Monday, October 28, 2013
Sunday, September 1, 2013
Collectivism vs Individualism - What is your default position?
There is a long running battle in the arena of ideas between the advocates of collectivism and advocates of individualism. One trap that some individualists fall into from time to time is in accepting the premise that an individual never acts in the interest of a collective. Belonging to or acting in the interest of a collective does not make one a collectivist nor any less an individualist.
Most human beings oscillate between individual and member of a collective all day, every day. Sometimes you act purely in your own individual self-interest. Sometimes you act as a family member, a citizen, a parishioner or club member. When you act as a member of a group, association or collective, you put the interest of the organization or association as a whole first. This may or may not conflict with your individual self-interest at any given time.
How is this different from collectivism? Well, an individualist decides on their own if, when, why and for how long to take on the role of group member. One may make a decision favoring the group one moment and favor ones self the next. The oscillation is entirely up to the individual. Of course an association may choose to disallow one's membership based on one's actions, which is fine, so long as they do not disallow one's departure. An individualist chooses to join and maintain good standing as a member of a group because doing so suits their own self interest, as defined by that individual.
A collectivist always puts the group first. Acting in one's own self interest is considered a weakness; a transgression; something one should feel bad about. The group's interest are determined by leaders, elders, some group of elites who are more in tune with the greater good than the individual members. A collectivist serves the group out of a sense of duty. It is not for them to ask why, but simply to conform and to serve. Understanding may be helpful, but is not necessary. One does what the group wants because the group wants it. There are no other considerations.
To summarize, an individual is a member of a collective when and if it suits them. A true collectivist is never an individual, except in moments of weakness. The Progressive movement is an attempt to shift human behavior away from individualism and toward collectivism. I wont presume to tell you which you ought to be, but I think it's important to recognize the distinction.
Most human beings oscillate between individual and member of a collective all day, every day. Sometimes you act purely in your own individual self-interest. Sometimes you act as a family member, a citizen, a parishioner or club member. When you act as a member of a group, association or collective, you put the interest of the organization or association as a whole first. This may or may not conflict with your individual self-interest at any given time.
How is this different from collectivism? Well, an individualist decides on their own if, when, why and for how long to take on the role of group member. One may make a decision favoring the group one moment and favor ones self the next. The oscillation is entirely up to the individual. Of course an association may choose to disallow one's membership based on one's actions, which is fine, so long as they do not disallow one's departure. An individualist chooses to join and maintain good standing as a member of a group because doing so suits their own self interest, as defined by that individual.
A collectivist always puts the group first. Acting in one's own self interest is considered a weakness; a transgression; something one should feel bad about. The group's interest are determined by leaders, elders, some group of elites who are more in tune with the greater good than the individual members. A collectivist serves the group out of a sense of duty. It is not for them to ask why, but simply to conform and to serve. Understanding may be helpful, but is not necessary. One does what the group wants because the group wants it. There are no other considerations.
To summarize, an individual is a member of a collective when and if it suits them. A true collectivist is never an individual, except in moments of weakness. The Progressive movement is an attempt to shift human behavior away from individualism and toward collectivism. I wont presume to tell you which you ought to be, but I think it's important to recognize the distinction.
Monday, August 5, 2013
Steroids in Major League Baseball - What's the Big Deal?
Another season, another controversy over performance enhancing drugs. Today Major League Baseball announced disciplinary action against a number of players that it has determined used banned performance enhancing substances, including one of its biggest stars, Alex Rodriguez.
So is the use of performance enhancing drugs really that big a deal. Yes, it is. For one thing, if the leagues says no performance enhancing drugs, that's that. It's their church. If you want their money, you play by their rules. But breaking those rules does damage not just to the integrity of the game, but to other players as well. Real financial damage.
Suppose you're a player trying to negotiate a new contract. What do you base your desired compensation on? Well, for one thing, you might look at players of similar ability and what they are being paid. Now if you have a bunch of players whose "ability" comes from a syringe, or is at least enhanced by it, they've distorted the curve. They've lowered your value by artificially inflating theirs. In fact, if you had clear evidence that the performance of one or more of these players was cited during your contract negotiations, you may well have grounds for a civil suit against that player or players.
The use of performance enhancing drugs in professional sports is akin to wearing brass knuckles under your boxing gloves. It's cheating, plain and simple. You can argue technicalities like the substance you used wasn't specifically on the list, but if you're taking something and you're not sick, you know you're cheating. You're violating the intent, if not the letter of the law. All the MVP awards, records, headlines, trophies now carry very little weight. In fact, they're especially tarnished because you may well have stolen them from someone who would have won them based on their natural ability. Yeah, it's a big deal. I hope MLB takes it further in the future and adopts a "one strike and you're out" rule.
