Running a cellphone network is a brutally capital-intensive business with thin profit margins, and subject to heavy regulation. Any economist will tell you that all three of these factors favor size – capital concentration confers a stronger advantage, thin margins can only yield a decent profit at high volume, and larger organizations can better afford the costs of capturing their regulators.
The Washington Post has an interesting graphic on the results in the U.S. wireless-carrier market:
This graphic is a bit behind today’s news; the Feds have sued to block the AT&T/T-Mobile merger. As a T-Mobile customer I wasn’t looking forward to it; as a staunch advocate of free markets, I’m not happy that the Feds have the power to stop it.
My preferences aside, the interesting question is whether blocking this merger can actually prevent further consolidation. I’m not very optimistic about this; the economics are what the economics are, and the real rates of ROI on wireless networks are negative. There is, sadly, every likelihood that smaller carriers like T-Mobile that don’t merge with larger ones will simply go under, leaving their assets to be snapped up by the remaining incumbents at the going-out-of-business sales.
What we need to fix this situation isn’t antitrust law but some sort of technological break that changes the economics of the business so it favors capital concentration less. Perhaps stealth mesh networking would do it?
Well in Economics they used to talk about what happens when a service is essential for the overall economy but because of the margins it is only possible for a single provider or small group of providers to meet this service. Up until the recent fade of neo-liberalism (what Americans call libertarianism) it said that the society with something like this had three options: 1. Was to force competition when it was not appropriate, which in the long run can’t work because of the nature of the industry 2. Just let the monopoly form, but with monopolies ability to control prices this would result in insane pricing, probably this is what we see in vacation roaming charges which can be several times more than a annual contract 3. regulate the monopoly to force a price structure upon it.
Clearly the mobile market is in this situation. Freedom of the market will do nothing but lead to a Monopoly. I assume we will probably go around the free market approach for a few more years, until finally a few players control the mobile internet infrastructure able to set strange price scales which prevent new enterprises from coming up. Right now the roaming charges alone that companies charge is blocking the growth of service like Gowalla.
In time the state will regulate because frankly there is no other option. This post was amazingly honest because despite the limiting impact of ideology the author was able to see clearly that a free market ideology finds itself in an impossible situation. This is a market singularity where the free market factors that normally drive the invisible hand of efficient distribution and universal profit rates breaks down. There is no free market approach to this problem other than just to deny it is a problem. You can’t open the market to competition because of the entry costs to the market.
>This post was amazingly honest because despite the limiting impact of ideology the author was able to see clearly that a free market ideology finds itself in an impossible situation.
Don’t overinterpret what I wrote. Yes, free markets lead to monopolies in situations like this, which sounds really bad until you figure out that political market-rigging leads to worse outcomes for longer periods of time – they freeze monopolies in place long after a freer market would have disrupted them.
My problem with the merger is that there’s really two separate cellular markets, with incompatible networks and phones. GSM, represented by AT&T, T-Mobile, and some tiny carriers, and CDMA with the rest. GSM is inherently superior for the customer, because it allows them to switch phones and buy and sell unlocked phones without having to involve the carrier. The CDMA carriers are like AT&T pre-Carterphone, where your choice of handset is completely at their whim. I used to use Sprint, and when my phone died, I had to wait until Monday before I had phone service again. After switching to T-Mobile, I have a spare phone and losing a phone or having one break is a matter of swapping the SIM.
This merger would give AT&T a monopoly on GSM in the USA. That’s not good for consumer choice among consumers who actually care about choice.
Hey, I have a great idea. How about banning unfair contracts (including locked phones) and requiring full portability with SIM cards or equivalent for all new phones after a certain date?
If the telecom industry is headed toward an inevitable monopoly or even duopoly, how exactly is that a free market anyway?
>If the telecom industry is headed toward an inevitable monopoly or even duopoly, how exactly is that a free market anyway?
You’re confused. There’s nothing about free markets that definitionally excludes the presence of monopoliies. But monopolies tend to be very short-lived without political market-rigging propping them up.
>By which I mean to say, rather than letting the industry tend toward monopolization and only then regulating it, wouldn’t preventing the merger first be the better of the alternatives?
See above. The problem with political regulation is that you can never do just one thing with it, and there are agency and capture issues. A regulator powerful enough to do good in some cases is also powerful enough to do great harm in most others, and the way to bet is that the harm will outweigh the good.
By which I mean to say, rather than letting the industry tend toward monopolization and only then regulating it, wouldn’t preventing the merger first be the better of the alternatives?
