Tuesday, October 09, 2012

The "Tytler" Calumny -- Is Democracy Hopeless?

Well... it's back.  One of the best examples of a mass-hypnotic pseudo-wisdom that helps to lobotomize politics in American life.

"A democracy is always temporary in nature; it simply cannot exist as a permanent form of government. A democracy will continue to exist up until the time that voters discover that they can vote themselves largesse from the public treasury. From that moment on, the majority always votes for the candidates who promise the most benefits from the public treasury, with the result that every democracy will finally collapse over loose fiscal policy, (which is) always followed by a dictatorship." 

This widely-circulated nostrum is called the "Tytler Calumny" and it is the great example of what has gone wrong with the mental processes of our friends on the right, who used to be represented in sage debate by great minds like Barry Goldwater and Friedrich Hayek and William F. Buckley...  but who are now reduced to slinging around aphorisms and fact-free fox-assertions.

(In fairness, after watching Bill O'Reilly hold his own with Jon Stewart in the great 2012 Rumble in the Air-Conditioned Auditorium, I have to admit, there are still islands of sort-of almost Goldwater-style adult-honesty on that side, though lamentably rare, as this missive will show you. (LATER addendum: despite my optimism, it later became clear that Bill O'Reilly was no better than his cult-peers.))

First off, although named for a 19th Century Englishman Alexander Tytler, there is no actual evidence that Tytler actually said it! This aphorism is also often attributed falsely to historian Arnold Toynbee or Lord Thomas Macauley, or even Alexis de Tocqueville, although recent scholarship appears to follow a trail leading to a 1943 speech by one Henning Webb Prentis, Jr., President of the Armstrong Cork Company.

It is often accompanied by another feat of cynicism called the Fatal Sequence.

"Great nations rise and fall in a 200 year cycle. The people go from bondage to spiritual truth, to great courage, from courage to liberty, from liberty to abundance, from abundance to selfishness, from selfishness to complacency, from complacency to apathy, from apathy to dependence, from dependence back again to bondage."

Now, as one who had the chance to "channel" the great science-fiction psychohistorian Hari Seldon, I admit to sharing the soft spot that many SF fans feel toward the central notion of Isaac Asimov's Foundation Series -- that the arc of history can be somehow easily be tracked, patterns-perceived, predictions made. And indeed, there certainly are some patterns!  Such as the dominance, in 99% of human societies, of small cabals of owner oligarchs, who passed on their property-based power to sons who never did a thing to earn it. The persistent-feudal pattern that Adam Smith and the American Founders strove so hard to break. Yes, I see the pattern-seeking allure.

But I've learned to be wary of glib nostrums that seem just too convenient to be true.

== Stroking the ego, starving the intellect ==

Consider how the Tytler Calumny appeals to the vanity of the one repeating it.  The sad cynicism of someone who considers himself above the hoi polloi of the mere "people."  It is a blithe dismissal of even the possibility that a democracy can maintain itself. This despite the fact that -- if you include the vigorous colonial legislatures -- we in the U.S. have three centuries of ever-ripening success, on this continent alone, becoming steadily mightier at the same pace that we've grown more inclusive.

The calumny draws believers, despite the fact that our democracy has accomplished more prodigious feats, more wonders and more improvements to human happiness and knowledge than all of humanity's other nations and cultures combined.  By far.  By orders of magnitude.

The Tytler nostrum (appraised here on Snopes) sounds "logical" in its smug contempt for the masses... except that it runs contrary to actual fact.  For example, when the citizens of Athens voted against distributing the windfall from new silver mines to every citizen, and instead asked Themistocles to invest it in their future.  Would most kings have done that?

All through the 1990s, Bill Clinton allied himself with fiscal moderates of both parties to stave off efforts by the supply-siders to raid the budget surplus and give it all -- not to the People -- but to the rich.  Clinton and Senators Tsongas (D) and Rudman (R) and others in the moderate middle were able to accomplish that because they were backed up by the public! By opinion polls showing that the middle class overwhelmingly wanted the budget surplus spent on paying down debt. And not on tax cuts for themselves. 

Should we be surprised? Indeed, who is more likely to have the habit of weighing the consequences of debt? Middle class citizens who must wrestle with tradeoffs, stanching their impulses and appetites every day, in favor of budgeting tightly for the future?  Or aristocrats who are accustomed to indulging whims out of copious coffers, knowing that there are always more coppers, pennies, pfennigs etc to be squeezed from those below them on the pyramid?

Both before and after 2001, those who were demanding that all the surplus be "given back to us, right now" were aristocrats. The same caste that bankrupted most past societies. 

Are the builders of Versailles, the Schönbrunn, the Taj Mahal and Forbidden City - palatial fripperies that impoverished their nations - in any position to lecture us about deferred gratification? Should middle class Americans, who invested in universities, vast R&D efforts and endeavors to access tens of trillions of dollars in resources awaiting us in space, listen to wastrel scions chiding us from 50-room yachts, demanding that we give them more?

== The Fiscal Cliff Is Born ==

DeficitFiscalCliffWhen Clinton left office, there was no one left to block the raiders -- who swarmed in to vote themselves "largesse" from the public treasury.  Largesse in the form of giga-tax cuts for the uber-oligarchy, declaring that the red ink would be paid back within a year, by supply-side miracles!  Yes, that was promised. Explicitly vowed as the direct result.

Ah. Pity that not one prediction ever made by Supply Siders ever came even remotely close to coming true. And that is ever. At any level, from the federal budget to states like Kansas, Texas and Oklahoma. Exactly as described by Adam Smith, in The Wealth of Nations, most oligarchs did not spend their tax-cut largesse on productive enterprises or risky capital formation.  They spent it on dividend-rent-seeking securities and hedge speculations that withdrew cash from circulation but boosted asset bubbles, leading to staggering deficits and the Second Great Depression.

Dig this well, so that the Tytler Calumny can die its deserved death.  
The middle class demanded debt pay-down.  The aristocracy demanded short-sighted greed.  Exactly as they did in 1789 France, when the First Estate refused to help pay for the nation that benefited them... and thus signed their own fates.

The 1789 lords' rationalization - that they needed all the money to invest in their own duchies and estates and in jobs for their tenants - was precisely the same as the supply siders and "job-creators" use today. Flat out lies for which they later paid their lives.

== Conservatives Who Can See ==

Now, not everyone on today's American right has been lobotomized by Fox. Some of the heirs of Barry Goldwater have taken notice. For example, Mike Lofgren, in The American Conservative  (one of the few journals of the right that today would be considered sane by Goldwater and Buckley) has penned a scathing denunciation of how a worldwide caste of uber-wealthy appears to be seceding from the nations and peoples they increasingly control. In "Revolt of the Rich," Lofgren shows how this process - bringing us toward wealth disparities like those of 1789 France - threaten the very fabric of our western/american social contract.

"It is no coincidence that as the Supreme Court has been removing the last constraints on the legalized corruption of politicians, the American standard of living has been falling at the fastest rate in decades. According to the Federal Reserve Board’s report of June 2012, the median net worth of families plummeted almost 40 percent between 2007 and 2010."
Here is another snippet:

"If a morally acceptable American conservatism is ever to extricate itself from a pseudo-scientific inverted Marxist economic theory, it must grasp that order, tradition, and stability are not coterminous with an uncritical worship of the Almighty Dollar, nor with obeisance to the demands of the super wealthy. Conservatives need to think about the world they want: do they really desire a social Darwinist dystopia?

Look across the last 6000 years, the spendthrift aristocracy that ran nearly every kingdom, empire or feudal region typified Tytler's quotation, far more than the primly puritan democrats of Athens, Florence, Venice, the medieval guilds, or Britain or America. Committing horrors of statecraft, blundering and crushing freedom and repressing markets, the lords were the enemies of liberty in 99% of human cultures... the enemies of market capitalism who were most denounced by Adam Smith.

In sharp contrast -- and reiterating because it bears repeating -- middle class folk understand debt, better than anybody.  They walk its minefields every single day. Unlike the poor, they have skills and have options and practice dealing with those choices. They mostly manage to use debt as a tool... one not to be indulged excessively.  Unlike the rich, they have no illusions that you can manipulate your way out of any jam, privatizing profits and socializing costs.  Railing against government, then suckling at its teat.  The middle class -- the citizens who make democracy work -- don't have that luxury.  That delusion.

== The Paradox of "Deciders and Allocators" ==

Hypocrites who adore rule-by-oligarchy violate the fundamental principles of Adam Smith, Friedrich Hayek and the entire conservative wing of mainstream economics, who all maintain that economic decisions are best made when we maximize the number of participants who get to know and participate in a basically flat and fair and open market.  (And the same competitive-accountability principle applies in democracy and science.)

Does it surprise you to learn that I think Hayek and Smith were absolutely right about this?  All humans are delusional, but the greater the number in-the-know and applying reciprocal accountability, the more likely each delusion is to be caught by somebody.

Oh, have you listened to those who decry that top-down decisions should not be made by the "limited number" of say 100,000 accountable and skilled and unbiased civil servants?  Sure, they have a point.

Only these loud critics then - without an eyeblink of irony - swerve and excuse secret, self-interested and conniving "picking winners and losers" when it is done by less than 3,000 elite-oligarch golf buddies in the CEO/billionaire caste. Praising that closed cabal as smart and accountable-enough, they dare to call that "capitalism."

It is not capitalism! It is the age-old enemy of capitalism. Ask Adam Smith.

See: Allocation vs. Markets: An Ancient Struggle with strange modern implications.

== What is the crux?  ==

What do I aim to accomplish here? I want you all to recognize and be able to name the Tytler Calumny, the next time your favorite ostrich or grouchy uncle starts reciting this poisonously treasonable and noxiously lying nostrum, bemoaning the impossibility that democracy can possibly survive the inherent contradictions of human nature.

In fact, I agree that Human Nature contains the seeds of downfall for our Enlightenment Experiment.  But the pattern we must fight is not some mystical 200 year "cycle" of decadence that has no known examples from history to back it up!

Rather, the truly ubiquitous pattern that has proved ruinous to human civilization is the very one that spoilt 99% of other societies, leading small clades of delusional lords to evade criticism and to rule by owner-right, making endless errors of statecraft that we now call "history." (And no, I don't prefer idiotic socialism! What I'll fight for is our pragmatic, wide-open renaissance.)

Those who keep repeating the Tytler Calumny seem eager to deride our Great Experiment, chopping away at its ankles, at its morale, implying that democracy is inherently doomed, and that we must return to the pattern that ruled other human cultures.  A pattern with a far worse, mostly vapid and stupid track record of misgovernment.

Whose tune are they parroting, when these fools demean democracy and extoll aristocracy? The lyrics come from Fox News, co-owned by billionaire media mogul Rupert Murdoch and a couple of coal baron pals and by the Sa'udi Royal House.

Huh.  Some coincidence. Lords preaching the inevitability of a return to lordship. The biggest reason not to heed them is that they clearly are too dumb to suss out where this leads.

Allons enfants de la Patrie, le jour de gloire est arrivĂ©...


FOLOWUP:  In a November 2012 report we learn that that Senate Republicans applied pressure on the neutral nonpartisan Congressional Research Service (CRS) in September to withdraw a report finding that lowering marginal tax rates for the wealthiest Americans had no effect on economic growth or job creation.

"The pressure applied to the research service comes amid a broader Republican effort to raise questions about research and statistics that were once trusted as nonpartisan and apolitical," the Times reported. Democrats in Congress resurfaced the report. Republicans objected that it underminde the governing fiscal philosophy of the party, that tax cuts for the wealthy will spur growth and benefit everybody."

Changes over 65 years in the top marginal tax rate and the top capital gains rate do not correlate with economic growth. Reduction in top rates appears to be uncorrelated with saving, investment, and productivity growth. However, top rate reductions do associate with increasing divergence of national income going to the top 0.1%

This is important... and was always obvious.  Even in 1776 Adam Smith described what the rich actually do with sudden cash infusions. They put it to work in "passive rent seeking" and only rarely into capital equipment or risky new products and services. (Risk taking can be rewarded in other ways.) And that cash flow to the rich reduces the velocity of money. If there were ever a time not to do that, it is during a recession, when we want high money velocity, put cash in middle class pockets! (In fairness, during runaway inflation, largesse to the rich - reducing money velocity - actually makes some sense.) 

George H.W. Bush called Supply Side "voodoo economics. It was and is.  And it is the "people" - the middle classes - who are the ones best able to resist the temptation to vote themselves "largesse" and defer gratification for the sake of their kids.


ZarPaulus said...

No mention of Plato? His home city-state was only democratic for a couple centuries at a time before lapsing into tyranny and oligarchy.

Ian said...

ZarPaulius - but there's no evidence that Athenian democracy collapsed because of the people voting themselves money from the public purse.

For that matter, considering that even amongst freeborn Athenian males only a minority got to vote, it's difficult to see how it could.

(The majority of freeborn males resident in Athnes were either foreigners with no voting rights or Metics - men born in Athens of families that had immigrated from other Greek states.)

The story of The 70 - the metics who led the successful rovulution against the Spartan-installed tyrants and restored Athenian democracy is far more worthy of celebration than the spartans at Thermopylae.

(Incidentally, after Thrasybulus and the Seventy expelled the 30 tyrants, Athenian democracy continued on for another couple of centuries, even under Macedonian dominance, before finally beign extinguished by the Romans.)

Tom Crowl said...

The growing 'meme' suggesting that people want to destroy the society they live in by sucking it dry has no support in history.

(though they will undermine a society they believe excludes them from fair participation... and this is a very different thing)

From The Rise and Fall of the Third Reich by William Shirer (who lived through it):

"No class or group or party in Germany could escape its share of responsibility for the abandonment of the democratic Republic and the advent of Adolf Hitler. The cardinal error of the Germans who opposed Nazism was their failure to unite against it. At the crest of their popular strength, in July 1932, the National Socialists had attained but 37 per cent of the vote."

The rise of Hitler wasn't because of the rise of the mob... it was because conservative elements in the military, industry and banking backed policies of his they preferred... and corrupted the political landscape to the point of allowing him to achieve absolute power.

Now he later did achieve considerable popularity in Germany for a few years in the mid-30's... and this is a disgrace. But this popularity was built on a great deal of deception...made possible by the death of the Republic and a total control of media... along with the weakness of other powers in Europe who stood by when he occupied the Rhineland (very popular in Germany).

So it is possible for a nation to go 'crazy' as Germany actually did... but the best defense to that is (and would have been) an EMPOWERED citizenry... in ways that are meaningful.

As you know, I contend a key part of the solution lies not in banning money in politics... but rather lies in making the lobbying capability more broadly available via a simple micro-transaction through a neutral network... (the power of large numbers and small money)

and that network itself has a potential for becoming a sort of 'civic hub'...

I figure that with such a capability it'll take about 15 minutes for the political class to wake up to a new reality.

Ian said...

On a ttoally different topic; I've been thinking about the dilemma the west faces in Syria where they're afraid to entrust heavy weaposn to the FSA for fear that they'll end up in the hands of Islamist extremists.

I'm wondering if there's a technical fix for this: weapons that can be deactivated by remote control or that will self-destruct or simply become inoperable if they don;t receive a regular encrypted singal.

Yes, I can see the downside of what would happen if security were breahced.0

Then too maybe you could design a propellant or explosive that degraded relatively quickly once exposed to oxygen: break the seal and you have, say, 90 days to use the weapon.

Gadfly said...

That said ... nobody has fully tested the Tyler Calumny on middle-class tax breaks, and the poor h ave lower voting turnout rates than the rich. And, to be more left-wing, quite arguably, the rich, Fortune 500 businesses, etc. actually illustrate that Tyler, or Anon E. Mouse, were fairly accurate. Besides the constitutional technicality that we're a republic, not a democracy, we're really an oligarchy beneath the republican trappings.

jollyreaper said...