So is the use of performance enhancing drugs really that big a deal. Yes, it is. For one thing, if the leagues says no performance enhancing drugs, that's that. It's their church. If you want their money, you play by their rules. But breaking those rules does damage not just to the integrity of the game, but to other players as well. Real financial damage.
Suppose you're a player trying to negotiate a new contract. What do you base your desired compensation on? Well, for one thing, you might look at players of similar ability and what they are being paid. Now if you have a bunch of players whose "ability" comes from a syringe, or is at least enhanced by it, they've distorted the curve. They've lowered your value by artificially inflating theirs. In fact, if you had clear evidence that the performance of one or more of these players was cited during your contract negotiations, you may well have grounds for a civil suit against that player or players.
The use of performance enhancing drugs in professional sports is akin to wearing brass knuckles under your boxing gloves. It's cheating, plain and simple. You can argue technicalities like the substance you used wasn't specifically on the list, but if you're taking something and you're not sick, you know you're cheating. You're violating the intent, if not the letter of the law. All the MVP awards, records, headlines, trophies now carry very little weight. In fact, they're especially tarnished because you may well have stolen them from someone who would have won them based on their natural ability. Yeah, it's a big deal. I hope MLB takes it further in the future and adopts a "one strike and you're out" rule.
Tuesday, July 23, 2013
Wednesday, July 10, 2013
America's neediness bubble
In economics, a bubble is an irrational inflation of value that ends in a sudden, rapid collapse of value. The inflated values are usually the result of actions taken outside the marketplace (i.e. by government). we've recently seen bubbles in Internet stocks and in real estate and now we're experiencing a neediness bubble.
There are now more people receiving some kind of government subsidized food aid than there are full time workers in America. There are also record numbers of people receiving some form of disability payment from the government. What's going on? Have Americans become less able? Is the economy so broken that it's impossible to survive on one's own? Actually, the answer is much simpler than that.
Even economists with differing views on which economic system or model is best are familiar with what incentives are. An incentive is a reward or benefit derived from engaging in a particular behavior. A disincentive is a penalty or disadvantage derived from engaging in a particular behavior. In a free market, incentives and disincentives come about through changes in what people want and/or need, as well as other factors, such as the availability of materials, location, etc. Generally, when something is incentivized, more of it is produced and if something comes with a disincentive, less of it is produced.
In the name of being nice to everyone and getting more votes, politicians have inadvertently incentivized neediness and disincentivized productivity. It's an easy sell. After all, anyone who is opposed to caring for the needy is obviously a callous, cold hearted monster, right? Never mind that such caring often leads to dependency and a lower standard of living over the long term. Elections are usually based on knee jerk reactions, so the long term is rarely a factor.
The government actually runs ads, encouraging more people to take part in various aid programs. It's become much easier to qualify for disability. I've heard many a conversation where people talk about how hard they work to "get their disability." I actually overheard one man, standing in line at the convenience store, proudly stating that he finally got "my 100%" after 7 years. He spent 7 years diligently trying to prove that he was incapable of productive activity. Yes, he walked out of the store to his truck, under his own power, with a twelve pack in one arm and a carton of smokes in the other.
Meanwhile, the more productive you are, the more demands are place on you. Your tax rates are higher. Many government fees are based on a sliding scale, so that the more you make, the more expensive it is. If you employ anyone, the government not only sets wage standards, but working and scheduling condition requirements, and now, the health care mandate. You have to get a license for just about everything; your sign, your scale, your business name; and you have to collect sales tax from your customers on behalf of the government so you can enable all this to continue.
There is still incentive toward entrepreneurship, if you are so inclined. But it is diminishing as regulations, mandates and taxes increase. And many people are not so inclined. They'd just as soon collect a check from an employer or, absent that, from the government. The trouble is we are approaching, if we have not already arrived at, a point where the bubble has to burst. The shrinking number of producers is no longer able to meet the promises made to the ever increasing number of needy.
This is the fundamental flaw of the underlying principal of socialism "from each according to his ability, to each according to his needs." The logical end result is a vast increase in neediness. Perhaps its a good thing to have an actual real life demonstration, not just for socialists, but for those who believe they are capitalists but also believe that some kind of socialist/capitalist hybrid is desirable and sustainable. It's not. But, don't take my word for it. Just watch.
