Capitalism V3

Off Topic: Software That Produces Ads?

CurtD — Tue, 31 Aug 2010 19:38:39 +0000

Don’t Tell the Creative Department, but Software Can Produce Ads, Too
The NYT

“BETC Euro RSCG, part of the Euro RSCG Worldwide division of Havas, has developed software that can produce elementary advertisements. The software is called CAI, pronounced Kay, for Creative Artificial Intelligence.”

(Posted in NYT comments)

“In the late eighties I wrote a very complex set of software applications that took data and made legal arguments. It horrified people in the profession, who were, at that time, still addicted to legal pads and lofty self impressions. But we were able to increase a docket (the set of cases a lawyer could manage) from the tens to the thousands. Admittedly, this was procedural law, and not dramatic legal theater. But it was law and argument none the less.

The number of federal judges that have seen, read and processed documents, and adjudicated cases based upon arguments purportedly written by lawyers, but entirely generated by machine, and only given a cursory review, is in the many hundreds, and the cases the tens of thousands.

Ads are not much different. They are commodities. Visual and literary symbolism adds high permutations to those commodities. But that does not mean that they are not formulaic.

Except for perhaps the top half-percent of ads, and except for brand symbols like logos, almost all advertising (impressions that is) relies upon a very limited set of visual compositions.

Any sufficiently mature technology becomes clerical in nature. And 2D ads are a mature and fairly tired technology. It matters more that you can afford to insert it into the consumer’s environment a hundred times, than does the quality of it. And the quality of an ad simply decreases the cost of the number of impressions needed to stick an idea into the consumer’s head.

The reality is the reality: advertising is a commodity and it is rarely interesting, rarely innovative, and almost entirely derivative. And if it wasn’t it wouldn’t work.

Almost all current creative innovation is in the digital arena, simply because it’s a deeper technology that hasn’t been fully explored.

Current attempts at automating 2D ads are not all that impressive. But given a sufficient pool of images, a sufficient pool of phrases and quotes, and a sufficient influx of cultural symbolism, and a simple enough set of requirements, most ads are derivative and permutations rather than informative and persuasive, and as such most ads can be automated.

And given the diverse quality of ads (impressions, not media) the median of the curve of quality of ad would undoubtably shift to the better, given automation.”

A Political Movement Pretending To Be A Religion Replaces A Religion Pretending To Be A Political Movement

CurtD — Tue, 31 Aug 2010 18:12:04 +0000

From The Left’s Unlikely Alliance with Islam By Robert Eugene Simmons Jr.

Capitalism V3

"First we encounter Marxism, which is a religion masquerading as a political movement. When we finally defeat Marxism the void is almost immediately filled by Islam, which is a political movement masquerading as a religion."

Most fair-minded Americans have no problem with people who wish to practice their religion. In addition, most fair-minded Americans know of the difficult pasts of Christianity and Judaism and would demand of Islam what has been demanded of other religions. Americans don’t tolerate inquisitions anymore than they do Sharia courts. Americans realize that religious freedom is inherent in the melting pot that is America, but they also understand that all religions must exist under an umbrella of mutual respect and within the boundaries of common law. Americans would no more accept honor killings than they would accept a Catholic man killing atheists for the sake of his religion. The freedom of religion, in the end, is not a carte blanche to do whatever you wish and then yell “first amendment,” but rather a constraint to prevent the government from imposing a single religion, as Islamic governments do.

I would add, that any religion that seeks dominion over temporal matters (to establish laws) is not a religion, but a political movement masquerading as a religion. And any religion that encourages its people to lie about their convictions, is incompatible with democratic government. Even worse, it’s incompatible with the western way of life.

First we encounter Marxism, which is a religion masquerading as a political movement. When we finally defeat Marxism the void is almost immediately filled by Islam, which is a political movement masquerading as a religion.

Islam and Marxism are the same. They are the totalitarianism of equality in ignorance and poverty.

(In retrospect, Christianity wasn’t much better when it was brought into the empire. )

The Reality Of Freedom #2: An Analysis Of Freedoms

CurtD — Tue, 31 Aug 2010 17:33:08 +0000

The Term Freedom, and its near relation ‘liberty’, has a long and varied heritage. Freedom is a physical analogy. It is a physical experience. It is freedom from constraints. Liberty is a political analogy. It is the lack of political constraint. It is a general condition of a populace. Freedom is individual. Liberty is a political state. You cannot have liberty if you are not free. But you can have freedom without liberty. These words are often used as synonyms. Because they are synonyms. And because we do not really know.

A survey of the definition of Freedom will return these results:
1) Freedom From Restraint and Coercion (Personal, physical, or verbal)
2) Freedom of Property and Exchange (Personal economic, property and exchang)
3) Freedom of Opposition (Personal Political, verbal) ie: Speech, Association.
4) Freedom from externalities (redistribution)
5) Political Freedom (choice of leadership, and form of government)
6) Religious Freedom (right of opposition)
7) National Freedom (right of race and tribe)

Understanding The Economy Of Freedom

We are all born free, so to speak, and able to use perception, memory, thought, action, force and violence to get whatever we want, if we choose to. Cooperation is not a necessity, at least for the strong. It is a compromise. It is a trade off. So lets look at the scope of actions human beings can take, and start from there, so that we can understand cooperation and freedom, and the compromises, costs and benefits that cooperation requires of us.

Scope Of Individual Human Action
Cooperation aside, this is the general scope of human actions.

A.0) Thought

A.1) Motion

A.2) Consumption

A.3) Transformation

A.4) Violence

A.5) Mating

The Freedoms
There are only four possible non-contradictory freedoms. Non-contradictory means, that they can be granted to others equally without coercing them.