Third try, sorry. I’m used to being able to edit after posting.
If the telecom industry is headed toward an inevitable monopoly or even duopoly, how exactly is that a free market anyway? If we’re doomed to waiting until a technological breakthrough changes the market, then rather than letting the industry tend toward monopolization and only then regulating it (which becomes a more difficult institution to dislodge altogether), wouldn’t preventing the merger first be the better of the alternatives?
This was true 5 years ago. It is no longer true today. You can move CDMA phones between networks today. The carrier is always involved, but you can pretty much walk into any phone dealer to get a new phone and have it on in 5 minutes.
> Don’t overinterpret what I wrote. Yes, free markets lead to monopolies in situations like this, which sounds really bad until you figure out that political market-rigging leads to worse outcomes for longer periods of time – they freeze monopolies in place long after a freer market would have disrupted them.
Can you give one example of a monopoly that was disrupted in this way?
I suppose a newer technology could come along to replace cell phones (outside of my current imagination), but in the meantime we would have price gouging and slowed inovation, very bad for the consumer.
>Can you give one example of a monopoly that was disrupted in this way?
One of the classic examples is the disruption of the Steel Trust by the introduction of electric furnaces.
Even if a monopoly is allowed, the cell phone industry will not represent a true free market industry. The airways used by the cell phones are heavily regulated as they are considered public property. The carriers have to license the frequencies they use. Unregulated access to the airways would lead to chaos where cellphone communication would likely be unworkable. The carriers depend on the government regulation for the existence of the industry.
>Even if a monopoly is allowed, the cell phone industry will not represent a true free market industry.
That is true. But it’s certainly not going to resemble one more under increased regulation. Only the abolition of spectrum licensing will do that.
>Unregulated access to the airways would lead to chaos where cellphone communication would likely be unworkable.
Only with stupid radios. Smart radios with adaptive frequency-hopping don’t have this problem.
>Well in Economics they used to talk about what happens when a service is essential for the overall economy
Monopoly pricing would prevent it from becoming essential to the overall economy in the first place. Presumably something like subsidies allowed cellphones to become cheap enough to get a foothold and get people used to relying on it. Shockingly, we find that coercion is addictive and self-reinforcing.
Or, the monopoly assumption is itself false.
@esr AT&T will work something out with the government to get the merger through. The break-up fee is too onerous not too.
Airwaves could have been privately owned – the alternatives are not FCC or tragedy of the commons. You’d end up with geographic rights to broadcasts, essentially multiple parallel real estate markets.
The biggest problem with stealth mesh networks is that it is dependent upon having a large earthbound backhaul. The major wireless carriers are all also in this business.
Followed by the inevitable regulatory capture by the monopoly and use of the regulatory structure to duplicate #2, only minus any opportunity for technical innovation to allow market disruption because the monopoly, via the captured regulatory body, has the power of government to use to crush upstarts.
If we had omniscient angels available to staff the regulatory bodies and the legislatures that make the laws the bodies enforce, sure, your third option could work. But we live in the real world, not Plato’s Republic.
>The biggest problem with stealth mesh networks is that it is dependent upon having a large earthbound backhaul. The major wireless carriers are all also in this business.
As I understand it, because of line of sight and bandwidth limitations, any mass communication system (except one to many broadcast) requires wired backhaul systems.
Also, wasn’t the over-optimistic buildout of “dark” fiber in the late 1990s bubble one of the major drivers of widespread high-speed internet (and, some have claimed, cell phones) in the decade since.
“If we had omniscient angels available to staff the regulatory bodies and the legislatures that make the laws the bodies enforce, sure, your third option could work. But we live in the real world, not Plato’s Republic.”
Actually, Plato spends a significant fractioh of the Republic discussing how his ideal state would degenerate into less effective, more oppressive forms of government. For all his idealism, Plato did understand real-world politics (as any Athenian would).
> This merger would give AT&T a monopoly on GSM in the USA.
Both AT&T and VZW are moving toward LTE in 700MHz, Verizon at 746 to 787MHz and AT&T at 704 to 746MHz.
LTE being a GSM standard (its name is really “3GPP Long Term Evolution”, with LTE Advanced (a real 4G network standard) also being standardized by 3GPP and ITU-T, your statement is, while true today, patently false in the very near future.
The AT&T / T-mobile merger is about AT&T’s ability to (quickly) deploy LTE, rather than having VZW run away with the prize.
