...Author Archive

March, April

It’s the ides of May, almost. What’s this?

  • I’m writing mostly at a “drafts blog” these days.

  • I publish occasional roundups, with excerpts of that writing here. This post will be a roundup of March and April posts.

    • There are already two May drafts. I am always running behind.

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  • If you’d like to interact more personally, drop by interfluidity office hours Fridays @ 3:30 pm Eastern US time.

    • That’s 7:30 pm UTC this time of year.

  • You can subscribe to stuff I write by e-mail if you want to.

Excerpts from March and April drafts, in reverse chronological order, follow.

I didn’t get a lot of feedback on the approval voting post, which I think is important.


From Out of the spotlight (2024-04-27):

Don’t #FreePalestine.

#ShackleIsrael.

What these two political communities require is restraint. Coercion. Subjection, until they reform themselves mutually into a political community that would enforce the rights of all residents of the territory they must share, and find ways to undo the damage they have done to themselves and one another and the world.


From The quality of what is coordinated (2024-04-26):

Our impulse when something is malfunctioning is to subject it to more intensive supervision and control. Often that is a mistake. It renders the thing we are correcting more constrained and more brittle than it otherwise might have been. If in fact the supposed malfunction was adaptive given the circumstances of the thing, and those circumstances remain unchanged, then imposing greater constraint will leave it seeking to malfunction in the same way, just able to do so less effectively. The thing is left crippled, rather than functional.

A better solution is to change the circumstances under which the malfunction was adaptive.


From Of dentistry and democracy (2024-04-22):

A core function of our state is to pool resources and purchase public goods, like knowledge about the effectiveness of medical treatments. It is not a problem if an effective treatment is out-of-patent. It is a blessing. It means the treatment can be made available inexpensively. If it would have been worthwhile for the holder of a freshly minted patent to conduct trials, that means the social value of the treatment is much greater than the expenses FDA demands. We don’t need to rip our hair out that there is no patent-holder to make this investment. We have a state.


From Seeing like a CEO (2024-04-14):

The key fact to note about Harry Stonecipher is not that he was influenced by Jack Welch. It’s that he was, for the first time in the firm’s history, an outside hire… he had no access to, no visibility into, no way to monitor, judge, understand, or discipline the je ne sais quoi that made Boeing work.

In order to do his job, Stonecipher undertook to rationalize and simplify and render legible the firm. Lacking access to “soft information” that could only come from developing relationships within Boeing over years of collaboration, he sought to manage the firm on the basis of “objective” so-called hard information. Among the most salient hard information in any business enterprise is cash flows, so the sway of “bean counters” was elevated automatically. Among the least legible information in a firm, to an outsider, is the quality of employee judgment calls, so internal expertise was demoted.


From Indirection and the character of capitalism (Part II) (2024-04-11):

Berle and Means famously grappled with the separation of ownership and control inherent in modern corporations. In a public company, the controlling interest is really management and the Board of Directors, even though in principle the “owners” of the firm are shareholders. How do we prevent the managers of the firm, who are present and effectively control it, from putting their own interests before those of dispersed, distant, disorganized, passive, shareholders?

Indirection turns that logic on its head. With indirection, owners remain distant, but they are organized, unified and active. Instead of protecting owners from managers, the struggle becomes to protect productive business units and the broad public from the predations of owners whose competitive strategy is to accumulate and exploit market power and political influence.


From Indirection and the character of capitalism (Part I) (2024-04-04):

Perhaps what initially was a small firm with its own factory is purchased by a regional supplier which is purchased by a national firm which is purchased by a private equity firm.

With every level of indirection, the controlling interest grows informationally more distant from the technology of production. It remains capable of affecting the core production process via only the same single lever. Squeeze.


From How to understand approval voting (2024-03-28):

Selecting multiple candidates under approval voting is an act of generosity. You have selected your first choice, but then you add a candidate that is someone else’s first choice, that is lesser from your perspective, and put that candidate on an equal basis to your own. The more candidates you select, the less you are insisting “my way or the highway”. You are supporting your way, but you are also assenting to other ways that are not yours, but you can live with… [M]ultiple selectors are generous voters. They are voters looking to find bridges and overlaps between their own preferences and those of other factions. And in what would be a close election if everybody chose only their fave — or under the current system — it is these generous voters, willing to make common cause with people whose values and interests differ somewhat from their own, who become kingmakers.


From Why does wage compression underwhelm? (2024-03-25):

[E]conomically sophisticated commentators miss something…obvious, which is that constant nominal wages at a constant price level feel to an individual worker very different from getting a 4% raise that fully covers 4% inflation… [W]orkers…experience raises as rewards, as the fruit of their personal merit. If a worker is given a big raise, she usually doesn’t attribute it to macroeconomic circumstances, but to her own hard work and savvy.

If a worker earns a constant nominal salary at a constant price level, she just never got a raise. But if a person gets a 4% raise and the price level rises by 4%, her experience is she earned a 4% raise through sweat and skill and staying late, ginning up the nerve to ask, demanding, holding firm. But then Joe Biden came along and took it away from her with his inflation.


From A simple theory of the stock market (2024-03-20):

[V]aluation independent “investment” into “diversified equities” as a black-box asset class…enjoys a great deal of elite-intellectual and policy support. It is what good upstanding prosperous professionals are told they are supposed to do with their savings. Once upon a time, equity investing was understood to be a high information, potentially quite dangerous activity that a relatively small fraction of the public would engage in. Now, among prosperous professionals, failing to be long equities is a mark of laziness, stupidity, or some form of financial dissidence. Being invested in equities “blindly” — by which I mean without picking stocks or using valuation to time exposure — is what conventional, smart, politically enfranchised people do.

Inevitably, a policy apparatus evolves to stabilize whatever conventional, smart, politically enfranchised people do. Post-crisis, the Obama administration openly gauged the quality of the plans it would have Tim Geithner announce by the reaction of the stock market in the days following. Trump crowed about his stock market and autographed ascending charts that he thought he could take credit for. There has long been perceived to be a “Fed put“. Economists like Roger Farmer have made stabilizing an ascending equity price path ever more acceptable in policy circles…

Disproportonately enfranchised affluent professionals — call them the “top 30%” — are equity holders who have come to rely upon high equity returns regardless of the timing or valuation of their purchases. Equities fluctuate, sometimes wildly, but the most enfranchised citizens now expect an upward ratchet over a five to ten year horizon. Speculators’ own self-fulfilling behavior joins forces with tacit but determined state support to deliver on that expectation.

February

February is one of the most beautiful and painful songs ever written, by Dar Williams.

March is nearly over already, and I didn’t write in January. But I’ve not yet done a February roundup. This is that.

Long suffering readers will recall I am mostly writing at my drafts blog these days, but I publish excerpts periodically here. Please feel encouraged to discuss these pieces or anything else in the comments to this post.

To interact more personally, feel free to join interfluidity office hours, which happen Friday afternoons at 3:30 pm US Eastern / 2:30 pm US Central / 1:30 pm US Mountain / 12:30 pm US Pacific. That’s 7:30 pm UTC, now that the US is on Daylight Savings Time.

You can subscribe by e-mail to my effluent, in all the places I deposit it. There’s a new option that gathers everything together in a weekly digest. Scroll to the bottom of the page for that.

Now, excerpts…


From What you are doing right now (2024-02-29):

If you’ve ever wondered what you would do during the rise of Nazi Germany, it is what you are doing right now.

People who make these kinds of remarks seem so certain they know who the Nazis are. But it could be us, too. The Nazis didn’t think they were the Nazis, in the way we mean it now. Whenever we consider ourselves part of a group so inherently righteous we are immune, we become particularly susceptible to slipping into the role.


