Gyroscopic Investing

I think Tech and the libertarians are also right about the unstable currency. This dovetails with debt to systematically encourage overconsumption in the present (among other effects). It doesn't seem like a crazy coincidence that these trends and price increases really took off after Nixon wiped out what remained of the gold standard.

Pointedstick wrote:Moda, that's actually the flip side of what we're talking about. The goods that are low-priced today (clothing, electronics, food) are all so historically cheap because of unpriced externalities, or slave labor, or something like that. I had a 90-minute phone conversation with my mother last night about immigration and really rattled her by talking about illegal immigration as essentially a supply of slave labor that the republicans tricked the democrats into accepting by letting them believe it would lead to a future demographic majority (it didn't).

What's weird is that all this cheap stuff made by exploited people encourages people to consume a ton of it... but we also consume more of things that are unprecedentedly expensive. You can understand a family with 3 TVs and half a dozen smartphones at $200 a pop, but 3 new vehicles costing $20-50k in a $300k particleboard McMansion? That's what's really killing us. Why do we do this?

As others have mentioned, debt has to be part of this: tricking our monkey brains to overvalue the smaller upfront price and discount the higher overall long-term price, which encourages prices to slowly creep higher over time to capture more of people's incomes.

The slave labor doesn't just happen by letting foreign populations in, but by allowing Western investors to gobble up gobs and gobs of natural resources in foreign countries. This is why I get frustrated by people in the U.S. complaining about foreigners. Imagine being in any one of the foreign countries where all of a sudden some Rockefeller & his co-cronies owns a massive chunk of the means of production? This is why the Euro was probably a bad idea. Similar to immigration, a country can only take on so much foreign investment before it begins to exhibit societal resentment. And I don't blame them... you can't really "own" land and natural resources IMO. You especially can't "own" them if you're 2,000 miles away and bought them from a dictator with friendly ties to the Dulles Bros in Washington.

Anyway... I digress yet again.

TennPaGa wrote:I guess I see this differently. Decisions to use precious resources above their replacement rate were made by people. Decisions to despoil the environment (or, at the very least, not go too deep into the question of "what could go wrong") were made by people.

Sure, but debt is the mechanism that allows people to make that decision in a capitalist market economy. A functioning market takes into account a good or resource's replacement rate.

It's funny how the problem space has changed over time. For most of human history, the problem was generating enough resources that people could actually consume some nice things. Now that we've totally mastered that, the problem shifts to preventing overconsumption so we don't squander scarce resources and despoil the environment.

Pointedstick wrote:

TennPaGa wrote:I guess I see this differently. Decisions to use precious resources above their replacement rate were made by people. Decisions to despoil the environment (or, at the very least, not go too deep into the question of "what could go wrong") were made by people.

Sure, but debt is the mechanism that allows people to make that decision in a capitalist market economy. A functioning market takes into account a good or resource's replacement rate.

It's funny how the problem space has changed over time. For most of human history, the problem was generating enough resources that people could actually consume some nice things. Now that we've totally mastered that, the problem shifts to preventing overconsumption so we don't squander scarce resources and despoil the environment.

From what I've seen, CONSUMERS are really bad at taking into consideration the deterioration rate of non-asthetic aspects of products. So if the consumer doesn't care, the builder isn't going to care too much for the 9 months it sits on their inventory.

Further, even for businesses, many managers are measured on relatively short-term indicators. If they're building a new facility, it's doubtful that they're keenly aware of whether the materials have a 20 vs 50 year useful life.

cf recent discussion on globalization. We hit on all these main themes:

- globalization's main reason to exist is to transfer production to places where labor is cheap (i.e. practically slave labor)
- manufacturing in such places results in cheap crap that doesn't last long and ends up filling our landfills and costing more in the end
- environmental impact of long-distance shipping, contradicting the personal views of many who are globalization advocates
- illegal and unskilled immigration is merely the flip side of globalism, with essentially the same goal

Maybe the problem isn't that prices in education, health care, and real estate are rising "too fast". They're rising faster than the CPI - but the CPI is based primarily on goods and services whose prices have been artificially depressed by the twin factors of globalization and unskilled immigration. Perhaps we are actually in a state of high inflation, or rather we would be without these unappetizing, and unsustainable methods of keeping prices down.

