And what is "institutional corruption," other than a large system stupidly investing more in its components than in its inter-dependencies - so that significant segments go their "own" way rather than doing the obvious, and allowing the insanely great returns-on-coordination to simply proceed?
The endless negotiations between hosts & parasites periodically sway outside the tolerance limits championed by both sides, with many, unpredictable local dead-ends. Some options can be lost by assimilating too fast, and some by dissolving the aggregate. Maximal returns come from parsing those tolerance limits, and staying away from the boundaries, rather than testing them with the entire farm. The result is what we call evolution, the endless spawning and eventual "more perfect union" of all flavors of hosts & parasites.
If there is a dark force, or "evil", surely it's the statistical chance that local hoarding instincts sometimes shield some intellects from the yawning returns of reverse-entropy. Why are incendiary individuals so dedicated to looking a coordination-gift-horse in the mouth? Why turn with pride to the systemic suicide of discoordination?
Why? Only because of lack of practice at the perception & discrimination of relative returns. Why, above all else, don't we get all students more practice at this simple point, so that they're always fully aware of the obvious as all later situations arise?
In every situation, there are endless options. One option - coordination - will render all the other options both negligible and fleeting, and "we" can always find it!
What else could possibly better sustain our interest? Everything else gets boring, very quickly. Let's just go for it all, and forego the crumbs. Our pride in our heritage, & our curiosity, demands that approach.
What else could possibly better sustain our interest? Everything else gets boring, very quickly. Let's just go for it all, and forego the crumbs. Our pride in our heritage, & our curiosity, demands that approach.
16 comments:
This really is sad. When the government and quasi-private institutions can manufacture fiat funny-money out of nothing in order to steal the purchasing power of the unsuspecting public while the elites try to pretend that this is completely normal and nothing is wrong, the glue that holds civilized society together starts to come apart at the seems.
Bob, was there a time in history under any monetary system that the powerful did not control society and manage to allocate wealth to themselves either directly by just taking it or else indirectly by arranging that the bulk flow to them? I don't recall any.
Mr. Hickey:
Why don't we aspire to a new ideal?
Bob Roddis,
You're missing the point about growth of complex systems.
With small, simple, systems, value is indeed concentrated in components. A one-cylinder engine is a good example.
With large, complex, systems, however, component value shrinks as a proportion of net system value, and most value shifts to organizing the inter-dependencies. A good example is the progression through 4,6,8,12 or more cylinder engines. All the value then is in the tuning instrumentation that allows agile coordination-upon-demand.
Same analogy applies to fiat currency. If there were no national coordination, then the value of currency would, indeed default to the value of a representative commodity.
However, even by 1933, it was clear that the need for agile policy - among millions of citizens pledged to a more perfect union - made commodity valuation of currency negligible.
Hence, we quit trying to peg the value of our national currency to it's personal value to individuals. Instead, we removed a constraints on currency value, and linked it to nothing other than public initiative, which can float at a second's notice.
We would not have been able to break the constraints of the gold-plutocrats, end the Depression or win WWII without that step.
Today, we will NOT be able to pursue available public options - including prosecuting a new generation of banksters - without letting unlimited amounts of fiat currency unleash the creative capacity of coordinated public initiative.
Can we run out of public initiative? No? Neither can we run out of fiat currency. The latter only denominates the REAL things that the former is capable of achieving.
Remember, for 311 million people, the overwhelming amount of value, wealth & adaptive power flows from organizing our interdependencies, NOT from clinging to archaic, individual concepts of value that just don't scale up to be relevant to the aspirations of a "more perfect union."
Actually, it's exciting and a relief that an organized electorate can denominate the insanely great will of the people - which runs far beyond what any individual can possibly imagine.
What's truly sad, is to let individual perceptions of personal value constrain the adaptive potential of an organized whole trying to continuously create a more perfect union.
The obvious advantages of a fiat currency were quite obvious to Ben Franklin, by 1727, and were actually the core reason why the Colonies fought the Revolution in 1776.
One has to suspect that Mr. Roddis works either shamelessly or cluelessly for the King of England, or the banksters.
Co-citizens don't let co-citizens be shamelessly used by frauds, innocent or not.
Mr Roddis, why don't you talk with Mr. Hickey and I over a beer, at lenghth, so we can work on making a more perfect union? We've endless options, and Aggregate Output is a terrible thing to waste.
please contact me at rge (at) OperationsInstitute (dot) com
Very good posts Roger,
But it's a waste of time you try to explain this to an all-knowing 'austrian', for all their talk about innovation they are the ones who have less faith in humanity.
For them it's all about hoarding 'money' and conservation of the status quo by other means. In their empowering of money above anything else, even life, they have signed for fatality.
Take in mind is about religion and ideology, and nihilism (the empowering of money is an ultimate form of nihilism) and fatality as a way of life is a subjective choice, and no amount of evidence will make an ideologue to change their rationalizations and vital positions ever (the ultimate justification will be a twisted vision of 'human nature' which will deny any empirical fact that falsifies that view, period).
