "Your only choice if you don't like what I'm doing is to vote me out. I'm not going to listen to you and I will never change my behavior based on what you think or say. Vote me out or get lost." That senator would be acting like a capital market! You tell me -- is that reciprocal accountability?

The observation that corporations are totalitarian in structure is not new. It has always been that way. A corporation, like an army, is not and cannot be a democracy or a jury of one's peers or a scientific symposium open to every possible point of view. A corporation has to have one guy at the top making decisions and everyone else has to follow orders. That might not be wonderfully pleasant to contemplate, but it works in real life -- and, as with symphony orchestras, if you try to get rid of the conductor, the guy giving orders, it just doesn't work.

My point, and the point of many many other highly respected economists like Lester Thurow and Thorstein Veblen, is that this gives corporations certain strengths and certain weaknesses. It means there are some things market can do very well, and other things markets can't do well, or at all. A corporation, like an army, plays a certain role, and when it tries to step outside that role, it fails -- as we've seen when the U.S. army has tried to play the role of a national constabulary in Iraq, and has failed horribly.

Dr. Brin goes on to claim that "Nearly all their faults have to do with failures of reciprocal accountability..." This proves eminently true of courts and science and democracy, but not at all with markets. The only kind of accountability a corporation has (assuming it doesn't commit outright crimes) is that the market will punish it if people refuse to buy its products. The market has absolutely no power to dictate specific behaviors to corporations; only to make the company go bust, or become more profitable. That's not accountability!

In fact, the stock market works precisely because it doesn't give a damn about popular sentiment and only values the brutal bottom line. Otherwise, beloved but unprofitable companies (like steam train railroad lines) would flourish and loathed but highly efficient companies like Microsoft would watch their stock price drop to zero.

Dr. Brin claims "Find a failure of markets and it is usually when RA was stymied." I wonder if you have any facts and figures to back up that claim? What we actually observe is that markets typically fail when reciprocal accountability is most perfectly observed -- the best example being a bank run. In a bank run the individual bank become 100% accountable, which means it goes broke. Not good. The solution to the problem of bank runs, of course, is for the gummint to step in and act as guarantor of last resort, which is an entirely non-market solution.

I really think Dr. Brin lacks some basic awareness of economics here, so permit me to dilate on some notable failures of the market. The classic market failure is the absolute inability to do long-term basic R&D. Markets do some things well, and other things very poorly, and long-term fundamental basic R&D is one of the things markets can't do at all. The internet and semiconductors and the human genome project and current biotechnology and atomic power and communications satellites all came out of generations-long basic R&D projects undertaken initially by the federal government, and in a few cases by the quasi-communistic soviet-style Bell Labs, which was an entirely independent arm of a highly regulated monopoly that cannot be described as a traditional market in any meaningful sense of the word. (Bell Labs was never ever required to show a profit or produce marketable products.) In a market, you've got a choice: the Bell System gave you no choice for many years. If you wanted a phone, you had to get a Bell phone in your home. That's not a market.

Markets were incapable of putting in the kind of dollars for the 20 or 30 years required with no ROI in order to push this sort of fundamental R&D forward. Most of Dr. Brin's pre-science-fictional career was spent at university and directly or indirectly funded by various publicly supported non-profit science foundations and science grants, most federally funded, so I'm sensing a great deal of hypocrisy here. Without anticapitalistic essentially communistic large-scale federal science grants and federal science foundations and humongous federal funding for pure research in universities that slurp at the public trough with billions in annual tax breaks from the government, Dr. Brin would've starved many years ago.

By the way, Slurping at the pubic trough" can be a very good thing. I'm not crticizing. I'm just saying -- nobody expects to produce the next maser or the next Pentium IV CPU and turn a profit next week when they fund planetary research. And rightly so. It's not something the markets can fund.

Markets do some things very well. Markets are superb at taking basic R&D and turning it into a useful application. Markets took DARPANET and turned it into Google. Big science couldn't have done that. Markets took semiconductors and turned 'em into cellphones & CD players. Bug gummint couldn't have done that. Markets are now taking the sequenced human genome and they're turning it into cures for a myriad diseases, and once again, big gummint or socialized medicine couldn't do that.