Another measure is the price of food that isn't government subsidized. That is, fresh fruits and vegetables and grass-fed/pastured meats. I've noticed that these have increased in price far more than the subsidized items. Has anyone else seen this?

WiseOne wrote:cf recent discussion on globalization. We hit on all these main themes:

- globalization's main reason to exist is to transfer production to places where labor is cheap (i.e. practically slave labor)
- manufacturing in such places results in cheap crap that doesn't last long and ends up filling our landfills and costing more in the end
- environmental impact of long-distance shipping, contradicting the personal views of many who are globalization advocates
- illegal and unskilled immigration is merely the flip side of globalism, with essentially the same goal

Maybe the problem isn't that prices in education, health care, and real estate are rising "too fast". They're rising faster than the CPI - but the CPI is based primarily on goods and services whose prices have been artificially depressed by the twin factors of globalization and unskilled immigration. Perhaps we are actually in a state of high inflation, or rather we would be without these unappetizing, and unsustainable methods of keeping prices down.

Another measure is the price of food that isn't government subsidized. That is, fresh fruits and vegetables and grass-fed/pastured meats. I've noticed that these have increased in price far more than the subsidized items. Has anyone else seen this?

Yes. I've also noticed restaurant prices seem to continue the noticeably upward trend in our area (mid-Atlantic), possibly related to the food you mention.

Insightful observations, WiseOne. There's a lot to chew on there.

Scott posted a retrospective of the best comments and theories on the phenomenon. I particularly like Megan McArdle's:

It’s pretty easy to tell a libertarian story where markets work fine, but government intrusions into these markets have rendered them so unfree that they no longer function the way they’re supposed to. And I think that is at least part of the story here.
[...]
But that’s perhaps a little simplistic. Agriculture is also the focus of a great deal of government intervention, as are sundry things such as air travel, and we don’t see the same phenomenon there. So we need to dig a little deeper and describe what’s special about these three sectors (we’ll leave public transportation out of it, because there, the answer is pretty much “union featherbedding combined with increasingly dysfunctional procurement and regulatory processes”).

First, and most obviously, they involve vital purchases made on long time horizons, and with considerable uncertainty. Food is more vital than health care to our well-being, but its price and quality are really easy to assess: if you buy a piece of fruit, you know pretty quickly whether you liked it or not. This is a robust market, and it’s going to take communist-level intervention to fundamentally mess it up so that food is both scarce and not very good.

Homes, schooling and health care, on the other hand, are more complicated products. You don’t know when you buy them how much value they will be to you, and it is often difficult for a lay person to assess the quality of the product. You can read hospital rankings and pay a home inspector, but these things only go so far.
[...]
But that’s only part of the story. A big part of the story is that America just isn’t very good at regulation. When you talk to people who live elsewhere about what their government does, one thing that really strikes you about those conversations is how much more competent other rich industrial governments seem to be at regulating things and delivering services. Their bureaucracies are not perfect, but they are better than ours.

That’s not to say that America could have an awesome big government. Our regulatory state has been incompetent compared to others for decades, since long before the Reagan Revolution that Democrats like to blame. There are many, many factors in this, from our immigration history (vital to understanding how modern urban bureaucracies work in this country), to the fact that we have many competing centers of power instead of a single unified government providing over a single bureaucratic hierarchy. There is no way to fix this on a national level, and even at the level of local bureaucratic reform, it’s darned near impossible.

In other words, this is probably what we’re stuck with. It may not be Baumol’s cost disease — but it’s potentially even more serious, and it’s going to be a lingering condition.

There are a lot of other really good ones there, too.

Pointedstick wrote:First, let's make libertarians cry: markets don't work.

Umm, define "work".

But let's make everyone cry: the problem is us. We spend much less of our incomes on food and clothing now, but didn't save the difference or lobby for policies or laws to let us work less. Instead, we plowed it into things that don't actually increase our marginal happiness that much: bigger, fancier houses in neighborhoods with more respectable school districts; more bigger, fancier cars; more fancier college degrees; more gadgets and junk than ever before; prolonging the lives of miserable dying people by 6 months.

Speak for yourself, Stick, because Asceticism Works!

If these current financial and real estate bubbles were to pop, and we had another Great Depression, could we at least expect some 1930s style deflation to lower these prices? Or would we have stagflation?

We'd get Abenomics.

ochotona wrote:If these current financial and real estate bubbles were to pop, and we had another Great Depression, could we at least expect some 1930s style deflation to lower these prices? Or would we have stagflation?

