The call for rational economy

If I were to wrap the causes of humanity’s recent political progress (and, quite likely, the scientific and industrial progress that followed) up into two words, I would use rational government. Starting with Machiavelli’s championing of republics (despite his better-known satire, The Prince) in the 16th century, and culminating in the Enlightenment of the 18th, political philosophers began to approach governmental problems with a structural and proto-scientific mindset. The concept that monarchs could rule by “divine right” was discarded, secular governments replaced religious ones, and constitutional government became requisite. It’s easy to take this for granted, but for most of human history, political bodies were ruled by charismatic leaders who would allow no checks against their accumulation of power. “Don’t you trust me, as your rightful king?” (“Well, even if I did, I don’t trust your asshole son who’ll reign after you knock off.”) What makes the 18th-century political philosophers so brilliant is their insight that trusting in people was the wrong way to go, because they tend toward unreliability in the long run as power corrupts and the throne changes hands, and that it was better to build robust structures. Governance, previously existing in the context a paternalistic reign handed down “from above” and usually justified with incredible supernatural claims, was something people could debate and vote on.

Since then, what we’ve had in the West have been mostly libertarian governments, at least compared to most of human history. It hasn’t been monotonic progress, but the ideal of rational government is clearly winning. We don’t burn heretics. In fact, most governments recognize the concept of a “heretic” as meaningless. This isn’t to say we got it right from the start, and it’s still not perfect– “sodomy” laws and the opposition to gay marriage are one example of pre-rational hangover– but the ideal is well-understood and people are working toward it. Libertarian government is, by and large, the accepted norm among educated people.

Rational government likely emerged as Europeans became more mobile. Interactions among people from different countries and with radically different experiences with governments fostered an interest in comparison. What are the English doing right and wrong? How about the French? The Italian states? As Europeans developed a more complete knowledge of their history and the variety of political structures, the existing patterns began to look ridiculous. The view of hereditary divine right evolved from seeing it as a component of a fixed, natural order to considering it a dangerous, reactionary superstition. Not to overstate my country’s importance as an American, but the United States plays a major role in this trend as well. In the late 18th century, a mix of mostly English Europeans attempted to experiment with rational government on the new continent, designing a country that was, from first principles, devoid of hereditary aristocrats or state religion.

What happens when rational, libertarian government (with low corruption) becomes the norm? The good news is that these governments tend to be fair and stable. There isn’t a lot of corruption or rent-seeking by government officials. It exists, but it’s less severe than it would be in a typical theocratic or aristocratic oligarchy. So you get an industrial, capitalistic economy. (For a contrast, the extortions and bribes required in a corrupt oligarchy retard industrial and entrepreneurial progress.) That’s a good thing, but it brings its own sets of problems. One of the major and perennial ones is the ability for businesses to profit, at the expense of the world, if they’re able to externalize costs (e.g. to the environment). There is also the instability, as observed in the 1930s, of hard-line industrial capitalism. Poverty, we learned in the Great Depression, is not some “moral medicine” that makes people better. It’s a cancer that can devour an entire nation. The third problem is that a libertarian government has a hard time curtailing an unchecked corporate elite that emerges in the power vacuum.

Over time, people begin to realize that laissez-faire capitalism is not desirable. This leads to a class of government interventions (social welfare programs, regulation, high taxation rates) typically associated with socialism and, in small doses, there’s no question that they’re an improvement. However, a number of supposedly “socialist” governments have proven themselves to be immensely corrupt, brutal, left-wing authoritarian regimes no better than the right-wing dictatorships of old. I don’t think anyone educated would prefer that extreme (statist, command economies) over the current system. Empirically, they don’t work well (see: North Korea). The question of where on this purported spectrum between statist socialism (left) and laissez-faire capitalism (right) an economy should be remains open.

