Submitted by: Mike Spindell, guest blogger
I am a regular subscriber to the website WhoWhatWhy written by investigative journalist Russ Baker. Recently he ran a response by one of his readers, Dave Parker, to a video Russ posted of Nick Hanuer, a billionaire venture capitalist who gave a talk at TED, which is an acronym for the non-profit, Technology, Entertainment and Design, TED holds conferences around the world on business/societal issues that relate to its theme. In his talk Mr. Hanuer dispelled the idea that the Rich create wealth and instead said it was really the middle-classes that drove the economy. He disparaged the idea that it is the entrepreneurs who are the “job creators”. Although the talk was well received by the conference attendees, TED curiously chose not to publicize it as it usually does with other such talks. Perhaps their decision was because Mr. Hanuer’s thesis goes against the current widely accepted mythology regarding job creation and entrepreneurship. Here is a video of his talk:
In his comment on this video, Dave Parker used the writings of Joseph Campbell. Joseph Campbell was:
“an American mythologist, writer and lecturer, best known for his work in comparative mythology and comparative religion. His work is vast, covering many aspects of the human experience.”
My reading Dave’s article was the type of moment where you can imagine me slapping my head and exclaiming: “Damn, why didn’t I think of that”. Indeed, I’ve read all of Campbell’s books and seen all of his famed PBS series of interviews, done with Bill Moyers. What follows is my jumping off from Mr. Parker’s excellent comments and any credit for what I’m writing here goes to him for his perception. In applying Campbell to Mr. Hanuer’s comments, Dave solidified a concept for me that’s been playing in my head for years about the 1%’s need to increase the disparity between themselves and everyone else . The Rich are trying to create a new kind of feudalism where Lordships are won not on battlefields, but in corporate boardrooms. The rest of us need to be impoverished because without serfs to worship them, having everything ultimately becomes boring. Some of the 1% no doubt are less ego-driven and have empathy for those not on their level, but even they are beneficiaries of a mythology in creation. I believe that this mythology is the result of a campaign waged since the supporters of Barry Goldwater went down to an inglorious defeat.
Joseph Campbell spent his life studying and teaching about mythology. This is a word that usually evokes images of the Hindu, Greek, Roman and Norse Gods. In a way, for some, mythology has become conflated with paganism. To Christians, Muslims and Jews of fundamentalist beliefs mythology is the other guys religion, when in fact it is also true of their own. However, Campbell did not stop with religion as mythology, he saw it as a driving force shaping human behavior and thus also studied the effects of cultural and political beliefs on human societies. Below is his sense of the role mythology plays in shaping ourselves and our societies via what Campbell calls the “Four Functions of Myth” taken from Campbell’s: “Pathways to Bliss (Novato, CA: New World Library), pp 6-10.”, I will discuss how these functions play out today to shape our collective views of the world.
One salient piece of Campbell’s history should be looked at before showing how these elements of mythological creation have been used in America, to lay the groundwork for a Corporate Feudalism, that will leave enthrone 1% as our Nobility. Dave Parker gives a side of Campbell that I was not aware of and I feel explains much:
“Campbell himself lectured for the State Department’s Foreign Service Institute for Decades, beginning 1956.……………That tells me that ever since the greed heads and warmongers at State and elsewhere have been steeped in a perverse reading of Campbell’s work. They read it for its utilitarian value in pursuing “National Security”. And the “successes” of the Feds are envied and emulated in the world of corporate propagandizing”
My suspicions are that we are being led via popular culture and the redefinition of celebrity, into a mindset that opens the door for Corporate Feudalism and indeed shapes the attitudes of most people. These are Campbell’s Four Functions of Mythology (.pdf):
1. …the first function of mythology [is] to evoke in the individual a sense of grateful, affirmative awe before the monstrous mystery that is existence
2. The second function of mythology is to present an image of the cosmos, an image of the universe round about, that will maintain and elicit this experience of awe. [or] …to present an image of the cosmos that will maintain your sense of mystical awe and explain everything that you come into contact with in the universe around you.
3. The third function of a mythological order is to validate and maintain a certain sociological system: a shared set of rights and wrongs, proprieties or improprieties, on which your particular social unit depends for its existence.
4. …the fourth function of myth is psychological. That myth must carry the individual through the stages of his life, from birth through maturity through senility to death. The mythology must do so in accords with the social order of his group, the cosmos as understood by his group”
As sentient beings, self-involved, the fear of our inevitable demise is primary to our existence. This gives rise in us to yearnings for meaning in our lives and purpose to our lives. Most of us need the comfort that when our inevitable end comes, we will continue to exist in some form. Beyond religion though, we are essentially social beings, who have learned the benefit of co-existence with other members of our species. In shaping our society it is essential that we have some over-arching concept that something exists around us to keep us safe from the terrors that are the legacy of our predatory past. We develop words like Republic, Democracy, Islamism, Libertarianism, Fascism and others of that ilk that provide individuals with a sense of something larger than themselves that provide protection for us and give meaning to our lives. In tandem to those words connoting societal structure are conflated words relating to the economic systems we live under such as Capitalism, Liberalism, Socialism, Communism etc. In truth all of these words meanings varies with each individuals perception of their meanings.
Most Americans have been inculcated with a set of mythological buzzwords if you will, that connote our Country’s notion of “exceptionalism“. We have been taught that America is a “Republican Democracy” thriving under a “Capitalist” economic system that provides us “Freedom”. We use symbols such as our Flag, our Anthem, and our Constitution to invoke the “grateful, affirmative awe” that Campbell describes. We are proud to be Americans and most importantly we feel protected by our mythology.
These mythological symbols have been translated by our government beginning in WWII and throughout the “Cold War” into awe inspiring emotions within us. Even as I try maintain a skeptical distance between myself and the myth of America’s Dream, I am also emotionally stirred by the evocation of this mythology, that approaches the “grateful awe” of which Campbell speaks. My sense of that awe is limned by my understanding that America’s Constitution nowhere mentions Capitalism, or even sets up a national economic system, so when I see this economic theory conflated with the notion of Freedom my hackles rise. I imagine this is not true for the majority of Americans and this has led to the widespread belief in the “American Dream” and our viewpoint that even the least among us can achieve untold success. People seem to not want to vote in their own self interest. It is this notion of the “American Dream” that has allowed taxation to become inequitable to the point where the rich pay a lesser percentage of their income than the rest of the people, yet many of those shouldering this burden are lured by the siren call of “no more taxes” for fear that they will be burdened once their own success is achieved.