I would expect the taps to open at the Federal Reserve, converting a depression into hyperinflation.

Libertarian666 wrote:

ochotona wrote:If these current financial and real estate bubbles were to pop, and we had another Great Depression, could we at least expect some 1930s style deflation to lower these prices? Or would we have stagflation?

I would expect the taps to open at the Federal Reserve, converting a depression into hyperinflation.

Which would ultimately lead to severe deflation.

In the fullness of time, dollars will become worthless. On the other hand, you will ultimately die. Which of these comes first is hard to predict.

rickb wrote:

Libertarian666 wrote:

ochotona wrote:If these current financial and real estate bubbles were to pop, and we had another Great Depression, could we at least expect some 1930s style deflation to lower these prices? Or would we have stagflation?

I would expect the taps to open at the Federal Reserve, converting a depression into hyperinflation.

Which would ultimately lead to severe deflation.

In the fullness of time, dollars will become worthless. On the other hand, you will ultimately die. Which of these comes first is hard to predict.

I agree that timing is always the hardest part of prediction.

Since I haven't got an answer yet, I'll say:

For myself, I think that free markets fall pretty clearly into the category of "things which work." A free marketplace is a well-established, mature, indeed ancient technology with a very long track record of achieving particular results. It accomplishes its technological end.

What results / what end?

The participants in said marketplace are able to obtain things they want, by giving other people things those others want. That's the functionality of a free marketplace. Does this sought output, in reality, actually happen in a free marketplace? Indeed. Mission Accomplished!

PointedStick is claiming that the free market must be said to not work due to its failure to provide a different outcome, to wit: it's failure to create or modify a group of humans such that they all act in the correct, intelligent, efficient manner according to him.

But reorganizing society according to PointedStick's preferences (sorry, not trying to pick on you, PS, same applies to any of us, you just were the one who brought it up, so I'll use your name for clarity) and re-molding all humanity into New PointedStickian Man is not actually in free marketplace's job description. It's not in the Scope of Work, not what it signed up for, not at all the intended use case!

LC475 wrote:Since I haven't got an answer yet, I'll say:

For myself, I think that free markets fall pretty clearly into the category of "things which work." A free marketplace is a well-established, mature, indeed ancient technology with a very long track record of achieving particular results. It accomplishes its technological end.

What results / what end?

The participants in said marketplace are able to obtain things they want, by giving other people things those others want. That's the functionality of a free marketplace. Does this sought output, in reality, actually happen in a free marketplace? Indeed. Mission Accomplished!

PointedStick is claiming that the free market must be said to not work due to its failure to provide a different outcome, to wit: it's failure to create or modify a group of humans such that they all act in the correct, intelligent, efficient manner according to him.

But reorganizing society according to PointedStick's preferences (sorry, not trying to pick on you, PS, same applies to any of us, you just were the one who brought it up, so I'll use your name for clarity) and re-molding all humanity into New PointedStickian Man is not actually in free marketplace's job description. It's not in the Scope of Work, not what it signed up for, not at all the intended use case!

I figured I'd get the biggest pushback from libertarians on the "markets don't work" comment. I know where you guys are coming from because I was one of you until pretty recently. And in fact I agree with you that free markets work if your definition of working is getting people what they want.

Thing is, this makes free markets a means, not an end. We don't actually want a free market; what we really want is to live in peace and prosperity. The market just facilitates that.

But let's not be lazy and assume that what people want is always good for them individually, or broadly good for their society collectively. This is an off-limits subject for libertarianism, which largely uses a 19th century model of the human brain that casts it as a rational calculating machine. People always choose the end that best suits them, see? And when they don't, they rapidly adjust and make better decisions!

Or do they? A few days ago I took a homeless kid into my home and offered him $10/hour and hot meals for honest work to help him get back on his feet. Over lunch, we talked and the truth spilled out: this kid had made all the wrong decisions, repeatedly. Drug and alcohol use, never saving any money, pursuing short-term pleasure over any kind of planning. I think we talked him out of trying to get his hoped-for girlfriend pregnant, thank goodness ("All of my friends are having kids!"). As for his family life: father was an illegal immigrant who under Obama was jailed for some other crime, and deported. His mother rejects him. And then you start to wonder: is this legally-adult human being's brain really capable of being a rational calculating machine?