What is the answer? Well, I think it’s important to look at this with a scientific, data-oriented mindset. I don’t have the kind of data that it would take to find a “closed-form” answer, but let me draw some insights from machine learning and statistics. Modeling approaches tend to be global, local, or some combination of the two. Global methods assert that there is some kind of underlying structure to the problem, and use all the data to build a model. For example, if one were relating latitude to average temperature, a global model would capture the relevant global relationship: polar latitudes tend to be cold, and equatorial latitudes tend to be warm. The vast majority of the earth’s surface would be well-classified by this model. It would, however, misclassify Rome (high latitude, warm) and Mount Kilimanjaro (low latitude, cold). You’d need a richer model (altitude, ocean currents, marine west-coast effects). Linear regression is one of the simplest effective global models, and for a wide variety of problems, it does well. On the other hand, local methods of inference give a high weight to nearby data. The archetypical local method is the “nearest neighbors” approach to inference. This is what real estate appraisers use when they attempt to find a fair value for a house or plot of land: what seems to be the market rate for nearby, comparable property? There’s clearly no simple global model relating positional coordinates to land or location value, so nearby data must be used. The disadvantage that local models have (as opposed to global ones) is the paucity of useful data. For many problems, there just isn’t enough data for local methods to perform well, either because the data is hard to collect or because the space is too convoluted (high dimensionality)– or both. The lesson is that both local and global methods of inference and modeling are valuable, and neither category is uniformly superior. To solve a complex problem, it usually requires both approaches to be used.

So what do these concepts of global versus local inference have to do with economics? Well, archetypical socialism is a global-minded approach. Certain social justice constraints (“no one should have less than <X>”, “total environmental pollution cannot exceed <Y>”) are set with the intention (at least, the stated intention, as many left-wing governments have been execrably corrupt) of keeping society fair, stable, and sane. The problem is that this can lead toward a command economy, and those do a poor job of solving the fundamental wealth-creation problem: building things people want, but that they don’t have the vision yet to know that they want. Command economies can produce commodities “to spec”, but no command economy could have come up with Google. Capitalism, on the other hand, is fiercely local. It has its own intellectually defensible brand of fairness (right-libertarianism) but no interest in enforcing global social-justice constraints. It doesn’t have the tools, and it has no interest in developing them. What it does extremely well is enable the individual to exploit local information (that command-economy bureaucracies would never acquire, and over which they would never agree on an interpretation) for personal benefit. This is, in effect, what markets are: distributed, computational methods for aggregating trillions of bits of local information, aggregating a signal from millions of self-interested actors.

What I intend strongly to convey, of course, is that a modern economy must draw from both columns. Socialist command economies degenerate rapidly, in large part because they must curtail individual freedoms in order to maintain the global structure to which they’re committed. Laissez-faire, on the other hand, diverges. For a while, the use of local information conveys a computational benefit and better economic decisions are made. Unfortunately, this also has a tendency to generate inequality among individuals that, in the long term, has a pernicious effect. Inequality among ideas and companies (aggregations of effort) is a good thing, because it means that bad ideas die and good ones grow in importance. When that’s applied to people, it’s not desirable. A class of economically disenfranchised people emerges, and so does an entrenched, wealthy aristocracy. The modern corporate elite is of the latter category. The incompetence and attitude of entitlement that reside at the top of American corporate world are truly terrifying.

One of the issues with capitalism and socialism both is that they tend to generate defective versions of the other. It seems to be a natural tendency. Supposedly socialist Russia had crime-ridden, violent black markets– the kind associated with illegal psychoactive drugs in North America– over commodities as staid as light bulbs. A command economy will not eradicate the very natural will to trade, and this creates a market. Making that illegal simply denies participation to law-abiding people, making what markets will exist unregulated and inefficient. On the other hand, American capitalism has generated a perverse socialism-for-the-rich. CEOs’ kids don’t “work their way up” in a meritocracy. Their wages aren’t set by a real market, but via favor-trading within a socially closed network of self-dealing corporate officials. Their daddies buy their educational admissions and resumes and, if they’re truly too stupid to make it on their own despite immense assistance, board-position sinecures at large corporations.

Right-libertarians (the “Tea Party”) blame corporatism on the government– it’s all this damn regulation that creates the corporate problem, they say– but that’s not a useful assessment. What actually happens is that the existing elite wants badly to stay elite and will use its immense resources in order to do so. They aren’t ideologically capitalistic. They would be just as comfortable as the ruling party in a left-wing, nominally “socialistic” tyranny as long as they were at the social apex. What they are is self-protecting. If corrupting governmental and educational institutions is an option to them (and it always is, because most modern corruption is in the form of invitations to parties, not actual wads of cash) they will do it.