There are now more people receiving some kind of government subsidized food aid than there are full time workers in America. There are also record numbers of people receiving some form of disability payment from the government. What's going on? Have Americans become less able? Is the economy so broken that it's impossible to survive on one's own? Actually, the answer is much simpler than that.
Even economists with differing views on which economic system or model is best are familiar with what incentives are. An incentive is a reward or benefit derived from engaging in a particular behavior. A disincentive is a penalty or disadvantage derived from engaging in a particular behavior. In a free market, incentives and disincentives come about through changes in what people want and/or need, as well as other factors, such as the availability of materials, location, etc. Generally, when something is incentivized, more of it is produced and if something comes with a disincentive, less of it is produced.
In the name of being nice to everyone and getting more votes, politicians have inadvertently incentivized neediness and disincentivized productivity. It's an easy sell. After all, anyone who is opposed to caring for the needy is obviously a callous, cold hearted monster, right? Never mind that such caring often leads to dependency and a lower standard of living over the long term. Elections are usually based on knee jerk reactions, so the long term is rarely a factor.
The government actually runs ads, encouraging more people to take part in various aid programs. It's become much easier to qualify for disability. I've heard many a conversation where people talk about how hard they work to "get their disability." I actually overheard one man, standing in line at the convenience store, proudly stating that he finally got "my 100%" after 7 years. He spent 7 years diligently trying to prove that he was incapable of productive activity. Yes, he walked out of the store to his truck, under his own power, with a twelve pack in one arm and a carton of smokes in the other.
Meanwhile, the more productive you are, the more demands are place on you. Your tax rates are higher. Many government fees are based on a sliding scale, so that the more you make, the more expensive it is. If you employ anyone, the government not only sets wage standards, but working and scheduling condition requirements, and now, the health care mandate. You have to get a license for just about everything; your sign, your scale, your business name; and you have to collect sales tax from your customers on behalf of the government so you can enable all this to continue.
There is still incentive toward entrepreneurship, if you are so inclined. But it is diminishing as regulations, mandates and taxes increase. And many people are not so inclined. They'd just as soon collect a check from an employer or, absent that, from the government. The trouble is we are approaching, if we have not already arrived at, a point where the bubble has to burst. The shrinking number of producers is no longer able to meet the promises made to the ever increasing number of needy.
This is the fundamental flaw of the underlying principal of socialism "from each according to his ability, to each according to his needs." The logical end result is a vast increase in neediness. Perhaps its a good thing to have an actual real life demonstration, not just for socialists, but for those who believe they are capitalists but also believe that some kind of socialist/capitalist hybrid is desirable and sustainable. It's not. But, don't take my word for it. Just watch.
Tuesday, June 25, 2013
China's make-believe boom
China has become the poster child for what neo-fascists like to call
"State Capitalism". It's really not capitalism, but just good old
fashioned robbery, central control and bs. China has been able to post
some impressive numbers in recent years in terms of growth and
employment. Pundits and politicians have suggested that we could learn a
thing or two from the China model and even predicted that the U.S.
would be replaced as the leader of the global economy by China.
Well, it turns out much of the Miracle in Mao Town was smoke and mirrors. They built mega cities that nobody lives in and shopping centers and theme parks that nobody will ever use. All with the intention of keeping people busy, money moving and creating the illusion of prosperity. But all good Ponzi schemes must come to an end and it looks like this one is no exception. No doubt the whole episode has created several new millionaires and billionaires (many of whom have already fled China), but the general public, as usual, got the shaft and will be responsible for cleaning up the mess.
Here's an excerpt from an article on
The Daily Ticker, via Yahoo Finance:
"China’s 'Giant Ponzi Scheme' Won’t End Well: Jim Rickards
In a nutshell, the ‘shadow’ banks borrow from China’s state-controlled banks, use the funds to finance construction projects and sell bonds tied to those projects with yields far above bank savings rates.
“The Ponzi scheme is going on with retail investors…they don’t want 1% or 2% in the bank or even less,” Rickards explains. “The quasi banks come along and say ‘we’ll give you 6%-7%-8%.’ They take the money, invest in these assets that are completely non-productive [with] no way to be able to pay off the debt.”
In true Ponzi scheme fashion, the key here is that the shadow banks use the proceeds from the latest asset sale to pay off investors from prior ventures. “They never sell the assets,” Rickards says. “They sell [new] products and use that money to pay off the old guys.”
Other articles paint a picture of a good idea that didn't work out, rather than the more cynical view that it was never intended to work out.
