malalex

An anti-partisan blog on economics and fiction.

On a boat with company

“In life,” Stewie was warming to the theme, took a sip of beer. Which meant his next works came out hydrated, with a little spray of spittle. “You got two choices - enjoy it now or work it now.”

I fidgeted with the chicken wings. Looking for a piece Stewie hadn’t already chewed on. He nibbled off the meat. The best part. Leaving the chewed-on tendons for me. I gave up, pushed the plate away. “Well, I think you ought to do something you enjoy. Passion. Passion makes life worth living.”

Stew hrmphed. “Good ‘nuff, kid. You try that, tell me how it works out.” He dragged the plate of nibbled wings back to his side of the table. “I’m just tellin’ you how things work. You can ignore me, find out for yourself.” He found a piece with some meat left on it, a piece I’d missed. A little treasure in a big, messy pile. He held up the piece, which pissed me off a little, since he was kind of rubbing it in. “Anyways, you gotta work now, I got a job for you. ‘Nuff.”

He waved his hand for the check, stood up to go to the bathroom. Second time he pulled this on me. I added up the bill in my head, figured I had enough but I’d need it for the boat. So I stood up too and followed him to the bathroom. Walking tight. Keeping my eyes low. Which probably gave it away.

The waitress wore 3-inch stilettos with a whip at his belt. Like a horny school-boy’s version of the Spanish Inquisition, if you can imagine. Anyway that’s the theme here, so it’s hard, really, to say what kind of a person she would be. As in, would she call the cops on a couple of vagrants who walked on a check, or would she just suck it up and continue her whip-wielding, teetering dance of a shift.

Anyway there’s not many options when you’ve got exactly what you need for a boat, and I wasn’t going to make an enemy of Stewie quite yet. Hell, what happens in Italy anyway, they deport you? I was in the process of deporting myself.

So I walked. Stewie was already in the bathroom, squeezing his sweaty bulk through a window. He was making way too much noise. “Fuckin’ Italian windows!” He grumbled as he shimmied himself. Me, I figured windows are all the same, the ‘fucking’ here was skipping on a check with a kid who needs every penny for his last chance. 

Anyway there was no way to block the door into the bathroom, and I didn’t want anybody walking in, so I leaned up against it. It crossed my mind to give Stew a boost, but I didn’t know how he’d react. So I waited. And prayed nobody had to take a piss in the next 5 minutes.

Stewie laughed about it later. After we got to the boat. After we’d caught our breath. After he’d introduced me to Taz. The coyote. I didn’t think it was funny, and Taz was impossible to read. He flicked his cigarette, a long, brown Davidoff, into the breeze and looked out into the harbor. It wasn’t even sun-down and it was already getting cold.

Taz’s eyes flicked to me, back out to harbor. He waved his hand, motioning Stewie away. “Leave us alone.”

Stewie slipped down from a box holding life preservers. “Hell, you two talk all night. I’ve done my part.” He stretched. “What’s to eat?” He waited for an answer, Taz said nothing so Stewie headed to the tower. 

 Taz turned to face me, his big, dark eyes searching my face. I’m glad you’ve come. “ He watched me like he’d brought me a gift, wanted to see if I really liked it.  “Your father’s been in touch with me.”

Me, I was doing my damnedest to hold it together. My hand started shaking on the railing, I pulled it back so Taz wouldn’t notice. “Really?” Despite my best, it came out like a squeak. I cleared my throat. “So, who is my father?”

Are Greece & Spain bringing on "the big one"?

Mises' take on the business cycle, formulated around the time of WWI, says that credit expansions (ie counterfeiting by central banks) inevitably lead to malinvestment, and those malinvestments inevitably lead to a crash. Thomas Woods calls this a sugar high of easy credit, from which we crash.

So are the PIIGS, the European spendthrifts of Portugal, Ireland, Italy, Greece and Spain, the terminal case of this process? When times were good, they spent irresponsibly, and now that the credit dried up and the economy is in recession, they find they can't pay their bills. So what do they mean for the rest of us? 