Big science as it is practiced today, in fact, Dr. Brin's bailiwick, planetary science along with particle physics and materials sciecne and all that other heavy-duty major basic R&D, is absolutely beyond the scale of even a single nation today -- let alone a single corporation. Many nations collaborated to build the LHC in Europe. Is Dr. Brin really claiming that any possible corporation or chaebol or keiretsu of corporations could fund the LHC? Or the NIH? Or the Minuteman missile project that gave us the first ICs? Or DARPANET? Or the VLBI radio telescope array? Or the National Cancer Institute? or Sandia Laboratory?

Dr. Brin points out "Markets aren't an enemy," and they certainly aren't. They have limitations, that's all. Markets are extremely valuable -- as long as we recognize those limitations. But I think the evidence is now starting to show that markets simply cannot handle some very large-scale projects, like building operating systems, anywhere near as well as open source peer production can. OSPP, by the way, is really a soviet -- that is, a collective which runs along communistic lines and is entirely antithetical to conventional market economics. It's politically incorrect to say it, but some of the most important elements of the American economy are actually soviets: the W3C, open source peer production, the NIH, the National Science Foundation, the CDC, the internet backbones, the human genome project, etc. All soviets. All anticapitalist collectives which operate in ways diametrically opposed to classical capital markets.

Note that I'm not saying all our economy should be made up of soviets -- that was the communist mistake, and it was foolish. But some of our economy has historically been composed of soviets (K-12 education is the most obvious example, ditto university libraries and free universal local libraries), so despite the railings of the neocons, pure market capitalism is just not appropriate for every last nook and cranny of our economy. For much of it, yes, but not all.

Dr. Brin goes on to claim:
They are a liberal enlightenment tool that is always, always attacked by the enemies of freedom.

This is a bit of an ad hominem attack. sir, and is beneath you. If you study the origins of the capital markets, you discover that the very first bank was started by whores to safeguard their earnings. Yes, the cult of Isis made so many talents of silver from templte prostitutes that they had to find a way to do something with their earnings, so they started the world's first bank.

Whores giving blowjobs to Roman soldiers does not strike me as a "liberal enlightenment tool." You might be talking about the first international bourses, which gained considerable sophistication in the Enlightenment but which actually began during the so-called Medieval industrial revolution as a way to deal with the problem of currency differentials when trade along the Slik Road really picked up. Some people along the Silk Road used things like salt (!) for money, you see, so you needed an international exchange system, which meant letters of credit. These long predated the Enlightenment, so Dr. Brin's facts are simply not in order here.

See "The Origin of the Bill of Exchange" by Abbott Payson Usher,
The Journal of Political Economy, Vol. 22, No. 6 (Jun., 1914), pp. 566-576

Dr. Brin went on to aver:
n fact, I agree that most investment wealth today is generated by collusion or “magic”.

Do you have any facts and figures to back that up? I don't know that that's true. Biotech seems to be generating huge amounts of money along with the health care industry. These two absolutely dwarf every other industry in the U.S. economy, AFAICT. U.S. health care works. It's just way too expensive (read: inefficient). But there's no question that those overpriced MRI scans and heart transplanets and lasik surgeries and bone grafts do work. No scam there!

Dr. Rrin remarked:
Capitalism is in deep, deep trouble. The right is killing it. Aristocratism, the great enemy of markets, it on the loose.