To grant these rights we only need to refrain from violence. In libertarian philosophy this is the principle of non-violence.
All other freedoms or rights, are derivatives of these four. The remaining freedoms people commonly refer to are technologies of coercion for the purpose of cooperation, or opposition, for the purpose of competing with or avoiding the coercion.

To say that they are forms of coercion, is not to demean them.

Property itself is a coercion. We defend property. (talk about property and memory here)

there is a limit to cooperatino because of a limit to perception.

Cooperative Freedom – The Production Economy
Cooperative freedoms permit the division of knowledge and labor, which decrease everyone’s costs, or the concentration of effort to increase both the likelihood of success, and decrease the individual costs. Many people use subjective analysis, expressing these cost reductions as emotions. But our emotions exist to assist us in identifying cost reductions. Emotions describe changes in state. They inform us. They inform us in particular about changes in the state of our costs. Human aesthetics may be wounded by this fact, but all group emotional sensitivities are to costs and discounts.

P.1) Life, Movement and Action:

P.2) Property (Exclusive Use. Inventory)

Property is an object over which one person has exclusive use.

We often create ‘shares’ whether they are acknowledged or not, of common property.

Some of our most common forms of property are beliefs, habits and morals.

P.3) Exchange (Trade)

Properties:

Key Concept:

Property allows us to:

a) inventory our efforts so we are less a victim of time and uncertainty,
b) break the world into utilitarian objects of exclusive use
c) divide the effort of calculating the possible uses of the exclusive objects
d) develop specialized knowledge
e) form a division of knowledge and labor
f) create a reason for cooperation : trade
g) decrease costs through the division of labor and knowledge, and the act of trading.

While almost all social groups do and always have, recognized personal property (possessions), and ownership of portable work products, there have evolved varying degrees of abstraction in addition to personal property: in particular, reputation or honor, family members, homes and other built capital, land and particular farm land, and territory. Other civilizations have created entirely abstract property (really, options) such as intellectual property, debts, and complex financial instruments.

Without property we cannot calculate: break up the world into bits over which we have exclusive use, and calculate the best use of it in real time, in a complex division of knowledge and labor, without which costs would be very high. We are not wealthier than our cave dwelling ancestors. Our only currency is time itself and we are born with the same amount of time as they were. By dividing our labors, and implementing trade, we make everything infinitely cheaper. We are not wealthier than cave men, we have simply made everything infinitely cheaper.

P.4) Freedom of Cooperation: Cooperating for production purposes, security, safety, comfort.

P.5) Freedom Of Assertion (Theft, war, conquest, oppression)

Culture: Manners, Ethics, Morals – The Conformity Economy (Inclusion / Ostracization)
Ethics: The Invisible Cost Economy
Freedom to attempt to establish a network of norms: restraints on action enforced by inclusion or exclusion in the group.
Inclusion in the group reduces risk and increases opportunity.

Manners, Ethics and Morals are terms for different segments of a spectrum for controlling costs of a group. Manners reduce friction and demonstrate predictability, class and quality. Display of good manners means access to more people who may grant one more opportunities. Each use of good manners requires some form of discipline. Each act of discipline is a cost to the individual, and a contribution to the cultural institutions. Each abuse of manners is a lack of discipline and a withdrawal from the cultural institutions. Manners must have a witness who can observe the demonstration of one’s discipline. In a demonstration of manners, there is no asymmetry of information. Each equally can observe the other.

Ethics on the other hand is a study in asymmetry. An action is ethical or not, because of shared lack of knowledge of the future, and asymmetry of knowledge between individuals. If one person has deep knowledge and the other shallow of the same exchange, ethical treatment requires that the person with greater knowledge act as if the other person is possessed of the same knowledge, and each is responsible for protecting the other from harm.

Ethical systems generally occupy some portion of a spectrum from the criminal to the charitable.
a) The Criminal Ethic: I take what I can, without consent.
a) The Bazaar Ethic: whatever I can get away with in voluntary exchange.
b) The Warrior Ethic: whatever will not make the other or unhappy.
c) The Christian Ethic: What is equally beneficial for both parties.
d) The Charitable Ethic: As long as the other person prospers, I do not care what my outcome is.
Then most ethical systems generally consist of intra-group and extra-group criteria, that might not be the same. Within and across family, clan, tribe, culture, religion, race, each culture varies in its adherence to its ethical standards. Furthermore,

Moral systems imply total asymmetry of knowledge. Actions fall under moral criteria whenever the cost of seizing an opportunity for one’s benefit either risks, or places an external cost, and a high cost, on others, and in particular, others with no recourse.

C.1) Freedom of Norms (Competition and Choice)

C.2) Cultural Freedom: (Choice and Opposition) The freedom to employ myths, norms and rituals, and to coerce, convert, and compete against other groups using different norms myths and rituals (opportunity cost payments required of members).
Coercion:
Opposition: The freedom to choose among norms, or to evade adoption of norms.
Cost:
Perception and Calculation:

Religion (Cultural Law And Institutionalized Conformity)

R.1) Religious Freedom: Freedom to create institutions, rituals, and codes for the purpose of establishing the criteria of inclusion and exclusion (ostracization). Including Freedom to choose to participate in religious factions, and freedom to evade participation in factions. Religions create opportunity monopolies and attempt to disallow competition of forgone opportunity costs. Competing religions are competitions of opportunities and opportunity costs. Evading participation is an attempt to obtain opportunities at a discount.