First off, the PIIGS, in the grand scheme, aren't very important for the global economy, so I don't think it's worth getting into whether they'll drag everybody else. They won't.

I think the more interesting question, for an American anyway, is whether the PIIGS' are canaries in the coalmine, going through problems that are down the road for the US. 

Here, I think the important distinction is what part of the PIIGS crisis has to do with national bankruptcy, and what part has to do with staying in the Euro (obviously not a problem for the US). That is, Greece could repudiate its debt, may well have by now, but this would probably endanger its membership in the Euro, so it trades the carefree ways of defaulting debtors for the straitjacket of German and IMF austerity. 

So, if the US were to go through the same irresponsible dance that Greece has, if we were to end up with 200% GDP in debt, unable to pay it, there would be no Germany demanding austerity, and IMF doesn't have enough money to help us. We'd be on our own. 

Which brings us to the traditional remedy of heavily indebted sovereigns through history - repudiation or inflation. I think both are actually quite popular in a democracy. In particular, I could see the US repudiating the debt held in foreign hands. After all, it's a very easy demagogue to blame foreigners for the crisis in the first place - you see, Japan and China stole our manufacturing, then lent us the money back. It's like I steal your car and charge you to carpool. Bastards are lucky we don't invade, to hell with paying them back.

The second easy demagogue is inflation. The traditional technique has been for demagogues to complain there is not enough money in the economy (eg banks aren't lending enough, consumers can't spend), and the solution is for the government to step in, stimulate demand. Now, once we've started talking about repudiating our debt, it'll be doubly attractive to print the money we need, since no sane bank would lend it. 

As a libertarian, I'm actually not very upset about the repudiation - I would like people to stop lending money to governments, and anything that discourages shifting savings to the state sector is, in my opinion, good. The inflation, however, will be a damn shame. Inflation tends to hit the poorest and those on fixed incomes (seniors) hardest, and unjustly shifts resources to those with government connections (via the Cantillon effect).

Personally, I don't see things coming to this for another decade or two - the US government can still borrow quite a lot, and benefits programs are sustainable for at least another decade. Come 2020, though, you might seriously want to think about gold and off-shoring. And, of course, government could surprise me - they could cut spending, reform entitlement, put the economy on a sustainable path. Care to bet on those odds?

What is the World's Carrying Capacity?

A great post by Shannon Love at Chicagoboyz, noting that "natural resources" are an infinitely elastic term, thus the notion they are "running out" is silly. Rattling Shannon's post around in my head, a post today on LifeAfterAuthority got me thinking about the carrying capacity of earth.

One implication of Shannon's Simonian post is that population growth actually helps, rather than hurts the supposed natural resource problem. While the sci-fi world has, generally, calmed down about over-population since the 80's or so, when population growth began slowing down, environmental hyperventilation remains a healthy market. The consensus these days (by the UN, anyway) is that world population will level off in 2050 or so at something like 9-13 billion. People seem to think 9-13 billion is a large number, and will cause problems. So will it?

The first question is whether the 9-13 is accurate. Even just good old life extension tech (curing cancer, bionic hearts, etc) would raise those numbers substantially. Let's take the extreme tech case - immortality tech drops from the heavens tomorrow, and is instantly universally available (to favelas in Rio, refugee camps in Congo). What happens? 

Well, worldwide deaths today are around 60 million, out of a population of some 6.5 billion. So our pop growth rate goes up 1%. To put that in perspective, since the 1970s, world population growth has declined from around 2.5% to around 1%. So immortality doesn't actually make that much of a difference - we simply get closer to 1970's growth rates. 

Add 1% to year through 2050, and we're talking maybe a 50% increase. Moreover, since the 9-13 billion is supposedly equilibrium, with immortality we get about a 1% rate of growth in 2050 (ignoring family-planning reactions to immortality - it's unlikely people would have 2.2 kids over and over every 70-some years). So, highest estimate is something like 20b in 2050, 30b in 2100, and a 70% increase every century thereafter. 50b in 2200, 85b in 2300 and so on.

