Trade

The basic argument for free trade, based on the idea of comparative advantage, is quite easy to understand. Let's say that farmer Alice can grow 20 pounds of wheat on the amount of land that it takes her to grow one pound of hop flowers. Let's say farmer bob can only grow 10 pounds of wheat on the amount of land that it would take him to grow one pound of hop flowers. Then if Alice trades her wheat for Bob's hops, each ends up with more beer than if both had try to remain self-sufficient. This result is extremely powerful:the conclusion trade is beneficial only requires that the relative "costs" of production (in this case use of land) are different. It doesn't matter why (it could be something about the land, or something about Alice's or Bob's skill, or anything) and it doesn't matter whether one or the other has an absolute advantage.

It stands to reason that consensual trades usually leave both parties in a sense better off. Why only "in a sense?" Because if each party benefits from the trade, then it is likely that in principle each could have gotten a better trade. This is true even with only two participants, but if there exists such a thing as a "market price", someone who makes a trade unaware of this market price and getting significantly less than the market price will, with some justification, feel "ripped off".

Attempts to fix prices will generally lead to bad results, as the market price will change over time, sometimes quite quickly, and a mandated price will either prevent mutually beneficially trades, or will be circumvented, with the costs of circumvention being pure waste. But it doesn't follow from this that all consensual trades are good ones. I think the strongest conclusion one can come to is that for a responsible adult it is disadvantageous for there to be a coercive entity with the power to restrict one's trades.

Memes

I think the "meme" concept, the idea that ideas themselves act as replicators in human minds,reproducing like yeast in a barley malt solution, is fundamentally wrong in the worst way an idea can be: it often seems to lead to plausible conclusions, but it can often lead to wrong conclusions, and even when the conclusions it leads to turn out to be correct, they generally could have been arrived at as easily and more rigorously some other way.

It is true that people learn lot from observing each other, but I think people try to copy general methods more than to precisely imitage. More to the point, they learn as much from observing each others;' mistakes as their successes, and the observer must decide for himself which is which.

I started but didn't finish Susan Blackmoore's Meme Machine book. I gave up on it shortly after she theorized that people talk more than is practical because a statement along the lines of "I think people should be babbling babbling babbling all the fucking time whether or not they have anything to say that could possibly of any interest to anyone on earth, let alone to whomever they happen to be talking at" is likely to be frequently repeated, whereas one on the lines of "those who have nothing relevant to say ought to remain silent" is much less likely to be repeated since in most contexts it would be itself irrelevant (this is paraphrased of course). But to suggest an idea is also to suggest its opposite. A claim that yapping for the sake of yapping is good is so obviosuly stupid that if anyone believes it, it makes a better argument for silence than a direct request for silence ever could.

Viruses can infect cells because the virus is similar to the cell's own information storage mechanism on a nuts and bolts sense that is not and could never be true for suggested ideas. A virus consists of a chain of amino acids, just like RNA and DNA. An idea in the human brain takes the form of the map on neural pathways and transmission spikes among them. A suggested idea is physically nothing like that.

The point is that ideas cannot slip past the mind's evaluation mechanism. The shape of a virus may explain why it can slip into a cell despite being harmful to the cell. There is no analogous "shape" of an idea.

Why then do people believe, or purport to believe, things which are clearly untrue? The only kind of ideas that are slavishly adopted are those that serve as group or status markers. That is, accepting the "beliefs" or a group may be a condition of joining or remaining within the group, and lower status members of a group may attempt to emulate the higher status members. The point is that these cases the success of the ideas has very little to do with the ideas themselves and a great deal to do with the perceived qualities of the individuals attempting to advance them.

Of course, people will not continue to act in accordance with beliefs, whether or not they claim to believe them, if there are clear and significant consequences to themselves for doing so. But whether or not this is true for an individual will depend on his specific situation. Most people today could be flat earthers without suffering any direct harm from their beliefs.