Law (organized violence and coercion)

L.1) Legislative Freedom:

C.3) Political Freedom (Choice and Opposition): speech, assembly, leadership, concentration of wealth. (The right to cooperate against others who have a similar right) The right of opposition. Political freedom is the freedom to cooperate for GROUP ends, by pooling resources, and establishing an organization, or association for the purpose of advancing those ends.
Coercion:
Opposition: The freedom to abandon, evade participation in informal and formal organizations.
Cost: Choice of, adherence to norms. Evangelism of norms. Opportunity cost competition with alternate norms. Compromise (discount) on methods in exchange for group cooperation on ends.
Perception and Calculation:

L.2) Institutional Freedom: Freedom to establish institutions: Taxes, dispute resolution, defense, justice
Contra:
Cost:
Perception and Calculation:

L.3) National freedom: freedom to control resources by establishing legal monopoly on violence over geographic territory. (In other words, adding territory to legal freedom.)
Contra:
Cost:
Perception and Calculation:

Credit Law (Anonymous, Non-Territorial Law)

CL.1)

Capitalist Freedom
(organizatoins to concentrate real capital)
(abstract property definitions)

Redistribution

R.1) Redistributive Freedom

Redistribution of some wealth, weather through charity, transfers, infrastructure, or credit is a means of compensating the less productive for their investment forgone opportunity costs. Most argue that price reduction along is a sufficient form of compensation. But as the difference in wealth increases, it becomes possible for market participants to use money to evade the market, and force a discount onto the poorer people’s opportunity costs, creating reverse distribution.
Contra:
Cost:
Perception and Calculation:

A Life Lesson – A Change In Approach – And A Thank You

CurtD — Tue, 31 Aug 2010 13:10:50 +0000

Every day I read around twenty academic papers, a book, and something on the order of 300 blog postings on economics and politics, and a little philosophy. I have my own aggregator on www.roundtable.capitalismv3.com, various news readers, and I use the site Rtable.net for everything related to economics. I have a high tolerance for information, a passion for the subject. And I maintain this pace while running a not insignificant mid-market company of hundreds of people, and maintaining a bi-coastal existence at the same time.

I visit a variety of sites, comment on a dozen, copy the comments to a text file, then edit them and put them on my blog, usually expanding them, fixing some of the language and grammar. Because while I read and write a great deal, I write far too fast and often carelessly.

I’ve come to this set of conclusions:

These ratios are about the same, depending only upon the number of assumptions, preferences, or errors involved. An eloquent writer can discount by half or more. An analytical writer like myself will use every word and then some.

I started working like this twenty years ago. Before the web. Back when there were modems and bulletin boards. I learned early, in newsgroups, and on CompuServe, then on email lists and web forums how to conduct a thorough debate online under hostile circumstances and win. Because of this strategy, I rarely lose.

Winning efficiently is accomplished by answering all the possible objections in your post, and leaving no stone unturned. I have literally thousands of these text files going back for decades, as a record of my intellectual development.¹ But this debating technique is designed to win, not to collaborate. That is because a radical does not collaborate, but fight. Otherwise he would not be a radical. And as a radical, I’m invested in this debate. I see it as a battle for the species. I learned a lot from Mises, Rothbard and Friedman: fight tooth and nail. And I learned what not to do from Hayek: be tepid – he only let Keynesian ideas roam freely, and to our painful detriment.

Unfortunately, the comment forum is not the debate forum. It is simply a forum for affirming the sentiments of the article’s author. Debates happen between blogs, not within them. That’s tantamount to stealing thunder. And I too often, quite by accident, steal thunder, or at the very least, only distract from the context. And it’s annoying.

My writing, which was much more literary in my youth, has been reformed by two very dominant experiences. The first, is this assertive debating online. The second, and somewhat unfortunate, is formed by the transformation of my thinking from the literary to that of discreet logical sets, by the act of spending years writing software programs. Writing software is somewhere between math and poetry. I have subconsciously merged the two experiences of debate and programming. And despite my attempts to change, I still write, effectively, the literary equivalent of programming code. My writing is structured as a program. And as such does not account for human short term memory. I leave too many associations unstated, because they are obviously deduced from the set of statement that i put to paper, and I am trying, believe it or not, for brevity despite my desire to describe an argument in a sequence of first-concepts.

Someone very kind, from another blog, chastised me today. And so I’m going to have to try to change my habitual behavior. I’ll leave my authoritative voice for my blog. And resort to socratic questions in comment sections. And point to my blog where necessary.

Old habits die hard. But using a methodology for the wrong application is just plain silly.

(Thanks Lauren)

I started out as a classical liberal in the Jeffersonian sense, became increasingly conservative, then libertarian, than anarchist, and now decidedly conservative libertarian.

“Extend And Pretend”

CurtD — Tue, 31 Aug 2010 10:29:01 +0000

I lost the source of this quote, but thought it captured the sentiment correctly:

The government has been playing “extend-and-pretend” based entirely on the idea that pent up demand in consumers would grow until it busted out and the recovery would be on – fueled by consumers. What has happened is the exact opposite. This is very serious. We are running into 3 years now, and 4 if you look at what commodity speculation did to consumers starting back in early 2007. Remember the prices for wheat and such that were even driving the price of pizza up 30% or more? And then we have such things as “staycations”. And so the concern should be whether or not we have a permanent shift in consumer behaviors. Three or four years is plenty of time to break old habits and establish new ones.

1) People forget. Their forgetting follows a ‘forgetting curve’. Knowledge is perishable. Habits are perishable. Relationships are perishable. Even wants are perishable.

2) People don’t ‘unforget’. They have to learn new techniques, develop new habits, and form new relationships. And it takes time.

3) People school or swarm on opportunities. Demand is created by those people who invent ideas then bait people into swarming on them. Developing swarms, especially large scale swarms takes time. Months, even years, because people have to learn from the person closest to them, how they can participate in the swarm. Then as the swarm grows, they must learn enough to break off from the main body and find and exploit new niche opportunities.

