Friday, November 28, 2014

Georg Simmel: Expansion of the Dyad

The two person, or two group "dyad" is a particularly important social grouping, according to George Simmel in The Sociology of Georg Simmel translated and edited by Kurt H. Wolff. But what happens when you expand the dyad to three people, to the "triad?"

Back to start: The Unknown Sociologist.

"The appearance of the third party.. [means an] abandonment of absolute contrast." In Simmel's view, it introduces three kinds of group formations. The third person might be a non-partisan mediator; he might be a "tertius gaudens" or someone who benefits from a two person quarrel; and he might even be someone who uses a dispute between two people to divide and conquer them. Let us look at each in turn.

The Non-partisan and the mediator. In many cases the addition of a third person can weld the two-person dyad together; the child "closes the circle by typing the parents to one another." But just as significant is the non-partisan mediator.
The non-partisan shows each party the claims and arguments of the other; they thus lose the tone of subjective passion which usually provokes the same tone on the part of the adversary.
In other words, the non-partisan "deprives conflicting claims of their affective qualities" and forces the parties to view a dividing issue more objectively than in pure adversary combat. "[A]ntagonism of the will is reduced to intellectual antagonism." Notice though that the mediator is not an arbitrator; he does not decide the issue; only the parties can do that. But the mediator must be viewed by both sides as neutral, either because he is equally close to each party, or equally distant.

Another impartial third element is the arbitrator, to whom the two parties render up the power to decide their issue. This requires not just a joint faith in the neutrality of the arbitrator, but "confidence in the objectivity of [his] judgment" beyon mere mediation.

As an example of mediation, Simmel offers the British King Henry III. His relations with the barons and prelates descended into constant conflict, and both parties came eventually to resort to a third element previously "kept out of state matters." We are talking about the beginning of the House of Commons.

The Tertius Gaudens. Here we have a third party that "draws advantage from the quarrel of two others", he is literally the third who rejoices at their difference. This party is similar to the third element that divides and conquers, discussed below, but does not need to be active in splitting the two parties. He may merely befriend one party to annoy the other. But the iconic case is two parties competing for the favor of another, as in two suitors for one woman. On the largest scale, the tertius gaudens is played out in the competition between producers for the favor of the consumer. Notice that the advantage of the consumer only applies when the producers do not collude with one another. In politics, the position of a third party is not as absolute, because a political party is not free to abandon its declared positions on the issues of the day; there is often only a narrow room for maneuver between two parties competing for the favors of a third party. A similar situation occurs in demarcation disputes between labor unions on a job site. If unions bid for their workers to do the job then the lowest bid wins. But if the unions collude to decide what pay should apply to each job then their basic interest, high pay, is preserved from attack by the employer.

Divide and Conquer.  In any three-element relationship the opportunity exists for the third element to take advantage of a quarrel between two others. In "divide and conquer" we deal with the situation where "the third element intentionally produces the conflict in order to gain a dominating position." There are many examples of this strategy, beginning with the prohibition by a sovereign ruler of any associations, thus heading of any combinations of people that might form a head of rebellion. The Anglo-Norman kings made sure that the estates of each feudal lord were widely scattered to make it difficult for any lord to become sovereign in a single contiguous district.  Similarly, employers often refuse to negotiate with a combination of employee unions. They prefer to negotiate with each one separately. The Incas liked "to divide a newly conquered tribe in two" and place a supervisor over each, with "slightly different ranks." This encouraged rivalry between the supervisors and prevented united action against the Inca. There are two basic strategies for divide and conquer. One is to get the two parties to fight each other. Where this does not work, then the third party combines with one other "long enough for the other to be suppressed, whereupon the first party is an easy prey for him."

It is easy to see why "two's company but three's a crowd."

Next: Subordination under an Individual

Thursday, November 27, 2014

George Simmel: The Individual and the "Dyad"

We think of sociology as the individual and society. But Georg Simmel in The Sociology of Georg Simmel translated by Kurt H. Wolff takes us to a more basic consideration, the individual and the "dyad", or the individual as part of a two-person social relationship.

But first, consider the situation of the "isolated" individual. Actually, we are not talking here about an individual that is "physically alone" as one might be on a walk in the mountains. The feeling of isolation is much more intense
when one is a stranger, without relations, among many physically close persons, at a "party", on a train, or in the traffic of a large city.
In other words, isolation is not the aloneness of an individual; it is the separation of the social individual from the rest of society. "As a conscious feeling on the part of the individual, it represents a very specific relation to society."

But then there is freedom, which seems at first glance to be closely related to isolation, but it is decisively different. On the one hand we can see that society -- as  "the state, the party, the family... friendship or love -- quite naturally... would extend their claims over the whole of man." Against this relentless pressure to conform to the expectations of others, "freedom emerges as a continuous process of liberation" for personal independence and also the right to remain dependent. On the other hand "the individual does not just want to be free, but use his freedom for some purpose", including "the extension of his will over others."

Thus we see that "isolation" and "freedom" are not external to the notion of humans as social individuals, but particular instances of genuinely human "sociation." The "dyad", the relation between two individuals or two groups is equally social. And the dyad has a particular characteristic unlike the isolation or freedom of the individual or a group of three or more people; if one person drops out of the dyad, it ceases to exist. The point is that any large group can be immortal; but the dyad cannot.

Simmel writes at length about the characteristics of the dyad. He starts with triviality. We tend to value things that are unique and rare, and undervalue things that are routine and commonplace. Clearly, a dyadic relationship, with its daily repetition of the commonplace, can descend into triviality, and "the tone of triviality frequently becomes desperate and fatal."

Then there is intimacy. For Simmel intimacy refers to the "ingredients that its participants contribute to [the relationship} and to no other" if they are regarded to be essential, forming the "affective structure" which the two show to each other and to nobody else. It is clear that intimacy is closely related to the exclusive nature of the dyad; intimacy withers as soon as a third element is introduced into the relationship.

Obviously the iconic case of the dyad is a monogamous marriage, and yet is isn't. For marriage typically leads to children, and then the dyad is broken. And marriage does not exist in isolation as merely two people. There is the family in general, the children, and the fact that marriage is "socially regulated and historically transmitted." Men and women are not just confronted by each other in marriage, but by the collectivity itself.

There is another curious characteristic of the dyad. It does not permit the two members to slough off duties and responsibilities to the larger group, as when people expect society to do what is properly their own responsibility. In a dyad there is a "co-responsibility for all collective actions." You can push a responsibility on the other member, but the other member can push right back. You can't hide behind the group or blame the group, because the other person cannot be fooled. In other words, it is hard to be a "free-loader" in a dyad.

Simmel now considers the "expansion of the dyad," or what happens when you introduce an additional member into a two-person relationship. It could intensify the relationship, or it could distract it. And it could provoke jealousy. Once you introduce a third member into a dyad it becomes possible to overrule a member with a majority of the others. This is fine if you are a person with "strong individuality" that wants to fight rather than blend in. It's not fine for the "decided individual" that will avoid groups "where it might find itself confronted by a majority." Also, as soon as you expand a dyad into a group you risk the lowering of individuality to the group level that is particularly evident in crowds.

Thus the decisive change for a dyad is the first additional member: the first child to a marriage, but not the subsequent child. And the same applies to bigamy(!). The addition of the third wife is nothing compared to the addition of the second wife. Notice that in Rome there were two Consuls, not three. Yet there is a different relation between two political parties, where "who is not for me is against me." But when two parties dissolve into a single mass movement there is no room for opposition or disagreement. There is only "yes" and "no" for the whole collectivity.

Next: Expansion of the dyad.

Wednesday, November 26, 2014

The Shallow Conceit of the North London Luvvie

Back in the 2000s Ross Ashcroft was briefly a BBCer and then an assistant theater director. But after the crash of 2008 he has reached for bigger things and in 2012 released a documentary on all the troubles of the world, entitled Four Horsemen. It got tons of awards at film festivals. It's available on YouTube.

You would expect that it to be pathetically banal and devoid of almost anything that might qualify as an idea. Why would it? You tell me. Where in the world would a theater person in today's London ever run into someone with an idea that wasn't safely approved by the left-wing culture that dominates the minds of everyone in the arts?

But let's take a look at Four Horsemen anyway.

The Four Horsemen of this modern apocalypse are: the rapacious financial system, escalating organized violence, abject poverty for billions, and exhaustion of our natural resources. Filmmaker Ashcroft reviews these problems in four sections of his documentary.

