The Failure of Communism. . . And Capitalism?

           When communism failed TV's were plastered with the images of mullets and axes and hands reaching Coke cans through the spray paint and rusty rebar of the Berlin Wall. Twenty years later, capitalism’s failure has no carnival--unless you count the media clowns. 

Ridiculously flip-flopping between the word “recession” and “depression,” our journalists were in the dark. Economists with all their funny hats and bits of paper could not come to consensus either.

Richard Posner, a sober-minded judge, sidestepped the media and academia. His verdict was his title: The Failure of Capitalism. But people don’t want to see “capitalism fail,” they don’t want to entertain the idea. Feeling the judge’s barb, a journalist at The Freeman fought back against the juror. But maybe it is time to give up capitalism. . .

Let’s take a hard look at that word: Capitalism.

Ironically, the word has been defined by its bearded and carbuncled nemesis, Karl Marx. For Marx and for the rest of us by default and repetition, “Capitalism” means “a society where the means of production are owned privately.”

First off, the definition is less than ideal since it suggests a false dichotomy. The definition suggests that the means of production might be owned “publicly,” which sounds like the opposite of “privately.” Hence the seeming dichotomy of Captialism and Communism. Nevertheless, historical experiments have shown that ownership by the government is sorta “private” too—its still the exclusive disposal of something by someone.

Teachers, don’t think that one is dispensing “both sides” of the debate between capitalism and communism—there are no “both sides,” that’s the trick of a false dichotomy.

Marx’s definition can no longer be droned out without thinking, not if capitalism has failed. We can throw out Marx’s definition, forever and set ourselves on the road to finding a more useful and illuminating one.

The word capital (without its ‘ism’) simply means somewhat durable inanimate helpers. If you brush your teeth a tooth brush is ‘capital.’ If you are a toothbrush producer, the toothbrush-making machine is capital. A road is capital, because it helps you get to work every day. A jig that helps Boeing build airplanes is capital, because it can be used over and over again to build fuselages, mount engines, and set wings. Your house is capital, so is a factory or an office building.

Capital is durable or semi-durable tools that, every day, help people to help each other enjoy a higher quality of life.

Capitalism is a society that produces and distributes the benefits of these durable tools.

In a bizarre sense, historical communism and historical capitalism had the same national goal—to extend the enjoyment of industrial capital tools to the citizens of a nation. Even now, in the last gasps of the nation, it is modern healthcare that is being distributed.

Now that we know that capitalism is a society that produces and socializes the benefits of industrial tools, what does its common synonym, “a free market” mean?

The free market means a society in which inviolable actors strive towards diverse ends by way of private ownership and competitive contracts. A free market cannot truly be capitalist, since the actors are inviolable, and cannot be taxed or even their money inflated. A free market does not accommodate the subsidization of capitalizing, despite capital’s numerous social affordances. Hence, when libertarians disagree with the socialization of healthcare, they are acting as free marketers, and, according to the above rubric, supporters of socialized health care are acting as capitalists.

If capitalism and communism have the same goal: more productive tools and the social enjoyment of those tools, that is, more capital in general, could it be that the Cold War—the blistering anger, the rattling fear, the spying, the nuclear weapons, the 13 million dead Vietnamese—was a huge waste of time?

The post Cold War failure of capitalism might not really be all that bad, in itself, in fact the end of capitalism could be considered an enormous benchmark of human development. A society based on the production ex nihilo of whole cities full of capital tools is over in some parts of the world. We did it. Capitlization is roughly complete. But then if it is a good thing, why the economic slowdown?

The answer lies in the heaps of institutions created to advance capitalism while the development occurred which now hinder the market, nearly terminally. The Federal Reserve and central banks in general is the most detrimental. This entity creates US dollars out of thin air. Durring capitalization, the idea was to subsidize all the fixed costs of producing large capital infrastructures like factories, roads, dams, and skyscrapers. In the short run, the real advancements in the efficiency and speed of production that accompanied these developments generally outweighed the negative effects of creating a lot of money and confusing price signals all over the economy. And in the long run, we are all dead.

However, since capitalism ended around the time of the computer revolution in the 80’s, all that extra money flowing out of the spigot of the central bank just poured into wars, suburbs, and Wallstreet fads, none of which cause exponential productive gains the way the first interstate highway did, and therefore cannot socially “pay back” the negative effects of the money creation leading to a concentration of wealth in the hands of the rich and the powerful.

In the end, the central bank makes Wallstreet like a huge blind giant, flailing its capital powers around like a tree stump; it makes the government hold a bunch of useless death-capital (bombs, tanks, etc), the consumer hold a surfeit of suburban-capital (McMasions and gas guzzlers); and tells producers to make more suburban and death capital, or to service these bankrupt social anatomies.

In this way, the central bank involves the majority as a vested interest in the market NOT clearing. If the market cleared, the investments of the majority would be wroth less than they expected, and people on the margin would forfeit some part of their stuff: houses, businesses, cars, etc, and governments might go bankrupt. So everyone holds their breath and employment goes down, and prices go up.

On the other hand, wherever in the world capitalization is in full swing, like China, the exact same mechanisms of central banking and national spending on capital projects are causing a big party. The subsidized or nationalized capital investments are producing exponential increases in the ability to produce goods and defraying the costs of creating money in the first and the government throwing it around like a cowboy.

Judge Posner is right to say it is the failure of capitalism, but in a way he does not suspect. The end of capitalism could be a boon if we can sweep away the outdated bureaucracies that gum up the market's ability to help people help each other.

If I had to guess, post capitalism will not come fully online without a revolution of the minority over the majority—a revolution of flexible costs against fixed costs; a revolution of savers vs. debtors; a revolution of the future against the past. If I had to draw battle plans today, I would put solvent companies and consumers on one side and insolvent ones on the other. Unfortunately, the US military is an insolvent consumer.

