The Son Also Rises

Thursday, January 16th, 2014

How much of our fate is tied to the status of our parents and grandparents? How much does this influence our children? More than we wish to believe, Gregory Clark explains, in his new book, The Son Also Rises: Surnames and the History of Social Mobility:

While it has been argued that rigid class structures have eroded in favor of greater social equality, The Son Also Rises proves that movement on the social ladder has changed little over eight centuries. Using a novel technique — tracking family names over generations to measure social mobility across countries and periods — renowned economic historian Gregory Clark reveals that mobility rates are lower than conventionally estimated, do not vary across societies, and are resistant to social policies. The good news is that these patterns are driven by strong inheritance of abilities and lineage does not beget unwarranted advantage. The bad news is that much of our fate is predictable from lineage. Clark argues that since a greater part of our place in the world is predetermined, we must avoid creating winner-take-all societies.

Clark examines and compares surnames in such diverse cases as modern Sweden, fourteenth-century England, and Qing Dynasty China. He demonstrates how fate is determined by ancestry and that almost all societies — as different as the modern United States, Communist China, and modern Japan — have similarly low social mobility rates. These figures are impervious to institutions, and it takes hundreds of years for descendants to shake off the advantages and disadvantages of their ancestors. For these reasons, Clark contends that societies should act to limit the disparities in rewards between those of high and low social rank.

I can’t say I draw the same conclusion, but it is the conclusion one must draw in polite society.

I found A Farewell to Alms fascinating, by the way.

Posted in Economics, Policy | No Comments »

Are We Ready to Legalize Drugs?

Wednesday, January 15th, 2014

Steven Levitt has thought a lot about the war on drugs:

Levitt: And it’s a great question to philosophize on I think, because…most people approach it from a more moral or philosophical point of view, of should drugs be legal? The libertarian perspective says maybe drugs should just be legal, maybe people should be able to do whatever they want. That’s what Milton Friedman thought. Other people think it’s immoral, there’s something wrong with drugs. But you know, that’s not the Freakonomics way. The Freakonomics way is to actually look at the data. And I do have a paper with Roland Fryer and a former student of mine, Paul Heaton, and Kevin Murphy. And we set out to look at the crack epidemic and the costs of the crack epidemic from a purely practical perspective. How bad was it? Do the places that had a lot of crack, did really bad things happen there, and why? And it was really interesting; it was really one of the most surprising results. Because almost all of the big costs that we saw had to do not with the consumption of crack itself. Consumption of crack had some negative effects, but they weren’t great. The really big social costs had to do with the prohibition of the legality of crack. And so it was the case that the greatest costs we saw were the violence related to the fighting for property rights, and the imprisonment of people. And it was interesting because it doesn’t say that legalization is necessarily a good thing. That’s a big jump to have. But it says that in a regime where drugs are highly illegal, hard drugs like cocaine, in the U.S., the real costs that we feel then are the costs of the prohibition, not the costs of the use, because the prohibition is reasonably effective at lowering the use. Now what would happen if we got rid of the prohibition and let anybody and everybody use crack cocaine? I think that wouldn’t be a great outcome either.

Dubner: And you say that, and you say that because the nature of crack is destructive, more so than say marijuana, or no?

Levitt: Absolutely. So crack cocaine is a really devilish drug because it gives you such an intense high for such a short period of time that your desire is just to get high over and over and over. It’s highly addictive, and it’s really hard to function when you’re a crack addict. But what it makes me think is that this experimentation we’re doing now with policy towards drugs like marijuana, and potentially it would be expanded over time is a good idea. Because I think when it comes to marijuana, the social costs of the prohibition of marijuana are just really low. Very few people in the United States are being killed over marijuana. The gangs are not making their money off marijuana. Marijuana in some very real sense is too cheap. It’s too easy to grow yourself and so it isn’t the source of all of the ills that come with prohibition. And so, so the gains of legalizing marijuana for society are much smaller than the gains would be to legalizing cocaine if you could control how the outcome came.

Dubner: So let me ask you this, whenever I hear a police department or some organization representing law enforcement talk against legalizing marijuana, the skeptic in me says oh well that’s because prosecuting and pursuing marijuana is a big part of police work and if it were decriminalized then the police would get unfunded. Is that a ridiculous thought to have?

