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There are two categories of anti-capitalists: murder/suicides and liars.

The first can be divided into two categories: negligent (the majority) and intentional (the lunatic fringe). The negligent simply don’t know what they’re talking about, and should they succeed will be incredulous for the few seconds before they join the 6.5+ billion people their negligence killed off. The intentional are actually desirous of destroying the facilities that provide the necessities of life for the vast majority of the people on the planet, but since they’ve never been farther than ten steps from a sidewalk when outside, their delight (should they win) will be quickly replaced by the same expression as found on the negligents’ faces.

The second category, the liars, is populated by those who understand that “capital” is the resources diverted from living expenses to provide the means of production, and intend that that should continue to be the case. They simply want all the capital assets to belong to a single entity, with themselves and their friends in charge of that entity — which is to say, they aren’t anti-capitalist at all (hence “liars”), they are monopoly capitalists on a scale that would give John D. Rockefeller pause.

Protest as you will. The analysis stands.

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I have no interest in either defending or attacking religion as a meta-subject. As with Norm Geras’s current essay on the subject, which responds to a piece by Derbyshire, that “debate” always ends up in the modern equivalent of “how many angels can dance on a pin-head?” There is another, perhaps more profitable, angle.

Societies can be thought of as analogous to organisms. Analogy is always suspect because exact analogies do not exist, and it is easy to fall into wrong thinking by following the analogy too far. Organisms have definite edges; it is possible to point to two points in space and say, “this is part of a wolf, and this is not.” Societies are much less well-defined, and merge into one another at the fringes. Still, though, we can and do think of and describe societies as identifiable subsets of humanity, as “nations” or “ethnic groups” or “tribes” or “cultures”, and at least some of the qualities of organisms apply to those identifiable subsets.

One of those qualities is evolution. Societies change by adopting new practices. If the new practice promotes success of the society and its members, the society grows stronger and larger; if a new practice is destructive the society shrinks and becomes weaker, and may disappear entirely. This is a reasonably exact analogue of the evolution of organisms, with the primary difference being that not all new practices follow the Darwinian model by appearing as random mutations; they can also be acquired, Lysenko-style, either by rational assessment of what is needed for success or adoption from an adjoining society seen as more successful.

Experience shows that the “rational assessment” is rarely carried out, and that when practices are adopted from adjoining societies it is rarely or never because they are rationally seen as success-promoting. From the point of view of the members of any society, the practices they follow simply appeared de novo; and, for the most part, neither the members of the society nor onlookers from outside it can define the specific success-promoting aspect of any particular practice. Societal practices appear to be arbitrary and lacking a rational basis. They must, however, be preserved; it is specifically the set of practices or customs the society employs that define it as contrasted to others, and it is those practices which have contributed to its success as a society.

This is the historical role of religion, and it seems plausible to suggest that it may be the origin of religion. Apparently arbitrary practices are codified into a rule-set, and taught to new members of the society as necessary practices. Neither the members of the society nor any putative observers can define the source of those rules, because they “just growed” as new practices were introduced and resulted in success or failure, nor can anyone define just why a particular practice promotes success and must therefore be preserved. The Rules are therefore attributed to some force outside the society — which is true, the force being the inexorable progress of evolution — and, with the urge to personify external influences which appears to be well-nigh universal, that force becomes Deity, the One(s) Who Must Be Obeyed.

Arguing about whether religion is “good” or “bad” is therefore effort poured into spinning the hamster wheel, getting nowhere with extreme vigor. The Rules remain arbitrary and capricious; they must nevertheless be codified and enforced, or the society adopts practices that do not promote success and consequently fails. The forces that promote success or failure are not at all obvious, apparent, rational, or reasonable; they appear to come from some outside source, and such outside forces are inevitably personified by individual human beings. Religion therefore appears, willy-nilly, in every society. It is amusing to see environmentalists declaring themselves rational and scientific while promoting the myth of Gaia, the Mother Earth. It is somewhat less amusing to see the Left striving to obfuscate their personification of the Inevitable Progress of Economics, as explicated by the Prophet Karl.