Of Keyens, Money, and Spaceships

Let’s geekout.

With the CERN's Large Hadron Collider coming fully on line in only a few months, the economic crisis could find a solution, but not, perhaps, in the way one might expect.

            Let’s say that a source of energy is discovered with CERN, and this energy can do nothing but run spaceships that could colonize other planets.

            Immediately massive projects would begin in the most technologically (capitally) developed nations, probably at the expense of both government and private business funded by a slush of credit made possible through central banks and central governments. That slush of credit, instead of doing what it does these days and inundating some hapless, trendy part of the economy and causing useless and disorienting bubbles or funding another no-win war, would fuel a useful project which, like a Roman fountain, would distribute economic benefits to the whole society.

Like WWI or WWII or the Pyramids of Egypt, the advances in the division of labor, and the countless parallel but incidental technological discoveries would drive the whole economy of the nation to new heights of production, which would "pay back" the negative effects of inflation with gross increases in productivity in the whole economy, leaving real wages higher, taxes on greater profits balancing the government’s budget, and the economy stronger fundamentally.

This magical pattern of capitalist growth was discovered and its institutions outlined by John Maynard Keynes.

The economic crisis—the net negative effects of creating more money in the economy—happened because the suburbs weren’t spaceships. There were no productive discoveries made because of the artificial concentration of money on house building. It was just consumption, which could not "pay back" the negative effects of inflation with exponentially greater production per input.

Greenspan, the veritable Captain Kirk of the Keynesian economy, thought that the economy had phase shifted through technology, and that the negative effects of monetary inflation were at thing of the past. He was right, the economy has changed. But his fallacy is he treated intensive capital as though it were extensive capital; he treated a cell phone economy like a rotary one. Our society has no spaceships, no pyramids, no centralized productive project to fuel the general growth of the economy. The growth of the economy comes from decentralized and unpredictable entrepreneurial discovery.

If the Large Hadron Collider fizzles, and we don’t get our spaceships, should we delete these institutions? Could we at least build in an "Off" switch for those times when there aren’t any pyramids around to build?

It would probably be easier to just build the ships.

Bargaining, Prices, and Supply and Demand.

Thailand's hundred Baht bill is hot pink - hot pink so sweet it will give you headache.

Money’s not the same in Thailand, however, or, better said, buying things is not the same. They bargain. Even in the malls, with shiny price-tags, you can squeeze the assistant for 10% off.

To the fresh fish, this is a primitive game, and to those going through a six or seven month slump, during those two weeks, bargaining seems down right stupid. However, considered theoretically, bargaining actually leads to maximizing the fine-grain price structure, leading to greater value capture, therefore greater entrepreneurial profits, and therefore greater net addition of social value.

(“Of course,” you’ll say with the grin of someone who doesn’t actually mind being scammed, “a net transfer from the tourist purse into the Thai.”)

We are used to one price in the West. If we want expensive things we go to Gucci, if we want a deal we go to Ross for Men. We sort ourselves into our price category, and we are always on the look out for a deal. However, this ignores the little differences between people, and the big ones.

If the individual supply-demand-indifference curves of each individual customer could be taken into account (and largely it can be through a seller’s sixth sense and acculturated biases), then the result will be a more perfect reflection of individual subjective evaluations of goods and the inter-subjective money-relative evaluation of goods—or in other words, optimal pricing.

It hurts our western sense of fairness if someone who looks wealthy is overcharged for what someone who looks poor can buy. Looks are so superficial.

Yes, and no. This is not 'soaking the rich' through 'progressive taxation.' If rich people make voluntary exchanges at higher prices than someone else there is no injustice, and there are many positive social outcomes. 

The social outcomes of this is greater employment, because there is a greater profit margin, and even assuming a diminishing return on labor (which is not usually the case) more people would be employed to increase productivity and therefore net profit.

Another social outcome would be a more egalitarian distribution of real goods. It can be argued that the rich value money in abstract more than poorer people, but, in a concrete sense, the rich (who have say 100,000 dollars) do not value one dollar more than a person with only one hundred dollars. The person with one  hundred dollars might value other things more than his dollar, but the dollar to him must be more valuable to him, on the margin, than the dollar to someone who is flush with cash. 

Bargaining brings to light that supply, demand, and indifference curves are never and can never be known. Even looking at past historical data, all you see is prices and sales, and those are just averaged aggregates of single points. No line can be given from a single point, even a straight one; moreover, each individual customer has their own different demand and indifference curve, and each producer (even an individual sales person) has a different supply curve.

These curves are part of a Cartesian seduction that confuses the young and conditions the reasoning of the grown.

Think twice before you wince an understanding smile at the brown person haggling with you. But more importantly, think twice before you believe those economics text books (and teachers) who tell you "This is a supply curve. This is a demand curve."

Of Plumbers and Time

I just had a little debacle with my plumbing. Solution?

a phone call, wait 30 minutes, a knock at the door, two plumbers, 15 min, done.

My landlord auspiciously asked me, "In your country, do you need a certificate to do this, to fix the water?" I nodded, she shook her head and smiled a Thai ashamed-for-you-smile.

My Ideal portfolio if I had any Money

Here is some financial advice to any surfers out there. It also is a timed proof, like a time capsule or a letter you mail to yourself, once I write this, I won't fix it at all and then there is a record of how my portfolio would have done if I would have acted with real money.

This follows the most basic theory of diversification and risk management.

So.
50%
Foreign currencies in order of importance:
Long positions:
Japanese Yen, low risk high yield 50%
Brazilian Real, low risk low yield 25%
Chinese Yuan, high risk high yield 25%

Short positions
USD, low risk (for a short) and high yield December to the end of febuary, as much as I could afford
Euro, High risk, potentially high yeild, january to march.