This last swarming behavior is the general problem with the Keynesian approach to aggregate demand. People are infinitely acquisitive as long as their acquisitions increase either their entertainment, security or status. But opportunities are not infinite. And the less knowledge, the fewer resources available for risk, and the fewer relationships they have, the less likely they are to identify and swarm new relationships.

Review: Dead Aid by Dambisa Moyo

CurtD — Tue, 31 Aug 2010 00:42:09 +0000

“Why Aid Is Not Working And How There Is A Better Way For Africa.”

We know: Aid is bad. It creates corruption. It harms the economy. It makes nice happy Christians, and nice happy DSH’s¹ feel good about themselves. But it is terribly harmful for Africans and their civilization.

Because I agree with everything she says, I’d like to say something meaningful and supportive, but everything I read in the book is old news. In the Austrian school we’ve been talking about this problem forever. Other than the fact that the author is a successful woman of African origin, this book is a easy read that is very hard to criticize for having uncomfortable motives.

Good book. Good cause. Smart woman.

But nothing new.

What I can say is this: there isn’t any difference between the problem of giving aid to Africa, the Spanish and Portugese import of gold from the new world, and easy credit for american citizens and their expansionist government. It’s all bad.

Democratic Secular Humanists

Review: The Secret Of The West

CurtD — Mon, 30 Aug 2010 19:36:55 +0000

I try to keep track of the ‘Grand Theories’. And I came across this one last week. I can’t find the book anywhere except online. I read what I could. And found this page by the author that summarizes his theory. Which is, quite simply, “stability and wealth provide the foundation for technological progress.”

There doesn’t appear to be anything new here. His thesis is a well understood circumstance of geography, which applies both tho coasts and to rivers. Europe has both.

He seems to dismiss culture as a factor. But western culture developed at the fringe of the bronze age and then iron age civilizations. And as a fringe order, especially a fringe order of metalworkers and warriors, they wanted to preserve their freedom from eastern mysticism, decadence and tyranny. It is this culture that led to vast enfranchisement.

I don’t see how he explains chinese stagnation. China is primarily coastal. It matured early. It has vast rivers, wealth and bureaucracy. What is it about confucian society that left it stagnant?

I could go on, but I don’t feel he has made enough of a case to allow me to draw any conclusions. Hopefully I’ll seek him out on one of my trips to europe.

Here is his summary:

Le Secret de l’Occident (“The Secret of the West”) unveils an economic and political theory about scientific & technological progress.

The theory gives the reasons why the scientific and industrial revolutions originated in the West, and not in the Middle East, India or China. It succeeds in explaining the European “miracle” in the IInd millenium as well as the Greek “miracle” in Antiquity. It unravels the causes for the declines and rises of India, China and the Middle East across the centuries.  That theory was brought together, like a jigsaw puzzle, from many pieces of the historical research previously unconnected. To my knowledge, it is the first united scheme able to explain the main booms and slowdowns observed in the scientific and technological evolutions of the main civilizations.

Chapter 1 – Debunking Traditional Explanations  The usual “internalist” explanations for the European originality – religion, culture, genetics, climate, third-world abuse, Greek heritage, pure hazard – are dismissed. None of these elements can pretend to shed light on the long-term European success.  They basically fail at the two following stumbling blocks: Eastern Europe backwardness and leadership fluctuations among civilizations.  – Eastern Europe is religiously, culturally, ethnically, climatically very similar to Western Europe. Nonetheless, it has always been lagging backward, for centuries if not more, painfully catching up with Western advances, but never leading the way.  – During some periods of time, China, India or the Middle East led the way in science and technology. This does not fit well with the idea of an inherent (religious, cultural, ethnical, etc.) superiority of the West. If, on the other side, one admits important changes in those inherent abilities, these remain to explain.  Greek heritage must be rejected because the Romans, the Muslims, the Indians too could benefit from it. Randomness is not an acceptable answer, it merely amounts to giving up looking for an answer.

Chapter 2 – The Economic and Political Theory (European case, 11th to 18th century)  Chap 2 discloses the theory. For science and technology to advance in a given civilization, two conditions are required: a thriving economy and a stable political division. That is, a rich and stable states system is needed. Western Europe enjoyed growing trade and manufacturing, and was divided between long-lasting competitive kingdoms, during the whole 2nd millenium; this is why it succeeded the way it did.

– A wealthy economy fosters scientific and technical progresses in several ways:  1) it generates a surplus which can be invested in non-immediately profitable activities, as science and arts.  2) merchants, bankers and entrepreneurs have a strong bent towards accuracy, numbers, (ac-)counting, weighting, timeliness, measurement. When successful, they impose gradually this kind of science-friendly mentality upon their social environment.  3) merchants, bankers and entrepreneurs have a vested interest in science and technology: they support development in mathematics (accounting arithmetic, higher-degree equations for interest rate calculations, statistics for stock exchange trading and insurances, etc.). In the Middle Ages, they supported the development of accurate clocks for measuring manufacturing and travelling times, of accurate maps for travelling, of astronomy for navigation, and of course of all sorts of new technical devices, since increasing manufacturing productivity and decreasing transport costs brings profit. The mercantile community, when successful, would financially support individuals active in those fields.

– Stable political division helps science and technology in several ways:  1) It generates freedom. No center has a monopoly of power, no government can control everything. Suppressed in a given country, a scientist or a technician can shelter into another one. Same for ideas and techniques.  2) Competition between states generates a profitable stimulation. Every government want to do better (or at least not worse) than neighbouring countries. Hence governmental support for science academies.  3) War exercices a continuous pressure towards modernization, it creates a strong government interest for new technical devices and for improving technical knowledge and education. War does not wreak too much havoc in the case of durable states, hence the need for a stable political division.

In particular, the smart European scientific professional structure, the institutions that allowed scientists to make a living while doing research – universities, royal academies, private mathematical schools, etc. – could come to life and survive only thanks to the existence of the wealthy and stable Western European states system.

