Preposterous Preponderance

I was reading yet another article about public school failure. While the kind of failures that seem so common in inner-city schools around the country don’t seem to have reached the suburbs, I don’t doubt it is coming. Lately, I’ve been thinking about how environmental policy and education relate to the government-backed churches in America up through the mid-19th century.

Many politicians and ministers were adamant that, since religion was vital to a good citizenry, public treasuries should be used to support the clergy. I can’t help but see similarities to the “public good” arguments of education and environmental activism.

Progressives who seek public support for their ends ought to look at the period in the American and English churches after the state churches were dismantled. It was then that an explosion in missionary activity around the world brought the gospel to more places than ever before. A great number of evangelists, from D. L. Moody to Billy Sunday to Billy Graham, worked here in America to change a formerly cold and formal laity into the most fervently Christian country in the world for many years.

Separation of progressivism and state might be the best thing for the activist left.

I fail to understand why economists treat deflation (the lowering of overall price levels, or the increasing of currency’s purchasing power) as a great evil, unless they consider non-economists as stupid people who cannot understand how prices work.

Colleges typically teach Economics 101 to first year students, fresh out of government-run high schools where they are lucky to learn how to read and write proficiently enough to navigate college applications. Part of introductory economics is supply and demand and resulting prices.

Most adolescents are capable of grasping exchange rates between currencies, and that relative prices in different monies can vary quite a bit in a short period of time.

Finally, part of the value of education is relieving young people of common misconceptions and teaching them how to think in more sophisticated ways.

Why then, do most mainstream economists insist that the government perpetuate the misunderstanding that money is the measure of wealth? Every time a recession comes (in no small part because of government trying to direct resources at some pet project), lamentations of impending deflation – and especially a fall in wages – rise from the halls of Econ departments everywhere. If workers experience a fall in wages, there will be less spending and recovery will never come, it is stated with certainty. Therefore, the money supply must increase so that nominal wages stay the same or rise, even if “real” wages fall. Inflation might happen, but it’s a lesser evil than the depression in animal spirits of falling nominal wages.

This argument not only furthers the misunderstanding about the nature of money, it requires rejection of a virtuous bit of common sense: namely, that lower prices are better than higher prices.

Generations of societal custom have taught westerners to expect ever-rising wages (at least in terms of units of account earned every paycheck), and that higher prices for other goods is the cost of being more prosperous. This causes people to ignore, at least during prosperous times, the fact that their incomes are gradually stretched thinner and thinner by rising prices of food and energy. It even causes a disconnect in the thinking of trained economists, who at the same time lament the increased gap between rich and poor and ignore the fact that it coincides with western governments totally abandoning hard money for politically manipulated fiat money.

Far more preferable would be a combination of consistent money (i.e., commodity-backed money), a citizenry that watchfully demands that the government not inflate the currency during times of “emergency” or war, and a general understanding that money is a good that is supplied just like food, cars, and computers, whose value can change depending on its relative supply and demand. People will not be so enraged by lower salaries if they can see that the lower salary still affords a better life than before. Of course, even under the classical gold standard of the late 1800′s, when prices of goods were falling and the supply of gold was volatile, nominal wages generally went up, and real wages, adjusted for deflation, went up quite a lot.

My guess is that a lot of economists do think most people are too stupid to understand economics. Add to that the political attractiveness of fiat money (especially when financing wars and spending money on threatened reelection campaigns), and it’s easy to see why the most vocal economists decry consistent money and falling prices as terrible enough to justify government intervention.

Those who find themselves drawn to Keynesian and Chicagoan economic theories would do well to consider Bastiat’s 160-year-old arguments against monetary schemes (and, at the end of the treatise, against government education).

Some especially salient points:

I cry out against money, just because everybody confounds it, as you did just now, with riches, and that this confusion is the cause of errors and calamities without number.

[W]hen a man, instead of acting for himself, decides for others, personal interest, that ever watchful and sensible sentinel, is no longer present to cry out, “Stop! The responsibility is misplaced.” It is Peter who is deceived, and John suffers; the false system of the legislator necessarily becomes the rule of action of whole populations.

[T]his perpetual struggle toward an impossible result, this permanent state of open or secret war with the whole world, are they not the logical and inevitable consequence of the legislators having adopted an idea that you admit is acted upon by no man who is his own master, that “wealth is money; and to increase the amount of money is to increase wealth?”