35%
Commodities, I don't know which ones are good so I would just do an index, oh well, (70), but I would get out of this market when it got really bullish, which it probably will or already is because its in the news, that usually signals the beginning of a bubble, so pretty quick in and out, no longer than a year.
and Gold is a low risk low yield investment (30%), hold on to this one, get out at like 2000 then get back on after a psychological check to 1860, then get out at like 2500 which will be its peak in like 15 years.


some stocks (no more than 15%) bio techs, genetic stuff, emergent market indexes, green energy (BP long term low risk high yield).

Should a Libertarian be a Capitalist?

First of all I should say that "capital" (for Marx, in general, and for this piece of writing) has a very concrete meaning: capital is a good or goods that help people accelerate the amount of wealth they have. So, a wrench, a road, or a building are very good examples, or a tunneling machine, or a shovel, or a cell phone insofar as it is used to do business. Capital, or capital goods, are the opposite of consumer goods.

The most common definition of capitalism runs something like this: A society in which the means of production are owned privately. This is not a very good definition because almost every term is too vague. One unorthodox way of defining capitalism is to see what happens in self-labled capitalist societies. 

Capitalist governments are not perfectly 'free market' as you might expect. They take such actions as subsidizing or nationalizing industries (like telephone companies or train systems) if and only if the intervention is meant ultimately to extend the enjoyment of capital investments (rails and telephone lines) to all the citizens. For this reason capitalist governments have felt it was legitimate to 

• tax and spend on "key" capital investments (such as public works), 
• control the monetary unit along the lines of Keynesian or Neo-liberal/Monetarist managed inflationism (e.g. the FED or the European Central Bank), and 
• spend excessively to raise aggregate demand in times of 'crisis' (for example stimulus packages, and bail outs)
• etc.

"Capitalism" in this historical sense is the body of reasoning that legitimizes government power that socializes the enjoyment and cost of large capital investment.

In this sense, "socialism" stops being the opposite of capitalism but merely a further degree of government power. In socialism the government has the power to intervene violently or with the threat of violence not just to extend the social enjoyment of capital investments but also to extend services that assure a varying set of privileges under the umbrella of "social justice." 

Communism, in this historical sense, means the argument and body of reasoning (now deeply shaken by historical experiments) that universal government violence is the "best" way to extend all services and goods capital or consumer to all people. 'Best' in this sense might include, 'most ethical,' and to some deeply deranged theorists even, 'most efficient.'

One step before capitalism on this hypothetical line of government violence would be called Freedom, where governments are used only to police life, liberty, and property, or, in otherwords, governments sole raison d'etre is to assure the sanctity of self-ownership in the present, past, and future.

One step before Freedom would be anarchy, where violence and the threat of violence is completely banished from society: a city with no guardians.

Why draw such a line of violence? One answer is to frame the question, which Thomas Jefferson believes is most important and most perennial political question which is "What is the legitimate role of government?" Another is to pose and define the terms of Freedom and limited government in the framework of a stragegic pragmatists, essentially the admirable and charismatic basis of President Obama's rhetoric and thinking. A third reason is to pose as a possibility that more centrally planned violence, such as capitalism, socialism and even communism (in the case of China and Vietnam) were okay plans to extend the enjoyment of industrial capital improvements to all people (as well as extend citizenship universally); however, that admitted, to raise the issue that now, at this point in human history we are coming to a time technologically, spiritually, and sociologically, when less and less violence is actually a prerequisite of the further advancement of justice and living well.

The violent organizations which were necessary and good in worse times, such as central banks, import and export tariffs, minimum wage laws, and income taxes are being out-moded, and are have now become, or will soon become a drag on future human satisfaction, both spiritually and materially. Just as slavery was outmoded economically even before its bloody abolishment by the automatic cotton picker and the industrial revolution, so too the recent economic crisis shows how Keynesian economics and central banking are more a hurting than a helping hand for the majority of people. The continued socialization of roads and highways have hidden the costs of using a car and eating trucked food and has thus been a huge contributor to global warming as well as alienating food sources from communities.  And, I predict confidently, that genetic and electronic medicine will make the social systems that now provide healthcare to many first world nations redundant and inefficient, or already have begun to do so.  

What would be best is of course a just society with as little violence as possible; whether Freedom is the best choice at this point is an open question, but a question that needs to be opened.

Free Trade: The Solution To Islamic Terrorism and Extremism

Recent Senate approval of Economic Sanctions Against Iran is another example of democracy using the wrong tools for the job. Economic sanctions will not have the same effect they had on South African Apartheid because free trade is a tenent of Islam.

Sanctions will increase the people of Iran's righteous hatred of America, and strengthen the demagogic regime in Iran. More hatred for America means strengthening the support for leaders, like the current ones, who win elections in a race to the bottom with one hotbutton issue: which candidate hates America more?

Opening trade to the whole Muslim region would be the real solution. At once it would hobble the anti-American demogogic powers in the region, support the people of those nations over the interests of their governments, and lastly, such a move would be part of a real (non-monetary, non-fiscal) solution to the American economic recession.

The Quran itself makes a very clear distinction between infidels who trade with Muslims, and those who refuse. The former are sometimes-friends, the latter, sometimes-enemies. Of course there are greate differences between the Scottish Enlightenment and Islam; nevertheless, numerous passages in the Quran have a striking resemblance to the verbiage of Adam Smith and John Locke in their radical support the natural laws surrounding commercial property and trade. In the linked article, a number of other authoritative Islamic scholars describe the free market in an Islamic context: Islam: A Free Market Religion

And not only are the elected powerful kept in power, but Iran, like any country still developing its property laws still has a somewhat oligarchical ring of families that control the vast majority of wealth, many of them having to do with natural gas and gasoline. These two points the senate singles out for direct economic sanctioning. If we hinder trade on those two points, it is simply the external equivalent of an import tariff, and, as happens with any import tariff or export subsidy, it has the effect of exploiting the people of the country more efficiently to the power of the titans of the industry involved. Moreover, those families are given incentives to support those demagogic regimes and force those regimes to grant more public money into infrastructure for the development of those elite controlled industries. For American audiences, these economic exploitative moves are not unlike the recent hike in steel tariffs and concurrent increase in federal public works under the present US administration, or in another way bank bailouts.