Corporate America has generated its own royalty. What is different about 2012 from five or ten or fifty years ago is that people are now cognizant of it. The most interesting right-wing movement in the United States is the nascent Tea Party. While I disagree with them vehemently (as a left-libertarian, and also as one who favors science over emotional argument) I will give them credit for this: at their intellectual core (and, yes, there is one) they are aggressively anti-corporate. Post-2008, Americans get that the Corporate System is not a meritocracy, not rational, and not even real capitalism. It’s designed to provide the best of two systems (socialism and capitalism) for a well-connected social and increasingly hereditary elite, regardless of merit, and the worst of both systems for everyone else. For themselves, they create an economic arrangement in which they can derive enormous personal benefit from random variables that exist in the economy, but at the same time build a jealously guard a private social-welfare system that ensures they stay rich, well-positioned, and well-connected even if they fail. For the rest, they provide mostly downside, displacement, and discomfort. A perfect metaphor for this is air travel. Well-connected people get discounted or free air travel, special lounges in the airport, and access to comfortable private aviation. The rest of us get Soviet-style service and capitalistic price volatility: the worst from both systems.

What’s changing is that people all over the world are beginning to see that we don’t have a rational economy. We have a priesthood caste of executives who rule by their own version of “divine right”, claiming that the (invisible, to most people) network of social support that has placed them represents the “wisdom of the market”. We have a world where the transference of money into power is not only politically accepted, but increasingly seen as socially normal. It’s not called “corruption” anymore when journalists and government officials attend depraved parties in Davos, La Jolla or Aspen; it’s “self-interest”.

So what are we going to do? How do we overthrow the tyranny of position, especially in a world where such entrenchment can masquerade as “reputation”? We now have a world in which private social assistance can be presented as a “talent acquisition” (or “acqui-hire”) when our forefathers at least had the insight to call it “welfare for rich people”. These people are very well-connected and extremely adept at corrupting press and educational institutions in order to make their positions seem legitimate. They’ve created their own variety of rule by divine right, with “God’s will” ascertained in accord with how much money a person has (regardless of how he got it). For one concrete example, people are usually evaluated in a professional context according to job titles. Well, what are these but knighthoods and baronies assessed “from above”, and “up” points toward an entrenched, never-elected social elite who are not so much capitalism’s “market winners” as those best positioned to exploit an increasingly industrial economy. Is there really a difference between “Senior VP at BigCo” and “Thane of Cawdor”? I don’t see one. So why is the former resume gold, while the latter is a laughable anachronism?

I’m running out of time, so I’ll stop bashing the corporates and cut to the chase. The 18th-century was when the idea of rational government came to the fore, and it changed everything. People argue that the French Revolution “failed” because it led to Napoleon, but the truth is that Napoleon was quite restrained in comparison to almost all feudal lords, much less absolute monarchs. Progress toward rational government was not monotonic, but once the ideas reached implementation, they couldn’t be rolled back outright. The ideals lived on. They continue, even now, in the darkest and most irrationally governed corners of the earth, such as the Middle East. These concepts of rational government may not be implemented yet, but they are well-known and considered superior among a large number educated people. I believe that the 21st-century is when we’ll start to see real progress toward the rational economy. Why? Because it will be the only thing that can compete in the technological world. Only societies with rational economies and true “meritocracy” will be able to grow their prosperity at a technological (possibly 10+ percent per year) rate.

The Industrial Revolution required rational government, because the theocracies and monarchies of old would never have tolerated the social and economic rise of these upstarts. Change to a technological world will meet similar opposition from our entitled social, nominally “corporate”, elite. I don’t believe in a “Singularity”, but there are phase changes in growth, and the fast-evolving new entrants frequently “win”. Immensely powerful reptiles (dinosaurs) died out, while the small, fast-evolving creatures with mutant sweat glands (mammals) were able to adapt. Tool-using animals were able to control their environment in a way that their predecessors could not, and eventually evolved into the first humans. Awareness of time and future-orientation led to the agrarian revolution, characterized by 0.05 to 1% annual economic growth, and rational government made the industrial (1 to 10% annual growth) world, emerging in the late 18th-century, possible. Now, the world is pregnant with a new possibility: a technological world characterized by rapid economic growth, general prosperity instead of poverty and, if we do it right, an end to this sickening tyranny of geography (physical and social) that has rendered most of the world’s population poor. However, we’ll need a different kind of thought to make this possible. We’ll need a world where the right people– technologically-minded people– are making the decisions, and we need an economy that is not only rational, but protects its own rationality. This requires both the protection against divergence (poverty and self-perpetuating, entitled wealth) provided by socialism and the individual, local liberty of capitalism, but it requires something more: a technologically-minded commitment to solving hard problems using approaches (such as, in software, open allocation) that would previously be considered radical.

