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
Tony,
A statement of clear fact is not a basis for argumentation. If you wish to find out more, read Human Action by Ludwig von Mises. I’ll have to leave it at that.
Take care,
— Jim.
Jim, nothing subjective about death. It does not ‘win’. Humans have no choice, if they want to live they must eat, breathe air, drink water and have shelter from the elements. Only the insane would die in order to prove your point about “freedom”. Preposterous.
From Stiglitz; How should the financial sector be reformed?
I think the answer is: You begin by saying, “What is the financial sector supposed to do?” It is supposed to be serving the rest of the economy.
It is supposed to allocate capital, manage risk. It is supposed to provide funds to small and medium-sized enterprises. So focus on what it is supposed to do. Then, you look at what it does and you say, “Well, let’s curtail the things that they’re doing and that will encourage them to do what they should do.”
For instance, if we restricted their ability to write these CDS derivatives (credit default swaps) — from which they make so much money — if we restricted their ability to engage in gambling like JPMorgan did, that would encourage them go to into sound lending practices.
If we restricted their ability to use anti-competitive practices to make money out of credit cards and by abusive credit card practices; if we restrict them from doing all the bad things they were doing, we will hopefully encourage them go to go back to the core mission of banking and that will make our economy stronger.
How else can the government act to reverse this trend in inequality?
Inequality in the United States has many dimensions; too much money at the top, many people in poverty, the hollowing out of the middle class. And each of these requires its own solution.
We have to have a more progressive tax structure. And what is interesting to realize is that our tax structure not only is unfair, but actually distorts our economy. It lowers growth and increases inequality. If you tax speculation at less than half the rate you tax people who work for a living, what you do is you encourage speculation. You weaken the economy. Speculative activities are activities associated with high levels of inequality. And that way you increase inequality.
We tax in a sense a lot of the rent-seeking activities at a lower rate because they get under the rubric of the capital gains tax. With our lack of progressivity, we are encouraging rent-seeking activities. So much of the money at the top is rent-seeking. When you tax it lower, you actually are encouraging rent-seeking.
So, those are examples of the kinds of things that we could do that would simultaneously make our economy more dynamic, more efficient, grow faster and less unequal.
Read more: http://www.foxbusiness.com/personal-finance/2012/07/03/is-wealth-gap-hurting-all-us/#ixzz20ABb82nt
.
Mike Spindell,
You know of course the entire “mythology” line of reasoning is strikingly parallel to the arguments made by Marx (in his arguments about the bourgeoisie). How did that one turn out? Mike, logic is logic, it is true for everyone, that is it’s power, and the reason so many people wish to deny it, as they struggle to overturn natural law by force of denial, then by force of aggressive violence (hence the need for taxation).
I think it is amazing that so much is blamed on the mythology of the “free market” that we never had (bailout after bailout, fractional reserve banking frauds, clear violations of property rights, monetary mismanagement, etc. are definitely not a free market) while the “solution” is even more of the same coming from a wealthy individual that was hugely benefited. Mr. Hanauer is just saying the same thing Mr. Soros is: give more power to the same group of people that led us astray in the first place – and that after, it seems, benefiting mightily from the Federal Reserve’s massive asset inflation in the stock market.
Why don’t we return to sound money (gold, or free market money, with 100% reserves), limited government, non-interference, etc… all the framing principles that appear to have made the country great? Or is that just mythology too? I wonder how far this ridiculous charge of mythology goes.
I don’t agree the basics of Human Action are premises, they are observed facts, to the extent as we have the capacity of accurate observation. Mine is not “experiential truth”, i.e. derived in primary from my personal experiences, but discovered reasoning from a correct starting point, after having been over a lot of erroneous territory. One must start from the right point (whatever that is, in whatever field it is) to get to a right answer. It is that point that is the issue.
It is also precisely the reverse of what so many people believe (start from evidence and then reason backward – an impossibility, as evidence is interpreted, and to do that, there must be a framework). Change the framework, change the outcome, and change the perceived message of the same evidence. The question is, do we have a framework that is cohesive, that makes (the most) sense that we can have? Is it a world in which we want to live? Is it *good*?
I suggest we leave the tired, worn out ideologies that have laid waste to country after country and return to the principles that have made our country free. The market will indeed solve all of those problems by laying waste to the frauds, unless we continue to allow our government to be run by them.
— Jim.
