I'd Vote For 'Em

You know, I guess what we need is an independent leader. Maybe you and I should run together on a unity ticket, Joe?

I think we could do that. [ Laughs ]

The unity ticket of Scarborough and Bill Maher. I'll be happy to be the vice president because you have experience in Congress and I don't really want to get up before noon.

Although I say it half jokingly, I think the concept of comedian and HBO late night political talking head Bill Maher and MSNBC political analyst and host of "Morning Joe" Joe Scarborough running together on an independent ticket really says something about the state of the union. In an interesting quasi-mutual interview on Newsweek, Bill and Joe undertake an entertaining dialogue that brought a few things to mind for me. Check out the entire script here, it is a must read if for entrainment value only.

1. The Talking Heads Can Actually Have Meaningful Discussion - It is sad when two self proclaimed polar opposites on the political spectrum can have more meaningful dialogue than our elected leaders. Bitter partisan jockeying is paralyzing Washington and although I haven't followed politics closely for too long, by all historical accounts it now seems worse than ever. I understand Joe and Bill don't have to worry about securing future votes and satisfying constituents and that definitely helps cut through the political talking points and BS associated with many of our nation's most important issues, but should it really make that much of a difference?

2. Republican Does Not Equal Conservative; Democrat Does Not Equal Liberal - I actually just finished Joe Scarborough's book on audio book where he talks about this issue a bit. It was one of the main principles that I took away from the book and it is definitely a root cause of the stagnate political environment described above. Congress is more concerned with voting based on party than they are with voting based on principle. Don't believe me? Need a few examples? Well look at the Bush era where a Republican president, who was elected based on his supposed conservative principles, and a majority republican congress took over a budget surplus and turned it into the greatest deficit the nation has ever seen. A more recent example is the surge in Afghanistan. I heard an interesting question posed the other day along the lines of, "if President Obama was still Senator Obama how do you think he would have voted for sending more troops to Afghanistan?" I will let you answer that one but regardless more troops are heading over there in a Democratic majority congress that largely opposed the surge into Iraq where the conflict strategy was much more clearly defined that the Afghanistan conflict. It is examples like these and the talking point laced interviews on major media outlets that have led me to this political truth.

3. Independents Are Taking Over The World - Although the title of this post is somewhat satirical in nature, I can't help but feeling a sense of camaraderie with my a younger generation who shares this sentiment. Although there is certainly no shortage of people out there who disagree with my political views or anybody else's for that matter, I think the growing majority of the younger generations are becoming disenfranchised with the way things are going politically in this country. Here is what Joe and Bill had to say:

Is it time for an independent?
Independent?

Yeah.
An independent? Well, that's possible. Isn't the independent registration now bigger than either political party?

It's up in the 40s. It's the highest it's ever been, according to Gallup.
That's twice as many as Republicans, and I think it's more than Democrats too. You know, I guess what we need is an independent leader. Maybe you and I should run together on a unity ticket, Joe?

The statistics are there to support my inkling and although the percentage of actual voters generally increases with age it is only a matter of time until the younger generations begin voting in greater numbers. And with the undoubted increase in political awareness largely stemmed by the recent election and technological advances in social media, etc. this time may come sooner than later. I think that there are more and more people who, like myself, are finding themselves agreeing more with the combination of progressive Bill Maher and Conservative Joe Scarborough than they are with the political parties they see on the TV screen. Perhaps this change is the natural adjustment to combat the political bickering described above. Let's only hope.

The Dollar And The Gun

You are in a conversation with an acquaintance. The conversation turns to politics. You make it clear you are for capitalism, laissez-faire capitalism. Eloquently, you explain the case for capitalism in terms of man’s rights, the banning of physical force and the limitation of government to the function of protecting individual freedom. It seems clear, simple, unanswerable.

But instead of seeing the “light-bulb look” on the face of your acquaintance, you see shock, bewilderment, antagonism. At the first opportunity, he rushes to object:

"But government has to protect helpless consumers from the power wielded by huge multinational corporations.”

Or: “Freedom is impossible under strict capitalism: people must have jobs in order to live, and they are therefore forced to accept the employer’s terms.”

Or: “In a complex industrial society such as ours, government planning must replace the anarchy of the marketplace.”

Does any of this sound familiar? It is a battle that is all but new. In fact it represents the fictional battle that ensues throughout one of the greatest pieces of literature ever written (my opinion). The literature I am speaking of is Atlas Shrugged by Ayn Rand. The book is controversial, however in my opinion I think that if you put your philosophical beliefs aside you will appreciate the mastery with which Rand has interwoven politics, business, philosophy, love, religion, etc all within an amazingly entertaining fictional tale.