From Situated versus unsituated virtues (2024-02-11):

We are, as individuals, the largest, best educated cohort of human beings that have ever lived on Plant Earth. Sure, maybe Harvard teaches more woke stuff, or maybe we are manipulated by TikTok and Fox News or whatever. There have, nonetheless, never been more humans more capable and skilled at any other moment in human history. Todays’ graduates of Harvard — and today’s graduates of every State U — can read and write, perform mathematics, and make use of unprecedented technical tools more capably than any generation in history…

Yet collectively, we are fucking idiots. If I may quote Larry Summers, look around.

I want to posit a very simple explanation for much of our aggregate incapacity. We now devote ourselves much more to unsituated rather than to situated virtues. But constructive action depends primarily on accomplishing situated activities, which the extremity of our dedication to unsituated virtues now undermines.


From Demographic transition is just specialization and trade (2024-02-06):

Market logics are not learned by catechism. They impose themselves invisibly, “naturally”, via rewards and punishments embedded in the apparently disjoint choices of people who do or don’t transact with us. The inefficient are left alone, and to be left alone is to be left to die. As Karl Marx famously put it:

For as soon as the distribution of labour comes into being, each man has a particular, exclusive sphere of activity, which is forced upon him and from which he cannot escape. He is a hunter, a fisherman, a herdsman, or a critical critic, and must remain so if he does not want to lose his means of livelihood; while in communist society, where nobody has one exclusive sphere of activity but each can become accomplished in any branch he wishes, society regulates the general production and thus makes it possible for me to do one thing today and another tomorrow, to hunt in the morning, fish in the afternoon, rear cattle in the evening, criticise after dinner, just as I have a mind, without ever becoming hunter, fisherman, herdsman or critic.

How then, “if he does not want to lose his means of livelihood”, in our capitalist and far-from communist societies, should we expect him to be a hunter in the morning and a parent in the evening?

The relationship between wealth and natality is nuanced. When wealth is certain, its increase is likely pronatal, as people can bank on greater resources to cover the burdens of childrearing. But when wealth is uncertain, when it is delivered via tournaments that deliver outsize rewards to winners, then increases in “expected” (meaning average) wealth likely translate to decreases in natality. The bigger the prize, the greater the cost of anything that will reduce your chance of winning.


From Nimble nationality will define state capacity (2024-02-02):

When restrictionists in developed countries say they don’t mind, aren’t against, immigration, they just want it to be legal and ordered and organized, that is fine and they are right. We do not want, should not abide a situation where our laws, whose tacit sanctity renders our national success possible, are run roughshod by new migrants that must learn also to hold them sacred if we are to collectively succeed.

But at the same time, we cannot succeed if the laws we enact are ill adapted to our actual circumstances. To save Miami from sea-level rise, we could ban high tide. We could place militarized cops on the beaches, fire machine guns at each transgressing wave. The tide will still come. Our laws cannot be shaped only by our preferences. Reality will have its say.

As pressures for mass migration accelerate, we will all become some admixture of Israel, Lebanon, and melting-pot America. Some countries will double-down on restrictionism become small, brutal, deformed shadows of the political communities they might have been. Some will accept the tide of bodies into the territory of their states, but prove unable to merge the diversity of communal identities and worldviews that come with those bodies into a coherent nation, leading to reduced social trust, impairment of the nation-state’s ability to coordinate at scale, bitterness among natives and new immigrants both, conflict, and authoritarianism.

But some countries will manage what the United States managed in the 19th and 20th Centuries, to accept the bodies but also join the minds of new citizens into a continually evolving understanding of the nation to which they now belong. Countries that manage this will achieve the economies of scale that nation-states can gain from larger populations without bearing the deadweight, deadly costs of interethnic conflict, militarized borders, deterrent brutality.

Cold December

It is almost February. Happy New Year! Time to round up drafts posts from, um, December.

I’ve been working a bit obsessively on what I think is a pretty great engine for turning any RSS feed, even from statically generated sites, into beautiful subscribable newsletters.

You can now sign-up for an e-mail subscription to drafts, where I am actually writing these days.

If you are interested in the RSS-to-E-Mail service, it’s called feedletter, and I’ve just published a detailed, if too long and intimidating, tutorial on how to set it up. Feel free to hit me up for help.

(You can also, always, join interfluidity office hours, every Friday afternoon @ 3:30pm US Eastern time, 12:30pm Pacific.)

Obsessive feedlettering has crowded out writing in January. I hope to make up for that shortly!

In the meantime, here is the roundup of December drafts.


From How to regulate AI (2023-12-28):

Here is my two point plan for what Congress should do:

  1. Congress should declare that big-data AI models do not infringe copyright, but are inherently in the public domain.

  2. Congress should declare that use of AI tools will be an aggravating rather than mitigating factor in determinations of civil and criminal liability.


From Norms mean you can’t pull rank (2023-12-14):

With norms… [t]here is no authority to appeal to… In any dispute, it is not just the belligerents that are on trial, but also the norms themselves… The habits of command are counterproductive in a normative context. Humans value their own agency. Badgering people to accept a norm you favor can prompt defiance. Norms are enforced by mutual consent. You must invite and persuade rather than demand… [Y]ou can bribe or threaten to force others to take your side. But then rather than reinforcing the norm you ostensibly were upholding, you have undermined it. The norm you have reinforced is that people behave only transactionally, which is the gray goo of norms, undoing all others

Over the past two decades, the United States has collapsed from a soft power to a hard power, has traded persuasion in significant measure by a kind of moral prestige for the crude application of carrots and sticks. Do whatever we say is good or we’ll sanction you.

But hard power is weak power, finite and exhaustible. Only soft power delivers resilience and longevity.


From There’s no such thing as international law (2023-12-10):

International law is a cargo cult. It has founding documents and esoteric codes and courts that interpret them, just like national legal systems do. All of that is masturbatory and ultimately quite destructive, in my view. It adds a liturgical patina of law to a set of practices that cannot operate as law. International law cannot come anywhere near keeping its end of the most basic bargain that the law makes to those whom it binds: If you conform, you will be protected.


As the kids used to say, read the whole things! Feel free to comment on any of them, or on anything, here.

Happy 2024.

May this year be a better year, and portend better times, than the last few. The future is always ours to make bright.

October, November

As I have been for a while, I’m mostly blogging at drafts.interfluidity.com, posting occasional “round ups” here. Like this one!

It’s an awkward way to run a railroad. I am working on new infrastructures through which I hope to mend my shattered digital self, and to restore more of the interactivity that used to come with comments. But I am slow. For now, if you use RSS — the internet’s original and still best social network! (Thanks Dave!) — you can follow all of my several blogs here.

Please feel encouraged to use the comment section of this post to discuss any of the posts excerpted below (or anything else).

If you’d like to interact, I’m active on mastodon, and host live office hours weekly, Fridays at 3:30 PM US Eastern / 12:30 PM US Pacific. You are welcome to drop by.

Here are excerpts of what I’ve written October and November, in reverse chronological order. Do read the whole things!


From Obama was the most destructive political figure of my lifetime (2023-11-30):

[Y]ou discredit even the best of your ideals when you sell your coalition out. That’s the heart of it. Obama inherited a financial crisis that represented the market system itself working desperately to course-correct, to undo some of the concentration of wealth and power three decades of bad policy and exuberant malinvestment had engendered. “My administration,” he told the bankers, “is the only thing between you and the pitchforks.” The public, pitchforks in hand, observed just that.