20 thoughts on “The call for rational economy

  1. Very interesting thoughts here, although I consider myself lucky to be able to live my first 12 years of my life in a socialist country before the system is collapsed and turned into a democratic / capitalist system. The most interesting part was actually the not the economical changes (as inequalities, classes reemerged alarmingly fast, never seen homeless people and luxury cars) but the social/human factor; watching and experiencing both as an outsider and an insider how the behavior, the attitude of people, your friends, and yours is changing just because the political/economical system is flipped over is a once a lifetime, extreme interesting experience (couldn’t fit to this post to explain). However, have no fear of communism – it never happened ever. There were different dictatorships around the world used this ideology as a cover, but there were only centralized authoritarian, insanely inefficient barbaric systems. North Korea is no exception; it’s not communism, it’s just a lunatic dynasty’s private country-wide playground.

    Just as broadband bandwidth is constitutional ‘legal right’ in Finland ( – many other basic services should be available for everyone in a civilized, well developed society.

    Since we’re still monkeys, and power structures in a human society are more important than anything else (just watch a religious leader – they would teleport back the country without a blink of an eye to the middle age just to keep their hierarchy), I don’t think we can even fantasize about an ideal system; but if we’d still try to do that, I’d vote for free housing(!) food(!) healthcare(!).

    In my opinion, everything what could be automatized, should be automatized. Jobs which can be done by robots, vending machines, should be considered as illegal and should be banned and fined seriously. No one should offer a job which could be done by a robot.

    Food production, supplies, housing should and could all be automatized with current technology, even in a sustainable way.

    In an ideal world, humans should do only what is their strengths, where they excel compared with machines and robots; to be creative, dreamers, humans.

    I’d strongly recommend one of my favorite book, which was written in Esperanto, then was translated to Hungarian and finally to English. I’m not sure it can be that impressive in English as the original, but still one of my favorite next to Brave New World from Huxley.

    The book is Kazohinia:

    • If “true communism” has never existed then it has exactly zero data points showing its even possible. However, I don’t feel like playing True Scotsmen today.

      • I think the main problem here is that communism is horribly difficult to do right as long as it have to fight scarcity. On the other hand, Free Software seems to be doing pretty well, mainly because software is not scarce (now there are tensions, mainly because software production is not scarce: we still need to feed the programmer).

        Now the trick is to figure out if we could actually transition to an economy of abundance. It could enable something like communism, only with much less coercion.

        Tamas, your description of an ideal society is strikingly similar to what the Venus Project is attempting (unsuccessfully, I fear: their plan seems to be requiring too much coordination).

  2. Been following your blog for a few weeks now, first time commenting. I would be very interested to read your thoughts on a “guaranteed living income” type setup, where the tax structure is set up in such a way that every citizen is given a basic income by the government, calculated to provide basic housing and food, etc., and automatically adjusted to cost of living/CPI year by year. Any income the person makes him/herself through working or investing would then be taxed at progressive rates, much like now. It should go without saying that we would also have some form of fully-nationalized health care. The idea would be that no one would be starving, homeless or left untreated regardless of employment status. Everyone would get their Government Income (GI) automatically and regardless of their Personal Income (PI), though those with high PI would end up with a tax burden much higher than the GI, of course, as it should be in order to pay for the program. Top marginal rates would be higher than current, of course, in order to pay for the program (they need to be higher anyway to pay for the government we’ve already got).

    It seems to me that this would foster a revolution in entrepreneurship, since people would be free to quit any job they found unstimulating and unfulfilling and pursue their creative pursuit of choice, with the security that they can always fall back on their GI if they fail. People would be free to spend 10 years inventing something while making no money at all, if that’s what it takes.