This matches well with another piece of the American mythological order in that there is the widespread concept of a “free market” being the apex of economic freedom. Thus all economic problems can be solved by ensuring that the “free market” is allowed to reign undisturbed by selfish manipulations of the government. The argument about whether there even is such a thing as a “free market” I’ll leave for another day. It is incontrovertible though, that this is a belief of a large majority of Americans and certainly has fared well in the political context. In the notion though of a “free market” comes a further notion that those who partake in the market’s freedom, indeed the movers and shakers of the market itself, are the “real heroes” of the “American Dream”. The Entrepreneur is held up as the most meritorious among us, because it is the Entrepreneur whose efforts create all of the blessings we share in common. The definition of entrepreneur of course is quite stretchable and leads from people of modest birth like Buffett/Gates, to those whose fortunes have been inherited like the Koch Brothers/Walton’s/Trump’s.
If our society is driven by these entrepreneurs then of course their status is rightfully at the top of our particular American food chain. They become sources to be venerated, copied, modeled after and of course envied. I believe they are well aware of this, luxuriate in their Alpha positions and assume the trappings suited to their status. Interestingly, many of the scions of “Old Wealth” in this country eschew the immodest lifestyle, thinking it gauche and nouveau riche. While their living standard reflects the elite into which they were born, they don’t feel the need to flaunt it like those parveneau’s such as Trump. For the masses of us we understand on some level that the Mellon’s for instance, are better than we, even though they don’t comport themselves in a way that draws publicity. Our role models for wealth come from those such as Donald Trump, who beyond his money and/or accomplishment, branded himself as the epitome of wealth and living luxuriously, even though his example is one of gaudy ostentation in the worst of taste. He is the entrepreneur as version of the Movie Star, which has been so confused with success and the “American Dream” that one became President and another the Governor of California.
Awe can be described as “a feeling of reverential respect mixed with fear or wonder”. This in truth is the way many of us view the elite of this country. This has been reinforced time and again by both media and by those in Academia who have functioned as their minions. It has also been the thrust of a massive propaganda campaign to disparage “liberalism” and turn the country towards what was redefined as a “conservative”viewpoint. I believe that viewpoint is less about political philosophy and more about solidifying the hold upon this country of a newly defined aristocracy. We are in “awe” of these our bettors, just as much as the medieval peasantry was in awe of the nobility of their day. Back then the gossip about the local Dukes latest mistress was as interesting and as titillating as Tom Cruise’s divorce, or The Kardashian’s TV show.
In medieval times entertainers were considered to be much less reputable, even while sharing relatively wide fame. Shakespeare was considered disreputable despite his fame in his day. Today entertainers are lionized as members of the elite which is mainly to conflate their fame with that of the Corporate/Inherited Elite, thus borrowing their glamour for the latter. In our society today the doings of the super-rich and other celebrities has become mainstream news. HGTV, for instance, has three programs dedicated to lovingly show the housing of the rich in New York, LA and London. The edifice homes, some costing as much as $50 million are displayed to us peasants for what reasons exactly, if not to inspire us with awe at the lives of our “betters“? Can we all remember the adulation poured out on the passing of Steve Jobs? He certainly was a man who made many contributions, but from his deification one would think he was directly transported to Valhalla. There is deification of our Armed Forces as the heroic exemplars of all that is good and true in America, yet are true gratitude is such that 50% of their families are on Food Stamps. Remember the hushed tones in which the news media portrayed General Petreus? That polls have shown many Americans to believe Ronald Reagan was our “Greatest President” is yet another example of the conflation of celebrity with supposed greatness. Neither Petreus, nor Reagan were either super-rich or super-competent, but they were treated with the deference of nobility and that is the point. We hold all these symbols in awe and the underlying message is one of gratitude to them for showing us what to aspire to and by leading us benighted fools through example. Jesus is of course the ultimate myth since in the opinion of many his decisions control our lives for eternity. “What would Jesus do” is a question asked by multitudes and many have been led to believe that if returned today he would be our ultimate entrepreneur.
This returns us full circle to Mr. Hanuer dispelling the idea that the “rich” create wealth. They are not in the end the “job creators” that Mr. Romney and conservative “wisdom” would have us believe. Yet I must acknowledge that a sizable number of Americans would take exception to that assertion. I think too that the “creator” part of that meme is one fraught with connotation. Just as religion deems that God created the world, isn’t there a strong inference with the term “job creator” that would lead one to feel that the Entrepreneur created America. Doesn’t the mythological creature in that reference stand above the Founding Fathers in our current mythological reference of America being the most exceptional country in history? I believe we are blinded by this American mythology to such an extent that the problems we face as a society will not be fully recognized until it is too late and we will collapse in the shattering realization that so many of our life perceptions are mythological in origin.
Adolph Hitler took a shattered country with a hyper-inflated, impoverished economy and through the brilliance of a master of mythology, Joseph Goebbels, created a world power with the potential for empire. NAZI Germany’s destruction though came about chiefly because the mythologists began to believe, along with those they had gulled, that their mythology was absolute truth and that they the “Master Race“ would prevail against all odds. Fresh from the incredible triumph of World War II and with the evidence of the most impressive military/industrial buildup in history, our politicians and public became convinced of the “exceptional nature” of the United States. We discovered another implacable foe to oppose and fought a new kind of war on a global basis. That having ended with the USSR’s collapse the country’s elite searched for new “enemies” with which to keep our military occupied and our defense industry rich. Perhaps the culmination of the idea of our country’s exceptional nature came with the writing of the “Project For The New American Century” a design to make the United States into an Empire in the Twenty-First Century. The two main guiding architects of that manifesto were Dick Cheney and Donald Rumsfield, who also were the architects of the two wars in which we are still enmeshed.
