Gedankenexperiment

This post’s title is a nod to today’s (eventual) subject.  I’m going to talk about and mathematically explore the whole ‘society of Einsteins‘ meme.

Whatever you think about them, and for better or worse, the George Mason University Libertarian(ish) Economists (G-Mules, for short) and the Mercatus Center scholars are a subset of what Moldbug calls the “Orange Line Libertarians” and are both major players in the econoblogosphere and opinion-making idea spreaders beyond. The fact that egg-head academics of this sort have the influence they do says a great deal about our era.  There’s Cowen and Tabarrok at marginalrevolution, Kling now at his own place, Hanson at OB, Caplan et al at EconLog, Eli Dourado, etc.  I like all of these folks, most of the time.  You might throw in some of the GMU law professors too, but we’ll defer that until another day.

They have plenty of disagreements amongst themselves, and because Cowen is a Straussian Obscurantist who avoids clear wagers, there’s little hope of resolution.

Sometimes they are both in agreement with each other and in alignment with neoreactionary thought.  For example, none of them has very nice things to say about Paul Krugman except that he’s one of the cleverest and best in the world at doing a very bad thing, but for what he imagines to be a good reason.  A delusionally-noble Machiavellian super-villain of political word-smithing.

But on other subjects they are all allied against our shared ideas; this is most noticeable (because most frequently expressed as of late – in accordance with the media-politics cycle) on the subject of immigration.

Neoreactionaries (and most countries in the world on a practical, implemented-policy basis, not to mention choosy universities) favor selectionism. The selectionist position is that personnel is policy, and that there is nothing illegitimate about a government, sovereign over a piece of territory, (or, more abstractly, any organization of regulated membership) distinguishing between its citizens and foreigners, and owing only those citizens the professional-to-client suite of duties.  These include loyalty, avoidance of conflict of interests, and vigorous and competent advocacy for the client’s benefit as the client would define them.

This doesn’t imply any antagonism towards or predation upon non-members, but it neither, in turn, implies any affirmative duty to restrict one’s conduct to actions which either improve, or are at least neutral, to the welfare of foreigners.  Some games are unavoidably zero-sum (e.g. sports, or trials).  You remain bound to try as hard as you can to win the case within the rules, even though if your client wins then the other party loses.  Sorry, but that’s called reality.

Neoreactionaries are comfortable with a mild, gentlemanly requirement to treat non-members with benign indifference.  The presumption is one of respect and agency – non members are responsible for, and perfectly capable of, tending to their own interests.  For example, the management of the Apple corporation is expected to try as hard as it can to maximize the value of the shares held by its owners, even if this were to necessarily diminish the value of shares held by owners of the Microsoft and Google corporations.  Worrying about Microsoft shareholders is not their concern, nor ought it to be.  If an Apple shareholder feels badly for a holder of Microsoft stock, he may alleviate his empathy on his own accord, but the company’s management should not violate their duties and force him to do so against his will.

It’s a crazy and radical idea; I know.  For nations, this notion also includes broadly regulating the conditions of entry and exit of foreigners across its borders and the process by which certain aliens of certain numbers can apply and achieve membership in the citizenry.  Again – a fanatically, hyper-extreme position.  How hateful.

The G-Mules disagree with this, with differing levels of adamance, but with most favoring an Open Borders policy on both Economic, and, as of late, Moral grounds.  The intense Libertarian interest in these sorts of moralistic or ethical deontologically-originating pronouncements seems to be a recent phenomenon, and one that seems at odds with the anti-moralism, absolutist-individualist thread that remains its common, Individualized Utilitarianism approach to other questions, such as sexual activity or the prohibition of drugs. I don’t think I’m the only one who has noticed this, but the obvious dissonance isn’t stopping them.

The Left-Libertarians, ‘Liberaltarians’ and ‘Bleeding Heart Libertarians‘ are likewise incoherent species of this Rawls-inspired tendency towards Progressivism – whereas ‘Libertarian Paternalism’ is merely pretending to be ‘Hayekian’ but is being pushed mostly by very anti-Libertarian types.  Not that there’s anything wrong with a properly targeted paternalism, of course there’s not, or that there’s something inherently correct about Libertarianism, but “as much choice as we can trust you to exercise responsibly” Libertarian Paternalism is to Libertarianism as Liberty Under The Soviets is to Liberty.  Heavy on the Paternalism and the Soviet, not so much of the other stuff.

Regardless, the point is that we get a lot of sanctimonious scolding and self-righteous sermonizing from these folks these days, especially to upbraid any blasphemers on the evils of immigration control.  Where is all this coming from, you ask?

Easy!  It’s because Libertarianism is Racist.  In three major ways.

The first way is the one that Foseti demonstrated.  Even if you were to have some kind of biblical grand jubilee and erased all debts and distributed all capital equally, (and erase all hate and privilege, etc., etc.) it is most definitely in the nature of things that the market, in due time, would begin to redistribute income, jobs, anything scare and valuable, unequally.

Some people are naturally more talented, motivated, and effective at producing things other people demand and are willing to pay for, or in economic parlance, sacrifice alternative opportunities for.  This even includes things like ‘sexual allure’, and we know well the lengths to which people will go to get themselves some of that.

Alas, Nature and God have conspired to fail to distribute these talents equally amongst the genders and various ethnic groups.  It’s such an obvious truth – that one constantly observes everywhere one goes – that it’s clear as day to any honest bigot whose honesty, if public, revokes his progressivism-issued permit to earn a living.  Someone once said:

For even when we were with you, this we commanded you, that if any would not work, neither should he eat.

A policy of that sort will sure encourage people to hussle, won’t it?  Very ‘American’. Just a few years later, Trotsky observed the other edge of this incentivizing sword.  That you could preserve this principle and simultaneously ensure everyone is fed by guaranteeing everyone jobs.  You could do this because you created a new military-like collectivist economic system where you control all the jobs, assign them to everyone, and force them to work.  Well, not ‘everyone’ of course; not your enemies.  They just don’t get jobs.  And so they do not eat.  A cruel but powerful tool for control.

Today, you may notice the existence of the worst of all worlds combination; the preservation of the tool of control, but the absence of the original motivating moral principle.  There are plenty of people who feed well without having to go to the trouble of expending their labor.  There are plenty of people who want to labor, but aren’t allowed to do so by the people who, somehow, mysteriously, seem to have control over that.  Because ‘social consequences’.  Or something.  All this in the ‘American’, ‘capitalist’, ‘free’ society.  All the Puritanical moral enforcement but without the Puritan’s God.  Where have we heard that one before?

So, without intervention and redistribution, (which Libertarians are supposed to presume are bad), you’re going to get disparate impact, which is wickedness beyond words.  This rings up a serious intellectual conflict, and you can always end a war most quickly by surrendering.  The Left-Libertarians are mostly-cool with this form of anti-racist, anti-inequality policy, and so are all Progressives.  Not much daylight between them.  So can we tell the difference?

Anyway, the second way actual Libertarianism is racist is that the contemporary definition of ‘racist’ also includes ‘insufficiently anti-racist’.  And insufficiently anti-racist means not favoring ethnicity-and-gender-conscious government coercion to counteract the disparate impacts that would result from both impersonal market forces and personal preferences.  (Hint: Libertarianism is supposed to be against, ‘ethnicity-and-gender-conscious government coercion’, so … oh snap.)

Any utilitarian philosophy that prioritizes individual preferences tends to run into some trouble when those preferences, the things that some people want, the things that make them happy without directly coercing anyone else are … ‘just plain wrong!’  Traditional Libertarianism, completely unlike Progressivism, had trouble pronouncing non-sadistic, non-coercive preferences as morally good or evil.