Levitt: No, I like the…We always think about incentives, and certainly if one of the incentives that a police department has is to be busy. We know there are a lot more police officers in places with a lot more crime. So if there was no crime to deal with there wouldn’t be many police officers. I mean, if you think about firefighters, talk about putting yourself out of a job, there aren’t any fires anymore. I don’t know what firefighters do all day. They’ve been pretty good I think at figuring out how to do things other than go put out fires. But, you know, you could imagine that if all the crime went away, the police would end up looking a lot more like firefighters than they would like police officers. And we just wouldn’t need that many of them around. So I think that’s sensible. But I also think that it’s deeper than that in that there is a mindset among the police which is that the law says that marijuana is illegal and it’s my job to uphold the law. And therefore marijuana is terrible.

Dubner: And Levitt let me just ask you one more thing before we move on about marijuana in particular. So Gallup polls, which are pretty consistent over time show that about 40 years ago, 12 percent of Americans favored marijuana legalization. And that number is up to 58 now. So almost five times as many. What do you think that represents, anything dramatic, or are we just seeing one of those gradual lines shifting that happens in society and nothing more than that?

Levitt: I think it’s a reaction to the fact that marijuana just hasn’t proven to be that damaging, that a lot of people smoke marijuana, it doesn’t ruin their lives, and they go on to be regular folks who no longer smoke marijuana. It’s just, a lot of it comes down to how much weight you put on the utility of the user. Right, if you really think that the people who are smoking a lot of dope are having a lot of fun with it, then probably you tip the calculus toward let them smoke it. Otherwise if you think that’s the wrong kind of fun, you shouldn’t count that, then you think it shouldn’t be legal. But in a lot of ways I think it comes down to that simple issue.

Dubner: And and Levitt just for the record, when’s the last time you smoked dope?

Levitt: Oh, man it’s been a long time. I think it’s been…I think it’s been…It’s been at least probably close to 20 years.

Dubner: If marijuana were totally and entirely decriminalized in Illinois and you could go to a nice little deli right outside the U. of C. there and buy some, would you do it tomorrow, or the next week?

Levitt: I would occasionally smoke, but it wouldn’t be a way of life I don’t think.

Dubner: would you like to say, try to play golf while stoned? Would that be a thrill for you?

Levitt: No, not at all. I take my golf pure.

Posted in Crime, Economics, Policy | No Comments »

Dwarf Fortress: A Marxist Analysis

Monday, January 13th, 2014

I’ve never played Dwarf Fortress, the supremely complex simulation game, and I’m certainly not a Marxist, but I enjoyed this (somewhat) Marxist analysis of the game:

What one does in Dwarf Fortress is create a colony of an existing dwarven fortress — you’re always sent out as a team from a much larger existing stronghold elsewhere, and your foreign relations with other dwarves are limited to that particular fortress, on the whole. Even though your settlement is independent and self-governing, and the relations with the mother fortress mostly those of trade, the purpose of the game in all its open-endedness can be nothing other than to create oneself in the image of the previous fortress. In other words, fundamentally in Dwarf Fortress you reproduce the existing structure of dwarven society on a merely quantitatively expanded scale. Allowing for the different resources in this or that part of the world, this resembles nothing so much as the colonies of the city-states of the ancient world, or the processes of settlement enforced on pagan Eastern Europe by the Franco-German feudal societies of the high Middle Ages. The goblins and kobolds who regularly harrass your fortress but do not impinge on your world as an equal counter-society are analogous to the more or less loose relations of early Medieval chieftainship that still prevailed in the lands not yet subject to Frankish reconstruction.

Now the organization of labor in a given fortress is essentially revealing of the nature of feudal society. Each dwarf, male or female, can equally be a worker at any task, and who does what is mainly a question of establishing a strict set of social conventions early on that limit each dwarf to a number of possible economic activities reproducing the whole. They live and die within this limited sphere of labor, and are identified entirely by it, being a ‘miller’, ‘miner’, ‘cheesemaker’, ‘planter’, or whatever. Unlike under capitalism, this process is a matter of a more or less organic arrangement enforced by the player as a top-down set of strictures, without the least competition between dwarves, let alone the appearance of such a thing as a labor market. In fact, in the present version dwarves are not paid for their work in money, but rather demand customary rewards in kind, such as high quality food and drink, decent living quarters, and valuable and pleasing decorations and furniture throughout the fortress. This is characteristic of feudal society’s bounding of needs by custom and convention and the strong role of reciprocity in maintaining the division of labor, especially given the technological constraints on mobility and on adjustment of production.