6:30 Empires. Empires do end, and the west has not yet come to terms with its fading supremacy. And it makes sense, from Gen. Glubb's life cycle of empires, 250 years from pioneers to conquest, commerce, affluence, intellect, and ending in decadence. Imagine an overextended military, conspicuous consumption, living off the state, and an obsession with sex. And debasement of the currency. In our decadent age everyone scrambles for the spoils amid the distraction of bread and circuses. And the baby boomers did it! Meanwhile millions of people go to bed every night hungry. So why are we still struggling to distribute wealth fairly?

16:45 Banking. Is the problem "systemic?" We review the evils of fractional-reserve banking, fiat currency, and we get the usual focus on greedy bankers and Goldman Sachs, and the evil of forcing mortgages on poor people. It's all based on the notion of "growth forever." Did you know that 97% of the money in the world is "debt?"

50:51 Terrorism. Ashocroft's got a "root cause" explanation of terrorism. The "inherent iniquity in our system of money, banking and politics has not just had consequences domestically," but also globally. Terrorism is thus a push-back against western neo-colonialism. First there's the military and its contractors, then the consultants and contractors that get the contracts from foreign aid and World Bank loans. But the aid benefits the local elites, and the people have to pay back the debt. Then there is Chile. Yes, we can still haul Noam Chomsky in front of the camera to remember that the US intervention in Chile in 1973 amounted to terrorism. But with all this outrage is it any wonder that people have no recourse but to resort to terror?

1:02:52 Resources. We have got to the end of the benefits of economic growth; the more we grow the more we create poverty. It's a question of competition vs. cooperation. We need a progressive move from globalization to localization, production not consumption.

1:13:00 Progress. There's a tendency to Hollywoodization these days. Everything must be a story with a beginning, a middle, and an end. There's got to be a villain, and usually a sacrificial victim. So it's hard to see that the system is flawed.

So what's to be done? We need to make societies more equal and reduce income difference; that will help solve environmental problems. We need to understand that the problem is pretty simple. It's about power, and its about democracy. So we need to sweep away the disinformation of neoclassical economics and the academic gatekeepers with the cleansing truth of the internet. And we need to question the system of fiat money. It all comes down to a three point plan:

  1. Return to gold as the basis of money, and maybe stage a debt jubilee, since debt is slavery.
  2. Tax consumption instead of labor.
  3. Return to a system with workers owning the place where they work and produce.
It's hard to know where to begin in analyzing such a precipitate of shallowness, but let's start with the three point program.

Yes, going back to gold and ending fractional-reserve banking is a great idea, but it's a good idea to realize why we have a fiat currency and persistent inflation. The reason is that governments are forever running out of money, or crashing the economic system with their economic interventions. The easiest way for a government to "get out of a jam" is to print money, devaluing debt and stealing the savings of ordinary people. Any big government program, whether a war on fascism or a war on poverty, ends up with a lot of government debt, and ends up with some kind of debt default.

That's why banks are such a problem, whichever party is in power. Ever since the Dutch invented the National Debt in the 16th century the government's debt has been the foundation of the credit system and the credit system has been the foundation of the rest of the economy. The banks are merely intermediaries between the government debt and the rest of the economy. The reason that bankers seem to be manipulating the system is that they are being tossed around by the machinations of the government's debt and cheap money operations. The first and most important government program is the program to sell the government's debt; that debt gets sold to bankers who are directed to use government debt for their reserves. Over time, the government regulates the banks in more and more detail, and over time the bankers learn how to manipulate their masters in the phenomenon we call "regulatory capture." Thus "greedy bankers."

In the run-up to the Crash of 2008 the government manipulation was particularly egregious because the US government had developed a policy over decades to extend "affordable housing" to subprime mortgage borrowers (i.e. minorities). The government mortgage twins, Fannie Mae and Freddie Mac developed policy to force banks to originate more and more subprime (i.e. low down payment, low credit rating) loans. But who would buy these loans from the banks and Fannie and Freddie? Simple. The investment banks like Goldman Sachs repackaged the loans and with a bit of financial trickery and sold securities that were rated AAA and could therefore be bought by pension funds and insurance companies. It all worked as long as the band kept playing.

If you read old stuff like Lombard Street by Walter Bagehot you get to understand how how the credit system works. It needs two things. And it needs debtors that can make their payments. And it needs debt that is properly collaterialized, so that the principal can be repaid if the debtor fails to service the loan.  When you get a situation where either of the two requisites are in question then you get a crisis of confidence; people start to wonder if their counterparty is sound or whether they might fail in a crash. So when the government floats about a trillion dollars in mortgages that are badly collateralized to borrowers that can't afford any downturn and maybe even can't afford to make payments right now... Well you get a financial system that is extremely fragile and will crash as soon as things start to go south and people really start to worry and take their money out of the market. Of course, you'll expose all kinds of bad apples when the market crashes, but the villain at the bottom of the story is not the greedy banker but the government that's mucking about with the credit system to give money or affordable home mortgages to its supporters.

So that's why we have fiat money. What about taxing consumption instead of labor? It's a good idea; that's what we all had in the 19th century during times of peace. But when the government gets above a certain size, consumption taxes become a real burden on the poor. And then you need to start taxing income. We could only return to a consumption tax system if we reduced government down to about 10-15% of GDP instead of the 35-40% of GDP right now. We could do it if we ended government pensions including Social Security, government health care such as Medicare, and government education.

The final item in Ashcroft's plan is to let the workers own the factors of production. There is already a government program to encourage this, the Employee Stock Ownership Plan or ESOP. But critics say that it's not such a good idea for ordinary employees to own a share in their employer's business. What happens if the company goes broke? Then the worker loses his job and his savings. There is another way to do this: privatize Social Security and let workers buy ETFs featuring the S&P 500 and the NASDAQ 100. Then workers get a part ownership in the income-generating potential of the whole economy. It's called diversification.

Now let's go back to the Four Horsemen.

Rapacious Financial System. The only way to fix this is to downsize government radically, so that government and its financing needs do not bulk so large in the financial picture. We have crazy banks because we have crazy governments.

Escalating Organized Violence. Yep, it's a problem, but it's localized at the borders of Islam. The Muslim peoples, particularly the Muslim Arabs, are having a horrific time, partly due to the west carving the Arab lands up a century ago at the end of World War I. Part of it is due to the pre-individualist, tribal society in the Middle East. Probably we are going to face a world war over Islam, and it ain't gonna be pretty.

Abject Poverty for Billions. Actually, people in the world are emerging from poverty at an astonishing rate, led by the economic growth in China and India. There has never been anything like it, ever. But then, as Deirdre McCloskey says, there has never been anything like the Great Enrichment of the last two centuries from $1 per capita per day to over $100 per capita per day in the rich countries, ever. Here's the chart on declining world poverty from the conservative think tank AEI. Don't trust the conservatives? Here's the word from the World Bank.

Exhaustion of Natural Resources. Trust the north London luvvies to be the last to know about the fracking revolution. Back in 2011 when, presumably, Four Horsemen was in production the revolution in shale oil and gas energized by horizontal drilling and hydraulic fracturing was already common knowledge. There isn't a crisis in natural resources. And if we should start to run out we have our internet billionaires that can't wait to live out their boyhood sci-fi fantasies and go mine the asteroids.

That leaves just one thing, the Glubb theory of empires and our terminal "age of decadence." To have a north London luvvie worrying about that is, well, it's a start. But, in my view, the "root cause" of decadence is the problem of creativity, the people in the arts. In my world view there are three kinds of people: Slave People --  peasants and workers; Responsible People -- knowledge workers, business people, and merchants; and Creative People. The Creative People are the big problem because they cannot be happy unless they can do something original and creative. Almost anyone can be a slave; almost anyone can learn to be responsible. But with creativity, many are called but few are chosen.

The great problem of the modern world is what to do about disappointed creative people, and to stop them before they pull down the temple in impotent rage. You could start with the problem of a 90 minute documentary that is beautifully crafted but that retails a nonsensical farrago of half-digested north London conventional wisdom.

Tuesday, November 25, 2014

Dr. Ha-Joon Chang, Renegade Economist? Oh Please!

One of the talking heads on Ross Ashcroft's Four Horsemen documentary is Dr. Ha-Joon Chang, an economist who's a Reader at the University of Cambridge in England.

In this video under the "Renegade Economist" brand Dr. Chang rehearses lefty talking points on "neoliberalism."

I didn't really know what neoliberalism was when I watched the video; I just knew that it was a term that lefties swung around as a kind of pejorative. It turns out that it was developed by spanish-speaking activists opposed to Gen. Pinochet's regime in Chile. See Wikipedia.