It claims to favor ‘freedom of association’, but doesn’t know what to do or think when racists or sexists wants to do it in their racist, sexist way.  It can claim the free market made things better, but that argument doesn’t truck with those who get to weigh its validity.  Equality and Liberty are values that sometimes conflict, and, when combined with a fairly severe ‘social consequences’ environment, Libertarian thinkers were compelled by necessity to stretch their minds tighter and tighter to try and square this stubborn circle.

Eventually, this rubber band is going to snap.  It did so in two ways.  The first was through Auster’s familiar ‘unpricipled exception‘.   Don’t pretend there’s anything wrong with or worth changing about Libertarianism; just make a special exception for certain isms the progressives get to identify and the list of which they get to modify anytime they feel like it. You may note that this is also descriptive of a lot of the History of modern ‘Conservatism’.

Ah, but the other way the elastic pops is to join the Progressives and go all-in with the latest version of their moralism software (they never stop putting out new releases of their OS), with perhaps a few nods-to-actual-Libertarianism tweaks here and there in the kernel.

There is a strange, third way that Libertarianism is inherently racist.  Not just racist, of course, but anti-minority in general (for which hell will have to begin construction on an additional level) and even self-contradictorily anti-Libertarian as implemented.  Libertarianism has a Democracy problem, but it doesn’t know what to do about it.  Demonstrating that Democracy is a horrible way to make rational collective decisions is just too easy, and that’s not what I’m getting at.

The problem is that most people don’t want Libertarianism in general (though they may want to legalize a specific drug here and there), but Libertarianism supports … people getting what they want, which is a lot of redistribution and government coercion.  Whoops.

Libertarians also hope to shape opinion so that a larger portion of the voting, resident population favors Libertarian policies.  But they also support allowing thwarted, would-be immigrants into the country, about whom we know empirically that their likelihood of supporting Libertarian policies is even lower than that of existing Western populations.  Whoops-squared.

If more Libertarianism is good for us, individually and collectively, then a lower chance of Libertarianism is bad for us all, individually and collectively, and even for would-be-immigrants.  Libertarians like Caplan say there is no paradox because voters are irrational and cannot be counted upon to know, let alone vote for, their own interests when the calculation becomes complex.  Alas, I have yet to see any of them engage seriously with this fact; not even arguendo.

Furthermore, in a Democracy, majorities are going to vote for anti-Libertarian policy, and so they’ll get it, good and hard.  Libertarians have to turn against Democracy (about as survivable a strategy these days as defending a racist’s right to be racist), or they have to favor some kind of Libertarian version of Constitutional interpretation which will forbid the Democracy from acting out its anti-Libertarian desires.  Once upon a time such an interpretation actually ruled the day, but that time has long since passed.

But why shouldn’t the majority get what it wants, even if it’s anti-Libertarian?  As David Friedman conceded in that video linked above, the Economic basis for Libertarianism cannot provide much of a moral foundation unless you go along with John Stuart Mill (On Liberty, Utilitarianism), and Jeremy Bentham (who looks a lot like Benjamin Franklin) and propose the axiom, “… it is the greatest happiness of the greatest number that is the measure of right and wrong …”

Sounds seductive as an ethical principle, just like ‘do unto others …’ but, as philosophers and bloggers have noted for centuries, without plenty of ‘grown-up qualifications‘ it leads us into a lot of absurdities, and maybe a few outright monstrosities when implemented politically.

Now, if you’re a Nozickian, (or any of the folks that MacIntyre wrote about in After Virtue) you might claim that it’s hopeless to try and compare incommensurables, or to calculate policy to optimize dynamic personal utilities, and thus to derive moral principles thereby.  But the reality is that you need some metric to argue that some policy makes things better, so you need a notion of what ‘better’ is.

Most Libertarian Economists settle on the concept of Maximizing Net Social Welfare, (the economic component sometimes being conflated with GDP) and it is here that we run into two more kinds of racist trouble.

The first is that if you believe individual utilities are indeed commensurable (a shaky assumption  deriving from egalitarianism, but whatever), and you combine that with a belief in the diminishing marginal utility of wealth (a more valid assumption, but not unassailable), then if Utilitarianism is a moral principle, then the Robin Hood strategy is also a moral principle.  Take from the rich and give to the poor.  Everybody’s doing it.

With maybe a little caveat to not take too much so that you break the Laffer Curve , or ruin constructive incentives too much, which would perhaps impede rates of innovation and productive factor accumulation, which would in turn leave less to redistribute in the future.  Maximum Expected Value of Sustainable Robin-Hooding is about where you end up.  Now, that does seem familiar, doesn’t it?  And that’s also not very Libertarian, now is it?

But it is anti-racist, as defined above, and if Libertarians have trouble with it, then they’re racists.  But more to the point, with a few progressive-favored exceptions, USG isn’t in the business of protecting liberty from democracy anymore.

It is, however, most definitely in the business of protecting minorities from majorities, that is … from racists, like Libertarian racists.  But if you really believe in maximizing social welfare, and you believe you can approximate it by counting heads, then the logic dictates that you favor policies where majorities triumph over minorities. That’s definitely racist.

It can hardly make numerical sense under this paradigm if the interests of 95% of the population are subordinated to 5%. Even if the 5% perceived that they gained up to 19 times more than the 95% perceived they lost.  If the 5% were willing to pay 20x what the 95% were willing to extort accept for such accommodation, then perhaps we could sell indulgences, fashion law in a Coasian manner from trade and auction, but we don’t do things that way.

But if the same logic that justifies coercive redistribution also invalidates minority protections, how come the Progressives are absolutely obsessed with minority rights, no matter how much the majority desires otherwise, and no matter how small a minority it is (even 0.1%)?  You need a kludge, and Rawls is here to helpVeils of Ignorance, Original-Position Social Contract Negotiation Blindness, yadda yadda … Social Justice!  Universal Human Rights! (but not to bear arms.)  Redistribution and Minority Favoritism!  What’s not to like?

The government doing it, that’s what; at least for racist Libertarians.  Moral principles are one thing.  Believe what you want.  Give away your own money; fine.  But enforcing them coercively on dissenters through the government in a Socialism-lite manner is another thing, and racist Libertarians aren’t supposed to like that shizzle!  And mostly they don’t.  Which is why they are racists.  Or maybe they’re not racists, but also they’re not Libertarians anymore either, they’ve just kept the name because it has positive connotations and valences that help them feel vaguely hip and above it all.

So, if you’re a racist Libertarian, not just in name but in some actual non-Progressive way, and your philosophy is inherently, triply racist, and yet you still want to be an invited party to the ‘Grand Conversation‘, then you are in critical, desperate need of some way to prove your anti-racist bonafides that lines up, even remotely, with ‘Libertarian Thought’.  It would also help a lot if that position was shared by the same people who were in charge of selecting whom gets accused of racism and who is thus allowed to talk and earn a living at the same time.

Enter Immigration.  And the ‘Society of Einsteins’.  For nearly eight years now.

Let’s chronicle the evolution of this meme.  Read the whole thing.