When legislators, after having ruined men by war and taxes, persevere in their idea, they say to themselves, “If the people suffer, it is because there is not money enough. We must make some.”

It is impossible for society to render more services than it receives, and yet a belief to the contrary is the chimera which is being pursued by means of the multiplication of coins, of paper money, etc.

[Y]ou cannot reasonably think that if the quantity of corn, cloth, ships, hats, and shoes remains the same, the share of each of us can be greater because we each go to market with a greater amount of real or fictitious money.

Do you believe that if it were merely needful to print bank notes in order to satisfy all our wants, our tastes, and desires, that mankind would have been contented to go on till now without having recourse to this plan? I agree with you that the discovery is tempting. It would immediately banish from the world not only plunder, in its diverse and deplorable forms, but even labor itself, except in the National Printing Bureau. But we have yet to learn how greenbacks are to purchase houses, that no one would have built; corn, that no one would have raised; textiles that no one would have taken the trouble to weave.

Bastiat ties inflation to increased economic inequality:

Once false money (under whatever form it may take) is put into circulation, depreciation will ensue, and manifest itself by the universal rise of everything that is capable of being sold. But this rise in prices is not instantaneous and equal for all things. Sharp men, brokers, and men of business, will not suffer by it; for it is their trade to watch the fluctuations of prices, to observe the cause, and even to speculate upon it. But little tradesmen, farm workers, and workmen will bear the whole weight of it. The rich man is not any the richer for it, but the poor man becomes poorer by it. Therefore, expedients of this kind have the effect of increasing the distance that separates wealth from poverty, of paralyzing the social tendencies that are incessantly bringing men to the same level, and it will require centuries for the suffering classes to regain the ground they have lost in their advance toward equality of condition.

It’s election year here in America, so I want to join in on the non-stop chatter about politics. Not that it really stops in non-election years, but it seems to be more personal in those years when we get to cast a vote for the highest political office.

So here is my stance at the moment: if Romney gets the Republican nomination, I’m voting for Libertarian (which means Gary Johnson, most likely), and if Santorum gets the nomination, I’m voting for Obama. Yep, I said it, now let me explain it. Continue reading →

Throughout human history, leaders and rulers have appealed to divine authority in arousing support for their military endeavors. Even the church, in various places at various times, has been used as a staging ground for influencing people in favor of war. But what does the Bible have to say about it?

Let me clarify that I am not a pacifist in the sense that I would let foreign aggressors simply walk all over my neighbor, steal his property, and violate his freedom. Such a position is cowardice dressed in religion, and has no part in the law of “love your neighbor.” However, I am a pacifist in the sense that I think we should never look at people who live in a foreign country with hatred, even if their elite are agitating them against us. Our prayers should never be for their destruction, but for their freedom from the darkness of sin that engenders such wickedness in the hearts of men. This is what I think it means to love your enemies.

What about Israel? Didn’t they wage an aggressive war to occupy their land? Let us look at the context of the conquest. Starting with Jacob and his sons, God blessed the Israelites so much that their Egyptian hosts became afraid (jealous, really) of them and forced them into slavery. After several generations, God miraculously and single-handedly released them, causing massive destruction to Egypt without the Israelites lifting a finger. After this, they journeyed through the Sinai peninsula for a few months, miraculously fed and watered by God. In this time, news of what had happened in Egypt and how this mass of 2 million people were living in the desert on food from heaven surely reached the region of Canaan. When the Israelites do get to the edge of Canaan, they chicken out, and God makes them live in the desert until the entire generation that didn’t listen to him dies. While they are “wandering” the desert, the people of Canaan and the surrounding countries like Edom and Ammon continue to hear of God’s power in sustaining these people, and they surely know that their end goal is to take over Canaan.

So, my thinking on this is: God had served a 40-year eviction notice on the people in Canaan. Is it fair? As believers, we know that God, as creator, owns and has a right to all things. He could have killed all those people in their sleep overnight if He had wanted, or caused them to turn on each other (remember Gideon and the Midianites?). Some people see the conquest of Canaan as ruthless. I see it as a showing of God’s enormous patience in the face of stubborn people.

But yes, God did use the Israelites to attack and destroy the Canaanites. But when you look at most of the battles, the work was done by God – at Jericho, at Ai the second time, and so on. I think God made them actually fight so they could see that if they were disobedient (first battle at Ai) they would not be able to take the land. Their success was completely contingent on their listening to God – a lesson the nation would have to relearn virtually every generation.