People who had voted for Obama, who had placed their hopes and dreams in his soaring rhetoric, his promise of change, were left devastated. White midwesterners became so-called Obama-to-Trump voters. They understandably perceived the “progressivism” for which Obama was hope-poster-child to be a sham, a shell game, a self-congratulatory exercise by a class of people who disdain them, exclude them, pretend to help them even while they prey upon them, mock and of course deplore them for the slightest transgression of their pieties. The less white part of the Obama coalition, a Black middle class which seemed briefly, finally, to be joining an American Dream of building wealth through homeownership, was decimated by the Obama presidency. The very same disillusionment that drove the white working class to Trump brought a renaissance of the muscular racial politics of the 1970s, renarrated through the kind of ideas that thrive in academia because their cleverness and radicalness and intentionally obscured simplicity render them useful for persuading colleagues and students that you are cool and worthy of tenure. The “Progressive left” (Yglesias’ “Lizard People”) and downscale MAGA voters are polarized now into enemy camps, but they are sisters and brothers sprung from the same seed.


From How rights make wrongs (2023-11-15):

Sanctimonious application of a human rights regime laden with internal tensions and contradictions guarantees that eventually some rights will give way. Maximalists can credibly condemn any proposed compromise as an illegitimate abrogation of rights, and so forestall any action they dislike that might reduce the tensions.

The predictable effect is that some of these rights will give way all at once, in a crisis, provoking what will correctly be perceived as a terrible injustice to one or both of the parties.


From Pluralism or magnanimity? (2023-11-13):

Freddie deBoer likes to mock a “progressive tendency to act as though every political question has already long been settled and its answer obvious to all good people”. One example of this, I think, is to make demands for human rights as though they can simply be provided, as if to will the end is sufficient to create the means.

Securing peaceful coexistence — let alone productive coordination — between human communities that perceive themselves as having distinct identities is the most persistent, recurrent, and vexing problem in all of human history. You can universal-declaration anything you want. Ratification by the UN that a good should exist does not will the good into existence. If you want a social good actually to obtain, you will have to attend carefully to means, and accept that, in practice, you will have to navigate contradictions and trade offs between the goods that you desire.

The absolute language of rights — “inalienable”, “universal” — and its obverse, the rhetoric of condemnation, make thinking clearly about these tradeoffs difficult. A tradition rooted in the prevention of extermination may in practice help to provoke extermination, as the language of rights takes compromise off the table, and the rhetoric of condemnation becomes a sanctified form of dehumanization.


From The bad war, like all the wars (2023-11-07):

World War II — or rather our misremembering of it — has dangerously distorted our understanding of human affairs… [D]espite the carpetbombing of Dresden and the burning of Tokyo and the two atom bombs, we came out of that war with a notion that it had been “worth it”, that the good guys had defeated the bad guys.

War is never worth it. World War II was perhaps the single worst event in all human history.

War is crime.

There are times when crime is necessary. I would steal bread to feed my child, but I would still become a thief. I would take up arms to defend my country, but I would still become a murderer. Whenever crime is necessary, there has been a profound social failure. The work, the main work to which the human spirit is devoted, organizing ourselves for mutual survival and prosperity, has collapsed.


From Price rationing (2023-10-19):

[W]hen industries are competitive, supply tends to be price elastic, because producers fear that if they raise prices very much, competitors capable of expanding production will undercut us and gain market share at our expense.

But under monopoly, supply tends to be price inelastic. From a producer’s perspective, the very sweetest outcome is when you can get more profit by simply raising prices, without incurring the costs and hassles of new production. (Hat tip Steve Roth!) Further, price elasticity requires that suppliers produce inefficiently, in a static and narrow sense. Firms have to invest in capacity that under current price and demand conditions will be “slack”. If no new demand materializes, that investment will be wasted.

So, without the discipline imposed by rivals who threaten to steal market share, monopolies tend to optimize for current or narrowly foreseeable market conditions. While they may be unprepared for them, they are very glad to be surprised by positive demand shocks. Sure, they will be unable to actually meet that demand at current prices. But they will enjoy the jump in prices by which they ration the insufficient level of production they are prepared to manage.


From The rhetoric of condemnation (2023-10-17):

I find the way people use “war crimes” and “genocide” to be lazy and evasive of the actual questions that need to be answered in order to address the situations that provoke those accusations.

To be very clear, I am not to in any way exonerating, defending, minimizing the many atrocities that attract those labels. They are reprehensible actions that anyone ought to find abhorrent. But those atrocities occur in the context of histories and unfolding events for which “just don’t do that” is nowhere near a sufficient answer. Speakers often use the accusations to place themselves on the side of virtue and the accused on the side of evil, without owning up to the consequences they would require of those they admonish.

Whatever some treaty or document held up as “international law” does or does not say about the matter is immaterial. Situations actually need to be addressed, and “international law” as it stands is far from being a system to which states or nonstate actors could simply agree to conform and then expect that their rights and vital interests will be protected.

There are disputes. They have to be addressed with solutions that antagonists can be persuaded at least to live with. Until such solutions are found, there will be conflict. When the terms of conflict create conditions in which the alternative to war crimes is unacceptable to any or all the parties, then war crimes will be committed.


From National self-determination is a vicious idea (2023-10-13):

“The Jews” do not have a right to national self-determination. “The Palestinians” do not have a right to national self-determination. Neither “Ukrainians” nor “Russians” nor “Estonians” nor “Chinese” have a right to national self-determination. There is no group or tribe called “the Americans” who have a right of national self-determination. There was no such thing as “the Germans” when Bismarck began to unite the state that is now Germany, which is not Austria or Denmark or Switzerland or Holland despite historical and ethnolinguistic entanglements.

“National self-determination” is a stupid, vicious, pernicious idea. It should be counted among the most destructive ideas in all of human history. The conceit that there are a priori nations to which some set of rights and dignities must inhere even at the cost of violent struggle pits human against human in the name of fabricated, ever shifting flags. However powerfully our emotions may become mixed up with these identities, they merit no moral deference. People engage in violence on behalf of sports teams. Their passions may be deep and sincere. But those United for Manchester have no right of self determination that justifies defiance of the laws of their state.

Nation is a flame that burns hot and fickle. It offers no foundation upon which to build a humane and peaceful world. Modernity is not built of or on behalf of nations. Modernity is built upon sovereign states.

Without an effective state, no one has any right to anything except death, sooner or later. The rest of us should stop fanning any party’s stupid self righteousness and do whatever we can to help them all choose later, much much later.

Round up, wind up

The world is reminding us once again of its bleakness.

I haven’t written much the past couple of months. Anxiety will probably compel me to start writing more soon.

As I have been recently, I’ll write for my drafts blog, not here. E-mail subscribers won’t see those posts until eventually I do a round-up post, like this one. I'll try to do them more frequently! When I have comments and e-mail subscriptions worked out for my new home-made blogging platform, I’ll probably bring the blogging back here. In the meantime, please consider subscribing to the drafts blog by RSS, or to my all blogs or all blogs and microblogs feeds.

For now, here are excerpts from “drafts” posted since, um, March. In reverse chronological order.


