Friday, September 9, 2016

Arabs, Power, and Charles Koch

An acquaintance told me a story about his college days in the 1970s in the UK. He opted to live in a student dorm for foreign students. The idea was that one Brit student should live with the foreign students to interpret British culture to the foreigners.

But he found that mostly he was trying to explain the foreign students to each other. The foreigners were just as confused about other foreigners as they were about the Brits!

But one group of students was different. The Arabs. The only thing that Arab students understood was power, power and possession.

That was back in the 1970s so I am sure that things are different now.

OK. Let us segue to a video featuring Charles Koch, he of the Koch Brothers, and Mike Rowe of "Dirty Jobs," who makes a living championing the "skill trades." Pull quote from Koch:
People who lead happy, fulfilling lives are ones that develop their abilities and figure out how they can best contribute … and they’re rewarded for it and respected for it.
Of course this is the basic contract of the exchange economy. Find something to do that other people will pay for, and do it. It is based on true altruism, thinking about the other and their needs before thinking about your own and setting forth your non-negotiable demands.

The other philosophy, the power philosophy, is based on the idea that you compel your welfare out of the sweat and the work of others. By the dawn raid on the neighboring village. By defeating the neighboring country and imposing an bone-chilling indemnity on it.

The great lesson of the last 200 years, the Great Enrichment, is that the way to human prosperity is the way of surrendering to the market, and doing what the market -- which is nothing but the aggregate expressed needs of other people -- demands with its price system.

Oh and one other thing. Innovation. The great thing about the last 200 years is that numberless nobodies had an idea for a product or a service that nobody else had thought of, and they went out and did it. When this idea was a true innovation, in technology or in organization, the innovator very often built a huge business making huge profits, while the business lowered prices of oil by 90 percent or steel by 67 percent.

The big thing about this age of innovation was that the powers that be did not, or could not, prevent it. That's why Charles Koch in the video talks about "permissionless innovation." You shouldn't need to ask someone's permission to try something new. You shouldn't have to get credentialed to do hair-braiding. Or even inventing a new pharmaceutical drug.

The big thing about all this is the retreat from power. The basic assumption is that humans can work together and do things for each other without the overweening threat of force. This, according to my acquaintance, is something that the Arabs in the 1970s did not understand.

And, of course, it is something that our liberal friends do not understand. They think that the economy must be dominated by a central administrative authority of credentialed experts, and that these powerful experts will lay down the parameters of human cooperation in the economy.

I wonder what it would take for our liberal friends to abandon their faith in power and surrender to the altruistic wisdom of the market.

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