I don't know that this is true either. Capitalism's in one of its periodic slumps in popular esteem, which we've seen many times before. The great Panic of 1845, the Gilded Age, the Great Depression, the bear market of the 70s caused by the Arab oil embargs, the sickening aftertaste of Reagan-era corruption emboied by Ivan Boesky & the S&L bailout... These were all passing phases. Markets are resilient and robust, and they bounced right back after every one of these dysfunctional troughs. I see no sign that capitalism faces any fundamental problems today. Scammers and cronies have succeeded in pillaging lots of wealth from the system by various Ponzi schemes, but the scammers are in the process of getting flushed out of the body politic like waste. Just today I saw an article that says a judge is allowing investors to go after Ken Lay's estate. The message here is clear: thievery doesn't work. Try it and you'll go to the pokey and your assets will get siezed. I think that's encouraging, not discouraging. Blackwater is getting its immunity yanked, Halliburtion is getting investigated, the cronies appointed by the White House are all going to jail or getting sued into oblivion. I think capitalism is bouncing right back and will self-adjust. Looks like I've got a lot more faith in the market than Dr. Brin has!

Dr. Brin allowed as how:
Aristocratism, the great enemy of the markets, is on the loose.
Actually, the most fundamental challenge markets face now seems to be commons-based open source peer production. This doesn't mean just operating systems like Ubuntu linux (which I use and cherish) or wonderful software tools like Planet CCRMA (if ya love computer music, gotta give that one a try!) or boons to mankind like Wikipedia or MySQL.

No, open-source commons based peer production also means incredibly subversive social tsunamis like the grameen bank. That's now the largest lender in India. You think Enron was a tectonic shift? Wait till you see grameen-bank-style lending destroy conventional U.S. banks. Wait till Bank of America and Ciiticorp go bust because American grameen banks are eating their lunch. With no shareholders and no dividends and no need for profit and millions of microlenders to distribut the risk down to nothing, grameen banks have the potential to annihilate the entire conventional capital-market financial ecosophere. In another 40 years, Wall Street may look like Cambodia after Agent Orange...there could well be grass growing in the streets. Why do we need a profit motive or concentrations of wealth for lending?

If I were Dr. Brin (or the chairman of Citicorp), that's what I'd be afraid of -- not some of the Veep's cronies looting a few billion with the aid of Halliburton and Blackwater.

Anonymous said...

anonymous(zorgon is it?),
you say that the National Highway System, designed for civil defense, would not have been built by commercial means.

Right before the Civil War, we had railroads crisscrossing civilized America. All built by commercial entities.

What we didn't have were railroads that were compatible with each other, or that didn't steal people blind (like Carnegie).

Anonymous said...

Given how much help the Government gave the railroads (landgrants, right of ways, eminent domain siezing lands, sweetheart deals, etc) one could argue it was done by the government with a capitalist partner.

The internet is a classic example of 'unintended consequences' in technology. A system for communicating between military units post nuclear war adapted to direct mail advertising, bypassing local blue laws, and babling about socio-political trends... tell one of the Generals who wanted it that what would happen to Arpanet, and he'd think you were insane.

David Brin said...

Zorgon, ouch! It is one thing for me to waste my time posting long missives on my site. But you are spending your lifespan posting long screeds on another man’s COMMENTS section. You’d be better off making your own blog and then clipping in “best of” summaries here, with active links to your main wisdom.

Having said that, I have only time to dash a quick response to a couple of your statements.

I totally agree that today’s corporations are horrible distortions in which a few hundred golf buddies vote each other onto corporate boards in order to steal billions from stockholders while delivering leadership that is no better than any other group of a few hundred narrow, secretive men would deliver. Say, government bureaucrats or kings. For sollusive aristocrats to claim they are inherently good decision-makers, just because they chant catechisms of capitalism - while destroying markets - is astonishingly hypocritical and destructive of the very thing they claim to believe in.

To understand this, just type the following into a Google search:
“GAR Guided Allocation of Resources”

But, yet again, you miss the point. These rapacious SOBs are ENEMIES of markets! They are the very same force - aristocratic oligarchism - that demolished markets throughout history.

Your final sentence was insulting in the extreme. I was forecasting and praising Open Source (e.g. in EARTH) while you were still sucking at the socialist teat. Your portrayal of my motives only shows ignorance and willful stupidity, unworthy of you.

Consider the possibility that you might be mistaken and driven to unfairness out of reflex, hot anger.