Posted in Economics, Games, Policy | No Comments »

The Monarchist Position on Economics

Friday, January 10th, 2014

No one is proposing that the United States in its current form be transitioned to a monarchy, Michael Anissimov notes:

It is too large and culturally/politically disconnected. It is more likely that a part of the United States would have to be broken off and converted into a monarchy. As a concrete example, consider a monarchy composed of northern California, Oregon, Washington, and Idaho, which could be called “Greater Cascadia”.

To start off, the economic system of the new country would be identical to the way it was before. No one wants to scare away business. In fact, a prudent move might be to make the economy more libertarian, less regulated than it was before. A monarchical government is minarchist, and traditionally composed only of an administration and the military. There would be no alphabet soup of agencies designed to control every aspect of business and the economy.

[...]

Eliminating income tax and taxing land is a possibility. See Georgism, but apply salt.

Might I suggest divvying the country into much smaller parcels than states — say, counties — and having one CEO for each such parcel — called, oh, I don’t know, count?

Posted in Economics, Policy | 2 Comments »

The War on Poverty at 50

Thursday, January 9th, 2014

The two statistics about the War on Poverty that should get the most publicity, Charles Murray says, are these:

In 1949, 41 percent of Americans were below the poverty line (scholars have retrospectively applied the official definition of “poverty” to the 1950 census); when LBJ announced the War on Poverty in 1964, that proportion had dropped to 19 percent. Contemplate that pair of numbers for a moment. In just the 15 years between 1949 and 1964, the American poverty rate had dropped by 22 percentage points.

What had the government done to help? By the definition of the 1960s and thereafter, nothing. The federal government sponsored no education programs for the disadvantaged. No training programs. No jobs programs. No community action. No affirmative action. No Head Start. No welfare whatsoever for men, and only a stingy cash payment for unmarried mothers, hedged with restrictions. The federal government was missing in action in the real war against poverty — and yet somehow America cut poverty by more than half.

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Degrees of Value

Monday, January 6th, 2014

In the field of higher education, reality is outrunning parody, Glenn Reynolds says:

A recent feature on the satire website the Onion proclaimed, “30-Year-Old Has Earned $11 More Than He Would Have Without College Education.” Allowing for tuition, interest on student loans, and four years of foregone income while in school, the fictional student “Patrick Moorhouse” wasn’t much better off. His years of stress and study, the article japed, “have been more or less a financial wash.”

“Patrick” shouldn’t feel too bad. Many college graduates would be happy to be $11 ahead instead of thousands, or hundreds of thousands, behind. The credit-driven higher education bubble of the past several decades has left legions of students deep in debt without improving their job prospects. To make college a good value again, today’s parents and students need to be skeptical, frugal and demanding. There is no single solution to what ails higher education in the U.S., but changes are beginning to emerge, from outsourcing to online education, and they could transform the system.

Though the GI Bill converted college from a privilege of the rich to a middle-class expectation, the higher education bubble really began in the 1970s, as colleges that had expanded to serve the baby boom saw the tide of students threatening to ebb. Congress came to the rescue with federally funded student aid, like Pell Grants and, in vastly greater dollar amounts, student loans.

Predictably enough, this financial assistance led colleges and universities to raise tuition and fees to absorb the resources now available to their students. As University of Michigan economics and finance professor Mark Perry has calculated, tuition for all universities, public and private, increased from 1978 to 2011 at an annual rate of 7.45%. By comparison, health-care costs increased by only 5.8%, and housing, notwithstanding the bubble, increased at 4.3%. Family incomes, on the other hand, barely kept up with the consumer-price index, which grew at an annual rate of 3.8%.

For many families, the gap between soaring tuition costs and stagnant incomes was filled by debt. Today’s average student debt of $29,400 may not sound overwhelming, but many students, especially at private and out-of-state colleges, end up owing much more, often more than $100,000. At the same time, four in 10 college graduates, according to a recent Gallup study, wind up in jobs that don’t require a college degree.

Students and parents have started to reject this unsustainable arrangement, and colleges and universities have felt the impact. According to a recent analysis by this newspaper, private schools are facing a long-term decline in enrollment.

Posted in Economics, Education | No Comments »

Run-Prone Financial Contracts

Friday, January 3rd, 2014

Bank runs are a feature of how banks get their money, John Cochrane says, not where they invest their money:

So a better approach, in my view, would be to purge the system of run-prone financial contracts — that is, fixed-value promises that are payable on demand and cause bankruptcy if not honored, like bank deposits and overnight debt. Instead, we subsidize short-term debt via government guarantees, tax deductibility, and favorable regulation, and then we try to regulate financial institutions not to overuse that which we subsidize.