AT&T is also attempting to purchase the 716-722 MHz spectrum that Qualcomm used for FLO TV. The FCC has decided to combine review
of this acquisition with the T-Mobile acquisition.
(MetroPCS is deploying LTE on its AWS holdings in 700MHz.)
The T-Mobile spectrum that AT&T is excited about is the 2100MHz AWS band, where T-Mobile has significant holdings. Many European handsets run in this band as well, though AWS and UTMS aren’t compatible. AT&T might be looking at a future where LTE phones also allow
operatin on UTMS in 2100MHz.
So in the medium to long term (heh), The AT&T / T-mobile merger is good for customer choice, given that the 700MHz spectrum rules also require the ability to BYO handset.
I understand that current T-Mobile customers feel threatened. If you’re a geek, you probably haven’t thought things through far enough.
T-Mobile’s 3G (marketed as 4G, but not really a 4G network) services run in 1700 MHz and 2100MHz. They have 2G services in 850MHz and 1900MHz, but the 850MHz services aren’t actually operated by T-Mobile (these are operated by competitors and accessible via roaming agreements.)
Apparently another Apple employee has lost another iPhone prototype in a San Francisco bar. At least three articles linked from the Hacker News New Posts page, http://news.ycombinator.com/newest
Something I wasn’t aware of until a friend was looking into how to deal with poor reception at home:
Many phones (some Androids, and oddly most all Blackberrys) support a feature called UMA or GAN, which allows them to seamlessly route calls/data over wifi networks they have access to as well as the cellular network. I wonder if that might be a key part of a disruption of the current model…
> One of the classic examples is the disruption of the Steel Trust by the introduction of electric furnaces.
What are you talking about? Electric arc furnaces (EAFs)?
When you mention the “Steel Trust”, do you really mean “The Corporation” (USX)?
Nucor certainly leveraged the capital cost advantages of mini-mills (EAFs) into becoming the 2nd largest US steel producer, but there are many other factors to be considered when talking about their success. They run an extremely thin management layer, decentralizing the decision chain as much as possible. They run no union shops, and despite management not engaging in ‘union-busting’, no successful union certification election has ever been held at a Nucor shop. No Nucor employee has ever been laid-off due to a work-shortage. The company engages in a very egalitarian culture with its employees.
You should check it out sometime.
Peter said: How about banning unfair contracts (including locked phones) and requiring full portability with SIM cards or equivalent for all new phones after a certain date?
What’s “unfair” about a locked phone?
You don’t like it, yes. (I don’t really like it either.)
But that’s not what “unfair” means.
Perhaps of some interest WRT this post: A low-cost, low-power DIY cellular data network
When the government does not interfere, there are (especially in our age) always potential options to bust up monopolies in the free market.
Hmmm. Mesh networking.
Remember that guru that started posting to the thread, because he’d been working on mesh networking for over 5 years?
Remember that company he worked for?
Remember the company that bought that company?
Remember the company that bought that company?
As for Clayton, here’s what he had to say about Jobs:
Apparently, near as I can follow his twists and turns, Christensen is so wedded to his innovator’s dilemma construct that he is now saying that the only way to make profits, lots and lots of them, the way Apple does, is to not care about them. I wonder if this should apply to every government agency and non-profit?
Christensen has come to the conclusion that he is right about innovation and disruption. And when he is not, it’s because the company isn’t concerned about profit. If you believe that, you have never been on the other end of a sourcing agreement with Apple, nor understand how they operate.
It’s time for Christensen to put the big speaking fees on hold and go back to the drawing board. (And you, in-turn to stop being a follower.)
As for your concern that Apple isn’t disrupting its iPhone business, we don’t know what Apple’s “October Surprise” is, yet.
Fully connected mesh networks are thermodynamically inefficient. Nature prefers the hub-and-spoke, i.e bifurcating tree like the internet and mass transport topology.
Ditto suburbia is economically inefficient. So with the coming debt defaults, I think we will see the end of suburbia and it will be more profitable to provide wireless service only big cities and mass transport. Outliers will pay much more. I think I had read that asian carriers, such as in Philippines are much more profitable, because the population density is so much higher, and they roll out high-end technologies only in the major cities, on a lag from the western world, as the technology gets cheaper.
> Ditto suburbia is economically inefficient.
Suburbs provide some things that cities don’t. Of course, there are also things that cities can provide more efficiently than suburbs.
Claiming that either one is “economically inefficient” is like saying that there’s a “best car”. There isn’t. Or rather, the answer to “what is the best car?” depends on what you’re trying to do with said car.