One corollary of that error is the assumption that since The Rules are arbitrary they can be modified at will. God does not exist; it follows that His Rules are invalid, and societies may do as they please. This ignores the evolutionary aspect (which, in most cases, is in fact the goal of those proposing New Rules). The practices or customs of any particular society are, by definition, those that led it to be sufficiently successful to exist in present time, just as the attributes of an organism are the ones that led to its species being successful enough to survive to be seen. Evolution takes a long time to work; random mutations may cause an organism to possess a trait that leads to failure by some subtle effect, so it may persist for a long time even though its species will eventually die out, and random alterations of societal practices may have some side-effect that will eventually destroy the society even if they result in short-term advantages.

That, in turn, leads to a thought: What makes us think our ideas are entirely new and unprecedented? Humans have lived in more-or-less-organized societies for many, many millenia, and while our predecessors didn’t have access to the information we have accumulated over that time, there is no reason to suspect that they were our intellectual inferiors. There is therefore no reason to suspect that our new, liberal, Progressive notions didn’t occur to somebody a long time ago; the only reason we might have to assume that this is the case is that no precursor society exhibits those practices. That might also result from those ideas being adopted by societies which did not survive and are therefore not present for us to refer to, while those societies that did not adopt those practices grew, thrived, and are therefore visible in the present day.

Early humans, lacking fangs, claws, or an abundance of fast-twitch muscle, had to live by their wits, thus conserving “intelligence” as a trait of the human species. There are distinct morphological differences between male and female human beings, but they are insignificant beside the difference between a human being and, say, a saber-toothed tiger, and there are almost no intellectual differences between men and women, certainly as far as raw processing-power goes. It “stands to reason” (haaaark, spit!) that a species that survives only by employing intelligence would necessarily employ all the intelligence it could put to bear on the problem of survival, and female human beings represent at least half of the available supply of intelligence. And, yet, no society which has survived to the present day allows full emancipation of women with consequent full use of their intelligence as a promoter of survival and success — in fact, the norm is “patriarchy”, denoting near-complete exclusion of women from the decision-making process except as secondary influences on men. Might it be that Evolution, whether or not personified as $DEITY, is trying to tell us something?

Smitty, Stacy, and others calling for the abolition of the Federal Reserve are treating the symptoms, not the disease. It’s the equivalent of curing gout by having leeches drink the excess blood, or treating schizophrenia by relieving the pressure on the brain.

Now hear this: We have a fiat currency, and we will have fiat currency for the foreseeable future. “Hard” currencies have failures and drawbacks of their own. It’s just been so long since anybody lived under a hard-currency regime that we’ve forgotten why we went to fiat currencies in the first place.

The only choice we really have is who is to manage the fiat currency, and the problem there isn’t that it’s fiat currency, it’s slapping Maserati badges on it and turning it over to incompetents who aren’t quite sure which end has the headlights but are absolutely certain that they need no further training or experience behind the wheel. To be scrupulously fair to Bernanke & Co., it is perfectly possible, even likely, that the combined wisdom and expertise of every economist since the concept became current would not be sufficient to manage the situation created by people who Want It Now and are blithely unconcerned about the cost — Daddy will whip out the credit card, as usual.

People with Great Ideas quite often fail to ask themselves, “What happens after I succeed?” Eliminating the Federal Reserve has exactly nil, nada, zero, zip, no chance whatever of returning us to the Good Old Days of a gold double eagle in every pocket and a chicken freshly killed by a virtuous libertarian hunter in every pot; to begin with, the Good Old Days are largely mythical, based on remembering the chicken and forgetting the chicken shit. There will be fiat currency, and it will be managed, and trading the Federal Reserve for the Bank of the United Nations does not strike me as a well-thought-out transaction.

 

We don’t have freedom of religion in this country.

We can’t. Not “we don’t want to”, not “we shouldn’t”; can’t, as in “it’s impossible”. Not even antigravity impossible, either — current science says antigravity is impossible, but if scientists discovered something new it would be possible without contradiction. We’re talking “red and blue at the same time” impossible, a direct binary logical contradiction between mutual exclusives.

“Exclusive” is the key concept. Religions worthy of the sobriquet are exclusivist, declaring that theirs is the One True Way and all others are somehow defective[1]. This is almost, but not quite, always accompanied by a duty to go forth and teach the nations, bringing everybody to the One True Way. So far, so good. Each cat his own rat, and evangelizers are trying to do their targets a favor by helping them Get Right With God (however that particular religion envisions $DEITY). Evangelists may be annoying, but we don’t execute people for cutting us off on the freeway or laboriously counting change in the checkout line, either.