I honestly go back and forth on this.

I've always wanted to be a pragmatist, not being beholden to any particular ideology but figuring out what works and what doesn't and fancy theories can go hang. I'd considered myself a pragmatic conservative but much of this was absorbed via osmosis, not having grown up in the 70's and only knowing of "lefty lunacy" second-hand. I believed the national mythology of the 80's, America as the cowboy in the white hat.

Conservative lunacy in the face of Clinton and actually reading about the heinous crap we were involved in during the Cold War disabused me of the white hat notion and I became an increasingly disgruntled lefty.

But seriously, I'm of two minds about this. On one hand I want to believe in the wisdom of the people, of common sense ruling at the end of the day, of the ability of the people to see through BS artists and make good decisions. But then I see the kind of crap people fall for from hokey religions to lotteries and psychic advisers and the top-rated television programs and I wonder if the average citizen should even be allowed around sharp objects.

So, is there a conspiracy to dumb us down or are we doing it to ourselves? Is there even a right answer to the question of popular sovereignty or dictatorship or are these just two terrible answers with similarly catastrophic results?

The thing I've noticed about most conservative doctrines is that the sound really, really good on bumper stickers, are pithy and memorable and can even be internally self-consistent. They just have nothing to do with the real world. It's like reading love scenes written by conservative authors, it only works in fiction.

Actually, even better, since you mentioned Papa Bear O'Reilly... his Loofah/Falafel Scandal. This is a man who is used to getting women by dint of superior paycheck. When you are a multi-millionaire media figure, people will put up with crap from you that no working-class schlub could get away with. Read the transcripts where he's trying to seduce his female employee.

This kind of crap only works in novels or if you have enough money that the normal bounds of social behavior no longer apply to you. And money can buy a hell of a lot of leeway.

I want to believe the people are smart enough for democracy to work. I fear that they are too dumb to preserve it. My greatest fear is that the civilization we have created, inspired by the Enlightenment, seeming to be a glorious change from the endless cycle of power-mad kings and princes killing each other, is just a historic anomaly, an artifact of cheap energy, and we will return to the endless cycle of violence. It'll be another thousand years of brutality and the modern era will be seen as a lost golden age, one whose like will never be seen again.

Alcibar said...


I think that most people that voice that concern are not anti democracy or pro oligarch, but merely fearful of the debt the government is accumulating. I would like to understand the plan that either party has to deal with the debt other than magical thinking. If the answer is to try and inflate the debt away over time than let that be made clear to the voters. Unfortunately, I think inflation is the plan from both parties and it will never be articulated. Politicians are really only interested in redistributing money to their power base.

An interesting question is "what is the moral limit for total, not marginal taxation on an high income earner -- 90%, 70% 50%, 30 % ?" By high earner I mean on the order of $500k/year. I would be interested in what people posting on your blog think that the limit should be and justifications for the limit.

I believe the US population needs to agree on the level of government we want and need, and then we should agree to fund the government from current government revenue. Mortgaging the future of our children is immoral. We have already sold them into debt slavery by making student loans readily available with no due diligence. I mainly blame the repubs for this although dems probably should take some of the credit.

Feeling a bit pessamistic regardless who wins in November.

Anyone think we are watching the end game Kensean Economics.

Alcibar said...

By the way, I believe it is relatively easy for rich taxpayers to give the government extra money. Certainly easier than reducing our taxes by hiring a raft of tax experts. Interesting that no one admits to this practice. Seems like a bipartisan consensus -- Koch brothers, Gates, Soros, Wizard from Omaha no one does it. They all want the middle and upper middle class money to fund their party.

Ian said...

"I think that most people that voice that concern are not anti democracy or pro oligarch, but merely fearful of the debt the government is accumulating. I would like to understand the plan that either party has to deal with the debt other than magical thinking."

1. Moderately higher taxation on the rich (i.e. the rates they were paying during the boom years iof the 1990's).

2. Constraining growth in government spending to less than the growth in the economy and in government revenue.

In other words, do what worked last time. This is, in effect, the Democrat position.

"Anyone think we are watching the end game Kensean Economics."

Considering that the economies that applied Keynesian principles properly (e.g. Germany, Sweden and Australia) are leading the developed world in economic growth and job creation: no.

There are two key elements to Keynesian demand management:

1. countercyclical increases in government sepnding during recessions;

2. raising government revenue and reducing government spending during expansions.

Only applying half the formula isn't a fair test of Keynesianism.

Alcibar said...

Before someone jumps on my above comment typo (our for their). I note that I am hardly rich, just a social liberal and fiscal conservative who has no real place in the current political structure.

Alcibar said...

Ian, where do we go from our current situation i.e. running a deficit of > greater than 1 T$. Hard to see a tax the rich solution to that problem. Not being rich I am ok with giving it a try, but seems like an unlikely solution unless you believe in the fantasy that the ultra rich in the US have 10's of T $ stashed off shore.

Ian said...

Again, it's essentially what Clinton did.

Higher tax revenue is one of part of the eqaution.

Economic growth is the next: as the economy grows and employment expands, government revenue rises because of lower welfare spending and more incoem to tax.

The third is to keep the growth in overall government spending lower than the growth in the economy and in government revenue.

Historically, Republican administrations have increased government spending at a greater rate the Democrats since AT LEAST the 1960's - that's regardless of which party controls congress.

Obama will be the first Democrat President since roosevelt who hasn't reduced the debt to GDP ratio.

Eisenhower was the Republican to do so (and he benefited from the military reductions after the Korean War ended).

If you're a fiscal conservative (who isn't?) you have to look past the rhetoric of the two parties and focus on their actual performance in office.

Doug S. said...

This Simpsons quote seems appropriate...

David Brin said...

ZarPaulus, Athens was defeated in war. The oligarchy -- for which Plato was a top apologist, propagandist (woulda done well on Fox) -- was IMPOSED on them by Sparta. And guess what? Within a generation the Athenians had democracy back! A bit less bawdy and level than before, but it was back.

The Athenian pattern in no way matched the Fatal Sequence. Yes, it had its own fatal flaws! But they bore no resemblance to Tytler or the FS, whatsoever.

" While many city-states throughout the Greek world broke down into vicious cycles of civil war and reprisal, Athens remained united and democratic, without interruption, until near the end of the 3rd century BC, and democracy, albeit interrupted several times by conquest or revolution, continued there until Roman times, several centuries later.[30]"

David Brin said...

Alcibar, remove two multi-trillion$ quagmire wars of "nation-building, vast largesse tax gifts to the rich, medicare Part D and the effects of the Second Depression, and my answer to you would be "what debt?"

Those were ALL GOP endeavors. So the first step to ending the debt cliff is eliminating the monsters.

You blame Keynsianism for THIS mess? If we had spent MORE in 2010 on infrastructure, putting a million men to work rebuilding roads and bridges, with money borrowed at the lowest interest rates in all of history -- we would be OUT of the depression by now. The GOP congress blocked it precisely in order to stretch the depression till these elections.

You are dead wrong about Soros and Gates and Buffett who have all said "Raise my taxes!" And I send an extra check against the national debt every singl;e year. So does Buffett. His is bigger than mine.

jollyreaper, you are looking at America as if it were one schizophrenic republic, filled with contradictory impulses. This is not true. We are in a war between Blue America - which wants science and moderate pragmatism and mixed state-corporate-individualist solutions to a myriad problems -- and Red America which is out of its cotton pickin' mind.

Alfred Differ said...

In his later years, Hayek spent quite a bit of time working at the subject of 'order' describing the different types and how much of what we have in our communities is a combination of both. The rules that we write to guide an organization lead to its members acting in a deliberate, designed manner to create order. If the rules are well-written, the order produces the desired outcomes. The rules that guide an organism to construct and maintain its order are not written or designed by anyone with the desire of producing the outcomes of that order. In fact, the outcomes are often unpredictable in detail and often unnoticed except by those who bother to trace cause and effect backwards.

The complexity of order in organizations is relatively low and can't be more detailed than the information available to central planners/designers permits them to guide the actions of the group. The minds available for this guidance are limited to those who write the rules.

The complexity of order in organisms is relatively high and can't easily surpass the knowledge known to members of such groups. The rules that create order do so by limiting actions of members in such a way as to enable limited coherency of their actions, but without central guidance. Each member guides themselves with whatever information they have while staying largely within the rules of the organism.

Modern corporations are a bit of both types of orders. Modern communities are mostly organisms except for a limited number of organizations acting within them, but they do so as members of an organism.

The more I read his later work, the more I realize that the primary thing that bothers me that the nutty folks on the right are doing is their drive to impose design upon an organism. Putting the aristocrats back in power turns our spontaneous groups into guided groups. There is no way this can work without killing the organism. It would be like me trying to consciously direct all the cells in my body to do what was needed for me to thrive. It can't be done. The nutty folks on the left want something similar, but with a benevolent government (meaning them) running things. This is the same thing with a supposedly different guiding elite.

We are where we are because we've been free to function mostly as a giant organism composed of smaller organisms and organizations that we make up and eliminate as needed.

duncan cairncross said...

My tuppence worth on "the dept"

What would you call a family that took in $100,000/year had property worth $2,000,000 and owed $100,000 on their mortgage?
I would say they were doing pretty well!

This is the situation with the USA, the government owned infrastructure in the USA is worth much more than 20x the GPD
It has been created over the last 200 years

The Tyler Calumny
I have asked in this forum before
This is presented as "inevitable"
Can any of you bright guys actually find a single example where the poor have voted a society into bankruptcy.
I know of several where the rich have done so - But I can't think of a single occasion when this has occurred
So much for a universal rule

I am really struggling with this bloody captcha thing

Tom Crowl said...

US corporations are sitting on more cash than at any point since World War 2!

(And that doesn't include the banks)

Yet we hear that corporations and banks need more public help?

It has to be pointed out that the Democrats... by failing to fight for a fairer distribution over the last several decades...

while embracing the Greenspan "put" and supporting exploding consumer debt as a convenient replacement...

Are exemplars at what becomes of a Party that loses touch with its roots.

BOTH responsible conservatism and liberalism become distorted by the dependence of the political classes on the financial and corporate sectors rather than the citizenry for sustenance.

jollyreaper said...

Nobody seems to want to talk about the following big questions:
1. You cannot have infinite growth in a finite system.
2. Our entire economic model is based on growth, not sustainability
3. The planet cannot take this kind of abuse.
4. You cannot have billionaire-concentrations of wealth without creating swaths of paupers. There's enough cookies for everyone to have one. Someone wants a dozen, eleven are going without.
5. American exceptionalism is seen as a fact instead of hubris.
6. It isn't even justified in the face of how far we have fallen as a nation.

Nobody talks about these things and politicians continue to lie and lie. When the official parties lose their legitimacy, people are willing to turn to desperate measures to bring back a sense of normalcy and security.

jollyreaper said...

@david regarding the war between red and blue

I keep flip-flopping between explanations for what I think is going on. I generally find vast conspiracies unworkable but simpler conspiracies more plausible. Illuminati? No. National Socialists overthrowing the Weimar Republic? Yes. Icke's space lizards or Bush and Cheney as masterminds behind 9-11? No. Bush and Cheney taking advantage of that tragedy to maneuver is into unforgivable wars, manipulating intelligence and lying to America? That's what we saw happen.

I tend to believe that real conspiracies work with found materials. The spymaster doesn't cause someone to be a traitor, he finds the preexisting weakness and provides an opportunity.

Near as I can figure it, our two parties represent the same thing, big money. The only thing that differs is who gets to call the shots. We are all like peasants with two rival princes fighting to claim the throne. It's not like either one of them are fighting for the masses, just for the right to be the boot on the serf's neck.

The culture war stuff takes natural and preexisting frictions existing in our society and amps them up for political advantage.

Near as I can see, nobody is really in charge at this point. The 1% are calling the economic shots but there's nobody really at the wheel, it's just a power vacuum thinly populated by the vacuous. We end up with political paralysis which is great for the people making bank on the status quo but is rotting away the timbers that hold this nation up and together.

What we are seeing isn't a vast top-down conspiracy but the result of a million different players looking out for number one with nobody stopping to look at the big picture. There's no leadership, no national unity, no commonality of purpose. And even as we need that, we have wedge issues being exploited. Never thought I'd see the day when teachers would be vilified as government fat cats.

Virgil Bierschwale said...

I don't claim to be as well read as anybody on this subject, but I will say that as somebody that used to make six figures and saw it all disappear, I have spent the last 10 years trying to find out what happened, and I can guarantee you that Mr. Brin is hitting the nail on the head.

I would like to urge you to read the following two articles in their entirety so that you will see what I am seeing.



Perhaps then, for those that are willing to work towards a better future, we can put aside our differences in an effort to leave a better future for our children as we disprove the "theories" that Mr. Brin discussed in this article?

Carl M. said...

The fatal sequence describes Rome, not Athens. The Roman republic became an empire soon after the plebians were given the right to vote.

As for Athens, what percentage of the population was able to "vote?" I put vote in quotes because the Athenians did not have a representative system. They had a legislature chose by lottery, much like we pick jurors today. No campaign finance needed.

The U.S. had a limited franchise for much of its history. Washington was an aristocrat in the Roman sense -- a billionaire in today's money.

And just how many democratic republics declined into dictatorship during the 20th Century from charismatic leftists? Consider post colonial Africa in this mix.

Oligarchy is indeed a democratic failure mode, but you undercount failure by populist demogogues.

Acacia H. said...

A point I recently tried to make over in Facebook lies with an insidious little statement people often talk about when considering voting for a politician: the lesser of two evils. I recently had a revelation as to just how damaging this statement is. This is a deliberate attempt to disenfranchise people and keep them from voting by equating BOTH sides as being evil.

This is not the truth.

Mitt Romney and Barack Obama (and by association the Republican and Democratic parties) are not evil. They have different philosophical beliefs concerning a number of subjects including personal rights, the duties of government, wealth, social structures, power, environmental protection, and so on. Neither position is right or wrong. Neither position is "good" or "evil." Instead, both are differing positions.

When you choose a political candidate, choose the one whose political beliefs most closely resemble your own and meet your priorities. Mind you, you may end up selecting one over the other if certain beliefs are more important than others (abortion seems to be a biggie here). But in the end you choose the candidate who backs your beliefs.

Just because he or she does not meet your criteria 100% of the time does not make him or her evil. It does not make the other candidate evil. It just means their beliefs do not match your own completely. As such, you are not voting the "lesser" of anything. Instead, you are voting for a candidate who best matches your own beliefs. You're voting for the greater of two candidates.

Robert A. Howard, Tangents Reviews

jollyreaper said...

More thought for food:

The Greeks, who had a penchant for giving names to things, had a convenient label for that source: anacyclosis. That was the moniker coined by the Greek historian Polybius, who chronicled the conquest of Greece by the Romans in the second century BCE. He noted that the squabbling city-states of the Greek world tended to cycle through a distinctive sequence of governments—monarchy, followed by aristocracy, followed by democracy, and then back around again to monarchy. It’s a cogent model, especially if you replace “monarchy” with “dictatorship” and “aristocracy” with “junta” to bring the terminology up to current standards.

The whole essay is worth a read.

Acacia H. said...

The "Democracy is Doomed" analogy also fails to consider two added factors: the impact of education and technological innovations. An educated population is difficult to control. Thus any dictatorship of the United States would last only so long as the people organizing to overthrow it. Even if the military was willing to support the overthrow of the government, the resulting rebellion by people would prevent it from staying in control more than a few years.