Seeing Like a State

Seeing Like a State, by James C Scott

The book describes systematic partial or total failures of various "high modernist" government sponsored projects, including German "scientifically managed" forests, planned cities (especially Brasilia), collective farms in the Soviet Union, and agricultural "modernization" policy in Tanzania.

The faults of the central planners include an unwarranted love of grand scale for its own sake, a fondness for structures that look orderly (that is to say, show obvious regularity when seen from a distance), a tendency to consider a region as a producer of one particular product of uniform quality (and hence quantity produced being the sole criterion of success), planning based on abstract "average fields" that do not reflect actual local conditions, and contempt for the hard-won local knowledge of the people whose lives the planners presumed to direct.

The book is well worth reading for the details, but I think after consideration certain elements seem obvious. A central planner has to feel infinitely wiser than the people who will be subject to his decrees. If he felt only marginally superior, he would conclude that the advantage in perspective of actually being there on the ground would outweigh his slight edge in intelligence, and would have to get out of the central planing business. A central planner has to be willing to abstract away almost a huge amount of detail, otherwise planning becomes humanly impossible.

Certain plans seem particlarly boneheaded. For example, mandating separate residential districts, shopping districts, districts full of nothing but office buildings, etc obviously forces a lot of wasted extra travel over mixed use, and it's hard to see how it does anything else. Polycropping has numerous benefits over monocropping; the main advantage of monocropping is that it is better suited for mechanization. Forcing farmers to live in villages away from their fields wastes time in travel, and does little else.

The one area where I would fault Scott is that he seems to fully credit the intentions of the planners and of the regimes that forcibly impose their schemes as being fundamentally good, at least in cases where those regimes were democratically elected. I see no reason to believe this is true. If there was ever any good reason, theoretical or practical, to believe that the various policies described in his book (other than the tree farms) would actually lead to an improved quality of life for anyone, Scott does a poor job of showing what it might be. So far as I can tell, the only practical advantage for anyone of most of these schemes is that it simplifies the job of the tax collector. There is one intangible advantage: the implementers get to build massive monuments to themselves, using other people's bodies as bricks and mortar.

Meta-information Markets

It is a general characteristic of information that it is often impossible to know, or even to have a good estimate of, how useful a piece of information will be until one has it.

People do buy books, of course, but it is quite common to feel afterward that the purchase of a particular book was not really worth it, and conversely a great many worthwhile books go unread by people who have no way of knowing in advance how much they would appreciate those books. Similarly with other forms of information.

In this particular post I will discuss what might be called meta-information, by which I mean information which leads to other information which the reader will (hopefully) find useful or otherwise interesting. The information pointed to may be further meta-information, but somewhere at the end of the chain there must be something will value for its own sake.

The problem in its full generality is too complicated for me to discuss here. I will assume that there is some entity which I will call the "publisher" who will be able to obtain some payment from the reader, direct or indirect. I will assume for now that there are no coercive entities that need concern us; the publisher is operating openly and "legally". However, unscrupulous publishers potentially may employ "shills" to promote their goods, and their competitors or others who dislike their ideas for whatever reason may say untrue negative things about their works. My goal is to briefly sketch how some sort of useful "reviewer" system might work.

In my proposed system, the reviewer describes the work using with some sort of standardized system which allows the reader to quickly find works of interest to him. Semantic web type stuff. Either the reviewer is a relatively large organization, or many mutually independent reviewers have agreed to use the same system. The reviewer's primary function is to accurately describe the work and only secondarily to give a subjective assessment of its quality. The publisher pays the reviewer in hopes of receiving a wider readership. The reader has access to reviews for free.

The reason the publisher pays rather than the reader is that the reader is highly uncertain as to the value to himself of the service of the reviewer, whereas the publisher has the relatively simple task of assessing whether the additonal sales due to the review justify the reviewr's fee. Even though the reviewer is paid by the publisher, the reader can have more confidence in the review than he could in advertisements because the reviewer is not merely acting on behalf of the publisher but is using some sort of objective criteria, and the reviewer's value is solely based on his reputation for honesty and accuracy. Yes, reviewers would review each other.