From Fascism as triage (2023-08-14):

[T]he model I would encourage you to think about is triage. For most of us today, triage is just the name they give to intake at the ER. But in wartime, it refers to the harsher practice of deciding whom to treat and whom to let die. When medical resources are scarce, you make decisions about who won’t make it anyway… Fascism is a process of internal exclusion, quite analogous to triage, although more in anger than in sadness. At a material level, a fascist order divides the polity into the worthy volk and “life unworthy of life”… This is not how human communities behave when they are secure and prosperous, when generosity, magnanimity, “civilization”, are broadly understood to be affordable public virtues. Polities “triage” the worthy from the unworthy under circumstances of perceived scarcity, of perceived threat… With medical triage it may (or may not) be sufficient for a few professionals to coldly decide, on the basis of medical facts, that these patients are a bad use of resources, while those patients may be helped by treatment. But humans writ large don’t work this way. We require moral heuristics to guide our actions, to motivate and then justify what we do… [W]e will find reasons why they deserve it. We will discover why they are in fact a danger whose dispossession is not to be lamented, but celebrated…

With this account, we can reconcile the conflicting evidence about economic anxiety and cultural resentment. At the communal level, economic factors predict which places are likely to become susceptible to a fascist dynamic, because the case for dividing and culling begins with a perception of scarcity… [A]t an individual level, within distressed communities, the people most enthusiastic to participate in the fascist dynamic are not likely to be the weak and dispossessed (who after all, might be susceptible to culling, depending what internal enemy gets identified) but those who feel safe in their own position and have preexisting resentments against candidate enemies… The members of the community who most enthusiastically participate in the thrill of fascism are not primarily the downtrodden…but relatively safe people who perceive an opportunity long denied to give effect to resentments they stewed in privately when prosperity and security bred norms of magnanimity and tolerance in their communities.


From If I were the plutocracy (2023-07-26, a response to this video):

If I were the plutocracy, I’d scapegoat immigrants, racial minorities, and sexual minorities in order to give the public someone to blame for the metastatizing pathology that results from all the material security I am sucking and sucking from them. Then I’d lavishly fund advocates of immigrants, racial minorities, and sexual minorities — the more radical, the weirder, the more aggressive, the better — to ensure a constant parade of controversies and outrages that activate people’s deep sense of identity and threat and injustice, so that they argue with one other — they might even riot and kill one another — over anything and everything but me.

If I were the plutocracy, the public would always know me to be there for them. I would be on their side in all these fights, since I would be effusively financing all the sides. Some of my organs would fund racial justice, while others would be donors to “antiwoke”, while others would ensure nicely catered luncheons for “Moms for Liberty”, and others would build underground railroads for people seeking gender-affirming care. Almost all of my organs would be deeply sincere about what they do. Meet them, you will love how genuine they are! Yet while they seem to be battling against one another, in a deeper sense they all — we all — would be pulling together in perfect harmony towards a common purpose, maintaining and expanding our extraordinary wealth and control that — surely you agree! — must be the basis for any notion of progress and civilized society, even if it does impose some unfortunate but necessary burdens on the rest of you who must serve us.


From Degrowth for Whigs (2023-07-17):

Until recently, virtual reality (like artificial intelligence) has been a joke, a transformational technology perpetually a decade away from transforming anything. But Apple's preternatural knack is to take technologies that already exist but are marginal, mere toys for hobbyists, and turn them into products so ubiquitous they upend society… What if it turns out that "mobile" was mere dress rehearsal, and the main event will be virtual reality for the rest of us? Smartphones have already delivered dematerialization. Kids aren't breathless for their drivers' licenses at age 16 anymore

What if virtual copresence…proves to be better than the real thing? …This would be The Matrix, except emerging "voluntarily". We need those scare quotes. Acquiescing to technological change is never voluntary, exactly, at an individual level. If this is the way the world goes, you don't really have a choice but to join it. It becomes voluntary like driving was voluntary once jobs and residences became so far dispersed you could only access both with a car. But, like that evolution of the mid-to-late 20th Century, this brave new world might emerge without much in the way of overt coercion by states… [I]t is plausible — and I think the fact of ecological and environmental limits renders it quite likely — that we will collectively choose our own quasi-Matrification. To a large degree, we already have.


From Cornering the future (2023-07-10):

What the FIRE industry sells is not abstract at all. The product it vends is future well-being. And like candy or plane tickets or drugs, whatever future well-being we purchase has a price… From a nadir in the early 1980s…measures [of that price] rise, by the 1990s, to new heights relative to mid-20th-Century experience. [T]he attractor these measures oscillate around remains secularly higher in the post-1990s period than during the midcentury period. In other words, purchasing future well-being in the form of investment cash flows has grown a lot more expensive…

If the good we were talking about were a cans of beans, it would be obvious that an increasing price might be good for people who already have cans of beans or who can produce them, but bad for people who need to eat but don't already have any beans. There is a divergence of interest between incumbent owners and potential buyers. But with financial assets, incumbent owners go on CNBC and say, "no, it's great that the price of beans has gone up, if you don't have any yet buy however many you can because the price is going to go up more!" Incumbent owners persuade potential buyers that there is no divergence of interest, they're just a bit late to the game, no big deal, just get in on the action now.

When you are hungry and you can only buy three beans, you recognize claims like this are absurd. But give the beans a ticker symbol though and somehow it makes sense.


From Quietly expensive desperation (2023-06-04):

It is silly to attribute cross-national differences in costs to personal or psychological differences. People are public-spirited everywhere. They are public-spirited in the United States. People are greedy everywhere. They are greedy in the United States. But what is not so silly to point out is that in the United States we are structurally greedy. At a macro-level, in the name of maximizing capitalist incentives to produce, our institutions are designed to encourage self-interested income-maximizing behavior more than the institutions of other countries are. Low taxes for top-earners, tax-advantaged payouts from firms to shareholders, strong "intellectual property" rights, tolerance and even lionzation of firms that consolidate industries to extract rents, all combine to create an environment where the quantity of private income forgone for an aliquot of public-spiritedness is higher in the United States than it is almost anywhere else.

At a micro-level, the dispersion and precarity of life outcomes in the United States make us all as individuals behave as if we are more greedy than we would if all that was at stake for us was a bit of luxury… In the United States, very basic goods like having your kid in a reliably safe and decent school, or having a home in a neighborhood where your family will be safe, or getting decent health care, are far from universal. In fact, these basic goods are scarce and price-rationed. Most of us do not enjoy them, and those who do pay through the nose for them. [I]ncreasingly, the only way one can secure these goods in the United States is to price whatever services one sells into the market aggressively, gain some market power and extract some rents of your own like a true capitalist hero… Everything we can't source externally is more expensive in the United States because we are all, desperately, striving to make the labor, goods, or services that we sell — or else the hold-up costs we can impose — expensive.


From Smeagols (2023-05-27):

Outside of Mussolini's Italy and a few performative weirdoes, fascism is not an identity people adopt. It is not an ideology that people support. The better way to understand fascism is as a syndrome that people are in the throes of. The identity "fascists" adopt is, first, patriotic opponent of insidious enemies who threaten what is virtuous in my society. Then, in a later stage, devoted and obedient supporter of the great leader who will vanquish our enemies. That describes "rank and file" fascists… What about leaders of movements who seek power by manufacturing and scapegoating insidious enemies?

I don't think [Ron] DeSantis yearns to personally murder trans people. I don't think he cares one way or another about "gender ideology" (or at least that he did before he started to take actions that might demand that he persuade himself, in order to avoid cognitive dissonance and feelings of guilt). Sexual minorities are appealing sources of an internal enemy for conservative political entrepreneurs. They provoke fear and disgust at a visceral level among many conservatives, and they are supported by social liberals who can conveniently be blamed for them.

So is DeSantis a fascist? I doubt that he identifies, to himself or to anyone else, as a fascist. Almost no one does. I think a useful way to describe people like DeSantis — and Trump, and Rufo, and Knowles — is "Sméagols". Sméagol is the character in The Lord of the Rings who lusts for "my precious", a ring of power under whose influence he transforms into both a pathetic wretch and a kind of monster ("Gollum"). DeSantis is willing to conjure the social dynamic of fascism in the service of his rise to power. He may not intend the awful consequences often associated with that dynamic. Indeed he may hope that once it elevates him, he can moderate and set it aside. But just because you may be leader doesn't mean you are the master of social forces much deeper and more powerful than any single person.