Economic sanctions, perhaps most often compared to those against South African Apartheid, cannot work on Muslim nations and will only serve as a paving stone the road to war and serfdom.

Bumrungrad, Bangkok Thailand the real Free Market Healthare

Michael Moore takes us to Canada; he takes us to Cuba, but where do we go to hear the other side of the story--where do we go to see fully functioning free market healthcare? One place is Bumrungrad Hospital in the downtown of Bangkok, Thailand.

I made an appointment to see a dermatologist on the internet the day before and in less than 6 hours, I got my first choice time of 6:15pm the next day. From entering the hospital to when I was seen by a doctor took 14 minutes--from when the care was finished, billing, and leaving the hospital, 5.

I was proscribed a topical cream for some dermatitis on my shoulder. I paid 1,800 baht for everything, which is 53$ out of pocket, no insurance. I think that is about 3 times cheaper and 5 times quicker than anything I have ever experienced in the US. To get an appointment the next day, to my mind, was outrageous.

The Free Market: Helping People Help Each Other.

Thailand's booming medical industry would love for the US government to limit is choices of healthcare services, because huge numbers of people will just come get their healthcare here where the division of labor and rational property structures exist, and therefore prices are naturally low and resources abundant.

Trickle Down Is a Myth. So, Why Are We Doing It?

It comes tripping from the lips of millions "Trickle down is a myth!"

And who could disagree? When has a class of super rich led to economic development?

So my only question is, why does the current administration embrace trickle down as their central economic policy?

Making sure that huge conglomerate banks are flush with cash, and the Federal Government, the largest coorperation in America, can still borrow trillions, is not going going to lead to a trickle down to the middle class, much less, to the poor.

There is no defense for it. The stable foundation of economic recovery can only come from allowing people the freedom to experiment with new systems of barter and money.

Economics and buddhism

Just as the Ocean has a single flavor, the flavor of salt, so this teaching has single flavor, the flavor of freedom.
--The Buddha, The Numbered Discourses (Anguttaranikaya)--

Economics is the study of coping with unease. Buddhism is the study of coping with unease.

Economics' primary concern is with means, and has no way to evaluate the ends of individuals. Buddhism is the science of each individual's evaluation of their own ends.

The social economy optimizes means with given knowledge and resources. Buddhism optimizes ends with given knowledge and resources.

In both, the individual is still the end all be all of the study, although in economics, individual express their values through exchange, leading to money, and therefore prices, which create what is considered a social economy - competition, advanced division of labor, etc. In reality, there is no social economy either, just a cattalaxy of individual evaluations and actions. In buddhism there is no analogy, there is no social-buddhism nor cattalaxy.

In economics we seek choice in order to have satisfaction. In buddhism we want the "softness" that comes from the freedom from delusion.

The question "What do you want?" begins to overflow its material boundries and triviality to become a worthy, philosophical, and pressing question.

In our times, accidental material forces, particularly the expansion of the divison of labor and the improvement of capital and technical means, are making an afluence of means available to many individuals who already possess a scarcity of ends. The study of buddhism promises the enhancement of their individual ends.

Copywrite-Smoppywrite, why society might be better off with fewer monetary incentives

Just a rant, thoughtful article was written by my friend Igor, see links.

Adam Smith wasn't right about everything. For example, trade, which Adam Smith concluded is a natural and spontaneous behavior in human beings is not spontaneous, but only takes place under one set of conditions: when two people find that the other has something they want more than what they have and are both willing to part with what they have. However, there are things that humans do spontaneously: they create.

Creating has an intrinsic value for creators, a value that they take into account when deciding how to spend their time. However, the value of creation for the creator is socially undervalued. Copywrite and patent laws depend on the assumption that creative types would not lift a little finger unless it were for expected commercial profit. Creators will still create without copywrites.

Want to read a book published only for money? Do we want to live in a culture that is cluttered with music and books extracted from creators in exchange for money along side books and music produced because the creator chose to produce it?

Of course, pharmacuetical companies want infinite patents to protect their R and D investements, but is that best for society? It might be profitable to keep everyone sick and on medications, but the market inviability of drug R and D only goes to show that there are more beneficial alternatives for human health. Genetics, stem cell, nano-, and bio-tech, all promise treatments and preventions far more effective and long term than drugs. Lo and behold, in many cases they are cheaper. Could it be that the price mechanism has already identified the obselence of drug therapies in favor of technical treatment and genetic prevention?

Is There a Doctor in the House?

I want to build a hospital with no doctors. Any takers?

Okay, the investors aren't queing up out the door. Yet.

Let's back up a second. We are looking for ways to cut costs in healthcare, right? So we have to keep all options open.

But we aren't supposed to flush quality of care down the toilet. Okay. No problem.

Doctors cost a lot. Why?

Because there aren't many of them and they cost a lot to train. Why?

A few factors. The American Medical Association keeps the number of doctors down like an ol' fashioned guilde from the middle ages. They limit the number of students who get to go to medical schools in toto, and make the process of becoming a doctor long and arduous. Its easy when everyone assumes that every doctor needs to know everything about everything - even though in practice that is not just impractical but with the huge amount of medical knowledge, it is literally impossible, and doctors, just like everybody else, generally know just what they need to know on a daily basis and how to look up the rest of it.