.Jim,
Seriously? Karl Marx and my line of reasoning are parallel? First of all the fact that Marx was critical of capitalism and what I was pointing out in my blog was critical of what some people are trying to turn America’s capitalistic into are quite different lines of thought. Categorically I know far more about communism than you do.
An unreasonable statement? I think not, when directed at you who enterred this discussion making categorical assertions which you take to be gospel. My history in the labor movement dealing with real live communists has been described in detail here, as was my distaste for them. Given that there’s a written record in the archives here, I’ll follow your methodology and say look it up.
I must state though that given your earlier expressions of civility I didn’t expect such a cheap shot from you. Apparently your civility has been worn down by the refutations of your beliefs that many have provided. The thrust of the current capitalist mythology has many critics that are far from communists. Mr. Hanuer, a billionaire for one and our own Tony C., who among quite a few others here, have had successful capitalist careers. You present yourself here as someone with an open, inquiring mind, yet you make unequivocal pronouncements which you deem so truthfully pristine that you don’t have to defend them. I believe some self examination on your part is in order, lest you become yet another who anathematizes rather than discusses.
@Jim: You are making argument for the sake of arguing.
No, I am not. I am making argument to disprove your conclusions which are false. What you claim is an axiom is not axiomatic, it is not self-evident or (to put it another way) obviously true or something we can both agree upon. It is just your assertion, and thus what you derive from it is just more assertion. Which may or may not be true, but because I do not agree with your original assertion, in my view your conclusions are just falsely justified restatements of your beliefs.
@Idealist: One says: how would that work.
I say, how would it NOT work? Where do you see a flaw? What enterprise do you envision that inevitably requires more than 150 workers?
I brought up the Hollywood model because they actually implement something like this when making a movie, even when it costs hundreds of millions of dollars: The studio can consist of a handful of people, or a few dozen. The actors and all the hundreds of workers on the movie, all the way down to the janitorial staff, are contracted either individually or from independent firms, and the operation is overseen by the studio. So a Harry Potter movie or the Lord of The Rings trilogy is a big production involving many hundreds or even thousands of people, but they work for firms that are themselves each just a few dozen employees. For example, there are companies that do nothing but cater the sit-down hot meals on movie sites, there are other companies that provide the craft service (buffet style food and beverages), there are companies that just do costume wrangling.
Outside Hollywood, some other companies have adopted the model. The term for them is “virtual company,” they consist of a core of managers that hire other firms to do their purchasing, do their books, do their manufacturing, do their distribution, produce their marketing materials, etc. Their job is basically organizing these contractors, providing direction and vision and overseeing them to ensure they get what they want at a reasonable price.
In essence, it isn’t much different than running several departments of a large company, with one exception: The contractors have autonomy and can decide to not work for you, and they can sell their services to the highest bidder. It can accomplish some of the goals of a union without being a union.
That is how it can reduce the effective sociopathy. For example, Walmart is notorious for how it mistreats its janitorial staff. But if Walmart were forced to hire small firms to provide its janitorial services, the workers in those small firms would be much less anonymous to the person signing their checks, they might even be partners in the firm, and by providing service to multiple clients would have greater leverage in turning down Walmart, demanding decent working conditions, hours and equipment from Walmart, and simply refusing to work for Walmart if it persisted in being a jerk employer. It would help to prevent Walmart from exploiting the desperation of individual workers whose only alternative is to quit and lose 100% of their income; a small firm has a better chance of being able to ditch a bad client and survive the experience.
Shano,
People will die for freedom, hence subjectivism wins.
— Jim.
Tony C.
The revolution didn’t create the wealth, it made possible the wealth creation by voluntary activity.
— Jim.
And then Kevin Slart….. comes along and paints graffiti on my monument to TonyC. Canonical it is.
Anybody who has thought about the nature of reality “knows” that. Going home. too many eggheads here.
@Jim Bradley: At most, violent actions can only protect wealth, redistribute wealth, and reduce wealth. They cannot create wealth.
The American Revolution was a violent action, I think it is ridiculous to argue that American Independence did not create an enormous amount of wealth.
Unless you think it makes no difference who gets the wealth. If it does not make any difference, then creating wealth for a king or dictator is no different than creating wealth for the serfs. If it makes no difference who gets the wealth, then a situation in which a man becomes fabulously wealthy by enslaving others to work his farm, and thereby raising their collective net worth, would be considered a positive outcome.
Those obviously wrong-outcome examples prove that creating wealth is not a good end in and of itself, it depends on whether the wealth created is distributed equitably to all stakeholders.