In context for those of us who come after Christ, God had promised a physical land to the descendants of Jacob. He has made no such promise to us, so to use the conquest of Canaan as justification for waging holy wars is a severe mutilation of the meaning of Scripture. Jesus and the writers of the New Testament did have some things to say about relating to the state. Jesus said, give to Caesar what is Caesar’s, and give to God what is God’s, and he provided for Peter’s tax miraculously. He talked about a Kingdom of Heaven. My take on his words and examples is: don’t be more concerned with earthly things like politics than you are with spiritual things – your relationship with God and your prospects for eternity.

Paul said to pray for kings and those in authority, so that we may live a quiet and peaceful life. That could certainly be taken to mean, pray for the rulers of all nations, so that people aren’t distracted by conflicts between men and we can teach them about their own, personal conflict with the almighty God. Like I said earlier, war brings out the worst in people – hatred, prejudice, violence, blood thirst. These things certainly are not compatible with living “in all godliness and holiness” or “lifting up holy hands without anger or disputing.”

What about the trend in America of warring against “evil” dictators for the good of democracy? Well, considering that most of those dictators have received support from the US government at some point, I think it’s pretty clear that using the state to manipulate other states is not in the long term interests of the people in either nation, and it certainly has done nothing to promote the acceptance of the gospel in those nations, who see America as “Christian” aggressors trying to force a new culture on them. Devout followers of Christ must remember that salvation is not about an outward change in actions, but an inward transformation into the image of Christ which results in an outpouring of righteous living. That last sentence could also apply to our collection of domestic “wars” against drug use and other social issues.

Finally, let us remember that God’s call for followers of His Son is to spiritual warfare, against “powers of darkness,” not against “flesh and blood.” Paul urges us to cast off every weight or restraint that inhibits our all-out running after God and holiness. Whenever war is proposed, we can discuss whether it conforms to loving our neighbors, loving our enemies, and other principles of Christ-like living, but we must not let our thinking on it be conformed to the pattern of this world.

Here is a letter written in response to a two-page ad written Mr. David Szady, vice president of Gaurdsmark and retired Assistant Director of the FBI, in the March 2012 edition of Security Management:

Dear Mr. Szady,

In your company’s two-page advertisement inside the front cover of the March 2012 Security Management, you echo many of the arguments being made in business and political circles for more comprehensive government regulation of “cyber-security”. In your opening paragraph, you write that “while [the Internet] provides countless benefits, it has also exposed us to entire new layers of vulnerability…” Yet you write that most of the responsibility for dangerous “cyber attacks” come from foreign governments. While the avenue – computer networks – may be new, this hardly seems like a new vulnerability, but rather a continuation of the typical violent competition between nation-states and their governments that hold monopoly power over the use of aggression.

While there has never been an instance of a full-scale cyber attack on “critical infrastructure” – among which you include communications, transportation, and electrical grids – it must certainly be a great selling point for your company to spread the fear of a possibility of such an attack. In fact, I’d wager that in writing these things, you were acting very much in your self-interest, something which you criticize other corporations of practicing when it comes to cyber-security.

Another case of your using fear, uncertainty, and societal taboos in your self-interest is when you compare the estimated cost of cyber crime (a very broad term, considering “two-thirds of people worldwide have been [victims]“) to “the drug trafficking of heroin, cocaine and marijuana.” This comparison has no logical purpose that I can elucidate, other than to cement in the reader’s mind that cyber crime is a societal danger which must be dealt with by government’s firm hand (assisted, of course, by your company’s expertise). May I remind you, though, that the War on Drugs has been a costly failure; you may want to find a more successful government program to which to compare your policy prescriptions.

Just a paragraph below the drug trafficking comparison, you repeat the trope about intellectual property “theft” and the mortal danger to consumers that foreign-made counterfeit goods pose. Let us not forget that “intellectual property” is merely a government-granted monopoly, most of the benefits of it going to large businesses like Apple and Microsoft and the lavish lifestyles of Hollywood elite. As to counterfeiting, you yourself admit that “[a]s the quality of counterfeit goods increases, American consumers may be challenged to distinguish between authentic and fraudulent goods…” I think your real concern is that domestic manufacturers will be challenged to compete with increasingly high quality goods from overseas, putting their profits and comfortable business models “at great risk.”