Have you been reading Shakespeare lately? Last week, Exeunt, today Alarums …
If the government owned all the farmland in the country and rented out slivers of it, with tightly controlled use regulation, what would happen? In my opinion, what would happen is that a bunch of small farmers would sign up, but over time they would be bought out by the big boys who would slowly consolidate the land into big chunks to gain the benefits of “economies of scale”. They would also start some legislative and regulatory capture, to make it harder for the non big boys to compete. Eventually, the farm land would be dominated by big politically connected players, choice would shrink, prices would increase, and you’d have to eat your broccoli whether you liked it or not.
The cell phone bit hauling market is an oligopoly because the government owns the farmland, and tightly controls it, meaning long term investment, innovation, systematic optimization, and competition are greatly impaired.
I live in the midwest, ADM notwithstanding, there are a lot more farmers than there are cell phone companies. (ADM also being a creation of government, but that is a different story.)
The cell phone competitive market is kind of like fleas fighting over who owns the dog. The government trying to fix the problem is kind of like someone stabbing you in the gut, and then offering to drive you to the hospital.
Low population density has lower economies-of-scale for just about everything, efficiency of errands, roads, transportation, electric grid, parks & playgrounds, service businesses, etc.. All all the infrastructure has to be maintained, and much of the infrastructure in the USA very old and crumbling. Suburbia was subsidized by federal money for highways as an extension of FDR’s New Deal politics after WW2, which made USA highly dependent on oil for transportation. There was always a political incentive to create more highways, because those with land along the routes would see the value of their land instantly jump by 1000%. This was fueled with debt, which is now coming due. We will have a reversion to mean towards densification, with the coming debt contraction. Many of those houses built in this housing bubble, will be left to pasture.
P.S. I don’t believe in AGW nor “peak oil” frauds. All of the world’s oil production is nationalized, so I don’t trust the data on reserves nor the incentive for exploration.
@Joe: Just you wait; next big nanotech breakthrough and he’ll be talking about Atomies.
Looking at the diagram in the OP, I’d say that a Sprint/T-Mobile merger would be healthier for the marketplace than the proposed AT&U/T-Mobile one. This would leave us with a solid triopoly (?), instead of an effective duopoly with a weak third player who is significantly smaller than the other players.
I don’t love the idea of further consolidation here, as what I really want is to race quickly into the era of bit-haulers competing to move my bits for the lowest possible rate with no coupling to anything else. But that won’t come quickly, only when the firms have exhausted all other options, and they may be able to defer it long enough to recreate Ma Bell first.
“recreate Ma Bell”
Yes, it will have to happen. There is no *need* for competing communications networks, and we are clearly headed towards their elimination. (Maybe we’ll end up with one big one plus one small one that the big one tolerates to keep the antitrust regulators off their backs.) People will complain when their bills go up, but things cost what they cost. Remember that when Ma Bell broke up, we did get lower phone rates for some things, but we also lost Bell Labs. Unix couldn’t happen now, in the present business climate.
Yes, city people will have to pay more so that country people don’t get screwed. It’s collectivism, I know, but the nation requires it.
@Cathy: “…recreate Ma Bell…”
@LS: “Yes, it will have to happen. There is no *need* for competing communications networks…”
Yes, there’s no need for competing handset manufacturers either. We should standardize on a single phone manufacturer making a small number of models, given the capital costs of such manufacture and the low margins in that business. Likewise, there’s no need for competing car manufacturers. One company can readily handle the demand for U.S. cars, and given the fixed costs of running a plant we’ll likely see lower prices vs. having to run a number of competing plants. We don’t really need multiple grocery store chains, either; there is another market where we can consolidate into a single coast-to-coast chain.
But I can’t shake this bad feeling that this has been tried before with less than stellar results….
(Note: Sarcasm alert above, for those who think I’m seriously proposing this.)
So, while I agree with concerns about regulatory capture, I’m not convinced that just allowing unfettered monopolies to run rampant is a good solution either. Also, eliminating spectrum regulation just doesn’t make sense – does that mean I can just go ahead and fire up a broadband jammer in my backyard and disrupt any wireless communications for my town (and what if I modulate my pirate radio station on that jammer and call it free speech)? Getting rid of the FCC entirely makes as much sense as trying to fix the IPv4 crisis by getting rid of IANA and just telling everybody they can use whatever IPs and broadcast whatever routes they like.