Hawker, as usual, is wise. But Hawker, here is a case where Zorgon has a point. Nobody has ever, ever offered an explanation for what happened, when the USA simply gave the Internet away to the world. It was the single most selfless and bizarely farsighted act that any of us have ever witnessed.

Anonymous said...

>with opponents of the Iraq War perceiving all the strategic failures

"Der Krieg ist eine blo├če Fortsetzung der Politik mit anderen Mitteln"

Carl von Clausewitz was indeed right. And by now, it should be plainly obvious to anyone that the real reason (i.e., political motivation) that Bush went into Iraq was to get Saddam. And he succeeded. I will never forget the US military reaction when it was announced they'd caught him. Some almost literally jumped for joy. They'd succeeded in their war aims. (Besides the fact they'd also completely destroyed the Iraqi Army) George W. Bush won the war.

And please, spare me another utterly biased and pointless lecture on what a great military leader Bill "The Tale of Sir Robin" was. The other night on the History Channel, I saw a couple of toothless Somalian thugs bragging about how they scared off the mighty US military. That's the legacy of Bill Clinton as military commander.


David Brin said...

Ignoring the fact that all of Europe (except Russia) reveres the man that gave them peace for the first time in 4,000 years.

Only a moron would keep bringing up Somalia when the real comparison is the vastly more important Balkans. You KNOW that is the comparison. And theres are NO qualities of Balkans vs Iraq in which Clinton does not come out better, by orders of magnitude.

As for Saddam, if I were given half a trillion dollars - or indeed half a billion - to kill him, I could have. You could have. And saved the US taxpayer a trillion dollars in the process.

You wave and screech. But try REFUTING. The generals and admirals all respected Clinton (some of them grudgingly).

They nearly all hate and despise Bush with a red-hot livid passion.

There is your fundamental. Screech about Somalia all you want (has Bush fixed it?) But the fundamental is that he's destroying America, as we speak. And people with brains instead of dogma can see it.

Anonymous said...

Well Brin in the interest of helpful criticism, and getting off this destructive point counter point argument. I would challenge you about calling Sadam a monster it’s dehumanizing and for many reasons I don’t think it helps the debate. He did a slew of immoral things but killing him has solved nothing, and seems to have made it worse. Sadly he was a human and I imagine that large portion of Humanity would like to imitate him if they could get away with it.

I would like to see a debate about if both the GOP and Democrats are decedents of a liberal tradition. One that while fantastically appealing and successful seems to be falling apart after 200 years when applied to government structures. The fact that our nation expelled all the Tory and the beginning of our first war should make it a short one.

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

Not sure I understand either point.

I do not feel behooved to grant equal "human" moral status to somebody who systematically denied the humanity - or right to live - of several million people.

I should leave Saddam alone because he's human too? That is as absolutist a moral position - and thus just as romantically silly - as ErnieG's proclamation against ALL coercive force. in principle. Yes, humanity needs to keep moving in both directions -- the spread of tolerance and abandonment of coercion. But, ironically, the purists in these matters would deny us our ability to make pragmatic progress. Which starts with the eradication of blatant, murderous monsters.

As for the failure of the Enlightenment Experiment, well, such forecasts have been made for a very long time. Read Marx circa 1875. Read Oswald Spengler's DECLINE OF THE WEST circa 1920 (Do it! Go read Spengler and report back! He was HUGE in the wake of WWI!)

Read Orwell in the wake of WWII.

Ironies abound. e.g. libertarians venomously denouncing FDR, who almost single-handedly prevented the radicalization of the American populace and staved off their rush toward simplistic ideologies of fascism or communism. (A delusion that has commonality with those rightwing bozos who praise the "greatest generation" of the Depression and WWI... yet howl that that generation was stupid for voting for Roosevelt.)

Or these modern ignoramuses' total ignorance of the industrial philosphies of Taylor or Henry Ford, whose notion of an enhanced consumer/worker class up-ended all of Marx's assumptions.

Not Spengler nor Marx nor Orwell could see the possibility of leaders as mature as George Marshall, because the cynical temperament cannot abide such an image. The notion that pragmatic men, well-gorunded in basic decency, might negotiate better conditions for all, in a spirit of willing progress.