  1. 21-JAN-2006: “Where Eugenics Goes Wrong: The Implications of Comparative Advantage” – Bryan Caplan
    1. Let me begin with a thought experiment, then explain the general principle.  Suppose we have an isolated society in which everyone is a genius. Let’s call them the Brains. Who takes out the garbage? A Brain, obviously. Who does the farming? Again, Brains.
  2. 25-JAN-2006: “Where Dysgenics Goes Wrong: Comparative Advantage Strikes Again” – Bryan Caplan
  3. 15-SEP-2010: “Against High-IQ Misanthropy” – Bryan Caplan (See Also Caplan’s: Selfish Reasons to Have More Kids)
  4. AUG-2013: “Immigrants and Native Workers: New Analysis Using Longitudinal Employer-Employee Data” – Mette Foged and Giovanni Peri
  5. 29-AUG-2013: “Unskilled Immigration To Denmark Increased Wages For Low-Skilled Danish People” – Matthew Yglesias
  6. 30-AUG-2013: “Immigration and wages – Alex Tabarrok”
  7. 03-SEP-2013: “Implicit Aristocracy” -Ly Cygne Gris

Now, a little aside.  There has been a lot of econoblogosphere commentary on the issue of ‘economath’.  Here is Kling, for example, who takes the view that there is too much Physics envy in the field, a theme he’ll explore in his upcoming book.  I am sympathetic to the argument, but I think the piling on is over the top.

Furthermore, some kind of mathematical modelling, or the use of mathematical symbology to express relations and assumptions and logically explore interactions and interactions is particularly useful to avoid the myriad common abuses of the narrative style.  The main thing is that it helps nail the slippery weasels down.  One should always express a healthy skepticism of overprecise overconfidence from fields with such high inherent complexity, but one should avoid enabling the weasels to get away with their weaseling by denigrating weasel repellant.  The world always needs more and better weasel repellant.  Math is weasel Deet.

But weasels aside, the best thing about demanding some math is that it, as Mankiw notes, is very useful in illustrating the Strong Assumptions necessary to arrive at some popular conclusion; assumption which, if implausible, must tend to degrade the plausibility of the conclusion itself.

So, putting my nonexistent LaTeX-in-free-Wordpress skills where my mouth is (sorry if your reader software or device can’t handle the renderings), let’s dive into the math and explore Caplan’s world.  Here’s the toy model of a General Equilibrium:

  1. Let L be the total amount of labor in our closed economy and K be the total amount of productive factor capital.  You could redo this whole model on a per capita, K/L basis, but we’ll keep things easy for now.
  2. There are two kinds of workers.  E’s and M’s.  E can stand for ‘Educated’ or ‘Einsteins’ or ‘Everyjob’ and M can stand for ‘Manual’ or ‘Mexicans’ or ‘Monojob’, whatever you prefer.  The smart fraction is s.  So: s = E/L
  3. We are assuming full employment of both capital and labor.  Every employee works a standard work day.
  4. There are also two firms which each employ people to do one particular job.  TP is the Theoretical Physics firm and hires people to look for GUTs.  FS is the Floor Scrubbing firm, which hires people to sweep and stuff.  The firms are ‘normal profit‘ – they distribute all their output to rent both capital and labor, which determines real wages.
  5. Here’s the thing: either M’s or E’s can FS and do so with the same productivity, but only E’s can TP.  It follows that the E’s act like a kind of floating reserve for both firms.  If FS wages rise higher than TP or vice versa, E’s will change jobs until parity is restored.  However, if all the E’s are employed by TP, then the rise of TP wages is unconstrained.  Your economic intuition spider sense should already be tingling, because you would expect some kind of ‘inequality trend discontinuity’ to appear at the point the last E switches into TP work.  The fraction of E’s working in TP is r, so the TP labor force is Ers.
  6. Let c be the fraction of capital rented by FS to augment its workers.
  7. Let the production functions be constant-returns-to-scale Cobb-Douglas type: QFS=a(L(1-sr))^\alpha(Kc)^{1-\alpha} and QTP=a(Lsr)^\beta(K(1-c))^{1-\beta}.  All variables are treated as given except the allocations, r and c, so we’ll eventually have to solve for those.
  8. All output is split between capital and labor.  We’ll call the Capital Shares KSTP and KSFS and the Labor Shares LSTP and LSFS.  So we have the identities: QFS=KSFS+LSFS and QTP=KSTP+LSTP
  9. But first, all our workers have identical utility functions.  (That’s pretty commensurable!)  The function is also Cobb-Douglas (it makes the math work out nice, but is reasonable, I’m not pulling a fast one on you) and is U={q_{FS}}^\gamma {q_{TP}}^{1-\gamma}.
  10. Prices are P_{FS} and P_{TP}.  Prices are nominally indeterminate, so we can only really understand price ratios, but that’ll become evident momentarily.

Just a quick note.  I’ve been working on a bit of a research project about changing quality of life patterns in the post-WWII era.  Part of that project is looking at income distributions and real purchasing power.  I get the impression that fifty years ago wage ratios between smart, highly-educated people and average, uneducated manual laborers were much lower than they are today.  There are a lot of stories you can tell to ‘explain’ that, but a change in the s profile, given the different kinds of jobs available today, could contribute as well.

Ok, now we can start deriving.  First, we must determine how our employee consumers, rational, utility-maximizing homo-economicus, will choose to allocate their budgets towards TP and FS.  The simplest way to solve this kind of optimization problem is to use the technique of Lagrangian Multipliers.

As yet another aside: as a closet math-geek, I tend to think about non-math issues in mathematical terms.  Relevant factors in a court case?  Those are the ones which, if you take the derivative of the mean holding in similar cases with respect to that variable yields a statistically significant effect on the outcome.  That includes your judge.  You should be able to write the actual law in this form for frequently litigated cases not of first impression.  You can then feed them into a computer and … oh snap, Cowen is right, Google’s going to eat my profession’s lunch.  Yours too, eventually.  Maybe the toadies will give us nice drugs to smooth out our depressions.

Lagrangian Multipliers are also a good way to think about rational policy in general.  The general form looks like this:

\Lambda(x,y,\lambda) = f(x,y) + \lambda\Big(g(x,y)-c\Big)

You are trying to optimize some multivariate function f, subject to some other multivariate relation (set equal to zero) that expresses the real constraints under which you are operating.  For static problems, you just set \frac{\partial \Lambda}{\partial x}=\frac{\partial \Lambda}{\partial y}=\frac{\partial \Lambda}{\partial \lambda}=0 and hope it’s analytical enough to solve or approximate.

Even assuming Bruce Charleton is right that we ‘secular’ (non-Orthodox-Christrian-theocratic) neoreactionaries are no better than the progressives when it comes to ends (the f function), we can still claim that we would be much better at the means directed at accomplishing those ends, because our \Big\{\lambda\Big(g(x,y)-c\Big)\Big\}_{neoreac} is truer than their \Big\{\lambda\Big(g(x,y)-c\Big)\Big\}_{prog}

Thus they want Leftism; but just a different kind of Leftism from the mainstream: a more realistic Leftism, a more efficient Leftism, a Leftism that actually does promote the maximal hedonic well-being which the politically-correct Left only pretends to advance….

… Seeking the magic button, the chink in the armour, the vulnerable patch of soft underbelly, the microscopic software vulnerability… that, if precisely exploited, would swiftly and effortlessly yield-up modern society to themselves and their theories.

I’ll respond to Bruce, and propose my own ‘chink in the armour‘ in due time.  But let’s get back to solving that Lagrangian.  What you’ll find is that:

q_{TP}=q_{FS}\frac{P_{FS}}{P_{TP}}\frac{1-\gamma}{\gamma}

And that implies that the overall labor share of the products consumed by employees has the identical ratio.  (I can prove this more rigorously if you’d like).