    It would certainly free us all from the tyranny of the corporate workplace. My feeling is that these types of jobs would go extinct in less than a decade if this sort of system were put in place; why would anyone work a soul-sucking job if they didn’t have to do it in order to feed their kids and pay for Grandma’s nursing home? (Of course, elderly care would be covered under health services in my world anyway, plus Grandma would have her own GI to cover additional costs and living expenses.) Not to mention the benefits to young people–I would probably allocate a portion of any child’s GI benefit to the parents, to offset the cost of childrearing, and a portion to be held in trust until adulthood, where it could be withdrawn for qualified educational expenses only until maybe age 25, at which point any remaining balance would be fully accessible. This would be a big boon to both educational opportunities–making at least a state-college level education financially accessible to everyone–as well as home ownership, where the balance accrued during childhood could be used by as down payment money.

    I think we’d see fewer “jobs” and a lot more meaningful, dignified, self-actuated and creative “work” getting done if people didn’t have to take the first crappy job offer they get after 6 months of unemployment makes them poor, depressed and desperate for anything that will pay the bills. A lot of people probably think that everyone would just be lazy and the whole system would collapse because no one “has to” work so no one would, but I think that’s a very simplistic and incorrect view of human motivations. I think it would work just fine.

    • I think it’s an excellent idea. It solves a lot of social problems, and while it costs a lot more than the current entitlement regime, middle-class Americans would probably be paying less in net taxes (when the basic income is included). The rich would hate it, the upper-middle-class would have less money but improved working conditions, and most people would uniformly benefit.

      BI sounds like radical socialism, but what it actually does is provide a certain immutable socialist infrastructure, then get out of the way and let the economy be mostly capitalistic. Once no one needs to work, it’s not unreasonable to let companies fire whoever they want (as long as they’re not unethical about it) and pay market wages, even if those are very low.

      It is, unfortunately, politically untenable until we reach such a state of prosperity that the alternative looks ridiculous. This is aggravated by the fact that the upper classes have siphoned off 80-95% of economic gains over the past 30 years. They assume that average people are too stupid to realize how much richer the country (in the aggregate) has become over that time.

      I could see the mid-21st century bringing about General Prosperity and 150+ year lifespans. I could also see it bringing about a massive, global class war. As a “have” who’d probably root for the “have-nots”, I’d prefer that one not occur, because it would make me natively conflicted.

    • Actually, we already have GI. When you consider all of the various benefits doled out (subsidized housing, medical care, welfare, extended unemployment that goes for multiple years) we already have a GI. The problems are twofold:

      1) It goes away if you try to improve your earnings (effective marginal rates for people earning around 30-40k/year can sometimes be over 100%).

      2) It’s too complicated. You need to make your whole job navigating the maze of applying for and keeping these various benefits. And then you need another whole set of people whose job is to make sure that you don’t cheat the system.

      So all in all a true universal cash payment GI solves these problems, which is why I’m a huge supporter of it. I’m not even convinced it would require higher taxes, our current system is that inefficient. When I went into healthcare reform I had much the same opinion there (better security at less cost).

      However, I don’t know if it will lead to quite the sea change you think it will. Any GI would need to be lower then the median income, so your talking about not a whole lot of money. You can already unplug from the corporate world pretty easily if your willing to live that cheap. Over at ( they lay down a plan to retire in five years on a grad students salary. If not working is that important then the cost of food and housing really isn’t that big of an obstacle. Even medical care isn’t an obstacle if your healthy and young (policies are cheap) and post Obamacare not that big a deal if you have a pre-existing.

      Of course few do this. Most people mean, “I want to not work while having an apartment in a prime location and still being able to go out for drinks with friends on Saturday night”. So yeah, I don’t think the GI is going to solve that problem. Your going to need to work. Especially because most things we really value in life (including safe neighborhoods, networking opportunities, and social status) are all relative positional goods.

      Moreover, most entrepreneurs need capital. Whether that be human (education, work experience) or financial. Most businesses don’t start in a garage somewhere with zero capital. And if you cut out software you can pretty much eliminate 90% of those stories. Most people are going to have to work, not just for the basics but also to develop the skills, connections, and start up capital to actually be entrepreneurs. The GI might help, but there are plenty of kids living in NYC getting a GI from their parents every month and they aren’t building shit.