Joseph Campbell correctly believed that mythology serves as a glue to maintain human beings in the close relationship of society, to give meaning to our lives and to give us inspiration to progress and achieve heretofore unthought-of accomplishments. Mythology though can also be the undoing of a society, community, ethnicity and religion. I believe that in the case of our country I see the signs of our common mythology seeding the possibility of disaster. For the dream captured, however imperfectly, in our Constitution, to culminate in a feudal system dominated by Corporatism, would seem to me tragic. My hope is that this piece will initiate some creative thought in the reader, just as Dave Parker’s comments did with me and I’m interested in how others view this concept of mythology recreating the Feudal System.
Submitted by: Mike Spindell, guest blogger
TonyC,
I hopped here, in my previous comment, directly from your reply to me. So have missed a deal, but your latest on Gore have I just read. Interesting, Very.
I comment, but it is only speculation. Perhaps clarified in previous comments. So will make it short.
Where do generally centralized functions such as HR
(ie employment decisions) arranged. Is it through team decision, ie delegation of responsibility of traditional management functions to team elected committees? Perhaps by the book in part by a HR person, but who does that HR person report to? A management team elected by the employees?
Dividing the “pie” by your team member’s decision is fine. But can end up in a competitive divisive situation, hardly a cooperative one. Or?
And “norms” for unit profit? Who sets them?
And the size of the pie, who sets that and what influence does these 200 employees have on that pie size?
BTW, this creates a similar socio-psychological view which existed in the one-industry towns in Sweden.
Perhaps found too in USA.
I find this BAD in that it transfers the grip on the whip to the hands of your co-workers. Keeps you honest in terms of your effort/input and to some degree provies informal human considerations to health, age, etc.
BUT, it also stifles free thinking generally. In effect in all aspects of life in the village.
Some fled to be exploited in the cities. There they organized. With varied results, but that is Sweden today which resulted.
There must be a central part in Gore, I believe.
And there one can hope for a benificient/benign “patron” who looks after his serfs.
Only these are not tied to their jobs as serfs were.
OTOT In CCCP, the collective farm workers did not have “papers” and thus could not travel, change jobs, etc. You were part of the elite if you had papers.
Overlong as usual.
@Jim: The error in your “axiom” is two fold; first that you think people’s values are constant and consistent rather than ephemeral and contradictory; and second that you think people have enough information to make decisions that support their actual values.
In the first, consider the psychological phenomenon of people dieting out of true concern for their health and continued survival, but still giving in to the free slice of chocolate cake, with remorse after eating it. How can somebody be pursuing their own “true values” when they literally betray themselves and feel angry with themselves for it? The only plausible explanation is that their true value is willpower, and they could not make the choice to exercise it.
In the second, if people had enough information to make decisions that comported with their true values, there would be no such thing as buyer’s remorse. Buyer’s remorse is not due to fraud or misrepresentation, it is due to buyers not having enough information or not thinking of consequences and ramifications. It is a feature of human psychology, that people can be excited by the anticipation of one thing, and that excitement prevents them from considering side effects or consequences, so they FAIL to act in their own best interest or in pursuit of their own TRUE values.
The simple fact that people can regret the choices they have made proves that people do not always choose what they truly value most. Or, alternatively, that choosing what they value most at any given moment is definitely not a formula for maximizing happiness in life.
TonyC,
Again I have failed to make my meaning clear. The aggression I mentioned was meant to point to that which I feared you had found in my previous comment was motivated by.
Oh damn, it only gets worse.
But as for your answer, I stopped reading after two sentences, as it was presenting:
1. an argument from you that I had understood and accepted.
2. I expected NO aggression from you, and had therefore no need to look for it in what you wrote.
@Blouise: There is a real business where an approximation of this rule is put into practice: WL Gore & Associates. (An entertaining article, and they have about 20,000 employees).
GoreTex does not allow a factory to exceed 175 employees. It was founded by an chemical engineer. He claimed that there was a fundamental shift in employee attitude somewhere between 175 employees and 200, that in that range employees stopped referring to what “we” were doing, and started talking about what “management” was doing, and this had a measurable drag on productivity.
So he decided that when a factory grew big enough, he would just split it up and duplicate it, and make the two factories independently managed units (from each other), even if they were making exactly the same thing.
That, and his other policies, works. GoreTex is also an open-book, open-meeting company, and there are no bosses; your pay is determined by the contribution you made to your team (as determined by your team) but there are no work assignments and you can turn down any request. It is your job to find a way to volunteer and contribute to the effort of your team. They say at Gore, “Nobody is your boss and everybody is your boss.” (That is purposely phrased for humor, but it means that while no individual is your boss your performance will still be evaluated by the community.)
I bring that up because it is a counter-intuitive system Gore invented; but almost exactly what I think would work in the ‘small company” scenario. If WL Gore can organize 20,000 employees into 130 or so autonomous groups of less than 200 people each, coordinating with each other and providing services to each other, using ground rules but no bosses, then I really think that is proof enough that any company could do the same.
Plus I prefer WL Gore as an example rather than Google or some tech company; Gore is an innovative invention machine, but it makes actual tangible products in factories, from clothing to guitar strings, that must be shipped to stores all over the world. I think that fact helps forestall arguments about whether the Gore management model could work at GE, Proctor and Gamble, Kraft, Ford, etc. Labor gets done, machines are repaired, maintained and operated, orders get taken and filled and products get shipped on time, and you do not need a general barking orders to make that all happen.
Gene,
“Some purchases are made out of necessity” does not change the fact that those purchases are still subjective valuation. Clearly, the fact that you buy food rather than toys means that food is higher on your scale of values and that by acting, you do choose. Biological necessity is not destiny – and history demonstrates that over and over. I get your point, but it does not change the declining demand curve, which exists for food and for toys. Once food (for example) is satiated, then secondary values are filled, etc.
The means of indirect trade does not in any way change the truth that when people voluntarily (note the qualification) trade it is wealth enhancing, as judged by the participants.
