The Equanimist

Thought on Incentive Misalignment and Currency Mismanagement

Posted in Uncategorized by equanimist on December 4, 2015

Of course, what’s good for companies is not necessarily good for a society. The drug industry provides a perfect example. By introducing drugs that treat (but do not cure) illnesses, while charging exorbitant fees for same, pharmaceutical giants sap productivity from other areas both by permitting chronic illness and by siphoning money off of the economy—money which could be used to other purposes but cannot be used to two purposes simultaneously. This is good for a drug company’s bottom line, and it runs against society’s interests. In the same way, giant cable companies (which somehow offer less than Netflix for multiples of the price,) HMOs, energy monopolies, diamond miners, and so on, wring outsized profits out of average people and hinder expansion by taking money from other projects.

Progress over the last century has been extraordinary compared with prior technological advancement. Still, because we are paying far more for goods and services than can be justified by either ingenuity (value-added) or total labor input, and because money (currency) velocity drives innovation (when total currency reasonably reflects discreet units of actualized-, future-, and value-added potential of some society), one must wonder: how many decades behind are we because we allow greed to divert and keep money from worthy projects?

It is not that some people don’t need “greater” incentives than others. It is not that we should not indulge this need to wring productivity from them. It is that we should act to restrain same wherever we can. Further, it is not that many people are not particularly useful and should not be paid living wages to perform tasks that do not require much skill or training. It is that we should make the best use of them we can. For example, it might be a waste to put so many in charge of micro-managing doctors and denying coverage. It might be better to use same to facilitate productive business activities.

We currently fail to address these kinds of wasted productivity. Among needed changes, incentives should be focused to reward solutions and increased productivity over manipulation and marketing. Further, detrimentally high salaries and bloated administrative costs should be dis-incentivized.

Tyranny is the problem not the answer to violence

Posted in Uncategorized by equanimist on October 7, 2015

Something that the media doesn’t report. Homicides and crimes comitted with guns have dropped precipitously in the past 22 years. We are as safe as we were 5 decades ago. And the correlation is now thought to be with demographics–not “gun control” which was applied in just patches of the country–though the decline occurred nationwide. [EDIT: the following links are about as true now as they were in 2013. They’ve just been hanging around.]
http://www.npr.org/sections/thetwo-way/2013/05/07/181998015/rate-of-u-s-gun-violence-has-fallen-since-1993-study-says
http://www.pewsocialtrends.org/2013/05/07/gun-homicide-rate-down-49-since-1993-peak-public-unaware/

If you are concerned with what is a low rate of crime relative to the US past then the solution to the problem is not to impose draconian measures that give away individual rights so that maybe we’ll be safer–safer while we are trampled by vested interests undermining our way of life! [And if you think that’s a crazy idea without precedent in US history read up on the very real plot to overthrow FDR foiled by Major General Smedley Darlington Butler.]

As Ben Franklin had it, “Those who would give up essential Liberty, to purchase a little temporary Safety, deserve neither Liberty nor Safety.” And like a fool and his money they would soon be parted!

Something I have never heard: He came from a loving family. He was well fed. The people in his life were supportive and respectful. He had a good, secure job and friends. He had time and money to pursue his interests. His healthcare needs were met. Then he just started killing people.

Demand that everybody be fed. Change perceptions around parenting. Stop marginalizing people. Stop belittling their beliefs. Just stop bullying them all together. Demand investment in quality public education. Stop unneeded stresses. Reject the enslavement of debt. Unionize. Demand higher pay. Demand congress act against outsourcing. The list goes on and on. But don’t fall prey to the specious argument that guns cause violence. Vlad the Impaler did just fine.

EU friction due to overemphasis on personal responsibility and cultural irrelevance

Posted in Uncategorized by equanimist on July 15, 2012

Blame being better tool not inherent—useful to adjust behavior but never more than physical fact (i.e., amoral) same ought never be more important than limits to which adjustment can be pushed. That is, I can effect so much change in others with the psychological technology available to me but I cannot effect more; and to the extent that I get caught up in personal responsibility (the individual mandate) beyond my capability I limit satisfaction when/to the extent that same derives from stability.

More to the point. Europeans make the same mistake that different cultures make when dealing with one another: Europeans do not share the same values and goals (as increasingly US Americans do not). If the goal of good government is highest possible civil obedience then government must account for these cultural differences (ideally individual differences!)

For example, when Germans look at Greeks it is not to the common good to look with a moral reference but with a realistic reference: Greeks, like Germans, are who they are—not whatever Germans think Greeks should be. And continued insistence that Greeks be Germans threatens the EU.

Consideration of Current Global Policy within a Context of Sustainability

Posted in Uncategorized by equanimist on June 24, 2011

Note:  I did this series of cartoons quite a while ago and did not intend to publish them as such.  That said, within a context of current events, the brief outline presented here is good food for thought.  So I’ve put words to them… Expect exploration of these issues in pieces to come.