From Decommodification and health care utilization (2023-05-17)

Under capitalism a persuasive apparatus emerges to sell us unnecessary baubles. Fine. There are worse things than having baubles. But superfluous health care services impose deadweight losses besides the financial transfers they provoke. Surgeries are painful and bring risks of complication. Medication has side effects, sometimes very serious. Drugs aggressively sold provoke addictions that destroy lives, families, and communities. If the ordinary result of commodification under capitalism is imperfect competition favoring sellers and then aggressive persuasion to maximize profits, then wouldn't we expect commodified health care to be overutilized? Wouldn't we expect the (important! good!) health care produced by the system be offset somewhat by manufacture of disease and addiction, matched by provider profits? And isn't this exactly what most of us think we see?

The cost of profit-motivated health-care overutilization is higher than the sum of individual disabilities and addiction occasioned by unnecessary care… The anti-vaxx movement is rendered credible to its adherents almost entirely by the conjecture that the pharmaceutical industry is very interested in getting us to take their products, and less interested in our heath. Anti-trans activists, when confronted by the strong consensus among medical providers in favor of cautious, incremental gender-affirmative care, argue that medical associations are corrupted by providers' interest in a lucrative new care market.

[M]edicine is the signal example of expertise in most people's lives. A world in which doctors can't be trusted because their financial incentives and patient welfare diverge is a world in which it will be hard for people to trust almost any form of professional expertise… For reasons beyond accessibility and cost reduction, we need to think about decommodifying medicine. Along with expertise in general.


From We haunt (2023-05-03):

I'm not actually going to excerpt this one. It's unusually personal, about my undergraduate alma mater, New College of Florida. New College has unfortunately become a subject of national controversy. This piece follows an even more personal post on the subject. You can also listen to this episode of the Palm Court Podcast, if you want my take on New College and what is happening to it.


From Urgency(2023-04-28):

We are in a foreign policy environment where catastrophically destructive war or even nuclear annihilation are plausible outcomes. We need to act with care, deliberation, and wisdom. Instead, political incentives militate either towards cartoon hawkishness or dogmatic isolationism, almost regardless of the actual circumstances. We need leaders who can actually negotiate and deliberate, who can understand nuance and consider compromise without those words becoming euphemisms for abandonning vital commitments.

We have to change the structure of our democracy.

And we can! Yes we can! Almost none of what ails us is embedded in our hard-to-change Constitution.

  • If our pustulent rotted Congress could rise above their pustulence and rottedness for a day or two, they could change the character of the antidemocratic Senate. It could become a body that elevates broadly popular, consensus-oriented statesmen rather than partisan sociopaths. It would take nothing more than an Act of Congress to insist that Senators be elected by approval vote.

  • We could ensure that at least four major parties emerge among the public and take seats in the House of Representatives, transforming today's stalemated trench warfare between implacably opposed camps into a more constructive dynamic where parties on their own can neither pass or block anything, where coalition building works while kneecapping a rival just advantages a different rival.

  • We could insist that elections be solely publicly financed.

  • We could properly fund Congressional staffs so they needn't outsource the basic work of legislating to think tanks bought by plutocrats and lobbyists working for industries eager to write their own laws.

  • We could even build a Supreme Court that would be trustworthy.

Any of these things, or all of them, could be accomplished by a simple Act of Congress.


From Two kinds of representation (2023-04-24):

Sometimes, we want one single person to represent an entire diverse public. In the United States, when we elect a president, he or she must look after the interests of all Americans… Sometimes, we define representative bodies whose role is to serve as "minipublics". In the US, the House of Representatives is the most prominent example. In a representative minipublic, the role of an individual member is not to stand for everyone, but to represent a particular faction or party… These two kinds of representation are profoundly different. Any conversation about electoral systems that fails to recognize this will be stunted from the start…

We don't need to repeal the Constitution to fix this. We just need to understand the different kinds of representation inherent in different Constitutional offices, and tailor our election rules accordingly. General elections for President and Senator, in every state, should be by approval voting, or some very similar system. Elections for the House of Representatives should be conducted under any of the many systems that reliably deliver proportional representation and are resistant to gerrymandering.


From Two parties make us stupid (2023-04-21):

A system that divides the public into two aggressively competing, highly cohesive factions renders an intelligent process of deliberation impossible… Intelligent deliberation requires that there exist some agent capable of weighing competing ideas without too much prejudice. It is fine — it is necessary! — that there are passionate interests on one side or another of any debate. But passionate interests don't deliberate. They advocate. You can't make a court only from the prosecution and the defense. Who would listen and synthesize the evidence? …[D]eliberation is only effective when there are judges and juries beholden to neither side, able to consider competing claims on their merits…

[W]e will never achieve perfect neutrality, objectivity, fairness, independence in our fallen human world. But these characteristics can exist in importantly different degrees… When a society becomes polarized into only two competing factions, each of which takes opposite sides over the set of issues under public contestation, there cease to be neutral-ish parties… A two-party system is a zero-sum game… In a multiparty system, on any given question, there may be factions without much skin in the game… What matters is that there be sufficient diversity and fluidity within the legislature that the swing vote usually comes from factions that has no strong, prior interest in the question considered, and no binding loyalty to any of the more interested factions.


From Taiwan (2023-04-19):

That one has a right to do a thing, however, does not imply that it's a righteous thing to do. Asserting ones rights should in general be a last, rather than first, resort. In ordinary life, nearly all of the time, we try to act with sufficient consideration of those our actions might affect that the question of rights never comes up. We assert rights only when someone will object, but we decide to act anyway… It is important that we can and do assert rights, that we have liberties that can overcome other peoples' objections. But it's also wise, when it is possible, to try to address people's concerns rather than jumping directly to an adversarial assertion of rights…

The keystone of the United States' policy with respect to Taiwan should be mutuality. Our position should be that we support any change in Taiwan's status so long as it is voluntarily agreed by both China's government and the de facto government of Taiwan. Voluntarily is important. The United States supports Taiwan, militarily and otherwise, only so that it cannot be coerced by China. If, at some point in the future, a convergence occurs so that China and Taiwan become ready to conclude a "peaceful reunification", that would be wonderful. If, in some future, friendly and mutually beneficial cross-strait relations lead China to become less concerned with exerting formal sovereignty over Taiwan and the parties jointly negotiate a more autonomous status for the island, that would be great too… For the forseeable future, no agreement is likely, so the parties will have to be patient. An awkward peace is so much better than the alternative.


From Systemic means it's not your fault (2023-04-10):

Much of the resentment that has condensed onto the term “wokeness” derives, I think, from people's perception that they stand accused, unjustly, of crimes they did not commit… [But a] structural problem demands a systematic solutions, usually in the form of public action. It is not an individual's fault, or within an individual's capability, to remedy.

I wish that those of us more on the “woke” side of the debate were clearer about this. When we say that racism or other social disparities are “systemic” or “structural”, we are absolving, not condemning, nearly everyone, as individuals… Systemic injustice is not your fault. But we’d love it if you’d help to fix it.


From Alignment is the problem of God's love (2023-04-06)

The presupposition behind AI “alignment” is that artificial intelligence technologies will grow into something much more capable than we are, with a kind of autonomous will or volition… Sufficiently advanced AIs, powerful beyond imagination and driven by their own wills, would be indistinguishable from gods. The alignment problem, then, is how do we encourage the emergence of a just and loving god or gods? But we have never found consensus on how a just and loving god should behave…

If alignment is god’s love, what does that make misaligned AI? Should we consider GPT training runs as the high-tech equivalent of rituals with pentagrams by power-mad occultists?

Am I wrong that the community that most urgently brings us these questions were once known as internet atheists? For what, if anything, does cosmic irony constitute evidence?