I recently began following The Ayn Rand Center on Twitter which posts publications in line with Rand's philosophy. One that I read the other day was entitled "The Dollar and the Gun." It was written by Harry Binswanger as published in Why Businessmen Need Philosophy back in 1983. The work centers on many of the central premises of Atlas Shrugged, specifically the distinction between economic and political power.

"Political power” refers to the power of government. The special nature of that power is what differentiates government from all other social institutions. That which makes government government, its essential attribute, is its monopoly on the use of physical force. Only a government can make laws—i.e., rules of social conduct backed up by physical force. A “government” lacking the power to use force is not a government at all, but some sort of ugly pretense, like the United Nations.

A non-governmental organization can make rules, pass resolutions, etc., but these are not laws precisely because they cannot be enforced on those who choose not to deal with that organization. The penalty for breaking the rules of e.g., a fraternal organization is expulsion from the association. The penalty for breaking the law is fines, imprisonment, and ultimately, death. The symbol of political power is a gun.

A proper government points that gun only at those who violate individual rights, to answer the physical force they have initiated, but it is a gun nonetheless.

Economic power, on the other hand, is the ability to produce material values and offer them for sale. E.g., the power of Big Oil is the power to discover, drill and bring to market a large amount of oil. Economic power lies in assets—i.e., the factors of production, the inventory and the cash possessed by businesses. The symbol of economic power is the dollar.

A business can only make you an offer, thereby expanding the possibilities open to you. The alternative a business presents you with in a free market is: “Increase your well-being by trading with us, or go your own way.” The alternative a government, or any force-user, presents you with is: “Do as we order, or forfeit your liberty, property or life.”

As Ayn Rand wrote, “economic power is exercised by means of a positive, by offering men a reward, an incentive, a payment, a value; political power is exercised by means of a negative, by the threat of punishment, injury, imprisonment, destruction. The businessman’s tool is values; the bureaucrat’s tool is fear.” (Capitalism: The Unknown Ideal, p. 48)

Whether you agree wholeheartedly or are completely opposed to the above line of thinking, the argument should be had. As I was reading through a second time I came across the excerpt below.

In today’s depressed economy where “obscene profits” have turned into (lovely?) losses, the anti-business theme is being played in a new key: the target has shifted to foreign businesses. The equation of the dollar and the gun remains, however. To wit: “Senator Paul Tsongas (D-Massachusetts) believes that the hightechnology challenge from Japan is as serious to the United States’ long-term security as the defense threat posed by the Soviet Union.” (Infoworld, May 30, 1983)

The Soviet Union threatens us with nuclear annihilation. The Japanese “threaten” us with the opportunity to buy cheap, reliable computer parts.

One could point out that the law of comparative advantage, a cornerstone of economic science, dictates that one country’s superior productive ability can only benefit all those with whom it trades; that if Japanese firms can produce computer parts at lower cost than U.S. firms can, then our firms will necessarily have a comparative advantage in some other area of production; that any government intervention to protect some U.S. firms from foreign competition sacrifices other U.S. firms and the public at large to inefficiency, lowering our standard of living. But all this would be lost on the kind of mentality that equates imports with bombs.

Does that sound familiar? It should. Because we aren't far off from the same situation today. Just replace Japan's cheap products with China and add in cheap labor from India and it is one and the same. I really enjoyed the way in which the author employed a Socratic method-esque approach to debating common accusations against capitalism.

It is true that laws protecting rights are a precondition for the production of wealth, but a precondition of production is not production. In enforcing proper laws, the government does not produce anything—it merely protects the productive activities performed by private individuals. Guns cannot create wealth. When a policeman prevents a mugger from stealing your wallet, no value is created; you are left intact, but no better off.

The absence of a loss is not a gain. Ignoring that simple fact is involved in the attempt to portray the government’s gun as a positive, creative factor. For instance, tax relief is viewed as if it were government encouragement. In reality, tax breaks for schools, churches, homeowners, etc., are reduced penalties, not support. But socialist Michael Harrington writes:

The Internal Revenue Code is a perverse welfare system that hands out $77 billion a year, primarily to the rich. The special treatment accorded to capital gains results in an annual government benefit of $14 billion for high rollers on the stock exchange. (Saturday Review, November 1972)

Harrington equates being forced to surrender to the IRS one quarter of your earnings (the tax rate for capital gains), with being given a positive benefit by the government. After all, the IRS could have taken it all.

Just as the absence of a loss is not a gain, so the absence of a gain is not a loss. When government handouts are reduced, that is not “balancing the budget on the backs of the poor”—it is a reduction in the extent to which the poor are balanced on the backs of the rest of us.