But before you can trash neoliberalism, you have to define "liberalism." For Dr. Chang, liberalism is a 19th century social economic theory that had a rather narrow view that everything should be run on market principles. They didn't quite realize you needed bankruptcy and limited liability laws. (Actually Marx was prescient on this, says Dr. Chang, arguing in the 1860s that limited liability was the future of capitalism). And, of course, these 19th century liberals thought that democracy was a rather bad idea, since the people would vote for an income tax and destroy incentives for wealth creation. This liberalism, of course, was completely discredited in the first half of the 20th century, through two world wars, the rise of communism, the Great Depression, and the rise of social democracy in western Europe.

What about neoliberalism? It's a remake of the old 19th century liberalism, according to Dr. Chang, but it has been modified at the margins. Now it doesn't oppose democracy directly, and endorses limited liability. It wants to maximize the domain of the market -- where one dollar, one vote rule dominates. But it still wants to diminish the domain of the state and democratic policies. It still believes that the most important freedom is freedom of property, and profit-seeking should be the only motive, and that "poor people should be punished." This ideology has been promoted very aggressively by "bad people" (Chang kinda swallows the "bad" on the video) "with a lot of money and power," so the whole world has come to accept this as the truth. Since the financial crisis of 2008 there has been some rethinking, but frankly there is too much power, money and intellectual prestige at stake for this to go away quickly.

Of course, this is a left-wing "narrative" that amounts to an apology for power, as the postmodernists teach us. Only the postmodernists generally spend their energies unmasking evil bourgeois apologies for power, rather than their own noble educated ruling class apologies.

I think the first thing to understand is that conservatives and libertarians think we are trying to understand the world, not change it. That makes us the opposite of Karl Marx who said in his Theses on Feuerbach: the point is not to understand the world, but to change it." What everyone from Marx to Mill was thinking in the mid 19th century was: what on earth has just happened, and what will happen next?

My take on the 19th century liberals is that they were trying to understand what had happened since the start of the industrial revolution. They were thinking: how should be understand this new world, and how can we preserve the beneficial changes? In fact, everybody thought, from Malthus to Ricardo to Marx, that it couldn't last. That's what Marx's "immiseration" thesis is about. He rightly saw that the ruthless efficiency of capitalism would extract the maximum out of the workers as the capitalist firms ruthlessly reduced prices.

But Marx, and all the static thinkers before and since, misses the whole point of capitalism. It is not about accumulation of wealth. It is about sudden, and repeated innovation, what George Gilder calls "surprise." The textile revolution was a complete surprise; nobody saw it coming. And it created fabulous wealth, not to mention cheap clothes for the masses. When that was petering out along came another surprise: steam railways and ocean steamships. Now for the first time ordinary people could travel -- travel the world -- and bulk goods like grain could be profitably transported across the world. It was a complete surprise. Tons of money were made, and famine was eliminated in Europe. Just as the railway revolution was at its height, along came the illuminating oil revolution. A clerk working in a commission merchant's store noticed the barrels of oil in the store, and decided to get into the new mineral oil business. Oil prices came down by 80 percent and John D. Rockefeller became a billionaire and invented modern philanthropy. Then came the electrical revolution, then the auto revolution, then the electronics revolution. Then the information revolution. The point about all these revolutions was that they were complete surprises; nobody saw them coming. The upshot is that per-capita income in real dollars has increases from $1 per day to $100 per day in 200 years. There has been nothing like it in human history. Ever.  The whole thing has been a complete surprise.

Now the question is: how does this system, or this organism, or this emergent phenomenon work? And what should be its relation to government, to society, to religion? In the 1970s, when "neoliberalism" reared its ugly head, the western world was going through a patch of "stagflation." Establishment minds decided that the world was becoming ungovernable, and that we should get used to the idea that the future would not see much growth. In fact we had to adjust ourselves to "The Limits of Growth." Nothing could be done, as the song says.

Well, not to worry. Along came a bunch of renegades, led by Bob Bartley at The Wall Street Journal. They proposed a program of hard money, lowered marginal tax rates, and reduced administrative regulation. This program was inspired by the Austrian economics school led by Ludwig von Mises (an Austrian Jew) and F.A. Hayek, and it was backstopped by "public choice" theory that argued that all regulation of business ended up in "regulatory capture" of the regulators by the regulated. Implemented by Reagan in the US and Thatcher in the UK, the result was a surprise: sky-high energy and commodity prices crashed, and a 20 year boom followed, interrupted only when people got overexcited by the internet boom in the 1990s.

Were the 19th century liberals a bit slow on relaxing bankruptcy laws? Maybe? But once the economy got moving, we could afford leniency on bankrupts, because there was always more where that came from. But go back to Middlemarch and the financial troubles of Dr. Lydgate. Should he have been able to escape his creditors, the local High Street merchants, after his ludicrous profligacy inspired by his empty-headed social-climbing wife? And what about limited liability? Well, the story on that goes back to the South Sea Bubble of 1720. After that crash, people thought that limited liability was a dangerous invitation to fraud. Limited liability got revived in the mid 19th century when it just became obvious that you just couldn't assemble the capital needed when each investor was liable for the debts of the bankrupt enterprise to the limit of his entire fortune. Limited liability protects the small investor, who doesn't have to keep an eye on the CEOs of the companies in his stock portfolio. His liability is merely that he can lose the entire value of his stock equity. My daughter's Wall Street father-in-law thinks that today's investment banks should return to partnerships, where the owners are the bankers and their entire personal wealth is on the line when the market crashes. Maybe there should be an exception on limited liability for bankers.

The argument of neoliberalism is an argument between elites. Should big corporations be regulated by the market and simple rules to penalize fraud, and incentives making it costly to pollute the environment? Or should they be regulated in detail by the assignees of the educated ruling class? It should be clearly understood that establishment economists like Dr. Ha-Joon Chang are not disinterested bystanders in this question. They are the chaps that get to do the regulating, and apply what Deirdre McCloskey calls the "sweet use of the monopoly of violence in government" to the corporate chieftains. But then what? Obviously the corporate CEOs do not just sit there when the Changs and the Grubers come calling. They learn how to manipulate the regulators, and execute a program of "regulatory capture." The result is what we racist-sexist-homophobes call "crony capitalism."

I suppose if we are honest, we right-wing nut-cases should admit that "crony capitalism" is a pejorative.

A couple of points: I don't think that 19th century liberals were really against democracy. Here's Wikipedia on John Bright, who along with Richard Cobden symbolizes 19th century "Manchester" liberalism. He "headed the reform agitation in 1867 which brought the industrial working class within the pale of the constitution" and gave them the vote. Conservative Prime Minister Disraeli famously one-upped the Liberals and passed universal male suffrage in a program called "Tory Democracy." So where is Dr. Chang coming from on this?

Then there are Reagan and Thatcher. The big thing about them is that they successfully appealed to the upper working class, and the left has never forgiven them. It was Reagan that enticed the "Reagan Democrats" out of the Democratic Party; in 2014 the white working class voted Republican by 30 points. And it was Thatcher that appealed to the "C2s" in Britain by passing a program for them to buy their "council houses." Just last week a Labour front-bencher resigned after sneering at "White Van Man" in a tweet.

Dr. Chang is right that there are a lot of people pushing the idea of a market-place relatively free from government power. But there are also a lot of people like him pushing the idea that corporations should be minutely regulated and supervised by government. And they are passing laws to do this, big, comphrehensive and mandatory programs like Sarbanes-Oxley in 2002 and Dodd-Frank in 2010, including the Consumer Finance Protection Bureau on which Sen. Elizabeth Warren (D-MA) did the Grubering. These are huge regulatory actions that have submerged corporations in a tsunami of paperwork. And no doubt they will all end in tears as the big corporations learn how to game them and use them to beat up their small-business competitors.

Let's at least be clear about one thing. Dr. Chang is not a "renegade economist." Nobody that "served as a consultant to the World Bank, the Asian Development Bank and the European Investment Bank as well as to Oxfam and various United Nations agencies" is a renegade. He just isn't!

There's a catchphrase that describes Dr. Chang. He's what politicians call a "safe pair of hands."

Monday, November 24, 2014

Piketty: Deirdre McCloskey Weighs In

Back in the spring the intellectual world was convulsed by a book about capitalism written by a Frenchman, Thomas Piketty. The book, Capital in the Twenty-first Century argued that the return on capital was always bigger than the economic growth rate (expressed as r > g) and this would mean that the rich would forever get richer and richer.

Since the left is currently focused on "inequality" you know that this is a Bad Thing. How can we solve this problem? Easy. All it takes is higher taxes on high incomes and a global tax on capital.

