Chyden Finance: profit from hypocrisy

It is rare that we get to see long-term experiments in Economics. The Russians devoted seven decades to the demonstration that communism is an utter failure, and the Americans currently are testing Benjamin Franklin’s hypothesis that when one gives up liberty for security, one loses both.

Similarly, Sweden is winding down a long-term clinical trial of social welfarism.

Invest accordingly.

CWE

Following up on yesterday’s post, CNN pipes in with a related topic. Apparently, liberalism, atheism, and male monogamy are statistically correlated with higher IQs.

George Washington University leadership professor James Bailey speculates that abnormal preferences might originate with a desire to convey superiority or elitism, which correlates with high IQ. He claims that embracing unconventional philosophies might be “ways to communicate to everyone that you’re pretty smart.”

In the case of autism, unconventionality is part of the overall package. Hyperconformity, then, would be associated with a signal lack of innovativeness (pretty much by definition), ‘mild autism’ with scary-weird smart, and full-on autism with incapacity.

In the surveys cited in the CNN article, ‘liberalism’ is defined “in terms of concern for genetically nonrelated people and support for private resources that help those people.”

This does not imply big-government social welfare programs. As I stressed in a recent post, “When we compress complex issues into one-dimensional spectra — left vs right, religious vs atheist, conservative vs liberal, etc. — we end up talking at cross-purposes, often with ourselves.”

One must be very conventional to succeed in politics, first to find backers and later to woo voters. Similarly, weirdos do not tend to rise to the executive suite in multinational corporations.

Those of us who mistrust big government and big business are not necessarily unconcerned for the plight of the downtrodden; we just don’t trust political and corporate Barbie and Ken dolls to get it right.

Invest accordingly.

CWE

Temple Grandin made a very interesting TED presentation on different ways of thinking, and how schools are failing children who do not fit the norm.

“Keep the company of those who seek the truth, and run from those who have found it.” —Vaclav Havel

When we compress complex issues into one-dimensional spectra — left vs right, religious vs atheist, conservative vs liberal, etc. — we end up talking at cross-purposes, often with ourselves.

Part of the problem is the habit of thought that comes from having only two non-trivial political parties in the USA and in many other countries, which Krushchev described as being like boots: there is no significant difference between the left and the right.

In the USA, the left tends to favor big government, and the right tends to favor big business. OpenSecrets.org maintains a database of individuals who move back and forth between the two categories of this false dichotomy. One of the most prominent examples today is Timothy Geithner, who has held executive positions at Goldman Sachs, the New York Fed, and the US Treasury Department; however, a multitude of less well-known examples fills the Revolving Door Database.

Choosing between ‘conservatives’ and ‘liberals’ in the USA — both terms, egregious bastardizations of their original meanings — is a watered-down exercise in choosing between ‘national’ socialists and ‘international’ socialists. No one of any practical significance in the USA is calling for a return to Thomas Paine’s dictum, “That government is best which governs least.” The tacit assumption along the whole political spectrum today is that each is to be lorded over, and the only real question is by whom.

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Granted, the libertarians have attempted to improve the debate somewhat, with David Nolan’s introduction of a two-dimensional political map. However, with less than 1% of the popular vote in all but one presidential election since 1972, their overall influence is trivial.

By way of comparison, Independent Ross Perot garnered 19% of the popular vote in 1992, and 8% in 1996; and Independent John Anderson, received 7% of the popular vote in 1980, the only year that the Libertarian Party candidate, Ed Clark, polled higher than 1%.

In the midst of this fray, we have various forms and levels of sanctimony, the advocates of which tout the benefits of their idiosyncratic preferences very loudly, while flagrantly ignoring the costs. We frequently hear about what the speaker believes that we all should do, and virtually never about how difficult and costly it will be. Whether your demon of the day is Glenn Beck, Rush Limbaugh, Al Franken, Michael Moore, or the Man in the Moon is irrelevant when the speaker’s goal is to force his or her vision of The Good onto society at large.

We see this in school curricula, where the battle is to see which world view is to serve as the foundation of the indoctrination of a generation, with little or no consideration for the side effects and tradeoffs. Was Christopher Columbus a courageous explorer xor a mass murderer? Were the Founding Fathers of the USA liberal democrats xor slave-owning tax-dodgers? Is religion a system of communion with the Word and the Way xor a mystical justification used throughout history for genocide and conquest?

Are you with us xor against us? America: love it xor leave it.

One of the messages that has been a cornerstone of public school curricula in the USA for more than a quarter-century is that girls should receive more attention than boys, purportedly because women do not fare as well as men in the capitalist labor market. (Never mind the richness of the irony that leftist champions of women’s rights routinely invoke the selling price of a woman’s services on the open market as the predominant measure of her worth.)

In the 1970s, Women’s Lib sounded so good. How could one be against it, unless one were some kind of mouth-breathing knuckle-dragger?

