First, what is a hero class? Well, there are specific job functions that allow a person to be viewed as heroic by virtue of their daily activities within that job function. Typically, these are privileged classes in the sense that workers within them are viewed as being better, in some way, than the typical member of the society. In western societies these classes are the Firefighters, Police, Paramedics, Doctors, and Military Personnel.
Why these classes are viewed as being particularly heroic is largely a narrative question. We have narratives throughout our social experience that enforce the heroism of these types of worker. These narratives contain the logic that these individuals are engaged in professions where they contribute to the good of the society in some way. However, this logic applies to a far greater class of worker than just these classes, so there must be additional, less manifest criteria. In any event, these categories of worker comprise a class that will from here be called the hero class.
A note on the analysis that appears below: The terminology used may appear to be imprecise. It is not explicitly connected to any particular ethical theory. It is my view that the terms used can be internalized to a given ethical system such that they make sense within that system. This will work for a large number of ethical systems. Whereas my language often suggests a consequentialist framework, it may be recast as deontological analysis by agreed upon replacement mechanisms that replace object values with rule arrangements.
How much greater is the value of the life of a hero than that of other classes of person? Certainly, the value of a hero is treated as being much greater than that of a criminal. For instance, if a law enforcement official suspects any degree of danger to his person, he can usually justify the summary execution of a criminal. This is the basis of the ethical justification for killing of criminals extrajudicially.
Foreign nationals are valued depending on their occupation and nationality. Generally speaking, Foreign military personnel and police officers are not given heroic distinction at all. Additionally, peasants, blue collar workers, the unemployed, day laborers, and non-professional white collar workers (basic civilians) are viewed as less valuable than professionals, businessmen, capitalists, and academics (prestige civilians). Peoples from countries outside of the United States, Europe, or the British Commonwealth (western) are also generally viewed as less valuable.
Thus, in order to preserve the life of a single hero, as many as one hundred civilians can be killed or allowed to die, provided that they are basic civilians from non-western countries. In this scheme, a prestige civilian is probably worth about 10 basic civilians, and a western civilian is probably worth about 10 non-western civilians. An empirical study could elucidate this ratio.
How did this arrangement come about? There are three aspects to it: first, the power of unions bargaining for occupational safety standards for these classes of peoples leads to restrictions on activities in times of crisis. Secondly, political leaders often perceive that allowing deaths of many heroes will be politically unprofitable, so they will make decisions that prioritize the lives of heroes. Third, the casualties among less valuable classes of people are heavily discounted in various ways.
On the first point, unions are successful in their attempts to secure benefits for the worker classes they represent largely as a result of the political dynamic in place. Hero classes generally receive a favorable political dynamic, so the interests of their unions become more successfully advanced than that of other workers represented under collective bargaining. Safety is typically a highly valued concern for these classes. Thus, the result is the establishment of procedures that reduce hazard levels. While not a deliberate trade off between the lives of non-heroes and heroes, it is this in effect because efficacy, and therefore net life-savings, becomes a secondary criterion to safety at least some of the time.
On the second point, Political leaders recognize the importance of preserving the lives of heroes, in part because some of the blame for hero deaths ultimately falls upon them. When heroes die, it carries extra poignancy to a society that idolizes them. Additionally, politicians seek to appease their unions, lobbyists, and advocates. Specifically, in the industrial supply for these industries, it is more profitable to utilize advanced technology, often on the basis of preserving hero life, and politicians will follow the money in this regard. Additionally, popular sentiment is more likely to follow stories of individuals or small numbers of people than large, statistical quantities. Popular sentiment also views the lives of typical people as being nearly worthless - this is the basis of our attitude toward strangers.
Regarding the third point, while the death of many people might carry a larger absolute number, people do not register these deaths in the same way because of various discounting mechanisms. First, media is often not present in the decision making of heroes. Thus, information on what actually happens is frequently unavailable. Secondly, people have a tendency to deny that heroes' decision making or operational pattern of action can actually be anything but ideal. Thus, the view that heroes (not necessarily at the individual level but through their institutions) can make a calculation that puts their lives above those of who they are saving is a source of cognitive dissonance for the average person, who will therefore avoid conscious consideration of the problem.
Turning now to the question of what hero institutions should strive to achieve, consider that as an alternative to this actual, unequal value arrangement, there was an ideal in which all human life is treated as being of equal value.
Under such an arrangement, one must consider relative effects on human action. Thus, the policy of police to less often shoot criminals might encourage them to become more confrontational on average, or less likely to flee from police. However, much sociological work suggests that this is of limited effect. Similarly, military interventions would probably not suffer from significantly increased resistance if military actions were made less brutal. In this regard, it is important to count accurately, since some of the changed effect comes from differences in immediate conditions, which should not be included, as the question is whether the net quantity of such decisions increases, not how they individually pay out.
Within a given operation, there are logistical constraints. The death of a hero prevents their presence at a later time in the operation. In this regard, two types of operation can be distinguished.
In an emergency operation, attrition is important because replacement cannot occur within a sufficiently brief scope, so that each death hinders efforts through to the remainder of the operation. Thus, in this case, the initial assessment of operation length and frequency of life-saving trade-off should help determine the degree of risk that the hero should initially undertake. As the operation approaches its conclusion, the hero should gradually be exposed to greater risk, until such point that the expected value is maximized with no risk avoidance premium at the termination of the operation.
In an operation that is planned in advance, arrangements can be made to replace any hero that is killed. Thus, the expected value should be maximized throughout, with no risk avoidance premium at all.
Expected value is maximized in terms of net human life. Thus, for the hero that has no risk avoidance premium, operational possibilities should be ranked based on expected lives saved - expected lives lost. A hero must be indifferent between his own death and that of another person. The risk premium is simply an additional value that is placed on the life of the hero, thus the calculation when there is a risk premium takes the form of expected lives saved - expected lives lost - risk premium * risk of hero death.
In conclusion, let an operation that has a net gain of human lives be considered good. Let an operation that has a net loss of human lives be considered evil. When the perspective is set such that the status quo is the current operational framework, operations are then defined as changes to policies and corresponding changes to lives saved or lost.
It is clear that policies that allow police to shoot people with near impunity, or allow militaries to bomb civilians in pursuit of political goals are evil. The resistance, even by unions (such as police unions) to policies aimed at increasing accountability of heroes, are policies that enforce the unequal valuation of lives between heroes and non-heroes. The honoring of military personnel who have committed atrocities in foreign states similarly enforces this inequality. Even the use of the term "hero" to describe activities that in any other light would be horrific is testament to the relativity and self-serving nature of our popular thinking regarding good and evil.
Saturday, March 19, 2011
Tuesday, February 22, 2011
Good Business, Bad Business
Denote the concept of a rule as a general term for everything from guidelines to laws, encompassing all of our sentiments regarding morality.
In a system where the rules are set by an outside (divine) authority, the rules themselves define the totality of goodness or badness. This can be proven by contradiction; suppose that someone did something bad (or good). If there was no rule to determine that it was bad, how could it be bad?
In a system where the rules are set by a human process that is internal to the society in which the rules exist, the rule set cannot be entirely stipulated or communicated throughout the society; regardless of whether it is agreed upon, individuals are only given a part of it and forced to infer the remainder. If we take this inference to be the basis of individual differences in ethics, we are, in a sense, arguing against the individual proclivity to have ethical originality. Nevertheless, this seems to manifestly be the case. Those who have more dissident ethical views are typically those who for some reason formed strong completions based on small subsets and then came to conclude that the remainder of society's opinion of the rules were invalid due to the resultant discrepancies. Typically this happens early in life.
The above description posits that rules begin at the level of the whole society and are disseminated to individuals through acculturation. Then it cannot be that the rules are merely the confluence or agreements, mediated by political processes, of individual ethical positions; rather they are the expression, by the politically dominant, of a mixture between their own vision of the complete rule set and modifications, including intentional omission of those rules which are in some way disadvantageous to them. For example, money talks in politics.
The concerned intellectual responds by pointing out these flaws and omissions, ideally by demonstrating clear and simple contradictions or recalcitrant data. The politically dominant, often having hired unscrupulous intellectuals of their own, seek to undermine, in whatever way is most effective, the potency of the concerned intellectual's message.
There is also an important function served by rules, namely that of the just social order. Under a rule set that is ideal, the basic physiological, social and emotional needs of the people are best fulfilled. Many arguments support this idea but it would be onerous to argue for it here; a detailed argument is given by Rawls in A Theory of Justice. There may be no single ideal, but within a single ideal the utility of stability typically makes movement to a different ideal undesirable.