From FT.com:
"...Much of the country’s economic growth has been driven by the building of its cities. But when the construction runs its course in about two decades’ time, there is a real risk that China will languish as a country “with pockets of extreme wealth and an educated middle class, but whose cities teem with enormous slums and suppurate with entrenched social divisions”.
Given that China was a late-comer to urban development, it had the advantage of being able to absorb lessons from all those that went before. Yet the precedent to which it conforms most closely, albeit unwittingly, is the zenith of urban sprawl and traffic jams: Los Angeles.
Instead of reaping the economic and environmental benefits of dense, mixed-use neighbourhoods, China has gobbled up ever more of the countryside. Vast grids of wide boulevards cut residential districts off from places of work and bear the hallmarks of top-down planning, like some giant, manic game of SimCity.
Built-up areas have more than tripled since 1980, but the urban population has grown by a much smaller 120 per cent. As Miller points out, the urbanisation of land has far outpaced the urbanisation of people."
Whether well-intentioned or not, the marketplace works when it's an expression of the cumulative effect of free individuals engaging in free trade. Yet, politicians and bureaucrats can't stop trying to replace the awesome power of controlled chaos with top-down central planning and edicts from on high. It never works. It never will. But, it's an easy sell because it sounds like it ought to work. People like predictability. Central planning is predictable, and when you get that much money moving around, it provides lots of opportunities for some of it to wind up in a quick thinking central planner's pocket. This Ponzi scheme may be coming to an end, but rest assured, there'll be another one right behind it.
Well, it turns out much of the Miracle in Mao Town was smoke and mirrors. They built mega cities that nobody lives in and shopping centers and theme parks that nobody will ever use. All with the intention of keeping people busy, money moving and creating the illusion of prosperity. But all good Ponzi schemes must come to an end and it looks like this one is no exception. No doubt the whole episode has created several new millionaires and billionaires (many of whom have already fled China), but the general public, as usual, got the shaft and will be responsible for cleaning up the mess.
Here's an excerpt from an article onThe Daily Ticker, via Yahoo Finance:
"China’s 'Giant Ponzi Scheme' Won’t End Well: Jim Rickards
In a nutshell, the ‘shadow’ banks borrow from China’s state-controlled banks, use the funds to finance construction projects and sell bonds tied to those projects with yields far above bank savings rates.
“The Ponzi scheme is going on with retail investors…they don’t want 1% or 2% in the bank or even less,” Rickards explains. “The quasi banks come along and say ‘we’ll give you 6%-7%-8%.’ They take the money, invest in these assets that are completely non-productive [with] no way to be able to pay off the debt.”
In true Ponzi scheme fashion, the key here is that the shadow banks use the proceeds from the latest asset sale to pay off investors from prior ventures. “They never sell the assets,” Rickards says. “They sell [new] products and use that money to pay off the old guys.”
Other articles paint a picture of a good idea that didn't work out, rather than the more cynical view that it was never intended to work out.
From FT.com:
"...Much of the country’s economic growth has been driven by the building of its cities. But when the construction runs its course in about two decades’ time, there is a real risk that China will languish as a country “with pockets of extreme wealth and an educated middle class, but whose cities teem with enormous slums and suppurate with entrenched social divisions”.
Given that China was a late-comer to urban development, it had the advantage of being able to absorb lessons from all those that went before. Yet the precedent to which it conforms most closely, albeit unwittingly, is the zenith of urban sprawl and traffic jams: Los Angeles.
Instead of reaping the economic and environmental benefits of dense, mixed-use neighbourhoods, China has gobbled up ever more of the countryside. Vast grids of wide boulevards cut residential districts off from places of work and bear the hallmarks of top-down planning, like some giant, manic game of SimCity.
Built-up areas have more than tripled since 1980, but the urban population has grown by a much smaller 120 per cent. As Miller points out, the urbanisation of land has far outpaced the urbanisation of people."
Whether well-intentioned or not, the marketplace works when it's an expression of the cumulative effect of free individuals engaging in free trade. Yet, politicians and bureaucrats can't stop trying to replace the awesome power of controlled chaos with top-down central planning and edicts from on high. It never works. It never will. But, it's an easy sell because it sounds like it ought to work. People like predictability. Central planning is predictable, and when you get that much money moving around, it provides lots of opportunities for some of it to wind up in a quick thinking central planner's pocket. This Ponzi scheme may be coming to an end, but rest assured, there'll be another one right behind it.
Sunday, June 23, 2013
Subscribe to:
Posts (Atom)