The next question is what kind of impact this will have, in terms of crowdedness. If the whole world were as crowded as the UK, it'd take north of 30b people. If the whole world were as crowded as Singapore, which is actually very green and livable, probably not far from an ideal society, in terms of quality-of-physical-life, we'd be looking at around 1 trillion. Now we haven't even started on the oceans (Seattle's boat houses are a nice prototype for sheltered areas), the air (yes, giant Zeppelins), or space.

Moreover, we haven't even began to count what technology would look like with ten times as many people on earth. There's no reason to think the new people will be poorer than today, indeed, given the massive death tax we pay each year (1% of people, aka human capital, die every year), per capita income in the Earth of 85b is quite likely to be substantially higher than today. Also note that population growth from immortality would be roughly proportionate world-wide, unlike pop growth by babies today.

So, even if we held technology constant, and even taking the most population-blimping immortality tech, earth in 2100, at 30b, would be no more crowded than Britain is today. With 5 times the brainpower and therefore tech to mitigate whatever problems do crop up.

The bottom line, for me anyway, is that with 5 times the number of interesting cities, 5 times the interesting people and 5 times the interesting cultural production, I'd much rather live in the bustling world of "over-population" than in the comparatively lonely world of today.

Is Cracked Magazine the future of media?

So I'm reading Cracked.com, where I get all my serious news, and I'm struck by the neutral POV. I mean, your average cracked piece is downright Wikipedian in its neutrality. Equal-opportunity irreverence.
 
This seems weird, since every other non-political magazine I can think of is lefty talking points early n' often. I'm also fairly certain Cracked has no political POV policy. So why is cracked different? And what does it tell us about the future? 
 
I think Cracked, like blogs in general, give us a peep into the emerging mediascape that the interwebs have wrought. In this new world, as Shirkey and Reynolds and others discuss, the intellectual avant-garde, lefty ways and all, lose their gatekeeper powers to a new meritocracy. For cracked, it's a meritocracy of funny writing, rather than some feller with 3 degrees deciding what runs in the zine. Now, the Onion doesn't seem quite as neutral-POV, but then the Onion has permanent employees (thus perhaps elite gatekeepers with journalism degrees who hire them), while cracked tries to crowdsource its content (write something funny, we'll publish it).
 
What's cockle-warming for me is that, whether its individual expertise or funny writing, I think there is more distributed talent floating in the masses then any of the formal media outlets. In other words, the rebels will win, the empire will lose. 
 
Now, it's true the rebels aren't libertarian - Daily Kos is left, HotAir is right - but at least we'll get closer to an actual open debate, rather than the progressive drumbeat we've had for the past 100 years or so. It makes me smile.

Fiction v Truth

Tom Clancy said "The difference between fiction and reality? Fiction has to make sense."

So, too with economic policy. It's a tricky thing to design even incentive-compatible policy. And moreso in economic fiction, where your policies, on some level have to represent what economists call an "equilibrium."

So let's say I want a society featuring omnipotent, uncorruptible, non-state enforcers. Call them Jedi. So I've got to explain why they're uncorruptible, how they've (until this recent pair) avoided exploiting their power to oppress. Indeed, I may assume they do oppress, you just can't see it. I mean maybe Yoda's an ascetic, but are they all? Even the ones with fancy outfits? Surely they must run side businesses here and there. Surely they might punish transgressions asymmetrically, to benefit their son-in-law's newly terraformed moon.

At the same time, consider similarly unrealistic non-equilibria in reality. I've never heard of a street vendor, say, taking payment and then claiming not to have. As in, you buy a coke, hand over the money, and the vendor pretends you haven't paid. I guess in theory it occurs, but logically it ought to occur a lot more. Especially in, say, tourist destinations with foreigners - Thailand, say. Another one is the famous "half now, half when the job's done" routine. Particularly for non-branded labor (say, daylaborers), my sense is very rarely do they take the money and walk, even though they are now getting paid only half for the work (a wage they might not accept in isolation). Then, of course, there's the institution of tipping - logically, it's so not an equilibrium, and if it were you'd expect people to leave money on tables out of the blue, for no reason at all.