I’m here, but what can I add? Liked, in the sense found interesting tho’ not always comprehened, it all.
Will repeat my enthrallment with Tony’s debate/lecture skills. If he’d written me from Nigeria the money would ba already on the way.
“I think it would be pretty interesting to adopt the “Hollywood Movie” model where almost everything is handled by sub-contracted independent firms and individuals; and just set a legal limit of 150 employees in a company. It would increase competition among smaller and more numerous providers, and is not an inherent limitation on investments or wealth. Psychologically, it would limit the levels of abstraction that could occur, and reduce sociopathy.”
One says: how would that work. And Tony brings up oil drilling, and the Bushes could also prove it as well.
Brings up speculation on who financed Alexander’s Asia campaign, and how many subcontractors with warriors and logistics did he have.
Nothing to add. Silence issues.
Ir’a overcast and cool. How are you suffering today?
Tony C said:
You spend your limited resources (resources under your control) on those things which you value most, and then on things which you value second most, etc. This is simply a psychological fact.” Jim
No, it is more of a physical fact. Humans have to have oxygen, water, food, shelter from the elements. these things are not optional for anyone alive. It has nothing to do with values. \
Maybe you value eating macaroni and cheese every night, but you have to eat something or you will die.
Tony C.
You are making argument for the sake of arguing. You spend your limited resources (resources under your control) on those things which you value most, and then on things which you value second most, etc. This is simply a psychological fact.
In regards to parallel lines, I think one has to be very careful when using the terms. Using the world “parallel” in a Euclidean sense is not the same as using parallel in a Elliptical sense – they are completely different entities. I think it is illegitimate to conflate the two.
In regards to economics, you are welcome to theorize an alternative universe in which subjective value is disproved, but keep in mind you will be attempting to overturn the entire marginalist revolution in economics (which handily explained why diamonds are more valuable than water when diamonds are not necessary for life).
As an aside, Randians make a critical error when they assert “existence is primary” as there is no ability to separate axioms, as they cannot depend on one another (that would violate the necessary characteristic of being independent). Peikoff had no answer when I pointed this out.
Take care,
— Jim.
Mythology and hero worship are merely modes of disguing the truth”
Blouise,
Beautifully put and so true on so many levels.
Jim,
It’s been a pleasure to discuss a hot- button issue in civil terms, in these uncivil times. I understand where you’re coming from, but disagree with your premises. We are all products of our history and mine has also been a long one. Coming from different, yet to each of us experience proven positions, we’ll just have to agree to disagree without rancor.
Haliburton may disagree with this notion that violence cannot create wealth. Mr. Prince and Dick Cheney became fabulously wealthy off of violence. Not as wealthy as they could have been by producing something of value, but wealthy indeed.
The problem with modern economics is as I have stated, the initial premise is wrong.
You cannot have infinite growth on a finite planet.
When you ‘create’ wealth from resource extraction, you are also simply redistributing wealth, say for example, by taking all of the gold out of the Black Hills before you give the land back to the Sioux.
When you ‘create’ wealth by drilling for oil in the Gulf of Mexico, and that act destroys the billion dollar sustainable fisheries, it is destroying wealth not creating wealth.
Mike Spindell,
Thank you for the kind words. While we are all susceptible to mythologies, still, I have quite a long history and substantial direct experience with the subject. Part of becoming mature is accepting the truth. In my experience, providing evidence is less useful than simply stating the reality. People accept reality, or they do not. Those that do not wish to, will not accept it, no matter what the evidence. It is pointless to note the evidence, as it was never a question of it in the first place.
The correct approach to economics is to build it from a true foundation – that of subjectivism (termed also the marginal revolution, in economic history), and to move up from there. The video promulgates numerous fallacies of “economics” – most notably that violent interaction (such as those that arise from government) are a net source of wealth – which is false as it ignores the cost and the structure of wealth-enhancing interaction – and it is demonstrably false, although the strongest proof of such lies in the information problem noted by Mises and Hayek. At most, violent actions can only protect wealth, redistribute wealth, and reduce wealth. They cannot create wealth. That is the strict domain of voluntary interaction. I leave that to the reader to “prove” (or rather, accept), as it has an immense amount of evidence, theory, and strength behind it, in this great experiment of limited government.
Thanks for the conversation,
— Jim.