I mean — c’mon! — Walter Wriston built the medium-size First National City Bank of New York into the colossus that is Citibank on his willingness to hire every female business school graduate in the Northeast that he could find a desk for, when his competitors at other banks — stuck in their 1950s mindset — saw the increase in girls in college in the 1960s and 1970s as a problem, because it meant that the proportion of male graduates was diminishing. Wriston had the insight to see opportunity, where his colleagues and competitors saw only cost.

But… for every benefit, there is a concomitant cost. Every dollar spent encouraging girls qua girls — as opposed to encouraging children in general, regardless of gender — to go to college is a dollar not spent encouraging boys qua boys to go to college. Every dollar spent on Women’s Studies is a dollar not spent on programs oriented toward men. Every dollar spent demonizing men is a dollar not spent addressing the issue of abusive mothers.

Any male, especially if he had blue eyes, who dared complain in the waning days of the 20^th Century was screeched down on the one side and chortled down on the other. To the feminists, he was a bourgeois perpetuator of patriarchal hegemony; and, to The Boys, his masculinity was suspect.

Roll the clock ahead by a half-century, and what to we have? Young urban women today earn more on average than their male counterparts, in large measure because the student populations on US university campuses have been majority female for more than a quarter-century. Yet, women of all ages still carp about the Glass Ceiling and the mythical paycheck of 59¢, 70¢, or whatever the magic number is today, for every $1 that a man receives.

The Gender War is so last century. Continuing to fight is makes as much sense as opposing the USSR.

As long as one frames the diagnosis in terms of a false dichotomy, one is almost certain to pursue an ineffective cure.

If one can identify this kind of folly in others and anticipate its positive and negative externalities, one can get rich by taking the fools’ money away from them.

Invest accordingly.

CWE

If you have ever wondered what-all is allegedly caused by Global Warming™, Professor John Brignell, who is a recognized expert on sensors and occasionally lectures on the abuses of statistics, has an answer for you.

It’s… impressive.

Invest accordingly.

CWE

It is sad that this point is not more widely understood, especially among those who really should know better, but way too many individuals conflate ‘corporatism’ (or ‘corporate fascism’, if you prefer) with ‘capitalism’.

Conventionally, a) the belief in the rights of humans to move their persons, goods, and money freely to and from wherever they wish and b) the engaging in market dominium rather than government imperium go by the same name: capitalism.

However, Big Business corporatism (dominium) bears a much stronger resemblance to Big Government socialism (imperium) — whether of the national sort or the international sort — than it does to individual responsibility, community mutual aid, and freedom of vocation.

OpenSecrets.org maintains a Revolving Door database that tracks the movements of individuals from high-level government positions to high-level corporate positions, and vice versa.

Whether Timothy Geithner is at Goldman Sachs, the New York Fed, or the US Treasury Department — and he is only one example of many — your interests are not his special interests. By now it should be obvious that this has nothing to do with any illusory distinctions within the Demopublican/Republicrat duopoly. Whether it is Nixon/Reagan/Bush or Carter/Clinton/Obama, Big Government and Big Business are virtually indistinguishable at the individual level.

As things stand today, we do not have an identifiable category of action, thought, and conventions that stands in opposition to this colossalism.

Unfortunately, ‘libertarian’ has come to mean any number of conflicting things, and it has been tainted in the USA by the hapless and self-contradictory Libertarian Party, which supports the idea running for political office and does not emphasize local community involvement or charity work.

Most maddening of all is that many self-styled libertarians cut their teeth on Ayn Rand’s works, which promote free markets, strong property rights, and individual liberty, but treat her idiosyncratic tastes — for, e.g., tobacco, rough sex, and industrial pollution — as moral imperatives. Her aesthetics are a throwback to the 19^th Century, which are as useful today as a longing for the Age of Discovery, and they gloss over the race, class, and gender relations that prevailed in those eras.

It is time for a new approach to governance that eschews Big Government, Big Business, and centralization in all its forms, and does not seek to establish a neo-Edwardian retro-futuristic utopia that looks like a set from David Lynch’s Dune.

The only time that a future century looked like a past century is now known as the Dark Ages. We must look to the cutting edge of today for guidance, and not one or two centuries ago.

As the basis of a name for this new movement, the term ‘capital’ is will not do, as it implies physical assets used in production. We need something that conveys the idea that all value is ultimately human knowledge, insight, and culture; everything else is ultimately land, sea, plants, and animals. Take away the humans, and earth would revert to a natural state that bears very little resemblance to today’s status quo in a relatively short time.

This is not to be confused with labor, which does not require humans, per se, once robots are installed.

Whatever we end up calling this ‘Entrepreneuritarian’ <bleh!!!> movement, we must recognize that the Cult of the Colossal leads inexorably to a duopoly of Big Government and Big Business, and that corporatism is not laissez faire.

Invest accordingly.

CWE

Although one might share some concerns with conspiracy theorist nutjobs at either end — or at both ends — of the spectrum, and although ‘They’ might be violating one’s natural rights, one does not have to subject oneself to persistent abuse, whether from the Illuminati, the New World Order, the Capitalists, or the Vogons.