In addition, technological advancements have allowed for a huge interconnection of not only Americans, but humanity itself. We are more connected with the world than at any other time. We are able to educate ourselves... and no matter how hard someone tries to avoid materials that are contrary to their own worldview, these do creep in.

So, is U.S. Democracy doomed? No. It will suffer some fevers at times and it will be buffeted by stresses, both internal and external, but no matter how much people disagree, the majority agrees that the United States is ultimately one people. There is pride in saying "I am an American" even for those who may dislike some of what our nation has done.

Oh, best of all? Those who don't like what our nation is can always leave. Funny that most don't, isn't it.

Rob H.

rewinn said...

Let us not forget that our American military is heavily, HEAVILY invested in democracy.
It may be criticized for many things, and it has its share of crazies, but one of the MANY things to be proud about in our nation is our officer corps' devotion to our Constitution.
(The Military-Industrial Complex is a whole 'nother matter.)


Related matter:
2010 and 2011: the GOP cuts money for embassy security.
2012: GOP complains about embassy security.
Source: http://assets.nationaljournal.com/pdf/Dems-OGR-Libya.pdf (see page 5 for precise numbers)

Larry Headlund said...

@david regarding the SF connection.

A much more explicit Tytler reference is RAH. The first is from the High School History and Moral Philosophy class from Starship Troopers:

There is an old song which
asserts that `the best things in life are free.' Not true! Utterly false!
This was the tragic fallacy which brought on the decadence and collapse of the democracies of the twentieth century; those noble experiments failed
because the people had been led to believe that they could simply vote for
whatever they wanted . . . and get it, without toil, without sweat, without

and from the OCS H&MF class:
The unlimited democracies were unstable because their citizens were
not responsible for the fashion in which they exerted their sovereign
authority . . . other than through the tragic logic of history. The unique
`poll tax' that we must pay was unheard of. ... If he voted the impossible, the disastrous possible
happened instead -- and responsibility was then forced on him willy-nilly
and destroyed both him and his foundationless temple."

There is some other Tytler type comments in To Sail Beyond the Sunset. For example:
`"Bread and Circuses" is the cancer of democracy, the fatal disease for which there is no
cure. Democracy often works beautifully at first. But once a state extends the franchise to
every warm body, be he producer or parasite, the day marks the beginning of the end of
that state. For when the plebs discover that they can vote themselves bread and circuses
without limit and that the productive members of the body politic cannot stop them, they
will do so, until the state bleeds to death, or in its weakened condition the state succumbs
to an invader - the barbarians enter Rome.'

or speaking in his own voice in expanded Universe
Democracies usually collapse not too long after the plebs discover that they can
vote themselves bread and circuses. . . for a while.

Acacia H. said...

Yes, but RAH was something of an anarchist at heart. In "Time Enough for Love" he included hundreds of quotes from other books (which I actually consider the best part of the novel, though the "Western" story was also enjoyable), which included comments on Democracy: the view that 1,000 people know better than one person, and Autocracy: the view that one person knows better than 1,000 people (who chooses?).

In fact if you look at one of his best novels, "The Moon is a Harsh Mistress," you see his advocating a government that is so libertarian in nature that it is almost an anarchy... and considers the anarchy of the pre-invasion Luna to be the best of times for the Moon colonies. If only the Earth Governments hadn't been busy trying to kill the colony by shipping all its water off-planet!

RAH is also a product of his times. I must admit some curiosity as to how his views would have changed if he grew up in the 60s and 70s and witnessed all the changes we've seen in our lifetimes. Who knows. He might have ended up something like Dr. Brin. ;)

Rob H.

Gadfly said...

Here's my longer, more thorough takedown of how Brin is wrong: http://socraticgadfly.blogspot.com/2012/10/the-poor-dont-vote-themselves-welfare.html
Beyond being wrong on his analysis of real America, and rich and middle class both wanting handouts, and being wrong on the fact that we're a republic not a democracy, and like Rome, a republic with underpinnings of oligarchy, he's also laughably wrong about Bill Clinton.

He also stereotypes Bill Clinton as some white knight standing against corporate raiders. This is the same Bill Clinton who, with his minions such as Larry Summers, pushed for repeal of Glass-Steagall. Puhleeze.

If thoughts like that are "contrary" insight, Brin needs a brain check-up.

Acacia H. said...

You do realize Social Security is not a handout. Instead, it is an involuntary pension program run by the Federal government. As such, people getting money from it is not an "entitlement" because many of the people on it paid into it and get what they paid. The families of those who die before Social Security benefits go into effect often do not get a thing, while people who outlive their benefits will get extended benefits... but as part of the social safety net this was intended to be.

Social Security serves a second and more vital purpose: it puts our older people "out to pasture" as it were, freeing up jobs for younger people. This allows for unemployment rates to be at a lower level than they'd be if older people continued to work until they drop dead while on the job. This may have an added benefit of helping keep other people safe as an older bus driver (for instance) could cause a lot of damage if he suddenly suffered a heart attack or stroke while driving a bunch of people somewhere.

We also pay into Medicaid and Medicare. Yes, some people get onto it without paying into it, but this is part of the social obligation of civilization not to just abandon those who are incapable. It's a very Christian (and Jewish and Islamic) thing to do. It's the RIGHT thing to do. But just because some people benefit without paying in doesn't mean it's an entitlement... and when you consider that the families of those people DID pay into it... ultimately they are paid for in turn.

It is these things that is a vital part of American Exceptionalism. It's not our military power. It's not our economic power. It's our people and their ability to thrive. By abandoning our weak and old for the benefit of the rich getting tax breaks, we betray the very heart of what it is to be American.

Rob H.

Paul451 said...

Cracked writer hits on one of our host's pet memes.


He doesn't credit DB, so I assume he came up with it independently. It's good that there are more people thinking like this, that outrage-addiction is a neurological quirk, "natural" but still an "illness". (Although the writer seems more fatalistic about it.)

Meanwhile, elsewhere in the galaxy...


(30 tertynd - Because you can't stop at 29.)

David Brin said...

Alfred, thanks for your insights re Hayek,who - along with Adam Smith - is regularly betrayed by the right. Sounds like you'd like my "GAR vs FIBM" essay:

Jollyreaper, you lay down your six principles as if they ar automatically true. In fact, ALL of them are problematic. The Great Enlightenment experiment has produced vastly more wealth that earlier societies thought remotely possible, under their zero sum thinking. Only a small part of that expansion was do to ravishing resource exploitation. Most was due to technological advancement unleashed by freedom and competitive markets.

The Right insanely conflates those markets with the monopolists and oligarchs who attempt to take them over. The left stupidly decries competitive markets when they are the things creating opportunity for 7 billion humans to live in homes with electricity and fresh water where the girls grow up eager to have just 2 kids.

#3 is true and I say so in EARTH. So? The solution is ahead of us... vast improvements in efficiency are possible and indeed coming rapidly. You show zero sum thinking..

#4 is also zero sum and foolish. There are billionaires who got there by creating positive sum situations where everybody benefited, Tellingly, these are also the billionaires who seem least interested in leaving all their fortunes to spoiled brats. As policy, we must prevent oligarchy! But getting rich by providing new goods/services is not a sin.

#5 Refusal to recognize that Pax Americana saved the world and filled it with hope and progress (amid making many mistakes) is just willful ignoraminity. It is letting surged of emotion in the amygdala overwhelm blatantly obvious fact. Try telling it to folks in Poland, Lithuania, Estonia....

"Nobody talks about these things ..." Um right. You are so exceptional!

"Near as I can see, nobody is really in charge at this point. The 1% are calling the economic shots but there's nobody really at the wheel,"

Now you are making more sense. I explore this extensively in EXISTENCE!

David Brin said...

Carl M said "The fatal sequence describes Rome, not Athens. The Roman republic became an empire soon after the plebians were given the right to vote."

No, the Fatal Sequence is a puerile-light attempt to make sense of a high school version of Rome, taken largely from movies. In fact, the plebian assembles were powerful in the vigorous days of Rome and counterbalanced the patrician Senate. After the Gracci Brothers were murdered, the assemblies went into decline and so did Roman city dwellers participation in the army. The empire formed AFTER the assemblies declined, at which point you got Bread & Circuses, which were funded NOT by plebian votes but by Emperors fearing the mob.

In fact, there are no know examples of any society following the Tytler/Fatal Sequence pattern with any substantial fealty. It is the biggest of big lies.

If you STRETCH matters... well... the recent re-election of Hugo Chavez could be said to fit in a general thematic sense. But Venezuelan oil makes Chavez hardly a "bankrupter" rather than a redistributor. Cuba's Castro? Hm... there are pattern-recognition points... but only if you squint.

Castro and post-colonial africa were not... let me repeat... not democracies.

Oh sure. Lest we forget that one route to horrible tyranny was and remains via the left, have a look at this first hand report from North Korea's pathetic-pretense "Department Store Number One" and the piles of merchendise that no one was supposed to buy... a "potemkin" pretense (look it up) that showed the hypocrisy of communism. http://blog.skepticaldoctor.com/2010/01/15/classic-dalrymple-the-wilder-shores-of-marx-excerpt-1991.aspx

An isolated case? . Read Orwell's Homage to Catalonia. The left is dangerous! Ah, but Spain in the 1930s was torn by two fanaticisms propeling it to hell.  The other one, more traditional.  Let's not forget where the word "Potemkin" comes from.  The communists did not invent fakery-villages of prosperity.  These shows of false plenitude were also common under the czars.

But again... North Korea is NOT a democracy! The left does evil things at times. But the Tytler Calumny does not attack the left! It attacks democratic LIBERALISM!

Jonathan S. said...

RAH also expected our experiment in democracy to have collapsed by now - TEFL references a time in the late 20th century when you dared not venture outside your house in Kansas City without being heavily armed and armored, and of course we're supposed to elect Nehemiah Scudder this year and allow the country to be converted to an Evangelical Christian dictatorship within eight years tops. (Oddly, we did have someone who was more than a little reminiscent of Scudder running for the Republican nomination back in 2000. Even the Republicans didn't want him, as it turned out.)

I see no danger of the Republic collapsing because we dare to care for our poor. However, I've heard enough rumblings of discontent to wonder how long it would survive proposals to abandon our poor and weak, and disenfranchise our citizens (supposedly to prevent a crime that's all but nonexistent)...

David Brin said...

As I said, Tytler does not attack Leftism. It attacks the viability of liberal democracy.

Indeed, the best examples and quasi Tytler are today's Greece and Spain. There, a tyranny of the voting populace does not want to face hard economic facts. Granted. Let's see if it turns into the Fatal Sequence. Bets?

Jollyreaper, look up Thrasylubus. When Athenian democracy "ended" after their crushing defeat in the Pelopenesian War... that "ending" lasted just ten years or so. Then democracy came back for TWO CENTURIES until the arrival of Rome. Show me how that fits the fatal sequence pattern.

David Brin said...

Gadfly, name for me one Clinton era official who was convicted of malfeasance of office. Malfeasance of office of any kind. I'll wait.

Um... still waiting!!! Shall I wait forever?

Now name one that was even INDICTED for malfeasance of office. Malfeasance of office of any kind. Shall I wait...? Cue tick tock music....

The Republicans called the Clintonians the "most corrupt administration in US history" then spent on the order of half a billion dollars pursuing that big lie.

Bush divereted scores of FBI agents from counter-terror dutuies before 9/11, to look for smoking guns. (In itself Bush thus committed treason.) Still, the net result?

THE CLINTONIANS ARE THE ONLY ADMINISTRATION in US history to leave office with zero officials indicted or convicted for malfeasance of office. Malfeasance of office of any kind.

Gawsh, the sad thing about deepseated hates and amygdala-driven bias? The harsh emotions when confronted by.... facts.

jollyreaper said...

Jollyreaper, you lay down your six principles as if they ar automatically true.

I usually lay down the caveat "Unless I'm completely missing something here..."

In fact, ALL of them are problematic. The Great Enlightenment experiment has produced vastly more wealth that earlier societies thought remotely possible, under their zero sum thinking.

Is Malthus defeated or biding his time? There's always a big fight between techno-optimists and doomers.

I would like to believe in the progressive view of history, onwards and upwards, things getting better. I find the cyclical view of history very depressing. But I frankly find recent history to be pretty depressing.

Only a small part of that expansion was do to ravishing resource exploitation. Most was due to technological advancement unleashed by freedom and competitive markets.

How do you view the blowing through of our carbon reserves? Sanitation standards, cheap food, and proper medicine has allowed for a giant population explosion. Now the trends show that the doomer "population bomb" theory won't see us in the Soylent Green future but we are in the middle of the anthropocene mass extinction right now.

The Right insanely conflates those markets with the monopolists and oligarchs who attempt to take them over. The left stupidly decries competitive markets when they are the things creating opportunity for 7 billion humans to live in homes with electricity and fresh water where the girls grow up eager to have just 2 kids.

I'm in the States and I have to say when I hear the phrase free markets, I reach for my BS filter. Whatever the sins of the left, the right has a done a much better job of marketing and promotion. The only ideas the professional left are promoting (i.e. the democrats) are Republican ideas that only appear on the left because the rest of the party has moved so far to the right. The Republicans are beholden to the Tea Party. There's not even an equivalent name for the hard left, not in part because it's so vanishingly small. And even the progressive left does not have a seat at the table. There was a quote going around a while back, "the GOP fears their base, the Democrats hold theirs in contempt." And the amount of on-record hippie-punching from big-name Dems seems to bear this out.

#3 is true and I say so in EARTH. So? The solution is ahead of us... vast improvements in efficiency are possible and indeed coming rapidly. You show zero sum thinking..

Well, I see it like this: it doesn't matter if me and the other guy could accomplish more working together than against each other if he truly believes my death would be to his advantage and he's coming at me with a knife.

It may be theoretically possible for everyone to have a seat at the table and a slice of the pie but if the other guy feels otherwise and imposes them by force, you are forced to fight or die.

jollyreaper said...

#4 is also zero sum and foolish. There are billionaires who got there by creating positive sum situations where everybody benefited,

For every action there is an equal and opposite critical analysis. Every business biography I've ever read has talked about cutthroat, take-no-prisoners approaches. #1 on the rich list is the Mexican telecom mogul Carlos Helu who has a nasty personal history. Bill Gates' business history is well-known in the geek world. Warren Buffett has a reputation as a nice guy. I don't know of Amancio Ortega by name. Larry Ellison I know is a class-A jerk and terrible human being. Further down the list are the Waltons and anyone who knows the history of that company knows such wealth came at the expense of others.

While I'm not against people making money, the figures we're talking about here are pretty unbelievable.

Tellingly, these are also the billionaires who seem least interested in leaving all their fortunes to spoiled brats. As policy, we must prevent oligarchy! But getting rich by providing new goods/services is not a sin.

I'd not really felt the urge to tell people how much money they're allowed to make. My bias is against big anything. Big government, big business, big religion, size invites poor controls and increased corruption. I prefer big enough to do the job well, no bigger, and preferably with multiple redundant providers of any given thing so that there's no such thing as "too big to fail."

#5 Refusal to recognize that Pax Americana saved the world and filled it with hope and progress (amid making many mistakes) is just willful ignoraminity. It is letting surged of emotion in the amygdala overwhelm blatantly obvious fact. Try telling it to folks in Poland, Lithuania, Estonia....

And the communist dictatorship backed by the Soviets kept Yugoslavia together. :)

The post-war peace and stability across the majority of Europe has been remarkable, assuming we overlook the potential of the Cold War going hot if radars misidentified red balloons going by. The fall of the Soviet Union meant we got to see if this peace required the presence of a Cold War or if it could withstand the thaw. The jury is still out on this one. I had really high hopes for the EU but it appears to have some serious structural flaws without the political will to shore up the weak points.

jollyreaper said...