Many with whom I interact seem to think that a dollar is some kind of a static instrument.  They seem to think that the number of US-controlled US dollars at a given time must equal the number of US dollars necessary to cover every US debt; and that same must do so now or we’re in serious trouble.  This is just not so.  A dollar is not static.  It’s good for more than one exchange.  And debt isn’t all due now.

Ideally a dollar gets passed on indefinitely.  In Fig. 1, a person spends a $100.  This either buys something or pays down some debt.  The person from whom s/he bought that thing then buys something from somebody else or pays the money out to cover some debt or a wage.  The recipient does likewise…  The same $100 bill gets passed from hand to hand, over and over again…  Assume that the first person in the picture is paying down debt and the second person in the picture is paying down debt and the third person is paying down some debt…  Then the same $100 is put toward debt owed by many people.   Of course, in real life, people tend to keep some portion of the dollars that they receive as in Fig. 2 (below).

In Fig. 2, we see what quickly happens to a hundred dollars when it is spent and ten percent is saved or siphoned off of the economy.  Two things jump out at me when I look at this: 1) $100 becomes $73 pretty quickly; and 2) $100 covers $271 in the first three transactions.

I’m going to hold off on 1) and take 2) first.  Again, dollars aren’t static.  A dollar gets recycled over and over again.  So, if three people are in varying amounts of debt and that debt totals $271, a hundred dollars passed from one guy to the next might actually suffice to make everybody even.

Further, dollars don’t get passed around once or twice but again and again.  Assuming that everybody in a chain gets a certain percentage of each transaction, and that the percentage does not change over some period, then income goes up as money gets passed along the chain more quickly.  On the other hand, assuming a steady money supply over the same period, to the degree that saving siphons money off of the economy or people are added to the economy, there’s less money to pass from hand to hand, and incomes must go down.

In Fig. 3, it’s clear: when one guy saves a lot off the top there’s a lot less left to be passed around even if subsequent savers save only 10% each.

Now imagine twice as many people sharing the same amount—imagine that the first hundred dollars must be changed for two fifties to split between two guys.  Even in the Fig. 2 scenario, the second guy in the transaction chain would only get $45 instead of $90.  So, if the number of people served by some supply of money doubles and productivity increases with population growth and there’s no shortage of resources then it is possible and reasonable to double the supply of money in order to furnish enough money for everybody.

But there exists another important reason to increase the money supply: productivity increase that outpaces expanding population.  We’re not on a gold standard or a silver standard or any kind of commodity standard anymore.  Money, instead, represents discrete fractions of actualized human potential (adjusted for instantaneous estimation of growth of same).

In Fig. 4, a guy makes a widget.  In Fig. 5, a guy makes six widgets.  What happens if there isn’t enough money out there to buy six widgets at the going rate?  Either prices must come down, or five guys are put out of work [even if we were to think of other uses for them, since we haven’t increased money supply, we can’t pay them.]

Let’s suppose that we can’t think of anything for them to do other than make widgets, and we can’t simply increase money supply because raw materials are too expensive to justify based on our society’s productivity or because use of those materials is not sustainable (which is really the same thing said differently).  Then we’ve got to accept lower standards of living, or we’ve got too many people.  As China’s population problem and the results of “One-Child Policy” clearly demonstrate, it’s hard to get people to stop having babies.

Since you can’t just kill people who won’t stop doin’ it, and because we haven’t had a good pandemic in ages—since we don’t have any other natural predators—war may be the answer.

War puts people (temporarily) to work.

A ‘good’ war rouses the rabble.

But, perhaps most importantly, war leaves devastation in its wake, and war kills people. The end result of a World War can be like starting over—as long as nobody drops too many nuclear bombs.

The problem with laissez-faire (the chief problem with modern interpretations of representative democracy)

Posted in Uncategorized by equanimist on October 31, 2010

Compromise is the result of a fight between opposing forces.

           Imagine two boxes that contain agendas. They’re butted up one against the other. On either side of the boxes is a guy. The two guys push the boxes toward each other with all their might. If, on a level playing field, both guys are equally strong and equally good at pushing then when they push the boxes directly at one another the boxes don’t move, as in Fig. 1, panel A.

            That’s more or less fine when the status quo is working because, if they’re the only two guys on the playing field, the fight itself doesn’t change things.

            As illustrated in panels B and C, one guy’s often “stronger”. At one time or another, the boxes move to the left or right. If we assume that the boxes always come back to the middle, this is a kind of dynamic equilibrium. But,

            1. These two guys aren’t the only ones pushing on the boxes.

            2. The fight takes time and resources that could be put to better use.

            3. Nature will favor change.

            4. No democratic law or set of laws governing specific actions can possibly ensure indefinite dynamic equilibrium.

            In order to maintain the status quo the two boxes must hold equally opposing positions on every political issue. Nothing can “fly under the radar” or “come at an odd angle” because the system is not designed to oppose the force behind the “odd” issue.