The trouble comes with religious practices. Every religion has God-commanded things adherents must do in order to remain within the religion, and some of those range from vastly annoying to destructive of societal cohesion. Islam, for instance, requires killing non-Islamics if they can’t be convinced to convert, and it isn’t the only religion that requires that. Baptists and Buddhists (among others) have to be alive to practice their faiths; if Muslims have freedom of religion, including killing infidels, the Baptists and Buddhists do not have such freedom. The contradiction cannot be resolved. If one group has freedom of religion, including religious practices, the others cannot.

There are lesser conflicts. Our society frowns on murder. There is more than one religion that either allows or demands sacrifice, including human sacrifice; by the tenets of the religion a human sacrifice is not “murder” but a sacrament; to the rest of us it’s unjustifiable killing. Again, the contradiction cannot be resolved because we have a mutually exclusive set of requirements.

What we do have in the United States and most of the West is religious tolerance. Private worship is just that, private, and nobody’s business but the worshipper’s; practices that don’t deviate too far from the societal norm are allowed, though they may be disapproved; practices that deviate beyond those bounds are forbidden on a secular basis. Adherents of some religions are forbidden to engage in some of the practices required by their faith, and thus do not enjoy full religious freedom.

But what sets the norms?

Religious practices, like most things, are created by evolution. Societies evolve just as species do. Practices arise within a society. Those practices either promote the success of the society, are neutral in their effect, or are damaging to societal success. Societies that adopt damaging practices fail to survive and perpetuate themselves, and so fall out of History, leaving few if any traces. Societies that adopt success-promoting practices survive, grow, and perpetuate themselves.

The phrase “survival of the fittest” is pithy, apt, and wrong. What evolution guarantees is survival of the fit enough in the context in which the species or society exists. All of the societies we encounter today have passed this test — the practices they have adopted are sufficiently productive of success that they are fit enough to have survived the tens or hundreds of millenia since human societies have existed.

None of the members of a society have, or can have, any clue as to where their practices came from. They arose spontaneously and at random; perhaps one of the members of the society, long ago, had a brainstorm or a bad dream, leading him or her to do something new. That new practice spread to the rest of the society and contributed to its success (as we know, because the society has survived[2]), but its originator is long forgotten in the mists of ailing memory. Lacking any knowledge of where the practices came from, the members of the society attribute them to God as Commandments. Religions have each their own set of societal practices, codified as the Orders of God because their source is evolutionary and therefore not evident.

There are several such sets of practices — religions — in existence today, all of them successful in terms of survival of the fit enough. One of them is Islam (“successful” is not synonymous with “nice”). Another is often simply termed “Christianity”, although it is a complex mélange of Judaism, founding Christianity, and Roman practice as modified by the historical Church and the so-called Enlightenment. Judæo-Christianity (for short) is currently far and away the best promoter on the planet of societies which feed their children and produce wealth and comfort in their members (although Buddhism comes close).

The United States is not “a Christian Nation”, but its Founders and the Framers of the Constitution were firmly embedded in the Judæo-Christian belief system. Some of the Founders were Believers, and some were not, at least as understood in modern terms. “Deism” is properly a specific religion with its own set of imperatives, but it does include acceptance of a set of practices as leading to success whether or not attributed to $DEITY, so it makes a reasonable catchall for the attitudes of the Founders, whether or not any of them would have described themselves as Deists — and it sits well within the Judæo-Christian tradition.

One of the significant components of Judæo-Christianism is the matter of sacrifice. It would be possible, with some work, to dig through the Pentatuch and derive a fundamentalist version of Judaism which permits or even requires human sacrifice, but Judaic tradition does not support such a thing (or even animal sacrifice) in its current incarnation(s), and in fact no such sect currently exists. The Christian tradition has no need for human sacrifice because sacrificing the Son of God suffices once and for all, and rejects animal sacrifice for many of the same reasons Jews do. This, alone, would go a long way toward serving as the basis for a cohesive society, and there are many other Judæo-Christian Commandments that are also supportive of societal success; “Vengeance is mine, saith the Lord” is somewhere near the top of that list.