Define a business as a collection of individuals that is marked by internal political relations that lead it to have coherent profit-seeking behavior and a hierarchical command structure. Typically the business has political interests insofar as proposed and existing rules have a significant effect on either the business itself or some political faction within the business. Since it has a hierarchical command structure, only certain factions within the business are able to express their political views through the business. Thus, the business organizes the labor of many political factions toward the ends of its leadership.
This political participation has its ethical expression in ubiquitous and blatant manipulations of the rules. Having not experienced more than a tiny portion of the unfairness within a given rule set firsthand, the typical member of the society will object to only a tiny portion of the behavior of businesses and a tiny portion of the rules. However, the many tacitly accepted modifications of the rules will, over time, create a divergence from the just social order. The individual whose interests are not coincident with those of business will not necessarily realize that the rules have become increasingly unfair to him. Instead he may perceive an arbitrary aspect of the rule set as vulgar or oppressive due to the interaction of his many rule completions, some of which involve the acceptance of manipulations or omissions.
Within a typical society, the lions' share of profit and corresponding sinister political manipulation come not from each business in an equal share, but from a small portion of businesses. These businesses are not necessarily the largest (so long as profit is not used as the yardstick). What makes these businesses different is the modus operandi of subversion through rule manipulation. Not always is the conduct of such businesses illegal, but typically there are many illegal activities taking place within these businesses, hidden behind a veil of secrecy and plausible deniability. Typically these businesses are monopolies or parts of cartels; or they control majority market shares within consumer and/or supply chain markets. In part, it is the freedom from the persistent pressure of competition that allows the accumulation of profits in sufficient quantity to corrupt the political process. However, perfect competition is an unbearable state for the typical business, and so it is no wonder that it is so rare.
Because of the power of business that result from their profits, and the myriad incentives to manipulate rules to jeopardize society in general, the political goals of businesses should be viewed with extreme skepticism. Within the political structure, the vast majority must be united against the small factions who control businesses. Great care must be taken, in particular, to ensure the fairness of competition between businesses, because it is often arguments related to this unfairness that become the basis for profound regulatory blunders.
If, on the other hand, the political effort to maintain skepticism toward the political goals of businesses fails, the political environment rapidly deteriorates. Instead of having a system in which the rules are more or less fair and a small amount of effort is needed to maintain that fairness, the system becomes one in which the rules are more or less unfair and those seeking to restore fairness must resort to extreme philosophic extrapolation in order to even visualize what a fair rule set might be. In such a situation, social reformers become pitted against each other because the proper ideal is unclear.
In order to resolve this conflict among social reformers, a robust traditional character must be cultivated within societies. This character must combine expressions that appeal to each relevant political faction. Within the traditional character, artistic and philosophic expressions, particularly hero stories read to children, must be developed that serve as a common language of ethical discussion. Small ethical fragments, enforced by celebrated art, become the basis for effective political discourse by the masses.
Businesses will seek to disrupt this character. However, it is not difficult at all to engender a persistent cultural belief that businesses are not cool.
I think that this musing has some relevance to present day America.
In a system where the rules are set by an outside (divine) authority, the rules themselves define the totality of goodness or badness. This can be proven by contradiction; suppose that someone did something bad (or good). If there was no rule to determine that it was bad, how could it be bad?
In a system where the rules are set by a human process that is internal to the society in which the rules exist, the rule set cannot be entirely stipulated or communicated throughout the society; regardless of whether it is agreed upon, individuals are only given a part of it and forced to infer the remainder. If we take this inference to be the basis of individual differences in ethics, we are, in a sense, arguing against the individual proclivity to have ethical originality. Nevertheless, this seems to manifestly be the case. Those who have more dissident ethical views are typically those who for some reason formed strong completions based on small subsets and then came to conclude that the remainder of society's opinion of the rules were invalid due to the resultant discrepancies. Typically this happens early in life.
The above description posits that rules begin at the level of the whole society and are disseminated to individuals through acculturation. Then it cannot be that the rules are merely the confluence or agreements, mediated by political processes, of individual ethical positions; rather they are the expression, by the politically dominant, of a mixture between their own vision of the complete rule set and modifications, including intentional omission of those rules which are in some way disadvantageous to them. For example, money talks in politics.
The concerned intellectual responds by pointing out these flaws and omissions, ideally by demonstrating clear and simple contradictions or recalcitrant data. The politically dominant, often having hired unscrupulous intellectuals of their own, seek to undermine, in whatever way is most effective, the potency of the concerned intellectual's message.
There is also an important function served by rules, namely that of the just social order. Under a rule set that is ideal, the basic physiological, social and emotional needs of the people are best fulfilled. Many arguments support this idea but it would be onerous to argue for it here; a detailed argument is given by Rawls in A Theory of Justice. There may be no single ideal, but within a single ideal the utility of stability typically makes movement to a different ideal undesirable.
Define a business as a collection of individuals that is marked by internal political relations that lead it to have coherent profit-seeking behavior and a hierarchical command structure. Typically the business has political interests insofar as proposed and existing rules have a significant effect on either the business itself or some political faction within the business. Since it has a hierarchical command structure, only certain factions within the business are able to express their political views through the business. Thus, the business organizes the labor of many political factions toward the ends of its leadership.
This political participation has its ethical expression in ubiquitous and blatant manipulations of the rules. Having not experienced more than a tiny portion of the unfairness within a given rule set firsthand, the typical member of the society will object to only a tiny portion of the behavior of businesses and a tiny portion of the rules. However, the many tacitly accepted modifications of the rules will, over time, create a divergence from the just social order. The individual whose interests are not coincident with those of business will not necessarily realize that the rules have become increasingly unfair to him. Instead he may perceive an arbitrary aspect of the rule set as vulgar or oppressive due to the interaction of his many rule completions, some of which involve the acceptance of manipulations or omissions.
Within a typical society, the lions' share of profit and corresponding sinister political manipulation come not from each business in an equal share, but from a small portion of businesses. These businesses are not necessarily the largest (so long as profit is not used as the yardstick). What makes these businesses different is the modus operandi of subversion through rule manipulation. Not always is the conduct of such businesses illegal, but typically there are many illegal activities taking place within these businesses, hidden behind a veil of secrecy and plausible deniability. Typically these businesses are monopolies or parts of cartels; or they control majority market shares within consumer and/or supply chain markets. In part, it is the freedom from the persistent pressure of competition that allows the accumulation of profits in sufficient quantity to corrupt the political process. However, perfect competition is an unbearable state for the typical business, and so it is no wonder that it is so rare.
Because of the power of business that result from their profits, and the myriad incentives to manipulate rules to jeopardize society in general, the political goals of businesses should be viewed with extreme skepticism. Within the political structure, the vast majority must be united against the small factions who control businesses. Great care must be taken, in particular, to ensure the fairness of competition between businesses, because it is often arguments related to this unfairness that become the basis for profound regulatory blunders.
If, on the other hand, the political effort to maintain skepticism toward the political goals of businesses fails, the political environment rapidly deteriorates. Instead of having a system in which the rules are more or less fair and a small amount of effort is needed to maintain that fairness, the system becomes one in which the rules are more or less unfair and those seeking to restore fairness must resort to extreme philosophic extrapolation in order to even visualize what a fair rule set might be. In such a situation, social reformers become pitted against each other because the proper ideal is unclear.
In order to resolve this conflict among social reformers, a robust traditional character must be cultivated within societies. This character must combine expressions that appeal to each relevant political faction. Within the traditional character, artistic and philosophic expressions, particularly hero stories read to children, must be developed that serve as a common language of ethical discussion. Small ethical fragments, enforced by celebrated art, become the basis for effective political discourse by the masses.
Businesses will seek to disrupt this character. However, it is not difficult at all to engender a persistent cultural belief that businesses are not cool.
I think that this musing has some relevance to present day America.
Monday, October 11, 2010
Defending Gay Marriage by valuing Equality
Here's a video on marriage equality
As I see it, a person can come up with rather silly "discrimination" arguments. But just because they follow the same form doesn't mean they have any merit:
Pretend the following holds:
1. "Banning men from womens' restrooms does not discriminate against men because they still have the same right to use mens' restrooms as anyone else".
IF AND ONLY IF
2. "Banning Mexicans from breathing air does not discriminate against Mexicans because they can still breathe water"
Clearly these two arguments have no relation to each other. But the point is they follow the same logical form.
But what about Gays who want to marry each other?
I post this because the concept of discrimination is problematic because we need to do two things:
1. Pick a well defined protected class
2. Have some standard of minimum harm
Instead of being generally frustrated, I'll give this one a shot using equality instead, something "easier" than discrimination. Its hard to precisely formulate what you mean when you say equality, and there will always be technical objections raised to arguments, even when these objections clearly come from a very cynical position within the debate. Discrimination, however, requires a subjective sense of proper conduct, which usually takes as its basis the assumption of equal rights.