And:

I will conclude with another scenario. Imagine that you survive a shipwreck and have to steer your lifeboat to one of two desert islands where you will have to remain for several years. On each island there is one inhabitant. The western island is the property of a retired multi-millionaire, who lives there in high luxury, with a mansion, two swimming pools and all the accoutrements of great wealth. The eastern island is inhabited by a propertyless beachcomber who lives in rags and eats whatever fruit and fish he can scrounge up. Let’s add that the millionaire is an egoist and strict capitalist, while the beachcomber is a saint of altruism who will gladly share his mud hut with you. Would you, or anyone, head east to escape being “exploited” by the millionaire’s economic power?

As I said earlier, you may not agree with the premise of the writing but I definitely recommend reading the article in its entirety here. I would love to hear comments as this is a polarizing topic amongst many.

We Can't All Be Right; So What Works? More Super Freakonomics Debate, Trolls, And Creation

After I wrote the post on the Super Freakonomics controversy regarding global warming/climate change, the controversy actually grew larger. Most notably when economist and NY Times columnist Paul Krugman got involved. I have included the second rebuttal by the Super Freakonomics team and I find it quite interesting how they are dealing with their critics criticisms. In fact they aren’t really arguing with their critics at all. They are merely outlining more definitively on the issues and more importantly what issue they are actually examining.

We are answering a different question than our critics.

Our question, at noted above, is what is the cheapest, fastest way to quickly cool the Earth. Like every question we tackle in Freakonomics and SuperFreakonomics, we approach the question like economists, using data and logic to conclude that the answer to that question is geo-engineering. Not coincidentally, almost every economist who has asked the same question has come to the same conclusion, including Martin Weitzman and the economists at the Copenhagen Consensus.

But that is not the question that Al Gore and the climate scientists are trying to answer. The sorts of questions they tend to ask are “What is the ‘right’ amount of carbon to emit?” or “Is it moral for this generation to put carbon into the air when future generations will pay the price?” or “What are the responsibilities of humankind to the planet?”

Unlike the question that we are asking — How can we most efficiently cool the Earth fast? — the types of questions that environmentalists are trying to answer mix together both scientific issues and moral/ethical issues. If you have any doubts about this, watch Al Gore’s movie, in which he says explicitly that reducing carbon emissions is not a political issue, but a moral issue.

That is why someone like Ken Caldeira can agree with the facts presented in our chapter, say that the chapter is written in good faith, but still disagree with the conclusion that geoengineering is the answer. It is because the question Ken Caldeira is trying to answer is not the question we are trying to answer. The same is true of our critics. But instead of just making this simple point — that we are asking different questions — the critics have either intentionally or unintentionally confused the issues by making all sorts of extraneous arguments.

I do not mean to imply that the question we answer in the book is the most important question. It may be that the questions that environmentalists are trying to ask are more important and more interesting, but that certainly does not mean that we don’t want to know the answer to our question, a question that the environmentalists don’t bother to ask very often because they are focused on their more philosophical questions.

So for all the blogosphere shouting against our chapter, I have to be honest and say that I just don’t get it. I can’t understand why any environmentalist who really cares about the Earth’s future could say with a straight face that geoengineering doesn’t deserve a seat at the table as the global-warming debate heats up.

This is why I have always been interested in economics. Especially the economics of social issues. I definitely have an idealist side to me. Being an optimist by nature I have a predisposition to strive for the way things should be. Although I am proud of that quality, it can be a dangerous trait as you are susceptible to having the blinders on. Economists are important because they study the science of incentives. Their study is the study of creating action. I read another extremely insightful post (as always) from Seth Godin regarding what he calls “trolls.” Here is what he had to say about trolls:

Trolls
Lots of things about work are hard. Dealing with trolls is one of them. Trolls are critics who gain perverse pleasure in relentlessly tearing you and your ideas down. Here's the thing(s):

1. trolls will always be trolling
2. critics rarely create
3. they live in a tiny echo chamber, ignored by everyone except the trolled and the other trolls
4. professionals (that's you) get paid to ignore them. It's part of your job.

"Can't please everyone," isn't just an aphorism, it's the secret of being remarkable.

I love number 2. Critics rarely create. I am not advocating abandoning debate and philosophical exploration. However there are times, as illustrated by the Super Freakonomics crew controversy, where it may be more important to stop debating what is right and start creating what will work. I am not saying stop moral debates, however each side of any issue feels that they are right. We cannot all be right, especially if we are on opposite ends of the spectrum. So there are times where maybe we should move onto agreeing on what can work....and what can work now. If you think this only applies to global warming you are wrong. Look at all the politically significant and unfortunately politically stagnant issues that consistently arise in Washington. Just a thought….