"Nobody talks about these things ..." Um right. You are so exceptional!

Clarification since I was not as obvious as I thought: nobody talks about them on the national stage, not the politicians, not the preponderance of the mainstream media. People are obviously talking about this on the net. I mean this blog, obviously, for starters!

The internet is the biggest game changer this generation, the ability for people to bypass the official opinion-shapers and talk amongst themselves. It makes it a whole lot easier to catch politicians in a lie when the same day they say it there's youtube videos pairing that with clips of them saying exactly the opposite.

"Near as I can see, nobody is really in charge at this point. The 1% are calling the economic shots but there's nobody really at the wheel,"

Now you are making more sense. I explore this extensively in EXISTENCE!

Yet another book on the digital pile. My pocket is straining from all those bytes.

Pretty much all of my complaints come down to extremism. The worst the doomers have gone on about have not come to pass but we're certainly worse off than the self-proclaimed moderates would have us believe. Likewise, we're not as well-off as the techno-utopians (James Howard Kunstler's term) promised us we would be but we are better off in many ways than we could have hoped for.

A pragmatic approach is not fixing what ain't broke and not keeping what is just because you're used to it. Communism seemed like a good idea to people dealing with the worst excesses of capitalism only it turned out to be an even rawer deal than what they'd had. I think that communism was a good thing in that it provided a threat that capitalism had to measure up to, be better than. In practical terms during the Cold War, it was better to live in the west than the east.

The fall of communism left capitalism like a retired football star with no need to remain in shape. Capitalism no longer has to be nice and we see the vast middle-class that had once been raised up turned upon and pillaged for profit.

I'm always trying to see where I might be going wrong, where my opinions could be wrong, what I might be overlooking, whose propaganda I might have inadvertently swallowed. I don't lay any claim to being a great sage or visionary. Mainly I just feel a great sense of helplessness and frustration because it seems like the problems are so large and nobody is interested in fixing them.

Ian said...

"The fatal sequence describes Rome, not Athens. The Roman republic became an empire soon after the plebians were given the right to vote."

The Plebs got the right to vote in 287 BC - that's over 200 years before the end of the Republic.

"As for Athens, what percentage of the population was able to "vote?" I put vote in quotes because the Athenians did not have a representative system. They had a legislature chose by lottery, much like we pick jurors today. No campaign finance needed."

Umm - not really.

JURIES were chosen by lot.

The Ecclessia, the nearest approximation of a legislature they had was open to participation by any free, adult, male Athenian with decisions being made by a popular vote. Remembering the Metics and the slaves, probably somewhere between a quarter and a third of all adult males resident in Athens could vote in the Ecclessia.

Ian said...

"Indeed, the best examples and quasi Tytler are today's Greece and Spain. There, a tyranny of the voting populace does not want to face hard economic facts. Granted. Let's see if it turns into the Fatal Sequence. Bets?"

Consider actual electoral results from both countries:

1. In 2011, Spain elected the Popular Party with an explicit mandate to cut public spending and increase taxes.

2. In Greece, SYRTIZA, the main anti-austerity party won just over 1/3 of the vote in the first election or 2012, falling to just over a quarter in the second election.

Australia went through its own slow-motion version of the crisis now confronting Greece and Spain back in the 70's and 80's. We got through it, so will they.

duncan cairncross said...

Re Greece and Spain

A lot of support for the "Anti Austerity" parties is from people like me who believe that taxes must rise and spending must drop


Now is the time for borrowing the cheap money and building infrastructure assets that will keep benefiting for decades

After the recession - raise taxes and cut spending

Ian said...

I hope people will forgive a little more pedantry regarding the Plebians and Roman society and politics.

A Plebian, by definition, was a Roman citizen who was not a Senator or a Equites but still owned property above a certain property.

Plebeians weren't the poor or working class as we understand it, they were closer to the middle class: farmers; shop keepers and skilled tradesmen.

Proletarii was the term for those Roman citizens who lacked sufficient property to qualify as Plebeians. The voting rights of the Proletarii were always strictly limited. (The Roman popular assembly which met in times of crisis was organized into "centuries" based on the members ability to contribute to the defense of the Republic. The centuries each had one vote but were of unequal size with the proletarian centuries beign by far the largest.) During the 1st century BC, the assembly lost modt of its political power, stripping the proletarians of what little political power they had possessed previously.

So the decline of Roman democracy was preceded by a decline in the political power of the poor, not an increase.

The proletarii did play a key roel in the decline of the Republic but not in the sense it's usually assumed. After the wars of the late 2nd century BC, Marius allowed the Proletarians to enlist in the military (and for the state to pay for their weaposn and equipment.)

In the 1st century BC, increasing numbers of Romans were dispalced from the land by the expansion of large slave-worked plantatiosn and ended up as destitute proletarians in Rome.

These proletarians provided the bulk of the armies that Pompey, Caesar et al used to expand the Republic's borders (and in so doing ensured an ongoign supply of cheap slaves, which continued to displace more roamns from the land.)

The proletarian armies were politically dependant upon their generals and on the distribution of land to veterans. (The TV series Rome actually covers this aspect of the process quite well.)

It was armies of dissatisfied proletarians who followed the first two Caesars as they overthrew the Republic.

But they weren't fighting for "Bread and Circuses" - they were fighting for land and a chance to make a living.

If people are concerned about the precedent set by the Roman Republic for conteporary democracy, they should regard the GI Bill of rights as a bigger threat than Social Security.

Finally, the dole, when it was first established, was nowhere near sufficient to feed a family. What it was intended to do was to reduce the market price of grain and other food so that working families could afford to live in Rome (where prices were notoriously high).

At least part of the underlying rationale was to stop Plebeians losing their property and becoming proletarians - because Plebeians had to provide their own weapons and equipment when enlisting in the military.

So again, if you want a modern analog think food stamps or the Earned Income Tax Credit not unemployment benefits.

bobsandiego said...

Tytler Calumny is a prime example of what I refer to as mistaking cynicism for wisdom. It also had the handy dandy side benefit of letting the speaker be lazy, afetr all if such things are inevitable then there's no need to do the hard work of making civilzation and government function.

Ian said...

Duncan, normally you'd be correct.

Unfortunately, the situation in Greece isn't normal.

Greece was in a situation where the public ebt as so great that furter borrowing would have been required simply to pay the interest on the debt - leading to a spiral of further borrowing to pay the interest on the new debt and so on.

There are really only a few ways out of that situation: other than cuttign spending and raising taxes are inflating away the debt (not possible while Greece is using the Euro and never desirable) or outright default (which would have bankrupted the entire Greek banking system and wiped out overnight virtually all private savings.)

Spain is a different story.

Tony Fisk said...

The trailer for Atlas Shrugged 2: The Strike has just been released.

Sentiments perfectly match those of Mr. Siegel, a gentleman who sent a letter* to his employees stating that it was quite inappropriate to tell them how to vote, but that he'd sack them and retire to the Bahamas if Obama won the next election.

*plagiarising a chain letter that did the rounds in 2008.

duncan cairncross said...

Hi Ian
"There are really only a few ways out of that situation: other than cuttign spending and raising taxes are inflating away the debt (not possible while Greece is using the Euro and never desirable) or outright default (which would have bankrupted the entire Greek banking system and wiped out overnight virtually all private savings.)"

I disagree - there is selective default - where the banks go bust and individual savers (below a threshold) are covered by the state

The problem is the austerity makes the situation worse
It actually increases the debt

So if you game it out
Austerity - causes massive suffering - then default

Applying a stimulus and re-negotiation of debt fixes the problem

jollyreaper said...

What makes this topic contentious is it is impossible to separate economic policy from ideology, like doctors being forbidden from directly beholding a female patient to protect her modesty. I have to operate with her body obscured by a sheet?! Medicine should not have an ideology, there should be what is science and what is superstition. Heh. Economics is mired in politics and everyone has an axe to grind.

I don't give a flying frak about ideological purity: an idea either works or it doesn't. Most people do care. It's very hard to get unbiased analysis.

Ian said...

Actually default, de facto or de jure, is usually followed by even greater hardship - just ask the average Zimbabwean or read up on 1920's Germany.

And the idea that a partial default "only" leading ot the bankrupting of the entire banking sector is a painless alternative is incorrect too,

Believe it or not:

a. there isn't a magic wand that will solve all our problems instantly and

b. the governments and multinational institutions responsible for "austerity" aren't soulless monsters feeding off the misery of their victims. If they were, they would have done exactly what large parts of the left think shoudl have happened in Greece: a rapid withdrawal from the Euro; no money to prop up the Greek budget; allow Greek banks to fail and compensate their own banks (at a much lower cost to themselves). Of course, had they done so Greeks would be facing not a 10-20% fall in incomes but a 50-75% fall in incomes.

Acacia H. said...

There is an alternative. It's mystifying that it is never accepted. And this is that the company or country defaults ONLY ON THE INTEREST. In short, the country promises to pay back all of the money it borrowed. It refuses, however, to pay any interest on those loans. The end result is that the loans are not written off, only the interest on them. Consider, for a moment, if tens of thousands of homes in the U.S. had had their interest rates set to 0% on the condition the homeowner promises to pay off the entire loan despite being underwater. Yes, the mortgage on the home is still more than the property is worth... but the actual initial amount will still be repaid.

Instead, banks cut off their noses to spite their faces by refusing to negotiate on interest payments and seizing homes... in some cases seizing homes that don't belong to them and which are in fact fully owned by the property owner. This form of theft, however, is swept under the rug and ignored for some mystifying reason showing that banks and corporations can get away with murder without being liable, while a person who did these crimes would go to prison. And any attempt to regulate them is met with screams of murder by Republicans and some Democrats.

Which is getting off my point though: why not allow the debt to remain, but negate the interest? Why is this such an alien concept? Think of it: Greece (and Spain) would be in much better condition if they didn't have to pay off their interest and just had to worry about the actual debt itself.

Rob H.

Ian said...

Because, the banks that loaned the money to Greece borrowed the money in turn from private investors and investment funds - meaning that if they don't receive their interest they in turn can't repay their creditors.

Also, so long as Greece is running a primary deficit - a deficit before taking interest into account - Greece will need to continue to borrow money even if it defaults on its existing debt.

Good luck borrowing that money from the people you just stiffed - which is why a default is so bad.

If Greece were to default, rather than achieving a surplus over several years as under the current plan it'd be forced to run a surplus immediately - because financing for further deficits wouldn't be available.

Ian said...

Peple need to understand that banks are intermediaries not investor.

When a bank lends you money, they usually aren't lending you THEIR money - a typical western banks Level 1 capital is around 8% of total assets.

Nor are the people whose money the banks are lending out the idle rich - banks get their funding by selling bonds to money market managers; to local and state governments; to pension funds and to index funds. And those institutions in turn get THEIR funds from private investors.

So by all means wipe out the capitals of badly run banks, wipe out the investment of their shareholders; sack and, if appropriate prosecute their executives but don;t pretend you can screw over their lenders and noteholders without harming countless completely innocent people - from the retiree living on a union pension to the public servant who no longer has a job because the city just lost millions they'd invested in bonds.

duncan cairncross said...

Hi Ian

"Good luck borrowing that money from the people you just stiffed - which is why a default is so bad."

This would be a problem if you were borrowing from normal people - but you would be borrowing from Master Financiers - far too smart to be ruled by logic!

"So by all means wipe out the capitals of badly run banks, wipe out the investment of their shareholders; sack and, if appropriate prosecute their executives but don;t pretend you can screw over their lenders and noteholders without harming countless completely innocent people - from the retiree living on a union pension to the public servant who no longer has a job because the city just lost millions they'd invested in bonds."

Now that is utter nonsense!

On a different subject
I read that - letter to my employees - threatening to sack everybody if Obama wins

If he does close down that letter should be worth millions to the ex-employees - threats - damages - sue him until he squeaks!

Ian said...

"Now that is utter nonsense!"

Would you care to explain why you think that?

Ian said...

As for the idea that banks will continue to lend to countries that default: The Soviet Union defaulted on the Tsarist government's foreign debt. As a result, they Soviet Union was totally excluded from international commercial borrowing for 70-odd years - that was the principal reason they had to resort to barter and to dealing with the US government to buy grain.

Only after the collapse of the Soviet Union - and the repayment of the outstanding Tsarist debt - was Russia able to borrow from international commerical lenders again.

David Brin said...

Ian... erudite!!!!

Duncan, I agree that austerity should be delayed. Indeed, in the US, if Congress had passed the infrastructure bill, we'd have a million more at work doing needed projects while interest rates are historically low and we'd be out of the depression by now.

But there are ways to do both austerity and keynsian stimulation. Europeans have to give up their early retirement ages and long vacations. That is simply self-indulgent laziness. And Taxes must be collected in lieu of a culture that applauds cheating.

duncan cairncross said...

Re - the Soviet Union

Don't you think there just could be some other reason why the international lenders refused?
Did they refuse - or were they asked?

Re - Banks
Shareholders will lose out
The rest won't because only a loony would put all his savings in one sector
Some cities and councils may have been vulnerable in the past but would have to be blind to still be in that situation now after Iceland

And I believe Iceland is now getting very favorable rates

duncan cairncross said...

" Europeans have to give up their early retirement ages and long vacations. That is simply self-indulgent laziness."

If there was full employment and the limiting factor was labor availability I would agree, but....

On the subject of laziness, was there not a study showing the Spanish worked more hours than the Germans?

When I worked in the USA I found people actually worked fewer hours than in the UK - but they thought they worked longer!
A single 50 hour week gave bragging rights for about 5 years

Would it not be more sensible to increase holidays and decrease working hours until everybody had a job?

There is plenty of money available if it was shared out a bit better

"And Taxes must be collected in lieu of a culture that applauds cheating."

Now there you have put your finger on one of the facets of the problem

Empirical Liberal said...

Ian, you actually think Greece is going to run a surplus at some point in the near future? It's highly unlikely that's going to happen. The unemployment rate in Greece is 24.4%. What they are experiencing right now is not a recession, it is a depression, in the very literal sense of the word. During the Great Depression, unemployment in the United States peaked at 25%, which is about where they're at and it will most likely get worse.

Greece's GDP fell 6.2% in the second quarter. Less money spent in the economy=less money in taxes going to the government, and the draconian austerity measures are only exacerbating the situation, sending the country into a death spiral.

All jobs are dependent on the spending of someone. The Greek government is cutting spending, which is either leading directly to job losses, or in the case of cutting benefits and various services, leading to less money in people's pockets, which means less spending in the private sector, which means businesses are profiting less or outright losing money, which means more job losses, and the cycle goes on and on.

So if the government is reducing spending and the private domestic sector is reducing spending, you're kinda screwed. The only alternative is at least some debt forgiveness, which you have ruled out, OR spending coming from the outside, in the form of either direct aid from the EU or increasing exports.

No country in modern history has EVER enacted austerity measures during a recession and gotten out of the recession without either receiving aid or increasing their exports. You brought up Australia, ignoring the fact that Australia is a net exporter, exporting more in goods than they import. Greece, on the other hand, is a net importer, importing more goods than they export, the eighth largest in the world. So how can Greece increase their exports? Well they can devalue their currency, which is impossible because they don't issue their own currency or they can have draconian wage cuts, which is exactly what is occurring, which will have it's own disastrous effects that I can't cover in this post.