Whatver the details of the reviewing system, provided that all reviews are specific and digitally signed, it seems to me that the system as a whole should be verifiably almost completely "honest". If Alice reviews Bob and says something "I agreed to read six books reviewed by Bob at random, here are the six books and his reviews, I found them completely accurate", this is not sufficient for a reader who trusts Alice to trust Bob 100%, but it's pretty good evidence that he's generally reliable. Provided that it can be kept unambiguous whether or not a review is "correct", one false review could be enough to destroy a reviewer's reputation. In order to establish themselves, reviewers might have to at first review a few books for free and pay to have themselves reviewed by established reviewers.

Problems with Choice

In general it is always better to have the opportunity of making a choice than not. However, being required to make a choice is often unpleasant. Making meaningless or irrelevant choices is a boring nuisance, and making choices without the necessary information to ensure one is making the "correct" choice can be frustrating or worse, particularly if the consequences for making the "wrong" choice could be severe.

This being the case, it's no surprise that in many situations people may prefer to rely heavily on the advice of some trusted authority, or even have the decision-making capabilty taken out od their hands entirely. But this solution, if undertaken voluntarily, may only push the problem back a level. One must still decide which authority to trust among many contenders, none of whom have perfect confidence, and all of whom may have motivations other than giving the recipient the best advice possible. Thus, the problem of deciding whom to trust may be scarcely easier than making the original decision oneself.

It is only by having the option to choose itself removed that the entire burden of an unpleasant choice is lifted, and so it should not come as a surprise that many people prefer to have the government mandate decisions for them, or at least do not object when the government does this. And often, it appears to be doing a reasonably good job. But the value of lost opportunities due to government mandates is usually invisible.

I remember a discussion on Usenet many years ago in which the libertarians were arguing that it was absurd that licenses were required to cut hair, and the antis dismissed the libertarian position as arguing for a "right to a bad haircut". Of course, governemnt certification is virtually worthless as a guarantee of quality, whereas the fact that a person has managed to stay in business for any length of time in an occumaption that relies heavily on repeat customers is actually a pretty strong assurance of competence, but this misses the primary practical effects of mandatory licensing policies. I don't want to pay the effective "haircut tax", but to me it's chump change anyway. But to lower income people, an extra expense of a couple bucks for a haircut or the loss of an opportunity to make a small amount of money cutting hair is nontrivial. In the greater scheme of things the losses to the world due to these kinds of restrictions are small taken one at at time, of course, but they add up.

It would be advantageous if there were such a thing as a knowledgeable and fully trustworthy party one could go always to for advice, but there are good reasons why this cannot be. Even an agent wholly dependent on his good reputation for acquiring an retaining customers can often get away with misleading them in subtle or even gross ways, and despite this may deceive others into thinking that it is the exemplar of honesty and wisdom and that those who dispute its pronouncements are quacks. But an entity with the power to compel will not only have at least equal opportunities for this type of corruption, it will tend to lose even the concept that it is some supposed to be an agent working on behalf of another, and will naturally progress from having the de facto power to make arbitrary decisions to feeling it has the right to make arbitrary decisions.

I have never understood the thought process which leads people to believe that something should be better because it came about as a result of a political process, democratic or otherwise, rather than a market process. I don't know of any theory that purports to explain why it should be true, I only know of theory that predicts the reverse, and indeed observation seems to bear this out. But the demonstration of this has not yet been made sufficiently clear.

Don't Follow the Money

Attempts are often made to "explain" financial downturns with the metaphor, "the economy is like an engine, and sometimes it overheats". This is more of a STFU than an actual explanation. No attempt is made to explain in what sense the economy resembles an engine, nor why it should overheat, or what that even means. There is perhaps an implication that there should be a "cooling off" period after a "boom", but no meaningful explanation as to why that should be so. The content essentially boils down to "shit happens". Shit does happen, but it doesn't JUST happen.