The world is a big place, and educated, talented, and skilled individuals can find happiness in jurisdictions other than the ones that they are in. Granted, relocation is not cost-free, but given a choice between applying for visas, maybe marrying a local in one’s target jurisdiction, or even living on the underground economy there on the one hand, and dousing oneself with gasoline and setting oneself ablaze on the other, the cost/benefit ratio of the former is generally lower for the former than for the latter.

Enter Andrew Joseph Stack, programmer, bass player, pilot… and terrorist.

8 February 2010, Stack posted a rambling anti-government manifesto on his website and then flew his single-engine Piper Cherokee airplane into a nearby IRS field office, killing himself and causing massive damage to the building.

Tax lawyer and former general counsel of the National Association of Computer Consultant Businesses Harvey J. Shulman sheds a bit of light on one of the claims in Stack’s manifesto. Apparently, in 1986 the US Congress passed tax legislation that discriminates against entrepreneurial programmers, by forcing them to become employees and “to abandon their dreams of getting rich off their high-technology skills.”

The provision in question is Section 1706 of the Reagan-era Tax Reform Act of 1986. The Free Library provides a detailed discussion of Sec. 1706.

Firms in the USA that temporarily hire programmers, engineers, and other technical workers must treat them as employees or risk stiff penalties even years later, if an IRS auditor decides to reclassify those contractors as employees. The rationale for this flagrant discrimination was that tech contractors are more likely to cheat on their taxes, which prejudice has been shown to be inaccurate.

By classifying temporary workers as employees, one compels those individuals to live and die by their résumés, rather than by the value of the equity that they build in their practices.

Imagine for a moment that you have an idea that you think could be the next Big Thing, but that is not yet self-sustaining. You’d like to start a small firm that works on your idea, but you have a family to feed, and you need to take temporary outside jobs. Instead of developing solutions for clients, which adds to your nascent firm’s equity, you must be classified as an employee, and the fruits of your labor belong to your employer.

You forever are stuck in the role of — albeit well paid — wage-slave. Someone else owns your work, and can terminate your position at any time. You are at the mercy of your manager, and serve at the pleasure of others.

As an independent contractor, you’d be your own boss. As a firm owner, you would be a budding capitalist.

Consider for a moment that programmers, engineers, and others who pursue technical careers will tend, on average, to be more intelligent than marketing and management staff. Consider, also, that weirdness and intelligence seem to rise and fall together.

Most individuals are fairly conventional; the smart ones tend to laugh out of sync with the rest of the muggles at the meeting.

Every now and then, someone is going to snap.

Andrew Joseph Stack III snapped.

It didn’t have to end this way. He could have moved to Canada, New Zealand, Singapore, or somewhere nice in Latin America or the Caribbean, and he should have, if the USA were too oppressive for him. In fact, if more Americans recognized that the universe does not end at the border, they might realize that the US tax code, USA PATRIOT Act, DMCA, and all the rest are local phenomena.

No need for protests, criminal acts, or suicide runs. Vote with your feet.

According to Cipolla’s Basic Laws of Human Stupidity, what Stack did was stupid. He caused injury to others, while losing everything for himself.

If some good comes of this, and the US Congress does the right thing by repealing Sec. 1706 of the Reagan-era Tax Reform Act of 1986, Stack might rise to the status of victim — or even martyr for those who wear tinfoil hats — meaning that he incurred a loss while others gained.

Either way, this was not your run-of-the-mill nutjob; this was a nutjob who had a legitimate axe to grind.

Invest accordingly.

CWE

Recently, a very nice individual alerted me to Cory Doctorow’s Little Brother, which you can download for free in the format of your choice.

Little Brother looks like an interesting read. I’ve downloaded it within an hour of typing these lines and read the first two pages. I’ll write a full review later, if one is called for.

My initial concern is with Doctorow’s conflation of ‘world’ with ‘USA’, as when he laments a world gone mad and cites the US National Security Administration as evidence. Then again, his complaints about ubiquitous cameras seem to apply more to the UK than to the USA, so maybe he is conflating the Anglosphere with the world.

Either way, that is not the world. To call two fading imperialist governments ‘the world’ cedes orders of magnitude more power to the wizard than is warranted by the little man behind the curtain.

Granted, my local sheriff’s department — which is not nearly as big or well armed as the US federal government — could throw my daily calendar into disarray, and Congress and the President wield power well out of proportion for 536 individuals among a population of more than 300 million, but I choose to live here.

However, if I become sufficiently annoyed, I can leave and deny my tormentors the taxes that I pay and the benefits of my investment and consumption spending.

This is not to say that we should not push back and keep the power-hungry in check. It is to say that declaring the ills of the USA to be the ills of the world is the wrong diagnosis.

It’s a big world out there.

Invest accordingly.

CWE

The Revolution Will Be Animated from Marine Lormant Sebag on Vimeo.

Nina Paley has an outstanding understanding of the economics of public goods. This is the face of the entertainment’s future.

Unfortunately, she doesn’t take the argument to its logical conclusion and embrace the public domain.

Share accordingly.

CWE