Lets start with a simple definition of inequality (state of being unequal): Denying a thing to one person while it is provided to another. We can then define equality: if a situation is not one of inequality, it is a situation of equality. "Rights" are just a type of "thing" that can be equal or unequal. Now, you need to be talking about something that can be measured or else you can't apply this criterion at all. So I can't say that I'm equal to you unless we are comparing something, for instance the length of our toenails or right to trial by a jury of our peers.
You might start by arguing that two unmarried people have the right to consensually wed, regardless of genital type. Technically though, that isn't an argument for equality of the individual but equality of the pair. For me, this is a fine and dandy way of looking at it but I think it is somewhat unorthodox and in conflict with the fundamentally individual way we tend to look at rights.
So, what if we try to frame it as the rights of individuals? Here's how I see it:
Some Jerks say "Gays and straights have an equal right to marry because everyone has the right to marry a person of the opposite genitalia". However, this is like saying that F(A) = F(B) because F()=F(). If the function was not dependent on its inputs, that is to say you could determine F(X) without knowing if X=A or X=B, then yes it would be an equal standard, but of course it isn't.
Here's what the law says:
Men can marry women but not other men.
Women can marry men but not other women.
If I say "Who can person X marry" you can't answer yet, because you have to ask:
"Is person X a man or a woman?"
So at the very least, men and women do not have the same right to marry.
At this point we can't say that the situation is equal or unequal because I haven't also assumed that these two situations are of equal value. There is a nagging question though: Is the right to marry a man equal to the right to marry a woman?
Here's another argument that should shed some light on that point:
Suppose a racist southern town in the 1950s devised a means of discriminating against its black population. They pass an ordinance that reads:
White citizens may only use the public transit system that operates in the western half of the city.
Black citizens may only use the public transit system that operates in the eastern half of the city.
Even supposing that these two systems were perfectly equal, that the public transit usage rate was the same for whites and blacks, etc., discrimination still occurs. Whites who live, work, or play on the eastern half of the city would suffer an equal harm to the blacks who live, work, or play on the western half of the city. The discrimination still exists, regardless of whether it exists in an equal pair with some other discrimination! This situation could be a huge inconvenience for both blacks and whites, and it is clearly wrong.
Returning to the issue of Gay Marriage: Just as in the above example, some men are harmed by not being allowed to marry other men; and some women are harmed by not being allowed to marry other women. Gays aren't the *only* group harmed here, for instance two male friends might wish to get married just to get better financial aid status. But gays are definitely the most harmed group.
How can this be put into words as an explicit "helper" principle for equality? Doing so is always dangerous. I like this one (flawed though it is):
"Inequality under a given criterion between any two groups is unjust and can only be tolerated for the purpose of promoting equality under a higher criterion, and only when this is the best proven method"
Of course, a situation doesn't have to be unequal to be wrong. Imagine if there was an 11th commandment: "Thou shalt not use insulin". How would diabetics feel? They are being treated equally, right?
It is no secret that America continues to treat gays as second class citizens for reasons that have nothing to do with logic.
As I see it, a person can come up with rather silly "discrimination" arguments. But just because they follow the same form doesn't mean they have any merit:
Pretend the following holds:
1. "Banning men from womens' restrooms does not discriminate against men because they still have the same right to use mens' restrooms as anyone else".
IF AND ONLY IF
2. "Banning Mexicans from breathing air does not discriminate against Mexicans because they can still breathe water"
Clearly these two arguments have no relation to each other. But the point is they follow the same logical form.
But what about Gays who want to marry each other?
I post this because the concept of discrimination is problematic because we need to do two things:
1. Pick a well defined protected class
2. Have some standard of minimum harm
Instead of being generally frustrated, I'll give this one a shot using equality instead, something "easier" than discrimination. Its hard to precisely formulate what you mean when you say equality, and there will always be technical objections raised to arguments, even when these objections clearly come from a very cynical position within the debate. Discrimination, however, requires a subjective sense of proper conduct, which usually takes as its basis the assumption of equal rights.
Lets start with a simple definition of inequality (state of being unequal): Denying a thing to one person while it is provided to another. We can then define equality: if a situation is not one of inequality, it is a situation of equality. "Rights" are just a type of "thing" that can be equal or unequal. Now, you need to be talking about something that can be measured or else you can't apply this criterion at all. So I can't say that I'm equal to you unless we are comparing something, for instance the length of our toenails or right to trial by a jury of our peers.
You might start by arguing that two unmarried people have the right to consensually wed, regardless of genital type. Technically though, that isn't an argument for equality of the individual but equality of the pair. For me, this is a fine and dandy way of looking at it but I think it is somewhat unorthodox and in conflict with the fundamentally individual way we tend to look at rights.
So, what if we try to frame it as the rights of individuals? Here's how I see it:
Some Jerks say "Gays and straights have an equal right to marry because everyone has the right to marry a person of the opposite genitalia". However, this is like saying that F(A) = F(B) because F()=F(). If the function was not dependent on its inputs, that is to say you could determine F(X) without knowing if X=A or X=B, then yes it would be an equal standard, but of course it isn't.
Here's what the law says:
Men can marry women but not other men.
Women can marry men but not other women.
If I say "Who can person X marry" you can't answer yet, because you have to ask:
"Is person X a man or a woman?"
So at the very least, men and women do not have the same right to marry.
At this point we can't say that the situation is equal or unequal because I haven't also assumed that these two situations are of equal value. There is a nagging question though: Is the right to marry a man equal to the right to marry a woman?
Here's another argument that should shed some light on that point:
Suppose a racist southern town in the 1950s devised a means of discriminating against its black population. They pass an ordinance that reads:
White citizens may only use the public transit system that operates in the western half of the city.
Black citizens may only use the public transit system that operates in the eastern half of the city.
Even supposing that these two systems were perfectly equal, that the public transit usage rate was the same for whites and blacks, etc., discrimination still occurs. Whites who live, work, or play on the eastern half of the city would suffer an equal harm to the blacks who live, work, or play on the western half of the city. The discrimination still exists, regardless of whether it exists in an equal pair with some other discrimination! This situation could be a huge inconvenience for both blacks and whites, and it is clearly wrong.
Returning to the issue of Gay Marriage: Just as in the above example, some men are harmed by not being allowed to marry other men; and some women are harmed by not being allowed to marry other women. Gays aren't the *only* group harmed here, for instance two male friends might wish to get married just to get better financial aid status. But gays are definitely the most harmed group.
How can this be put into words as an explicit "helper" principle for equality? Doing so is always dangerous. I like this one (flawed though it is):
"Inequality under a given criterion between any two groups is unjust and can only be tolerated for the purpose of promoting equality under a higher criterion, and only when this is the best proven method"
Of course, a situation doesn't have to be unequal to be wrong. Imagine if there was an 11th commandment: "Thou shalt not use insulin". How would diabetics feel? They are being treated equally, right?
It is no secret that America continues to treat gays as second class citizens for reasons that have nothing to do with logic.
Tuesday, June 22, 2010
Unpleasant questions, Migration, Wealth, Secession, and the Common Good
Think out loud last week was about immigration rules in America, particularly the controversy surrounding Arizona's immigration law. As I lay in bed listening, I got to thinking about the underlying policy of immigration and emigration, the limits of liberal education, and how the many smaller issues that came to light throughout the discussion linked back to the philosophy that our Nation's laws are ostensibly based on. Although everyone agreed that reform was needed, there were essentially two visions of what the reform should be. One group put forward rather persuasive arguments that the large influx of new immigrants was undermining the bargaining power of workers in America and by the numbers this influx can account for all of the unemployment in America today. The other group essentially argued that we are all immigrants and that it is wrong to separate out the immigrants of yesterday from the immigrants of today. These arguments aren't mutually exclusive, and neither side really argued against what the other group said. It seemed that the commentators on each side approached a dark space within the rhetoric, a collection of unutterable assumptions underlying the worldview of the opposition, and chose to remain safely in the light rather than venture into new, dangerous territory.
Without dwelling on the implications of this behavior on the theory of progress through dialectic, this debate highlighted a clear deficiency in the liberal educational experience. Although the typical collegiate is bombarded with a few ideas from a smattering of philosophers and given many tools for justifying whatever opinion he or she might personally fancy, there is little effort made to confront the ideas of the student in a way that highlights systematic inadequacy and encourages the synthesis of new ideas and structured application of theory. Instead, the individual finds himself with many different ideas at his disposal that are mere instruments of justification, rendering the ideas of philosophy nothing more than tools to be used ad hoc to justify whatever decision the student fancies. In this way, the liberal experience functions as a preparation for corporate office culture because it deliberately deconstructs many of the individual's natural tools of moral decision making rather than integrating the philosophy into those notions. Thus, the individual is torn between a philosophy for which he or she has a poor understanding and his or her natural sense of fairness that has been stunted and alienated. Such an individual comes to experience the world from a state of permanent immaturity. When acting with authority, he or she tends to be unnecessarily cruel; when responding to authority, he or she tends to experience a much higher level of stress.