LSTP=LSFS\frac{P_{FS}}{P_{TP}}\frac{1-\gamma}{\gamma}

What about the Capital Share ratios?  The allocation of capital will be such that the returns to investment (similar to an interest rate, so we’ll call it i) are equal, so we can write:

\frac{P_{FS}KDFS }{Kc}=i=\frac{P_{TP}KDTP }{K(1-c)}       , thus:

KSTP=KSFS\frac{P_{FS}}{P_{TP}}\frac{1-c}{c}

Now we’re getting somewhere. Let’s solve for r.

Here’s a key piece of reasoning mentioned above:  If not all E’s are TP’ing (r<1), then wages must be equal.  If they weren’t, E’s would switch jobs. Wages are:

W_{FS}=\frac{P_{FS}LSFS}{L(1-sr)},W_{TP}=\frac{P_{TP}LSTP}{L(1-sr)}

But we know the ratio between Labor Shares, and so we arrive at:

\frac{W_{TP}}{W_{FS}}=\frac{1-sr}{sr}\frac{1-\gamma}{\gamma}

If wages are equal, r=\frac{1-\gamma}{s}, else, r=1, which means that our equality trend discontinuity lies at s=1-\gamma.  If your smart fraction is greater than that then r<1, wages are equal and you get toy-model equality.  Otherwise, \frac{W_{TP}}{W_{FS}} takes off asymptotically with shrinking s.  See, as Sailer and Foseti keep reminding us, there’s this thing called the law of supply and demand.  If demand is held constant, but supply shrinks, then relative prices rise automatically to clear the market.  And vice versa. And even in the labor market, which is the insight unions (which we are supposed to favor) have been relying upon for centuries to keep their wages up.

Now we’re going to try and crack the capital allocation nut.  How do we solve for c?  In a homogenous labor environment, we would usually assume Pareto Efficiency but in our two-types-of-employee market, that will lead us into some problematic dilemmas because one kind of labor hits the wall regardless of demand, as we’ll discuss later.

So for the moment, we’ll take a different tack.  We’ll assume reasonably that both competitively big for capital and expand production until marginal profit with respect to capital is zero.  We don’t include wages because employees get whatever remains after disbursement of the capital share.

Profit_{FS}=P_{FS}QFS -Kci, Profit_{TP}=P_{TP}QTP -K(1-c)i

Because of the convenient form of the production functions, we can write:

\frac{\partial Profit_{FS}}{\partial Kc}=P_{FS}QFS\frac{1-\alpha}{Kc}-i=\frac{\partial Profit_{TP}}{\partial K(1-c)}=P_{TP}QTP\frac{1-\beta}{K(1-c)}-i=0

which means two things.  First:

QTP=QFS \frac{P_{FS}}{P_{TP}} \frac{1-\alpha}{1-\beta} \frac{1-c}{c}

But second, because we have some new expressions involving i, we can combine those with the equal returns assumption and the identities from earlier and discover:

KSFS=QFS(1-\alpha), LSFS=QFS(\alpha)

KSTP=QTP(1-\beta), LSTP=QTP(\beta)

Wait, what?  The Capital and Labor shares and capital allocation stays constant regardless of the smart fraction or the overall capital to labor ratio K/L and are based entirely on the capital-labor tradeoffs of the production functions?  That’s not very realistic and should make your spider sense tingle about the plausibility of our assumptions.  But, in the mean time, we can use it to solve for this bizarrely constant c:

\frac{1-c}{c}=\frac{\alpha}{1-\alpha}\frac{1-\beta}{\beta}\frac{1-\gamma}{\gamma},c=\frac{1}{1+\frac{\alpha}{1-\alpha}\frac{1-\beta}{\beta}\frac{1-\gamma}{\gamma}}

and QTP=QFS\frac{P_{FS}}{P_{TP}}\frac{\alpha}{\beta}\frac{1-\gamma}{\gamma}, \frac{P_{FS}}{P_{TP}}=\frac{QTP}{QFS}\frac{\beta}{\alpha}\frac{\gamma}{1-\gamma}

Well, now that we have all that, we can throw in some reasonable numbers for our givens and plot a few charts and see what happens when you change the smart fraction s.

QFP QFS

The image makes sense.  If you have fewer E’s, you get less TP and more FS.  When s hits that magical equality discontinuity point and E’s can start floating between FS-work and TP-work at equal wages, everything flatlines.

Now, since we have an expression for the wage ratio, we can also calculate the famous, inequality measuring, Gini Coefficient.  For this two-worker-type economy:

G=(1-sr)\Bigg(1-\frac{1}{1+sr\Big(\frac{W_{TP}}{W_{FS}}-1\Big)}\Bigg)

Wage Ratio and Gini

Which also makes sense.  Perfect equality with lots of E’s, but lower than that magic point, the wage ratio and Gini inequality both increase quickly.

We can’t identify nominal wages, but we can take the ratio to the prevailing interest rate, and the chart looks like this, just like the law of supply and demand.

Wages to Interest Ratio

Finally, we can now also evaluate what happens under different scenarios.

What if, I don’t know, you were to import a number of M’s equivalent to 20% of the population, but who don’t bring any capital with them?  Seems like an important question to me for some reason, at least, one we should try to answer and understand before we actually go ahead and do it.  Here’s one example:

Post Immigration

You can see that, on an absolute basis, TP wages don’t change all that much over most of the range of smart fractions, but FS wages can rise or fall, depending on the production function trade-offs and which side of the smart-fraction discontinuity point we were on prior to the M-immigration.  Here is what it looks like on a relative post-vs-pre-immigration basis:

Post Immigration Relative

We shouldn’t expect reality to be any less complicated than this toy, and so evaluating which side your society is on would be a very important thing to know before you were to embark on such an irreversible policy course.  That is, if you care about what happens to the absolute, relative, and comparative wages of the various worker-types in your society.

Now, before ending, I must return to the Pareto Productive Efficiency problem I mentioned above.  Normally, we would set production possibility frontiers tangent like so:

\frac{\partial QFS}{\partial Kc}/\frac{\partial QFS}{\partial L(1-sr)}=\frac{\partial QTP}{\partial K(1-c)}/\frac{\partial QTP}{\partial Lsr}

Which changes our capital allocation to:

\frac{1-c}{c}=\frac{\alpha}{1-\alpha}\frac{1-\beta}{\beta}\frac{sr}{1-sr},c=\frac{1}{1+\frac{\alpha}{1-\alpha}\frac{1-\beta}{\beta}\frac{sr}{1-sr}}

Which is the same as it was above except at smart fractions below discontinuity, where it begins to diverge asymptotically as s shrinks by the ratio \frac{s}{1-s}\frac{\gamma}{1-\gamma}

Ah, that makes more sense!  When all the E’s are busy doing Theoretical Physics, as the number of E’s shrink, and in order to keep production ratios in line with consumer demand, capital is reallocated towards E’s to make them more productive while making M’s less productive and reducing their output (and real wages).

But now we run into some problems.  I won’t torture you with any more mathematics, but, in narrative form, what happens is that if the TP labor productivity is more capital augmentable than FS (i.e. \beta<\alpha), then under certain conditions, for our poor Floor Scrubbers, the Labor Share and Wages can fall below zero.  What went wrong?

The full employment assumption, that’s what.  Obviously, as wages approach zero, our M’s will drop out of the labor force, reducing FS output and supply, which would raise prices, and stabilize wages but at some positive unemployment rate.

So, to fix our broken toy, we could do several things.  We could add a ‘leisure’ component to the utility curve, and/or add some kind of reservation wage below which M’s will not work, and a consequent floating unemployment rate that keeps FS wages pegged to that reservation wage.  We could justify the reservation wage through the availability of welfare, and also add a Government actor, which taxes both capital and labor and redistributes to unemployed M’s at some level below the incentive to work.