There are a few steps in the process of healing people--diagnosis, treatment, follow up--and each of these can be subdivided again into countless other jobs, each of which requires a precise set of knowledge and skills. Granted, the knee bone is connected to the leg bone, and the body is all connected, does that mean that every medical practitioner needs to be trained for upwards of six years?

You walk into the hospital, or are pulled in on a gurney by those who specialize in emergency responses (EMT's / Paramedics) you are examined by a diagnostician who can identify anything and specializes in medical histories and pathology, but has not be trained to perform procedures. In emergency situations the diagnosticians are "making the call" to an assembled emergency team of technicians. In a hospital visit, the diagnostician triages you and begins a standard file taking all relevant information. Then she builds a treatment plan, or refers you to a particular department (say a cardiac ward) with specialized diagnosticians to build a treatment plan.

Past the diagnastician we find a hospital peopled by proceduralists, nurses, and social workers and their teams. The proceduralists are specialized to know everything they need to know (and how to look up anything they don't) to conduct a handful of procedures. They are trained and certified with a merit badge system on top of a foundational base of extensive anatomy, physiology and basic pathology, from a host of competing institutions of medical studies. Nurses would prep and close surgeries, do diagnostics, and team lead assistants to conduct and monitor convalescence. They would be trained in similar institutions but probably would study for a shorter time and have no procedure merit badges. Social workers are the administrators, customer service, and business people of the Hospital. They liaise with hosptal workers on the one hand, and patients and their families on the other. Some social workers would coordinate teams of proceduralists and nurses, monitoring the activities on particular patients. Others would facilitate people coming into the hospital and post-proceduralists would study the hospital's effectivity while advising the future health and care for the patient and the patient's family.

But, "I want to see a doctor!" Why? A doctor doesn't remember very much from medical school anyways, they know three things: 1) what they need to do their job, 2) how to identify what they don't know, and 3) how to look it up. We want to see a doctor because we are just passed from one person to another and everyone just keeps shrugging and saying "I'm not the doctor." However, in a system designed with no doctors, responsibility for care would fall on a team of proceduralists, diagnosticians, nurses, and social workers whose whole job and raison d'etre would be to collaborate to provide individualized care for each patient. Simply by increasing the division of labor, we can cut costs and increase quality of healthcare.

So is there a doctor in the house? Who cares.

I loooove technology, but noooot as much as you. . . Always and forever.

"The means by which we live," taught Martin Luther King Jr. "have outdistanced the ends for which we live" Like so much of MLK's philosophy this perspective was respectfully lifted from Mohandas K. Gandhi's in his essay, "Ends and Means," and, while at first, we might say that the answer to this 'outdistancing' is simplifying our means, and (perhaps) buying a spinnign wheel, but an alternative answer might be to close the gap by increasing the scope and focus of our ends.

The last four hundred years have seen prodigious growth of material technology, fruit from the root and tree of the physical sciences, but we have seen no analogous enhancement, from psychology or religion, to our ends. I will suggest that the philosophy of the current Dali Lama is the successor in the debate of ends and means and offers an unformulated but radically new answer to the spiritual progress of human beings.

It is possible to view Buddhism disrobed of its various cultural and traditional garbs. What emerges is more than a cultural tapestry; at its epistemological heart, buddhism is a science that differes with all other science in one respect--the conclusions are not communicable.
Sciences, what we could call communicable sciences, such as chemistry, physics, biology, astronomy can meaningfully communicate their findings. Although all scientific 'facts' are conditioned, since they fail to be more than just hypothesis that haven't been proven wrong yet, they can still be explained, understood, and applied to technological problems. For instance, the knowledge of the ideal gas law can be applied in the world to make brakes and hydrolics. Moreover, the person who uses those brakes or hydrolics doesn't even need to know the principles at stake to find that technology useful.
The special science that Siddartha Gautama discovered (lower case 'b' - buddhism) produces 'facts' that are also conditioned by hypothesis, and it even yeilds a sort of technology; however, the 'facts,' although they can be put into phrases, the sense of those phrases cannot be apprehended by a listener until that listener discovers the truth of it for themselves, and the technology derived from these scientific facts is only useful to those who understand the priniciples invovled. It is as if you could not make a call on your cell phone until you understood the principles of elector-magnatism, and you could not start your car until you could calculate torque.

His Holiness the Dali lama wouldn't argue that Buddhism is not a religion, nor does he argue the epistemics of the issue. He simply appeals to our common sense and common humanity. And it turns out that 'common sense' and 'common humanity' is just a very limited, unsystematic, and imperfect amount of buddhism that everyone has experienced just from being alive. Practicioners of buddhism use meditation and other experiments as the scientist uses her bench. They observe (all of percpetion, mind, consciousness and materiality), take note (in memory), and come to conclusions which change and are modified as new evidence emerges.
Buddhism the science suits modernity very well. As the division of labor and capital infurstructure enhances individuality increases, and unlike the forcably communitarian ethos of ideologies of the past, buddhism promises each individual their own individually tailored goals and serenity. Just as science has no biases, moral or otherwise, niether does buddhism. And for the practicioner who starts with those biases, their first hurdle in their practice will no doubt be to discover the impermanence of such biases.

Buddhism, in this devested respect is neither psychology, nor a religion, but a separate branch of knowledge whose nearest of kin is modern science, and its technology promises to close the 'outdistancing' of modernity between ends and means. The next step is to do the philological legwork necessary to create as complete a cannon of buddhist experiments and increase the acceptance of secular buddhism as a new branch of knowledge.

Mackey is Wackey!

I don't know which is used more the word 'right' or duct tape.

When wire taps and net neutrality were the order of the day, it was the 'right to privacy.'
Now, when healthcare overhaul balloons over the horizon like a Zepplin, we hear about the 'right' to healthcare.