      The rest of the comments about child GIs and GIs for paying tuition have their own problems, but I’d be getting off into tangents to the main point.

      “The rich would hate it”

      The rich would love it. Do you think the Papa John’s CEO likes paying a flat transparent tax on earnings or reading through pages and pages of reports from the consultants he had to hire to figure out how the fuck to comply with Obamacare? GI would be simpler and cheaper for the upper class.

      The people that would hate it would be the Cathedral. What would they do all day if they weren’t administering all these various patchwork programs. How would they justify their government jobs where the only skill they have is the accumulated knowledge of how to fill out useless forms the prescribed way. How will they accomplish #62 on the SWPL list (#62 Knowing what’s best for poor people) if they can’t be paid for spend all day concocting complicated programs to “nudge” poor people to act the way they think they should?

      • @asdf:

        Your points 1) and 2) about the current welfare system are why I think this kind of change needs to be made–it makes the system largely inaccessible to anyone who is unwilling or unable to navigate the Labyrinth, even those whom it’s ostensibly meant for and could really benefit from it, while advantaging the scammers who wring out every drop of assistance by being professional welfare queens.

        I am aware of ERE and I share some of Jacob’s philosophy. I’m actually working on “unplugging” at the moment; my wife and I are in the early stages of building a live-in conversion van, and when it’s ready, we’re going to quit corporate work (well, she works from home, so I’ll be the one quitting) and travel and live on as little as we can while still hopefully socking away money. Of course if we were getting, say, $30K/yr combined GI, we could do it right now without any worries, and would in a heartbeat. We know we can live on that easily; we’re doing nearly that now, in a house with 2 cars and a daily commute, because we don’t spend anywhere near our full income. Living in a van is much cheaper, of course, and requires even less.

        I don’t feel too bad about putting a bunch of paper-pushers out of work. They’ll get their GI like everyone else and they’re free to find or create useful work if they want it. The point isn’t to give everyone a luxurious lifestyle or make working irrelevant, it’s to make sure no one slips through the cracks and give everyone a better chance to work out of choice rather than necessity–which is where I feel the best work gets done and people’s creative abilities get used to their best advantage.

        asdf: “Moreover, most entrepreneurs need capital. Whether that be human (education, work experience) or financial. Most businesses don’t start in a garage somewhere with zero capital. And if you cut out software you can pretty much eliminate 90% of those stories. Most people are going to have to work, not just for the basics but also to develop the skills, connections, and start up capital to actually be entrepreneurs. The GI might help, but there are plenty of kids living in NYC getting a GI from their parents every month and they aren’t building shit.”

        This sounds to me like a feature, not a bug. I’m not about encouraging people not to work. I want people to have the bargaining power and security to choose good jobs over crappy ones, or create their own.

        That said, there are plenty of lifestyle businesses being started out of garages with very little capital. Sometimes they grow into big companies, most times they don’t. I think many people would happily work for themselves if they thought they could manage it, without the desire to get on the Fortune 500 list; GI would give them the chance to try, and fail or succeed, without worry of bankruptcy, etc. Just seems to me like it would encourage a lot of creative risk-taking, whatever the scale of the business, and I think that’s a good thing.

        Michael: “BI sounds like radical socialism, but what it actually does is provide a certain immutable socialist infrastructure, then get out of the way and let the economy be mostly capitalistic.”

        Exactly. It should actually allow the markets to function more rationally; I’m not even sure wages would actually go down, because workers would have much stronger leverage: “I don’t need this job, so if you’re not going to offer me strong compensation and benefits, I’ll fall back on GI until I can get something better, or work for myself” kind of thing.

        • I like what you are saying here and I agree. BI isn’t perfect but it would be an improvement.

          I’m ambitious, so I’d still work. However, I’d rather live in a world where workers are treated with respect for giving over a *huge* amount of time, rather than being perceived as “water-drinkers” who are just there because they need money.

          With regard to BI, the major complaint is that there will be a class of parasites (cf. hipsters in New York) at the bottom of society who’ll do no useful work. That assessment is accurate. It will happen. But with the Corporate System, we get a class of parasites (boardroom elite) at the *top* of society, and that’s a lot more toxic.