Now things are getting more complicated, but also more ‘realistic’, even in our simple toy.  What all this effort is really getting at is that one cannot trust, sans plus, the kind of media-narrative assertions we often read on the economic impacts of immigration.  It all depends on the particular nature and state of your society.

That being said, we can still stand by a few plausible statements about our own society.  In general:

  1. We appear to be on the left side of the discontinuity.
  2. Our E’s are scarce.  They get good wages, which are pulling away from those of our M’s, which are stagnant or worse.
  3. We have a whole spectrum of E’s and M’s, of course.  Our hyper-E’s do things almost no one else can, and their incomes have exploded along with the Gini coefficient.  Our hypo-M’s are barely attached to the labor force and heavily dependent on government transfers.

Under these conditions, if the above model has any validity at all, we would expect the rapid significant immigration of lots of new M’s to:

  1. Lower FS real wages for old M’s.
  2. Raise FS unemployment old M’s.
  3. The effect on most E’s will probably be neutral.
  4. Some E’s, especially employers of M’s, will benefit greatly.

Ah, but what if the new M’s will vote with the E’s and against the interest of the old M’s?  Ah … but that really would complicate the analysis, wouldn’t it.

 

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51 Responses to Gedankenexperiment

  1. Vladimir says:

    The main thing is that [math] helps nail the slippery weasels down. […] The world always needs more and better weasel repellant. Math is weasel Deet.

    The trouble is, for the last century or so, this attitude has led to the evolution and proliferation of frightful and hideous breeds of Deet-resistant weasels. These modern super-weasels are historically unparalleled monsters of mendacity and delusion — and with their exoskletons of spurious and yet invincibly abstruse math, certified by professorial authority and peer review, they have made themselves immune to any independent criticism and intellectual scrutiny.

    What you say used to be true in the past, but our civilization has long since passed the point where it’s no longer even remotely true. Nowadays any use of math should be prima facie suspect, and if it’s not in some field like physics where mathematical methods have a centuries-old tradition, it should be considered as guilty until proven otherwise.

    Here I don’t have in mind just the abominations of 20th century crackpot economics and other “social science.” The same pathologies have also long become rampant in many STEM fields as well, even many that are completely neutral ideologically. (Moldbug has written a few very good articles about such pathologies in the field of computing, and I can confirm his observations from personal experience.)

    • Handle says:

      Super-weasels beget super-weasel-super-predators like us. I can spot their errors better and quicker when they resort to relations of symbols.

      I see things in the opposite way to you. Instead of presuming that the use of math is fraught with hazard, I presume that the evasion of equations is a warning that mischief is afoot.

      Whatever risks are posed by the use of mathematical expressions, there is an order of magnitude more danger in pure verbal narrative and heavy reliance on inapt metaphor and analogy.

      • Vladimir says:

        Speaking as someone with a great love of mathematics, and more than a decent background in it, I would say that you’re falling for a fallacious and misguided sort of thinking. Pure mathematics is indeed an edifice of iron logic, where supreme clarity of thought reigns by necessity. However, as soon as you’re using math to make some argument about the real world, things are very different.

        Outside of pure math that rejects any real-world interpretation of its objects, the use of math is by itself no guarantee whatsoever of greater precision and clarity. On the contrary, the effect of math can go either way. When correctly used, math indeed enables far more precise and complex thinking than is possible with prose — but it can also be used to make sophistries, fallacies, mendacity, and weaseling far more effective.

        How and why this happens is a difficult and complex topic, but since I have to compress my argument, I’ll offer you these few brief points:

        1. The strict logic of pure math is never possible to maintain in the applied math of real-world problems. Even in the most rigorous physics, there are constant leaps in reasoning that go beyond what can be strictly inferred by mathematical logic, and a reliable body of knowledge emerges only when these are solidly justified by common sense and empirical findings. Consequently, a math-savvy weasel can run circles around you by skilfully directing these inevitable leaps, feeding you utterly fallacious nonsense while you believe you’re seeing a marvel of logic and rigor.

        2. Even a conclusion derived by fully rigorous mathematical logic ultimately rests on the premise that the mathematical objects you started with have a particular correspondence with the real world. This is another step where common sense and empirical findings are the only guide, and where fallacies can be skilfully hidden. It is very easy to forget (or never even fully understand in the first place) the limits where your model loses contact with reality, and to confuse the map with the territory. Again, math-savvy weasels can use this to their incredible advantage.

        3. Math can be used very effectively to bury nonsense so that it’s extremely difficult to pick apart. This is very difficult to do in prose without ending up with an evidently nonsensical pile of verbiage.However, by piling on the math, a banal or fallacious point can be presented in a way that requires enormous effort to disentangle, and which appears sensible and sophisticated. (With this in mind, your claim about the weasels that you can “spot their errors better” if they use math is simply untrue. This is indeed so if the parties in the math-aided discourse cooperate with the goal of finding truth, but absolutely not when it comes to weaseling.)

        4. Math also serves as an effective barrier against independent criticism, by making it look like any outsider critic must be a crackpot who’s intruding on the experts’ turf. This is another way in which math is a great aid to institutionally entrenched weasels: it ensures that even if you win the argument against them objectively, you’ll certainly lose it in the eyes of the public, who will be unable to see through this veneer of science, rigor, and institutional respectability.

        5. Finally, as a practical observation, so much intellectual mischief is done under the cover of math nowadays that in many areas — arguably all but the hardest of the hard sciences — it is actually insistence on math instead of common-sense arguments that should raise a giant red flag.

        • Handle says:

          I think your points are good ones Vladimir. Yet I’m still not persuaded. Maybe I’m overconfident in my own ability to separate wheat from chaff. What I’d like to see are examples. Can you show me some samples of ‘better in narrative than symbols’ or ‘worse in symbols than narrative’?

          • Vladimir says:

            Frankly, I’m surprised that we’re disagreeing here. If there is any well-established insight to be found in these “neoreactionary” circles, it surely includes the realization about the fallacy and mendacity of much of the official, typically heavily mathematized, academic “science.”

            In fact, I don’t really understand where we disagree. Are you disputing that mathematics can be used as a powerful tool for obfuscation and sophistry, just like it can be used for precision and clarity? Or that such use is nowadays so widespread that in most fields mathematization should be prima facie suspect? Or that a well-crafted math-heavy fallacious argument will be much more difficult to disentangle and refute than if its central fallacy were expressed in plain words? Or that math can be useful to discuss a given problem only when a solid epistemological basis for this has been established, and otherwise we can produce only mathematized nonsense?

            The very existence of so many mathematized and yet spurious and blatantly ideological fields nowadays is a testament to all this. If suddenly all purported scientists were somehow forced to apply sound epistemological standards that are necessary to keep math in accordance with reality — standards that are still mostly upheld in physics — whole vast academic fields would simply vanish. (For start, almost anything that falls under “social science” would certainly have to go. Almost any question about human society can be used as an example of the kind you want: insofar as we can say anything sensible about these things, we can say it in plain words, and a solid epistemological basis for introducing non-trivial math into the discussion simply doesn’t exist.)

          • Handle says:

            We don’t really disagree, and I get what you’re saying. I’m about to review Weissberg’s education book, and when I do, I’ll be able to provide you with an example from his writing of the style I prefer.

          • > standards that are still mostly upheld in physics

            Actually, modern physics is a beautiful example of ‘mathemasturbation.’ Consider string theory and its near-explicit rejection of testability.

          • Handle says:

            Maybe, but it sure got pretty far outside theory-for-the-sake-of-theory. Higgs Boson and all that.