I think a better solution is to identify the true natural monopoly, regulate the living daylights out of that, but then limit the scope of its operations ONLY to what it needs to be. Transmission of packets over limited spectrum is a natural monopoly, but routing those packets in a way that creates a phone service is not. Running cable pairs from homes to a central office is a natural monopoly, but providing DSL service over those cable pairs is not. Utilities should do nothing more than operate a single natural monopoly within a defined geographic area, and should be forbidden from doing anything else. Utilities exist to serve the public interest, not to grow for the sake of growth.
Kind of a recurring theme in the Obama administration, we’ll tell you what’s good for your economy. And if we decide your acquisition of T-Mobile is “bad for America”, we don’t have a problem at all forcing your commitment to pay your competitor $3 billion to its parent Deutsche Telekom because we pulled you out against your will.
Not to mention airspace and a roaming agreement worth considerably more.
The termination requirements are designed to protect Deutsche Telekom and T-Mobile in a particularly precarious deal, said Robert Bell, co-chairman of law firm Kaye Scholer’s antitrust practice group. Waiting for the controversial proposal to go through could leave T-Mobile vulnerable as key employees consider leaving and competitors circle, Bell said.
“Agreeing to this fee was part of the price AT&T had to pay to convince T-Mobile to go forward, to take a calculated risk in this transaction” he said. “Typically, the longer it takes to get to closing, the more problematic it can be for the seller. You’re really putting your company in limbo.”
Someone remind me again why businesses are unwilling to invest capital to expand right now? Why they want to punish Obama by sitting on their capital and adopting a wait and see attitude?
What could it be, what could it be?
Mobile service is what is called a natural monopoly. The only thing that’s really prevented a complete merger is the fact that there are two technologically incompatible systems in use. Once everyone’s on LTE though, that barrier goes away.
Whether we like it or not, we never going to have multiple competing carriers on the same tech for long in this country – we’re just too large.
And I’d bet a nickle that if AT&T makes the right donations, the deal will go through. Maybe Lanny Davis can take care of it.
@Cathy: There’s nothing to stop competition in handsets, automobiles and other individual possessions. As Brian points out, telephone service is a natural monopoly. Other utilities such as electricity and gas comnpanies, ditto. You just regulate them as best you can to keep the gouging down as much as possible.
Nobody (with the possible exception of the railroads) objects to the government-built and operated highway system. Communication systems are pretty much the same. Just keep some spectrum in reserve for the inventor that produces the next disruptive technology….
linux dot org cracked (rooted), film @ 11
> So, while I agree with concerns about regulatory capture
hold that thought
> I think a better solution is to identify the true natural monopoly, regulate the living daylights out of that, but then limit the scope of its operations ONLY to what it needs to be.
and exactly how are you going to do that in a world where regulatory capture is working against it?
> Utilities should do nothing more than operate a single natural monopoly within a defined geographic area, and should be forbidden from doing anything else.
There’s your problem – you think that your notion of “should” will somehow stop folks from enacting their version. You’re wrong.
> Utilities exist to serve the public interest, not to grow for the sake of growth.
Utilities are staffed by folks who are going to work to serve their interest.
I find it interesting that tech folks who would presumably laugh at any proposal requiring perpetual motion will happily propose schemes that rely on the human equivalent.
>I find it interesting that tech folks who would presumably laugh at any proposal requiring perpetual motion will happily propose schemes that rely on the human equivalent.
Yes, it’s very odd. It’s as though they think people in “government” or a “utility” will stop behaving like, er, people.
> Low population density has lower economies-of-scale for just about everything, efficiency of errands, roads, transportation, electric grid, parks & playgrounds, service businesses, etc..
You’re assuming (1) that cost of production is the only relevant factor and (2) that cities can produce the same things that suburbs can. Both assumptions are wrong.
Cost of production is only half of the equation. The other half is what you get. You’re assuming equivalence where that’s simply not the case.
Consider the private backyard. A shared park isn’t the same. And, lower density actually works in favor of parks because there’s less wear and tear, not to mention a busy park isn’t the equivalent of a mostly empty one.
Cities are good for things where high-utilization is good, or at least acceptable. Not all things fit in that category.
Suburbia continuing forever would be perpetual motion.