So what's the missing ingredient in reality? Why are so many exploitable opportunities left on the table? My guess is people love justice, and suffer disutility from engaging in unfair acts.

Now, this is probably obvious to the non-economists out there, but it does seem a bit of a riddle - if fairness makes people suffer on behalf of doing the right thing, then in theory we would have societies with huge unexploited loopholes. 

So if I were designing a sci-fi world, I'd know better than assuming those who hold power don't use it. And yet the US military does not impost its own taxes nor enslave the population (on its own behalf - civilian politicians might conscript). Similarly, the US military, even when it was the only game in town (late 40s), did not, nor seemed interested in, levying a worldwide tax.

I suppose you could go part-way, positing unexploited profits in a power system, but setting them as in the process of being exploited (eg placing the story at the emergence of the Sith). That way you keep both the logical beauty of a system headed towards equilibrium, and the slack reality affords to allow disequilibrium systems to persist.

Does Anarchy Suck?

Somalia, Northwest Pakistan, post-quake Haiti. These are among the go-to examples of why anarchy would suck, as a political system.

It seems to me what's missing here is two factors - first, screwed up places go anarchy, rather than anarchy causing screwed-up places. That is, hellholes tend to lack well-maintained flowerbeds, but do lack of flowerbeds cause hellholes?

Governments, as I think we all can agree, are grabby. So what defines the kind of place where governments have been unable to set up permanent grabby institutions? Alternatively, in what kinds of places do governments' grabbies get temporarily disarmed? In both cases, ailing communities present difficulties for the entrepreneurial grabbiness of states, leaving the field to the much-maligned anarchy.

So, let's look at situations that aren't screwed-up to begin with where anarchy is tried. Rothbard talks about Icelandic and Irish institutions that seemed to work pretty well. Somewhere between insurance companies and clans. JP Hill talks about emergent regulatory mechanisms in the so-called "Wild West." Essentially, ad hoc groups of good guys rose up to counter threats, and these ad hoc groups grossly outmanned the bad guys.

I think it's an article of faith, since Hobbes, that the state is the price we pay for security. This, of course, assumes we'd all behave as we would under the state - irresponsible, dishonorable unless we're going to get caught. Call it the 'bourgeois values' of the savannah, but I think man in his natural state has to pay one helluva lot more attention to his reputation, and this means honorable, justice-seeking men of bravery ready to band together against threats. 

So, beat down by the unmanning, infantalizing society we live in, on day 1 of anarchy we'd be pretty pathetic. Toss in whatever calamity dethroned the state and things'd be pretty dire on day 1. I'd say give it a year or two, though, and we'd have all kinds of emergent, voluntary mutual aid and defense organizations, and I'd wager we'd be safer than we are today.

Who can secede?

There's a debate these days about secession, a wholly healthy thing in my opinion. After all, Californians don't want Alabamans writing their laws any more than the contra.

So who can secede? It seems to me the question goes beyond the text of the Constitution back to under what authority the Constitution was promulgated in the first place. It is predicated on local autonomy from Britain. So if the Constitution is valid, it implies that unilateral secession is valid. If unilateral secession is not valid, then the Constitution is also not valid. In which case, we've been borrowing Queen Elizabeth's country for a good long while here, and should give it back with interest.

So if unilateral secession is valid (unless Whitehall is invited back), then what level of secession? Why stop at states - if unilateral secession (as opposed to emigration, which is not what the Declaration of Independence was about) is valid, then counties, towns, even single properties can secede.

I personally would like to secede my house and invite people to live there in return for one ounce of gold per month (currently $1250 or so) head-tax and no other taxes. You will be subject to common law, administered unfortunately by me until I can afford to hire a British retired judge of good reputation who will teleconference trials. You'd be able, in my housetopia, to smoke dope and consentingly shag whomever, however you like.