          • Candide III says:

            Not what S.D. was talking about it didn’t. The Higgs was proposed almost 50 years ago when string theory yet on the blackboard. No string theory went into its discovery either. Particle physics hasn’t made much progress at all in these 50 years. Feynman wrote about 30 years ago (couldn’t find the quote, sorry) that we don’t understand where the Cabibbo angle and the small mass difference between K^0_1 and K^0_2 come from, and guess what? we still don’t. There’s lots of mathematics purporting to explain it, but we know no reason to choose one batch of mathematics rather than another.

          • Handle says:

            I was talking about Physics in general. I’m familiar with the String Theory argument. I’ve got Peter Woit’s book on the shelf and follow both him and Motl. Personally, I think everything is easily explained by one fundamental particle, the adamantion, with tiny little Wolverines flittering in and out of existence, fighting and slicing each other up.

          • Candide III says:

            I mostly agree about physics in general (progress in fundamental understandings has been less than stellar), but then you shouldn’t have mentioned the Higgs.

          • Handle says:

            I only mentioned it because I thought LHC confirmation of the particle’s existence and the measurement of its mass was a tremendously impressive and recent achievement.

        • Scharlach says:

          Vlad writes:

          Speaking as someone with a great love of mathematics, and more than a decent background in it, I would say that you’re falling for a fallacious and misguided sort of thinking . . .

          Outside of pure math that rejects any real-world interpretation of its objects, the use of math is by itself no guarantee whatsoever of greater precision and clarity. On the contrary, the effect of math can go either way. When correctly used, math indeed enables far more precise and complex thinking than is possible with prose — but it can also be used to make sophistries, fallacies, mendacity, and weaseling far more effective.

          So how is Handle falling for “fallacious and misguided thinking” by doing what he does here, which is to use math to attempt a more precise view on a subject?

          The more I re-read your comments, the more I think that you’re essentially a Gorgianic Sophist, with his skepticism cranked up so high that he can’t actually commit to anything one way or the other, which explains why most of your comments are nay-saying. You remind me of a physicist I know at my university. He works in optics. His standard line is that if it’s not applied physics, it may as well be religion. He can’t fathom the idea that there can be better or worse lines-of-reasoning even when dealing with messy subjects.

          You say that “most of the social sciences” would have to go if we were to do away with fallacious thinking that dresses itself up with math. So do we just give up on any attempt to learn about humanity in an objective, quantifiable way? It sounds like you’re saying, “It’s just so much trouble to untangle the sound from the unsound reasoning when it comes to the study of humans, I’ll just jettison the entire course of study and pooh-pooh the methods that everyone uses, whether they’re using the methods well or not. Easier that way.”

          • Candide III says:

            > So do we just give up on any attempt to learn about humanity in an objective, quantifiable way?
            Not entirely, but we must be very, very humble about this. As I see it, It is impossible to err on the side of too much humility here. There are things about humans that we have long known how to more-or-less quantify, mainly of physiological nature. Humans being different, it is not straightforward to generalize, otherwise medicine would be easy. There are some other things which we have recently learned to more-or-less quantify, like properties of perception and cognitive biases, but the important ones don’t really quantify very well, and the ones that quantify better are not so important or interesting. And even so, it is a very long way from quantifying elements such as cognitive biases to a quantifiable understanding of people. As an analogy, it took roughly a century since the electron was discovered to learn how to more or less derive simple materials’ properties from scratch, and even so there are lots of things we do not understand, for instance high-temperature superconductivity, even though we have expended oodles of ingenuity on it in the intervening 30 years.
            Besides all this, objective is not the same as quantifiable, unless you define one as the other. Which reminds me — neoreaction is so far rather weak on the philosophical side (I don’t count Yudkowsky’s hedonic-utilitarian followers). We have MM’s reservationism essay, it is good but does not go very far.

          • Handle says:

            To the extent anyone cares about arguments, you can attack the erroneous assertions of an adversary by going after either their assumptions or their logic.

            Sometimes the best way to contradict public nonsense is to show it’s wrong, contradictory, and incoherent even under that opponent’s own terms and methods.

            It’s one thing to say, “Your use of mathematics here is inappropriate and only gives a pretense of confidence where none can exist.” It’s another to say, “You didn’t even do the math right.”

          • Scharlach says:

            I don’t know how one would be objective without quantifying things—taking some measurement, paying attention to variables and operators, etc. By all means, write an essay about the differences between objectivity and quantification. Sounds riveting. But if that’s an example of ‘good philosophy’ to you, then I’ll stick to Nick Land’s blog.

          • Candide III says:

            Unfortunately I can’t read much Nick Land. His philosopho-jargon is too dense to my taste. Not that I don’t understand it, I can make the effort; I just don’t like it much. Same thing with Slavoj Zizek, to pick someone from the other side. As for the difference between objectivity and quantification: modulo standard intersubjectivity arguments, surely objectivity must come before quantification. If you walk with your eyes closed and bump into the wall, you must first forgo pretending that it did not happen. Only then you can start measuring how far the wall is.

  2. Max says:

    As an Orange Line Libertarian, I have a generally positive outlook towards neoreactionaries such as yourself, but the hostility towards immigration always induces eye-rolling.

    “The selectionist position is that personnel is policy, and that there is nothing illegitimate about a government, sovereign over a piece of territory, (or, more abstractly, any organization of regulated membership) distinguishing between its citizens and foreigners, and owing only those citizens the professional-to-client suite of duties.”

    Oh, is that all the selectionist position entails? In that case, I’m a selectionist too. Where we appear to part ways, then, is that I also believe the following: There is nothing illegitimate about a government, sovereign over a piece of territory (or, more abstractly, any organization of regulated membership), deciding to grant citizenship/membership to whomever it damned well pleases. Indeed, any government/organization lacking this power may not properly be called sovereign.

    America does not belong to you, the neoreactionaries, or even the citizens who comprise it (democratic propaganda notwithstanding). America belongs to the brahmins; the communists; the Cathedral. Like any sane ruler facing a potential uprising, they seek to nip it in the bud by importing new voters/soldiers who will support them, unlike the native rabble-rousers, who appear to be growing increasingly dissatisfied with Cathedral rule and would like to see it overturned.

    If you want to live in a country that restricts immigration for the benefit of its citizens, you either need to secede from this one and start your own or incite a revolution and overthrow the government. There really isn’t a third option. Neoreactionaries aren’t supposed to be terribly fond of such uncivilized proceedings as revolutions and secession though, are they?

    You won’t catch Cowen/Tabarrok/Kling/Hanson/Caplan/Dourado saying it in public because they doesn’t wanna get Richwined, but at least four (and I suspect all) are race realists who favor freedom of association and would prefer that racially restrictive covenants be enforced. So most of this post reads to me like a straw man. The problem is that defending oneself against these spurious charges would require publicly taking positions that it is not permissible to take under the current regime. The neoreactionary movement is so marginalized and powerless that the decision to completely ignore its criticisms ought not be taken as evidence that those criticisms are valid.

    • Handle says:

      Hostility goes too far. I’m not even remotely hostile to immigration or immigrants. I’m the first of my family to be born in the US, and there are plenty of neoreactionaries who are immigrants themselves. These immigrants are, justifiably, more than a little bitter about expending huge amounts of time and resources in their attempts to become residents in the legally prescribed manner, only to watch the government turn a blind eye towards scofflaws, when it isn’t actively assisting them to get away with violating the law. But just as insufficiently anti-racist is ‘racist, insufficiently pro-open-borders is ‘anti-immigrant’. Such is the age.