In this context, the XVIth-XVIIth century Scientific revolution is interpreted as the outcome of the economic boom and military revolution that Western Europe underwent in the same period 1500-1700.

The difference between the two parts of Europe becomes clear here. Western Europe had a favourable economic and political background during the whole 2nd millenium, that is, it enjoyed a rich and durable states system. Eastern Europe suffered from bad economic and political conditions. Eastern Europe’s states were unstable, they underwent fast boundary moves. Moreover, trade was weak, manufacturing rickety. Merchants never thrived half as well as their Western equivalents.

Chapters 3, 4, 5 – The Economic and Political Theory (Middle East, India, China)  Chap 3, 4, 5, demonstrate that the rich states system theory explains quite well the different stages of the scientific evolutions of the Middle-East, India and China. Each time prosperity and stable division are there, scientific knowledge flourishes. In all other cases (political unity, fast-changing boundaries and/or economical doldrums), science recedes.  Each civilization is studied century after century, period after period, because they do not experience a constant economic and political situation. So, to get a clear picture, one must consider each period separately.  The book devotes 110 pages to analyze the political and economical histories of the Middle East, India and China in relation to the evolution of science and technology. This is arguably the most original element in the book’s approach, since, generally, authors studying scientific history focus on the West, devoting only a few pages to other civilizations, without distinguishing between the (very) different periods.  For example, the rich states system theory solves neatly the mysterious ups and downs in Chinese scientific history. The interval from 750 to 1280 was highly productive in scientific and technical progress because China enjoyed a rather stable division and a very dynamic trade and manufacturing. After 1280, political unity set in and science stopped.

Chapter 6 – The Coastline Shape Hypothesis  In chap 6, I find out why only Western Europe benefited from prosperity and stable division during such a long time: the main cause is the shape of its coastline. The Western part of the European continent is the only densely populated area in the Earth boasting as many peninsulas, gulfs, straits, inland seas, while still being for the most part an interconnected land. Such an articulated coastline enhances trade, because sea accessibility makes maritime transportation easier. The sea route is much better than river or land transportation. Before modern times, it was safer, quicker, freer and tremendously cheaper. Moreover, an articulated coastline defines naturally limited core areas within which polities can live their lives without being too much disturbed – Britain, Ireland, Spain, France, Denmark, Sweden, Italy are regions well delimited by the sea. The long-term stable political division stems from that advantage, as the sea is the best possible boundary for a state.  In mathematical terms, the quality of a coastline is measured by Mandelbrot’s fractal dimension of the coastline. The higher the dimension, the better the shore articulation. I made some measurements on maps and obtained that Europe has a fractal dimension of 1.46, much higher than China (1.26), India (1.14) and the Middle East (1.13), which is significant because this figure can only take values between 1 and 2.  Eastern Europe does not enjoy as good a shore profile as Western Europe: it is a mainly landlocked area. Vast surfaces are deprived of sea access: the seas are too far-away, they are often closed or ice-blocked seas. Hence, trade could not take off, and no natural boundary protected the regions’s states, which were brittle and short-lived. This is the reason why this region did not perform well in science and technology.

Chapter 7 – The Greek Miracle Explained  Chap 7 shows that the rich states system theory explains the ancient Greek miracle as well. The Greeks formed a lasting states system, enlivened by a brisk trade, both element thriving on the very indented and articulated coastline of the Aegean sea. Only the Southern part of Greece nurtured the miracle, because it had abundant access to the sea. The mostly landlocked Northern part of Greece stayed apart from the scientific adventure. So the Southern/Northern opposition in ancient Greece mirrored the Western/Eastern opposition in modern Europe.  The miracle lasted until military technological progress overshot the possibilities of the Greek geographical platform. Then, the scene extended to the whole Eastern Mediterranean region, which the Greeks conquered. Huge states formed in Egypt, Mesopotamia, Asia minor, which could follow the competition, but only for a while: the new territories did not have an articulated coastline. The economy slumped down (this was compounded by demographic decline) and a more and more unstable division settled, ruining the Greek world and ending the “miracle”.

Chapter 8 – Evolution of the West, 19th and 20th Centuries  In chap 8, I apply the theory to the 19th and 20th centuries. The states system of Western Europe continued on its course, generating scientific progress at a fast pace, until the first part of the 20th century, when technological progress in the military domain (essentially tanks and airplanes) rendered the European continent too small. At this stage the states system destroyed itself (2nd world war). Greater states were required for the competition to continue. The USA and USSR, luckily, were there. They continued the battle until, again, the military technology (thermonuclear bombs and intercontinental missiles) exceeded the possibilities of the geographical platform. But this time, technology was so powerful that war simply became impossible on Earth between great powers, ushering the nuclear peace in which we live now.

Chapter 9 – Present Situation and Near Future  In chap 9, I develop several contemporary topics, like the Asian boom and the sharp drop of science in Russia. I show that, today as ever, only two forces prop up science: stable division and prosperity: governments, companies and donators are the funders of science. They can assume that role only if the necessary ressources are there, hence if the economy fares well. Also, only the freedom of a multicenter world allows research to go on unfettered (think of cloning, assisted fecundation, and so on). Furthermore, inter-state prestige or trade competitions are a crucial motivation behind that financing.  As a consequence, one can take scientific progress for granted in the future as long as some region in the world will enjoy prosperity and stable division – this progress shall be a bit weaker, however, with the waning of the military pillar.