“Unscientific” of course, means next to nothing at this point. “I think, therefore I am” is “unscientific” although, a hard point to argue without undercutting the claim. Clearly things are true or not true, not just “scientific” or “unscientific”. As far as polemic, von Mises built up economics from fundamentals, which isn’t “unscientific” by the essential acts of science. I hesitate to confuse the issue by using the term because what I think is meant here is “empirical”. “Empirical” economics *is* the problem. It is used to bury assumptions and generate policy justifications that are demonstrably false. It is largely part of the “myth” that the video identifies. In that sense, I agree with the sentiment.
I won’t go further because I feel that your objections were answered to sufficient extent so that if you think about it carefully, rather than simply dismiss it out of hand, you will see that it is correct.
All “systems of thought” (including science) are an exercise in circular logic. I think we discussed this: the framework is “inseparable from the evidence”. Hence the problem with epistemology as it pertains to science.
I’ve never framed the argument in terms of efficiency, although it is a consideration. Clearly socialism (without any market) is so “inefficient” that everyone dies in the long run. Fine – you can go with that if you want. But I find it more useful to consider how wealth (not monetary profit) is created and sustained. The reason I am uninterested in efficiency, is that it is not coincident with wealth. People might find themselves much happier in an “inefficient” situation, should they have the freedom to exercise their choices. Hence the issue is “wealth” and “freedom” as opposed to “efficiency”.
I’ll have to leave it there as the unfriendliness and scornful attitude prohibits continuation. I think what is happening is that a number on this board have not really read Mises to any extent, dismissing the Austrian school out-of-hand. While there are many who call themselves Austrians who appear not to have much common sense (who – in my view, are far wide of Misesian theory), it is important in discourse to get to the essential issues. Even a passing familiarity with the first chapter of Human Action would prevent a number of inaccurate comments here on the board. I find myself tired of defending so many ill advised criticisms because of that unfamiliarity. And then of course, the “character assassinations” of Mises, as far as I can tell, are far wide of the mark and also demonstrate a lack of civil discourse.
I hope to have a conversation in the future that is a debate about essential philosophical ideas, not about side issues.
Best wishes,
— Jim.
Mike S,
Here is more support for your elaboration inspired in part by Campbell, but it ties into the reality of today you portrayed as an elaboration on that theme as well:
(Daily Kos). Six children in Arkansas have more wealth than 100,000,000 Americans because their parents know how to sell Chinese goods around the country, and this:
(The Homeland). Jose can you see, by the pawn shop’s neon lights, all the BS on the bill boards with the red states fiery glare…
All hail Ayn Rand says the “job creators.”
Dredd,
Yes your examples are quite consistent with my theme. That Ms. Hilton has become an “A List” celebrity is an example of what passes for role models today. It is mildly interesting that both she and Kim Kardashian’s fame exploded when sex tapes of each were released on the Internet. I am both amazed and disturbed by how the Main Stream Media breathlessly reports their doings and they are interviewed as if they have more to express other than flacking their line of products. The juxtaposition of their lifestyles with that of most people who are struggling to exist in our country is reminiscent of Marie Antoinette’s “let
them eat cake” and the Romans “Bread and Circuses”. In fact when one see the semi-religious ritual of the “Super Bowl” in tandem with the quest for Empire and the death of the Republic, just how are we different from the “glory” that was Rome?
Slartibartfast,
So, impress the world, win a Nobel, and present an empirical scientific model that accurately leads people to wealth generation – but you would need to do so with a higher ability to create wealth than does the price system – which is what you claim can be done. I await your “system”.
The assertion that the market will “go crazy” as there is “no feedback mechanism” is false. The feedback mechanism is profit. People, by trading are guided into producing wealth for others … unless of course some people can manipulate the law into their favor, etc. etc.
Again, we are talking about a “free market” in the sense there is prohibition against force, fraud, etc. What I keep seeing is some straw-man version of the argument, a “pure free market” … whatever that means. No one here is arguing purity (except those opposed).
Plus I tire of the incivility. Hopefully nothing I have posted made it seem personal, but clearly there are some on this board that don’t feel the same constraint.
— Jim.
@Idealist: Yes, I saw your post. Thanks.
No, I was not attacking you; I took your question as intended, meaning some people might ask “How would that work,” and I provided what would be my answer to such a question.
I was not looking for aggression and did not detect that in your post, I thought you pointed out a valid hypothetical and I provided the answer to that hypothetical. There was no aggression there; just a challenge for your hypothetical questioner to clarify their position.
WARNING FOR RAFF–DO NOT READ THIS COMMENT UNDER PAIN OF MATH!
Jim,
“authority”–you keep using that word… I do not think it means what you think it means.
Jim said:
My dictionary defines authority and free market thusly:
and:
In what sense can an economic system be said to be an authority? And how can the market (or a higher authority) be “accurate for wealth-creating activities”? This doesn’t make any sense, but I’ll try to answer…
The “free market” (which has never and will never exist according to your definition) is clearly not a desirable thing. Complex systems function by means of feedback mechanisms (and feed-forwards, but I don’t want to confuse you…). There are three kinds of feedback: positive, negative, and zero.
Regulation* of complex systems is done by means of negative feedback–as anyone with a passing familiarity with ordinary differential equations can tell you, systems employing negative feedback have several stable modes–steady state, sustained oscillation, as well as more complex behaviors (I wrote my thesis about this, so I have some experience here…). Positive feedback systems, on the other hand, have only one mode–they oscillate out of control. You generally don’t find positive feedback in nature as the only thing that it ensures is complete instability and an eventual catastrophe. Finally we have no feedback–the perfect free market that you think would be so grand. This is equivalent to having no one at the controls–it is an equilibrium, but it is completely unstable–the slightest nudge will send it careening off in a random direction–and there’s nothing to bring things back on course. Now, in any real system, especially one as complex as the market, there are many of these feedback mechanisms involved, so we need a way to understand how they interact (which modes dominate and what sort of behavior do they exhibit). If you have a system of differential equations, you can do this with what are known as eigenvalues–these are (complex) numbers ***Raff, if you decided to read this anyway, proceed with extreme caution*** which determine the relative strength of these modes (Raff: I’m trying to avoid the term “eigenmodes” in deference to you… D’oh!). Now, all of the behaviors associated with negative eigenvalues die out while those associated with positive eigenvalues persist–in other words, if we can find these values and their associated modes, we can accurately determine the long term behavior of a system. Now, for some systems these eigenvalues can actually be solved for or approximated, but that certainly isn’t true of the economy. However, that doesn’t change the fact that the system has eigenvalues resulting from positive and negative feedback mechanisms and if those mechanisms are strong enough, we should (and do) see the behavior associated with those mechanisms. Let’s take a look at some examples:
If a CEO is paid in stock options which increase in value (if only temporarily) when the company downsizes, this is an example of positive feedback. Positive feedback is associated with systems oscillating out of control–otherwise known as a “boom and bust” cycle. Can you think of any examples of this occurring? I’m pretty sure you can… Can you identify the positive feedback mechanisms that caused these problems and the negative feedback mechanisms that had to be disabled to allow them to happen? Your confirmation bias may not allow you to see them, but they are obvious to any fairly objective observer.