      But it’s pretty unlikely that a country like the US would really adopt a truly unlimited legal immigration regime, if for no other reason than the sheer magnitude of the number of foreigners who would move there right away. Logically, you either permit this unlimited flow rate, perhaps in the hundreds of millions per year (not going to happen) or you can restrict and quota that number. If you control the number, you approve some and deny others, and you have to have a way to choose. You could do this randomly according to lottery, but that’s stupid. Why not try use criteria in an effort to optimize some benefit? You know, like other countries and universities do.

      To recap, you can support unlimited overwhelming immediate invasion open-borders (crazy), quotas filled randomly (stupid), or selectionist (common).

      I don’t disagree with you about sovereignty either, or the undesirability of violent upheaval, but hello, that wasn’t what the post was about.

      What the post was about was demonstrating that a particular claim, one commonly being repeated by both Cathedral (i.e. Yglesias) and Libertarian (i.e. Caplan) sources, is shaky and unsupported. It conflicts both with common sense (the normal relations between supply and demand and prices) and rigorous analysis. If a lie is repeated, its contradiction must also be repeated, as often as necessary.

      If you or other Libertarians want to do something productive and try and support open-borders with argument, logic, and evidence, then, please, enlighten me as to what corrections should be made to the model.

  3. Matt says:

    Regarding immigration and “selectionism”, civilization is founded on obtaining consent from males to not kill those in power. The natural state is (as is clear from Y-chromosome geography) males fighting to maintain territory against other male immigrants, so any civilization that promotes immigration has nullified this primordial consent. Perhaps libertarians are aware of this and, rather than fight the decline of civilization, are working to hasten its demise so we can get back to basics.

  4. Matt says:

    Until these pseudo-libertarians admit that property rights should be the source of government revenue, they’ll continue the Austrian School’s absurd social contract that says: “Join us and protect the property rights of the rich while you beg them for subsistence!”

    These pseudo-libertarians think people are so divorced from Nature that they can’t even conceive of Lysander Spooners definition of legitimate government as a mutual insurance corporation. Well, ok, if you call a mutual insurance corporation that issues no dividends to the members “legitimate” — then I suppose you could continue the con game for a few more generations. Hell, that might be long enough to exterminate all the heroic genes in the gene poll that might be troublesome by sending them into harm’s way to protect property rights with their blood. By that time maybe autonomous drones could do the dirty work and kill off the rest.

    The problem arises when you have all these bipedal beasts of burden with large brains running around. You never know when they might start using those brains in unauthorized modes and start realizing, “Hey, I can actually control my own body!” Monopoly on force broken…

    Pseudo-libertarians (like the Austrian School folks) like to throw around “initiation” of aggression in contexts like a young man and his mate walking across an imaginary line in the soil that separates “Ted Turner’s million acres” from other lands. Even worse, that young man might harness his draft horse and put plow to “Ted Turner’s land” to plant some seeds! Then there is the moral horror of the young man punching Ted Turner when Ted Turner exercises his right to drive his humvee over the obviously-planted soil and kill the seedlings!

  5. Matt says:

    Genuine libertarian thought is founded on individual sovereignty.

    Individual sovereignty is the quality of individuals having supreme, independent authority over their own territory.

    To our civilized minds this is an absurdity but it is easy to demonstrate that, except for eusocial animals, sexually reproducing species are naturally in a state of individual sovereignty. Clearly, “independent authority” cannot mean that an individual calls forth his own mass-energy-space-time from the void. These things are given.

    What, then, does “independent authority” mean?

    It is necessarily Malthusian:

    In competition for reproduction, it is individuals, rather than groups, that battle for limited resources—the primary resource being “territory”, or an ecological domain over which bio-available energy is concentrated.

    Humans, unlike other animals, are capable of entering into agreements with others. Until such agreements are reached, the pseudo-libertarian’s concept of “ownership” simply does not exist. They say that you own yourself by virtue of exercising control over your own body and that “non-aggression” is “axiomatic”.

    No it’s not.

    Aggression is axiomatic because aggression is part of nature. You own your body only to the extent that you can defend your body from aggression in single combat—individual sovereign vs individual sovereign conflict over reproductive resources.

    So, right off the bat, they deny individual sovereignty by denying individual aggression in their axioms.

    Intellectual death before they start.

    Get individual sovereignty correct and you can start to understand how genuine legitimacy arises from true individual sovereignty.

    It is from the notion of a natural territory over which an individual, not a gang, is sovereign that is formed the “founders stock” of any society that claims to uphold “property rights” and collect fees to pay for the costs of upholding those “property rights”.

    • Scharlach says:

      Humans aren’t bears or mountain lions, Matt. In the past, humans who wanted ‘individual sovereignty’ probably found themselves alone and dead very quickly while the rest of the kinship group marched toward civilization. Today, humans who place ‘individual sovereignty’ at the center of their ideological universe will quickly find themselves sovereign over a nice little piece of sidewalk real estate next to a freeway on-ramp.

  6. Matt says:

    The non-aggression principle is incompatible with nature. When Ted Turner claims “ownership” of a million acres, Ayn Rand/Austrian School “libertarians” say that a young couple in love who want to start a family are committing an act of “aggression” when they plant a garden and build a cottage on a few acres of “Ted Turner’s” land. In nature, that young man would challenge Ted Turner to natural duel if Ted Turner came up and initiated force to kick the young couple off “his” land.

    I call these idiots “pseudo-libertarians” because they think “libertarianism” was invented by Jews during the 20th century.

    They should read Lysander Spooner — 19th century American frontier anarcho-capitalist philosopher who, during the founding of the civilization in the US, saw first-hand the practical realities of carving property rights out of nature and described all legitimate government as a “mutual insurance company”.

    • Handle says:

      If there’s a core difference between neoreaction and libertarianism, it’s the difference between ‘legitimacy’ and ‘quality’. I want good government, regardless of whether it’s justified under someone’s pet ideological system.

      • asdf says:

        Why do you want good government?

        Wouldn’t you want a government that works well for you, regardless of whether it worked well for everyone else (within the constraints of a long time horizon and potential reprisal, enlightened self interest and all that). It seems to me that a government that looked out for your interests could still be quite a bad one.

        That’s what our friend Max up above is saying. I wonder if what Dark Enlightenment people really want is “good” government at all, or just a rearrangement of the structure such that they are inner party rather then outer party.

        I don’t like this or that social restriction because of what it does to me.
        I don’t like what immigrants do to the crime rates or wage pressures on me.
        Etc

        The primary motivation is of course the self. Why even bother referencing things like Coming Apart. One doesn’t really care about Fishtown, one only cares about how talking about Fishtown might improve ones own situation, how they can be used as allies or arguing points to advance personal interests. And then once their purpose is over, once you no longer need them, toss them aside, like the ones that came before you.

        Even the pathetic half hearted attempts at moral justifications for this self interested toadying are endorsed entirely because they advance the speakers self interest, not because they believe such things would be good for the world. A libertarian supports the non-aggression principal because he believes he would personally do well under such a regime, not because he cares if it is a good policy.

        It seems to me the whole idea of wanting “good government”, that is a government that is looking out for the best interests of its people, is itself an ideological statement. One could easily be of the ideology that the purpose of government was to benefit a few at the expense of the people and call that “good”.

        • Handle says:

          “Why do you want good government?”

          For the same reason I want good whiskey. That doesn’t mean I don’t care if other people are getting crappy whiskey.

          “a government that looked out for your interests could still be quite a bad one”

          A company that tried to satisfy my desire for good technology or software could still be quite a bad one for you, and vice versa. It’s nice to have choice and competition short of bloodshed.