Those are the norms. Religious practices which fall within the (rather broad) limits of the Judæo-Christian ethos are freely permitted; those which do not are deprecated or forbidden, and adherents of religions which require them do not have religious freedom. Atheism falls snugly under that umbrella — yes, atheism is a religion; nothing makes that more evident than evangelical atheists’ hysterical and forceful attempts to suppress visible religious practices, or, rather, visible other religious practices — so long as the atheists accept the practices as societal norms. That’s how the Founders saw it; when they spoke about “religious freedom” they meant freedom within the Judæo-Christian ethos, and they were dismissive (sometimes sneeringly so) of religions that did not fall within those limits. The structure they built was much more elastic than they themselves imagined, and today we can accommodate a much wider variety of faiths than they contemplated — but practices that are endemic to non-Judæo-Christian religions and contradict the Judæo-Christian ethos are not, and cannot be, accommodated. Attempts to do so are self-contradictory and destructive.


[1] Buddhism, which has a Prophet but no Deity, is treated as a religion in Law. Close enough for Government work is exactly right.

[2] Compare and contrast the Anthropic Principle, as discussed previously.

There are two answers to that question, Mr. Reeves. (Via Instapundit).

First: One of the basic human drives is to be the Boss. It’s the result of evolution working on the fact that human beings are relatively weak compared to animals, and can accomplish more in groups than as individuals or even the sum of individual efforts. Operating in groups requires coordination, so that the individuals in the group are aligned with the group’s goal. We call that coordination “leadership” or “management”. The group’s leader is quite properly regarded as having created the extra value resulting from group effort over that of the sum of individual contributions without leadership, and is rewarded for that contribution by an increment of wealth, including availability for sex.

However, there’s little or nothing there for evolution to work on as regards individuals. Group organization has evolved over time, and one of those factors is that groups are somewhat better able to select leaders which will make them successful, but the leader has more opportunities to reproduce than the members regardless of whether the group is ultimately successful or not. That means there’s a weak correlation (if any) between ability to manage or lead and desire for a leadership position.

Government, once in place, provides an ample set of positions carrying with them the trappings of leadership, including the ability to boss people around. However, Government is, and has always been, arranged so that its Chief is the one carrying the can for failures. Individuals below the Supreme Leader can always blame Teh Leader for failures, so they are not selected against for management or leadership failure. The drive to be Boss exists, like every other human attribute, in a distribution, with some feeling it strongly and some weakly if at all; Government therefore disproportionately attracts those with a strong drive to be important (“fire in the belly”, in the memorable phrase) but does not negatively select for inability to do something effective with the leadership position once it’s gained.

It’s another corollary of the principle behind Gresham’s Law and the Peter Principle. Government, over time, becomes populated with individuals with a strong drive to be Boss but little or no ability to perform the duties of Boss. It might almost be a definition of Government that it is composed of people who would stop at nothing to become Boss, but have a feeble or no ability to manage or lead. It should not be surprising that the result is expensive and ineffective.

Second: Note that the activities promoted or supported by Government tend to be things that the society doesn’t need or want, or doesn’t any more. Rail transportation sits somewhere near the top of that list, and may serve as an exemplar. Rail transportation is somewhat more efficient in terms of resources expended than individually-directed vehicles — but the latter are enormously more flexible, both in terms of where the source and destination of goods might be and in the ability to expand or contract the system according to the need for transportation. Society therefore cheerfully pays a relatively small penalty in efficiency to gain an enormous increment in flexibility.

One of the aspects of leadership ability is time-binding, the ability to recognize change and adapt to it. Since the individuals populating Government are ineffective leaders, they will fail to recognize social change and attempt to preserve the existing system. They are therefore eager to subsidize things the society no longer wants or needs, or no longer wants or needs to the degree they exist, and that’s always expensive because it involves shifting resources by fiat from the capability society wants to the legacy capability being preserved; in this case, society wants flexibility at the expense of efficiency, but Government tries to preserve rail at enormous expense. As more and more societal changes occur, and the feeble “leaders” in Government try harder and harder to stifle them rather than get out in front of what society wants, the things sponsored by Government become more and more expensive — and other things perforce become less expensive, because Government is siphoning off resources that would otherwise be used to support them, and if they are to exist at all they must do so on fewer resources.

The problem is made more acute when there is an idealistic or ideological basis for the things that work less well than what society develops on its own. Individuals in Government then have not only their innate tendencies, but a strong motive to declare that the Old Ways are Good For You and the new ones are Bad. Those individuals who do have leadership ability will then exert themselves to see that the population is compelled to do what’s Good For Them, and that transfers more and more resources to Government, leaving non-Governmental activities even more parched for resources. It is thus inevitable that Government becomes more and more expensive, while non-Government activities become cheaper or fail to exist at all.