[...]

[I]f we purge the system of run-prone financial contracts, essentially requiring anything risky to be financed by equity, long-term debt, or contracts that allow suspension of payment without forcing the issuer to bankruptcy, then we won’t have runs, which means we won’t have crises. People will still lose money, as they did in the tech stock crash, but they won’t react by running and forcing needless bankruptcies.

This sounds radical to Arnold Kling, but I’ve long held that demand deposits fail spectacularly.

Posted in Economics, Policy | 3 Comments »

Parkinson’s Law

Friday, January 3rd, 2014

Work expands so as to fill the time available for its completion, so, Cyril Northcote Parkinson noted, the number of the officials and the quantity of the work to be done are not related to each other at all:

Factor I. — An official wants to multiply subordinates, not rivals; and

Factor II. — Officials make work for each other.

We must now examine these motive forces in turn.

The Law of Multiplication of Subordinates

To comprehend Factor I, we must picture a civil servant called A who finds himself overworked. Whether this overwork is real or imaginary is immaterial; but we should observe, in passing, that A’s sensation (or illusion) might easily result from his own decreasing energy — a normal symptom of middle-age. For this real or imagined overwork there are, broadly speaking, three possible remedies

(1) He may resign.

(2) He may ask to halve the work with a colleague called B.

(3) He may demand the assistance of two subordinates, to be called C and D.

There is probably no instance in civil service history of A choosing any but the third alternative. By resignation he would lose his pension rights. By having B appointed, on his own level in the hierarchy, he would merely bring in a rival for promotion to W’s vacancy when W (at long last) retires. So A would rather have C and D, junior men, below him. They will add to his consequence; and, by dividing the work into two categories, as between C and D, he will have the merit of being the only man who comprehends them both.

It is essential to realise, at this point, that C and D are, as it were, inseparable. To appoint C alone would have been impossible. Why? Because C, if by himself, would divide the work with A and so assume almost the equal status which has been refused in the first instance to B; a status the more emphasised if C is A’s only possible successor. Subordinates must thus number two or more, each being kept in order by fear of the other’s promotion. When C complains in turn of being overworked (as he certainly will) A will, with the concurrence of C, advise the appointment of two assistants to help C. But he can then avert internal friction only by advising the appointment of two more assistants to help D, whose position is much the same. With this recruitment of E, F, G and H, the promotion of A is now practically certain.

The Law of Multiplication of Work

Seven officials are now doing what one did before. This is where Factor II comes into operation. For these seven make so much work for each other that all are fully occupied and A is actually working harder than ever. An incoming document may well come before each of them in turn. Official E decides that it falls within the province of F, who places a draft reply before C, who amends it drastically before consulting D, who asks G to deal with it. But G goes on leave at this point, handing the file over to H, who drafts a minute, which is signed by D and returned to C, who revises his draft accordingly and lays the new version before A.

What does A do? He would have every excuse for signing the thing unread, for he has many other matters on his mind. Knowing now that he is to succeed W next year, he has to decide whether C or D should succeed to his own office. He had to agree to G going on leave, although not yet strictly entitled to it. He is worried whether H should not have gone instead, for reasons of health. He has looked pale recently — partly but not solely because of his domestic troubles. Then there is the business of F’s special increment of salary for the period of the conference, and E’s application for transfer to the Ministry of Pensions. A has heard that D is in love with a married typist and that G and F are no longer on speaking terms — no one seems to know why. So A might be tempted to sign C’s draft and have done with it.

But A is a conscientious man. Beset as he is with problems created by his colleagues for themselves and for him — created by the mere fact of these officials’ existence — he is not the man to shirk his duty. He reads through the draft with care, deletes the fussy paragraphs added by C and H and restores the thing back to the form preferred in the first instance by the able (if quarrelsome) F. He corrects the English — none of these young men can write grammatically — and finally produces the same reply he would have written if officials C to H had never been born. Far more people have taken far longer to produce the same result. No one has been idle. All have done their best. And it is late in the evening before A finally quits his office and begins the return journey to Ealing. The last of the office lights are being turned off in the gathering dusk which marks the end of another day’s administrative toil. Among the last to leave, A reflects, with bowed shoulders and a wry smile, that late hours, like grey hairs, are among the penalties of success.