Dig it, we still have EVERYTHING that we need, in order for the Enlightenment to thrive as never before. A highly educated world population, empowered by Internet-delivered knowledge and dedicated to problem-solving, could achieve wonders.

It is the cynical romantics who do not want this to happen. We are ruled by one set -- a bunch of classic theft-aristocrats. But there are others. This nasty human tendency abounds in all directions, making otherwise smart people doctrinaire and unwilling to negotiate.

Spengler may only have missed by a century or so.

Anonymous said...

As a man who was a member of the military when Saddam was captured, I can assure you we didn't jump for joy. We gave the release of tension sigh, one given by a man who has finished a hard job. We stood, and said, "We can go home now. It's over. Two or three months more, and we're out of here and go back to our lives."

How naive we were!

Saddam was not 'the' objective of the administration. Control and dominance were. Control of the oil fields (not needed to USE them, but to prevent thier use too soon), dominance of the MidEast nations in airstrike range of the Iraqi airfields we know controlled.

Didn't work, did it?

panzerjensen said...
This comment has been removed by a blog administrator.
David Brin said...

A screech and hysterical laugh cannot substitute for evidence and reason.

The only thing you exhibit is fanatical loyalty to a "side" that has betrayed our military, our economy, our people and our country.

Go do it somewhere else. Don't return until it is to reason with us. Instead of screeching.

Anonymous said...

Brin, while I have the utmost respect for you and your work, the troll is right for once. This is the internet, and seeing as panzerjensen's second comment is correctly spelled (if the removed post was indeed in l33t or something similar then you were justified), his obvious lack of understanding of the bill of rights aside, I don't see what else could possibly have justified removing his post. If you censor your own debate, nomatter how braindead the participants (and indeed he does seem to have a lack of grey matter), you're no better than those who would see all open discourse crushed.

- A longtime lurker and admirer

Unknown said...

No, in a forum like this (which is, of course, private - hence why first amendment rights aren't necessary... DB can't stop anyone from making their voice heard in general) it is perfectly legitimate to ban anyone whose sole purpose is disruption, no matter how they go about doing so.

Concern trolling, continual insulting, pure vulgarity ... it doesn't matter.

If they are not only failing to contribute, but actively trying to hinder, there is no reason to leave them the ability to speak.

I mean, if someone ran into a Bush press conference with a loudspeaker and just started screaming gibberish into it to try to drown him out, I think security would be perfectly justified in removing that person - and that's governmental use of censorship.

Anonymous said...

Ok I will try to make my point clearer. Whenever a person gets labeled as a monster it prevents both parties from ever getting their legitimate needs met. This is not to say we should “leave him alone” I can think of a dozen ways to prevent him from denying others humanity without calling him a Monster. The most effective of these you cogently stated in the Transparent Society but if both parties think of the other as Monsters it will not work and we get stuck with the mess we have in the Middle East. This idea is explained upon in the book by Marshal Rosenberg on non-violent communication.

Orwell and a lot of those you mention, were wrong about the prescription to fix our society. But my point was that Reagan, GOP neo-liberals, and neo-cons are in decedents of our Enlightenment/Liberal culture. They may deny it, but when we expelled all the conservative Tories in 1776-1784 America closed down conservatism. Then the French revolution put the nail in the coffin in Europe. Reagan thought highly of Tom Paine and his idea to spread democracy at the point of a gun. Honest conservatives like those described in the book Crunchy Cons care about keeping change slow enough to ensure that nothing good is lost.

Hope that clears that up.

David Brin said...

This blog is to some extent a public place. But it is also my "home" in a sense. And while Panzer's behavior was not officially obscene, it was driveling insipid and immature in the extreme. I have a perfect right to warn such a person, then, after several warnings, show him in the clearest possible way that he is unwelcome here.

I will defend to the death his right to make his own blog. He may even drop in here, whenever he likes, and - under comments - say "come to this URL to see my posted nyah nyah taunt that farts in Brin's general direction!"