As noted by Kathy’s correspondent. err…

“Yo, Roscoe, it’s that time again. Pay up.”

“Um, I’m real sorry, Guido, I just don’t have the money.”

“That ain’t how it works, you know that? The deal is, every Saturday.”

“Yeah, I know, an’ like I said, I’m sorry, I just don’t have it. I was gonna knock over a liquor store last night an’ get it, but…”

“But what?”

“But I looked, an’ my gun license is expired, see? Ran out last Wednesday, an’ the office don’t open ’til Monday morning. I need to run down there, an’ then I’ll get your money, Tuesday morning for sure.”

“We.e.ell… all right, I can see you ain’t got much choice. But Tuesday morning for sure, you got that? And it’s gonna cost you an extra ten percent late fee…”

Yeah, riiiiiiight.

 

Norm Geras comes across a discussion of the multiverse hypothesis, and plaints:

Come on, help me out, someone who understands the science. It’s a question I’ve posed before, but I’m still none the wiser more than five years later. The context of my question is the hypothesis that ‘our universe may be just one in a vast collection of universes known as the multiverse’; and the question itself is prompted by this sort of thing… There has to be a way of explaining this that saves it from its prima facie air of total unreasonableness.

The problem is, Norm has it backwards. (This happens a lot.) The anthropic principle, which is what is being invoked at the “this sort of thing” link and is causing him puzzlement, doesn’t specify a cause, much less declare humans the cause of anything. Where a causal relationship exists, it goes the other way.

There are a lot of things in physics that are (currently at least) unexplainable — not just “we don’t know”, with the implication that maybe we could find out with the right experiment, but inexplicable a priori. For instance, there’s a quantity called the “Fine Structure Constant“. Its value is so close to 137 that for years it was thought to be an integer, and because it’s calculated as mass/mass it has no units, so it’s the same in the metric, traditional, and furlong-footnight-stone systems. There’s no discernable reason it should have that value; scientists have been looking for the “why” ever since it was first defined, with no tiniest glimmer of a way to find a clue, much less actual evidence — but if it were different we wouldn’t be here, because many processes go the way they go because of that value.

The anthropic principle doesn’t say the fine structure constant has that value because we’re here; it says we’re here because the fine structure constant is what it is — if it were different it would still be what it was, but there wouldn’t be any physicists to calculate it. It answers the “many worlds” and “multiverse” hypotheses by saying, in effect, “So the f* what? Pay attention, people!” As such, it’s philosophical guidance for scientists rather than a physical law.

The principle is contentious because it is mainly aimed by physicists at mathematicians. Mathematics is perhaps the ultimate anthropopism; it’s not at all clear why it’s possible to use math to support descriptions of the Universe, no causal relationship that means the math operators must have physical meaning. It is and they do, but it’s purely a matter of pragmatism. At the higher levels, mathematics is a way for people who find card games and World of Warcraft boring because they’re too simple to entertain themselves and one another. The fact that it often turns out to be useful is merely a delightful coincidence, made more emotionally satisfying (to the mathematicians) by putting the nerds who couldn’t play dodgeball in school at the top of the “scientific” heap.

Mathematicians delight in contriving new, complex, and abstruse gimmicks and pursuing them to their conclusions, sharing them with other mathematicians in a genius-version of “can you top this?” Oddly enough, in many (perhaps most) cases the puzzles they solve for their own amusement turn out to have physical meaning, and physicists are accustomed to finding some effect and going to the mathematicians looking for a way to describe it usefully. Meanwhile the pure mathematicians are off in their usual flights of fancy, formulating mathematical systems that don’t have real-world application for their own edification and entertainment. The anthropic principle is physicists saying to mathematicians (and physics theorists, who are today mostly mathematicians in lab coats) that such pursuits are the equivalent of playing Solitaire instead of finishing up that proposal, and could you get back to some useful work, please?