To illustrate, consider a thought experiment that one of my teachers used in a writing class that I took. In this experiment, a ship is sinking, and there is not enough space on the life boats to accept everyone. The question is then to determine who among the remaining passengers shall be saved. There are young people, old people, child prodigies, retards, lepers, etc. We each made our list and recorded our reasoning. The teacher then had a few of us present our views on the matter. After listening patiently to our presentations hinging on random dice rolls, who is first in line, and of course measures of the value of individuals based on characteristics, our teacher told us that the only ethical thing to do was to refuse to participate in the thought experiment entirely. I disagreed, and continue to disagree, and this is the core of my objection to the liberal educational program. My teacher had conflated two very similar but different things: the political impression of an action, and the moral impact of an action.
Anyone who we believe to be a good person has certain traits. Such a person respects diversity, cares for the less fortunate, shows kindness and compassion, etc. Our perception of the person as such comes from a relatively small data set. We typically only know of a few actions a person has taken that are good or bad. Additionally, we tend to see things in a self-centered way, so that our friends become good people because they have done thing that are good from our perspective, such as helping us to get a job over other people, hanging out with us rather than other people, and sharing with us rather than other people. I call this phenomenon - our impression of a person based on a relatively small data set, biased by our ideas of allegiance - our political impression. Therefore, when a person does something that strikes us as not being good, it doesn't necessarily mean that it is a bad action or that he or she is a bad person, even if we individually come to believe that it is so. He or she has left a bad political impression, but more investigation must be done to determine if the action is truly bad or if the person is truly bad.
Because it is highly likely that people actually can't be good or bad, and in the interest of brevity, I'll focus from here out on just actions. The political impression of an action is one thing, and it is an aspect of our individual perceptions. The actual moral impact of an action must be an object that does not depend on individual perceptions - we are striving to perceive an actual object that is ultimately constructable from a log of physical events (by "actual object" I don't mean something having physical substance, I just mean a collection of traits, eg. a doorway, a karate kick, to give $10, a collision, the color red).
So we can immediately approach the question in two ways - either we can have a paradigm of actions that are good and actions that are bad, match the action up to that paradigm and immediately label it, or we can have a valuation of world states in which the action occurs and in which some alternative occurs, and label the action as good iff the world state that results is the more valuable one. We want our approach to eventually solve the problem, and a little bit of thinking tends to reveal situations in which both approaches must be blended in order to arrive at the truth. But we can't pretend to have solved a problem by refusing to address it, nor can we act as if it is unsolvable simply because we haven't solved it.
Western philosophy is horribly tainted by Christian sentimentalism. When a group of firemen race toward a burning building only to find several people outside dying of smoke inhalation, knowing that several others remain inside, they may be faced with a choice: save those who have already escaped or try to rescue more from inside. The political impression of either choice cannot be bad, but the moral question is not necessarily neutral. It certainly isn't neutral for the author of the firefighter's training manual. Here, even when weighing lives equally, points of equivalence must arise. If nobody asks whether the life of an elderly man should be saved before the life of a child, whether a convicted felon should be saved before a Nobel Laureate, whether a healthy person should be left to die while a sick person is saved, nobody will know if the right thing was done. The christian answer seems to be to pray, that is to say to leave the decision to fate. But fate is not just.
This is all stated merely to argue that even though unpleasant questions may arise during philosophic discussions this is not an indication that the discussion has gone down the wrong track. Rather, this tends to mean that that these questions must be asked - a person who purports to have a solution must answer them. A person who doesn't offer solutions is not necessarily unwelcome in the discussion, but those who offer solutions deserve the highest honors, even if those proposals end up being flawed. The discussion must always be about finding solution, not just meandering talk.
Democratic decision making functions best when it is the most localized. That doesn't mean that the best decisions are made at the local level - but that when the democratic process does work correctly, it puts the decision in the hands of those who are affected by the problem. Of course, the process requires some level of dedication to the common good to be of use at all, and a real debate must occur. We tend to see this very little nowadays. This is probably symptomatic of the fact that modern states are so large that individual opinion really end up mattering very little, even for people like the President. It is only natural that people stop caring about the common good when their opinion seems irrelevant in the first place.
Nevertheless, as a democratic country, the United States gives each citizen a vote and collectively the citizens are sovereign from the laws of other countries. Even though our control is imperceptible at the individual level, collectively we control the destiny of our country. We determine the economic regulations that in turn create specific incentives that lead to specific business configurations. Collectively, the people's preferences, knowledge, and beliefs, in combination with the system of economic regulations, history, and institutions of business represent the object known as the economy. This economy, being the result of repeated democratic decisions reaching back into the past, is ultimately sovereign from other economies. This sovereignty is necessary if we are to exercise democratic control over the economy.
Other economies, existing within other sovereign states, are similarly free to determine their own compositions. As a result of different events in their history, some economies experience significantly lower standards of living than our economy does. So it might seem that accepting people from these other economies to come live within the United States is a good policy. But allowing this free exchange of peoples actually deals significant harm to the ability of the people to regulate the economy.
Immigration to this country has always imposed the greatest weight upon the poorest. The first immigrants to this country drove the indigenous peoples off of their ancestral lands, "spoiling the world" for them. So naturally I take the statement that "you should be for immigration because you are an immigrant" with a grain of salt. Regardless of my specific heritage, looking at the problem objectively it is clear that immigrants tend to inflict real harm to those whose economies they migrate to. While a new immigrant to our country might not have the right to take land away from us as we did from the Indians, they instead compete for jobs, and to a lesser degree, social services. There was a time (about 40 years ago now) when a young, middle class person like me could work in a factory producing the goods we consume, work in a field tending the crops we eat, or work in a kitchen washing dishes or the like. But nowadays it is not simply that we don't want to do this work, but that the wage for such jobs has been artificially depressed as a direct result of an influx of unskilled laborers as a result of a broken immigration policy and porous borders. For the wealthy and the educated elite, in fact for any member of our society who has a secure, white collar job, or even some secure blue collar jobs, these immigrants pose no danger - they are not in line to receive public welfare service or applying for jobs that take unskilled labor. In fact, these classes of our society benefit from unregulated immigration because there is a marginal lowering of prices that results from reduced labor costs.
The core of the problem is that resources are limited, meaning that only a certain maximum quantity of goods and services can be provided within our society at any particular time. Furthermore, the level of exploitation of resources is far below the theoretical maximum because environmentally harmful infrastructure must be built upon any natural resource that is to be exploited, or the resource itself is environmentally valuable. Thus, there is an environmental cost associated with any particular standard of living. Ultimately, too, these resources will one day be depleted. Our country has prudently decided to pursue meaningful environmental policies. These are predicated on controlled growth and a limited material standard of living. Inviting millions of additional people to this country means that either A) they will starve or B) they will receive some resources, either through additional environmental destruction or through competition - meaning reduced welfare for those already here.
The problem cannot be solved simply through increased welfare and raises to minimum wage. As more services make available to the poorest, and the more friendly we are toward immigration, the greater the incentive becomes to immigrate to this country. There are more than enough poor people in this world to overwhelm the limited resources that are available to the United States to feed, house, educate, and employ them, at least in our current economic configuration of market capitalism with debt-issue balanced budgets.
All of this drives me to ask whether the right of emigration - the right to leave one's country - truly is a fundamental human right. It is enumerated within the UN's Universal Declaration of Human Rights, so according to one authority it is fundamental. But as I have written before, it is problematic without a right to immigrate anywhere. I prefer the stance that the right to become a refugee and the right to amnesty are fundamental - but that there is no right to leave without first being seriously oppressed or under threat. Poverty alone cannot suffice. Certainly, being wealthy, gifted, or ambitious is also not a valid reason.
Wealth is only ownable by an individual because the laws of the state to which that individual is a citizen confer the privilege of ownership to the objects of property that are considered to have a wealth value. It certainly follows that an individual cannot take wealth from one country to another except by the consent of both governments. Whenever such a transfer is considered, the governments must ask whether the common good is served by allowing this exchange. The movement of currency from one state to another alters the market conditions in both states. As immigrants arrive in the United States, they bring currency with them that is exchanged for dollars, reducing the quantity of dollars held by the country from which they came and in turn encouraging imports from that country to the U.S. Prices are also bid up in the U.S. and down in that country. This price disparity exacerbates the inequality between nations. So it seems that a prudent policy is to heavily tax the movement of wealth between nations.