In a controvertial and probably unprofitable move the other day, John Mackey, CEO of Wholefoods alienated a huge contigent of his clientelle's political sensibilities when he denied that healthcare was a right in an op-ed for the WallStreet Journal. His argument is that this 'right' cannot be found in the Declaration of Independence or the Constitution. His reasoning is flawed, as is the reasoning of his opponents who employ the word on their side.

A right is like the 'right of way.' What would happen if no other human being got in your way? What would you do? If no one got in your way, you would go on through the intersection. In the minds of creators of limited government and a free society, Rousseau, Locke, Hobbes, Jefferson, Jay, and Washington, a right is what a human being does if no other human being gets in there way. For instance, we all will breath, we all will move around at our will. Hence the rights of life and free movement.

The sad truth is niether privacy nor healthcare are a right, and the word is employeed in their favor incorrectly and ends up destroying a concept central in all philosophies of freedom and justice.

What we do not, or cannot do on our own is either called a privaledge or a service. Healthcare, Mackey rightly concludes (but wrongly argues) is not a right, but a service that ethically ought to be provided to all. Privacy is an example of a privaledge that ethically ought to be assured to all. Services are best provided by unhindered, transparent, and fair human cooperation. Privaledges can only be assured by good government--that is laws, police, and judges who work to stop people and instituitions from troubling each other. The fourth amendment to the constitution, against unlawful searches and seizures (by government) of people's papers and effects, is a wonderful example of assuring the privaledge of privacy, but it only serves to protect against government's invasion of citizen's privacy.

Ron Paul is going to do it!

Buy Ron Paul's New BOOK! End The FED.

The FED is the central bank of the US, just like the central bank of Europe or China. The economy of the most advanced nations are changing, and the central banks are holding the advance ment of an egalitarian, super creative, even spiritually enlightened society in the dark ages of big dumb cooperations, big dumb government, and consumerism (which is in itself big and dumb).

For those of you who are not American: this revolution effects all of us. Central banks used to be the way to develope a modern economy out of a rural one, but now that that development has run its course in modern countries, these institutions work only to centralize power and money in the hands of a banking elite that run big business and big government.

Ron Paul ran for president against John McCain, and had he won there he would have faced off against Obama. He is a Republican, but a very unique one who follows in the traditions of Goldwater and Senator Taft. He believes that the constitution of the US should be obeyed. Presently it is violated in many, many ways by the government that pretends to gain its legitimacy by it.

Viva la Revolucion!

And In The Darkness Bind Them

Q: What are the three hottest issues in Washington?

A: Health care, the economy, and global climate change

Let's get a policy solution that can solve them. What's going to happen? Everybody's going to get a little thinner, along with the wallets of some cooperate agro-businessmen. Who wins? the globe, sick people, small to medium sized family farmers. . . everybody.

On June 27th of 2009 the journal Health Affairs collaborated with a leading nutrition expert at the Center for Disease Control and Prevention to publish and estimate of the social healthcare costs of obesity. Here are the numbers. with more than a quarter of Americans obese, the treatment of the health complications and illnesses associated with obesity cost a whopping $147 billion a year in medical expenses, nearly double what it did in 1998, and about 10 percent of the nation's medical spending.

Do people need to eat less and more healthily and exercise more. Yes. However, before we reduce obesity to a purely individual moral problem, we have to face facts. The diet of our society has been constrained and mutated by federal government interventions in agricultural production causing market distortions that have caused social double-chin. Subsidies for producers and tariffs on lower priced international foods keep a few rich agro-businessmen and their lobbiests in business and the rest of us counting calories and paying the price. Simply put, it is hard to become healthy because healthy food is expensive and high calorie, low nutrient food is cheap.

The economy is contracting and where do people feel it the most: at the grocery store. When you get sacked and your grocery's for the week for your family cost 200 bucks, it doesn't feel good. When prices first spiked at the store, pundits blamed federal ethanol production subsidies for straining the food suppy, and hence raising prices. But there are bigger forces at play than this and over a longer time frame.

Agriculutral subsides were introduced during the great depression as sort of bail out for farmers. In 1935, the number of farms in the United States peaked at 6.8 million as the population edged over 127 million citizens. The majority of these being family farms, meaning about 6-12 people per farm, that is about 45 million of the 127 million citizens. The New Deal introduced agricultural subsides as a way to bail out mainstreet. However, now we live in a world where less than 1% of people claim farming as an occupation, 2.3% of the biggest farms account for more than 50% of sales in agricultural products (USDA, 1997 Census of Agriculture data), medium-sales ($100,000-$249,999) and large-scale farms received 78 percent of commodity-related government payments in 2004, and most farms—61 percent in 2004—receive no government payments and are only indirectly constrained and influenced by these price distorting projects. Most 'farms' are owned as a lifestyle with other sources of income. Most 'farmers' are either in retirement 14.1% of farms, or live on farms as a residence and lifestyle 40.4%. Agricultural subsides are actually hurting real Rockwell family farmers by making their large competitors so much more economically viable. In essence, these subsides and the price distortions caused by tariffs are just being pocketed by the largest farm companies.

Note that the largest cooperate farms are generally held in trust by families, and therefore live under the sentimental mantel of 'family farmers' which is purposefully perpetuated by populist politicians, the media, and even the US census bureau.

But without tariffs we would be overrun with the imported cheaper food of other countries. Wait, THAT'S AWESOME! The US would still produce food, but we would buy a lot more food from other nations because its cheaper and just as delicious or more delicious (have you ever had a Spanish tomato, or Thai basil?). In return, foreign national traders would be stuck with the dollars we gave them for the food and would be happy to buy our exports with those dollars. In the end, we, who are better at designing micro chips, computers and financial services and not very good at making corn, can buy our corn from them and they can buy our microchips, computers, and financial services. Both the poorer communities in agricultural economies, and richer communities in sophisticated information/design economys become wealthier. All this amounts to a real bottom up (rather than top down federal fiscal or monetary) economic stimulus plan. I seem to recall a much talked about presidential campaign that promised that bottom up thing. . . hmmmm.

