Monday, July 24, 2017

The economics of waste


There is no particular reason to believe that Charles H. Smith is a Veblen scholar or that he has even read The Theory of the Leisure Class (TOLC). Nevertheless, if someone had been assigned to summarize TOLC, the following would rate an A+ because these are exactly the points Veblen was trying to make. For example, Veblen includes a whole chapter on why the Leisure Classes believe that waste enhances their status, entitled Conspicuous Waste.

This essay is short and sweet, and the reader isn't required to learn a bunch of arcane terms as is the case with a reading of TOLC. Several times in my life I have been asked to "translate" TOLC into modern English. Because I am terrible at such tasks, I have begged off. But I DO think it is a good idea. And however Smith came to write the following, it will be an excellent substitute until someone actually reworks Veblen's classic.
EARTH'S ECONOMY GLORIFIES WASTE, EXPLOITATION, DEBT, EXPEDIENCY AND MAGICAL THINKING

CHARLES HUGH SMITH, July 16, 2017

Humanity appears to default to magical thinking when faced with untenable situations that demand systemic change.

How would extraterrestrial anthropologists characterize Earth's dominant socio-economic system? It's not difficult to imagine their dismaying report:

"Earth's economy glorifies waste. Its economists rejoice when a product is disposed as waste and replaced with a new product. This waste is perversely labeled 'growth.'

Aimless wandering that consumes fossil fuels is likewise rejoiced as 'growth.'

The stripping of the planet's oceans for a few favored species of edible fish is also considered 'growth' as the process of destroying the ocean ecosystem generates sales of the desired seafood.

Even more perversely, the resulting shortages are also causes of rejoicing by the planet's elites, as their ability to purchase the now-scarce resources boosts their social status and grandiose sense of self-worth.

This glorification of waste is the same dynamic that destroyed the civilization on Zork.

Earth's economy also glorifies exploitation, as this maximizes profits, which appears to be the planetary equivalent of a secular religion that everyone believes as a Natural Law.

Thus slavery and monopoly are highly valued as the most reliable sources of profits. If ethical concerns limit the actual ownership of humans, Earth's economy incentivizes feudal arrangements that share characteristics of servitude and bondage. In the current era, the favored mechanisms are over-indebtedness (debt-serfdom) and taxation by the state, which extracts approximately 40% of all labor via threat of imprisonment.

Earth's elites exhibit a pathological preference for micro-managing the commoners via criminalizing much of everyday life and imposing extremely harsh punishments for any dissent or resistance to elite domination.

This is the same dynamic that doomed planetary civilizations in the Blug system.

Earth's economy is currently dependent on depleting fossil fuels and borrowing from the future to fund consumption in the present, i.e. debt. Rather than face the reality that this is not sustainable and pursue other arrangements, Earth's elites have chosen expediency, responding to the inevitable crises caused by depletion and dependence on debt with expedient but ultimately destructive policies that paper over the crises but at the cost of generating greater crises in the next iteration.

Humanity appears to default to magical thinking when faced with untenable situations that demand systemic change. This is eerily parallel to the now-lost civilization of Frum.

It seems Earth's dominant species has selected the most destructive policies and mindsets to glorify and worship. Earth's current civilization is doomed, with near-zero prospects for the necessary transition to a more sustainable, less exploitive arrangement.

Earth's decline is a tragi-comedy, much like the one on Ononon that entertained our home planet audiences for a time." more

Friday, July 21, 2017

Re-upping my Producer Class credentials (again)





The main reason for do-it-yourself home repair is that you can have something in your life that is unaffordable any other way. Pictured here is my new rest-and-towel-off area built on the site of one of the nastier basement bathrooms ever seen or imagined. Among its many features it has an ADA-approved low-slip tile floor, knurled, high-grip, stainless-steel grab bars, an ergonomically excellent bench, and an LED lighting system that delivers almost 100 lumens / sq. ft. It is safe, comfortable, and aesthetically quite pleasant. And best of all, it was built with some of the lowest-cost materials sold in the big-box building supply store in my little town—for example the ceramic wall tile only cost $1.52 / sq. ft. ($16.36 / sq. meter).

But for me, this sort of building is also (and probably mainly) an epistemological exercise. Building teaches many important lessons including:
  • Careful and extensive planning is essential.
  • There is absolutely no substitute for getting it right the first time
  • Inexpensive materials can be made to look spectacular if used with imagination
  • The instinct of workmanship works best with good tools
  • Nothing disrupts a time schedule like a non-standard design or application
No one changes the world quite like the builders. And when the builders got really serious about their applied art, they produced the Industrial Revolution. The greatest errors in economics stem directly from a deep ignorance of the tool-users and what their role in society really is. So I build because I never want to lose touch with these people. It is what separates the economic thinking of this blog from virtually every other economics site on the internet. Unless one categorizes Ben Franklin and Peter Cooper as economists, there are no historical examples of economists who were graceful tool-users. Of course the greatest political economist of them all, Thorstein Veblen, built simple things—which mostly proves my point about how rare it is for the tool-users to be even mentioned in economic debates.