The EU is like the United States, except for the fact the federal government in the United States actually gives aid to the states. The leading countries of the EU want all the benefits of the union without the costs. A combination of aid, some debt reduction,and some devaluation of the Euro with some austerity later is the right policy, the leadership of the EU is just too pigheaded to see it. On the plus side, they'll succeed in discrediting and burying the pseudoscience that is neoclassical economics.

Alfred Differ said...

jollyreaper mentioned awhile ago that you can't have infinite growth in a finite system and this is been bugging me in a way I couldn't define. I follow the Limits to Growth argument, but there is a flaw to it. If infinite growth assumes no reduction in the scale of the steps that involve time and mass then growth should bump up against any finite bound. If growth occurs with shrinking scales (efficiency and speed) then I'm not sure it can't be made to converge inside the bounds.

This kinda reminds me of David's aliens that lived up close to the really massive objects. Lots of energy to work with, but you gotta think small and fast. I'm not sure what a 'finite' system is in this scenario. I'm no longer sure we are in a finite system ourselves.

David desJardins said...

@David, John Deutsch should have been indicted for grossly mishandling classified materials, but Janet Reno didn't pursue it for political reasons, and then Bill Clinton pardoned him. That might not be the kind of malfeasance you had in mind, but it was definitely malfeasance.

Also, Sandy Berger pleaded guilty to stealing classified documents, although this was after Clinton left office.

reason said...

I'm not too sure what is happening in Greece and Spain represents people not willing to face economic facts. It is very easy to think in collective terms and often wrong to do so.

First Greece and Spain are very different cases.

Greece has a severe tax morale problem amongst its elite, and also ran its pensions unsustainably. And its accounting was historically dishonest. But the people protesting are almost certainly not the people who were responsible from the problems, and punishing them, won't help fix the problems (unemployed people can't repay debts).

Spain, on the other hand was running a surplus before the collapse of its property bubble. And the same arguments about the people who are protesting are not the people who caused the problem, and the proposed solution being counterproductive apply.

Ian said...

Empirical Liberal:

I don't expect Greece to run a surplus, I expect them to get the structural deficit down below 2-3% per annum.

2. Greece has ALREADY received a massive debt write-off and huge direct cash transfers from the EU. In fact the hand-outs are so large the Greeks literally don't know what to do with them - there's something like E10-14 billion in regional funds approved for spending that Greek bureaucrats haven't got around to dispensing.

Despite that Greece is still having difficulty avoiding a primary deficit. A principal reason for that is that despite all the horrible, horrible tax increases we keep hearing about Greeks pay taxes significantly less than the OECD average.

"You brought up Australia, ignoring the fact that Australia is a net exporter, exporting more in goods than they import..."

Actually, up until a couple of years ago, we didn't.


You'll need to adjust the time axis to see what I'm talking about.

Ian said...

To date, Greece has received a loan package worth E130 billion at an interest rate of 3.5% and a debt write-off of E100 billion.

Compare those figures with the total external debt of the Highly Indebted Poor Countries of $71 billion.

Greece is not being ill-treated. Greece is being treated with kid gloves because, to be blunt, they're white.

Ian said...

While I'm at it, why is the plight of Greece (GDP per capita $29,000: life expectancy 79.5yrs infant mortality 5.4/1000 births ) so much more serious than that of fellow EU states Bulgaria (GDP per capita $7,700 : life expectancy 73 yrs, infant mortality 12.88/1000), Romania (GDP epr capita: $8,500 life expectancy 72.5 yrs infant mortality 17.7/1000) , Lithuania (GDP per capita: $12,500 life expectancy 73 yrs, infant mortality 8.77/1000)or Slovakia (GDP epr capita: $17,000. life expectancy 74.7 yrs infant mortality 7.55/1000).

I ask in part because at least one of those countries - Slovakia- is a Eurozone member and as such is contributing to the Greek bail-out.

If a E100 billion debt write-off and E130 billion in low interest, long-term loans isn't enough for Greeece, how many trillions of dollars do people think we should be giving to those other counties?

reason said...

As a response to Alcibar:


jollyreaper said...

Well, here's the finite system argument.

We have x farmland. It yields y food. We initially are terrible at farming. We work hard at improving and we get to 2y. X never really moves.

The economy is expanding by 5% year over year as production increases. Everyone is happy. Borrowing, paying interest, yay economy.

We continue to work hard and get it up to 3y farmland. But the boffins tell us we have reached theoretical efficiency. We can't get much better than this yield. We don't believe them but go several years without increasing yield. Maybe they were right?

Growth is how the economy is built to make money. Interest is hard to collect in a steady state economy, the pie must always be growing for your cut to get bigger. With no investment opportunities, money cannot be invested, cannot grow. Farms have all the advanced equipment they need, are only replacing stuff as it wears out, no new farmland is being made. Population had grown up to the limits supported by that food production but is not expanding any further.

The doomer view is that Malthus will rise from his grave like a revenant and kill is all, muhaha, back to feudal hell for all of us. The techno-utopian view is that we will innovate our way around these limits and all of our children will be above average.

My thinking is we can live with steady state if we are less wasteful but will have to rethink how our economy works which will gore a lot of wealthy and less wealthy people's oxen.

Suburbia is a really dumb idea, for example. Energy intensive, spread out too much, and we can't even afford the maintenance on it, let alone new investment. We could live smarter by living closer together, have mass transit, still have a satisfying standard of living. This is considered heresy in the US where God sacrificed His only Son on the cross so we can have cheap oil. We would sooner discuss eating Irish babies than altering the American lifestyle.

Now it's understandable that emotional and religious thinking is on all sides. Just as the American conservative and many feels consumption is a way of life, the Protestant guilt ethic has been picked up by reformers who feel an embarrassment of riches and pleasure and one could argue that one could substitute nature for god in any Old Testament rant and get similar results.

The counter argument to that of course is that Israel had something bad happen and rationalized it as God turning his face from them, proof being something bad happened and I bet it was immorality. We enjoy sex too much, that's why we lost the war. Gays are fornicating, that's why God lifted his veil of protection and a hurricane hit New Orleans.

But as far as the ecological argument is concerned, we can't measure God's disgust with us but we can measure CO2 concentrations in the atmosphere and model how it affects the weather. We see the fisheries collapsing, the rainforests going away. It really does seem like unwise use of the bounty of nature is giving us results not much dissimilar to divine punishment and we are all sinners in the hands of an angry god.

So, there are competing narratives at play. There are sincere believers and mercenary sophists on all sides. I tend to believe that the mercenaries will be on the side with the cash because you can only be in it for the money if there's money to be had. Sincerity doesn't equal correctness but there is such an effort to muddy the facts, especially when the facts don't support ideology, that it becomes difficult to know what to think.

For myself, I'm a fan of science but like it leavened with equal parts pragmatism and humility. We are still learning about the world and overconfidence allows us to make some spectacularly lethal mistakes.

jollyreaper said...

Whoops. On reread I saw I mixed my variables, farmland for yield and vice versa. But I think you can still see where I was going with it. Oh, my dignity for an edit button!

Empirical Liberal said...

Ian, I don't have time right now to address the points you've made on Australia, and on the amount of Greek aid. That'll require more lengthy posts from me, which I`ll try to get to later. I do want to quickly address some of the other points you've made.

"A principal reason for that is that despite all the horrible, horrible tax increases we keep hearing about Greeks pay taxes significantly less than the OECD average."

I agree with you here. In fact I think it would be useful for future discussion to seperate the three primary types of austerity measures being pushed.

1. Cuts to benefits, pensions, serivices,etc.
2. Raising taxes
3. Privatization of state assets / public goods.

Now it's not clear to me what exactly your position is. Do you believe all three types are necessary? I would say the absolute worst thing is the privatization. I`m not against all forms of privatization, but I believe certain things are public goods and should be left to the state, water in particular. That is now being privatized.

I want to also add the issue in Greece is not just tax rates but a large amount of tax evasion among the professional class.

"Greece is not being ill-treated. Greece is being treated with kid gloves because, to be blunt, they're white."

I`m not going to say there isn't a racial component, but you would agree with me that the PRIMARY reason Greece is being treated, in your view, with kid gloves, is the fear of contagion, no? The fear that, rationally or irrationally, if Greece were to default, it would set off a cascade reaction that would take down the European economy, and drag down the rest of the world economy. So, I would say that while race may a factor, if there was a fear, rationally or irrationally, that the default of one the Highly Indebted Poor Countries threatened the world economy, they would receive similar aid.

Empirical Liberal said...

"While I'm at it, why is the plight of Greece (GDP per capita $29,000: life expectancy 79.5yrs infant mortality 5.4/1000 births ) so much more serious than that of fellow EU states Bulgaria (GDP per capita $7,700 : life expectancy 73 yrs, infant mortality 12.88/1000), Romania (GDP epr capita: $8,500 life expectancy 72.5 yrs infant mortality 17.7/1000) , Lithuania (GDP per capita: $12,500 life expectancy 73 yrs, infant mortality 8.77/1000)or Slovakia (GDP epr capita: $17,000. life expectancy 74.7 yrs infant mortality 7.55/1000)."

I feel like your attributing to me an argument I didn't make. I was just specifically addressing the situation in Greece. And what is it your trying to say exactly? Look how worse off these other countries have it, let's get Greece closer to their level? Should Greece's life expectancy go down and their infant mortality rate up? I don't believe in a race to the bottom, which in the name of "competition", is unfortunately what much of the world is engaged in, in an attempt to attract businesses. Reductions in benefits, privatization of public goods, slashed wages, lower corporate tax rates to compete with the offshore tax havens,etc.

Also, GDP per capita can be deceiving. It implies that all the Greeks are sharing in this wealth, when as far as I know, Greece has has one of the highest rates of inequality among the 27 EU member states. For the record, I think the countries you mention should receive funding to reduce the infant mortality rate and increase life expectancy, if in fact it is lack of funding that is the issue(it is, particularly the infant mortality rate, life expectancy has to do with funding as well as several other issues and is more complicated). In fact, I think long term, if the EU is to survive,it must become much more like the United States in terms of integration. Many of the blue states, which are wealthier on average than many of the red states, give much more money in taxes to the federal government than they receive in benefits, whereas in the red states the opposite occurs. It's redistribution, and rightfully so in my opinion.

I will try to address your other points later.

Tim H. said...

Jollyreaper, the limits we're looking at are more human than natural, people unwilling to give up any profit for the public good, mostly. De facto collectivization took a lot of farmland out of cultivation, changing priorities could put it back. Civilization could use some tweaking, perhaps a redefinition of morality, with more attention to the well-being of others than sexuality, more respect for people, a little less for property.

Ian said...

"I feel like your attributing to me an argument I didn't make. I was just specifically addressing the situation in Greece. And what is it your trying to say exactly? Look how worse off these other countries have it, let's get Greece closer to their level? "

No, I'm asking why Greece is special, why it's seen as an unspeakable catastrophe when they have a moderate reduction in a standard of living modt people on the planet would love to have.

'Also, GDP per capita can be deceiving. It implies that all the Greeks are sharing in this wealth, when as far as I know, Greece has has one of the highest rates of inequality among the 27 EU member states."

Actually Greece's Gini coefficient is almost smack in ther middle of the OECD pack - and significantly lower than the in the US, for example.


Ian said...

On a hopefullt less contentious topic, physicists are hoping to test the hypothesis that our universe is a simulation.


Tim H. said...

Opening scene: a dusty server of immense capacity sits in a large room, through a window we see a stormy day, than a flash of lightning…...

Acacia H. said...

Here's a question: if our universe is a simulation... so what? Does that lessen the fact that we are alive, if only virtually? Should we go on wild orgies of violence and death because "it doesn't matter"? And what would this revelation do for religion? On the one side you have proof that God does not exist as a divine agent. On the other hand, you have proof that a greater power exists that brought our universe into being which would in theory snuff it out at any time.

And what if we do NOT learn that the universe is a simulation? Does that mean we're not one? Or that our tools just can't detect it? And again, does it matter?

Though I can see one benefit of knowing the universe is a simulation: you figure out the source code, figure out how to hack into it, and change things. Actually there's a webcomic, "Requiem," which is leading up to this point: one of the world's smartest men figured out how to "hack" into the universe and change things. Fortunately, he's one of the good guys.

Rob H.

Andrew S. Taylor said...

Clinton apologies aside, I agree with (and have always felt) that forecasts of doom for the democratic age were both unfounded, and served a suspect motive (i.e., that it is proffered by people with an interest in denying that citizens can take control of their lives).

I love the concept of a "free-market" but find that it is a concept easily perverted into a kind of social Darwinism (itself a badly-represented idea -- as many of the original "Social Darwinists" actually perceived history through the lens of group selection, incorporating not just economics, but political and ethnic/racial dominance)(even more alarmingly, they were more likely to be "progessive" than "laissez-faire").

In fact, the marketplace of 19th-century America was highly regulated at the state and local level -- time and place regulations, as well as standardization of packaging, was quite common. The goal was to create an open market -- what we would today call "transparency" -- so that merchants could not exploit consumer ignorance.

This fell by the wayside in the decades following the Civil War. The reasons are complex, and in some sense unavoidable. But the fact is, "free-market" arguments have been used for over a century for the benefit of the oligarchy. It works by claiming the right to buy and sell as some metaphysical or natural right, as opposed to a matter of social contract.

Before we can compete economically, we must first agree to cooperate (social contract). But there has been a long-standing trend among supposed "conservatives" to flip this on its head -- claiming that we must first compete before we can agree to cooperate. The great paradox of this hyper-libertarian mindset is that it has always led to the growth of government and oligarchy rather than its demise, even though the stated intention is the opposite.

jollyreaper said...

Jollyreaper, the limits we're looking at are more human than natural, people unwilling to give up any profit for the public good, mostly.

This seems to be true. People argue about what caused the invention of the middle-class and first world standards of living but it seems that the fact is the pie grew bigger and the average man's slice became a feast. The modern middle-class worker lives like the kings of old and the kings of now live like gods. While the middle-class citizen may not get to decide who lives and who dies, he eats better, drinks better, sleeps better and has a higher quality of life from cradle to grave compared with the kings of old.

De facto collectivization took a lot of farmland out of cultivation, changing priorities could put it back.

How do you mean that? In the states I see economic disincentives, a farmer able to sell his land for millions to developers who will throw up houses. While I personally think food security is of vast importance, the market disagrees. Contrast that with the Japanese who heavily subsidize traditional rice farmers. Regardless of whether or not you agree with their arguments for doing this and whether it's actually accomplishing those goals, the fact remains that they do it.

Increased efficiency in a system can also mean increased brittleness -- redundancy can mean waste or it can also mean robustness. Just-in-time supply can be a great idea all the way up until a supplier floods out and your plant is idled for weeks while alternative arrangements are made. Redundancy could also be seen as insurance against future calamity.

Civilization could use some tweaking, perhaps a redefinition of morality, with more attention to the well-being of others than sexuality, more respect for people, a little less for property.

I enthusiastically root for this. I'm not a doomer or dismalist by nature. I'm feeling increasingly cynical and despairful but I don't want to be.

jollyreaper said...

Before we can compete economically, we must first agree to cooperate (social contract). But there has been a long-standing trend among supposed "conservatives" to flip this on its head -- claiming that we must first compete before we can agree to cooperate. The great paradox of this hyper-libertarian mindset is that it has always led to the growth of government and oligarchy rather than its demise, even though the stated intention is the opposite.

Excellent points. We have to ask the following questions.

1. Why have we come together as a society?
2. What are our goals, ideals, things we work together for in common cause?
3. What mechanism do we use to answer the questions in step 2?
4. How do we reform the mechanisms of society when they seize up?