I read the whole thing so you wouldn't have to and I blogged on the book with commentary on each chapter, starting with the introduction here. Broadly speaking, the book is balderdash. Of course r is greater than g. The rate of return on capital is connected to time preference whether or not there is any growth. If you want to borrow money you have to pay for it; you have to pay the capitalist for the fact that when you repay his money in a couple of years you need to pay him for the fact that right now money in two years is worth less than money in the hand right now. Because time preference.

Now Deirdre McCloskey, economist and author of the "Bourgeois Era" books celebrating bourgeois dignity and virtue, has weighed in with a long review of Capital in the Twenty-first Century. It will appear in the Erasmus Journal of Philosophy and Economics. Her judgment is scathing. Piketty set out, she observes, to write a book that surveyed the modern world with a view "at once economic and political, social and cultural".
But he has not achieved it. His gestures to cultural matters consist chiefly of a few naively used references to novels he has read superficially—for which on the left he has been embarrassingly praised. His social theme is a narrow ethic of envy. His politics assumes that governments can do anything they propose to do. And his economics is flawed from start to finish.
 Exactly. For instance he offers Balzac's Pere Goriot as a tableau of life in the accumulating rentier class. But Goriot is a novel about how people with money will gladly throw it all away for the chance to climb the social ladder. It also turns out that people without money are happy to throw other peoples' money away in order to climb the social ladder.

Now McCloskey's great virtue is her story-telling. Her "Bourgeois Era" books retell the economic miracle of the last 200 years as the Great Enrichment in which per capita income in real money went from $1 per day to $100 per day. But all the Left can think about is that there are still people that haven't got their share.
And yet the left in its worrying routinely forgets this most important secular event since the invention of  agriculture—the Great Enrichment of the last two centuries—and goes on worrying and worrying, like the little dog worrying about his bone in the Traveler’s insurance company advertisement on TV, in a new version every half generation or so.
What does the left (and sometimes the right) worry about? I'm glad you asked that. McCloskey has a little list:
[G]reed, alienation, racial impurity, workers’ lack of bargaining strength, women working, workers’ bad taste in consumption, immigration of lesser breeds, monopoly, unemployment, business cycles, increasing returns, externalities, under-consumption, monopolistic competition, separation of ownership from control, lack of planning, post-War stagnation, investment spillovers, unbalanced growth, dual labor markets, capital insufficiency (William Easterly calls it “capital fundamentalism”), peasant irrationality, capital-market imperfections, public choice, missing markets, informational asymmetry, third-world exploitation, advertising, regulatory capture, free riding, low-level traps, middle-level traps, path dependency, lack of competitiveness, consumerism, consumption externalities, irrationality, hyperbolic discounting, too big to fail, environmental degradation, underpaying of care, overpayment of CEOs, slower growth, and more.
And now, of course, net neutrality. The whole point is that "'capitalism' is doomed
unless experts intervene with a sweet use of the monopoly of violence [my bold] in government to implement anti-trust against malefactors of great wealth or subsidies to diminishing-returns industries or foreign aid to perfectly honest governments or money for obviously infant industries or the nudging of sadly childlike consumers or, Piketty says, a tax on inequality-causing capital worldwide.  
Like I said, McCloskey is great with words, and that's a good thing in an economist. It's also a good thing in a writer.

I could do on and on quoting her bon mots, but I won't. Instead I'll close with this.

A big problem in Piketty's book, according to McCloskey, is that he doesn't really tell us why inequality is a bad thing. He is no better than intellectual fluffball Glencora Palliser (nee M'Cluskie) who says in Phineas Finn that "Making men and women all equal. That I take to be the gist of our political theory."

Well, you can have your M'Cluskies (although we love our McCloskeys). But I'll take Madame Max Goesler, the incomparable rich young Viennese widow who in the end gets the hand of young Phineas, courtesy of Anthony Trollope. The only way to find out why is to read the book. But I will give you a hint: Character.

The best chap I've found that discussed freedom and equality intelligently is the German sociologist Georg Simmel. It just happens that I blogged on his analysis of equality and freedom in the 18th and 19th centuries last week.

Sunday, November 23, 2014

Georg Simmel: Numbers and Social Life

We moderns like to think that we invented numbers. Back in the old days life was organic and natural, centered around the family and the village collective. But Georg Simmel in The Sociology of Georg Simmel translated by Kurt. H. Wolff reminds us that enumeration was not an invention of the absolute monarchs and their bureaucracies. Numbers in social life go further back than that.

Back to start: The Unknown Sociologist.

But the point of numerical subdivision is the one proposed in James C. Scott's Seeing Like a State. Numerical subdivision replaces subdivision by kinship and tribe. In the Germanic tribes, they divided the whole into Hundreds, that is 100 men, and this became a subdivision also in Britain. Even today, members of Parliament that wish to resign their seats are appointed steward to the Chiltern Hundreds.

The point is that in numerical subdivision a society starts to organize itself on abstract principles rather than kinship principles. It is the first step towards the abstract social structure that we have today.

Another interesting question is the numerical minimum for a social gathering we call a "party." When two or three people gather formally, it "never constitutes a 'party.' But we do have one when we invite say, fifteen of our closest friends." The number in question is the decisive factor, and society has recognized the importance of number when "sumptuary laws prescribed the exact number of persons" allowed to escort a couple at their wedding. And so the question arises:
How many soldiers make an army? How many participants are needed to form a political party? How many people make a crowd?
We think of our present age as uniquely obsessed with number. But number has been important for quite a while.

Next: The individual and the "dyad".

Friday, November 21, 2014

Georg Simmel: 18th and 19th century views of freedom

Society want to be an organic whole of which "individuals must be mere members." But the individual rebels against total absorption into the whole, writes Georg Simmel in The Sociology of Georg Simmel translated and edited by Kurt. H Wolf.
The individual strives to be rounded out in himself, not merely to help round out society.
This conflict between the whole and the individual is insoluble. The individual's striving for wholeness appears as egoism, compared to the altruism of serving society. But society itself "is an egoism that does violence to the individual". Thus comes freedom, to referee a boundary both for society and for the individual. The 18th century and the 19th century offered different ways in which freedom could be understood and implemented.

Back to start: The Unknown Sociologist.

In the 18th century the old social forms -- the old aristocratic privileges, the "despotic control of commerce," the "still potent survivals of the guilds, the intolerant coercion by the church, the feudal obligations of the peasantry" -- seemed "an unbearable limitation" on peoples' energies. Thus it invented freedom from obligation and coercion and equality to level the ranks.

But the freedom of the individuals to pursue their energies immediately creates problems.  The 18th century idea of freedom assumed equality between individuals and the abolition of ranks, but individuals are not equal. Freedom allows the powerful to accumulate power, the moneyed to accumulate money, and the clever to outshine the stupid. This is what socialism was invented to cure.
"[S]ocialism" does not refer to the suspension of freedom. Rather, socialism suspends only that which, at any given degree of freedom, becomes the means for suppressing the freedom of some in favor of others. This means private property.
 There is an "antimony between freedom and equality" that only Goethe seems to have seen.
Equality, he said, demands submission to a general norm; freedom "strives toward the unconditional." "Legislators or revolutionaries," he pointed out, "who promise at the same time equality and freedom are fantasts or charlatans."
How then did the 18th century not grasp this problem? It is because of Kant, who posited an abstract and idealistic ego which is really identical in every man. And then there is Kant's categorical imperative:
Act in such a way that the principle governing your will could at the same time be valid as the principle of a general legislation.
The 18th century "based equality upon freedom, and freedom upon equality."

This ideal broke up in the 19th century into two tendencies: "toward equality without freedom, and toward freedom without equality." The first is obviously socialism.

The second tendency is a new individualism. The individual that had broken "the rusty chains of guild, birth right, and church" now wanted "to distinguish himself from other individuals."
The important point no longer was the fact that he was a free individual as such, but that he was this specific, irreplaceable, given individual...

This new individualism might be called qualitative, in contrast with the quantitative individualism of the eighteenth century... At any rate, Romanticism perhaps was the broadest channel through which it reached the consciousness of the nineteenth century.
Simmel summarizes all this in a majestic paragraph that still resonates unabated with us a century later.
[T]he doctrine of freedom and equality is the foundation of free competition; while the doctrine of differentiated personality is the basis of the division of labor. Eighteenth-century liberalism put the individual on his own feet: in the nineteenth, he was allowed to go as far as they would carry him. According to the new theory the natural order of things saw to it that the unlimited competition of all resulted in the harmony of all interests, that the unrestricted striving after individual advantages resulted in the optimum welfare of the whole.
Simmel looks to a higher form in which the two ideas of "personality as such and of unique personality as such, are not the last words of individualism."