If each trade in a commodity’s futures market incurs a small fee, this is an example of negative feedback. This lowers the profitability of using the commodity market as a giant casino and allows it to function more efficiently at its original purpose: providing price stability for those buying and selling commodities.
I can’t give an example of zero feedback in the economy–like the free market, it doesn’t exist.
Now I realize that no one finished the preceding section (I’m guessing that I’d lost everyone by “eigenmodes” and I’m praying that Raff heeded my warnings [Raff: if you are hyperventilating, breathe into a paper bag… 😉 ]), but my point is about what is possible. For someone who doesn’t understand what kind of tools modern mathematics, science, and technology place at our disposal and what people properly armed with those tools can do** to try and tell us what science can and cannot do seems like laughably naive hubris to me.
*it is not a coincidence that this is the same term that is used for government action on the market, by the way…
** There are really only three options here: 1. I’m exceptionally intelligent and have insight no one else does–I doubt you’ll believe this (I certainly don’t); 2. There are plenty of others with the same level of understanding and access to the same tools out there.; or 3. I’m full of shit. Now, I know you want to believe it’s number 3, but if you’d like to voire dire me, feel free–in fact, I triple dog dare you 😛
TonyC,
You will never see this correction of your understanding of my position and consequently we will be eternal enemies. Boo Hoo.
No seriously, this looking at each post assuming aggressive intentt combines so unfortunately with my use of one as a person designator.
When I said, “One questions how….”, I simply meant literally ONE GUY questions, NOT the impersonal “one” ie meaning people in general.
Did you not read my comment PRAISING YOU?
Let’s share the blame, you for looking for aggression and I for unclear writing. My praise I stand for.
Jim,
“What retreat? Honestly, if you want to address the issue, then go ahead. Answer the question: what is incorrect about the statement “people use their resources to obtain the things they first most desire, on their scale of values, then what they second most desire, and so on …”? ”
Some purchases are made out of necessity. Fallacy of incomplete comparison.
“What is incorrect about the statement that people voluntarily enter a trade because they are trading what they value less for what they value more, and thus two people leave wealthier than before? After all wealth, is ** subjective **, it is not the same as “profit” (a monetary gain).”
We don’t live in a barter economy Jim. We use a medium of exchange. Fallacy of oversimplification.
“What is incorrect about “evidence is interpreted by a framework so that the framework is a crucial aspect of what evidence says”?”
Nothing. But your particular framework is unscientific political polemic trying to disguise itself as legitimate economics. Not all frameworks are equal and given the relative ease of disassembly of the Austrian School framework by basic logic and the scientific method, it is readily apparent it is a sub-standard framework for any substantive analysis. It’s a plaything. An exercise in outcome determinism. Your logic is flawed coming out of the gate, tied to the bad assumptions and weak unscientific assertions of von Mises.
“What is incorrect is the statement that “free people, in their voluntary choices, are the ultimate authority of what has the most value, and that there is no higher authority (and if there is a higher authority, what is it?)”. What can challenge the value put on things by voluntary, free people, free of the use of (or threat of) force, or fraud between themselves?”
Other factors impact value that are not subjective. Again the fallacy of incomplete comparison.
“And I’ve never made an “appeal to authority” in the derisive way that you mean it – as some sort of “god spoke to me” way … I’ve presented arguments based on what can be verified as clearly observable facts. You can accept them, or deny them, but facts they are, and facts they remain.”
Yeah, Jim, you have. Von Mises “observations” are not scientifically valid and easily dismissed by other valid logical and scientifically valid observations from real economics, sociology, psychology and even computer science as above. Your entire argument is couched in an appeal to von Mises authority.
“And in truth, and in the spirit of polite debate,”
I don’t owe you politeness. I owe you a certain degree of civility and you’re getting it and nothing more. I don’t give a shit if you’re offended or not. The corollary to free speech is the right to be offended. If my dismantling your statements and assertions offends you? Too bad. Suck it up.
“I shouldn’t need to defend against ridicule”
Ridiculous ideas get ridiculed, Jim. So do ridiculous rhetorical missteps and the application of logical fallacies to an argument. Attacking your method is as fair game as attack your argument proper on the merits. That you disapprove of my countering you on multiple fronts is irrelevant.
“, typos (everyone makes them),”
Misusing words are not typos. Fallacy of false equivalence. Imprecise language is a sign of weak argumentation and argument from ignorance (also a logical fallacy). Using words you think make you sound educated in an improper way may impress the other rubes, but people with an actual education and highly developed language and argumentation skills and training laugh their asses off when you do that. Making up the meaning of words or misusing perfectly good words to provide sophist window dressing? It’s amateur night, Jim. Penultimate? Really? Like mespo, I find that really funny, but probably unlike mespo, I was also a little embarrassed for you, Jim.
“works taken out of context,”
Works taken out of context? That’s only a problem if you insist on using von Mises as if he is the final arbiter of valid context for framing arguments.
“Accusations that I am “possibly a liar” etc.”
That’s not a statement of fact, Jim, merely a statement of possibility. Other explanations were offered for your misstatements about arguing from efficiency, namely that you weren’t as well versed in your economic religion of choice as you think you are or that you were not familiar with the criticisms of the Austrian School (again, argument from ignorance albeit in two different forms). The possibility that you were lying was only brought up when you first said
“Jim Bradley 1, July 9, 2012 at 8:59 pm
Gene,
So far as I know, Austrian economists do not make an argument from efficiency.