Finally, emigration can be seen as a special case of secession. If secession is disallowed, so ought be emigration. When a group of people secede from a nation, they declare themselves and certain of their property holdings to no longer fall under the jurisdiction of their former State. Secession generally disallowed by states because it poses significant problems to the process of law. Emigration is merely the movement outside of the geographic boundaries in which the state operates. That is, it accomplishes the aims of secession but only for the individual. However, individuals can still emigrate en masse, in which case emigration ceases to be the harmless, low level phenomenon that it was. Furthermore, the state's interest in controlling a person's behavior do not cease simply due to a person being in a specifc geographic place. This is particularly true if the person in question is, say, an unscrupulous industrialist intent of thwarting environmental regulators. So, individuals have no more right to emigrate than they have the right to secede, that is to say, they have no such right.
If emigration is not allowed, immigration cannot be allowed. Thus, there is no case to be made that a fundamental right to immigration exists.
Without dwelling on the implications of this behavior on the theory of progress through dialectic, this debate highlighted a clear deficiency in the liberal educational experience. Although the typical collegiate is bombarded with a few ideas from a smattering of philosophers and given many tools for justifying whatever opinion he or she might personally fancy, there is little effort made to confront the ideas of the student in a way that highlights systematic inadequacy and encourages the synthesis of new ideas and structured application of theory. Instead, the individual finds himself with many different ideas at his disposal that are mere instruments of justification, rendering the ideas of philosophy nothing more than tools to be used ad hoc to justify whatever decision the student fancies. In this way, the liberal experience functions as a preparation for corporate office culture because it deliberately deconstructs many of the individual's natural tools of moral decision making rather than integrating the philosophy into those notions. Thus, the individual is torn between a philosophy for which he or she has a poor understanding and his or her natural sense of fairness that has been stunted and alienated. Such an individual comes to experience the world from a state of permanent immaturity. When acting with authority, he or she tends to be unnecessarily cruel; when responding to authority, he or she tends to experience a much higher level of stress.
To illustrate, consider a thought experiment that one of my teachers used in a writing class that I took. In this experiment, a ship is sinking, and there is not enough space on the life boats to accept everyone. The question is then to determine who among the remaining passengers shall be saved. There are young people, old people, child prodigies, retards, lepers, etc. We each made our list and recorded our reasoning. The teacher then had a few of us present our views on the matter. After listening patiently to our presentations hinging on random dice rolls, who is first in line, and of course measures of the value of individuals based on characteristics, our teacher told us that the only ethical thing to do was to refuse to participate in the thought experiment entirely. I disagreed, and continue to disagree, and this is the core of my objection to the liberal educational program. My teacher had conflated two very similar but different things: the political impression of an action, and the moral impact of an action.
Anyone who we believe to be a good person has certain traits. Such a person respects diversity, cares for the less fortunate, shows kindness and compassion, etc. Our perception of the person as such comes from a relatively small data set. We typically only know of a few actions a person has taken that are good or bad. Additionally, we tend to see things in a self-centered way, so that our friends become good people because they have done thing that are good from our perspective, such as helping us to get a job over other people, hanging out with us rather than other people, and sharing with us rather than other people. I call this phenomenon - our impression of a person based on a relatively small data set, biased by our ideas of allegiance - our political impression. Therefore, when a person does something that strikes us as not being good, it doesn't necessarily mean that it is a bad action or that he or she is a bad person, even if we individually come to believe that it is so. He or she has left a bad political impression, but more investigation must be done to determine if the action is truly bad or if the person is truly bad.
Because it is highly likely that people actually can't be good or bad, and in the interest of brevity, I'll focus from here out on just actions. The political impression of an action is one thing, and it is an aspect of our individual perceptions. The actual moral impact of an action must be an object that does not depend on individual perceptions - we are striving to perceive an actual object that is ultimately constructable from a log of physical events (by "actual object" I don't mean something having physical substance, I just mean a collection of traits, eg. a doorway, a karate kick, to give $10, a collision, the color red).
So we can immediately approach the question in two ways - either we can have a paradigm of actions that are good and actions that are bad, match the action up to that paradigm and immediately label it, or we can have a valuation of world states in which the action occurs and in which some alternative occurs, and label the action as good iff the world state that results is the more valuable one. We want our approach to eventually solve the problem, and a little bit of thinking tends to reveal situations in which both approaches must be blended in order to arrive at the truth. But we can't pretend to have solved a problem by refusing to address it, nor can we act as if it is unsolvable simply because we haven't solved it.
Western philosophy is horribly tainted by Christian sentimentalism. When a group of firemen race toward a burning building only to find several people outside dying of smoke inhalation, knowing that several others remain inside, they may be faced with a choice: save those who have already escaped or try to rescue more from inside. The political impression of either choice cannot be bad, but the moral question is not necessarily neutral. It certainly isn't neutral for the author of the firefighter's training manual. Here, even when weighing lives equally, points of equivalence must arise. If nobody asks whether the life of an elderly man should be saved before the life of a child, whether a convicted felon should be saved before a Nobel Laureate, whether a healthy person should be left to die while a sick person is saved, nobody will know if the right thing was done. The christian answer seems to be to pray, that is to say to leave the decision to fate. But fate is not just.
This is all stated merely to argue that even though unpleasant questions may arise during philosophic discussions this is not an indication that the discussion has gone down the wrong track. Rather, this tends to mean that that these questions must be asked - a person who purports to have a solution must answer them. A person who doesn't offer solutions is not necessarily unwelcome in the discussion, but those who offer solutions deserve the highest honors, even if those proposals end up being flawed. The discussion must always be about finding solution, not just meandering talk.
Democratic decision making functions best when it is the most localized. That doesn't mean that the best decisions are made at the local level - but that when the democratic process does work correctly, it puts the decision in the hands of those who are affected by the problem. Of course, the process requires some level of dedication to the common good to be of use at all, and a real debate must occur. We tend to see this very little nowadays. This is probably symptomatic of the fact that modern states are so large that individual opinion really end up mattering very little, even for people like the President. It is only natural that people stop caring about the common good when their opinion seems irrelevant in the first place.
Nevertheless, as a democratic country, the United States gives each citizen a vote and collectively the citizens are sovereign from the laws of other countries. Even though our control is imperceptible at the individual level, collectively we control the destiny of our country. We determine the economic regulations that in turn create specific incentives that lead to specific business configurations. Collectively, the people's preferences, knowledge, and beliefs, in combination with the system of economic regulations, history, and institutions of business represent the object known as the economy. This economy, being the result of repeated democratic decisions reaching back into the past, is ultimately sovereign from other economies. This sovereignty is necessary if we are to exercise democratic control over the economy.
Other economies, existing within other sovereign states, are similarly free to determine their own compositions. As a result of different events in their history, some economies experience significantly lower standards of living than our economy does. So it might seem that accepting people from these other economies to come live within the United States is a good policy. But allowing this free exchange of peoples actually deals significant harm to the ability of the people to regulate the economy.
Immigration to this country has always imposed the greatest weight upon the poorest. The first immigrants to this country drove the indigenous peoples off of their ancestral lands, "spoiling the world" for them. So naturally I take the statement that "you should be for immigration because you are an immigrant" with a grain of salt. Regardless of my specific heritage, looking at the problem objectively it is clear that immigrants tend to inflict real harm to those whose economies they migrate to. While a new immigrant to our country might not have the right to take land away from us as we did from the Indians, they instead compete for jobs, and to a lesser degree, social services. There was a time (about 40 years ago now) when a young, middle class person like me could work in a factory producing the goods we consume, work in a field tending the crops we eat, or work in a kitchen washing dishes or the like. But nowadays it is not simply that we don't want to do this work, but that the wage for such jobs has been artificially depressed as a direct result of an influx of unskilled laborers as a result of a broken immigration policy and porous borders. For the wealthy and the educated elite, in fact for any member of our society who has a secure, white collar job, or even some secure blue collar jobs, these immigrants pose no danger - they are not in line to receive public welfare service or applying for jobs that take unskilled labor. In fact, these classes of our society benefit from unregulated immigration because there is a marginal lowering of prices that results from reduced labor costs.
The core of the problem is that resources are limited, meaning that only a certain maximum quantity of goods and services can be provided within our society at any particular time. Furthermore, the level of exploitation of resources is far below the theoretical maximum because environmentally harmful infrastructure must be built upon any natural resource that is to be exploited, or the resource itself is environmentally valuable. Thus, there is an environmental cost associated with any particular standard of living. Ultimately, too, these resources will one day be depleted. Our country has prudently decided to pursue meaningful environmental policies. These are predicated on controlled growth and a limited material standard of living. Inviting millions of additional people to this country means that either A) they will starve or B) they will receive some resources, either through additional environmental destruction or through competition - meaning reduced welfare for those already here.