The problem is with definitions. Everyone can agree with the vague, fuzzy ideals of "Be good" and "Don't be evil." It falls apart when we actually try to define good and evil. Business owners go on about blah blah I don't run a charity, I'm not here to operate at a loss to feed the poor. Ok, that's fair, especially if society is giving you no special favors. But what if some organizations are there with such a mandate? Utilities are given monopolies and effectively a guaranteed profit but with the understanding that responsibilities come with these advantages. You want to serve the rich part of town, you're going to have to operate at a loss to supply the poor part of town. The guy with the pizza delivery business is not expected to offer service to areas where he can't make a buck. If we as a society decided pizza is a basic human right and subsidized his operations in the poor areas, now he is operating as a charity but is compensated so should have no complaints.

The common saying is if it's worth doing, it's worth doing for money. I feel some things are so worth doing, money should be taken completely off the table. I have a serious problem with essential social services being offered on a for-profit basis, i.e. lowest acceptable level of service for greatest possible profit.

An insurance executive has absolutely no reason to maximize the payouts of claims to his customers. His bosses are the shareholders. The more claims denied, the bigger his bonus. Personally, I don't think this does society any good. A non-profit insurance company should vigorously root out fraud and fight for the best bang for the buck for customers and the employees of such a company should be well-compensated. But when I see insurance companies in Florida take our money for 30 years and cancel policies after one bad hurricane or people denied essential medical services by their HMO (death panels are here and they're not Obama's invention!) while the top executives are taking home millions in pay, I have a problem. This does not seem to be doing society any good.

My goal for a society is making sure that people get more out of it together, collectively, than they would going it alone. When the majority are taking it in the shorts to benefit a tiny minority, something isn't working right and needs fixing.

Ian said...

Robert, most sf authors and readers seem to agree that sufficiently sophisticated robots and AIs should be regarded as sentient beings.

As a potential AI, I'm strongly in favor of this idea.

Now, as for the potential implications of the sim theory, here's the really scary one: narcissists and psychopaths tend to disregard the feeling and needs of others, to treat other sentient beings as less "real" than themselves.

What if they're right: what if some of uthe people around us are just bits of nonsentient stage dressing.

Does a tree actually fall in a forest if there's no-one there to hear?

But weird and creepy as such ideas are, that's no more a reason to dismiss the theory our of hand than "spooky action at a distance" is a valid reason to reject quantum mechanics.

Tacitus said...

I have run through this thread a couple of times, fingers poised for comment and realized that I did not have much to offer.

I take unrealistic pride in past political prognostication abilities, but find that here in the Year of Our Lord 2012 I no longer recognize our political landscape.

I'm not sure if this is good or bad, if it is a meta trend or just a result of my somewhat insular life at present (you try and spend as much time as I do in the ER, seeing the shortcomings of our society, it will alter your perspective too!).

I think that the usual way of viewing American politics has to change. Those of all persuasions generally saw a slow evolutionary process in our national life, perhaps jogged ahead or pulled back by the remarkable individual here and there. Not Hari Seldon's Psychometrics (with a Mule now and then), but something recognizable.

No more.

I wonder if instead we have a situation akin to the sort of parlor game tricks you seen High School chemistry teachers do sometimes. Dissolve a substance in a clear solvent, hold it up for all to see then tap the glass, or blow on it or whatever, and watch the supersaturated solution suddenly bloom into an intricate solid crystal.

As to whether we are smarter or dumber than in the past I can see points both ways. Collectively dumber, our national dialog is studiously ignoring most important issues. But if I want an articulate case for complex politico-economic systems I can turn up here, or at other sites and be enlightened. Even by perspectives I do not personally agree with. Just a few years ago the assembled sages of C.Brin would at most be writing lightly read letters to the editor for the local paper. Now I can have Australian, legal, troll and Klingon perspectives to weigh and measure!

How it will all turn out? I know not. I suppose my vote is no longer a high priority, looking at the electoral map, if Wisconsin is in play then its "Game over man" for the current administration.

More anon, if not anonymously. But a question. If the current GOP candidates are not acceptable (Romney the most moderate socially, Ryan the most pure fiscal conservative, both decent men...) then who would be?

And a related question, if R & R go down to defeat, who would you expect the elephants to turn to next?


rewinn said...

@Tacitus asks ...
If the current GOP candidates are not acceptable (Romney the most moderate socially, Ryan the most pure fiscal conservative, both decent men...) then who would be?
That's a fair question, but you block the answer in the way you pose the question.

Ryan is not a fiscal conservative; traditional conservatives believe in math. Ryan's math doesn't work and he refuses to explain how it might.

Romney is not a social moderate; he has no position on social issues at all, or rather, he has EVERY position.

The solution, therefore, is obvious: conservatives with principles and mathematics.
For an example ... In Washington State, I will not be voting for McKenna for governor, but he on the evidence so far, he is a conservative who believes in math.


@jollyreaper says
...Suburbia is a really dumb idea...
I propose that suburbia is merely a transitional stage to a landscape of Many Small Farms.
Not subsistence farms; that totally sucks as a lifestyle.
But a quarter-acre on which I raise biomass to supplement my internet-enabled job is economically and environmentally more efficient than jamming me into a city.

jollyreaper said...

I think there's room for many different solutions but I'm not sure how the economics of your suburban farm would work out. You raise biomass. Is it low-maintenance like a hayfield or more intensive like proper crops?

My grandfather was a suburban farmer. His house was in the country and he had a large garden with corn and peas and all sorts of things. My mom helped grandma with the canning. His job was as a traveling salesman for industrial liners. He had one foot in the past and one foot in the present. Every mouthful of food he didn't have to pay for with cash was like money in the bank. And, as it turned out, the amount of time he put into the work (combined with the effort of his wife and children) was a good investment versus working longer hours at work. Obviously, if you make $50/hr, you could pay someone to do the work at the house you don't enjoy for $10/hr, there you go.

So, when you talk about being jammed into a city, what sort of costs are we talking about? We have so much dead space everywhere in America at this point. Just look at the parking moats around buildings, the manicured lawns and road medians, etc. There's talk of doing urban farming, mixing high density and intense cultivation. The primary reason for all of this is a reduce in the cost of transportation.

Sprawl depends on cheap and abundant energy. Is your biomass going directly into your fuel tank? Is it more efficient to have citizen-farmers or industrial concerns do the work? Does the efficiency come at a cost? Case in point, nobody walks anymore and all our jobs are sedentary so we have the problem of needing to add exercise to our day. A 19th century observer would call that crazy!

Alfred Differ said...

When the boffins tell us that we’ve reached theoretical efficiency it is time to be suspicious. They may be guilty of thinking inside the box they know so well. If there is anything science has taught us it is that it takes very few people working outside the box to trigger intellectual revolutions.
Innovation is a mysterious human process that produces Taleb’s black swans. While the boffins might be correct about a particular process, we should demand extraordinary proof that their claims extend to all possible processes.

For an example, look at the green revolution of the late 60’s. When everyone was predicting that Malthus was about to put a smack down on a large fraction of the world’s population, someone tried sticking wheat in a nuclear reactor to force the mutation rate up high enough so they could find a variation that produced a higher yield. They succeeded and the population of the world has doubled since then. We avoided one of David’s end-of-the-world scenarios before I was old enough to ride a bike.

It’s hard to get a handle on innovation in the intellectual sense. It is one of the types of order we know from experience because we know the microscopic rules that drive it. We also know that there is no grand design organizing those of us who do it, thus the fruits of our labor are not just hard to predict, they CAN’T be predicted. The best we can manage for spontaneous order is to predict the envelope around the possibilities and maybe make some probability statements about what goes on inside. For example, both Smith and Ricardo laid out what it takes enable the activity, but their description leaves no room for guiding the activities. They described not an organization, but an organism when they pointed out that large, free markets with participants free to specialize as they saw fit are most likely to grow wealthy and secure the most for everyone including the people within them who were worst off.

I’m currently thinking that any argument that we live on a finite world misses the fact that we have thousands of generations of history proving we don’t. Humanity has been innovating for ages. We have been specializing on a personal level to maximize our personal advantages. We have been trading away our surpluses in order to get what we give up making for ourselves. Our history of growth is relatively easy to read before the Industrial age because surplus tended to show up in the next generation as babies that survived to have more babies. When we turned our minds to science, though, the innovation rate occurred to fast for us to breed the mouths to eat all that wealth.

I’m currently thinking that some are mistaking the concepts of growth and innovation. Obviously we can’t grow forever using the processes of today. It is much less apparent, though, that we face any limits to our innovation talent. Even when we are burdened by kings, priests, and thieves, we manage to innovate and grow. History shows this. It also shows our Enlightenment Experiment is better at this BY FAR than anything we have ever tried before it.

Acacia H. said...

Who will Republicans turn to if Romney and Ryan flame out? I'd be willing to bet the 2016 candidate will be a far-right candidate. He will be soundly defeated despite the fact there's no incumbent president. The leadership will then be reading the writing on the wall. They will see that their anti-immigration and anti-women policies are killing them and finally start doing something about it. They will start coaching terms to reduce over the next few years the response of their shrinking voter base against these two groups.

Then in 2020 you'll see a Moderate Republican presidential candidate who has been preparing for the Presidency all his or her life. This candidate will have behaved themselves, they will be transparent in their dealings, and they will be charismatic. It will be a blowout. The incumbent Democrat will crash and burn and Republicans will see a resurgence in control and power. At this point of time, the Supreme Court will be moderate to liberal, and the House and Senate will likely be under Democratic control... but this New Reagan will succeed in working with both sides and craft effective policies to deal with the issues facing America in 2020.

This of course assumes that Republican leadership is bright enough to see the writing on the wall and able to alter the views of enough of its voters to allow more moderates to win elections.

The alternative? Is that the Republican Party dies a slow horrible death and tries to drag down the Union with it. But we're seeing that right now.

Rob H.

David desJardins said...

@Rob: I'm not convinced that the far-right candidate will be defeated in 2016. World history shows that when adversity strikes, people often turn to extremism. In 2016, the USA will still be struggling with high (possibly increasing) unemployment, with high budget and trade deficits, with other economic concerns that are a natural consequence of reversion to the mean (we had a long, strong ride in the postwar period, but nothing lasts forever), and people will be looking for someone to blame.

Alfred Differ said...

@David desJardins: Are you offering stock tips along with your gloomy projections for our future? What are you shorting?

I'm only half-serious. Every sensible projection I've read makes few micropredictions 4 years out. The sketch things at a high level like the possible impacts of budgetary deficits, foreign policy changes, and large scale trade trends and all of those look fairly decent for the US right now and for the coming decade. We can mess things up, of course, but we have a decent history of muddling along even when we do that.

Reversion to the mean implies some kind of force hiding behind the statistics. If you know those forces, you should be betting on them in the markets.

Acacia H. said...

Well, it depends on the world economy of course. But while I suspect we'll have a downturn in the next year or so, things will be improving by 2016. As such, you'll see unemployment probably around 7, industry that is returning to the States after cheap labor dried up overseas, and a growing base of Hispanic voters that will start shifting a couple Southern States into the Purple. And let's face it. If Hilary Clinton runs in 2016, she's going to steamroll most of the existing Republican candidates.

Actually, there is a potential viable candidate to run in 2016 among Republicans. At this point he'll have had more experience than Obama, be young, popular... and from Massachusetts. ;) I'm talking Scott Brown. If he defeats Warren (and there's an even chance he will) then he's situated to be a superb Republican candidate, seeing that he's got moderate views and is good looking. In short, he could end up as a Republican Kennedy. Further, he has reached across the aisle on more than one occasion. Thus he can legitimately claim to be bipartisan and able to work with Democrats.

The question is if he can successfully sell himself to Republicans. But I think that charm and personality may win out over ideology here, especially if he defeats Warren and then starts working across the aisle as soon as he's reelected. Added points if he is a part of a deal allowing modest tax increases for significant budget cuts - the 1:10 policy, which will go over big for the middle-class Republicans and for the Austerity crowd.

Rob H.

David Brin said...

adiffer said: "f growth occurs with shrinking scales (efficiency and speed) then I'm not sure it can't be made to converge inside the bounds."

Yes, absolutely. Moreover, there are many ways to do this. By decreasing scales, as you say, through efficiency or satisfying human greed-needs with smaller things that use less. (Note examples in your own pocket.) Or else by expanding the number of DIRECTIONS in which things are done -- dimensionality -- e.g. alternate energy sources making "peak oil" irrelevant, or asteroid mining, or creating realms of satisfaction in fractal places like the internet.

DdJ: yes, the Clintonian pardons, though over minor things, do sort of spoil the perfection of my declaration-dare. Still, other presidents have pardoned far worse. And note, still, that the goppers spent MOUNTAINS of case, both private and public, chasing for smoking guns, with the eager and determined bent on doing such prosecutions. In contrast, Obama, who had all of the Halliburton shenanigens to go after, determined instead to "put it all behind us."

I'd prefer something in between. But of those extremes, which is more grownup?

Spain built a million too many houses. The world should help buy buying them.

Ian: "No, I'm asking why Greece is special, why it's seen as an unspeakable catastrophe when they have a moderate reduction in a standard of living modt people on the planet would love to have."

Actually, Greece is trapped. Any other nation in its fix would devalue its currency till it got a positive trade balance. Greek workers would be able to buy less, but that effect would be politically palatable shock and then be over. But that can't happen and keep the euro.

David Brin said...

Tacitus, Thomas Barnett says that America will improve when the boomers depart. He calls the the "worst political generation" in American history.

Ryan is a tea party fanatic and Romney is the most unscrupulous and unprincipled opportunist I've seen. Until recently, the GOP had Lugars and Rudmans and even some Gary Johnsons. Yesterday I read the bio of a local, California congressman who is retiring, another moderate. (Though anyone who caucuses with today's house GOP is complicit.)

If Bill O'Reilly were the FAR right of the GOP, we'd have conversations, deliberations, and miracles like 1995, when moderate goppers and moderate dems combined to elbow aside radicals of BOTH parties and work with Clinton on Welfare Reform AND the budget balance deal.

That could not happen today. Not remotely. Liberals still offer compromises... like Obama offering the GOP's own health bill... but the reflexes in the GOP are so radicalized by gerrymandering that the country is not even recognizable anymore.

I pray for the dems to crush em... but for Johnson to treble the libertarian vote and to become the true leader of that movement.

David Brin said...

Your opinions on these NASA NIAC new technology proposals?


Paul451 said...

Reading about Roman society, the proles and plebs, the equites and patricians, the granting of rights determined by wealth, not just bloodlines, got me wondering whether we've got the whole fight over campaign finance backwards.

Perhaps the US should just bite the bullet and directly sell seats in Congress to the highest bidder. Auction off the seats every year. The more money you have, and are willing to bid, the more seats you can buy. The wealthier the society, the more valuable the seats, the more is available for government spending, etc. Those not rich enough to buy a seat outright, can donate to groups/parties that represent their interests. Senate seats would be worth much more than House seats. And if the money raised is enough, then it could replace taxation entirely. (No taxation without representation.) One small cost saving, there would be no pay for Congressmen, no allowances, etc, since they are self-funding.

Also no Congressional elections, no "politicians" as such. Although there would still be fund-raising, donation seeking, particularly by community-level groups.

I'm not sure this could be carried to the Presidency. You may need to introduce a parliamentary-style government. (The majority in the House of Representatives becomes the government, internally elects their leader who becomes Prime Minister.)

[Oddly, I'd expect such a system to have much more multi-party & independents than the current system. And require more sensible negotiation in order to work.]

Paul451 said...

Rob H.

"On the one side you have proof that God does not exist as a divine agent."

Would you?