But, at a site that is dedicated to evidence and reasoned argument among adults, I have no obligation to host playground screeches of "pooh-pooh kaka!"

(In fact, as you know, I put up with a lot of THOSE, from DonQ, so long as he laced them with occasional interesting material, insights from the left or at least answering questions germane to the topic at-hand. Something that Panzer has never, ever done.)

As for my over-use of the word, "monster", Doug makes a very good point. And probably a valid one. I rail against the way that romantics create pure "us-them" dichotomies in order to dehumanize their enemies. I claim that my overall philosophy... plus my personality tendency to aim contrarianism in all directions... preserves me from being accused of perpetrating romantic injustices.

But that is bullshit, of course. My fudamental nature, as a mythologist and writer, is to have been wired from birth with every nasty, creative, ecstatic, roaring, insightful, artistic and nonsensical romantic impulse there is! If I have dedicated all of my fealty to the Enlightenment, that does not mean I am all cold logic. I can feel rage and anger. I can hate.

And there comes a point when hatred is appropriate.

Look, I am on record having urged liberals to calm down, during the Reagan era. To concede his many good points, in order to gain credibility criticising his many bad ones. Few listened. But I am on record. (The USSR was indeed an "evil empire.")

But this situation is different. These klepto-liar-traitors have no redeeming qualities. If they are NOT deliberately dismantling the nation and civilization that I love, then they are doing a great job of imitating that program, by happenstance of dogmantism, insatiable robbery and titanic incompetence.

I MUST make clear that this is not politics as usual. They have crossed a line... a very generous zone in which people can be legitimate opponents, mistaken, foolish, but still fellow citizens. People to reason with. As I tried reasoning with Don Q. As I tried reasoning with Panzer.

I never used "monster" to describe either of them, by the way. My prevalent feeling is sadness. Though they represent shrill left-right extremes, I wish them well... though not here.

But people, there ARE monsters in the world. Oath-breakers and betrayers for whom Dante reserved the final circle of hell. There are differences among them, of course. I wanted Saddam dead -- but the Bushites that succored him and propped and enabled him and collaborated in his murders? I would still call W "sir" and answer a phone call. His version of monstrous betrayal should be punished with denial of power, full public revelation of all crimes, and the disdain of history.

Still, the word applies. His criminal gang long ago passed the line.

panzerjensen said...

>DB can't stop anyone from making their voice heard in general

Well don't worry, because I'll let my voice be heard from now on by voting Republican the rest of my life. And after that little anti-American censorship stunt, you can take that Ostrich bullshit and shove it up your hypocritical asses. Because I've never breathed fresher air in my life. Kiss my ass mother fuckers.

I don't need this. So I'll let you Democratic Party rejects argue with the stupid cunt who actually thinks censorship is a good idea, and the dude who's going out of his way to kiss Saddam's ass like some kind of pining homo. Boy, this website sure does attract a lot of people with political acumen!

David Brin said...

Now THAT one I will leave posted.

Any man who would declare in advance that he will enslave his mind to, and vote forever for, a particular party, letting it control him robotically for the rest of his life, no matter what it does...

...all because one day a host told him to behave better as a guest...

...was never a person approachable by reason. I think you'll all understand now, if he's excised as a matter of routine.

But it does bring up an interesting question. I know we have some moderate lefties here (though alas, not the real article, since DonQ left). And several libertarians. And a bunch of former GOP folks. But is it possible to find a GENUINE neocon supporter who will come here and argue with us cogently?

I know a couple... genuine ostriches in that they seem nice and decent folk, though Fox-reciters, line -by-line. I'll see if I can recruit one or two. You guys are welcome also, to try.

Unknown said...

Panzer: Do you actually expect anyone to believe you weren't already going to do so?

You made your absolute refusal to consider the possibility your stance might be the incorrect one perfectly clear already.

We already know that we can't hope to change your mind - all you can possibly do is convince the silent majority who might be watching this blog that you're right... and I don't think you're even coming close to accomplishing that, deleted comments or not.

Christian J. Schulte said...