The problem cannot be solved simply through increased welfare and raises to minimum wage. As more services make available to the poorest, and the more friendly we are toward immigration, the greater the incentive becomes to immigrate to this country. There are more than enough poor people in this world to overwhelm the limited resources that are available to the United States to feed, house, educate, and employ them, at least in our current economic configuration of market capitalism with debt-issue balanced budgets.
All of this drives me to ask whether the right of emigration - the right to leave one's country - truly is a fundamental human right. It is enumerated within the UN's Universal Declaration of Human Rights, so according to one authority it is fundamental. But as I have written before, it is problematic without a right to immigrate anywhere. I prefer the stance that the right to become a refugee and the right to amnesty are fundamental - but that there is no right to leave without first being seriously oppressed or under threat. Poverty alone cannot suffice. Certainly, being wealthy, gifted, or ambitious is also not a valid reason.
Wealth is only ownable by an individual because the laws of the state to which that individual is a citizen confer the privilege of ownership to the objects of property that are considered to have a wealth value. It certainly follows that an individual cannot take wealth from one country to another except by the consent of both governments. Whenever such a transfer is considered, the governments must ask whether the common good is served by allowing this exchange. The movement of currency from one state to another alters the market conditions in both states. As immigrants arrive in the United States, they bring currency with them that is exchanged for dollars, reducing the quantity of dollars held by the country from which they came and in turn encouraging imports from that country to the U.S. Prices are also bid up in the U.S. and down in that country. This price disparity exacerbates the inequality between nations. So it seems that a prudent policy is to heavily tax the movement of wealth between nations.
Finally, emigration can be seen as a special case of secession. If secession is disallowed, so ought be emigration. When a group of people secede from a nation, they declare themselves and certain of their property holdings to no longer fall under the jurisdiction of their former State. Secession generally disallowed by states because it poses significant problems to the process of law. Emigration is merely the movement outside of the geographic boundaries in which the state operates. That is, it accomplishes the aims of secession but only for the individual. However, individuals can still emigrate en masse, in which case emigration ceases to be the harmless, low level phenomenon that it was. Furthermore, the state's interest in controlling a person's behavior do not cease simply due to a person being in a specifc geographic place. This is particularly true if the person in question is, say, an unscrupulous industrialist intent of thwarting environmental regulators. So, individuals have no more right to emigrate than they have the right to secede, that is to say, they have no such right.
If emigration is not allowed, immigration cannot be allowed. Thus, there is no case to be made that a fundamental right to immigration exists.
Monday, May 17, 2010
The ironic pairing: Globalization and Deficit Terrorism
Globalization - here used synonymously with "free trade" - punishes countries which pay their workers too much. It lets a flood of cheaply manufactured goods into wealthy countries' markets - and these goods are cheaper precisely because of the difference in wages. In other words, each portion of wage in the importing country can capture more than an equal portion of wage in the exporter country.
Since wages are typically paid in national currencies, this effect sees its expression in currency exchange rates. Since currency can only be used to purchase goods within an economy, a nation that imports more than it exports will, ceteris paribus, find that over time its currency will decrease in value relative to those of nations that export more than they import. However, this measure of value is only meaningful if incomes and currency circulation patterns are also taken into account. The simple measure of literal exchange doesn't tell the full story of the value of a currency. If an hours' labor earned worker A 1000 yuan that were each worth 0.25 dollars, while worker B slaved for a pittance of 10 dollars per hour, can one really say that the yuan is a "weaker" currency?
For the typically encountered modern situation where one large consuming nation is served by several satellite nations that function as producers, any additional money entering the hands of an investor will tend to be invested in a satellite nation if it is invested in production and a few other outsourceable functions, and invested in the importer nation for purposes like distribution and retailing. Therefore, a true currency supply expansion, distributed uniformly (such as through tax relief) in an importing country would in part be transmitted to foreign countries and in part into the local economy. This ratio is determined by the nature of the goods that are intended to be produced and by incentive structures that apply to these goods. Thus, such a currency supply expansion will increase the wealth of both the importer and the exporter nation.
However, this effect is moderated - and can even be supplanted completely - by rent-seeking behavior. If wealthy individuals are able to cartelize or monopolize any stream of consumer necessities, acts of currency issuance instead lead to a near seamless increase in the costs of those necessities until the effect of the currency issuance is absorbed. If labor markets are sufficiently slack to keep workers from bargaining effectively, the system will essentially remain as it was, except that the price of goods in the importing country will rise or fall relative to each other, depending on the nature of the rent-seeking. If, on the other hand, labor markets are tight (and not necessarily because of low unemployment but also possibly because of a shortage of qualified workers) inflation will occur as the workers demand greater wages to counter the increase in cost of living and these wages motivate increases in prices. But here it is worth noting that price increases and wage increases in pair do sometimes serve a beneficial equalizing function in the society, if the worst off see these wage increases.
Anti-deficit hysteria hinges on value of currency as expressed not in the wages of workers but in exchange rates. But this means that nations which refuse to devalue their currency through deficit spending are essentially capitulating on trade deficits, agreeing to continue exporting industry and jobs. The sensible policy - indeed what appears to be the strategic equilibrium - is to have every nation locked in a currency devaluation race. Such a race would proceed until full employment was reached.
This strategy will doubtless lead to inflation, especially since workers who depend on cheap imports to maintain a low cost of living will see these imports increase in price due to the inferior exchange rate. However, this inflation should be moderated by the reduction of profits collected by the outsourced companies. The inflation is also beneficial in the sense that it forces workers to bargain for higher wages and undermines the total profits of the wealthy, delaying the rent-seeking behavior that would otherwise lead to increases in the value of real estate and other owner-income-stream-type assets. The inflation is necessary to stimulate the growth of local industry in the importer country - from the perspective of the entrepreneur, inflation has the same effect that tariffs would, except that the upward price trend will tend to make investment more favorable in the long term than tariffs would, especially since tariffs can be much more effectively countered by foreign government policies than currency devaluations.
Therefore, the pairing of Globalization with deficit terrorism is particularly odd. On the one hand, nations are expected to put up no resistance to the exporting of jobs overseas. On the other, expansions of money supply are criticized as irresponsible, even though such expansions would correct the imbalance caused by the strategy of globalization. In fairness, as has been noted before, government borrowing from wealthy investors doesn't really expand the money supply. However, it does effectively increase the money in circulation , but with a much more mild effect than non-parity currency issue. But in their economic ignorance, most deficit terrorists are blind to the actual workings of the money supply anyway. What we should never forgive them for is their willingness to blindly repeat political talking points as if they represent real analysis.
Since wages are typically paid in national currencies, this effect sees its expression in currency exchange rates. Since currency can only be used to purchase goods within an economy, a nation that imports more than it exports will, ceteris paribus, find that over time its currency will decrease in value relative to those of nations that export more than they import. However, this measure of value is only meaningful if incomes and currency circulation patterns are also taken into account. The simple measure of literal exchange doesn't tell the full story of the value of a currency. If an hours' labor earned worker A 1000 yuan that were each worth 0.25 dollars, while worker B slaved for a pittance of 10 dollars per hour, can one really say that the yuan is a "weaker" currency?
For the typically encountered modern situation where one large consuming nation is served by several satellite nations that function as producers, any additional money entering the hands of an investor will tend to be invested in a satellite nation if it is invested in production and a few other outsourceable functions, and invested in the importer nation for purposes like distribution and retailing. Therefore, a true currency supply expansion, distributed uniformly (such as through tax relief) in an importing country would in part be transmitted to foreign countries and in part into the local economy. This ratio is determined by the nature of the goods that are intended to be produced and by incentive structures that apply to these goods. Thus, such a currency supply expansion will increase the wealth of both the importer and the exporter nation.
However, this effect is moderated - and can even be supplanted completely - by rent-seeking behavior. If wealthy individuals are able to cartelize or monopolize any stream of consumer necessities, acts of currency issuance instead lead to a near seamless increase in the costs of those necessities until the effect of the currency issuance is absorbed. If labor markets are sufficiently slack to keep workers from bargaining effectively, the system will essentially remain as it was, except that the price of goods in the importing country will rise or fall relative to each other, depending on the nature of the rent-seeking. If, on the other hand, labor markets are tight (and not necessarily because of low unemployment but also possibly because of a shortage of qualified workers) inflation will occur as the workers demand greater wages to counter the increase in cost of living and these wages motivate increases in prices. But here it is worth noting that price increases and wage increases in pair do sometimes serve a beneficial equalizing function in the society, if the worst off see these wage increases.
Anti-deficit hysteria hinges on value of currency as expressed not in the wages of workers but in exchange rates. But this means that nations which refuse to devalue their currency through deficit spending are essentially capitulating on trade deficits, agreeing to continue exporting industry and jobs. The sensible policy - indeed what appears to be the strategic equilibrium - is to have every nation locked in a currency devaluation race. Such a race would proceed until full employment was reached.