From State as coordination (2023-03-31)

Instead of defining the boundaries of the state by legal formalities — this institution is an agency of the education department, while that institution is organized as a private corporation — …define the state functionally, as the panoply of institutions that serve to coordinate human behavior at the scale that the formal state superintends… A small bank…may genuinely be private, because what it does or does not do will have mostly localized and idiosyncratic effects. But the banking system — even in a better, counterfactual, world with a banking system made entirely out of small banks — is part of the state. The banking system is a core means by which we coordinate economic behavior at scale… The system is state, and should be democratically managed. The elements are private, with owners who enjoy liberty rights. There are tensions there, but effective governance depends on managing those tensions.

Perhaps more jarringly, under this approach the conventional contradistinction between state and market is rendered absurd… The market is the primary means by which we coordinate behavior at national scale, in the service of internal goals like general prosperity or external goals like achieving moon shots or winning wars. So the market is properly classified as an element of the state… As individuals and moderate sized businesses, we maintain liberty rights against the formal state. Regulatory choices may shape our incentives, but we make our own decisions and set our own prices. But whether we like it or not, functionally the state must be responsible for market outcomes in aggregate, because the large-scale social coordination whose quality it is the responsibility of the state to support is itself primarily a market outcome…

[A] trick of states, especially the states we describe as liberal, is to launder massive wallops of state coercion through markets, and then deny they are exercising any form of coercion at all. Allowing the formal state to pretend, absurdly, that it stands apart from the market, to proclaim that the key institution that performs the function of the state is unfortunately some external fact of nature, provides politicians and bureaucrats with a commodity they value very highly: plausible deniability. Conceiving of state and market as distinct does not coherently constrain the modern state, because nation-scale markets cannot function without extensive state construction, regulation, and support. However, maintaining the conceit does help state actors — and the private interests who lobby them! — avoid accountability for outcomes that in fact result from political choices.

Where am I?

It’s been a while! There’s been nothing on this site, but I’ve been busy elsewhere. What writing I’ve done is mostly on my drafts blog. I’ve been largely devoted to tech-ish things lately, some of which I write up on a tech blog.

My writing is now split among multiple sites, but you can follow all of it via unified RSS feeds, one that covers all blog posts, another that covers all blog posts and also microblogs.

These days my microblogging is Mastodon.

Mastodon is not a unified service, but a federation. You join a forum and post on that forum, but your posts gets syndicated to followers elsewhere as well. I’m currently on zirk.us, but started out on fosstodon.org and then econtwitter.net. I’ve published archives of these past lives — here’s the fosstodon archive, here’s the econtwitter archive. I wrote a tool (“fossilphant”) that generates archive websites from the post archives you can export from Mastodon, and tried to make it very easy to use. If you have a Mastodon presence you’d like to preserve, I’d love if you would check it out!

I’m basically off Twitter, though I occasionally check my old account there. A social website is a collaborative enterprise. Twitter has become an enterprise to which I do not wish to contribute. I really hope that you won’t either. Let’s collaborate to build better things.

Among other tech-ish things, interfluidity “office hours” have migrated from Zoom to a self-hosted Jitsi. Which means you don’t need an app, it’s just a URL in your browser to join. We’ve had office hours (almost) every Friday for more than two years. If you are interested in participating, say so in a comment to this post, and use a real e-mail address. (E-mail addresses are not made public when you comment.) I’ll mail you the info.

Over the next day or two I’ll do a roundup of the stuff I’ve posted to the drafts blog, since when I last did such a thing in March.

Time flies. I hope that you are having some fun.

Excerpts!

I continue to write these days beneath the shelter of my “drafts blog“. A big benefit of that is almost nobody reads it, so I feel much freeër to write. A downside is, well, almost no one reads it.

I thought I’d excerpt some bits from posts I’ve written since the last “drafts” roundup.

There are not yet comments on the drafts blog, so please feel encouraged to offer comments here. (I do mean to add comments to the drafts blog! But I am now desperately allergic to surveillant or potentially surveillant tech platforms, so I will have to implement them myself. It won’t be instant.)

Without further ado, some excerpts!

From Banks should fail much more often (2023-03-26):

The most important reason to prefer small investent funds, however, is because large-scale funds are stupid. Large banks and investment funds are stupid in a very particular, very destructive way. They rely far, far too much on “hard information”. They are evidenced-based. Fucking idiots!

At a large bank, it will never cut it to go before the loan committee and say “Yes there’s no collateral, and limited credit history. But I’ve known Duane and his family for a long time. They are serious and connected to the community, and the business plan is promising.” But it is exactly this kind of loan that creates the greatest social returns. The true source of economic development is speculative but discriminating monetization of human aspirations and capabilities. You turn people with nothing but a work ethic and a great idea into proud pillars of the community by making available the resources they require to succeed. The more a borrower lacks — the less collateral they have to offer, the further they are from holding a sexy degree from Stanford — the more social upside there is in their success.

The very best loans are the ones that cannot be justified at all in terms of hard information, but are made anyway on the basis of very good soft information. Big banks are simply unable to lend on soft information, due to bureaucratic imperatives, and a need to manage legitimate ethical concerns. (Is this “soft information” just nepotism? Are we “discriminating” on the basis of some hypothetical je ne sais quoi of investment quality, or is it really just race?)

From Financial regulation is just debt covenants (2023-03-24):

Fundamentally, private debt covenants and public financial regulation are the same thing. They are means by which creditors of leveraged firms try to ensure shareholders can’t loot them by building tripwires that allow creditors to usurp control from shareholders when shareholder risktaking threatens creditor interests. They look different, they take different forms, because private creditors can regulate within debt contracts that they sign, while the public sector offers finance primarily via guarantees, and so must impose its regulation outside of the contracts that borrowing firms and their notional creditors devise.

From Banks are not private (2023-03-21):

[P]eople spend far too much energy worrying about the cost of bank failures, and far too little worrying about the cost of bank survival… [T]he most costly forms of state support take the form of subsidies that the state can pretend are not “taxpayer funded”, but that impose quiet costs on the public anyway. Do you remember when the Fed retroactively rewrote millions of lending contracts so that banks could charge more interest and recapitalize? Do you remember when the nation debt doubled in less than four years, precisely so that large banks would not have to be resolved? Yes, Virginia. Bank failures, actually, are much less expensive than the things we do to fill holes in bank balance sheets so we need never acknowledge their failures.

From Unlimited deposit insurance (2023-03-12):

Treasury/Fed/FDIC say no losses will be borne by the taxpayer because they will levy a “a special assessment on banks, as required by law” to recover FDIC’s losses. But who, pray, will pay for that “special assessment on banks”? It is not an assessment on the personal wealth of bank managers or shareholders… Sure, there will not formally be a new tax to cover these costs. But in substance, the tax-paying public will experience higher expenses or foregone income. This habit of declaring “no new taxes” in form, while tacitly imposing taxes in substance, deprives the public of any capacity to design the tax, to shape its incidence, and to hold accountable those who provoke the costs the tax must recover.

From Libertarians and hierarchy (2023-03-08):

Libertarians share exactly the same pathology as university professors and the smiling residents of Marin County: They flatter themselves that they stand in opposition to vicious social hierarchy, and find true-enough narratives by which to spin their allegiances into support for equal dignity. But their actual practices, the institutions they inhabit and animate and from which they earn their succor, belie all that… [U]nder actually existing capitalism, Matthew effects rule the day. Markets may be notionally “free”, but past winners (humans, not just firms) have tremendous advantage. Certain classes of people understand that market arrangements are likely to continue to deliver to them security and abundance, but will sadly deliver those goods less adequately to other groups whose ongoing misfortune, despite occasional bootstrap stories, we can pretty well predict.