Okay - a bunch of friends have just left my house, I'm just a little drunk, and I'm feeling just crazy enough to post what I'm actually thinking, although I'll probably regret this later.

Fact is, in general, I'm probably politically opposed to most of the people who feel at home here, and when this neocon crisis is over, I'll go back to opposing all y'all.

But for now, I feel more camaraderie among people with a certain style of discourse, and Panzer, even though I've probably voted with him more often than not (sigh), is not in that group.

So I'm just asking that the smart folk here remember that most of us libertarian-conservative Republicans would rather dwell on what what we have in common as Americans and get back to that point where the debate is about how best to achieve America's promise, not who is or isn't deserving of the label "American."

Have a good night, all, and thank you, Dr. Brin, for hosting this site. It's where I come for a reminder what's important politically, in the long run.

David Brin said...

Thank you cj.

You appear to be PRECISELY the kind of libertarian-conservative that I want our save-the-enlightenment alliance to reach out to.

Your phrase "the neocon crisis" says it all. This is NOT about conservatism vs liberalism in any classic sense of the word. It is not left-vs-right. The issue is far too important.

It is precisely as if a ruling Democratic party had been taken over by rabid communists... possibly puppetted by the KGB, relentlessly acting to destroy the republic. I would have found that outrageous and objectionable. I hope and pray that enough Democrats would wake up in time to help their Republican neighbors bring that putsch to an end.

It happens that, in our generation, with commmunism a smoldering memory, the dogmatic/moronic/destructive force happens to have taken over the other party, the one on the right. Still, it is a situation just as tragic. Just as terrifying. Just as dangerous and perilous to everything we hold dear.

And to be frank, I wonder about those who blithely denounce their neighbors, for being misled by the Bushites. People who never once in their life had to deal with the frisson of horror that one faces, when realizing "this time MY side has gone mad..." such people have no business feeling smug. I dare them to swear that they would be quick to notice, if that ever happened!

And it may happen, someday. If the class system returns in full force, and the poor and middle radicalize, and the left resurges... it could happen, so don't be smug, you fellows on the left. You, too, may facethat dread. That shame.

People like cj are the reason I have held so strongly that decent conservatives are the key. They matter more than any ten classic democrats in this struggle. If you folks can waken your pals. If you can wrest control of the GOP back into the hands of pragmatic, courteous, reasonable men and women, there may be something yet to save, in a reborn American conservatism. God I hope so.

If only to give poor, spinning Barry Goldwater some rest, in peace.

Jumper said...

It's a good idea to encourage others to get their own blogs. For example, I would jump over to Zorgon's from time to time. But not the other guy.

One thing the Panzer said, however, I wanted to comment on: the business about some Somalis gloating over their "victory." The mere thought of this makes just about every American angry. But what it amounts to is some punks dissing us. Hating us. Hating ME, also. Now we've all heard various debates in the past about how Americans should or should not not care if they are loved by the rest of the world, and the various debates get stretched and tortured until no one knows what their debating adversaries are talking about, but I wanted to cut past that to make the point that there will always be evil punks in the world who hate this country, and our policy should not be determined by kneejerk reactions to something like that.

Woozle said...

CJ: Although I tend to fall more on the liberal/dem side of the fence (even in the best of times), I thought I should add my voice in support of your post. "Neocon crisis" -- yes! These people are not conservatives or Republicans; they are wolves in political-sheep's clothing (where a "sheep" is a metaphor for something perceived as safe-and-on-our-side and therefore who we want to support against those evil Democrats with the fake witch-noses the neocons put on them).

Mainly, though, your post reminded me of a question I've been gnawing on for awhile: What is conservatism? What is Republicanism? Whose definitions have we been using, and why? We need to have better documentation of these and other terms, so that we can recognize when they are hijacked (as now), and -- more importantly -- reveal the hijacking to those who hold those terms in high esteem (much as Dr.B has been attempting to do with the Ostrich Campaign).