You conclude with a call for more power for the Departments of Defense and Homeland Security to force private corporations to spend money on cyber-security infrastructure – which, again, I’m sure your company would be happy to provide at those now-inflated prices. If you are so concerned about the safety of your fellow Americans, why do you not offer your services at greatly reduced prices? After all, I’m sure your retirement benefits from the FBI are sufficient to sustain you and your family while you pour your energy into defending this country. I would also urge your readers to remember that the government does not have a very good record in data security. Do you recall those repeated cases of government-issued laptops being stolen out of homes or cars with the private information of thousands of people stored unencrypted on their hard disks? In the light of such reports, the risks that Google or Amazon pose to my privacy seem minuscule.

I fully affirm your freedom to purchase advertisement space from Security Management and practice your right to speak freely. And I would applaud you for such statements as “America needs to embrace the free flow of information across borders and within societies,” if such statements were not contradicted by your suggestions that we authorize the federal government to place further restrictions on that free flow of information. I do agree that perhaps the best means to a more secure data network is sharing threat information, but I again ask, why do you not volunteer your expertise and influence to bring about such a goal, rather than urging politicians to pass laws that raise the demand, and therefore the prices, on your services? Are the “economics of cyber security” really “below par” or just below what you would find most profitable?

Sincerely,
Kevin LeCureux
Security Engineer
Norcross, GA

My phone has had four Android versions running so far today.

A few hours ago I thought I’d check whether an official Ice Cream Sandwich update for my phone (Nexus S 4G) had been released by Sprint. I saw some talk of a leaked version, but couldn’t find a good source to download. I ended up downloading the Nuhetri 4.0.4 ROM based on the stock update. It installed over the AOSP 4.0.3 I had installed in early January. However, I quickly noticed that Google accounts functionality was completely missing! Most Google apps (including Gmail) wouldn’t work, which of course is a significant problem for an Android phone.

I panicked a little bit and ended up restoring the 2.3 Gingerbread I had backed up almost two months ago. (I had been foolish and not backed up before installing this new ROM. Let that be a lesson!) That was working ok. I did lose my text messages and call logs, but that doesn’t bother me. I was a little sad that I had given up the Google Voice integration so I could set up a separate work number. I was really getting tired of the battery drain on Gingerbread, though, so I went and looked for some other ROMs. I downloaded the GummyNex 0.7.8, which is also 4.0.3 with a bunch of mods. Looks good so far. I’m waiting to charge it a bit before testing the battery life.

Speaking of phones have you seen Ubuntu for Android?

Today, I drew this graph of my conception of an entrepreneur-value model of the production economy. (I’m mulling over a model of the reputation economy, also.) Here are some of the key points:

1. Purchase price is proportional to the value to the consumer. Value is the subjective measure of worth compared to any alternatives the consumer faces.
2. If value (and therefore purchase price) is greater than the inputs, there are profits; if value is equal to the cost of the inputs, there is no gain but also no loss; if value is less than the inputs, losses ensue.
3. Every actor is a consumer (i.e., buyer) of something. Every person in the cycle is also a supplier of some good or service. Theoretically, and quite often in the real world, every person is also an investor.
4. The real key is the entrepreneur. This person or people are what I call the impetus behind innovation.
5. Every relationship is bi-directional.

Notice what is not in this model:

1. No coercion. In the real world, coercion happens and is a net cost. I think good economic models do not need coercion for their principles to operate. That’s an important reason I like Austrian or Misesian economics.
2. No external regulation. Because every relationship is bi-directional, regulation is built in by the ability for any given actor to exit the cycle. I also think regulation is added by the reputation economy. More on that in another post.

Some possible questions about this model:

1. What about money and the cost of transaction media? I think money is best modeled as a good, which would have its own similar cycle.
2. You dislike intellectual property, but doesn’t entrepreneurship practically require IP? No. Ideas are important to innovation, but notice that in my model, the idea is currency. The value added by the entrepreneur lies in his familiarity with the idea, true, but also in his coordinating all the other factors. Indeed, entrepreneurship has far more to do with relationships than with ideas. Introducing monopolies on ideas only hampers the productive cycle. If you think of ideas as currency, then IP is analogous to deflation.

I might find some time to get this sketch into a prettier format.