Once you acknowledge the possibility of mental fallibility, social pressure, chemical dependencies, constant short-term focus, and repeated mistakes, you start to see them show up everywhere, short-circuiting the ability of free markets to bring a lot of people the things that will make them happy. Instead, you start to become attuned to a recurring pattern of people buying things that actually make them poor, unhealthy, and unhappy--and somehow never getting the message. Suddenly cigarette companies lose their moral neutrality. And soda companies. And sellers of chemical dependency-inducing drugs. And advertisers in general. You start to see the ways in which they're all preying on human weakness, as now understood by modern psychology for which anarcho-capitalist free market ideology hasn't been updated. And you start to think more about children and the mentally ill--people whose brains are not physio-chemically capable of making adult-level decisions in some or all circumstances.

At least, that was my journey.

What especially resonated with me about the article was that the in-crisis markets are ones where the outcomes are complicated and far off in the future. How do you really know that a certain house for your family or school for your kids will be the right one? There are just so many variables. It's always inherently a guess--a guess backed by potentially hundreds of thousands of dollars.

But despite it all, I don't really believe in the ability of government regulation to improve these situations. We have reams of history to show us that. Most hurt more than they help, in fact.

That's why it's such a quandary.

Basically these markets need better products, because people have demonstrated their general incompetence in distinguishing bad products from good, or choosing the one that's right for them. If product selection in such an environment is going to look pseudo-random, it's important that there not be any truly terrible products, or products with hidden defects. And it's important that there be enough of a supply of good products.

My feeling now is that diversity and artificial scarcity make these markets break. Respectable English-speaking middle-class-and-higher American citizens with no criminal history (liberals included!) don't want to live around trashy people, foreigners, non-English-speakers, criminals, drug addicts, etc. having a bunch of people like this in your society is toxic. The respectable people move away from them, making some neighborhoods super-desirable which inflates prices in bidding wars, and consigns others to becoming crime-ridden deteriorating wrecks. Essentially it introduces artificial scarcity into real estate markets because there are huge zones that are technically available for habitation, but that respectable people would never consider buying into. And since public schools are neighborhood-based, the effect bleeds into schools.

So you get the phenomenon of these brick architectural masterpieces in Baltimore inhabited by trashy losers and criminals who largely neglect, abandon, and burn down their historic properties, and respectable people who live in particleboard disasters that cost $300,000 and require an hourlong commute--just to live far away from the trashy people. What a mis-allocation of resources.

Pointedstick wrote:Basically these markets need better products, because people have demonstrated their general incompetence in distinguishing bad products from good, or choosing the one that's right for them. If product selection in such an environment is going to look pseudo-random, it's important that there not be any truly terrible products, or products with hidden defects. And it's important that there be enough of a supply of good products.

My feeling now is that diversity and artificial scarcity make these markets break. Respectable English-speaking middle-class-and-higher American citizens with no criminal history (liberals included!) don't want to live around trashy people, foreigners, non-English-speakers, criminals, drug addicts, etc. having a bunch of people like this in your society is toxic. The respectable people move away from them, making some neighborhoods super-desirable which inflates prices in bidding wars, and consigns others to becoming crime-ridden deteriorating wrecks. Essentially it introduces artificial scarcity into real estate markets because there are huge zones that are technically available for habitation, but that respectable people would never consider buying into. And since public schools are neighborhood-based, the effect bleeds into schools.

So you get the phenomenon of these brick architectural masterpieces in Baltimore inhabited by trashy losers and criminals who largely neglect, abandon, and burn down their historic properties, and respectable people who live in particleboard disasters that cost $300,000 and require an hourlong commute--just to live far away from the trashy people. What a mis-allocation of resources.