Posted in Business, Economics, Policy | No Comments »

Affluenza

Wednesday, December 25th, 2013

Nathan Lewis discusses American affluenza:

Minimum wage is $7.25 per hour, or about $14,500 per year for a full time 40-hour-per-week load (could be multiple jobs). Often, localities have a higher minimum wage than the Federal minimum. It is not a lot. But, it should also be enough. It should be more than enough. We still live in one of the most materially abundant societies the world has ever seen. You can get a lot for $15,000.

Most of the best things in our civilization are actually free, or nearly so. Public libraries, public parks, beaches, museums, the Internet, and so forth provide most of the best our civilization has to offer. Even a genuinely poor person can afford a $75-per-year membership to the Metropolitan Museum of Art in New York, which is a really fine museum. I’ve always found it interesting that you never see anyone there who is plainly of a lower income, although they are abundant on the subway you ride to get to the museum. (Indeed, there are some low-income neighborhoods that are an easy walk from the museum.)

Even on minimum wage, you can afford things that even kings didn’t have a few centuries ago. Electric lights. Refrigerators. Hot and cold running water, and modern sewage systems. Indoor flush toilets. Hot showers. Weekly trash removal.

Orange juice. And pepper!

Even a cellphone, if perhaps a prepaid one. They used to call cellphones “carphones,” because they were so big you needed a car to carry it around. That was only 20 years ago.

You can get a decent notebook computer for $450, brand new. If it lasts for a typical four years, that is only $112 per year.

Wow.

Many other material things you can get for free, or nearly so. I often contribute to a church charity nearby called Magic Closet. A few hours per week, you can bring anything you like there, and donate it to charity. You can also take whatever is there, for free. No limit. Flat out free. It is like Goodwill or Salvation Army with no money in between. Just give it away for free and get it for free. I think it’s a great way to interact with your neighbors, and also to clear unused stuff from your house and get it in the hands of someone who can make use of it.

You can get clothing and housewares of all sorts there, certainly enough for the basics of modern living. It is even pretty good quality. I know because I drop off a lot of stuff there myself (it seems to build up continuously), and the stuff I’m dropping off isn’t junk.

You can even get big-ticket items like furniture, for free or nearly so, if you ask around. Pretty much everyone has a thirty-year-old sofa in the garage, which is still in good usable condition. If you ask nicely, they will probably give it to you.

I once gave away a piano. It ended up with some Chinese people from Brooklyn.

You would think it is the best possible time to be poor, particularly since the advent of things like Craigslist or eBay, where you can get things for much cheaper than new, or sometimes for free.

On top of this, we have various government services, like Medicaid, available to the lowest incomes. For free.

Twelve years of public schooling — for free!

So, what’s the problem?

There are a number of problems, but one problem is the same problem we have throughout American society today. Affluenza. It is really not so much a question of needless luxuries, but rather that the “basic American lifestyle” is too expensive.

There are plenty of people in the U.S., making very little money, but who are quite prosperous in their way. Mostly these are immigrants. They haven’t been raised in American society, and don’t have American expectations or American ways of doing things.

They don’t own automobiles, because, where they are from, nobody owns an automobile. They probably don’t even know how to drive. (My wife, whose father owned a Honda dealership, did not drive on a public road until after age 30.) They ride bikes. When they need to travel farther, or carry loads, they share vehicles or hire one from another person much like themselves.

They will often pile into a typical suburban house, with a family (or four working men) in each bedroom. There might be twenty people in a house. On a per-person basis, it is pretty cheap, because they can split the electric or heating bill twenty ways.

Heck, I did that in college. It was actually pretty fun.

They cook for themselves, with simple nutritious food based on rice, beans, basic vegetables and so forth. It costs almost nothing. It takes labor, but one woman can easily cook for many, which is what people do and what they have always done, where they come from, and indeed in all places throughout history. If they are going outside the house, they bring some food with them. (Often, in food service jobs, you can get food for free anyway.)

Now, I am not saying that sharing a bedroom with three other men in a boarding house is as nice as having a 2500sf suburban house of your own. Did I say that? I didn’t say that. But, if you have a low income, it is not a bad solution, and indeed is perhaps not a bad way to live in any case. It depends mostly on the other people. Not everyone is badly behaved. Military people live in more materially austere conditions than this, but they are generally well-behaved, and it goes well enough. Immigrants usually know how to live with each other and behave themselves. Many American poor do not.