Bob Roddis: "Why don't we aspire to a new ideal?"
I am all for that. The present institutional arrangements aren't working a whole lot better than feudalism for many people in developed countries, let alone emerging and still underdeveloped ones.
I agree with Rodger Erickson, however. Fiat is not the core of the problem although admittedly the way it is now treated is problematic. But so was gold. Society under that was a unequal as the present society. The problem is the monetary system per se. It is the sociology and politics that underlies the institutions of a type of society.
In my view economics is all about the material life-support system of humanity, considering the global economy as a closed system. Any other approach is too narrow given the challenges the world and the species face today.
What we consider money is simply a bookkeeping arrangement for keeping track of allocation of real resources and claims on resources, just like a title is not the land but rather is record of a legal claim on use.
The actual issue is production, distribution and consumption of real resources while provisioning real resources for future needs. Money is one way to facilitate this. But money is not a thing. It is a social construct that underlies one of the most important institutions for contemporary society. That construct is artificial, there being no money produced by Nature, and so it can be altered to better suit purpose, individual and societal.
The ultimate purpose is to enable individuals to actualize their full potential as both human beings with a shared nature and also individuals with unique characteristics. Freedom has several aspects. Freedom from unreasonable constraint is basic, of course. Freedom to choose as one wishes as long this doesn't impinge on on others rights, also basic to the social construct of "right" as embedded in custom and law. However, the most important aspect of freedom is freedom for self-determination and self-actualization as a human being, considering the purpose of life as actualization of maximum potential as a species socially and an individual metaphysically (non-materially) more than physically (materially).
The bottom line should be creating a global life-support system that at least everyone's material needs. That would be rather simple to do given the state of technology today if existing knowledge — humanity's unlimited metaphysical resource — were used intelligently to scale up technology and distribute resources sustainably.
I can envision a system in which the money-things are entirely digital — entries on a huge spreadsheet run by AI into which is fed all the needs and resource available to meet them, which also takes into account wants beyond needs, future requirements, and potential for innovation. In fact, this is coming likely within a matter of decades, given the "law of exponential returns" on knowledge and information technology. An ideal global society would be one in which the needs of all are met, both physically (materially) and metaphysically (non-materially). In that way every person would have an equal opportunity for self-determination and self-actualization within a society in which that was the guiding value. Of course, the result would be different among people and there would be a spectrum of diverse outcomes.
A major problem in my view is focusing on money instead of looking at what money is for — allocating resources to needs and wants — and figuring out how to accomplish this in a way that maximizes return on real inputs, like labor, energy, and natural resources using state of the art knowledge and pursuing innovation through education, R&D, etc.
In my view, focusing on "sound money" is looking backwards instead of forward.
Bod Roddis,
Please refer to these
How Benjamin Franklin Made New England Prosperous
http://www.planetization.org/prosperity.htm
English historian, John Twells:
"It was the monetary system under which America's Colonies flourished to such an extent that Edmund Burke was able to write about them: 'Nothing in the history of the world resembles their progress. It was a sound and beneficial system, and its effects led to the happiness of the people.' "
Benjamin Franklin And the Birth of a Paper Money Economy
http://www.philadelphiafed.org/publications/economic-education/ben-franklin-and-paper-money-economy.pdf
Of the Paper Money of America - Benjamin Franklin, 1781
http://franklinpapers.org/franklin/framedVolumes.jsp?tocvol=34
Benjamin Franklin believed that all economic output is valued according to the amount of labor funneled into the production of that good. He believed that "trade in general being nothing else but the exchange of labour for labour, the value of all things is, as I have said before, most justly measured by labour." He’s completely wrong. Value is purely subjective and the only objective measurement of value is the empirical examination of the terms of each exchange, prices.
Franklin also believed that gold and silver are used as money and are valuable because they are quite laboriously dug from the ground. Franklin writes, "the riches of a country are to be valued by the quantity of labour its inhabitants are able to purchase, and not by the quantity of silver and gold they possess."
In all reality, labor has nothing to do with the value placed on gold, silver, or any other factor on the market. Once again, value is determined by the subjective decisions of individuals bidding for certain goods or services on the market.
Further, the idea that the quantity of money is important to trade is incorrect. The market does not desire a certain quantity of money. Rather, certain characteristics of given commodities enable them to become media of exchange. These given commodities have a purchasing power decided by the market. The purchasing power of a monetary unit is equal to the vast array of goods and services it can purchase on the market. Thus, the purchasing power of the money is always what must be analyzed; a purchasing power that comes from subjective evaluations and not from the labor needed to acquire that commodity.
http://mises.org/daily/2251
I see no evidence of any MMTer or Keynesian having the slightest curiosity in or familiarity with Austrian School concepts, despite your repeated hostility to those concepts (which you do not understand.) However…..