Good point, but soon saving old brick homes in Baltimore or trashy neighbors will not be at the top of the priority list. I'm not trying to divert from the central topic of this thread but this somehow seems relevant: I just heard a discussion of demographics that was eye opening. The discussion mentioned that the world population will be just over 9 billion in 2050 with about 7 billion of us over the age of 65 (due to low production rate of babies). Given the normal retirement age of around 65, and the fact that in most of the first world procreation is less than the replacement rate to sustain the population at current levels, that means 2 billion active workers will be supporting 7 billion oldsters .... that does not seem to be a realistic scenario to me but regardless, it appears we are headed for a big heap of trouble. The thrust for minimizing population by a variety of methods over the last 50 years or so (birth control, abortion, euthansia, the shift in focus to environment importance vs. people, etc.) is likely to have some dire, unexpected consequences for many of us. Think of it this way, count up all the people required to put food on your table - farmer, maker of farm equipment, supplier of farm equipment fuel, truck driver, tire maker, road and bridge builder, grocery store dock unloader of the food, grocery store shelf stocker, cashier, auto maker and parts supplier to get the food to your surburban McMansion that is heated and cooled by power plant workers, etc. About half or more of those workers aren't going to be there in another 30 to 40 years just due to demographics. Should we: learn how to farm, move to the country, buy a few acres while you still can, move to Africa where the population is still growing at or above replacement rate and hope they stop corruption and murder of outsiders as well as insiders, stock up on guns and ammo, pray, stick head in the sand?

Pointedstick wrote: I figured I'd get the biggest pushback from libertarians on the "markets don't work" comment. I know where you guys are coming from because I was one of you until pretty recently. And in fact I agree with you that free markets work if your definition of working is getting people what they want.

Thing is, this makes free markets a means, not an end. We don't actually want a free market; what we really want is to live in peace and prosperity. The market just facilitates that.

But let's not be lazy and assume that what people want is always good for them individually, or broadly good for their society collectively. This is an off-limits subject for libertarianism, which largely uses a 19th century model of the human brain that casts it as a rational calculating machine. People always choose the end the best suits them, see? And when they don't, they rapidly adjust and make better decisions?

Or do they? A few days ago I took a homeless kid into my home and offered him $10/hour and hot meals for honest work to help him get back on his feet. Over lunch, we talked and the truth spilled out: this kid had made all the wrong decisions, repeatedly. Drug and alcohol use, never saving any money, pursuing short-term pleasure over any kind of planning. I think we talked him out of trying to get his hoped-for girlfriend pregnant, thank goodness ("All of my friends are having kids!"). As for his family life: father was an illegal immigrant who under Obama was jailed for some other crime, and deported. His mother rejects him. And then you start to wonder: is this legally-adult human being's brain really capable of being a rational calculating machine?

Once you acknowledge the possibility of mental fallibility, social pressure, chemical dependencies, constant short-term focus, and repeated mistakes, you start to see them show up everywhere, short-circuiting the ability of free markets to bring a lot of people the things that will make them happy. Instead, you start to become attuned to a recurring pattern of people buying things that actually make them poor, unhealthy, and unhappy--and somehow never getting the message. Suddenly cigarette companies lose their moral neutrality. And soda companies. And sellers of chemical dependency-inducing drugs. And advertisers in general. You start to see the ways in which they're all preying on human weakness, as now understood by modern psychology for which anarcho-capitalist free market ideology hasn't been updated. And you start to think more about children and the mentally ill--people whose brains are not physio-chemically capable of making adult-level decisions in some or all circumstances.

At least, that was my journey.

What especially resonated with me about the article was that the in-crisis markets are ones where the outcomes are complicated and far off in the future. How do you really know that a certain house for your family or school for your kids will be the right one? There are just so many variables. It's always inherently a guess--a guess backed by potentially hundreds of thousands of dollars.

But despite it all, I don't really believe in the ability of government regulation to improve these situations. We have reams of history to show us that. Most hurt more than they help, in fact.

That's why it's such a quandary.

It's not a quandary at all other than in your mind.

The State is composed of human beings just like other human beings, with all the same fallibilities and biases. Except of course that there is an incentive for people who want to use force against others to join the State, so in fact they are worse on average than the general population.

So it is logically impossible for the State to improve circumstances, and in fact (as you have noted) it makes things worse.

Thus, anarcho-capitalism, which provides the maximum of freedom for people to live their own lives, however good or bad they may be at that, is the best solution.

Q. E. D.

I'm not sure the demographics are going to be that dire, certainly not in the US. Don't forget that life expectancy in the US is decreasing, and the fertility rate remains high among the lower classes (which may or may not be helpful).

I agree with PointedStick's message about advertising to vulnerable populations skewing the free market in some areas. That's long been a liberal viewpoint that I have a lot of sympathy with: outlawing sodas is meant to counteract the relentless and highly financed ads, directed to kids who don't understand how they're being manipulated. My main objection here is that making those products illegal only means that you're going to further complicate a tough situation by dragging in police, courts and jails. It won't actually change behavior.