          • Tom Paine nailed it two centuries ago in Agrarian Justice. Give everyone two infusions of capital, one at age 18, the other at age 65. The first lets them start off decently, the second lets them retire decently. And the source of the capital? Taxes on the unimproved value of land and other natural resources, because such taxes can neither be evaded nor shifted to the consumer. (Paine, like everyone in the 18th century, thought only of agricultural land, but land in cities is even more valuable, as are resources like minerals in the ground, trees growing naturally and the fruits of them, and radio spectrum.)

            Is it just? Yes, because the unimproved value of natural resources is not the product of anyone’s labor, and each member of humanity is equally entitled to it. For efficiency’s sake, only some can own it, but they owe the rest of us for the privilege, which is in fact the foundation of all other privileges. Whatever is left over after paying this capital is more than enough to serve all the legitimate purposes of government — the amount of land revenue currently going to greedy private hands, mostly bank owners, is immense. It’s always better to tax bads (like the natural-resource oligopoly) than goods (like income and capital gain). Indeed, the original income tax had the floor set so high that it effectively taxed only unearned income.

      • I’m very pro-GI. I just don’t know if it will be quite as society altering as one thinks. Most people who want to unplug from the corporate matrix and live a minimalist lifestyle can today. They just choose not too for a variety of reasons. Most of those reasons wouldn’t go away even if we had GI.

  3. I love your stuff about corporate America, but your politics stuff is just so disappointing. Let’s get started.

    “What makes the 18th-century political philosophers so brilliant is their insight that trusting in people was the wrong way to go, because they tend toward unreliability in the long run as power corrupts and the throne changes hands, and that it was better to build robust structures.”

    Structures are no less corruptible then people. You might even say that structure are made up of people. And while individual people sometimes make virtuous decisions; bureaucratic structures are almost always devoid of any virtue.

    When you think of the worst decision making body you can think of its usually the committee.

    “We don’t burn heretics.”

    Go into work tomorrow and express a non-PC idea. See how quickly you get burned. I believe what you mean is people who hold opinions with the acceptable constraints of the current zeitgiest are not considered heretics and therefore not burned (and since your strain of progressive thought IS the zietgiest, well obviously your not in danger of being a heretic).

    “Why? Because it will be the only thing that can compete in the technological world. Only societies with rational economies and true “meritocracy” will be able to grow their prosperity at a technological (possibly 10+ percent per year) rate.”

    How many generations have we been saying this again? If the problem of human nature was “not enough stuff” then I think it would have been solved by now. These are problems of human nature and they aren’t going away.

    Look, I take two big issues with you:

    1) Overconfidence in human rationality.

    Many of your proposed political changes would be disasters. It’s like you can understand human nature really well when its right in front of you (like where you work) and can’t understand it at all when it transfers to the political arena.

    2) Not understanding what leftism/progressivism/PC is.

    For instance you seem to think leftists aren’t in charge. However, its really obvious they are. We even have a name for it, the Cathedral. It’s main arms are people in government, academia, journalism, media, and recently software. Wall Street is a member as are most of the super rich individuals (Buffet, Soros, Gates, etc).

    Their views are exactly your views. When I read your blog I see the progressive boilerplate. This isn’t even all that original. Your views are what they are putting into action. Today, right now. It’s just not working because they don’t work. Because they ignore giant fundamentals about human nature. For all the talk of irrationality they are themselves irrational (at least irrational beyond the careerism of those implementing them for profit).

    Your kind are in power. Nobody is stopping you from implementing your ideas that would solve everything. Your ideas just aren’t as good as you think they are.


      On the limits of human reason.

      The modern progressive “rational” movement is one of liberalism in rhetoric/politics (ideas, appearances), realism at work (in action), and vitalism on the weekend and holiday (as the goal of life). The modern progressive wishes to increase the sphere of vitalism over the other two as much as possible, as the other two are merely goals to the third. These forms of “rational” nihilism have the inevitable end result of destruction.

      • They may look the same to you, but there’s a huge difference to us between rational centralist technocrats and progressives. We are not, truly, in the business of dehumanization and depersonalization.

  4. I think hiring “professional” CEOs based on “years of experience” is a big factor in this problem. If you think about it, how does someone with no experience become a “professional” CEO and gain experience?

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  6. Pingback: The call for Rational Economy

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