Epilogue  Finally, the epilogue generalizes the theory for the space age (that never came). Planet Earth has become too small to stand large conflicts between great powers, but wars with missiles and nuclear bombs could still be waged in the interplanetary medium. I briefly study the quality of our stellar system in that respect. In the same way as not all coastline profiles allow for long-lasting rich states systems, similarly, not all “planetographies” foster such lush combination at the space age level. The result of this investigation is that, unfortunately, our neighbouring planetary environment seems hopelessly forbidding. We are not going to experience in the future another full-fledged “miracle”, like the Greek and the European ones in the past.

========

The Reality Of Freedom #1: Freedom Requires Coercion

CurtD — Mon, 30 Aug 2010 18:58:53 +0000

Whenever something is scarce, some concept of property (the exclusive use of a resource) is necessary for the development of incentives, coordination, and production — even if the difference between ‘several property’ and ‘shareholder property’, is defined differently by different groups — therefore all societies include and sanction some form of coercion. No society can exist without coercion. This applies to tribal hunter gatherers, nomads, village agrarians, market city dwellers, and vast urban and rural empires in a complex division of knowledge and labor.

We can equally forgo the opportunity for violence theft, fraud, corruption. For the poorest, this means refraining from theft, fraud, deception and violence in exchange for access to the market society and it’s prices. For the middle class, it means refraining from fraud and deception in exchange for participating in the market society and profiting from it. For the wealthiest, it means refraining from manipulation of market prices or and participating in corruption of the rules of the market, and corruption, in exchange for status and choice. For the most powerful it means refraining from corruption, and refraining from laziness, incompetence, and maintaining disciplined efforts to serve the marketplace in exchange for freedom from participation in the marketplace.

Each of these forgone opportunities for profit is a cost to the individual. Cumulatively, for each individual, and for any society, these are very, very high costs, because opportunities for violence, theft, fraud, deception, market manipulation, and corruption are more frequent than opportunities for fair exchange of goods and services due to asymmetries of knowledge and resources — even if the type of cost is different along the spectrum: theft and violence are easiest for the bottom and corruption is most easy for the top.

Capitalism V3

"There is no social order that is free of coercion as long as there is scarcity. Property itself is a form of coercion. It must be or we would not have to invent it and enforce it."

There is no social order that is free of coercion as long as there is scarcity. Property itself is a form of coercion. It must be or we would not have to invent it and enforce it.

The coercion that people object to, and classify as corruption, is profiteering by the political class. Or financial coercion, which means the taking of their time, opportunity, effort, property, or most importantly, status, and to some degree their very attention, and distributing it to people with whom they disagree, or using it for purposes with which they disagree. They see this as corruption: obtaining political office and favors by taking from one group and giving to another whom they disfavor.

All societies concentrate and redistribute wealth. All societies participate in coercion – or else they could not have property and production. But whenever a society consists of people with dissimilar interests, by definition there must be negative coercion.

Almost all members of any society will tolerate any commonly accepted set of property definitions, even if the scope of individual property is severely limited. They may form black markets if that scope is too severely limited. They may form tax avoidance schemes if taxes are too expansive. But if those definitions remain constant, and they do not have to feel that their plans, and efforts at gain were frustrated, then they will not see the state as coercive.

Freedom is defined as freedom from coercion. Meaning freedom from all but equal coercions. And the only freedom we can equally coerce each other with is respect for property. And even then, respecting property is a higher cost for some, and lower for others.

China And Defining Freedom – Easterly VS National Review

CurtD — Mon, 30 Aug 2010 18:36:04 +0000

In William Easterly’s post “Why can’t leading conservative magazine understand freedom?” he refers to a National Review article “China Teaches US Lessons About Economic Freedom“. I replied in the comments:

William,
I’ve read this post four times, and it’s still not very clear what you’re arguing for and against.

I think you’re reading far too much into a what are simple, broad analogies that express a sentiment not a formula. All he’s saying is that small increases in freedom produced a great impact on china. And he’s implying that small decreases in freedom here in the USA, will have as grand a set of effects.

I think you’re both confused and you both overrate government, overrate individuals, and underrate demographic migration and change.

Growth was easy for the USA during the 1800’s: buy half a continent from Napoleon and import millions of Europeans into it. Sell them all sorts of consumer goods so that they fill up the territory, and so that you can collect profit and create capitalist barons doing so. Use the cheap land and labor to produce commodity goods and sell them to europe. Cause a price catastrophe in europe. Let them have a horrendous civil war and inherit their intellectuals and england’s naval empire.

Now, take a country like china, forcibly held back in ignorance and poverty by Mao who decided it was better to have everyone poor and suffering than a wealthy south and a poor north and west — fragmenting the chinese empire. Now, import vast amounts of western technology, western banking and accounting technology in particular, and use your inexpensive labor to produce goods based on that technology cheaply and sell back to the westerners.

China’s growth is largely in the form of construction: moving people from hovels in the rural areas, to apartments in urban areas. The country is vastly poor. And it’s per-capita GDP is horrid. They used totalitarianism and capitalism to manage their expansion, we used republicanism and capitalism to do the same thing. There is nothing interesting about china. Nothing. There is nothing interesting about america, either, which is why you’re both confused.

What’s interesting is how Europe in general, and England in particular, created so much innovation, how Americans capitalized on it, and how we can use that tradition and culture of innovation to compete in a world where we are no longer the one making money from a huge demographic change.

Once cheap labor stops, and marginal differences in knowledge are exhausted, what remains is a nation’s ability to dynamically reorganize production in real time, and to competitively innovate in real time.

The question is, whether Americans will maintain their innovative risk taking speculative culture without the military and economic dominance they possessed in the last century, and the resulting control over the international banking and trade system.

William Easterly wrote:
Curt and Sam, thanks for your comment. I was making a simple point: the article had a double standard for the Negative Changes in Economic Freedom in China and the US.
And, 2nd, in giving so much general credit to Deng Xiao Ping vs. America’s leaders, it ignored Deng’s despicable actions against individual freedom in Tien An Men Square, and continued violence against and imprisonment of dissidents in China.