Even so, I look at my rebuilt bathroom and am filled with the calm assurance that very likely no other political economist in history could have built it. And this fact alone significantly explains why so many got so much horribly and disastrously wrong. It is impossible to accurately explain human society without accounting for the tool-users. Moreover, tool-using constitutes a knowledge that is rarely found in books—this is something you must do.

I must admit that most of these lessons had been learned long ago. But this time around, I thought a lot about the intersection between competence and honesty (mostly inspired by the hilarious debate in the movie The Big Short over whether it was fraud or stupidity that drove the housing bubble that crashed in 2007-8). Besides cost containment, my main goal was to have a well-made outcome. Like any such project, there were many jobs I had not done before. When that never-been-done-before job appears, the most important assignment is to take an honest and thorough inventory of the possible assets that can bring this task to a successful conclusion.
  • Is there a Youtube of someone doing the same thing? 
  • Do I have the right tools for fabrication? 
  • Can I purchase suitable raw materials? 
  • Is the planned method within my skill set? etc.
Of course, when there isn't a relevant example to copy, you are thrown into the world of invention where all these steps must be repeated with a lot less help. In these situations where outcomes are less certain, the margin for dishonest self assessment drops to ZERO. Turns out, once again, that the most important core ingredient of competency is honesty.

Unfortunately, this will be my last such project. I recently turned 68 and physically I cannot do it anymore. Especially if only to prove an epistemological point. This project was conducted in a cellar which means everything had to be hauled down a flight of stairs. Some construction materials are pretty damn heavy and clumsy. But I DO enjoy my repaired bathroom. The details of how it was done can be found by clicking the Read more button below.

Thursday, July 20, 2017

According to the Guardian, "How economics became a religion"


If there is one position I have maintained for as long as I have been writing this blog it is that, "Far from being a science, conventional economics is just bad theology."

I grew up in a parsonage. I had religion crammed up my nose from before I could remember. I fell in love with science because it offered a refuge from that sort of thinking. In my old age, I have made peace with much religious practice—SOMEONE has to bury the dead, after all, and this is something religious practitioners do fairly well. But I certainly do NOT want religious thinking around questions that are not religious. I consider someone who would pray that their god would heal their broken brakes to be crazy.

Theological thinking applied to economics is just as crazy. And yet, we see it all the time. And this article shows that the problem has become so obvious, even The Guardian can see it. Of course, as the "left" house organ of neoliberalism, they probably aren't about to do anything meaningful about their new point of view. This probably isn't even much of a start. But as someone who has taken a great deal of flak in life for questioning the "scientific" claims of the economics profession, I do find their new awareness oddly pleasant.

Sunday, July 16, 2017

R.L. Bruckberger on American School Economist Henry C. Carey


Last month I posted a large article on American School Economist Henry C. Carey, The only economists who ever created a national economy. The article was drawn almost entirely from the 1965 Pulitzer Prize winning history book, The Greenback Era: A Social and Political History of American Finance, 1865-1879, by Irwin Unger (Princeton University Press, 1964). One of the most intriguing references cited by Unger was R.L. Bruckberger.

Raymond LĂ©opold Bruckberger was a French priest of the Dominican order. At the beginning of World War Two he requested the order allow him to join a combat unit, and served in the French mountain light infantry and commandos. After the collapse of the French army, Bruckberger became chaplain general of the French Resistance. He was awarded the Croix de Guerre and the medal of the Legion of Honor for his role in the Resistance. After the war, he lived eight years in the United States, researching and writing his book Image of America, published by Viking Press in 1959. Prominent American historian Arthur Schlesinger Jr. wrote a front-page review of the book for the New York Times Book Review, comparing Bruckberger to Alexis de Tocqueville.

One chapter of his book focuses on American School economist Henry C. Carey, and is entitled, "The Only American Economist of Importance" The title is taken from a 5 March 1852 letter by Karl Marx and Friedrich Engels, in which they wrote that Carey is “the only American economist of importance.”

Bruckberger inlcuded some excerpts from Carey that directly assault the key tenets of conservative, libertarian, and neoliberal economic thought. And, of course, Bruckberger frames Carey’s economic thought as being distinct from, and hostile to, today’s economic thought dominated by the British school. Contrast Carey’s belief that man’s struggle to master nature necessitates the creation of a cooperative society, with neoliberals' belief  (as per Margaret Thatcher) that “there is no society.”, only a never ending struggle of personal interests mediated by the working of markets. Carey’s belief also foreshadows Veblen’s analysis of the need for organized cooperation in the industrial processes of production. And Carey's analysis of humanity's struggle to master nature reinforces the point I have made in the past that the most important economic activity a society undertakes in the creation and dissemination of new scientific and technological knowledge. In The Higgs boson and the purpose of a republic (July 2014), I wrote:
....what is wealth? Is it really hoards of cash, or stockpiles of precious metals? Consider: Why do we have computers now, when there were none 200 or 500 or more years ago? Certainly, 500 years ago, all the raw materials that go into making a computer were available. There was lots of silicon laying around, and there was a lot of petroleum, with which to make plastics, sitting in the ground. There was the same presence of germanium and silver, and copper, and whatever else is needed to make a computer, 500 years ago, as there is today. What is so different today that we can make computers now, but could not 500 years ago? The answer, of course, is knowledge - we first had to develop, acquire, and master, the various facets of science that allowed us to make use of those latent natural resources, then apply that science to actual physical processes of production, or what we call technology. So what wealth really is, is the human power of thinking: reason, investigation, hypothesizing, testing, figuring out why things are the way they are -- and then figuring out how that new knowledge can be used to change the way things are.
In other words, the knowledge required to master nature.