Take care,
– Jim.”
And then promptly followed it with . . .
“As far as an “efficient” valuation mechanism, the market (when free) is in fact the **penultimate** valuation mechanism … because it is human choice in action.”
Thus framing your argument in terms of efficiency and the terminology of the Austrian School (while making an indirect appeal to authority and begging the question that von Mises definition of human action is correct when it was already demonstrated it is an exercise in circular logic and von Mises appealing to his own authority).
To be clear, I don’t know if you were arguing from ignorance or a liar, but both are possibilities. What I do know is counterpoints illustrating why you were wrong were provided and went unanswered by anything other than evasion. The logical conclusion is that you cannot rebut no matter what the reason might be so instead you try to change the subject, obfuscate and engage in the fallacy of many questions in several of its variations.
If you’re offended by my pointing that out? I really don’t care. Your reactions are not my concern. They are yours and one of the few things in life you actually have control over.
As I told someone else earlier, I’m not going to censor myself to comfort your ignorance. The marketplace of ideas is a rough game and in a free speech environment it is the only truly free market in existence. If you cannot compete, you have no one to blame but yourself for coming to market with sub-standard products like von Mises drivel and then try to sell it with substandard rhetorical skills as again exemplified by your plurium interrogationum response that I just deconstructed.
Cheers.
Take care.
Mike Spindell,
von Mises was hardly lazy, devoting a monumental effort to read all of economic thought (a requirement at the time) before writing his own, and was regarded by many in the day as having an astonishing intellect. He was denigrated because he fought against socialism and communism, and never achieved the academic post he wished. Being a Jew, he was forced to flee Nazi Germany. I see you know precious little about him, unfortunately.
The first post was in response to the numerous economic and logical fallacies in Mr. Hanuer’s video. The first fallacy was post hoc ergo propter hoc (if more money to entrepreneurs would equal job creation we would be drowning in jobs). Clearly that is a logical fallacy without additional supporting argument.
As far as the mythology sentiment, I agree … what people believe is making them slaves. But I feel that Mr. Hanuer’s sentiments while right, are terribly confused with warmed over totalitarianism, playing into the hands of the financial elite. Clearly, the elite pay no taxes as all of their funds are stolen (via “legal counterfeiting”) … and as a result, should we decide to raise capital gains taxes, it will fall disproportionately on the competition not the elite, as the insiders already have a lock on policy evasion. Rather than layer yet another government policy on top of the prior intervention, I suggest we simply let the rich get their fair share of failure (if not prosecution).
As far as my “assertions” .. they are more than that, and you know it. They are concise statements of well known facts, some of them documented all over the web (I trust it is not useful to give you links to banker bailouts, fraud, etc), others statements of known economic principles which you can discover easily (such as the writings by Carl Menger, or Frederic Bastiat, etc. Even many modern neoclassical economists, a school with which I disagree but which provides many sources as well). But mostly I’ve focused on the essential basics, things that are “undeniably true” – to the extent anything can be.
The Austrian school has been furiously against the government bailouts, insider crony capitalism, and for banking failure. The School is most properly defined by the work of Ludwig von Mises, who held none of the opinions you ascribe. So, in the interests of “evidence”, I ask that you find the quotes of Mises that support your assertions.
In addition, you might as well go for the whole enchilada and answer these as well:
What is incorrect about the statement “people use their resources to obtain the things they first most desire, on their scale of values, then what they second most desire, and so on …”?
What is incorrect about the statement that people voluntarily enter a trade because they are trading what they value less for what they value more, and thus two people leave wealthier than before they trade? After all wealth, is ** subjective **, it is not the same as “profit” (a monetary gain).
What is incorrect about “evidence is interpreted by a framework so that the framework is a crucial aspect of what that evidence says”?
What is incorrect is the statement that “free people, in their voluntary choices, are the best authority of what has the most value to them individually, and that there is no better authority (and if there is a better authority, what is it?)”. What is better than the value put on things by voluntary, free people, free of the use of (or threat of) force, or fraud between themselves?
And I continue to plagarize myself: I’ve never made an “appeal to authority” in the derisive way that you mean it – as some sort of “god spoke to me” way … I’ve presented arguments based on what can be verified as clearly observable facts. You can accept them, or deny them, but facts they are, and facts they remain.
All the answers to the fallacies in the video are contained in the questions above.
Take care,
— Jim.
“The first post was in response to the numerous economic and logical fallacies in Mr. Hanuer’s video. The first fallacy was post hoc ergo propter hoc (if more money to entrepreneurs would equal job creation we would be drowning in jobs). Clearly that is a logical fallacy”
Jim,
Reading this statement of yours was like the proverbial light-bulb going off in my brain. I now understand where you are coming from. What you call Mr. Haneur’s “First Fallacy” was the diametrically opposed to what Mr. Haneur was stating. His thesis was that the entrepreneurs were NOT “job creators” and that therefore the economy was driven by the rest of us. That you got the whole point of the video wrong is rather telling as to your ability to understand any points that run counter to your pre-judged beliefs. This is why I see you as a secular religious zealot because you lack the ability to understand any argument that falls outside your tightly held dogma. You are an example of what my blog was discussing, Jim, that is someone awash in mythological beliefs that is unable to understand anything that threatens those beliefs.
“von Mises was hardly lazy, devoting a monumental effort to read all of economic thought (a requirement at the time) before writing his own, and was regarded by many in the day as having an astonishing intellect.”
This is another example of your ability to ingest information, but transform it into something it isn’t, to avoid the impact of what it is. I clearly called von Mises lazy because he rejected having to try to do any research to prove that his theories were valid. He built a web of assertions, “supported” by a foundation of pseudo-factual statements that buttressed themselves tautologically. The laziness I was referring to was intellectual laziness, which appears to be a problem you are also plagued with.
“Plus I tire of the incivility. Hopefully nothing I have posted made it seem personal, but clearly there are some on this board that don’t feel the same constraint.”
So talking of the rising “incivility” let us look at the first sentence, of your first comment on this thread:
“It’s hard to address all of the fallacies in this piece, even the obvious fallacy of asserting that if more money to entrepreneurs would equal job creation we would be drowning in jobs.”