William, thank you for replying.

Let’s define Freedom. Because unless we define it, I’m not sure what you’re talking about.

Let’s see:
Freedom: absence of external constraint.

2) Political freedom: speech, assembly, leadership, concentration of wealth. (The right to cooperate against others who have a similar right) The freedom to cooperate for GROUP ends.

3)Legislative Freedom: This includes the freedom to establish property definitions (real, several, built) as well as abstract (patents, options), as well as enforce normative opportunity cost payments, including manners, ethics and morals, and normative tax payments for a multitude of purposes.

4) National freedom: freedom to control and compete for resources by establishing legal monopoly on violence over geographic territory. (In other words, adding territory to legal freedom.)

5) Cultural Freedom: Freedom to employ, coerce, convert, and compete using different opportunity cost norms (opportunity cost payments required of members) as a means of competing against other groups who have different opportunity costs, and different capital structures.

6) Redistributive Freedom: Freedom to claim a share of proceeds of production, earned by virtue of adhering to norms (bearing costs of adhering to norms), despite lack of control over resources, participation in production, or influence over the productivity of those resources, except by voluntary restraint. (Restraint is a real opportunity cost to individuals.) This is the correct non-platonic definition of economic freedom that describes human actions in the productive process.

The only form of ‘freedom’ you can have, that is non-contradictory (you can equally grant it to others and they to you) is personal, individual freedom. And even then, the only form of political freedom you can have is to DENY others the right to their political freedom.

And at that point you are stuck with the problem of either getting to the point where you can convert the barbarians into paying the opportunity cost of becoming property holders in the first place, (establishing the system of property definitions) and without that need for coercion, you’re stuck in poverty even if you want to change the established order. But the only freedom you can have is individual freedom – the freedom of constraint. We can grant it to others equally.

The rest of the freedoms are not ‘freedom’. They’re rights to take from others. All political freedoms are rights to take from others. They are rights of coercion, oppression. But then one cannot have a division of labor, a complex society, economic calculation, and the incentive to participate in productive activities unless you apply the ‘coercion’ of private property – at least to some degree.

Confucianism is a high-opporunity-cost social order. It is very conservative. It requires respect for hierarchy and authority (opportunity costs). It requires consensus (opportunity costs but with risk reduction). It is an almost entirely shareholder-property society with low rates of creativity, low risk, slow moving social and economic model. But if it is BIG enough that people cannot sense external competition from OTHER social orders then internal status symbols can be preserved by way of nationalism or culturalism and the social order can work. (it doesn’t: the south is a competitor with the north of china, which is their whole cultural problem – that’s what Mao did. He destroyed the country economically to keep the south from outpacing the north.) This is not necessarily ‘bad’ in Confucian society.

It may bear understanding that Confucius failed to solve the political problem (it is somewhat evident that he understands this) and directed everyone to hierarchy and family. So the Confucian model is not republican at it’s base. It is not tribal. It is hierarchical, and familial. The entire nation operates as a family. This is not a bad strategy unless you are competing with a group of high-risk, highly-innovative, fast moving westerners, for whom individual heroism, innovation and achievement are viewed as ‘keeping the group strong’. Competition and individualism are a ‘group good’ in the west. They are not in the asian societies. we are free to copy the innovators, and in doing so, everyone has the opportunity to be ‘better’. The west is an innovation and adaptation society.

Freedom as we understand it, is not possible, and probably not necessary under Confucianism.

Economically speaking, a nation that does NOT participate in heavy research and development will eventually fall behind, and governments can concentrate more wealth than the private sector on Research and Development. (What would the impact be of 200 new nuclear power plants in the USA? We have people feeling good about not wasting energy but manufacturing is the greatest energy consumer, and we need more manufacturing. Economizing is a spiritual act, not a material one.) China is making productive investments. We are making redistributive expenses, and spending trillions defending oil and trade routes, and our primary export – the dollar.

And we will not get anywhere thinking that some very small minority of a Confucian population, or our odd obsession with the religion of Universal Democratic Secular Humanism will have any long term effect on the Sinic culture. The rest of the world is clearly condemning it. There isn’t even any evidence yet that our UDSH values will persist in the west without the Militial and Commercial balance to it, that is the foundation of western civilization.

The calculative institutions of capitalism, which provide incentives in the form of pricing, sensory information in the form of objects defined as property, expressed and manipulated quantitatively, and the technologies of intertemporal collaboration and coordination in the form of money, interest, banking, fiat money and the technologies of dispute resolution in the form of contract and law, have little or nothing to do with the technologies of redistribution, and the methods of capital concentration, as well as the ‘forgone opportunity costs’ which citizens pay for participation in society and market’. Political freedom is not economic freedom. Political freedom exists either to defend ones self against a predatory state, or to use the violence of the state to put extra-market pressure on competing groups with competing interests.

The reason for the western matrix of freedoms is to promote innovation, competition and wealth, so that the nobility, the upper middle class, and therefore prosperity will be maintained, and management elites, will rotate keeping the society competitive. At least, that’s the implied theory: meritocratic rotation of the elites – a thematic value system inherited from western heroic competitive militarism. ie: it’s a knowledge production engine.

China values stability and security, not change and innovation. It is a culture where conflict is a sin. Where the individual is subordinate to the state. Where virtue is not heroic excellence, but duty. (At least, until the middle class is large enough.)

Conservatives are in large part, whether knowingly or not, subscribers to ‘natural law’ theory, which states that human behavior is what it is, always has been and always will be. They do not subscribe to the philosophy that all men would work happily for the common good, nor, if given the opportunity, that they would do some common good in political power, or even know what such a good would be, simply because of the number of trade offs and secondary causes. Nor, that we are capable of implementing any designed change in our social orders without horrific consequences.