Aretae on the Fatal Conceit

A comment at Aretae, who asks why so many people think it'll be different this time, despite government's litany of failure:
 
Why do people consistently believe firm X can solve problems, when firm X consistently fails to solve problems?

Well, firm X has control over media (eg access for interviews, licensing, censorship), control over academia (grants, censorship in form of punishing institution for extreme views), control over education (direct for 90% of K-12), and finally a substantial PR budget (public service announcements).

Nearly all groups that (pre-internet) could overcome coordination costs were those who stood to benefit. Their general pitch (eg gov't intervention can costlessly raise wages) tended to reinforce company X's efforts.

Only in the past 2 decades, due to lowering coordination costs (internet) and more independent media (fairness doctrine vis-a-vis radio & cable) are we seeing any counterpropaganda. Even so, counters need to hack away at 100 years of indoctrination.

The Bureaucracy Borg

A comment over at Isegoria, where he discusses the cancer of bureaucracy:

I’m not sure that corporate bureaucracy is getting worse. Casually, it seemed to hit a peak in mid-20th c. If anything, start-ups are more numerous than ever, and corporations try for flatter org charts these days – independent biz units, etc.

Now, gov’t bureaucracy does seem to be growing, but I think rather than computerization, the problem there is, basically, the professional civil service. On a long-run chart, the Pendleton Act (1880s), by creating permanent budget-maximizers (contra the old spoils system, which simply created petty thieves on 4-year timers), leads inexorably to both the growth and mission creep of gov’t.

Unfortunately, I can’t imagine reversing this one – try selling to voters a return to the spoils system? So I suppose the system will just have to bankrupt itself, and we’ll start over.

Political Immune Systems

Every 2 years (every 4 if we're a little lazier) we in the United States face that perennial question: Which party is less evil? 

 
I think, personally, that the individuals involved, Congresscritters and Maximo Leaders and all, are roughly equal on the evil scale. I know some would like to be more evil, but I think they're all ballpark the same evil. Suck it up and deal, Rahm.
 
No, I think you've got to look at the evil in consequentialist terms - which party /causes/ the most evil, accepting their hearts are equally black?
 
I think this boils down to 2 questions: permanency of evil, and our collective immune system against their evil. 
 
Starting with the permanency, it seems to me the Democrats, these days, have a much longer shelf-life on their evils. The main planks of the New Deal are still with us, while LBJ's grand projects - Medicare, the Great Society - have, arguably, gotten stronger (cf Obamacare, welfare for illegals). I expect this has something to do with blowback from benefit-recipients, and a sympathetic press.
 
On the other hand, consider the great conservative innovations over the past century. Haha, that's a trick question, you say, what the hell has the right accomplished since Harding's 'return to normalcy' after the nightmare that was Wilson. (Yes, I know George the First put through the ADA, George the Second Rx drugs, but these are progressive reforms so I ignore them). Well, let's broaden the definition and look at minor conservative accomplishments - school choice in DC, stem-cell regulation, limits on abortion. These accomplishments either get reversed within a decade, or they are constantly on the ropes, in danger of reversal. Even marriage amendments seem, to me, a rearguard postponement at best.
 
In sum, the evil the GOP inflicts has a much shorter shelf-life.
 
Now on to my second measure of evil - the immune system. I think, again thanks to a progressive press, outrages against freedom are far more resisted under the GOP. Consider the blind rage sustained against the Patriot Act, and how that rage vanished once the Dems took the rudder. Then again, consider how Obama can blithely train the media with dog-treats (eg cite unnamed sources and lose WH interview opportunities) without a peep. I expect this is due to pro-Dem sympathies in the media, but from the perspective of evil-watcher, I have much more confidence in the American people's immune system when the (commonly accepted by the press as evil) GOP is in power than when the (can't imagine as evil) Dems are in office.
 
Thus, I would recommend, if one were to vote for a major party, going with the GOP. Although I personally detest them almost to a man, I think the fact the press knows they're evil is a major asset. It means their oppressions have one helluva time getting through, and have a relatively short shelf-life anyway. Now that's my kind of party.