Do you remember the TV series M*A*S*H? It was about a team of battle surgeons in the Korean war. They lived in dirt-floor tents, a few miles from the front lines. On cots. Shared. It was OK. After the war was over, they probably remembered it as one of the most interesting times of their lives.

Of course, one of the problems is that people are badly behaved. This is a problem, but it is not really a problem of income. It is a problem that we attempt to solve with income — moving to a neighborhood with better-behaved people, which costs more money.

Posted in Economics | 8 Comments »

Fixing One Thing

Wednesday, December 25th, 2013

In 1984, around the time that the Dune movie was coming out, Frank Herbert gave an interview to Jean Marie Stine of the Los Angeles Reader:

JMS: In Dune, written in the early ’60s, you were one of the first to question the danger of modifying the ecology of a particular environment to try to “improve” human conditions.

Herbert:  Let me give you a little example on that one.  About 20 years ago the U.S. and West Germany pooled their resources — well, we put in most of the bucks and the people — and went into North Africa, and all across most of the southern veldt of the Sahara.  We dug a lot of tube wells — we drilled them, put pumps on them and brought water up.  We did a good thing and then we walked away from it, more or less.  Technologically we sure as hell walked away from it.

What happened was that they had more water and more grazing areas.  More arable land was opened up, more cattle were put on the land, and the population grew to equal the new food supply.  Then about five years ago, the rainfall, cyclic rainfall, decidedly decreased.  Three years ago it went, practically dry.  Of course the water table went down much faster because they were pumping.  Right now as we sit here talking, 2,000 people a day are dying in that area.  You can’t go in and fix one thing to make everything all right in a complex situation. It’s like an internal combustion engine.  If there is only one thing wrong you may happen on the one thing that fixes it.  But chances are much larger that by just doing one thing you create other problems you’re going to have to adjust.  And you have to keep adjusting until you create a balance.

For instance, one of the side effects of what we did in some of those North African villages was that we broke down the social system.  Women previously went to the well for water, which they carried back on their heads, and the well was where they solved all their community problems.  By piping water into the houses we cut off that link in their society and all hell broke loose.  There were family feuds, murders, all kinds of things that had never occurred in these places, in that particular way, ever before.  The Green Revolution was another, similar con game.  We went in with a technologically based system into primitive countries, and where before they had depended on manure and animals to pull their plows and that sort of thing, we made them dependent on special soil additives and special seed stock which was, by the way, very vulnerable to disease.

I’m reminded of The Logic of Failure.

Posted in Economics, Policy, Science | 7 Comments »

Peak Parsi

Thursday, December 19th, 2013

In 1941, the religious community of the Parsis in India peaked at 115,000, Volkmar Weiss remarks:

This 0.03% of the population of India provided 7% of all engineers and 5% of all physicians in the entire country. Parsi female literacy today is 97%, the highest in India. For generations their women have been educated, they study and marry late and end up having fewer children. Since 1953 their birth rate has sunk below the magic number of two, and may at present be even less than one per family. If this does not change, by 2020 there will likely be only about 23,000 Parsis in India. The Parsis symbolize – even in a more pronounced way than the secularized Jews – the fate of the industrialized society and of its elites. The Parsis, who have been characterized (Kulke, 1974) as “engines of social change”, share their fate with the childless feminists. Because they will have exterminated themselves by failing to reproduce, the culture they represent will be replaced by the culture of those who are more prolific.

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Our Greatest Political Novelist?

Monday, December 16th, 2013

When we call literary writers “political” today, we’re usually talking about identity politics, Tim Kreider notes:

If historians or critics fifty years from now were to read most of our contemporary literary fiction, they might well infer that our main societal problems were issues with our parents, bad relationships, and death. If they were looking for any indication that we were even dimly aware of the burgeoning global conflict between democracy and capitalism, or of the abyssal catastrophe our civilization was just beginning to spill over the brink of, they might need to turn to books that have that embarrassing little Saturn-and-spaceship sticker on the spine. That is, to science fiction.

Science fiction is an inherently political genre, in that any future or alternate history it imagines is a wish about How Things Should Be (even if it’s reflected darkly in a warning about how they might turn out). And How Things Should Be is the central question and struggle of politics. It is also, I’d argue, an inherently liberal genre (its many conservative practitioners notwithstanding), in that it sees the status quo as contingent, a historical accident, whereas conservatism holds it to be inevitable, natural, and therefore just. The meta-premise of all science fiction is that nothing can be taken for granted. That it’s still anybody’s ballgame.