And under that view, they would say that you are making a moral equivalency where there is none.

Moral statements are economic actions, and either economic payments or theft. Ethical statements are economic actions, and either economic payments or theft. Manners are economic demonstrations, contributions, and payments. But these payments are made against a vast, habitual, rather than written set of legal, cultural and class body of accounts – and vastly different concepts of property definition, and they exist largely to ‘pay for the social order’ by reducing opportunity for friction and conflict.

In the west, we have a very different payment system. We are all trying to be noblemen or priests. In the east, they are all trying to be Confucian – to hold their place. More like the German model prior to ww1. Our anglo model, is very rare. And it may simply be the artifact of a thousand years of wealth generated by expansion under the reformation.

So before I get too far into this (I already have gotten way too far into it) I think you are being literal with conservative (allegorical) language. Conservative language is allegorical because conservatives have failed (especially during the 1870′s and 1930′s) to articulate a causally sufficient social science. (Myself and two or three rather off the wall libertarians, excluded perhaps.) Where the social democratic method can rely on the coincidence and correlation between easily collected monetary transaction information the Dynamic Stochastic Equilibrium model, and christian egalitarian sentiments, and Jewish anti-western-militial sentiments. But that does not mean that conservatives sentiments, expressed in allegorical language are false. It means they are insufficiently articulated. (and worse -foolishly wrong as in the case of many libertarians.) It simply means that they don’t yet know how to do otherwise.

I think furthermore, that
a) China is simply importing knowledge at very low cost. It is not producing it. Wealth may make knowledge production possible. But we have seen the Asian model is great for incremental improvement and the western model is better for radical innovation.

b) cultures do not change. There is a high cost of changing norms. And Sinic civilization is very resistant to change. It is highly racist and highly culturist. (And it has a huge chip on it’s shoulder.)

c) Their entire obligation structure (morals, ethics, property rights, manners) is a set of established costs. Our values are antithetical to them.

d) their identity ( the means by which they judge the world) and their status signals (the human natural intuitive economy of events and consequences) will continue to force them in their native direction.

And lastly, (why am I just getting to this now?) all the conservative writer was saying is that ‘a little momentum made a big difference’, and that ‘even if we make a little momentum in the wrong direction it will make as big a difference’.

He is not comparing statements, he is comparing trajectories in time.

And that’s what it means to be conservative: taking the long view.

The BiPolarity Of Class

CurtD — Mon, 30 Aug 2010 10:26:04 +0000

In response to The Tea Party is a Marxist movement on Half Sigma, I created this diagram.

The BiPolarity Of Social Class, And The Status Competition Between Them.

I”ve posted a diagram that is in progress. It’s at: http://www.capitalismv3.com/wp-content/uploads/2010/08/BiPolarityOfClass-2010-08-29.png

What I want to illustrate is the difference between people who exist in the market economy and people who exist in the bureaucratic economy, and their gender, class and cultural origins. Tea partiers are, in general, status seekers who participate in the non-clerical, market economy. They are white people who are remnants of the anglo saxon social order. Very “Burkeian.”

Tea partiers are a status and power movement – a cultural movement that crosses classes. Most tea partiers appear to be middle class, or upper prole. Uppers and upper middle (like me) are not as status-challenged as middle’s are by cultural dissolution. In other words, in any cultural or racial group, the penalty for loss of political dominance by your elites is paid for by its middle and proletariat classes, who benefit from cultural network opportunities created by the dominant preferences. So it’s materially important: The prole risk status loss if they do not rescue their elites.

Even as such, I’m not sure anglo saxons don’t have a bifurcated proletariat class: militial service in the west conveys social status, and anglo saxons are a militial society. This drives enfranchisement lower into the class system.

Capitalism V3

"Tea partiers are a status and power movement – a cultural movement that crosses classes. Most tea partiers appear to be middle class, or upper prole. …. In any cultural or racial group, the penalty for loss of political dominance by your elites is paid for by its middle and proletariat classes, who benefit from cultural network opportunities created by the dominant preferences. So it’s materially important: The prole risk status loss if they do not rescue their elites."

In our case, it so happens, that the tea partier social preference is for freedom, individualism, and capitalism, which also happens to be a material benefit to society. Even if they wrap it in religious doctrine. But they wrap it in religious doctrine because as a group they tend to create solid families, and solid families tend to be more religious. While religiosity increases as IQ decreases, the statement is open to erroneous interpretation. WIthin a people of similar values, the religious moral codes are equally justified among all the member classes. It’s just that the upper classes are more rational, the middle are more allegorical, and the lower are more sentimental. It’s just a matter of articulation – methodology – not one of differences in execution.

The tea party movement relies upon sentimental arguments rather than rational arguments because conservatism lacks a rational social science to compete with marxism. While conservatives and libertarians have tried for over a hundred years, they have so far failed to articulate a social science that can compete with the combination of marxist sentiments, democratic secular humanism, and mathematical positivism. This is partly due to inter-temporal complexity, and our over-reliance on the analysis of money and redistribution rather than the status economy – an economy that humans are far m ore sensitive to than the monetary economy. (Intertemporal complexity is too complicated for here. But in general, conservatism is a longer time preference, that puts greatest emphasis on group persistence – it is a capitalization strategy for the future.)

I think, Half-Sigma’s goal was to try to pull marxian class analysis into the tea party movement. And there is some truth to it. But it’s not a class movement. It’s a culture or race movement. Traditional whites are now a minority and they are losing their status symbols both domestically and internationally and this goes against their core reason for existence – self sacrifice, family, forgone opportunity, in exchange for group persistence, and they see that persistence under attack.