This strategy will doubtless lead to inflation, especially since workers who depend on cheap imports to maintain a low cost of living will see these imports increase in price due to the inferior exchange rate. However, this inflation should be moderated by the reduction of profits collected by the outsourced companies. The inflation is also beneficial in the sense that it forces workers to bargain for higher wages and undermines the total profits of the wealthy, delaying the rent-seeking behavior that would otherwise lead to increases in the value of real estate and other owner-income-stream-type assets. The inflation is necessary to stimulate the growth of local industry in the importer country - from the perspective of the entrepreneur, inflation has the same effect that tariffs would, except that the upward price trend will tend to make investment more favorable in the long term than tariffs would, especially since tariffs can be much more effectively countered by foreign government policies than currency devaluations.
Therefore, the pairing of Globalization with deficit terrorism is particularly odd. On the one hand, nations are expected to put up no resistance to the exporting of jobs overseas. On the other, expansions of money supply are criticized as irresponsible, even though such expansions would correct the imbalance caused by the strategy of globalization. In fairness, as has been noted before, government borrowing from wealthy investors doesn't really expand the money supply. However, it does effectively increase the money in circulation , but with a much more mild effect than non-parity currency issue. But in their economic ignorance, most deficit terrorists are blind to the actual workings of the money supply anyway. What we should never forgive them for is their willingness to blindly repeat political talking points as if they represent real analysis.
Monday, May 10, 2010
The role of bank capital scarcity on inflation
Increases in interest rates due to bank capital scarcity cannot generally lead to increases in prices, because interest rates are the arbiters of general employment levels which in turn control demand for goods. However, changes in interest rates can precipitate changes to market structure that cause increases in the cost of goods in individual markets, or occasionally precipitate both unemployment and inflation, given that economic growth within a region is sufficiently robust or the general population is sufficiently wealthy. To illustrate, begin with the following example of a single firm within a single industry.
Imperial Widgets (IW) is a widget factory facing capital replacement costs due to depreciation. The company is not profitable (zero net profit) and has no liquid assets that can be sold to finance such a purchase. Therefore, the company must take a loan to cover these replacement costs or cease operations. Supposing that IW takes such loans on a rolling basis and therefore faces similar monthly payments (without loss of generality) in each term.
Further, suppose that IW is making its price and quantity production decisions in a competent fashion, that is to say it is maximizing (or attempting to maximize) its profits. It expects an increase in price charged to lead to a decrease in sales sufficiently large to reduce profits and a decrease in price charged to similarly lead to an insufficiently higher volume of sales; additionally it is not likely to sell additional units produced, the marginal cost of production equals the marginal revenue, or IW is already producing at capacity. In other words, IW's profits would decline were it to maintain current capital stocks but change its price and/or quantity of production.
Now, suppose that interest rates increase. As IW considers its replacement schedule for depreciating capital, it realizes that it faces a change to its cost curve that could alter its price and quantity decisions. Depending on the capital objects to be replaced, IW may either curtail production and increase prices, or simply operate at a loss. In the first case, IW is likely to only obtain a partial replacement of capital, thus it is borrowing less. In the second case, IW is likely to finance these losses, causing an increase in borrowing.
The distribution between these two decisions across all firms is connected in a mutually causative way with the economic trend. At the macro level, some firms will move in one direction and some firms will move in the other, but a third option looms in the shadows. Here, long term expectations become significant - do firms that are operating at a loss hold out for better days or close shop? In any event, employment declines so long as at least one firm either cuts production or goes out of business.
The model case from here on will depend on market structure. It is virtually impossible to conceive of a monopoly enterprise that is not in the first place profitable, so we can focus instead on competitive and near-competitive markets. Within such a market some firms will be facing slightly higher cost curves and others slightly lower curves, but all firms will charge very similar prices for the same good, therefore some firms will be slightly profitable or have liquid asset reserves and some will be operating at a slight loss or have a deficiency in liquid asset reserves. When interest rates increase, some firms will face untenable finance positions and close. Therefore, interest rate increases can cause the breakdown of competitive market structures and lead to monopoly, cartel, or other degenerate market structures. This in turn allows the individual market to come to a higher price equilibrium due to the diminished competition within the market. This higher price equilibrium is generally accompanied by lower output.
However, if similar effects occur across too many markets at the same time, the reduction in employment level and wages that accompanies such restructuring leads to decreases in demand for goods through both revision of consumer budgets and increased incentives to save. In such a situation, the prices charged for goods must decrease as output declines, because prices follow a cost curve that is non-horizontal (due not just to the initial assumption of high interest rates and capital scarcity but also to the reduction in wages). A reduced output level must in turn exert downward pressure on interest rates.
Another under-appreciated aspect of this problem is the role that investment decisions play in the availability of capital to banks. Bank loans are a class of investment that competes with direct investment in corporations. During boom times, the increase of direct investment in corporations is a source of the very capital scarcity that leads to market consolidations as described above. However, during more stagnant economic times, companies cannot raise capital as easily because of the greater risk associated with direct investment. This means that capital is being held in bank accounts, implying a capital surplus - so interest rates should tend to fall as economic conditions deteriorate.
Economies go into crisis when prospects for direct investment become so bleak that essentially no direct investment occurs. Here, individuals will even settle for no interest and keep money in the bank, waiting for better times. These better times are caused by exogenous effects - technologies, government stimulus, and resource discoveries.
In contrast, economies also go into crisis when too few dollars are available for loans. If spending is sufficiently robust, investors will be unwilling to leave any money sitting. Capital for short term adjustments becomes too expensive for firms, and they are forced to curtail production. During times of especially strong demand, this can lead to prices increasing even as unemployment increases. Ultimately, the ability to spend is actually a function of wealth and not of income. Among other things, this explains the enigmatic "stagflation" of the 1970s.
In a previous post I have described these two contrasting situations as "disincentive" and "shortage". It is "shortage" that most closely corresponds with bank capital scarcity scenarios particularly the enigma of stagflation.
It is worth addressing whether such an effect - stagflation - can occur in a less developed country (I cringe and the imperialist heritage of this term. Is it conceptually much different than "less civilized" or "barbarian"?) due to the same forces as in a developed one. Here, banking and capital sources are primarily externally located. This is crucial, because it implies that any growth or decline in local demand will only have a marginal effect on the investing economy. These export economies do not get the benefit of profit capture or control, because the investors are not members of the economy itself and do not have a stake in the local community. It is the destabilization that the interests of the foreign investor bring to the political process that repeatedly dooms efforts at growth and social justice within a developing country. Generally, both loans and direct investment will always be available or unavailable in parity to the developing nation. It is not some economic law - but the political conditions of our time - that leads to suffering throughout the world.
Imperial Widgets (IW) is a widget factory facing capital replacement costs due to depreciation. The company is not profitable (zero net profit) and has no liquid assets that can be sold to finance such a purchase. Therefore, the company must take a loan to cover these replacement costs or cease operations. Supposing that IW takes such loans on a rolling basis and therefore faces similar monthly payments (without loss of generality) in each term.
Further, suppose that IW is making its price and quantity production decisions in a competent fashion, that is to say it is maximizing (or attempting to maximize) its profits. It expects an increase in price charged to lead to a decrease in sales sufficiently large to reduce profits and a decrease in price charged to similarly lead to an insufficiently higher volume of sales; additionally it is not likely to sell additional units produced, the marginal cost of production equals the marginal revenue, or IW is already producing at capacity. In other words, IW's profits would decline were it to maintain current capital stocks but change its price and/or quantity of production.
Now, suppose that interest rates increase. As IW considers its replacement schedule for depreciating capital, it realizes that it faces a change to its cost curve that could alter its price and quantity decisions. Depending on the capital objects to be replaced, IW may either curtail production and increase prices, or simply operate at a loss. In the first case, IW is likely to only obtain a partial replacement of capital, thus it is borrowing less. In the second case, IW is likely to finance these losses, causing an increase in borrowing.
The distribution between these two decisions across all firms is connected in a mutually causative way with the economic trend. At the macro level, some firms will move in one direction and some firms will move in the other, but a third option looms in the shadows. Here, long term expectations become significant - do firms that are operating at a loss hold out for better days or close shop? In any event, employment declines so long as at least one firm either cuts production or goes out of business.