Next: Numbers and social life

Thursday, November 20, 2014

Georg Simmel: Social Humans at Play

If we think of humans as social animals, then our social actions can be considered as a deadly serious part of being human.

Back to start: The Unknown Sociologist.

But Georg Simmel in a chapter on "Sociability" in The Sociology of Georg Simmel translated and edited by Kurt H. Wolff looks at social relations without a purpose, occasions when humans gather in social gatherings that have no purpose other than sociability. Simmel analyzes this sort of social interaction as "sociability as the play-form of sociation." You can think of the relation of sociability to sociation as "similar to that of the work of art to reality."

When people are engaged in the serious business of social cooperation with an objective purpose they restrain their personalities in the cause of furthering their interests, and so in business and commerce, rules of amiability, refinement, and cordiality apply.

But where no interest in involved, similar restraint or "tact" is still needed to regulate interpersonal relations. At a social gathering one is expected to leave behind "the purely and deeply personal traits of one's life" and things like "[w]eatlh, position, erudition, fame, exceptional capabilities and merits" are expected to be de-emphasized as a part of good manners.

Sociable man is a curious phenomenon. On the one hand he presents himself "only with the capacities, attractions, and interests with which is pure human-ness provides him. On the other hand, however, sociability also shies away from the entirely subjective and purely inwardly spheres of his personality." Displays of extremes of character are not appropriate. So pure sociability enacts "sociability thresholds," the one where individuals start to interact from objective motives and the other where "their entirely personal and subjective aspects make themselves felt."

There is, thus, an aspect of sociability that makes it a democracy of equals, and something that is played in a game where "the pleasure of the individual is closely tied up with the pleasure of others." It is a game where people act as if all were equal, and each honored in particular.

Simmel reviews specific examples of pure sociability, starting with "coquetry... the play form of eroticism", in which people play at eroticism without ever quite reaching an erotic acceptance or refusal. There is "conversation" where people "talk for the sake of talking" but without an object in view. There is the rehearsal of ethical questions, experiencing the friction between the individual and the collective and also the formation and splitting up of groupings, which can all be done in pure sociability without consequence.

Many social groupings start out with objective purposes and then relax into pure sociability, such as the brotherhoods of knights in the early German Middle Ages, that eventually relaxed into  "purely sociable aristocratic associations." And there was the courtly society of the French ancien régime where the once-powerful French aristocracy was reduced at the court of Versailles to enacting a work of art: "imitating the reality of the models, of things outside of art itself."

Pure sociability, or "society," has a reputation of superficiality. 
Yet it is precisely the more serious person who derives from sociability a feeling of liberation and relief. He can do so because he enjoys here, as if in an art play, a concentration and exchange of effects that present all the tasks and all the seriousness of life in a sublimation[.]
No doubt that is why women have in recent centuries organized salons where serious people can go to enjoy sociable interactions without risking the dread consequence of real life.

Next: 18th and 19th century views of freedom

Wednesday, November 19, 2014

Georg Simmel: Individual and Mass

When we talk about human individuals, it is easy to think that we are talking about isolated humans in their non-social activities. We think that, of course, because a century and a half of left-wing thought is founded on that assumption, that individuals acting as individuals are not really social.

Back to start: The Unknown Sociologist.

But Georg Simmel in The Sociology of Georg Simmel translated and edited by Kurt H. Wolff, discussing "The Social and the Individual Level," is quick to puncture that idea. If we are to think of an individual just doing the bare minimum, such as obeying the law and "obeying the norms adequate to secure the continuation of the group... he would be an ethical abnormality, an utterly impossible being." In other words, when we talk about humans we may talk of humans as individuals or as members of a group. But we are always talking about humans as social beings.

But there is an important difference between a human in the mass and a human considered as individuals.
The first part of his nature can evidently consist only in more primitive elements... [that exist] in all individuals.
Individual qualities, on the other hand, are those "which constitute his private property, as it were, and which lift him out of everything that he may have in common with others." The point is that both these qualities are human and social. The only reason we don't think of them that way is that the left has diligently worked to make individual qualities and actions scandalous.

Simmel then goes on for pages about the consequence of the mass interaction being "more primitive". The "necessity to oblige the masses... easily corrupts the character. It pulls the individual away from his individuality and down to a level with all and sundry." So humanity in the mass tends towards the lowest common level of its members.

Thus Simmel rounds his arguments with quotes from Schiller and Heine.
[I]n Schiller: "Seen singly, everybody is passably intelligent and reasonable; but united into a body, they are blockheads." The fact that individuals, in all their divergencies, leave only the lowest parts of their personalities to form a common denominator, is stressed by Heine: "You have rarely understood me, and rarely did I understand you. Only when we met in the mire did we understand each other at once."
You can immediately see why Simmel hasn't become the go-to sociologist for all and sundry. His analysis of the social consequences of individual social action and mass social action just do not square with the needs of the modern ruling class.

The modern ruling class, in its revolutionary or its rational expert model, wants to sequester all higher and evolved individuality into its own care. And it wants the masses to be obedient and dependent. The model of universal freedom and individual equality dispersed throughout the population, with individuals using their unique qualities that lift them out of the mass, cannot advance their power project.

The whole concept of the modern authoritarian welfare state is based on brilliant experts devising one-size-fits-all universal programs in which humans are reduced into the mass, mechanical cogs in the machinery of government, designed and implemented by the better sort. As we have seen in the rollout of Obamacare, the ruling class knows what's best and must do what it takes, in deceit and misdirection, to advance its goals in the teeth of opposition from the "stupid" voters.

On the other hand you can see that the conservative-libertarian model of responsible individualism really focuses on encouraging individuals to develop and utilize their better qualities, and they can only do that, as social beings, by contributing to society. Good ideas, good products, good services developed by superior minds are encouraged. Yet they are in fact mass products for mass consumption by the masses.

Imagine that. Modern organic developed society can blend individual and mass to benefit everyone: the superior individual with the idea that nobody else has thought of, and the ordinary mass man that just goes with the flow and gladly enjoys the achievements of the exceptional individual.

The point is that the achievements of individuals are not selfish; they almost always have a social component. For humans are social animals; almost everything that humans do is social.

Next: Social humans at play.

Tuesday, November 18, 2014

Georg Simmel, the Unknown Sociologist

I first encountered the name Georg Simmel in Jerry Muller's The Mind and the Market. I wrote about him in 2008 here. Simmel recognized that 19th century technologies "made for less labor in the household." This caused unease among middle-class women, who now sought activity outside the home.

Obviously, Simmel wrote, the public sphere, the world outside the home, in the short term would still be defined by men for men, but in the long term women would transform the public square to suit "a more feminine sensibility." So, feminists like Simone de Beauvoir that talked about the "independent woman" were talking nonsense. What really developed is what we see about us today, with conservative women trying to create a public square that celebrates love and marriage and children and men and work, and liberal women acting as high-school Mean Girls in a death spiral between their feminine natures and the ideological mandate to break glass ceilings, and enforcing their own feminization of the public square by naming and shaming.

Now, finally, I have actually got to read Simmel's sociology in a translation of his work. The Sociology of Georg Simmel translated and edited by Kurt H. Wolff is actually a compendium of material from three sources: Grundfragen der Soziologie (Individuum und Gesellschaft), written by Simmel in 1917, Soziologie, Untersuchungen über die Formen der Vergesellshartung, written in 1908, and a lecture delivered in 1902-03.

I'm about half way through Sociology right now, and I admit to being blown away. My notion of Sociology has always been that it amounts to an apology for left-wing politics, that it tells its students what they need to know to operate as a ruling class in a social welfare state, or what they need to  understand as social welfare state dependents. You get class theory, domination, and an institutional view of modern society.

Sociology starts with Comte, who with his Positivisim was trying to create a "religion of humanity." And let's not forget Marx and Herbert Spencer. Then there was Max Weber and his brilliant insights; but Weber died with much of his work in draft form. There's Emile Durkheim, but I find him only fair. And then there are folks like Sombart and Tönnies. Then we come down to the moderns like Sumner, Mead, Dewey, Parsons. Everybody knows those names, but lost in the shuffle, for me, is the name of Georg Simmel.