One more note: Bruckberger identifies Carey as a Jeffersonian (there is an article in Bruckberger's book devoted to Jefferson previous to the article on Carey). Since Carey was a foremost advocate for the neomercantalist policies of Hamilton—a protective tariff, a national banking system, and massive government investments in infrastructure—Carey thus brings together and melds the two contending factions of early American history: Jeffersonian, and Hamiltonian.

Following are excerpts from pages 156-165 of Bruckberger's Image of America. At the end of this post are more results of an index search in economics textbooks.

Friday, July 14, 2017

Tucker Carlson destroys Max Boot


Tucker Carlson used to drive me into fits of rage. So now he has a gig at Fox News and suddenly, he has almost become a voice of reason. Yesterday, (12 JUL 17) he has Max Boot on his show and proceeded to tear him a new one on the subject of foreign relations in the age of Trump. Whatever feelings I may have had for Carlson (an arrogant, overprivileged rich kid with a career path greased by well-connected parents, for example) they pale in comparison to my loathing of Max Boot, one of the nastier house neocons over at the Council on Foreign Relations whose lies have caused the deaths of thousands (if not millions) of people. As John Lennon once wrote:

There is room at the top they keep telling you still
But first you must learn how to smile as you kill
If you want to be just like the folks on the hill

A Working Class Hero

After Carlson got done with him, Boot was NOT smiling—even though I am certain he smiles a lot for his employers over at CFR.


Monday, July 10, 2017

Missing the opportunity of a lifetime


Former CIA Director John Brennan said today on Meet the Press, "...right before he met with Mr. Putin and talked with him at some length, which I'm glad he did, he said it's an honor to meet President Putin. An honor to meet the individual who carried out the assault against our election? To me, it was a dishonorable thing to say."

Really? The appropriate way to meet a leader of another country is to be nakedly rude—especially concerning an accusation for which not one shred of proof has been offered in over eight months? Here's the deal Brennan. Putin is the first truly democratically-elected president in a country that has existed for over 1000 years. He has approval ratings after being in office for nearly 18 years of over 80% He can conduct press conferences that last over three hours without notes. And you actually believe that such a person deserves scorn?

After somehow surviving the utter BS of the Cold War, I thought that maybe, just maybe, the lies about Russia would stop. I could even tolerate all this mega-lying about Putin / Russia if it were not for the fact that some lifelong friends believe it. There are days when I feel physically sick.

So here's to our Democratic "heroes" who are actually more ridiculous than Tailgunner Joe McCarthy ever was. The other day Maxine Waters confused Korea with Crimea. Nice to know that geography isn't a requirement for high elected office. The people who can believe in "Russia-Gate" are the same sort that believed Iraq had weapons of mass destruction—in fact, they are often the very same people.

We are missing a golden opportunity here folks. If we were to get serious about doing business with V. Putin, who knows how many serious problems facing planet earth could be solved.

Monday, July 3, 2017

Sovereign Debt Jubilee?


Whenever someone suggest that we fund a Green "New Deal" (to use the phrase of Green Party candidate Jill Stein) a howl goes up of "you must be crazy-don't you understand the national debt is already in the $20 trillion range?" And unfortunately, that pretty much ends the discussion. And so we keep doing nothing because paying the interest on the national debt is SO much more important than doing something meaningful to save the ecosystems that make human life possible. Massive death by compound interest, anyone?

The power of creditors to force people to do very unpleasant things is really quite amazing from cultural intimidation, to evictions, to debtors prisons, to various methods of physical torture employed by loan sharks—and all to enforce a "reality" that exists mostly as a line of bookkeeping. Think about it—we have been prevented from doing things that are utterly necessary to the survival of the species because of "information" that exists as an electronic charge in the memory of some computer. This reality is so fundamentally insane that its no wonder the creditor classes must resort to their bag of cultural and physical violence to enforce their claims on your life.

The intimidation must be total because the nature of debt can be changed with almost tiny revisions in law and practice. Here Ellen Brown outlines how Japan is in the process of wiping out half of its national debts with almost invisible changes to the way their central bank operates and asks, "Why cannot we do the same thing?"