1. I own and have read Abba Lerner’s “The Economics of Control” (aka “The Secret Plan to Save Socialism):
http://www.flickr.com/photos/bob_roddis/5560086644/in/set-72157626353319778
2. I read Scott Fullwiler:
Having said that, MMT’ers are keenly aware that governments can and do write laws that their treasuries’ operations be legally bound in certain ways. For instance, the Fed is constrained by law to only purchase Treasury securities in the “open market,” is thereby forbidden from directly lending or providing overdrafts to the Treasury. In other words, "specific" cases can and do differ from the "general" case MMT’ers describe for a sovereign currency issuer under flexible exchange rates in the sense that self-imposed constraints specify particular operations.
http://tinyurl.com/3tdadas
(So, isn’t Mike Norman’s proposal that the treasury just spend even when it does not have the money in “the bank” illegal?)
3. I read L. Randall Wray:
http://bobroddis.blogspot.com/2012/03/new-blog-feature-dumbest-mmt-statement.html
4. John Carney has written:
MMTers do not seem to fully appreciate the problems of ignorance and calculation that inform Austrian economics. They seem to recoil at even thinking about them because of the implications for the limits of political action. This also needs to be corrected.
http://tinyurl.com/7sycbey
Indeed.
We just think you guys are bonkers, Bob. :)
Seriously, we disagree over not only principles but also the putative facts.
We are resigned to never convincing you, so why don't you just give up on us. It's like fundamentalists trying to convert confirmed atheists, and vice versa. Not gong to happen, and the conversation is going nowhere.
Call it a "religious thing," if you like.
Mr. Hickey:
I read your blog my every day and I do learn things from you guys. I have an open mind.
I also appreciate your positions on the police state, control by the elite etc...
If you guys have the answers (as you say you do), I shouldn't be all that much trouble to refute.
Bob, I don't think it is a matter of refutation as much as a disagrement over starting points, assumptions (yes, aprioris are assumptions) and interpreting events as facts.
We look at the world differently. That is why it is not a matter of rational argument.
For example, institutionalists see human beings as social animals shaped by their surroundings. Individualists see human beings as radically free. As a result the former reject methodologically individualism as naive, and the latter regard it as a given.
Agency is debated in sociology, for example. There are different schools that marshal different rationales including putative facts. There is no clear resolution, so the debate continues to rage. Followers of Mises take his view of human action as the starting point. Yet, his view of agency is one among many competing view, none of which have been able to dislodge all the others so far.
I think you do not understand the "individualist" aspect.
Libertarians are methodological and political individualists, to be sure. They believe that only individuals think, value, act, and choose. They believe that each individual has the right to own his own body, free of coercive interference. But no individualist denies that people are influencing each other all the time in their goals, values, pursuits and occupations.
As F.A. Hayek pointed out in his notable article, "The Non-Sequitur of the 'Dependence Effect,'" John Kenneth Galbraith's assault upon free-market economics in his best-selling The Affluent Society rested on this proposition: economics assumes that every individual arrives at his scale of values totally on his own, without being subject to influence by anyone else. On the contrary, as Hayek replied, everyone knows that most people do not originate their own values, but are influenced to adopt them by other people.[1]
No individualist or libertarian denies that people influence each other all the time, and surely there is nothing wrong with this inevitable process. What libertarians are opposed to is not voluntary persuasion, but the coercive imposition of values by the use of force and police power. Libertarians are in no way opposed to the voluntary cooperation and collaboration between individuals: only to the compulsory pseudo-"cooperation" imposed by the state.
http://www.lewrockwell.com/rothbard/rothbard168.html#1
@ Bob Roddis
'I think you do not understand the "individualist" aspect.'
Of course we do. Anyone who's ever discussed bio, networks, analog computing systems, or any other system-science is quite aware that the perception of any component cannot encompass all the options available to the aggregate - and that also holds for individual human components in a nation-state.
Compared to group-intelligence, an individual wields no more comparative ability to "think, value, act, and choose" than a single neuron wields in comparison to the networked neurons of the human CNS.
Granted, human cultural networks are not yet quite as intimately instrumented as neural networks are, but the aggregate computing power is still exponentially greater than that of any individual.
Millions of people are intimately aware of HP's need to "know what HP collectively knows."
Good thing the Joint Chiefs of Staff at the Pentagon don't prefer individualism over coordination. We never would have been able to mobilize to win WWII, nor execute most of the national coordination that defines a modern economy, culture & nation-state.
A cult of the individual is an anachronism in the networked age of an advanced, social species.
Real issue of any aggregate - whether molecular aggregates in a cell, cellular aggregates in an organism, or individual aggregates in a social species - is to carry out a 2-stage net optimization.
Adaptive survival = F[f(i)+f(g)] indicates "protect the components PLUS grow the system." There's no adaptive value in focusing on either/or, only on both simultaneously & inseparably. And one, isolated human is as vulnerable as an ant isolated from it's nest - both are toast.
That co-optimization approach gives us tremendous flexibility to vary both sub-functions in different settings.
You should read about dichtyostelia, the social amoeba. They're a species that is remarkably analogous to the semi-social human species.
https://www.google.com/search?sourceid=chrome&ie=UTF-8&q=dichtyostelia&qscrl=1
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