I'll be discussing the details of Simmel's sociology in upcoming posts. They will include the following:
  1. The individual and the mass
  2. Social humans at play
  3. 18th and 19th century views of freedom
  4. Numbers and social life
  5. The individual and the "dyad" (i.e. two people)
  6. Expansion of the dyad (three's a crowd)
  7. Subordination under an Individual
  8. Subordination under a Plurality
  9. Subordination under a Principle
  10. Degrees of Domination
  11. Knowledge, Truth and Falsehood
  12. Types of Relationships and Reciprocal Knowledge
  13. Secrecy
  14. The Secret Society
  15. Faithfulness and Gratitude
  16. The Negatives of Collective Behavior
  17. The Stranger
  18. The Metropolis and Mental Life
  19. Wrapup
Before I start with the individual topics, let's look at Simmel on the individual and the mass. The point about the mass, he writes, is that people connect on a level that they can all relate. That inevitably means that on a mass level they relate on "lower and primitively more sensuous levels."

You can see right away that Simmel causes problems for the folks that practice what we might call the "religion of collectivism." When people associate primarily as individuals they can contribute their highest and best qualities. But when they are mixed into a crowd or a mass or an organization as rank and file then only the more primitive qualities apply.

Next: The individual and the mass

Monday, November 17, 2014

What About the White Working Class?

The liberals first turned against the white working class in the 1970s with Noman Lear's All in the Family. It featured, if you remember, a racist, bigoted, patriarchal white working class man who worked on a loading dock in the New York borough of Queens. His name was Archie Bunker.

Interesting thing about Archie. You'd think that he ought to have been an ethnic, Italian or Irish, given the time and place. But he wasn't. He was Anglo.

Since then liberals have, as we say nowadays, thrown the white working class under the bus, for the same reasons as Lear threw Archie under the bus. For their racism. For their bigotry. For their cultural traditionalism.

So I read a Slate piece "Why Democrats Can't Win Over White Working-Class Voters" by Jamelle Bouie with interest. Well why can't they do it? The reason, says the sub-head, is "The party's economic populism doesn't reach that far."

In 2010 and 2014 Democrat lost white working class voters by 30 points, and in 2012 by 20 points. So what should they do about it? Chaps like Ruy Texeira think that a dose of populism would do it, but Bouie isn't so sure.

He harks back to the 1970s when the white working class first discovered Democrats spending money on "them", the rioters of the 1960s:
Why was the government spending our tax dollars on them, working-class whites asked, when they destroy their neighborhoods and refuse to work, and we’re losing our jobs and our homes?
Racism, you see.

But couldn't the Democrats come up with "a commitment to universal policies that working-class whites like and support" as people like Kevin Drum propose? Can't they develop policies that spend money on working class whites and make them feel wanted again? Not really, says Bouie, because the Democratic Party is "a collection of disparate interests which—at its best—is nervous about economic liberalism and hesitant to push anything outside the mainstream." Anyway, the government is already spending a ton of money on programs the white working class does like: Social Security and Medicare.

In other words, the Dems won't reach out to the working class whites, because Archie Bunker.

So what is Slate write Jamelle Bouie telling us between the lines? I think he is telling us that between the urban gentry liberalism and identity politics there just isn't any room for the white working class. The problem is, as Bouie states, that the white working class is huge:
"Close to half of white men and 35–40 percent of white women in the labor force are still essentially 'working class,'" finds liberal commentator Andrew Levison in his book The White Working Class Today
You realize what it would cost, both in money and issues, to attract a chunk of the white working class back into the Democratic coalition?

You'd have to back off on the urban policy of high density and transit, the social liberal gospel of feminism and gay rights. You'd have to share the spoils of affirmative action.

And don't forget that up to yesterday, Democrats thought that they had an emerging Democratic Majority with the votes of women, minorities, youth, and the educated locked up for years.

This brings us back to Charles Murray and Coming Apart: White America 1960-2010. His argument, remember is that white America is coming apart into three pieces: the top 25% that's doing fine, marrying each other and prospering personally and economically; the middle 30% that's not doing so great, with significant divorce and income problems. And then there is the bottom 30%, where the women don't marry and the men don't work.

I don't know about the men and women in the bottom 30%, but the children of those folks hate it. They want to become part of working, respectable, decent America, and all the clever political positioning in the world isn't going to lead them astray forever.

The point is that government, any government, only has a limited amount of loot to hand out to its supporters. The rest of the people just have to go out and get a job. And the bigger the government the harder it is for ordinary folks to prosper, because all government spending and subsidy is waste; it is money that could have been doing something productive.

Eventually ordinary folks cotton on to the fact that they will never get to feast at the lord's table, no matter what the lord promises.

That's the headwind the Democrats are experiencing, and it will get worse before it gets better for them.

Friday, November 14, 2014

Ron Fournier is the Problem, not Jonathan Gruber

OK, now that Rush Limbaugh has turned on the national radar, everyone is shocked, shocked that MIT professor and health-care expert Jonathan Gruber boasted about the Obama administration's Obamacare lies. Not least of the shocked is former AP superstar Ron Fournier. He writes in the National Journal more in sorrow than in anger:
If there is one thing that unites clear-headed Americans, it's a belief that our leaders must be transparent and honest.
Instead, it can now be told, the administration and its acolytes deliberately lied about Obamacare:
Its officials lied to all of us—Republicans, Democrats, and independents; rich and poor; white and brown; men and women.
You see, Ron Fournier wants everything that is good:
I strongly support bipartisan efforts to expand the availability of health coverage to the working poor, and bending the cost curve that threatens federal budgets for years to come.
But then Ron excoriates "knee-jerk opposition from the GOP." Do you see how that tells us everything we need to know about you, Ron Fournier? When you say "knee-jerk" you are telling us that you support a big-government solution to the health-care problem and that anyone opposing it is a small-time political opportunist, playing to the base.

If you were a true "un-biased" reporter, Ron, you would say: "Look, as much as I want to solve the health crisis with a big-government one-size-fits-all program in the teeth of economics and experience, I gotta say, the Obama guys didn't sew up a bipartisan deal on their PPACA legislation."

"According to the science," you'd say, "partisan wrangling is normal and healthy until the proponents of the bill buy the support of the opponents to get passage. Political Science 101, baby."

But you may remember, Ron Fournier, that the votes the Obamis bought to pass the bill were Democrat votes. Remember the Louisiana Purchase, the Cornhusker Kickback?

And remember Daniel Patrick Moynihan, who said that to pass a big bill like Medicare you need a 70-30 vote in the Senate?

Given all that, a wise observer of politics would have said back in January of 2010: this PPACA is a mess. Take it back to the drawing board, Mr. President, Madam Speaker, and Leader Reid, and don't come back until you've got some Republican votes. Just to make a bipartisan consensus. Just to propitiate the ghost of Moynihan.

But let's get back to the question of political lying in general.

In my view the partisan mainstream media has done Republicans a favor. Chaps like you, Ron, never give Republicans the benefit of the doubt on political rhetoric. When Republican administrations are trying to put one over on the voters here's always the "but critics say" graf to give the Democrat talking point. And there are always liberal activist groups crying "Bush lied, people died" or some similar catchphrase to push back against the administration talking points.

But the mainstream media doesn't call Democrats on their lies. Partly, I suspect, it's because you are all liberals and all believe that the American people are stupid, like Gruber does, and that wise educated rulers are needed to tell the American people where to go and what to do. Partly, I suspect, it's because you are all afraid for your jobs. You well know what a call from the White House or a powerful senator can do to you and your career. So you keep your diaper clean.

Let's rehearse the lies the Democrats got away with over the last 20 years.

  1. Bill Clinton and "I did not have sex with that woman, Ms. Lewinsky." If you had gone after President Clinton like you did with President Nixon...
  2. Bush stole the 2000 election. No he didn't. But the Democrats spent eight years whipping up their base about Bush the "selected not elected" president, and you chaps were pretty spare with the "but critics say" that the recount in Florida clearly showed that Bush won.
  3. "Bush lied, people died" on Iraq. No doubt the Bushies over-promised on the weapons of mass destruction, but this was intelligence; nobody can be sure what is going on. You have to go on the best intelligence, and the intelligence said Saddam had weapons of mass destruction.
  4. "Greedy bankers" caused the Crash of 2008. No doubt they helped, but the real culprit was Fannie and Freddie lending money to sub-prime borrowers on low down payments. And sub-prime lending was liberal policy. What did we hear from the media on that?
  5. "If you like your doctor you can keep your doctor." If you guys had done due diligence you would have known that the claim was a flat lie. But you said nothing.
  6. Climate change. The science is pretty clear on this. The current global temperature is nothing special. The rate of increase in temperature is nothing special. We don't know what a doubling of the trace gas carbon dioxide will do to the climate, and our computer models have failed to predict the current "pause." Anyway, it seems pretty clear that we can't afford the cost of changing the climate; we can only adapt to climate change.
Here's the problem, Ron Fournier, from the point of view of establishment journalists like you. Because you chaps have failed to call your guys on their lies in recent years your guys have upped the ante. And now the lies are really hitting home with ordinary Americans, particularly as they lose their jobs and their health plans to Obamacare.