Were this an uncivil place I the author would have immediately attacked you for the implication that I had written a blog laden with fallacy. Instead my response was:
“Jim,
A reasonable beginning for one making the case that there are “fallacies” in the thinking of Nick Hanuer, a billionaire venture capitalist, who is a quintessential entrepreneur. However, to make the claim of fallacy it then becomes incumbent upon the accuser to present evidence that this is so in the light of Mr. Haneur’s obvious expertise.”
You can follow the rest of my reply and see that it is quite civil in tone and merely asked you for proof of the assertions you presented as self-evident facts. Throughout your numerous comments you never really did anything more than make assertion after unfounded assertion, or finally retreating to the position of read Von Mises and all would become clear. Your presentation of your position has from its beginnings been one of exposition of statements of what you deem are “self evident” truths, but what I and others see as neither “self-evident”, or “truths”. since you began your comments by claiming fallacy then in civil discussion one would think that you would pertinently supply evidence of their fallacy beyond your assertion of same. You haven’t.
Beyond that you have continually either ignored others points that sought to disagree with your views, or even worse you have mis-characterized them.
Going back to your first sentence, from your first comment, as an example.
What Mr. Haneur was clearly stating in the video was that entrepreneurial
enterprise has been asserted time and again as job creation. Indeed isn’t this one premise of the Romney campaign. He was discussing the meme.
You interpreted his point, Dave. Parkers’ and mine incorrectly, seizing the opportunity to flack the Austrian School. If you are unable to understand the parameters of the debate, then why should those in the discussion take you seriously? At first I made the mistake of thinking you were merely someone offering opposing viewpoints, but after your spate of comments I saw that your pseudo-religious belief system made that impossible.
There is history here of my encounters with people whose viewpoints differed from mine that became extensive discussions on threads. One such with Gary T. from last year was particularly illustrative. Gary T. is a libertarian and i certainly am not. Yet we were able to discuss our differences with collegiality and reach a point of disagreement, but mutual respect. This was because we argued our differing views competently, responsively and pertinently to the others points. We each ended the discussion with respect for the others point of view and acknowledging some validity to each side. Your argumentation has not followed the normal foundation of spirited debate, but is more an assertion of what you think are “self evident truths” that cannot brook disagreement. It is not only an annoying and palpably false train of discussion, but also disingenuous in a manner your zealotry can’t comprehend. That you end each of your comments with an attempt at cordiality that is as sincere as the cliche “with all due respect”, only makes your presentation annoyingly patronizing, rather than civil discourse. Perhaps this explains my progressing lack of civility towards you.
Have a nice day!
Mike
Shano,
You are proving the point. If you have excess apples, you hardly value them at all, so you trade for something you value more. On the other side, the other party wants apples more than they want what they have to offer you. Thus wealth is increased. The act of trading is **fundamentally** wealth enhancing.
The question was “What can challenge the value put on things by voluntary, free people, free of the use of (or threat of) force, or fraud between themselves?”
i.e. what authority is better, more accurate in terms of their own perceived status of wealth (not just money! … but wealth), than the people themselves, free of force or fraud?
It was not to say that there are no external influences …
Keep in mind, a poor man with a loving family may consider himself far wealthier than a rich man with a hateful family. Wealth is not “money” or “profit”.
Take care,
— Jim.
Shano,
Your assertion about the banks is only partly correct, and it leaves out a crucial element. Here’s an example. An economy has $1000 which serves as it’s “money supply”. Our friendly banker creates an additional $100 and funds a business in competition with existing businesses. With $1100 in existence now, the value of the monetary units is reduced from what they would have been. In essence, the economy has been **forced** to fund a competitor that never would have arisen except for the (unfortunately legal) counterfeiting of money. So the competitor, to defend themselves, then has to obtain funds to compete, and so on. The Fed forces the funding of businesses that are less viable at the expense of good businesses.
So it is not true that the Fed remains non-complicit. They are the source of the entire bubble, as it cannot happen with an inelastic currency. Why? Because as more money goes into asset inflation, less is available for other uses, and the nature deflation that occurs in non-assets inhibits the illegitimate rise of the assets. In other words, X (loans) can’t keep going up and up and up because then we won’t have enough money for Y (food). The only way X can keep soaring, is if the Fed underwrites the process by the creation of new money via the banking system. Of course, you should know that the banking system pyramids on the Fed and is subject to Fed regulations, so any of those things can be used to allow the banking system to create mountains of new credit by altering the rules – it is not necessarily a creation of new base money (reserves).
Banks should never be allowed to “borrow short and lend long” … it is the unequal duration of liabilities and assets, along with the Fed, that creates a perpetual subsidy at the expense of the worker. It is a fascist system that maintains and concentrates wealth at the top.
The statement “people choose to expend their limited resources on those things which they most highly value” is not a nonsense question. People may choose to die rather than live in slavery, they may choose to give their last food to their children, etc. But of course, it also is true down the scale. We are not always talking about survival. People choose to spend their resources on the 2nd most important items, 3rd most important, etc. This is the foundation of the “declining demand curve” which explains a great number of economic phenomena such as relative trade, wealth and capital accumulation (and the necessity of it), savings, etc … and it requires no empiricism (although it is empirically valid). Since it does not require empiricism, it does not suffer from the problems of empiricism (such as the criticism that “this time is different” or “that time was unique”).
There is no model whatsoever of a “perfect free market” that has been promoted by me on this board or anywhere. As far as Austrian economics goes, it is also unappreciated on this board that Austrian economists are in diametric opposition to the “perfect competition, perfect free markets, perfectly rational actors”. Had even a few people here been sufficiently educated in Austrian economics, that point never would have been suggested. von Mises, Rothbard, Kirzner, Schumpeter, Hayek, all of them are in disagreement with that position, which is the assertion of **neoclassical economics** … not of Austrian economists.
In fact, the expressed belief is such a central tenet against the “perfect market” that one cannot be considered an Austrian economist and hold such beliefs. Rothbard argued against “perfect competition” and emphasized that goods (as did Mises) are heterogenous, not homogenous. I.e. you cannot add goods together willy nilly (as do the mathematical economists).