            In Fig. 1, panels D and E we see the boxes in two dimensions. With “no” (i.e., very weak) opposing force on top of the boxes, a sudden strong force from below pushes the boxes right off the scale as in E. But this is still overly simplistic. The boxes float freely, and lots of people are pushing on them from all angles.

            In Fig. 2 at left, the boxes are transformed to a shell (not pictured) against which forces act from the inside and the outside and in all directions. Shown is a cross section of forces (the center slice of a prickly ball).

            Even when every force is adequately checked by an opposing force, in a laissez-faire world substantial time and resources must be devoted to constant struggle to maintain the status quo. This is good if there isn’t anything better to be done because it’s generally better to employ somebody than not. It’s a big waste if there’s better work to do, like innovating. But, even when we allow that it is a fine allocation of resources, every force cannot be so balanced because it’s just not possible to anticipate every socioeconomic force and counter same with a ready, opposing force.

            Forces will come at odd angles. Forces will deform the shape of the shell. Individuals will conceive “creative” solutions to “problems” posed by specific laws with which they must comply. They will undermine the principle to benefit themselves. And, a laissez-faire democratic system (a system legislating only specific actions) predicated on the outcome of this constant war between individuals and governance cannot ensure that the system always returns to some original shape.

            While the dueling forces in Fig. 2 are drawn as more or less equal in magnitude, alignment and time for the sake of simplicity, these forces actually vary in magnitude, focus, and application relative to place-of-society on the ideological continuum (more generally, time).

            Let us suppose that we establish laws right now that require (under present circumstances) that the elastic system (our shell) always rebound to conform to some current ideal. We cannot possibly anticipate every action—every drive to change the shape that our socioeconomic system takes.

            Imagine now that the two guys in Fig. 1 represent battle at some pair of opposing arrow heads in Fig. 2. What if one guy gains “the upper hand”? He distorts the shape of the shell, of course.

            Assume that the first change is small—that the result of the contest is slight deformation of the shape of the shell. The small change will or won’t prove beneficial over some time frame.

            It isn’t hard to imagine that a change, which will lead to turmoil, might seem beneficial to all parties over some relatively short time frame. When then ought we to expect more of the good medicine? Is it reasonable to assume that we will hold off making additional changes until we’ve determined that there is no downside? Certainly, there is no guaranty. In a cascade of adoption, similar changes might be made, and these might prove beneficial over a short term. The system is “permanently” deformed to favor some different shape.

            Laissez-faire democracy is inherently vulnerable to socioeconomic mores: it changes and continues to change in accordance with perceived “best practices” until it takes a new shape. Laissez-faire democracy is opposed to the status quo.

            Some will say that inherent instability drives successful innovation. And, it may in some cases. But, it need not. It can drive us backward, sideways or asunder.

            The problem, then, is to reconcile maximal individual freedom with an immutable framework. I believe that the US Declaration of Independence, Constitution and Bill of Rights were a modern attempt to do so—to reconcile inherent flaws of representative democracy with stability. Yet we have in past and may stand again on the brink of failure. Why?

            US Law is misinterpreted, or it is without overarching principles.

(more…)

Housekeeping

Posted in Uncategorized by equanimist on October 29, 2010

While I continue to work on a new post that will go up on this page, I’ve been posting at the Dog-Meat-Home Companion page… Ideally, the Equanimist is not just this page but consists of the Equanimist, Dog-Meat-Home Companion, News Blog and Not a Joiner–each of which has its own flavor. I just don’t know how to bundle them all into a single front page more like a newspaper. So, for those of you who are looking for updates, and I see that some people keep checking back, you might check out the other pages!

Update

Posted in Uncategorized by equanimist on August 9, 2009

Dear Readers,

I have found much to rewrite in “Part I.” — Little to change, but much to elaborate upon and, in the course of things, I have embarked upon a total rewrite of same. So, “Part III.C.” &c. will have to wait a little while longer… I don’t think anybody is in a rush — we’re still deflecting blame, calling names, rousing rabble &c. Solution can wait 🙂 Which brings me to a point of order: The Equanimist has become, for me, a pretty serious place where I publish relatively well-formed ideas that I cannot or will not rush. That said, there are many worthy inchoate ideas that (every day) don’t make it up to the top of the list. And to that end, I may start putting them down at “Dog-Meat-Home Companion” where the Apocalypse is nigh and the dog meat is delicious! We’ll see how it goes.

First post here.

-Adam

Extra! Extra! News Blog is up and running! Read all about it!

Posted in Uncategorized by equanimist on December 7, 2008

You may have noticed a new link on the sidebar. News Blog at the Equanimist is up and running! First post, A Riot in Iceland, Those (Pro)Roguing Canadians, “Let them eat cake!” See what the hubub is all about.

Posted in Uncategorized by equanimist on May 5, 2008