And now President Obama is pushing executive amnesty, which forces ordinary Americans to compete will low-wage illegal immigrants not just in the underground economy but the formal economy.

The point is that in the next two years it will be easy for Republicans, even really stupid ones, to run against Democrats and win. Americans think that things are going the wrong way, and that the president has lied to them. Remember the recent midterms? It was hardly mentioned on the nightly news. So even with the mainstream media pushing against Republicans, the American people still knew what to do if they were angry about jobs and health care.

Just imagine if top establishment journalists had run a "Truth-o-list" list server that was devoted to keeping their own side honest. Imagine that journalists had written "but critics say that the real culprit in the Crash of 2008 was federally subsidized loans to sub-prime borrowers." Imagine that journalists had written that "administration insiders admit that many people will lose their health plans as insurers adapt plans to meet the front-end benefits like contraception mandated by Obamacare."

Imagine that you chaps had actually been doing your jobs.

But that's "if only" now.

Now the Democrats are reaping the whirlwind. Now we have chaps like Ted Cruz coming up to bat. Now we have a Republican Congress. Now we have tired, extreme Democrats like Hillary Clinton and Elizabeth Warren leading the polls for Democratic nominee in 2016 while the Republicans have a full bench of successful governors and aggressive senators ready to bat.

Now we have African Americans spun around by Trayvon and Ferguson, demoralized by the First Black President that made their lives worse. How we have Hispanics that want jobs more than they want immigration reform. Now we have Asians that got to see the gentle giant of Ferguson strong-arming an Asian shop-assistant and wondering what they are doing in the party of affirmative action. Now we have young people wondering if they will ever pay off their student debt or ever get a decent job that leads to a good career.

And you establishment journalists could have helped prevent it. If you had done your jobs.

Yep, Jonathan Gruber isn't the problem. There will always be ambitious henchmen to do the bidding of their powerful patrons. But journalists, we were told, were different.

Except that they aren't. Journalists are just ordinary humans. They go with the flow and are easily intimidated by powerful politicians.

What a shame.

Thursday, November 13, 2014

Net Neutrality: Liberals Want More Power

Liberals think of themselves as selfless educated servants of the people. But what they do is seek more power.

Take net neutrality. The government might do nothing about the internet, and just let it evolve on its own. But that throw away a great opportunity to wield political power. So why let sleeping dogs lie? Why not get in the middle of internet pricing and mandate net neutrality, and make sure that everything is fair?

President Obama is all in favor of net neutrality, and he told the chairman of the Federal Communications Commission, Tom Wheeler, on November 10 how he wanted the internet to be classified as a public utility. The FCC, of course, is an agency supposedly independent of politics, one of the products of the Progressive Era that believed in government by disinterested experts, and is not answerable to the president.

Why would the president want to stick his political oar into the internet?  Well, it's all about politics and power. Liberals say they care about you, but what they really do is care about power for themselves. It's nothing peculiar to liberals. People that are attracted to power -- people that want to control other people -- are attracted to politics and government. The proof is that successful politicians hang around in their elected positions forever, while successful businessmen, from John D. Rockefeller to Bill Gates, tend to quit business and go into philanthropy.

Notice the interesting difference between the politician and the philanthropic businessman. One gives away other peoples' money and one gives away his own money.

Holman Jenkins at the Wall Street Journal uses President Obama's directive to the FCC chairman to create a functional diagram of the liberal power machine. Let's pull some quotes and look at the parts diagram.
So why is Mr. Obama promoting strict regulation? Because liberal mau-mau groups like regulation. It’s that simple: If government controls business and they control government—well, you get the idea.
Remember what I said about power and control? The point about all political regulation is that it forces the private sector to pay court to politicians and activists.
Congressmen can’t extract donations from the auto industry or telecom industry or health insurers if costly, consequential rules affecting those industries aren’t being drafted.
And really, if the government isn't drafting regulations and special interests aren't paying tribute it's a fate worse than death. The horror!
Bureaucracies can’t expand. “Public interest” groups that align themselves with Democrats can’t collect scalps and orchestrate episodes in which businesses and politicians are taught to fear their power.
Would you please read that quote again, pausing for a moment on the word "scalps" and the phrase "fear their power"? Thank you.

Imagine a world in which budding social justice warriors didn't have a chance to name and shame.

Jenkins observes that probably nothing will happen on net neutrality anyway.
But even this outcome suits the machine, since the machine is really interested in process—endless, high-stakes process that swells Washington’s ranks of lawyers and lobbyists.
Now the punch line:
Whatever “liberal” used to mean, it now means a self-interested machine of influence peddling and rent extraction. 
What this country needs is a national politician that can teach the American people to hate the "self-interested [liberal] machine of influence peddling and rent extraction." And hate the hypocrisy. 

Wednesday, November 12, 2014

Suppose the Democrats Became the "Black" Party

I have an acquaintance who's almost as radical on education as I am. Recently he attended 7th grade for a day in two public schools in Broward County, Florida, the area around Fort Lauderdale.

One school was the "worst" school and one was the "best" school in the district. The worst school was chaotic, with nobody paying any attention to the Civics class. The best school featured good dutiful students listening and participating. You won't be surprised to learn that the worst school was mostly black with some Hispanic. The best school, on the other hand, was composed of all races and my acquaintance had trouble determining just what race each kid came from.

It just so happens that the same day I had read a piece by Steve Sailer where he talks about politics as "core vs. fringe." Maybe, he suggests, the Democrats will start to get into trouble with their inherently fragile "Coalition of the Diverse" that unites all the non-white, non-white middle-class fringes together.

Hey, if the Democrats want to make the Republicans into the White Party, he writes, maybe "the GOP should slyly work to rebrand the Democrats as the Black Party."
Ironically, in 2014 the Democrats made themselves the Black Party by anointing the late Michael Brown, the not-so-gentle giant of Ferguson, the face of the Democrats. Not surprisingly, Asian voters appear to have reacted with dismay.
If the 20th century was the century of ideology, Sailer writes, maybe the 21st century will be the century of identity.

But think of those schools in Broward County. The point is that the racial mixture of kids in that good school are not really mixed at all. They are all good dutiful middle-class kids, whether they are whites, Cubans, Hindus, or East Asians. If we are going to have real identity politics, we should recognize the monoculture in that good school. The monoculture is civilized middle class. I am using "civilized" in the strict Latin sense meaning "city person."

Right now the political division is between the middle-middle Republican Party, representing what I call the People of the Responsible Self, and the over-under Democratic Party, composed of elitists that promise "if you like your doctor you can keep your doctor" and the underclass, the People of the Victimized Self.

So really, we are already divided into the Black Party and the Middle-class Party. It's just that a bunch of educated people that ought to know better are going for the power trip of thinking themselves potential Peter Grubers "trying to confuse people" about Obamacare.

So what happens next? I suspect that, after the social justice warriors have totally marginalized the Christian Right and anyone that disagrees with gay marriage, ordinary libertarian-type professionals will start drifting back to the Republican Party. That's because Obamanomics is not very good for your average upward-bound professional, and that kinda makes all the culture war stuff irrelevant. The modern middle-class professional needs a good economy, the kind of economy where you can up sticks and move to a new job without worrying about whether your mortgage is underwater. Only trust-fund babies and folks with good inside contacts in the liberal ruling class can feel secure in the Obama economy.

Ten years ago Democrats did a good job of making libertarian professionals embarrassed by the Christian Right. But I think they overdid it, and bashed the ordinary middle-class believers into the shadows. Now they are reduced to Wars on Women and ginning up the black vote with phoney-baloney race incidents.

I tell you what I think. I think that the Obama race politics is going to isolate African Americans from the rest of America even more than they are today. Yesterday, Veterans Day was coupon day at Half Price Books in Seattle. I visited the University District store, and it was all white liberals. But out at the Half Price Books store in Microsoft's Redmond, the store was filled with South Asians, East Asians and Russians. No African Americans in either place. I wonder what those folks out in Redmond think about the Democrats' race politics?

I read a guy a year ago -- I think it was Roger L. Simon -- that said he could never vote for the Democrats again on account of what they've done to African Americans. Of course, Democrats have done the same thing to the white working class, turning its lower regions into the underclass, which is why the white working class is slowly but surely moving into the GOP.