Kreider makes an excellent point about science fiction addressing big political ideas, but he misunderstands conservatism, which does not see the status quo as inevitable. Rather, it sees the status quo — civilization — as fragile. Don’t mess it up! Many of civilization’s less pleasant aspects exist to prevent even worse things from befalling us.

Kreider suggests that Kim Stanley Robinson may be our greatest political novelist:

In his Mars novels, Robinson uses the Red Planet as a historical tabula rasa, a template for creating a saner, more sustainable, and more just human society. What’s most powerful about the Mars books as political novels is that they envision a credible utopia, one that doesn’t — unlike, say, Skinner’s “Walden Two” — rely on a revision of human nature. Robinson’s characters are cynics, opportunists, idealists, narcissists, drug-dependent, manic-depressive, borderline Asperger’s, and emotionally frozen survivors of abuse, but with all their flaws and conflicting agendas they manage to remake their world in more humane and equitable form.

So far, it sounds almost Moldbuggian. But it’s not:

Essentially, Robinson attempts to apply scientific thinking to politics, approaching it less like pure physics, in which one infallible equation / ideology explains and answers everything, than like engineering — a process of what F.D.R. once called “bold, persistent experimentation,” finding out what works and combining successful elements to synthesize something new. He scavenges ideas from the American Constitution, the Swiss confederacy, “the guild socialism of Great Britain, Yugoslavian worker management, Mondragon ownership, Kerala land tenure, and so on” to construct his utopias. The major platform planks these methods lead him to in his books are:

  • common stewardship — not ownership — of the land, water, and air
  • an economic system based on ecological reality
  • divesting central governments of most of their power and diffusing it among local communities
  • the basics of existence, like health care, removed from the cruelties of the free market
  • the application of democratic principles like self-determination and equality in the workplace — which, in practice, means small co-ops instead of vast, hierarchical, exploitative corporations — and,
  • a reverence for the natural world codified into law.

Depending on your own politics, this may sound like millennia-overdue common sense or a bong-fuelled 3 A.M. wish list, but there’s no arguing that to implement it in the real world circa 2013 would be, literally, revolutionary. My own bet would be that either your grandchildren are going to be living by some of these precepts, or else they won’t be living at all.

You could argue that, if I didn’t fundamentally agree with his politics, Robinson’s fiction might seem contrived and didactic to me, the way Ayn Rand’s does if you’re not predisposed toward her brand of enlightened assholism. It’s true he likes to write lectures and speeches, but they’re more engaging than some of Tolstoy’s, who nearly succeeded in stomping my clinging fingers off of “Anna Karenina” with his ruminations on Russian agriculture circa 1870.

Robinson’s Red Mars is one of the few books I looked forward to and then started without finishing, so I share neither Kreider’s politics nor his taste in fiction.

It might be interesting to consider some of the same issues through, say, Heinlein’s eyes. On his anarchist moon colony — in The Moon is a Harsh Mistress — common stewardship of the environment means tossing anyone out the airlock who endangers the colony.  And roughly nothing is codified into law.  If people don’t agree to something, well, that’s that. How’s that for divesting central governments of most of their power and diffusing it among local communities?

On a neo-reactionary colony, stewardship of the land, water, and air would be the duty of the owner of that land, water, and air — the sovereign, probably a corporation — who would have every incentive to maintain its value over the long term, just as a monarch wants to leave his land in good condition for his children and grandchildren. The neo-reactionary point of view, despite its semi-confused reputation for supporting monarchy, also supports subsidiarity, or divesting central governments of most of their power and diffusing it among local communities, just as historical monarchs were rarely totalitarian, and modern mall-management companies rarely try to run shops.

Interestingly, true paleo-reactionaries have pointed to the same cruelties of the free market as Kreider and Robinson and argued that an aristocratic lord protects his peasants, and a plantation-owner protects his slaves, far more than the market protects its free laborers.

(Hat tip to T. Greer.)

Posted in Economics, Media, Policy | 5 Comments »

Taxing land would solve America’s biggest problems

Tuesday, December 10th, 2013

Jesse Myerson argues that taxing land would solve America’s biggest problems:

No need to tax labor and industry at all. Just tax the stuff that humans had nothing to do with creating, and therefore have no basis to claim ownership over at all. You’ll find that almost all of it is “owned” by the fabled 1 percent.