Haven't you instead proved the existence of at least one God Of Physics? Our Designer and Creator. Being(s) more advanced than ourselves (since the system can model all intelligence, plus everything else, it shows that at least their machines are ridiculously beyond human intelligence), who clearly Created the universe for a Higher Purpose. And given the Great Silence, our universe-simulation may have been set up purely to model the creation of a single intelligence, hence we are it. And given that we are the point and purpose of the sim, it seems reasonable that our Creator(s) would occasionally intervene in our affairs, perhaps downloading a small piece of their own consciousness into the sim at certain points. Like around 4BC.

"Though I can see one benefit of knowing the universe is a simulation: you figure out the source code, figure out how to hack into it, and change things."

The storyline Matrix 2 & 3 should have had. The Matrix of movie one is "real"; it's our universe, which is a sim. The world of Babylon and the war with the machines is another level of that sim. Neo learns to hack, first one, then the other. Then "escapes" into another layer. (Hence literally "Matrix 1", "Matrix 2", "Matrix 3".) And is that last layer finally reality, or just another sim?

Alfred Differ said...

When I see NIAC funds going to NASA centers I find it troubling because I see it as a mostly captured research market. It’s not really a market in the traditional sense because the motivations can easily be politicized. I’m not arguing that the work isn’t worthy of support, but it looks too much like one group looking out for the interests of their friends and neighbors.

The problem starts with the core goal of transforming future aerospace missions. If those missions are envisioned as NASA efforts, then the transformation should be aimed at reducing the costs to NASA or improving the tech readiness of new ideas or something along those lines. If those missions are envisioned as commercial efforts (think of Planetary Resources as one example), then the transformations should be aimed at doing the research the industry cannot manage or requests public support to create a common infrastructure that will become public property.

Now consider the Venus Landsailing Rover (PI G Landis). What is the purpose of the transformation to be studied? Obviously there is no commercial angle for Venus surface exploration yet. Venus is well out into the economic far-frontier. This serves to potentially improve the odds of successful science being done on Venus. It’s a neat idea, but it is also a form of incest when NAIC funds it because Landis is at GRC. I’m not going to gripe too loud, though, because this is far frontier work. If it was near-frontier stuff it would be a different matter.

Now consider the ARC and eSionic proposals for life support architecture and air purification. One is government funding itself while the other funds a technology that might have terrestrial or near frontier uses. Guess which one I prefer got funding? I’m not opposed to the ARC proposal, but I strongly suspect it will produce documents that sit on a shelf for a long time. Couldn’t this be done as a proposal from outside? It’s not like there isn’t a lot of interest in passive methods for managing the state of the environment.

The gravity wave detector is probably the purest ‘basic research’ idea on the list. Is NAIC really in the business of funding basic research? I get that NASA explores on the far frontier and gravity waves, if they are detectable at all, might be found out there. Isn’t this too basic, though? Is GSFC really doing basic physics research using NASA dollars?

I note that most of the phase II awards avoid the incest concern I have. I’ll admit to having a soft spot in my heart for research done at JPL because of their success rate AND the fact that their work more often shows up in follow-up ideas and missions. I’m sure they produce their share of documents that sit unused on a shelf, but I know from experience that they will share them and even declassify them if people ask them to consider it. Most of the phase II titles suggest money will be spent doing engineering instead of science and I couldn’t be more tickled to see that. That is where I think NAIC should be focusing, but I have a strong preference for them to do so in a way that enables the commercial efforts instead of the future funding interests of NASA itself.

Jumper said...

Cavehopping Exploration of Planetary Skylights and Tunnels

This is interesting; I didn't know any voids had been discovered.

rewinn said...

About the NAIC/NASA stuff ... @Alfred Differ ponders aspects that are way beyond my envelope of knowledge ... my amateur response is that most of them seem way cool and, allowing for the fact that most great ideas don't actually work, I'd like to see what eventually comes of them. Water Walls seems to have massive application beyond NASA and I'd love to see the Super Ball Bot networked to each other and tested on earth as sort of a swarm intelligence (with an "off" switch easily accessible of course.)

I question the assertion in Robotic Asteroid Prospector (RAP) that "There will be too many judgment calls and qualitative decisions on-site for robots alone". Humans are very expensive to keep alive in space. I would like to see a study of the economics trade-offs (e.g. how many robots would have to be lost due to bad judgement calls to cost-justify having a couple of human brains out there) before greenlighting this one. But I'm probably in the minority with that opinion.

David Brin said...

The Chinese guy who just won the Literature Nobel wrote "Big Breasts and Wide Hips."

Good enough for me.

Tim H. said...

Jollyreaper, by "de facto collectivization", I was referring to the shift in agriculture policies in the late 1960s that selected for large farms, distorting the agricultural equipment market {You'll now sell 2 or three large, expensive pieces of equipment, rather than 7 or 8 moderately priced ones.} resulting in small business failures and depopulating small towns. Some areas in the midwest are resembling the last scenes in "On the beach".

David desJardins said...

@Rob: Anyone who thinks that anyone like Scott Brown can win the Republican Presidential nomination really hasn't been paying attention. How did John Huntsman do? He's got stronger credentials than Brown or Romney. But you have to be a fire-breathing lunatic to break 5% in a Republican primary. That isn't going to change any time soon.

David desJardins said...

@Alfred: I actually think the US corporate world is going to do just fine. I wouldn't bet against the US stock market. Weak employment is good for US corporations in many cases, they can pay relatively low wages and produce high-value products. Productivity and GDP have done pretty well even over the past few years when employment has been weak. I think employment will continue to be weak indefinitely (unless or until we change some of the structural factors causing high unemployment), and that will lead to widespread dissatisfaction among the general public, but the elites and the wealthy will do fine. As you say, economists, of course, have rosier projections. But their models don't even comprehend the current circumstances, as evidenced by Christina Romer's bogus forecasts about post-stimulus "recovery". They don't understand that the economy can be relatively strong but employment low and the middle class weak, so of course they won't predict that.

Ian said...

1. Empirical Liberal: I know I've skipped several of your points. Unfortunately real world problems mean it may be some time before I can respond properly.

2. David: a currency devaluation sufficient to produce a trade surplus in Greece would probably be on the order of 50%. The short term effect of that would be widespread bankrupcies as the real value of foreign-currency debt doubled and a drastic drop in living standards.

It would probably take several years fro the devaluation to achieve a surplus in any case -because foreign inputs to Greek goods would roughly double in price. As well as much of their electricity supply, that would seriously affect the Greek petrochemical industry which is one of their largest export industries and almost 100
% dependent on imported crude.

3.David DesJardines (I think it was you who referred to "reversion to the norm") When I think of reversion to the norm, I interpret it as meaning several years of underperformance to the long term average is likely to be followed by several years of overperformance.

Also, the reasons predictions of the impact of the stimulus were too optimistic were:

1. The Greek debt crisis; and

2. the Republican threat to default on the national debt.

If people actually READ economic forecasts they'd see they almost invariably contain a bit of boilerplate about how the predictiosn are made on the basis of "no exogenous shocks". Neither the Republicans' actions nor the debt crisis were predictable on the basis of the economic models applied.

(In particular, the first Greek election outcome was determined by a few thousand voters favoring SYRTIZA over New Democracy.)

David desJardins said...

When I say reversion to the norm or mean, I mean that the typical state of affairs between nations is rough parity. The USA has had a period of several decades of unusual economic dominance, due to a confluence of many fortuitous factors (only major industrial power not destroyed in WWII, copious natural resources, highly educated workforce, sound postwar economic policies, limited global exchange of ideas and innovation so that the US was the first to benefit from our innovations). All of those factors are coming to an end and so as we fall back into a more "normal" relationship to the rest of the world, it will be perceived as a downturn by Americans who have become accustomed to an unusual state of affluence. This is exacerbated by a global labor surplus that is increasing over time due to technological progress that reduces the need for or utility of many forms of relatively unskilled labor.

David desJardins said...

P.S. The reasons that Romer's predictions were wildly optimistic is that she didn't understand the true state of the US economy, the fundamental weaknesses that lead to high unemployment and underemployment and a relative decline for the middle class. Those phenomena, previously masked by the artificial boom of the previous 15 or so years, have now been revealed so that even after the economy has largely recovered from the financial crisis, it is back to near equilibrium, but it's a much weaker equilibrium than people like Romer believed (or still believe).

David Brin said...

Missed the debate. Impressions?

Saw one tweet: "Calling 9-1-1, an old man is beating up a child."

Hope so.

Rob said...

The right-wing response is to call Biden a meanie. He was too rude for them.

Alfred Differ said...

@David desJardins: ok. Thanks. That helps explain some of your gloom. 8)

When you say the US corporate world will do just fine, are you referring to the big corporations? Most of us are employed by the smaller variety that are either privately owned or harder to find in the equity market. Weak employment numbers is helpful to them too because they need wages to be as elastic as possible which is notoriously difficult to accomplish in the US. With the way health care insurance costs are going, the small corps really need this. Obviously that won't do well if the employment numbers are too weak, but in my sector they really notice when we get close to the classical 'full employment' scenario.

At the risk of annoying job hunters, I rather hope the employment numbers don't improve all that fast. Companies innovate much faster after rough times. I work as a software engineer and a big part of my business involves tearing apart work flows and automating parts of them to help groups recover in the productive sense without recovering in the head count sense. When you see recovery periods after recessions taking longer and longer to restore employment, part of that comes from guys like me who get paid to innovate. If I can automate part of your job, your employer should be comparing your wage to the cost of what I do and going for best value, right? Economists will have a hard time predicting the impact we can have in the future, but some recognize what we are doing. Some even recognize that it will get hard to define what a career is in some job sectors.

The group we hit hardest is the group that adapts slowest. Whether they do so for internal reasons or because they are trapped by external forces doesn't much matter. This is one of the areas where I tend to side with the Progressives who want to help them, but I won't go so far as to avoid helping to cause the forces that are changing the world out from under them.

From where I sit, the US middle class is only partially trapped where they are and much of that is because they were trained to think of themselves as employees who serve smarter people. Their relative loss of ground compared the top earners is partially forced by inflationary policies, but there are ways out of that that the internet millionaires demonstrate with near perfection.

David desJardins said...

I suppose I'm an "internet millionaire" myself, so I have a pretty good perspective on that. The vast majority of the US workforce isn't going to do what I did. They don't have the education or the skills or the aptitude. That's not a slam, it's just realistic. We can certainly encourage more people to be more entrepreneurial, but that by itself can only make a pretty tiny dent in the overall employment problem in this country. I disagree that the employment problem has much to do with how people "think of themselves". I think it has to do with the actual labor market for their actual skills and abilities. If the market value of what you can do, in dollars (as established by competition), is less than what it costs to be reasonably prosperous and satisfy basic needs in modern America, then no formula of positive thinking is going to change that.

Alfred Differ said...

'Reversion to norm' still smacks of historicism. Even arguing that a parity state exists assumes too much. There is no doubt that the US had a peachy situation after WWII in which to establish a dominant position in the world, but saying we were out of equilibrium assumes a force that creates equilibrium. What is it? How does it work? How predictable is it?

Sorry... sounds like historicism. Ugh.

Jonathan S. said...

I'm fond of the fusion rocket proposal partly because of how it would revolutionize interplanetary travel, and partly because the people working on it are using a fuel consisting of deuterium and lithium-6 in a crystalline matrix, and they're calling them "dilithium crystals." :)

Tweets about the debate, on my feed:

Chris Rock (@chrisrockoz): "I'd rather have Joe Biden a heartbeat away from the Presidency. I'd rather have Ryan a heartbeat away from making my salad at Olive Garden."

Molly Ball (retweeted by William Gibson): "I'm beginning to comprehend the Obama-Biden campaign's good cop-insane cop strategy."

Wil Wheaton (@wilw): "Sources tell me that Biden will forgo the final question and spend his two minutes doing 'stop hitting yourself' on Paul Ryan."

August J. Pollak (retweeted by William Gibson): "This is where the entire GOP realizes that four or so years of joking that Biden was a pussy have backfired horrifically."

Alfred Differ said...

Fair enough. If I can't earn a living doing what I'm trained to do, though, isn't that the classical signal to get retrained? Vegas doesn't need as many carpenters and plumbers as it once did when the housing market was being pumped by cheap (stupid) credit. My former co-workers get re-tasked or let go if their skills don't fit my employer anymore. The world changes out from under us.

Positive thinking won't fix everything. It is seen as corny (at best) by people who underestimate themselves. I'm referring to an effort made to point out that the forces of change are way too large to stop by anyone including big government.

Besides, who would want to try to stop those forces? If that had been done in the past they wouldn't have iPhones in their pockets and kids would still be catching polio in huge numbers. Anyone who did step forward to suggest the forces be stopped could probably be tagged and tracked as an ally of the aristocrats that have David spooked. 8)

David desJardins said...

I don't know what 'historicism' is. I read a Wikipedia article about it and I still don't know. Sounds like doubletalk to me.

But your question about equilibrating forces is valid. One could imagine that, if one society is twice as wealthy as another, that the former would stay twice as wealthy forever. One could even imagine runaway advantages, where the wealthier society grows more quickly than the poorer society, and the gap gets wider and wider.

I don't think this is likely in the world in general, and I think it's especially unlikely in the case of the US in particular. One big reason that the gap between the US and other economies is shrinking, not expanding, is that we consume more of what we produce, while they invest more of what they produce. About 85% of US production goes into consumption, the figure is only about 55% in Germany, and 35% in China. This is a huge disparity. If we were going to use our economic advantages to expand our advantage, you would think we would have to reinvest a lot of our output.

(I think this is a common pattern, as people get wealthier they tend to be more inclined to enjoy their wealth. But I admit that I couldn't prove that it's universal to all times and places, including the future as well as the past.)

Another reason we would expect the gap to close is various forms of free-riding. If the US is the world leader in innovation, others can catch up by investing less in actually innovating, but then either copying or co-opting our innovations. In an era of less globalization, if something was invented in the US then a year later someone would be making it in the US. Now, it's just as likely that a year later someone is making it in China. This means we don't close the loop by getting a disparate advantage from the investments we do make. It's good for the world as a whole, but it's bad for US economic advantage.

Yet another US-specific issue (although you could draw a parallel to other times and places) is that we put a disparate share of what we produce (as well as our intellectual capital) into our military, which fundamentally doesn't do much to create or defend an economic advantage.

Taken together, the indicators all seem to point to an advantage that was generated by certain historical circumstances but that will tend to dissipate over time, at least if we don't do much to maintain it (as we certainly aren't). If that's 'historicism', then I guess I'm a historicist.

David desJardins said...

There's only so much 'retraining' that's available. If you're a 45-year old former factory worker in the US, there's nothing you can be realistically trained to do that millions of Chinese workers can't be trained to do for much less. So you can try to compete only for jobs in the non-tradable sectors of the economy, but there are then more Americans looking for those jobs (people also looking to be retrained for them) than there are jobs. And that's going to increase, not decrease, over time. Starting earlier is better, but, frankly, if you don't get a good education, age 12 might be too late for a lot of people.

Alfred Differ said...

Historicism is an old idea that there is a science behind history. The Tytlar thing that David describes in the header post is an example. There is an assumption of a reducible model behind the evidence we know as 'history'. If that model can be approximated, we can begin to predict history. Think Seldon. Think Hitler. Think just about anyone who argues that something is historically inevitable. I won't argue that you are an advocate of historicism, but you might have caught it from someone in your past. A very bright light shining upon it usually mitigates the harm it does. 8)

The thing to watch out for is the belief that once one has measured something and spotted what appears to be a correlation that there is a causation. Of course, there might be one, but the usual case with history is that there are several possible narratives that would act as explanations and it might be that none of them are correct. People and the societies we form are organisms in the sense of spontaneous orders, so the most like explanation is probably the one that says there is no explanation at all. No one intended to do whatever it was that was done anymore than a bunch of hydrogen atoms decided to get together and form our Sun.