Markets, under these circumstances, become a locus of hierarchy, rather than a challenge to it.

From Dilution of faction requires voting system reform (2023-03-08):

David French argues we can “dilute the disruptive power of faction by allowing factions to bloom.” …[James] Madison counseled that factions should be small and many. But our single-winner, first-past-the-post voting system exerts a social gravity that pulls us into two, gigantic factions of similar size… If we want multiple factions, we understand how to design voting systems that encourage and support that, rather than the voting system we have, which punishes any divergence from two major parties… If you think democracy would work better with a more pluralistic ecosystem of factions…please specifically advocate voting system reform!

From Economists are such scoundrels (2023-03-06):

But when you learned about [Arrow’s Impossibility Theorem], I bet you didn’t learn that its original object was the impossibility of authoritative technocracy. Social actions cannot in general be ranked under the ordinal utility constraint economists impose upon themselves. Instead, you learned that it was about the impossibility of a good voting system… In other words, after struggling for decades to come up with a basis to make authoritative claims beyond politics, the economics profession realized by about 1950 that, at least on the terms they had prescribed for themselves, it was impossible. They had no criterion, and could have no criterion, by which they could elevate their conclusions as “scientific” and above the fray. What was to be done? Well, we know what they did.

They took the weapon they invented, this theorem that damned their own authority, and they pointed it at the rest of us. They stopped talking about the impossibility of ranking social actions, but loudly proclaimed their theorem foreclosed the possibility of coherent democratic choice.

From What is fascism? (2023-03-25):

The use of fascism as an epithet, as a kind of rhetorical “cooties” that discredits whomever can be somehow associated with it, prevents us from thinking clearly about a phenomenon whose roots go too deep to simply shun away.

Fascism…represents an approach to solving the key problem of modern nation-states: How do we build and sustain a capacity for effective social coordination over scales so large that people’s interests and identities are likely to be diverse and conflictual? …Fascism can be understood as a means of rendering permanent the clarity, conformity, and collective decisiveness that publics usually tolerate only when they perceive exceptional threat.

As they say, read the whole thing!

If you have nothing better to do. If you read this stuff at all, please understand that I am desperately grateful to you. Thank you always for your company.

Drafts (meta)

For the past week or so, I’ve been running an experimental “drafts” blog.

The first post there is a long-winded take on why, but to boil it down, I want to blog like the early days. When some thought crossed my mind, I just wrote it down as best I could and hit publish.

Over the years, because interfluidity had a readership for a while, which engenders caution, and because the blogosphere evolved from a conversation to a cacaphony of competitive resumés, I stopped giving myself license to do that, and largely stopped writing.

So, I’ve undertaken to call my new posts “drafts”, then just write shit and hit publish again. I’ve really enjoyed it.

Here are those “drafts” so far, in reverse chronological order:

I’m not sure where I’m going with all this, and would welcome your feedback. Should I revise and promote some “drafts” to posts here, or just acknowledge that the whole drafts thing is a conceit, and let it become the chattier successor to this site?

You can subscribe to the drafts blog by RSS. You can’t yet subscribe by e-mail. I think I’ll continue to do round-up posts like this one, so if you are subscribed by mail here, you’ll indirectly get mailed digests. Eventually I mean to implement subscriptions by e-mail directly on the drafts blog, but that too will take the form of a roundup, not more frequent than weekly. Knowing each post gets spammed out as e-mail has been a discouragement, on the margin, from just fucking writing.

Eventually I hope to make a “unified” RSS feed that points to anything I write anywhere, but for now, please consider subscribing by RSS to both feeds.

On this main blog I laboriously track any changes I make (after a “grace period”, maybe an hour or two after posting) in “update histories” you’ll find after most posts. I’m not doing that in the drafts blog. I’m tweaking at will. But the drafts blog is a static site published via git, everything published will have been a commit. You can keep me honest by rolling back history here.

Whoever reads this, please know I am incredibly grateful that you do. I welcome any feedback on all of this in the comments.

As a reminder, interfluidity still hosts chat-about-anything drop-in “office hours” via Zoom, Friday afternoons, lately at 12:30pm PST / 3:30pm EST / 8:30pm UTC. If you are interested, please say so in a comment and provide a real address (it won’t be published) in the e-mail field of the form. I’ll send you an invitation. Or you can send me an e-mail directly, or message me on Mastodon.

Tackling inequality from the demand side

We often think about inequality in terms of supply of wealth to the wealthy. Interest rate declines contribute to inequality because they cause the real estate and financial assets held by the rich to appreciate. Monopoly contributes to inequality because it enables the owners of dominant firms to extract rents from the rest of us, increasing their already large hordes. To reduce inequality, we could break up monopolies, or stop enabling them with ever expanding “intellectual property rights”. We could get rid of the carried interest loophole that lets hedge fund plutocrats pay very low tax rates on their labor earnings, or get rid of the tax-preference for capital income entirely.

Trying to suppress inequality by identifying wealth flows to the already rich and blunting their supply is God’s work. But it risks a certain whack-a-mole quality. You fix this tax loophole, the accountants come up with that one. The rich are clever, or at least they hire clever people, and they have lots of resources. Also, the rich create hostage situations to protect their wealth flows. For example, by preventing the enactment of generous automatic stabilizers by which the state would stimulate the economy through downturns, the rich ensure that the only way to prevent welfare-catastrophic employment losses is for the central bank to collapse interest rates and bid up the price of the financial assets and real estate, which the rich very disproportionately own. If you try to stop the rich getting richer, the story goes, you will just hurt the poor and marginalized. And the story is often true! Because the rich organize our institutions so that it will be true!

Staunching flows of wealth that the rich “entrepreneurially” invent, then assiduously protect, is like fixing a leaky roof by putting your hands on the cracks. You run out of hands pretty fast. We should think a lot more in terms of suppressing inequality from the demand side. What would it take for the very rich not to want to get richer?

I have no intention to address deep questions about human nature here. Are we in fact homo economicus, innately and insatiably greedy? Who knows. Even if we are not, I think we can presume that there exist people, whether they are most of us or just a few sociopaths, who will behave as if they are insatiably greedy. And once there are such humans, if they succeed, it sets off arms races. We have to compete, for essential positional goods, for zero-sum insurance against systematic risk.

I don’t know whether, in some deep sense, we can make people want money less or not. But we can change the legal environment so that the things people do to augment their hordes come with lower payoffs and higher risks. The rich then come to behave as if they want money less.

The classic example is the 90%+ top tax rates that prevailed for much of the period between FDR and JFK. The most common critique of that policy is it didn’t raise a lot of money, as very few people ever paid those rates. Why did no one pay those rates? Because it was dumb to earn incomes into a tax bracket from which funds would just be confiscated. So the rich, so good at gaming to pay themselves more money, also proved adept at gaming to pay themselves less. They behaved as if they were less greedy, regardless of whether in some deeper sense they were or were not.

During this period, the wealthy left funds in firms rather than realizing incomes. With the funds that accumulated, managers bought perquisites and prestige research labs rather than endowing for shareholders huge personal balances at BlackRock. Workers find it easier to bargain for better wages and conditions when their firms are flush, rather than when they are kept “lean” or even leveraged by whisking cash flows to investors as soon as they are earned. Indeed, during the barbarism of the “shareholder-value revolution”, firms were advised to stay leveraged in order to discipline managers against the temptation they might be generous to workers rather than funders. With the knife of hard interest obligations at their throats, managers behave as if they are greedier than when they have a great deal of financial slack. Conversely, when investors let firms accumulate cash, managers behave as if they are less greedy, whatever generosity is or is not in their unobservable hearts.