Of course, the Democratic Party can never really be the Black Party. There just aren't enough African Americans to make a majority. So they'll still have to figure out another way to divide American from American.

Don't worry, I'm sure they'll find a way. That's what politicians do; they divide people.

Tuesday, November 11, 2014

Please, Mr, President. Don't Do It

President Obama seems to be determined to get an immigration bill by the end of the year, or, he says, he'll do it by executive order. I have one thing to say to the president. Don't Do It.

Here's why. It will be bad for the country, bad for the Democratic Party, and bad for the president.

Bad for the Country.  According to the Gallup Poll Americans are in favor of immigration reform. Over 80 percent are in favor of a security fence and employers checking immigration status. And 88 percent are all in favor of giving illegal immigrants a path to US citizenship if they pass certain requirements including "paying taxes and a penalty, passing a criminal background check and learning English."

So it oughta be easy for the president to push an immigration bill through Congress with overwhelming support. Right? Except that the devil is in the details, with Democrats against a fence and penalties and English, and Republicans thinking that maybe illegal immigrants should never get citizenship. And then there is the little problem that nobody wants to deal with the president, not Republicans, not Democrats.

The way to pass comprehensive legislation is by comprehensive legislation in which both parties sign off and we get a "consensus." Legislating without Congress and without a consensus is called "ruling by decree." It's the sort of thing that tin-pot dictators do. And it ends in tears.

Bad for the Democrats. What a surprise! The Republicans totally cleaned up in the 2014 midterms. The GOP now has more members in House of Representatives than any time going back to 1929. How could that happen?  Could it perhaps be that President Obama has been governing by partisan division? That his nominees have been bending the law anywhere and everywhere to advance the progressive agenda by any means possible? Today Dennis Prager is laughing at the NYT pundits writing about a "dysfunctional" politics. Dem defeat for them means that the people got it wrong.

Here's my prediction. If President Obama changes immigration law "by decree" he will further erode voter support for the Democrats. Surely, right now, a lot of Democratic officeholders must be talking to each other and saying: Wow, I don't know how he is doing it, but this guy is demolishing the Democratic Party right before our very eyes. We've got to stop him before the tsunami gets to me.

Bad for the President. It may be that the president has no ego. It may be that he is just trying to push as much of the progressive agenda past the American people as he can, full speed ahead and damn the torpedoes. But I doubt it. I think the president is human and he wants his place in the pantheon of great presidents. But like anyone in a tough spot, he doesn't know what to do except do what he knows. As the airplane accident guys say: when an airliner hits an emergency the crew instinctively do exactly what they are trained to do. The president is trained to be a community activist; that's what he does. So he keeps doing it because that's what he's trained to do.

Here's my prediction. The president's divisive governing style is going to make him an example of How Not To Do It for the next 100 years. People will say: if you want to divide the country and provoke a massive backlash, if you want to ruin your political party, and if you want to go down as the Worst President Ever, then do what Barack Obama did.

Don't do it, Mr. President.

Monday, November 10, 2014

Dueling World View Monday

I picked up a straight-from-the-shoulder definition of the left's world view over the weekend. It's from Danusha V. Goska. To the left there are three kinds of people: the oppressors, the oppressed, and the champions of the oppressed.

There's a soft version, of course. It says that there are the privileged, the underprivileged, and the activists.

The point of such a simplistic world view is to reduce all human life to politics, because if there are oppressors, they must be smashed. If there are privileges, they must be erased. And we, the evolved, the enlightened ones, the champions of the oppressed, are the ones to do it.

But the problem is that it reduces human life to war. Of course it does. If you reduce life to politics, it means you reduce life to us-and-them. It means that life is merely a fight between our kind and the other.

I suppose you can soften the paradigm down to mere advantage and disadvantage, with knowledgeable experts applying settled social science to fix the disadvantage.

But this is a world where something is missing. You know what's missing? Humans, the social animals.

Weird, isn't it, that the folks that talk endlessly about peace and justice are the ones that believe in societal war.

Now I have my own three-sector world view. In my world there are three kinds of people. There are the People of the Creative Self, who believe in the German cult of creativity. There are the People of the Responsible Self, who believe in responsible individualism. And there are the People of the Subaltern Self, who believe that they are the pushed-around.

But there's a problem. People who believe in creativity are usually going to be disappointed, because very few people get to be creative and create a new thing. I like to say that my ambition is to have one original thought in my life. That's almost impossible, because almost all knowledge is social, something we learn from other people or in combination with other people. So what are the not-very-creative also-rans among the People of the Creative Self going to do? It's obvious. They are the champions of the oppressed, the activists doing their advocacy. It's the dull person's way out of the creative problem, that many are called but few are chosen. If you can't create, then the next best thing is to break things.

By contrast, almost anyone can be a responsible individual. Individualism gets a bad rap as selfishness, but that misunderstands the situation of the human individual. Humans are social individuals whethet they like it or not; they must make their life in society. The question is: shall they be compelled in their sociality or shall they find their own way to contribute to society, by making and doing things that help other people?

The great problem is the under-people: the oppressed, the victims, the underprivileged, the disadvantaged, the dependent. Used to be that they were simply slaves and serfs in some hierarchical society with the big men on top and the subservient underneath. That was in the old days, when, as Eric Hoffer writes, work was dishonorable and the rulers told the people what to do. But in our days work is honorable and work is the responsibility of each individual worker. Those workers who have not joined the culture of work live indeed at a great advantage.

There are many different ways of thinking of the three Peoples: Creative, Responsible, and Subservient. We could think of their self-image: Evolved people, Responsible people, and "the" People. Or we could think of pejorative descriptions: Educated Snobs, Selfish Careerists, Slave People. But you get the point.

And you can see how our national politics breaks down. The Democrats are a coalition of the Creatives and the Subservient. The Republicans are the party of the responsible individuals. That's why Mia Love and Tim Scott are Republicans.

The thing is that to win the culture war we have to scotch the creatives as fakes and pseudos. And exalt the responsible individual as the best and noblest kind of person. And we have to find ways to help the Subservient lose their addiction to free stuff in the service of some great One and join the modern world as responsible individuals.

One good thing is the the liberals of 2014 seem to be Bourbon retreads. They seem to have forgotten nothing and learned nothing. But I suspect that in the next few years we will see something like the Clinton New Democrats, trying to look like Republicans only not so much.

Well that's all today, except that I thought of a real good word for the Under People, but I forgot it. Hopefully I'll remember and put in an update.

Friday, November 7, 2014

The Farmer and the Oilman Should Be Friends

Flying east on Thursday to visit my daughter and family I got to talking to a pleasant women from British Columbia. Her whole family seemed to be working in the oil business in Alberta.

Funny how you can learn something from anyone you meet.

I mentioned the Keystone pipeline and the safety and costs problems associated with the rail shipment of crude oil.

Oh yes, she said. And there's another problem. The farmers can't get their grain shipped by rail. It's too expensive.

Now there's something I'd never thought of. Imagine! The environmentalist war on pipelines doesn't just hurt the oil business so that it costs $12 per barrel to ship Bakken oil on Warren Buffett's trains to the West Coast, doesn't just hurt consumers who must pay more for gasoline, doesn't just put money into the pocket of Mideast jihadis, doesn't just pour money into the pockets of the world's richest man, Vladimir Putin, said, according to an official, to be worth $180 billion after a lifetime in business.

Yeah. A pipeline-less world also hurts farmers, because the oil guys can outbid the farmers for rail capacity.

Of course, there are still a dozen grain ships on any given day anchored in Vancouver's outer harbor ready to load grain from Canada's prairie. But the farmers in Alberta are reduced to shipping their grain by truck, and they lose on every truckload.

That's not the only problem with shipping oil from Alberta's oil sands play. A lot of the oil gets shipped by heavy truck, according to my Canadian friend, and you should see the mess they make of the region's roads.

Nice guys, those environmentalists. They got their principles and other people have to suffer.

I mean, come on. Pipelines are safe, and they are buried underground, and they are way cheaper than railroads. Why in the world would anyone object to a pipeline?

Well, you can make an issue out of anything. You can gin up a crowd to object to anything; you can create fear and loathing with anything. See Race card, playing of.

I just wish that liberals would get themselves a real religion, one that's all about liberals committing themselves to a higher purpose, rather than committing other people to a higher purpose,keeping the little people poor and unemployed while liberals live off the fat of the land on ample stipends and lifetime tenure.

It's ironic. Used to be that the highest calling of a politician was building farm-to-market roads. Now the roads and the rails are clogged with crude oil because the politicians and liberal special interests won't let businessmen build pipelines.

Could we get back to basics, and just let the farmers get their produce to market?