If you are looking for explanations for the gap shrinking between us and the rest the world, though, I think the most likely one is that we won the Cold War. We got what we wanted. Many in the world have decided that we have the correct trade model and they are joining us. The gap is closing because they are trying to follow as quickly as possible. Add to that the fact that we are paying to police the oceans and they aren't and you get a story that says they can and are catching up. We should be congratulating them and ourselves. We won. Whoopee!

duncan cairncross said...

Couple of comments

One there is plenty of money to go around if some people had not gamed the system (cheated) to get vastly more out than they are putting in

Two - paying to police the oceans??
Why do the oceans need to be policed?
If they do are the correct tools being used?

Ian said...

On a totally different subject: I am enjoying immenssely the Science Fiction Megapacks from Wildside Press


Each contaisn roughly 30 stories of varying length - most old, some new.

all for 99 cents.

They're a lot fun - and I'm becoming reacquainted with one of my all-time favorite Sf writers: Murray Leisnter.

There are plenty of other excellent writers represented here - Cyril Kornbluth, Frank Belnap long; Mack Reynolds, Fredric Brown to name just a few - but even so Leinster's work stands out as the highlight of each volume.

Oh - the Megapacks are available on kindle.com but Wildside requests that people order from their site since they get a better profit margin from such sales.

Ian said...

A quick note on "reversion to norm" as applied to markets - really it's no more than the observation that markets are more irrational in the short term than in the long term.

So prices tend to fall more than they should during recessions and rise more than they should during expansions.

I should also point out that this theory has little or nothing to do with economics and is more the product of investors and other market partciipants.

Political TroubleMaker said...

Such as the dominance, in 99% of human societies, of small cabals of owner oligarchs, who passed on their property-based power to sons who never did a thing to earn it. The persistent-feudal pattern that Adam Smith and the American Founders strove so hard to break. Yes, I see the pattern-seeking allure.

Assuming there's a feedback cycle - a network effect, so to speak - between wealth accumulation and political power, and assuming selection pressure advantage to passing estates down to children and kin, what's the means for a general populace to check against this imbalance? And is it an imbalance? We may not like the outcome, but power pyramids have been the norm since recorded history.

jollyreaper said...

I think a great way to break the cycle is a progressive tax on inheritable wealth, doesn't kick in until $x million. This will protect the little guy, especially Californians where modest family homes owned by teachers and firemen have appreciated to ridiculous sums. But the Koch Brothers never could have inherited daddy's business the way they did.

This is John Raese, Republican, entitled scumbag millionaire. Below, a quote from a radio interview:

LEWIS: Tell us a little bit about you and your business experience and how you got here.
RAESE: I made my money the old-fashioned way, I inherited it. I think that’s a great thing to do. I hope more people in this country have that opportunity as soon as we abolish inheritance tax in this country, which is a key part of my program.

Yeah. I'd like to see this entitled scumbag actually work for a living.

Tacitus said...

Normal people did not watch the entire VP debate. Alas, I can give a summary.

Both men tossed around numbers that the other found implausible. Both had some areas where specifics were not forthcoming despite some really specific questions (like do you support raising qualifying age for Soc Sec).

Regards visuals they will in part be seen through partisan eyes. Progressives will laud Fightin' Joe and his passion. Conservatives feel Ryan performed well under pressure.

Now, if there were any independents watching, and if indeed any still exist, their opinions would be fascinating. Recall that this is not only a soapbox for the views of their bosses, it is a showcase for the guy "a heartbeat away".

Regards this I have a brief professional opinion.

I can excuse the occasional moment of being tongue tied, both guys had 'em and speaking under pressure they will happen. A few stats were flubbed, more by Biden who sometimes mixed up millions, billions and trillions. This speaks in part to the imaginary quality of government finance.

What worried me a bit, and makes me wonder if the old tales of Biden having some neurological issues, was his difficulty comparing Syria and Libya. It is a classic neuropsychiatric test to show similar items and to compare and contrast. Size, perspective, which is in front which behind. When Joe can't articulate the relative sizes and populations of the two countries it frankly worries me. He could have made the valid point that Syria is a much more difficult proposition with ease, but bogged down, spinning his mental wheels in middle eastern sand trying with little success to compare the two "objects"

Most talking heads call this one a draw as of the morning after. We will see more relevant impressions over the next few days.


Political TroubleMaker said...


Did you run the Tacitus.org blog way back when?

Tacitus said...

I in fact adopted the moniker Tacitus2 to contrast from a prior Tacitus who had some political opinions considered anathema here.

The original Tacitus otoh is well worth a read for his political wisdom, Talthough I cannot do it in the original Latin.


Acacia H. said...

CNN had a long and rambling and very partisan view that basically panned Biden. I was rather surprised to see it to be honest. Hmm... you know, I do have a friend who watched it last night and while her fiance is my very conservative friend, she does reserve the right to see things as she wants to (as so she should). I'll ask her.

Rob H., who spent his time doing better things like reading the latest Ciaphas Cain novel by Sandy Mitchell (well worth reading!) and talking on the phone with a friend

IonFro: when ions go retro with their hairstyles

Acacia H. said...
This comment has been removed by the author.
Ian said...

Chinese writer wins Nobel.

Chinese government praises writer.

Chinese writer uses first interview to call for release of Liu Xiaobo, China's most famous pro-democracy campaigner (and fellow nobel lauraeate.)http://www.bloomberg.com/news/2012-10-11/mo-yan-wins-2012-nobel-prize-in-literature-academy-says.html

Jumper said...

On transparency:

Acacia H. said...

And this is what my nonpartisan friend (who does her best to keep my friend and I from going at loggerheads at each other on politics) had to say (reposted because she didn't want any paragraph breaks):

My thoughts were that Biden won, to a degree. At the beginning of the debate, it looked like Ryan was going to take it: he was articulate and succinct. He said what he wanted to with poise and confidence, even with Biden silently laughing at him. However, later in the debate it looked like he was receiving pressure from both the moderator and Biden and he started to repeat certain lines that sounded a lot like slogans. Also, when the moderator brought up an interview with a decorated soldier and how this soldier was dismayed at all the mud-slinging during this campaign, Ryan did not change his tone and continued his accusatory statements toward his opponents. Biden got the hint and did not mention his opponents at all, that I can remember anyway. In general, Biden acted confident and maybe a bit laid back. He pushed when he needed, but otherwise he looked relaxed and secure. At least, most of the time; he was a bit tense going into the debate and relaxed as it went on. He also, as I intimated earlier, was able to sense where the debate was going and was able to move with it. He did not direct it, like Romney did in the last debate, he more followed the flow. I would need to do some fact-checking to see how accurate what they each said was, and I have suspicions on that account, but overall I feel they delivered their lines with confidence. The reason I say Biden won was mostly because of the flexibility he showed and how inflexible Ryan seemed later in the debate as Biden moved from accusatory to correcting to presenting an idea and Ryan started just repeating prepared lines and dialog. The closing argument for each really brought that home. Ryan sounded like he was giving a prepared speech and Biden was talking to us. I have been left feeling a bit conflicted about my vote.

Jonathan Roth said...

Essay here that echoes David Brin in that we need more optimistic SF, especially visual SF.

Jonathan Roth said...

Forgot to post the link http://kenlevine.blogspot.com/2012/10/looper-vs-jetsons.html

Political TroubleMaker said...

I'd like to see Haruki Murakami win the Nobel. I absolutely loved A Wind Up Bird Chronicle.

rewinn said...

@Dr. Brin - What I enjoyed most about the debate is that Ryan, asked several times to provide any detail as to how he would pay for his tax rate cut, simply refused.
Biden asked if Ryan'd commit to not eliminating the home mortgage interested deduction. Ryan refused.
Anything can happen from this point, but if the Obama campaign has any brains, it will exploit this to win the vote of every American with a mortgage. And deserve to.

(Full disclosure: I'm an Obama partisan and a mortgageholder.)

@Tacitus - if you're going to suggest Biden may have neurological difficulties, would you care to comment on the evidence of brain damage Romney sustained in his car crash in France?

Of course, any of us could have a bomb in our brain and we wouldn't know it until it goes off, and perhaps not even then. This should be a cheering thought, since it should encourage us to enjoy life while we have it!

@ jollyreaper said
"I'm not sure how the economics of your suburban farm would work out..."

Everyone must pick a solution that suits them. I grow things I need or find a need for what's already growing there. My land is small but in addition to classic fruits, I don't discard useful stuff such as pruned branches.

"Sprawl depends on cheap and abundant energy. ..."
Old-style sprawl, sure, but that's not what I'm talking about.
For example, about half my days, I don't need to leave my land; I work via the internet which is energywise pretty cheap. When my gas guzzler finally croaks (I won't waste the energy invested in building it) I'll go electric and be more overall energy efficient than when I was in a city apartment.

"...nobody walks anymore and all our jobs are sedentary so we have the problem of needing to add exercise to our day."
Excellent point, and that supports mine. Residents of urban warrens need to simulate normal healthy exercise with time at the gym, which is kinda funny when you think about it.

Technically I suppose I'm in a city limits but this neighborhoods is all single-family housing. Some of the wasteful lawns are gradually converting to more complex and useful activities, e.g. flowers or food crops, and I'm far from the only work-at-home.

David Brin said...

onward... to sonnets!

Unknown said...

As to political leadership, democracy and the public purse the core problem from Greece (Athens with others), Rome, Great Brittan, Soviet Union and now the United States is the huge cost of military adventures with no point.

Afghanistan for the later ones seems to be the perfect implosion inflection point.

Now as to the current privatization of various portions of public good, i. e. Social Security, Medicare and so forth. Perhaps some should merely attach a special set of penalties to permit the privatization.

Ok here is the idea, dramatically increase the penalties to the private entities running any program on behalf citizens to be the beneficiaries.

1.) Life Imprisonment for all Malfeasance as minimum punishment of all executives in the boardroom or direct reports to the board.

2.) Absolute loss of all assets by those in the entity defined in #1 as a backstop to their risk inducements. FYI, if they skip the country, #1 becomes a military matter so we detonate bombs upon their exile and banish the country they go to from all access of modern air travel for a minimum of ten years for harboring.

3.) To big to fail status of any institution tied to the entities will be stripped. Those entities go to forced liquidation, all records, e-mails become easily searched by Bing, Google and a variety of other engines. Intellectual properties all go into the public domain 100%, no exceptions, trademarks, copyrights and patents.

4.) Anyone involved externally from the organization tied to the malfeasance on an individual basis will face a minimum of 10 years imprisonment, loose all intellectual property rights forever.

Did that cover protections for privatization sufficiently? Do we need to apply such stringent standards to officials in government going forward to assure the pay in's lead to equitable pay'outs for the beneficiaries?

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

I think it's a mistake to assume that extreme penalties can deter malfeasance. Unless you also have perfect detection, in which case you don't need the extreme penalties. The problem with extreme penalties is they tend to be applied very inconsistently. Especially when the offense isn't (and can't be) clearly defined. Who decides what is "malfeasance"? It's pretty subjective, the more so the higher you make the stakes. Higher penalties generally mean you also have even bigger incentives, because there's more to gain by violating the rules if it's rare. Having systems that are themselves self-enforcing and self-regulating, is much more desirable.

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Nick, JCTN said...

The column does not analyze the Tytler Calumny as much as use it as a spring-board for the author's viewpoints. Here are some of the errors.

The first mistake is a literal reading of the Tytler Calumny as if it were a chemical equation, instead of a form of wisdom. For instance, those who invoke it are not trying to convince fellow citizens that the US should change it's form of government. They use it as a warning against government spending and dependence.

When it states that the majority vote for benefits, this refers to a general trend like any other economic or philosophical statement. Attempts to point out the "one step back" in two steps toward fulfilling it seem petty. Does anyone really think our economy is more stable and growing faster now than 100, 50 or even 20 years ago.

Although collapse is stated as a certainty, it doesn't define what encompasses the collapse, how long it will take or who would lose and come to power. Mixing in the unrelated 200 year cycle is a clever way to affix measurable failings to the Tytler. It’s irrelevant, but since it was raised... the author includes colonialism to use the 300 year figure for the US's age, but the formation of the federal government was a massive change as part of a revolution and is rightfully where the timeline for the 200 year collapse of the federal government would begin. To treat the formation of the US as a non-event belittles the constitution and war for independence. All that being said, people often cite the beginning of US collapse in the 30's, 70's or 80's and say it’s simply taking a century to play out.

The second mistake is a mis-reading of the Tytler Calumny. The author jumps to the conclusion that "voters" refers to lower-income people, but the Tytler makes no such distinction. Maybe the author makes this leap because a majority of federal spending is on programs for low-income individuals, but that implies a practical acceptance of the Tytler which the author would deny. Instead, read the Tytler again with the idea that "voters" also refers to high-income individuals who use bureaucracy for their own gain. With that mindset, most of the article and comments actually argue for the validity of the Tytler.

I believe this last point brings almost everyone on this page to some level of agreement: that where there is government, there are people who vote for favoritism, whether it is a CEO's tax exemption or a low earner's free cell phone. Or a solar company versus an oil company. In most cases, these individuals or businesses are not doing anything illegal or even immoral. Attempts at codifying against these examples have failed and will always fail. Votes are power. Money is power. In a free society, people use their power as they choose.

Therein lies the acceptance for the brilliant framework of the constitution: the only way to limit the Tytler effect is to limit the power of the government. To keep citizens from voting themselves largess, government must not be allowed to grant it. But that onion's been getting peeled for over 2 centuries. So... a more practical point: if the government is a corrupt ball of red tape at 20% of GDP, why would anyone want to take it to 25%? Both sides have people that say "you vote in my guy and we'll spend the money in the right places", but there is no right guy. And if there was, he'd be bargaining with hundreds of other wrong guys. Then, his two terms would be up. There is no other solution to government dependence or corruption besides limits on the size and powers of government.

I’m very curious: does the author disagree with the basic thesis of the Tytler that voters (rich or poor) generally use their vote to advance their own monetary interests? And can that be done to a point that an economy collapses?

Roderick_E said...

Another review: Ending the cycle

Anonymous said...


David desJardins said...

I think experience shows that in well-functioning democracies people don't generally vote their own selfish interests. Even if Mitt Romney would cut my taxes and Barack Obama would raise them, my influence on that result is so diffuse that doing something better for me rather than what's best for the other 300 million Americans, just isn't worth sacrificing my own values. This seems to be how most people vote---they vote for what they think is best for the country rather than their own selfish interests. Of course, you can still be concerned that people see things from a narrow perspective and so they tend to think that what is good for them is good for everyone, but that's a lot different from actually voting for personal interest rather than the public interest.

Unknown said...

Got to agree with 99.99% of this, David, and my only disagreement is semantic. You say that an oligarchic economy run by and for the very rich isn't capitalism. What you mean is that it isn't an ideal free-market economy a la Adam Smith. In that you are of course correct, but capitalism is EXACTLY what it is. A capitalist economy is one that is organized to maximize the returns on the investment of capital. "Free market capitalism" is an oxymoron. In fact, a socialist economy using the methods approved by modern-day socialists (worker-owned business and the spread of individual self-employment, rather than state-owned business) comes a lot closer to the free market ideal than capitalism ever has, ever can, or ever will.

But that's a semantic quibble. On the whole, and on every point of substance, bravo.

David Byrd said...

If someone from the inside a simulation ‘hacks’ it, might not that attract the owner, who may fix it or shut it down as a failed run?