“There is no fascist like a liberal in charge of something.” — Anon (by choice)

Norm Geras again addresses “human rights”, in the context of a review by John Gray of Samuel Moyn’s The Last Utopia: Human Rights in History. (I haven’t read the Moyn; I’m responding to Gray, and to Norm.) Gray is a European Leftist of the school that excoriates American intervention in Iraq, and seeks to assign moral repugnance to that intervention, and to George W. Bush and Tony Blair for conceiving it and carrying it out; he uses his review as a springboard to support that assignment. His focus is to deprecate the argument that the intervention secured human rights to Iraqis in some degree, and his method is to deny the very validity of “human rights” as a reasonable proposition. You should read both his essay and Geras’s response before continuing, lest much of this be meaningless.

Geras extracts and numbers eight propositions from Gray’s essay. I balk much earlier than he does, at #2 and #3 taken together. Gray’s formulation (“secured”) makes it clear that he has, like much (if not all) of the Left, confused natural with constructed or [sneer] positive [/sneer] rights. Natural rights can be violated, but have no need to be “secured” — one may kill, thus violating the victim’s right to life, but absent that intervention the right is exercised freely.

It is only the “positive” rights that can ‘only be respected in the context of an effective modern state’. Should a food-producer be so surly and uncooperative as to fail to recognize the “right to nutrition” of another party, it is necessary to send thugs the police to “secure” the “right” by forcing him to disgorge.

#4 is indeed baloney, but neither Norm nor Gray is on point. The essence of natural rights is that a State that avoids violating them is more stable. A State that avoids killing its citizens for trivial reasons is less likely to find that those citizens take up arms against it; a State that does not punish free speech is more likely to hear and address its citizens’ concerns, and thus less likely to require instruments of oppression; a State that does not interfere in the people’s pursuit(s) of happiness is less likely to find itself resented and opposed. Such a State is also likely to be a less uncomfortable neighbor — the tactic of demonizing the folk on the other side of the river in order to distract the people’s attentions from State misbehavior is very old.

It is beyond doubt that a cynical and self-interested apprehension of the last point was one of the motives for the invasion of Iraq. Saddam’s regime was a very uncomfortable neighbor, and relieving that discomfort was one of the motives, perhaps a primary one. Two thoughts occur: First, that I see no moral or ethical objection to a “win-win” in which the Iraqi people benefit as much as or more than the United States does; Second, that people who are still willing (as the Left, especially the European Left, is) to excuse, or even approve, e.g., the USSR’s intervention in Czechoslovakia, made on the ground that the regime thus overthrown was an uncomfortable neighbor, have no standing to criticize another State’s intervention on the same ground.

Every action, from rolling over in bed to launching a thermonuclear war, sets off a chain of events that is in many ways unpredictable and may have a wide range of possible outcomes. In the case of Iraq, the likely range of consequences was bound by, on the one hand, a worst-case result (establishment of a new but equally uncomfortable regime, perhaps theocratic) and a best-case one (creation of a liberal democracy). There is no reason beyond blind political partisanship to suppose that Bush, Blair, et. al., were unaware that the range of possibilities existed, and every reason to suppose that they were aware, since the efforts they directed have consistently aimed for the best case while accepting that a lesser result might be all that could be reasonably achieved. The governing motto is “aim high, at least you won’t shoot your own foot”.

Gray’s points #5 and #6 are, again, based on the necessity for violent intervention to secure “positive rights”, coupled with the notion that the State should have a monopoly on violent intervention; utopian, indeed. #7 is non sequitur, applicable to the case only because of Gray’s purblind partisanship; “politics”, the term subsuming an astonishing range of possible actions, is an inescapable part of anything involving two or more people, and to suppose that any politician is unaware of that says more about the supposer than about his target.

#8, again, confuses natural with “positive” rights. It is in the interest of the State — more properly, in the interest of the individuals who comprise the mechanisms of the State — to recognize the natural rights, because that results in stability, with consequent perpetuation of their powers and perquisites. Framing that as a moral or ethical question is, to my mind, an error precisely because it leads to “positive” rights. An actor within a regime who self-limits his power by refraining from interfering with natural rights can remain relatively secure in that limited position. A member of a regime which must reave away the farmer’s right to his own produce in order to guarantee to others a right to food, or suppress free speech in order to support a right not to be offended, must expect to be resented and therefore opposed, and consequently must seek greater and greater power for himself and the regime in order to overcome the opposition and maintain his position. I submit that addressing it on that pragmatic basis is more likely to achieve a happy result than anything based on ethics, morals, or “compassion”.