Slartibartfast
I suspect you will be unsurprised if I disagree. You say economics must adhere to some sort of rubric of “science” when it most clearly is not a science and cannot ever be. You are choosing to focus on the limited definition of what passes for economics these days rather than genuine economics which studies human action and which is praxeological. In fact, “science” isn’t science as you think of it. It is an explanation of reality which certain metaphysical decisions made, of which you may disagree. I need only to direct you to astronomy (for instance, Hubble’s “Observational Approach to Cosmology”) which specifically states that the Copernican principle was *decided ahead of time despite evidence*. You may read this on page 40 and page 46 at the top. See: http://ned.ipac.caltech.edu/level5/Sept04/Hubble/paper.pdf
I quote it here:
“Such a condition would imply that we occupy a unique position in the universe, analogous, in a sense, to the ancient conception of a central earth. The hypothesis cannot be disproved but it is unwelcome and would be accepted only as a last resort in order to save the phenomena. Therefore, we disregard this possibility and consider the alternative, namely, a distribution which thins out with distance.”
and
“No margin is left for a thinning out. The true distribution must either be uniform or increase outward, leaving the observer in a unique position. But the unwelcome supposition of a favoured location must be avoided at all costs. Therefore, we accept the uniform distribution, and assume that space is sensibly transparent. Then the data from the surveys are simply and fully accounted for by the energy corrections alone – without the additional postulate of an expanding universe.”
and
“The departures from uniformity are positive; the numbers of nebulae increase faster than the volume of space through which they are scattered. Thus the density of the nebular distribution increases outwards, symmetrically in all directions, leaving the observer in a unique position. Such a favoured position, of course, is intolerable; moreover, it represents a discrepancy with the theory, because the theory postulates homogeneity. Therefore, in order to restore homogeneity, and to escape the horror of a unique position, the departures from uniformity, which are introduced by the recession factors, must be compensated by the second term representing effects of spatial curvature.”
In sum, the “unique position” is that the earth is the center of the universe, as evidenced by the consistency of observed matter density in all directions. Instead, the theorists decided that “space itself is expanding” rather than saying that matter in the universe is expanding in space.
Indeed, much of what passes for science these days is along the lines of this. I wonder what cosmology would have discovered if it had gone in a different path?
Getting back to economics, actions by thinking participants are not subject to the controls necessary by the scientific method. Note this area was discussed already by noting that economics is properly studied by praxeology, not by empirical methods. Economics is outside of empirical proof or disproof. I think it is best that we step aside, and think outside the box where we have been put.
Regards,
— Jim.
@Gene: In some ways that quagmire is already in place! If you look at something like drilling for oil in the Gulf, you can have people that own the well, people that lease the drilling equipment, people that lease the drilling platform, multiple other firms hired to operate the equipment and or pilot the platform, and on and on. It is really a legal nightmare already.
Personally, although I use LLCs and corporate veils in my own businesses, I think they are disconcertingly easy to legally abuse, and hide from liability that most people would say should be unavoidable. The trick is simple, and is the trick that Bain used repeatedly: An LLC (or corporation) can be kept very modestly capitalized and pay all its profits to its owners in the form of distributions or dividends, as long as things are going okay and the owners have no plausible reason to anticipate any lawsuits. Then, when their risk taking results in a physical or financial disaster, the LLC (or corporation) goes bankrupt but the owners are not personally liable for any damages, and the loss of the LLC or corporate assets is, by design, peanuts compared to what they have been bleeding from it for years.
I think that whole arena of the abuse of limited liability is a different problem to solve. Limited Liability is like a form of insurance, it can be purposely abused or create a moral hazard, in which the protection against losses allows riskier behavior.
Ah … and this is where mythology and hero-worship come into play.
Societies since the beginning of time have always understood that extreme wealth and extreme poverty are equal destroyers of an ordered and healthy society.
Mythology and hero worship are simply modes of disguising that truth.
The human imagination asks what-if and proceeds to answer that question with great discoveries, inventions, and works of art.
But that same imagination foresees death and seeks out a non-existing security against that end-all. Gods who do not die, heroes who survive the calamities, wealth to mitigate the pain, and monuments to ensure that the memory of an individual lives on. Foolishness.
So we have the man sitting on the wooden seat in his outhouse, flactuating; we have the man seating on the crapper’s plastic seat in his bathroom, flactuating; we have the man sitting on his gold plated commode in his spa, flactuating. When the storm comes and the tree falls causing the roof to collapse, the guy in the outhouse is as dead as the guy on the gold-plated commode … mythology not withstanding.