I think a great deal of confusion is caused by people being distracted by money valuations. Even when a dollar referred to a specific quantity of metal, the purchasing power of a dollar would vary over time. Now that a dollar doesn't mean anything in particular, it is particularly foolish to act as if a valuation in dollars is anything like a "true" measure of value.

Of course, there isn't and can't be a single number which is an absolutely true measure either of stored value or of productive capacity. The relative values of goods and services will change unpredictably over time, and there are no generic factories but rather there is the capacity to produce particular goods and services.

A speculative bubble happens when there is an unsustainable accelerating increase in the relative value of some kind of good or service. There are two related phenomena which characterize a speculative bubble. First, there is a great deal of illusory wealth. Income producing assets such as stock or rental property, are valued far above what they "should" be worth based on the actual amount of income they produce based on the belief that their future valuations will rise still higher. Second, there is a misallocation of resources toward production both of the overvalued goods and services themselves and of increasing the capacity to produce them still further.

There are two important points here. First, the "losses" incurred at the "bust" at the end of a "boom" are inevitable, because much of the wealth was never really there in the first place. Second, there is not and cannot be such a thing as a generic boom. The world has never had a problem with too much productive capacity for everything, and it is doubtful that it could. Excess productive capacity for certain goods can be harmful to those who possess skills or equipment which are useful only for producing those goods, but their problem is not so much that too many other people can produce what they can as that they can't competitively produce anything else either.

The Left

Many years ago on Usenet a remember reading a post by a Muslim who argued that, although the Koran in English may seem unimpressive, if one were to read it in the original Arabic one would be convinced that it must be the direct word of God, that it is such sublime poetry that it could not have been written by a mere man. I wasn't an active participant in that particular thread, just a reader, but the argument made an impression on me because it so clearly illustrated a principle. It seemed absurd that the poster would expect his readers to go to the trouble of learning Arabic just to refute him, and yet in principle there was nothing really wrong with his argument, nor was there any real way he could make it without expecting the other participants to learn Arabic. I had perhaps been somewhat suspicious of the assertion that one should investigate all ideas for one's self rather than merely relying on the judgments of others, but never before had it been so clear what an utter crock it is; there isn't time, wouldn't be sufficient time in a thousand lifetimes, to actually examine all possibilities sufficiently, even if one restricted examination to ideas with a substantial number of adherents.

This post is not about the political left, but rather about the left side of the intelligence curve, and not just the left tail, or even the left half, but more like the bottom 95%, and perhaps in some cases still more. That is, nearly everyone.

I have a pretty high opinion of my own intelligence, but although I'm samrter than the average bear, I know that there are millions of people in the world who are at least approximately as smart as I am, and some of them are substantially smarter. Occasionally I have come across an argument that seemed sufficiently complicated that not only was I unwilling to devote the time and effort to puzzle it through, I thought perhaps it might be beyond my ability to follow (and I'm not counting cases where the author is deliberately being obscure). I can't remember the particular incidence, but I do remember once being shocked by the insight: most people are like that all the fucking time.

There are important implications of this. First, people are generally being sensible when they dismiss unconventional or outlandish ideas as "nonsense". Most such ideas are nonsense, and most people are incapable of distinguishing the occasional profound insight from madness, Either they can't do it all, or they can't do it within the constraints of time and effort the idea seems to deserve. Second, that when new ideas do overtake the old, it happens not so much because everyone is convinced as an individual of the truth of the new idea as that an influential few embrace the new idea and the rest follow "expert" opinion. That's all they can do. Finally, if an idea is popular with the most influential members of a society it is likely to become regarded as "true" regardless of the idea's actual merits. This is, I think, true in all societies, but particularly those like ours which have a reasonably well defined class of professional intellectuals.

It follows that it's generally a waste of time trying to persuade the masses of anything new by argument. The following one can get will depend more on one's skill as a persuader than on the quality of one's ides, and in any case that following will remain small unless one has the support of the influential ones.

But where argument fails, demonstration may succeed. Technology advances because the new methods can be directly observed to be better at accomplishing desired aims than were the old methods, or even are capable of accomplishing that which could not be done before.