I have long been in favor of banning certain types of advertising, most especially direct-to-consumer pharmaceuticals. It would be optimal to counter the ads with public education campaigns, similar to what was done so successfully for smoking, but governments just don't have the money to outpace the advertisers. I figure that advertising bans plus some education is the safest and least intrusive way to deal with problems. For instance, my division has banned drug reps from our office and patient areas. Having them hanging around MD's like fleas is an insidious form of advertising that seriously needs to stop.

Pointedstick wrote:I figured I'd get the biggest pushback from libertarians on the "markets don't work" comment. I know where you guys are coming from because I was one of you until pretty recently. And in fact I agree with you that free markets work if your definition of working is getting people what they want.

Of course! That's all I'm saying. Instancing a free marketplace does solve a problem, just as installing a word processor will solve a problem. A word processor will not enable you to create accurate three-dimensional models of objects. For that, you would need a different tool, such as a CAD program (or a lump of clay). A free market does not solve every problem.

Now I'm with you. I'm with you far more than you know. I too am a long-time libertarian, but I too have over the last few years been gradually... I think of it as moving onward, upward and beyond libertarianism. I still am one; I still accept the insights and truths afforded by that school of thought, so full of brilliance and logical rigor. But there are other things going on in our civilization, things even deeper, things more fundamental, things that even transitioning to a fully libertarian political solution will not solve.

Thing is, this makes free markets a means, not an end. We don't actually want a free market; what we really want is [XYZ, something that I want]

Are you sure? Is that what "we," as in everyone, wants? Demonstrated preferences, right?
Ideals and mission statements, beloved bromides
Dwell loftily and legion in the clouds;
While where the vulcan meets the graded tar, lo:
Soda shells and cigarette butts abound.
Which preference is more real? What do people ("we") really want?

But let's not be lazy and assume that what people want is always good for them individually, or broadly good for their society collectively. This is an off-limits subject for libertarianism, which largely uses a 19th century model of the human brain that casts it as a rational calculating machine. People always choose the end the best suits them, see? And when they don't, they rapidly adjust and make better decisions?

Oh, absolutely! It's not! I, for one, certainly do not assume that "what people want is always good."

Fundamentally, absolutely foundationally, at the deepest level: a society is its people. If the people are good, it will be good. If lazy, then lazy. If debauched, then debauched.

Or do they? A few days ago I took a homeless kid into my home and offered him $10/hour and hot meals for honest work to help him get back on his feet. Over lunch, we talked and the truth spilled out: this kid had made all the wrong decisions, repeatedly. Drug and alcohol use, never saving any money, pursuing short-term pleasure over any kind of planning. I think we talked him out of trying to get his hoped-for girlfriend pregnant, thank goodness ("All of my friends are having kids!"). As for his family life: father was an illegal immigrant who under Obama was jailed for some other crime, and deported. His mother rejects him. And then you start to wonder: is this legally-adult human being's brain really capable of being a rational calculating machine?

Smart people have a problem. You're smarter than pretty much everyone around you. Do not take this as flattery, it's just a fact. I am, too. And (like everyone else) we tend to basically assume that everyone thinks more or less in the same way -- that is, on the same level -- as we do. That is not the case. You would likely be shocked at just how unintelligent a sizable percentage of those around you are. There have been studies done wherein a representative population is given a short sports article to read and then asked a few basic questions about it. They can't do it. Many people cannot answer even one. Tell smart people this and they cannot believe it. They're incredulous. They just cannot believe that 20%, 30% of the people around them are operating on a mental level so foreign to them.

But they are.

Once you acknowledge the possibility of mental fallibility, social pressure, chemical dependencies, constant short-term focus, and repeated mistakes, you start to see them show up everywhere, short-circuiting the ability of free markets [anything!] to bring a lot of people the things that will make them happy.

Right?

This is not a unique problem to the free market, right?

And, as per my previous comments, this is not even a problem that the free market has. Not its problem. The free market doesn't address it. Why would anyone expect it to? All a free marketplace is is a bazaar. Just a big open area full of tents and booths and hawkers and people coming from all around, milling around, trying to sell this year's crop, or buying some butter. It's not a thing that's going to make people better, lift them up to new heights. It's sure as shootin' not gonna make 'em smarter. That's not in its design. It's just a bazaar.