So, one way to suppress inequality from the demand-side is just to have high top marginal tax rates. Similarly, high corporate tax rates can reduce firms’ demand for accounting profits, rendering shareholders more open to “expenses” that might build off-balance-sheet, long-time-horizon assets. Like resiliency. Or a capable and loyal workforce. Do shareholders and managers in their hearts become more generous, or do they just pretend to be, because devoted and experienced workers are necessary to preserve wealth that they can no longer quickly extract? Does it matter?

One way the rich demand wealth flows is by accumulating market power, escaping or restraining competition, whether as sellers of outputs or buyers of inputs. The extent to which our economy is now controlled by monopoly is extraordinary. The rich have demanded, and we have accommodated, an era of “chokepoint capitalism“, as Rebecca Giblin and Cory Doctorow put it.

But we can make them want to do that less, if we make the costs and risks of engendering chokepoints higher. In the previous post, I suggested nationalizing the freight rail industry. (I’m not alone!) But won’t that turn us into Soviet Russia or something, if private assets can be force-purchased arbitrarily by the overweening state? Well, not if it isn’t arbitrary.

The legitimacy of private sector economic power is based on the claim that competition will discipline it in the public interest. When that claim holds, then the state generally should leave firms in the private sector. But as soon as competition becomes perhaps less than vigorous, municipalization or nationalization should be on the table, front and center. We need to flip the incentives surrounding “antitrust”. Under the status quo, firms seek to limit competition as much as they can get away with, while regulators play whack-a-mole with very proportionate (usually much less than proportionate) remedies. Instead, what we want is for industries themselves to ostentatiously ensure they are open and competitive, because the threat of eminent domain hangs above dominant firms if it seems like they are not.

Would Bill Gates, in his heart, have been less of a rapacious monopolist if market domination carried the real, proximate threat of nationalization? I have no idea, but I bet that Windows’ “openness” in the 1990s would have been less of a marketing sop and more of a fact, regardless. Do network effects mean that, really, there can be only one dominant search engine? I bet Google would figure out how to share some of the benefits its users create for it with other firms, if failure to do so risked making Google (reasonably enough!) a public utility. Etc.

High top marginal tax rates, or perhaps even a wealth cap. Taxes on firm payouts, higher corporate profits taxes, an excess profit margins tax. Normalizing the nationalization of monopolies. All of these interventions might lead wealthy investors and managers to behave as if they are less greedy.

Alternatively, we might say the status quo — under which the already rich can endlessly extract ever more funds via ever less competitive firms with little cost or penalty, while as individuals we are locked in competition with one another for essential positional goods — encourages people to behave as if we are more greedy than we in some sense truly are. The fact of inequality, and a legal environment that permits and promotes it, can be understood as a tax on virtue. Let’s tax money instead. Let’s reshape our laws so that endlessly extractive behavior just makes less sense.

Whether the humans in our heart of hearts are generous or greedy, naughty or nice, I leave to you dear reader. Regardless, we can build a world in which people just want to do the things that divide and impoverish us a great deal less. Let’s.

Update History:

  • 7-Dec-2022, 11:30 a.m. EST: “Workers finds find it easier to bargain for better wages and conditions…”

Betrayal

There is no other word for what the Democratic Party has just done to railworkers than betrayal. I am sorry, dear reader, if you don’t like to hear that.

I don’t think that’s how President Biden sees it. He’s a process guy, he got union leadership and the railroad companies to hash out a deal a couple of months ago, he thinks it’s fine and good. Historic even.

Only the rank and file did not agree. It was unacceptable to the unions representing a majority of railworkers. Biden seems to view this as workers reneging on his deal. That is bullshit. A deal is not a deal until the principal signs on the dotted line, not when some lawyer says it’s the best he could do. Sorry if you think it was your deal, Joe.

The deal was unacceptable not because railworkers are greedy. The “historic” raise in the tentative agreement will barely exceed inflation over the period of the contract. Railworkers are treading water on wages. The unreasonable commie militants seem just fine with that.

The dispute is over how railworkers are treated. Which, in a word, is like shit. For decades, the rail industry has been achieving “efficiencies” by in large part by dumping nonfinancial costs onto its workforce. It’s great when productivity increases because of some new invention: A construction firm buys a steam shovel, and becomes genuinely more efficient. It accomplishes the same work with fewer workers. But it’s a different thing entirely when the same firm buys a whip, and then is able to accomplish the same work with fewer workers by beating the crap out of those desperate enough to remain. Both get scored as “productivity increases” by statisticians, but the second one is a regressive transfer from workers to shareholders, not an actual efficiency. Railroads’ vaunted “precision-scheduled railroading” is the whip rather than the steam shovel. It puts ever fewer workers on ever longer trains, magnifying the responsibility and hazard each worker must bear. Railworkers are on call to be dragged from home for days or weeks 75% of their lives, and harshly penalized if life supervenes and they can’t show up. You try living that way.

The unions were asking for up to fourteen paid sick leave days, rather the one that the current deal provides. Fourteen was an opening bid. Had Congress actually done what Democrats only pretended they were trying to do, and included seven paid days in the Congressionally imposed deal, it would have been fine. Congress would have been taking away railworkers’ leverage to strike, but giving much of their very modest ask in compensation. Instead, Congress stole all of railworkers’ bargaining power and gave them nothing.

Pacino as Godfather offers Nothing.

Besides just how just plain wrong this is, Democrats are in real danger of repeating their 2016 hubris. Yes, no matter how many formerly Republican-ish affluent suburbanites Democrats pick up on abortion or concern about saving democracy — really important issues! — if the working class, the majority of our citizenry, continues to abandon the party, Democrats will lose, and they will deserve to. The party is riding high at the moment. Hey, they said inflation would kill us in the midterms, that our key issues weren’t “bread and butter”, but they were wrong! We did great (at least grading on a curve). But last month, Biden could still claim to be a pro-worker, pro-union President. Now, not so much. No matter how much historians tell us (grading on a curve!) he still might be the “most union-friendly President in history”, it becomes like Malcolm X and taking out the knife half way. The populist wing of the Republican Party — Marco Rubio, John Hawley, Ted Cruz — may never actually deliver the goods to workers, but for people who want to throw out the bums that just fucked them, the rhetoric (like Donald Trump’s before them) may offer just enough hope to win their votes.

All is not lost. As Steven Greenhouse and Harold Meyerson point out, President Biden can remedy this just by eliminating an exemption for railroads in an executive orders that already requires Federal contractors to offer workers seven days paid leave. Embedding social desiderata in Federal contracting requirements is a bad way to do policy. It imposes an “efficiency” wedge” from customers’ perspective between the private and public sector, discrediting government action. But in this case, with the railroad industry consolidated into joint duopolies that already behave extractively towards customers, little would be lost. Certainly there’s no reason this rapacious sector of our economy should be exempt from an obligation of Federal contractors in every other sector!

If you want to save democracy, or just do the right thing, let Joe Biden know. Railroads that wish to transact with the Federal government must meet the same obligations that bind every other industry. That means seven days of paid sick leave. Right this wrong, conspicuously.

Alternatively, freight rail is an essential utility that is not meaningfully regulated by competition. It is persistently extraordinarily profitable, and not a locus of technical innovation beyond shifting costs and risks to workers. Perhaps we should simply nationalize the industry.


Update: Here are my letters to Joe Biden and Marco Rubio on this issue.

Update History:

  • 2-Dec-2022, 9:45 a.m. EST: “…their the rhetoric (like Donald Trump’s before them) may offer just enough…”
  • 5-Dec-2022, 9:45 a.m. EST: “…a regressive transfer from workers to shareholders, not an actual a real efficiency gain.”
  • 5-Dec-2022, 12:10 a.m. EST: Added bold update with links to Biden and Rubio letters.