Lastly, although everybody talks about cars when they talk about global climate change, and a few smarter people talk about building efficiency and healthy urbanism, in fact the IPCC also states that from 1850 to 1998, about 136 (+ 55) Gt carbon has been emitted as a result of land-use change, predominantly from forest ecosystems. For comparison, 270 (+ 30) Gt carbon has been emitted as carbon dioxide into the atmosphere from fossil fuel burning and cement production (Bierregaard, Richard; Claude Gascon, Thomas E. Lovejoy, and Rita Mesquita (eds.) (2001). Lessons from Amazonia: The Ecology and Conservation of a Fragmented Forest.). If you break down burning fossil fuels into its constituent parts like cars, planes, electricity production, and then separate cement production, the percentage biggest contributor of CO2 to the atmosphere since the industrial revolution is land use changes. The biggest contributor in the biggest category? Agriculture. It turns out a swamp or a forest holds down a whole hell of a lot of CO2, and a corn field that is regularly harvested and replanted, almost none.

So, get rid of the tariffs and subsidies and what do we get? Cheaper, higher nutrient food, freer farmers, more prosperous small and local farms, a huge decentralized market driven plan to create millions of CO2 sinks called forests, swamps, bogs, and marshes, and a bottom up economic stimulus plan. Nobody but a few agro-business men and the purse of the federal government get hurt, and these two have been hurting the rest of us for long enough.

Patent # 6078806

What if you could hold a balance of electronic cash on your cell phone and pay your bills, buy your groceries, and send money to any other cell phone with the ease of a text message?

For one, you would be thinking along the same lines as four Nokia engineers back in 1998 that patented a 'mobile station payment system.' And with good reason.

In a world where Visa and Mastercard rake in about 3 billion in profit every year, atm fees account for an increasing large portion of bank revenue, and the World Bank measures remittances add up to a whooping $290 billion in 2009, an electronic cash SMS-esque payment system would cut quite a figure and contribute hugely to the social benifit to the cash-using working poor.

With this spread, and when Nokia in its application competition called for applications in "Emerging Markets and Mobile Necessities," what is stopping this mobil payment system from going forward?

The same year that Petri Heinonen, Mikko Terho, Matti J. Marttila,and Markku Rautiola were sweating in their wool socks in Nokia, Finnland developing a mobile station payment system, a little e-commerce company called Paypal was born in Palo Alto, California. And, whereas traditional banks might not service a mobile cash system, Paypal, l'enfant terrible of the finance world, probably would. Could we expect to see a Nokia/Paypal partnership in the future?

Keynes and Green Cheese

In a time when all money was based on gold, John Maynard Keynes had an outlandish diagonsis for the global economy. Solutions for our times might sound just as weird.

200-odd pages into General Theory--a dense, sober, jargon-wed text of raw economic theory--Keynes falls prey to fancy in order to describe the fundamental institution of his economics.

"There is no remedy but to persuade the public that green cheese is practically the same thing [as money] and to have a green cheese factory (i.e., a central bank) under public control" (Keynes, 1936, p. 235).

40 odd years later the green cheese factory came true in near perfection when, on August 15th 1971, Nixon ordered the gold window of the FED closed. The dollar was officially fiat. And, more recently, on June 27th 2009, the logical acme of Keynes reasoning was proposed by Zhou Xiaochuan, the govener of the central bank of China. Mr. Zhou suggested that a new fiat international reserve currency should be created and monitered by the IMF.

Keynes was not an idealist; he treated governments and markets pragmatically. From the easily determinable facts of his times he was able to pose the question "What kind of monetary and fiscal insitutions would aide humanity in these times?" His answer to this question was a monitored and careful general expansion of the money supply. Keynes solution was more than outlandish: the idea of a green cheese factory, sounded perposerous to his audience: gold is money, the only way to make more money is mine more gold.

Lord John Maynard Keynes, now remembered as the architect of all modern fiscal and monetary institutions, wrote in a time when the population was growing exponentially and was expected to keep growing that way, and when the implimentation of useful tools and durable structures was for the first time lifting a whole society (the American one) into the middle class.

Keynes discovered that monetary expansion increases employment and accelerates the extension of capital--i.e. those useful tools and durable structures. Things like roads, factories, power plants, appliances, water treatment facilities, cars, and all sorts of machines made commercial labor more productive and living more comfortable and safe. Capital extension in the US demonstrated for the rest of the world how durable and semi-durable equipment could be employed by a market economy or concievably by a centralized planning agency to increase wealth and eradicate extreme poverty.

Increasing the money supply does cause economic booms, but also busts--bubbles, but also troubles. Monetary inflation stimulates investment in durable and semi-durable equipment and increases employment by simultaneously cutting productive costs (decreasing interest rates and lowering real wages) and raising the expectation of profit (higher prices). Keynes warned that too much money at once can push prices too high too soon, before wages keep up, and demand will drop off, which reverses the positive effects of money creation. In the case of sagging demand, the government, Keynes argued, ought to put demand on all sorts of things--maybe fight a war or provide some service like national highways or a national health care system. The other danger of money mis-managment should sound familiar; by producing too much money now, and concequently lowering interest rates, and then producing less and less money, raising interest rates, will cause a large number of fix interest loans on the margin to 'go bad.' Maybe in these cases, Keynes might argue, the government ought to buy all the toxic assets. Who knows? Despite busts, bubbles and troubles, Keynes bet that one 1-5 year recessions for every 8-12 years of boom growth was a good trade.