Instead, you start to become attuned to a recurring pattern of people buying things that actually make them poor, unhealthy, and unhappy--and somehow never getting the message. Suddenly cigarette companies lose their moral neutrality. And soda companies. And sellers of chemical dependency-inducing drugs. And advertisers in general. You start to see the ways in which they're all preying on human weakness, as now understood by modern psychology. And you start to think more about children and the mentally ill--people whose brains are not physio-chemically capable of making adult-level decisions in some or all circumstances.

Look, they're all like children. Every one of us is like a child to someone (God, if no one else). People have different IQs. They really do. And that intelligence level is pretty much set. So, let me sum up your problem for you:

They're not that smart.

You can't make them smarter.

That's it! In a nutshell! They're going to keep buying those central air conditioners and those college edumacations and making themselves into walking chemistry experiments. Unless......


The solution is elitism. Our civilization rose, as did every civilization before it, as a hierarchical structure topped with a group we can call the "Natural Elite." People are different. All men are not the same. Some people are better than other people. Just a different stock, a better breed. Higher intelligence. Greater wisdom. Stronger courage. Longer foresight (reminds me of what you said: "What especially resonated with me about the article was that the in-crisis markets are ones where the outcomes are complicated and far off in the future." Lower IQ people cannot, or at least typically do not, think with this kind of time horizon.). Essentially, they have more productivity, planning, industriousness, and inventiveness, enabling them to gobble up all the farms around them, thus becoming lords. And also, in a harsh climate they will have more surviving kids, thus enabling the long, slow process of improving the genetics, and thus the society.

These elites were in a position of grave responsibility and at least the good ones took it very seriously. (Nice thing was, the more seriously you took it, the more of a good one you were, the more successful your fiefdom/principality/duchy/kingdom/bishopric/city-state tended to be, so there was a positive feedback loop.) They had to be moral. They had to be respectable. They had to be, in a word: Noble.

And so it was their job, yes, to know better. To set a good example, to chart a righteous course for their people, and to help decisions to be made that would be good and wise in the long, very long, term.

This natural, wholesome elitism is not incompatible with liberty. This was the very incubator in which liberty arose. It seems, in fact, to be the case that it is indispensable to it. In the long run. Yes, it is actually egalitarianism which is incompatible with liberty! And with civilization itself, at least any civilization I would find halfway interesting to live in.

PS, can you point to any social problem that has been fixed by people following your current line of thinking?
And fixed without big seen or unseen "costs"?

Also, who draws the lines, once you start determining what is good for people and what is bad?

We all go through this phase as some point, so I'm not looking to bash your thinking. I went through it many times, and I finally came out the other side where I am now. Well, saying finally is presumptuous on my part. We all evolve.

I said years ago that once health care costs are socialized, then you have to know government will come for your bad habits. The same applies to other areas of socialized payment. My take is, if someone wants to smoke, that's their problem. That's assuming I don't have to pay for whatever happens.

IMO: Ride with no helmet, knock yourself out!

That is where your thinking is leading. Smart well-intentioned people will clamp down on the poor saps who don't know what's good for them. What could possibly go wrong?

I appreciate the detailed reply, LC475. It sounds as if we're in agreement on about 99% of these things. I too consider myself a "post-libertarian," and I haven't rejected their important insights about markets and incentives. I just don't think that fully embracing those things alone will make a great society. That would certainly solve a lot of problems, but I think it would also create or exacerbate others--especially for the significant fraction of the population that's just not that bright or thoughtful. They need guidance. They need to be shown the way. They need certain things done for them, for their own good.

In a lot of ways, that was the beginning of the end for me. It was easy to be a libertarian living in the Lake Wobegone bay area, where everyone's super smart. But as life continued, and my sister started dating some real duds, and I moved to New Mexico, and I got out of the bubble, yeah, it started to become abundantly obvious that more choice and freedom just won't actually help some people. And if they get it, systemic forces will be unleashed that may actually make some things worse as a consequence of their poor decision-making and ease of being exploited by smart people without a moral compass.

We're largely in the same place regarding egalitarianism and elitism. Damn, you're making me want to have a third child.

Pointedstick wrote:I just don't think that fully embracing those things alone will make a great society.

Right.

you're making me want to have a third child.

Now that, will!

Do your part, citizen!