Donkeys, like sheep and goats, will eat the grass down and pull the roots out so it can’t grow back. Cows and horses don’t do that; they graze all the way down to ground level, but leave the roots (and, usually, a bit of green), and when Spring rains come there is more grass. Goats don’t really like grass, and will eat the weeds down, which is a good thing. It’s really only sheep and donkeys that destroy their later food supply while satisfying their immediate hunger.

Bad tax policy very often ends up like a donkey grazing. It fills the immediate need but uproots the precursors to further growth, producing revenue in the short term while damaging the economy it feeds from in the long.

Economists at Bank of America Merrill Lynch say one key to a jobs recovery is an improvement in housing — because so much job creation is driven by new businesses that have in recent years been financed in part by home equity borrowing. (Via Instapundit)

An accountant in a piece I read not long ago was amazed and aghast that the United States “double taxes dividends”, that is, charges taxes on corporate profits before they are distributed to stockholders. What’s amazing is that the accountant quoted is from New Zealand (sorry, I lost the link), where the ideal of governance is European-style Social Democracy, though they don’t call it that.

The way it’s supposed to work is this: People who have assets surplus to their immediate need can turn them over to businesses, who use those resources to amass capital in large enough amounts to produce the means of production. Production satisfies the needs of the populace, who purchase the goods. Profits from those sales flow to the business owners, who use them to augment the means of production. This virtuous cycle contains both positive and negative feedback loops — negative, in that goods and services that do not satisfy the needs of the populace do not return a profit and are thereby discouraged; positive, in that goods and services that do satisfy the needs return profits that go to increase the production of them.

A “corporation” is simply a legal and social structure that facilitates the operation of the cycle. The owners of a corporation are the stockholders — “shareholders” in BritSpeak, and that’s really a better term. Each shareholder owns a share, a portion, of the corporation, and receives a proportional share of the profits. Shareholders acquired their shares by sacrificing their surplus, or “investing”; the returned profits replace that, augmenting the surplus, which can then be used for further investment, which results in more goods and services. Returned profits can also be used for consumption, but that simply widens the distribution of the benefits — consumption, that is, purchasing goods and services, results in profits to businesses other than the specific one represented by the investment, propelling the cycle elsewhere.

Taxes damp the cycle. Taxing profits makes them smaller (well, d’oh) and thus reduces the surplus available for investment. Government needs revenue, and therefore must tax. Shareholders in a corporation are, almost by definition, “rich” — that is, they have assets surplus to their immediate needs. Taxing the rich for revenue makes sense, because they have lots of assets (making the collection efficient), but care must be taken to extract revenue without totally breaking the virtuous cycle of investment — production — profit — investment. Taxing the rich to total destruction breaks the cycle, resulting in reduction or elimination of production and consequent failure to meet the needs of the populace.

Taxing the corporation makes no sense whatever. Profits taxed away are not available to shareholders for further investment, which damps the cycle — and has the further pernicious effect of making shares less attractive to those with surplus, which damps the virtuous cycle even more. Taxing both the corporation and the shareholders is eating the grass to the roots, so the rains produce only mud. The ass has an excuse: it isn’t sapient and cannot be expected to be forethoughtful.

Double taxation and “soaking the rich” have been U. S. tax policy for a long time, and the results are catching up to us. Genuine capital formation — amassing the wherewithal to build the means of production — hasn’t taken place for a long time; business have, instead, gotten their capital by borrowing. The profits of the enterprises have thus flowed not to genuine investors, members of the populace, but to banks who insist, quite properly, that they be repaid. “Shares” are no longer valuable because of the profits they will return from production of goods and services; they have become in reality “stock”, items that have some existential value depending on the ability to sell them later to someone else, making the “stock market” into a frenzied exchange of tulip-bulb futures. Less investment means fewer means of production, which means less production, which means more and more of the needs of the populace are not met — and also means fewer and fewer “rich” to tax, which means less tax revenue.

This, ultimately, is the cause of unemployment. Workers are needed to operate the means of production. If there are no means of production, there is no need for workers. Worker complaints about “offshoring” are correct in essence but mistaken in emphasis — if production is to occur at all it must happen where the means of production are available, so workers are only needed where capital formation (by whatever means) can occur. If tax policy in the United States breaks the investment — production — profit — investment cycle, production and employment will move to where the cycle is permitted. The ass et its fill, and wonders where the green grass went.

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September 2019
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