Unfortunately, what the more radical believe is that the market is better for every arrangement, something that just doesn’t work. Clearly common law is far superior, but still it must remain circumscribed. The number of prohibitions should be as low as possible to maintain the gifts of limited government. We have (had?) a fantastic balance of common law and private interests, individualism and collective action. I daresay that the more government we get, the more chaos we will have, just as we are seeing now.
I think there is a fundamental lack of familiarity with the fields of economics which keeps coming up on this board and what is amazing, is a number of people that profess to know about these things, in fact do not.
Take care,
— Jim.
sheesh Jim ; What is incorrect about the statement that people voluntarily enter a trade because they are trading what they value less for what they value more?
One thing that is incorrect is that people may have more of something valuable that they do not need (I have too many apples, I value them but this is my surplus) so I will trade for something else I can use. I already have enough apples.
Jim: What can challenge the value put on things by voluntary, free people, free of the use of (or threat of) force, or fraud between themselves?”
The value is not always put on things by people. Sometimes the value of material goods are decided by scarcity, by necessity, and by comparable values in the form of labor and other intrinsic costs. Sometimes something as arbitrary as fashion or as speculation as in the tulip bulb bubble. Gambling on assets increasing in value or in assets decreasing in value can also affect the ultimate value of things.
It is not simply people deciding the value.
Gene H.
What retreat? Honestly, if you want to address the issue, then go ahead. Answer the question: what is incorrect about the statement “people use their resources to obtain the things they first most desire, on their scale of values, then what they second most desire, and so on …”?
What is incorrect about the statement that people voluntarily enter a trade because they are trading what they value less for what they value more, and thus two people leave wealthier than before? After all wealth, is ** subjective **, it is not the same as “profit” (a monetary gain).
What is incorrect about “evidence is interpreted by a framework so that the framework is a crucial aspect of what evidence says”?
What is incorrect is the statement that “free people, in their voluntary choices, are the ultimate authority of what has the most value, and that there is no higher authority (and if there is a higher authority, what is it?)”. What can challenge the value put on things by voluntary, free people, free of the use of (or threat of) force, or fraud between themselves?
And I’ve never made an “appeal to authority” in the derisive way that you mean it – as some sort of “god spoke to me” way … I’ve presented arguments based on what can be verified as clearly observable facts. You can accept them, or deny them, but facts they are, and facts they remain.
And in truth, and in the spirit of polite debate, I shouldn’t need to defend against ridicule, typos (everyone makes them), works taken out of context, accusations that I am “possibly a liar” etc.
All the best,
— Jim.
ah gad, Jim : A number of lenders were forced (if they wished to remain open) to compete on the basis of lower credit quality”
No, the banks, once they could securitize loans and sell them off at a profit and not have any exposure to the lower credit were inessence turning lead into gold. Nothing the FED did, except keeping interest rates low, made them commit this fraud.
They did it in the name of ever expanding profits as they themselves blew up that FIRE sector bubble.
…………………………….
Jim: “In that way a less elastic money supply prevents the kind of rampant asset inflation which wreaked havoc on our economy”
Yes, there has been huge criticism of the FED for keeping interest rates too low for too long. Greenspans ideology stopped them from doing anything about this asset bubble- banks can regulate themselves because it is in their own self interest to protect the financial system itself turned out to be entirely a false assumption.
……………………………..
JIm: In what way is the statement “people choose to expend their limited resources on those things which they most highly value” in any way false?”
This is sort of a nonsense question. People will spend resources first on the necessities of life, things they have to have to stay alive.
After that, discretionary spending can be influenced by all sorts of outside and inside interests, including being conned by advertising, losing money or making money by spending on business opportunities, spending on vices, addictions, spending to make others happy, spending to improve your lot in life, ie, higher education.
It is not always the most highest value, it may simply be an impulse that is gratified, a request that is granted, a idea that sounds good at the time. Humans are messy, as is the business world.
They are not going to fit into your perfect model of a perfect free market.
Every human interaction has rules. In no other area of human interaction would one say there should be no rules and no organization of any type and that the self interests of humans would cover all sins. Which is what you seem to be saying here. We do not need regulation or rules because the market is perfect. No such thing.
And Jim doubles down on his belief system when cornered!
“I am/von Mises is not wrong! Everyone else is illogical and wrong! I don’t care what evidence you have that the premises of the Austrian School are faulty! My religion is number one!”
Who’d have thunk it . . . except for all the people who have read the probably literally hundreds of times this very same scenario has unfolded time and again on this blog in the past.
The refutation of your nonsense isn’t for your benefit, Jim. You’re obviously a true believer. The refutation of your nonsense is for other readers who might get the mistaken impression that the Austrian School is serious scientific economics instead of a political polemic to excuse greed. We provide the same educational services based upon those who mistakenly think Scientology is a real religion instead of a Ponzi scheme or that this is a Christian country instead of the expressly secular nation our Founding Fathers actually created.
Cheers.
“Diversionary tactics”
Jim,
Get real. Your first comment on this thread expressed fundamental disagreement with my blog and then changed the discussion to an arcane econmic system that you have secularly deified. My blog had nothing to do with economics and everything to do with how mythology is being used to create a new feudalism. Feudalism is only tangentially about economic systems, except when such systems are used to perpetuate failed ideology, such as the Austrian School. The thrust of my article dealt with human psychology and was thus quite related to Gene’s excellent series on propaganda.
Where people like Von Mises and yourself clearly miss the issue is when you believe economic ideology can explain human behavior. Human behavior can be empirically tested, but someone like Von Mises was too lazy to do the work so he made blanket assertions that those such as yourself have absorbed as gospel primarilly because it agrees with your selfish pre-judgments.
You have not logically responded to any of the critiques made regarding the fallacies of the arguments you’ve presented except to answer both evasively and with further assertions that for some unknown reason you think are self-evident.
You clearly have as much grounding in logic as any religious fundamentalist, but at least some of them are capable of defending their positions by honestly admitting their beliefs are matters of faith rather than logic.
Cheerio,
Mike
mespo,
It’s is funny to watch and it makes my lil’ heart go all snicker-snack.