The dream of green cheese and its net positive effects was not based on the precepts of an ideal science. Economics for Keynes was a conditioned, descriptive chain of reasoning with assumptions and premises that relied on real economic and political conditions. A literal 'real economik.' Hence, an analysis of Keynes fundamental premises and those of our times could be the first place to look for the contiunation of the open conversation about the recent monetary and fiscal problems and the structure of monetary and fiscal institutions for the 21st century.

Unlike in Keynes' time when population seemed unbounded exponential growth, today, population is expected to level off around 10 billion.

Logarithmic population graph with shaded varients and dashed line showing if there were no change in fertility rates. Source: Wikipedia: ESA, United Nations.

An increasing population means more of all things economic. A growing population has always been the first and most obvious argument in favor of inflationary monetary institutions. A shrinking or level population raises the question--"what will the economy of a world with a constant human population even look like?"

In Keynes time it was obvious that major roads would be built and populated with cars, a huge number of buildings would be built to house and shelter the work and families of the world, factories for clothing, hospitals for health, and farmland would need to be set aside and developed. Now, however, in the richest countries all these capital commitments have already been made, and we are entering into a time when cannot predict the future shape of economic development. The internet, for example, was not predicted in any way by futurists or science fiction writers, and yet it has driven the productivity and growth of the global economy for the last 10 years. Humanity is also in the position to begin to see some weird gadgets like computers computing as fast as a human brain and the ability to grow organs in petridishes.

There will be an end to the historical process of capital extension. The development of Africa and Haiti will signal the end of economies of development ex nihilo. With the end of capital extension however does not come the end of economic growth. A new and explosive trend in development that has already been taking place for twenty years might be called capital intensification. If you intensify capital, you design durable and semi-durable tools that do more with less. Compare cell phones to telephones, or solar panels to coal power plants. The sectors of capital intensification are telecomunications, green energy, the internet, medicine and biotechnology. These secotors make use of very few resources while adding huge productive and consumer value to the market. As capital intensive industries grow, they will take up a proportionally larger and larger part of the economy, just as capital extensive industries and their financial compliment edged undercapitalized industires (agriculture and folk industry) into just 2% of any capitally extensive economy.

Capital intensive industries have a different financial anatomy than capital extensive ones. Whereas extensivity required huge and long term investment, intensivity is fast-paced and has minimal fixed costs; extensivity tended towards vertical alignment and horizontal hegemony, intensivity leans towards companies creating their own market niches and then cooperating and competing in diverse webs of service and exchange. Whereas, as Keynes reasoned, extensive industries need a climate of rising prices to offset their fixed capital costs, intensive industries live and grow within a climate of the expectation of gradually falling prices.

If the world faces a shrinking and then steady population and growing non-inflationary industry, both these signals suggest that the monetary and fiscal policies of the future will be largely stationary. An actively deflationary money--that is, shrinking the money supply--makes no sense under almost any conditions, since it does the opposite of inflationism, raising all costs and lowering all expectation of profit, hence impeding all commercial venture and causing huge unemployment. However, a monetary institution, or group of institutions, that create a flexible but stationary money supply might better match the world in which we live in or will live in within the next 25 years.

The economic effects of a flexible and stationary money supply would be shifting the time preference of demand, the gradual and steady increase of all real wages, limited government fiscal policies and higher, floating interest rates--incentivizing saving and inhibiting reckless and finally bootless investment behavior.

Right now, Mr. Zhou's proposition to create an international fiat reserve currency is the most probable future of global money. Given the power of the players involved (big government, a military industrial complex, jarrasic industry), any other idea besides greater and greater monetary inflation will encounter petulance, resistence, and ignorance. However, if Keynes' reasoning depends on conditioned premises, and those premises have changed, the logical conclusion of Keynes' ideas might in fact harm the present and future economy. Just as Keynes solution sounded outlandish and improbable, solutions for our present economic maladays and the future of money in general can be difficult to believe. For the sake of brevity, this author will outline only one possible way of creating a flexible and stationary money supply.

One way to assure a flexible yet stationary money supply is to allow for a regulated market of private money. The major regulations would be a 40% reserve requirement of all deposits, no taxation on money providers (since this would constitute taxation on money itself), the banishment of any 'too-big-to-fail' catagory, and the preservation of free entry for new moneys. With these regulations in place moneys would be launched, probably by major banks, but also by communities and small entrepreneurs. Competition would be based on the preservation and even growth of each money's value, since who will 'buy' money that will loose its value over time. Banks would carry multiple balances of different currencies. Commerciants, laborers, landlords, and retailers would detail what money's they excepted for payment. Electronic money and mobil payment systems would simplify any paper bill problems without eliminating cash itself.

The exact dynamics of such a monetary structure would be complicated, and far outside of the scope of this article; however, a rough sketch is possible. Without a central agency to increase the money supply, no coherent national or global plan of inflationism could be made, therefore the market would determine the interest rates and values of money, causing a higher and more realistic representation of risk. Currently, with 10-5% deposit reserves, the money supply can multiply 9-20 times from the uncoordinated actions of the banks, but a 40% reserve would allow the money supply to multiply by 2.38 times making the two responsibilities of banks possible: the coordination of liquidity demand schedules with investment scheduals. Fiscal policies would be limited by the real ability of a government to pay back its debt to private banks--the knee-jerk exchange of treasury bills for dollar bills between government and federal reserve would be a thing of the past.

Right now maybe we need the 'spend our way out' fiscal policies, maybe we need the green cheese and its factory, but Keynes would be the first to agree that we live in a world much different than his. The population will slow its growth and stop before the end of the present generation. Africa is looking at develping faster than Asia did in the next generation. GM and California are in chapter 11 and Google and Apple are creating technological and financial benchmarks. All these conditions suggest that our monetary and fiscal policies are being outmoded by progressing real economic and social conditions. Perhaps, after a year or two of deleveraging, and then eight more years of global capital extension, we might not need any more green cheese and we will need something else.