          ” I wonder if what Dark Enlightenment people really want is “good” government at all, or just a rearrangement of the structure such that they are inner party rather then outer party.”

          Don’t wonder. I don’t care about being part of and inner party, I just want good government. We’re not even an outer-outer party yet.

          “Why even bother referencing things like Coming Apart.”

          Because it’s a brilliant book that demonstrates something crucial that’s happening in our society – a dramatic and multidimensional class divergence.

          “One doesn’t really care about Fishtown”

          You keep saying this, but I do. Dude, look, you can believe me or not, you can say it doesn’t make abstract philosophical or logical sense or not. It doesn’t bother me if it doesn’t make sense in that way, but, as a matter of actual fact, I really do care about their welfare and happiness. A lot of people are like this. Call me a mush-brain softy; fine, but I request that you please stop insinuating that I’m some kind of callous, cynical, and solipsistic elitist. Paternalism can come from a place of patronizing condescension and contempt just as easily as it can come from love and a genuine desire to see people happy and flourishing. Like a good father regards his own children.

          “It seems to me the whole idea of wanting “good government”, that is a government that is looking out for the best interests of its people, is itself an ideological statement.”

          Of course it’s an ideological statement. That’s my ideology!

        • asdf says:

          I don’t understand the connection. Unless other people getting bad whiskey affects your whiskey in a net negative way, why do you care? You’ve never presented a case.

          You can say, “I don’t understand why.” And that is well enough. One would of course prefer one whose instincts were on the positive side to start with over the alterative. Nor do I think people need to go around wondering about deep principals all the time, especially the laymen or in most of the situations we all encounter each day.

          However, the reason I say that is matters that you know “why” you should care about your neighbor is two fold.

          1) I would say your inability to understand why no doubt has an affect on your ability to think of a solution.

          It is much like many of the things in your life. I don’t know how many of my appliances work, but then I’m only asked to use them as a laymen. If I wanted to open them up and repair them, or design all new appliances, it would be very important for me to understand “why”.

          Or if you will the DE is like a boss that comes in and demands that some project plan get implemented, but the project plan makes no sense. It makes no sense because the boss doesn’t actually know why the thing this project is building works. I’ve never really bought any of the plans the DE is selling, and that’s mostly because I think the entire viewpoint has problems in the foundation. That’s what Charlton’s Charge is.

          2) Max has outlined above why things are the way they are. Can you offer a rebuttal within the framework as you see the world? If you were in Max’s place, given your worldview, how could you do anything but what Max is doing? I’m just not seeing it. You say that XYZ would be better then ABC, but Max is clearly telling you that ABC is better for Max. How do you get him away from ABC? How do you get yourself away from ABC? It’s easy to talk about XYZ > ABC as a theoretical concept, what matters is what people do though.

          If unrestricted Mexican immigration is the easiest way for the Max’s of the world to achieve their objectives under the present framework that is what we will get. It doesn’t matter if some points system or other option is theoretically better for the masses in the long run, these people go with what’s easiest to advance their own interests. You try to restrict immigration, whether its sensible policy or not, and someone might call you a racist. We all saw that with Richwine.

          Unless you can construct some counter argument against this, how will you defeat them? How will you act differently in their place?

  7. Matt says:

    The fundamental problem is subsidy of property rights and political dispensation of social goods resulting in private sector rent seeking and public sector rent seeking respectively.

    There’s an air-tight case for the citizens’ dividend and net asset taxation of liquidation value of assets, based on individual anarchism. No one has even tried to refute it because they know they can’t. They simply resort to argument by assertion and hope the idea will go away, along with the existence if not the very memory of 19th century, American frontier libertarianism and its roots in the nation of settlers.

    19th century individualist anarchism in the United States according to Wikipedia:

    “Rothbard was influenced by the work of the 19th-century American individualist anarchists[58] (who were also influenced by classical liberalism). In the winter of 1949, influenced by several 19th century individualists anarchists, Rothbard decided to reject minimal state laissez-faire and embrace individualist anarchism.[59] Rothbard said in 1965[60] “Lysander Spooner and Benjamin T. Tucker were unsurpassed as political philosophers and nothing is more needed today than a revival and development of the largely forgotten legacy they left to political philosophy.””

    The article goes on to ignore what Spooner said about government in “No Treason: The Constitution of No Authority”:

    “It is true that the THEORY of our Constitution is, that all taxes are paid voluntarily; that our government is a mutual insurance company, voluntarily entered into by the people with each other; that that each man makes a free and purely voluntary contract with all others who are parties to the Constitution, to pay so much money for so much protection, the same as he does with any other insurance company; and that he is just as free not to be protected, and not to pay tax, as he is to pay a tax, and be protected.”

    And Spooner’s “Trial by Jury” section “Taxation”:

    “All legitimate government is a mutual insurance company, voluntarily agreed upon by the parties to it, for the protection of their rights against wrong-doers. In its voluntary character it is precisely similar to an association for mutual protection against fire or shipwreck. Before a man will join an association for these latter purposes, and pay the premium for being insured, he will, if he be a man of sense, look at the articles of the association; see what the company promises to do; what it is likely to do; and what are the rates of insurance. If he be satisfied on all these points, he will become a member, pay his premium for a year, and then hold the company to its contract. If the conduct of the company prove unsatisfactory, he will let his policy expire at the end of the year for which he has paid; will decline to pay any further premiums, and either seek insurance elsewhere, or take his own risk without any insurance. And as men act in the insurance of their ships and dwellings, they would act in the insurance of their properties, liberties and lives, in the political association, or government.”

    A mutual insurance company, whose object is the establishment of artificial property rights will, in its “articles of the association” be required by the signatory, “if he be a man of sense”, to pay a dividend to him as a voting share holder. As a corollary, this man of sense will also demand terms in the articles of the association that amount to “the politics of exclusion” which will necessarily mean immigration restriction to the land rights enforced by the mutual insurance company; and also exclusion from membership in the association those who do not add to the value of membership in it. The primary argument that leftists make against this is basically that too many men have taken leave of their senses. The primary argument that rightists make against this is—to ignore it and blather endlessly about the libraries of nonsense inspired by 20th century Jewish (the true ethnicity of the so-called “Austrian” school) “scholars” of “libertarianism”.

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  9. Matt says:

    Yes, you and people who say things like, “I know a black computer programmer”, and “I have black friends”, should pay attention to the reality of persistent genetic patterns.

    “Legitimate” has been identified as “good” and defined by genuine libertarian thought in operational terms. You haven’t defined anything. Saying that you like ‘good’ government tells us nothing if you don’t define what it means. You’re just saying that you like what you like.

  10. Handle says:

    Why should it mean other than what I like?

    Anyway, look man, I don’t want to get all PC on you, but this is a ‘safe space’. If your ‘persistent genetic patterns’ means white and black guys don’t tend to get along, just say so.

    Or if it means something as banal as ‘in history, there were these things called wars between different groups of people who had control over their local areas, the members of each group tending to be more closely related to each other than the other group from farther away, if for no other reason than limitations to mobility and geographic proximity.’ – then it is nonsense to stretch such obviousness to some kind of predictive determinism.

    But, today, in the real modern world, especially in America and Canada, amongst normal white guys with very different y-chromosomes, there is zero evidence for what you are claiming. Zero.

    If you’ve got a link otherwise, post it.

  11. Pingback: Review of “Exodus” by Paul Collier | Foseti

  12. Pingback: Five Point Plans Open Thread | Handle's Haus

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