The model case from here on will depend on market structure. It is virtually impossible to conceive of a monopoly enterprise that is not in the first place profitable, so we can focus instead on competitive and near-competitive markets. Within such a market some firms will be facing slightly higher cost curves and others slightly lower curves, but all firms will charge very similar prices for the same good, therefore some firms will be slightly profitable or have liquid asset reserves and some will be operating at a slight loss or have a deficiency in liquid asset reserves. When interest rates increase, some firms will face untenable finance positions and close. Therefore, interest rate increases can cause the breakdown of competitive market structures and lead to monopoly, cartel, or other degenerate market structures. This in turn allows the individual market to come to a higher price equilibrium due to the diminished competition within the market. This higher price equilibrium is generally accompanied by lower output.
However, if similar effects occur across too many markets at the same time, the reduction in employment level and wages that accompanies such restructuring leads to decreases in demand for goods through both revision of consumer budgets and increased incentives to save. In such a situation, the prices charged for goods must decrease as output declines, because prices follow a cost curve that is non-horizontal (due not just to the initial assumption of high interest rates and capital scarcity but also to the reduction in wages). A reduced output level must in turn exert downward pressure on interest rates.
Another under-appreciated aspect of this problem is the role that investment decisions play in the availability of capital to banks. Bank loans are a class of investment that competes with direct investment in corporations. During boom times, the increase of direct investment in corporations is a source of the very capital scarcity that leads to market consolidations as described above. However, during more stagnant economic times, companies cannot raise capital as easily because of the greater risk associated with direct investment. This means that capital is being held in bank accounts, implying a capital surplus - so interest rates should tend to fall as economic conditions deteriorate.
Economies go into crisis when prospects for direct investment become so bleak that essentially no direct investment occurs. Here, individuals will even settle for no interest and keep money in the bank, waiting for better times. These better times are caused by exogenous effects - technologies, government stimulus, and resource discoveries.
In contrast, economies also go into crisis when too few dollars are available for loans. If spending is sufficiently robust, investors will be unwilling to leave any money sitting. Capital for short term adjustments becomes too expensive for firms, and they are forced to curtail production. During times of especially strong demand, this can lead to prices increasing even as unemployment increases. Ultimately, the ability to spend is actually a function of wealth and not of income. Among other things, this explains the enigmatic "stagflation" of the 1970s.
In a previous post I have described these two contrasting situations as "disincentive" and "shortage". It is "shortage" that most closely corresponds with bank capital scarcity scenarios particularly the enigma of stagflation.
It is worth addressing whether such an effect - stagflation - can occur in a less developed country (I cringe and the imperialist heritage of this term. Is it conceptually much different than "less civilized" or "barbarian"?) due to the same forces as in a developed one. Here, banking and capital sources are primarily externally located. This is crucial, because it implies that any growth or decline in local demand will only have a marginal effect on the investing economy. These export economies do not get the benefit of profit capture or control, because the investors are not members of the economy itself and do not have a stake in the local community. It is the destabilization that the interests of the foreign investor bring to the political process that repeatedly dooms efforts at growth and social justice within a developing country. Generally, both loans and direct investment will always be available or unavailable in parity to the developing nation. It is not some economic law - but the political conditions of our time - that leads to suffering throughout the world.
Wednesday, May 5, 2010
Firefox Double Crashing
Dear firefox feedback,
Firefox is a very predictable product. If something causes it to crash, that same thing will cause it to crash again. Please forgive me for not sounding sophisticated here, but I don't have the statistics that your techie people have access to. This is because firefox is a computer program. It responds in a predictable fashion to the data that is fed into it.
The crash recovery option is designed to store, apparently in cached form rather than reloading them, all of the pages that were being viewed at the time of a crash. In 99.99% of situations, this means that when firefox is restarted, it simply crashes again. I reported this as a bug and was shut down:
https://bugzilla.mozilla.org/show_bug.cgi?id=506883
Apparently, having a product that crashes a second time after every crash is not a bug but a feature.
So, at the very least, I would like to have an option to turn this "feature" off. I know from searching support that I can go to some internal settings page to fix the problem - and I have. But for everyone else out there who is a loyal firefox user and might not know about this fix, I am asking you and the other tech people to do two things:
1. Come up with a crash recovery procedure that works in a meaningful way.
2. Include an option in preferences that can be checked to disable this feature.
On the first point,
I suggest storing any form data and URLs and simply saving them to a text file in the event of crash. Naturally you can exclude credit card and password info. Then, on recovery, firefox should simply display these contents in a form that makes them easy to copy and paste.
Especially in crashes, your current standard is really unrealistic. Paul Oshannessy said "I'll say that the common case, people just want Firefox to start back up and figure it out on its own. They don't want to be shown this potentially confusing page after Firefox crashes - they want it to 'just work'."
But it doesn't "just work". Common sense indicates that it won't. Programs can't just start back up after crashes with no data loss, because as soon as the program executes that same line of code a second time, the same result occurs! In the case of web content, crashes are the result of errors in the generation of webpage scripts or firefox's interpretation of the contents of those scripts. If firefox doesn't ask the servers that generated the pages to re-generate them, it will simply run the same scripts on those pages that caused the original crash, and because firefox is such a nice and stable product, it will crash again! But even re-generating pages will still cause a lot of crashes, almost as many as loading the cashed pages. What you find, and this is very much CS315, is that each time you strip away a layer of data, that is step back from the most recent page, the fewer crashes there are, until you find the only way to really prevent any crash is to not reload the offending page at all.
That gets back to the comment of the poor user that Paul shut down: Why not let the user choose which tabs to restore on the first restart?
On the second point,
I suggest you make it so that whatever Crash Recovery "solution" you end up implementing, you make it easy to turn off so that grouchy people like me can avoid going batshit insane. Make this an advanced option. That way average users who have no functional literacy won't go bumbling into that option, accidentally turn it off, and subsequently leave nasty messages demanding to know why their firefox doesn't double crash anymore.
Also, I would suggest that you take the time to figure out whose idea this was, because you might want to take future ideas by this same person with a grain of salt. As a general rule, clever marketing comes after the product - it should never motivate the creation of the product itself, unless you intend to defraud consumers.
Thank you. I feel better now.
Firefox is a very predictable product. If something causes it to crash, that same thing will cause it to crash again. Please forgive me for not sounding sophisticated here, but I don't have the statistics that your techie people have access to. This is because firefox is a computer program. It responds in a predictable fashion to the data that is fed into it.
The crash recovery option is designed to store, apparently in cached form rather than reloading them, all of the pages that were being viewed at the time of a crash. In 99.99% of situations, this means that when firefox is restarted, it simply crashes again. I reported this as a bug and was shut down:
https://bugzilla.mozilla.org/show_bug.cgi?id=506883
Apparently, having a product that crashes a second time after every crash is not a bug but a feature.
So, at the very least, I would like to have an option to turn this "feature" off. I know from searching support that I can go to some internal settings page to fix the problem - and I have. But for everyone else out there who is a loyal firefox user and might not know about this fix, I am asking you and the other tech people to do two things:
1. Come up with a crash recovery procedure that works in a meaningful way.
2. Include an option in preferences that can be checked to disable this feature.
On the first point,
I suggest storing any form data and URLs and simply saving them to a text file in the event of crash. Naturally you can exclude credit card and password info. Then, on recovery, firefox should simply display these contents in a form that makes them easy to copy and paste.
Especially in crashes, your current standard is really unrealistic. Paul Oshannessy said "I'll say that the common case, people just want Firefox to start back up and figure it out on its own. They don't want to be shown this potentially confusing page after Firefox crashes - they want it to 'just work'."
But it doesn't "just work". Common sense indicates that it won't. Programs can't just start back up after crashes with no data loss, because as soon as the program executes that same line of code a second time, the same result occurs! In the case of web content, crashes are the result of errors in the generation of webpage scripts or firefox's interpretation of the contents of those scripts. If firefox doesn't ask the servers that generated the pages to re-generate them, it will simply run the same scripts on those pages that caused the original crash, and because firefox is such a nice and stable product, it will crash again! But even re-generating pages will still cause a lot of crashes, almost as many as loading the cashed pages. What you find, and this is very much CS315, is that each time you strip away a layer of data, that is step back from the most recent page, the fewer crashes there are, until you find the only way to really prevent any crash is to not reload the offending page at all.
That gets back to the comment of the poor user that Paul shut down: Why not let the user choose which tabs to restore on the first restart?
On the second point,
I suggest you make it so that whatever Crash Recovery "solution" you end up implementing, you make it easy to turn off so that grouchy people like me can avoid going batshit insane. Make this an advanced option. That way average users who have no functional literacy won't go bumbling into that option, accidentally turn it off, and subsequently leave nasty messages demanding to know why their firefox doesn't double crash anymore.
Also, I would suggest that you take the time to figure out whose idea this was, because you might want to take future ideas by this same person with a grain of salt. As a general rule, clever marketing comes after the product - it should never motivate the creation of the product itself, unless you intend to defraud consumers.
Thank you. I feel better now.
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