And boy are they sucking a lot of money out of it. By far the most valuable asset form in the U.S. is real estate, and the majority of that is the value of the land, as distinct from the value of the human-made buildings. Economist Michael Hudson has assessed that the land value of New York City alone exceeds that of all of the plant and equipment in the entire country, combined. No one put any enterprise or cost into producing the land’s value – they simply bought it when it was cheap, sold it when it was dear, and waited for the check. “They” are the Finance, Insurance and Real Estate (FIRE) sector, and they capture 40 percent of the United States’ profits, despite the complete passivity of their profit-accumulation method.

This is Henry George‘s single tax, which was too confiscatory for the right and not socialist enough for the left.

Posted in Economics, Henry George, Policy | 11 Comments »

Will the Real Satoshi Nakamoto Please Stand Up?

Monday, December 9th, 2013

Wait, Satoshi Nakamoto, founder of Bitcoin, might be Nick Szabo?

I recently became interested in identifying the pseudonymous creator of Bitcoin, Satoshi Nakamoto. I started from the Bitcoin whitepaper [0] published in late 2008, and proceeded to run reverse textual analysis –essentially, searching the internet for highly unusual turns of phrase and vocabulary patterns (in particular places which you would expect a cryptography researcher to contribute to), then evaluating the fitness of each match found by running textual similarity metrics on several pages of their writing.

Which led me rather directly to several articles from Nick Szabo’s blog.

For those who wouldn’t know Nick Szabo and his documented links to Bitcoin: prior to the apparition of Bitcoin, Nick had been developing for several years (since 1998 [1]) the enabling mechanism for a decentralized digital currency, eventually converging on a system he called “bit gold” [3], which is the direct precursor to the Bitcoin architecture.

According to what seems to be a widely accepted origin story of Bitcoin, Satoshi Nakamoto was a highly skilled computer scientist (or group thereof) who found about Nick’s proposition for bit gold, hit upon an idea for bettering it, published the Bitcoin whitepaper, and decided to turn it into reality by developing the original Bitcoin client. Nick denies being Satoshi, and has stated his official opinion on Satoshi and Bitcoin in a May 2011 article [1].

I would argue that Satoshi is actually Nick Szabo himself, probably together with one or more technical collaborators.

As I mention above, what originally led me to this hypothesis is that reverse-searching for content similar to the Bitcoin whitepaper led me to Nick’s blog, completely independently of any knowledge of the official Bitcoin story. I must stress this: an open, unbiased search of texts similar in writing to the Bitcoin whitepaper over the entire Internet, identifies Nick’s bit gold articles as the best candidates. It could still be a coincidence, although an unlikely one — since cryptocurrencies were a fairly niche topic in 2008 and earlier (seemingly 3 or 4 people), every contributor to the field was going to be reusing the same shared expressions and vocabulary. Satoshi would have been a reader of Nick’s blog, so you would expect him to describe the same concepts in a similar way. But there’s more.

Running similarity metrics on the whitepaper and Nick’s bit gold articles as well as his paper “formalizing and securing relationships on public networks” [2] indicated an excellent match over content-neutral expressions as well — so either Nick wrote the whitepaper, or it was written by somebody imitating Nick’s writing style.

TechCrunch interviews Skye Grey:

I am not certain it’s Nick Szabo, but I have quite a few independent pieces of evidence pointing in his direction, each one interesting in itself:

  • text analysis (only 0.1% of cryptography researchers could have produced this writing style –again, please, attack my methods on this)
  • fact that Nick was searching for technical collaborators on the bit gold project (a very similar cryptocurrency) a few months before the announcement of Bitcoin (and then the bit gold project became perfectly silent)
  • lack of citation of Nick’s work by Satoshi, whereas he cited other, less related cryptocurrencies
  • lack of reaction on Nick’s part about Bitcoin, whereas a decentralized currency like Bitcoin had been a major project of his for 10 years
  • fact that Nick deliberately post-dated his bit gold articles to look posterior to Bitcoin, shortly after the announcement of Bitcoin

Posted in Economics, Policy, Technology | 3 Comments »

Changes in measured GDP aren’t capturing everything

Friday, November 22nd, 2013

We live in a richer world, Russ Roberts notes, and changes in measured GDP aren’t capturing everything:

I think I got something in my eye…

Posted in Economics, Policy, Technology | 1 Comment »

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