Conserve: "to keep in a safe or sound state", "to avoid wasteful or destructive use of". Conservatism: "2 a: disposition in politics to preserve what is established b: a political philosophy based on tradition and social stability, stressing established institutions, and preferring gradual development to abrupt change; specifically : such a philosophy calling for lower taxes, limited government regulation of business and investing, a strong national defense, and individual financial responsibility for personal needs (as retirement income or health-care coverage) 3: the tendency to prefer an existing or traditional situation to change"

And, ya know, that generally sounds pretty good to me. I've never been crazy about traditions, but here in the US we have a tradition of tolerance for the non-traditional... so as long as the "tradition" you're wanting mainly has to do with governance -- something we could certainly use now, as Bush has substantially trashed many of our most important governance traditions! -- I'm all for it.

"preserve that which is established" -- you mean, like keeping the environment "in a safe or sound state" and avoiding "wasteful or destructive use of" natural resources?

"social stability" -- like giving gay people the right to marry, so they too can have stable families? And not rabble-rousing anti-gay sentiment, thus causing social disruption, in order to enhance one's personal power? Sounds good.

"limited government regulation..." -- like simplifying the rules so anyone can understand them, rather than requiring a team of lawyers to find the best exploit? Sounds good.

"individual financial responsibility..." -- yeah, I know, this one translates to an argument against government-run welfare programs and "socialized medicine". So, ok, who is "individually responsible" for the needs of those who are unable to help themselves? If nobody helps them, they become more of a burden, not less. I wouldn't be so cruel as to force them to appeal to the government for help, so I'm totally with the conservatives on the idea that we need to find a better solution (though of course it would not be responsible to discontinue existing programs, flawed as they are, until there is a replacement online). This is obviously a problem in need of some focused, non-power-mongering, conservatively-based thinking (i.e. not wildly spendthrift, and taking personal responsibility for the consequences)... though it may require some non-traditional solutions, since none of the traditional ones seem to be working.

(Resisting the urge to make a suggestion about returning to the tradition of whatever the system was before Reagan closed all the mental health care facilities back in the 80s, because that tradition may well have been deeply flawed; more research is needed. I presume that conservatism does not require blind adherence to tradition.)

So... where do I sign up for this "conservatism" thing?

(Speaking as someone who first registered to vote primarily for the chance to vote against Jesse Helms, who was plainly a radical trying to overturn our established and revered American traditions of tolerance and personal freedom.)

Anonymous said...

Ohmigoshgolly, Panzer says he won't vote for a Democrat because a blogger who calls the Democrats "the better of the two" parties (darned with faint praise) won't let him post frothing at the mouth diatribes? So, given a choice between (exagerated for comedic effect) a Republican caught publicly kicking small dogs and children and the second coming of Harry Truman, Panzer will vote for the puppy abuser because (shudder) David Brin (who for the current election prefers Democrats) edited his posts.

OK. PJ has gone beyond "Ostrich" to mole.

Now, I've had far worse things done to me by self proclaimed Republicans, including nasty letters sent to my Commanding Officer... but I can think of circumstances when I would vote Republican. Because I realize that a. they didn't represent the Republican party and b. even if they did, there are times when you must vote for the opposition to keep an even worse person out.

Tony Fisk said...

cj, there is nothing wrong with admitting to a conservative streak. Maintaining the status quo is usually the best strategy, except when it's time to jump!

The 'tanked' twit exhibits the sort of mentality I last encountered in the schoolyard: the goading, needling bully who seeks to get his chosen victim to lash out and then claim a just cause for wading in.

What does he get out of it? Apart from the thrill of righteous indignation, it would be reaction, mostly (like this comment and others). A bit of noise to drown out a POV he doesn't like. Reasoned argument, where it is offered, is used as an enticement only.

In a way, it is a pity that David blocked one of his comments: I distinctly recall a reference to neocons saving us from all being killed by terrorists (this, from a blatant felinophobe!).
And we all know what happened in the dead of winter to the singers of brave Sir Robyn's exploits!
Oh, well. All the less to react to.

Anonymous said...

I believe that the United States currently has one conservative party and one reactionary party.

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