I disagree that USA can continue to subsidize the “country”. Many didn’t object to collectivist highways, FHA, Freddie Mac, etc.. while the dollar was the reserve currency making it possible to borrow from the rest of the world. But that is not sustainable, and we’ve reached the actuarial limit, especially given our population age pyramid contains a boomer bulge reaching the “scale down” and “move closer to conveniences” age. Including regulatory capture, I discussed via email with the statistician MW Hodges that the total govt share of the national income is likely north of 75% in the USA (if we had complete data) and provably north of 50% (with limited available data), or perhaps 90+% on an actuarial basis (but we don’t have data to prove it).
My personal thought is suburbia appears to be a idealized lovefest with the agricultural age, sans the agricultural economy (local production of food) an that would sustain it. Idealized because profitable agriculture involves lots of mud, because it is not cost efficient to concrete all the pathways. Those who want to live in the country will either have to subsidize themselves, or do agriculture. Apparently the FDA and Monsanto are determined to monopolize agriculture.
I don’t view this as a bad outcome, rather a necessary optimization of specialization. Cities are more dynamically interconnected and superficially social. And the country will still be there for those who want to pay for it or who want to escape that technology hum.
Could you make a specific economic case where suburbs are more efficient?
Efficiency depends on what you want. Suburbs have it all over cities in terms of privacy, comfort, and personal space. And efficiency is only one of many considerations when choosing alternatives/making choices.
“Natural monopolies” depend on what you consider important. In pure efficiency of production and energy use, for example, all agriculture and manufacturing is as much a “natural monopoly” as cable TV and wireless networks.
Hayek’s *The Fatal Conceit* and Pournelle’s “Iron Law of Bureaucracy” get to nearly the same point through different paths — all bureaucratic organizations, especially government because the counter-pressures are even weaker there, get to the point where they are primarily serving the desires of the bureaucrats rather than whatever end the bureaucracy was created to serve. Government schools are an especially vivid example right now.
I was expecting this response:
Efficiency depends on what you want
If everybody could have what they want, then no one would be rich, and the world would be perfect without the concept of cost nor thermodynamics. Apologies for the forceful reply, but it is an absurd delusion that violates all science, to assert that efficiency is correlated with desire. Refute my link please.
@William B. Swift:
Yep. That’s it exactly. I explored this idea of mesh networking and while ESR’s proposal addresses a lot of issues, it still doesn’t address this one entirely. I don’t see the carriers allowing people to use their own backhauls against them. At all. They may look that stupid, but they aren’t really that stupid.
What if Google’s dark fiber backbone is married to wimax for wireless local loop to connect to the end user wireless mesh…
Comes under the heading of “as long as I’m wishing, I’ll ask for a pony too”. That’s a lot of ads to sell to justify that sort of thing and you’re back to a monopoly anyway.
Sorry, Shelby, but your most recent response places you squarely in the “Too Stupid to Argue With” category.
> So, while I agree with concerns about regulatory capture, I’m not convinced that just allowing unfettered monopolies to run rampant is a good solution either.
Excellent, can we eliminate the biggest monopoly of all first? That would be the government.
> Also, eliminating spectrum regulation just doesn’t make sense
Who is proposing that. I’d propose we treated spectrum the same way we treat every type of non sharable property, which is to say with private ownership rights.
> – does that mean I can just go ahead and fire up a broadband jammer in my backyard and disrupt any wireless communications for my town
Git off my property you varmint, or you’ll see the business end of my shotgun.
> Getting rid of the FCC entirely makes as much sense as trying to fix the IPv4 crisis by getting rid of IANA
The IP address problem could have been solved in a similar way. We could have defined an IP address to be the physical coordinate of the issuing authority. It takes about 52 bits to represent your position to within one square meter, add another 12 for vertical height, and another 64 to give a full set of IP addresses, and then anyone who owns a cubic meter of volume can issue more IP addresses than you could ever need, with the same number of bits as IPv6, no central issuing authority required. From what I see, the IANA isn’t doing such a great job with this whole IPv6 thing anyway.
Uh, Jessica Boxer, you forget:
– Farms are heavily subsidized, Monsanto and otherwise. So don’t point to them as bastions of the free market.
– Who resolves your geolocated IP’s?
– What happens to privacy with geoloctaion-appended IP’s?
It’s just a bad idea to merge AT&T and T-Mobile, and I don’t need a pseudo-intellectual argument to know that. We dodged a bullet. I’m no fan of big government but I toasted the DOJ for putting a stop to it last night.
>There’s nothing to stop competition in handsets, automobiles and other individual possessions.
>As Brian points out, telephone service is a natural monopoly. Other utilities such as electricity and
>gas comnpanies, ditto.
This might be going wildly off tangent, but I’m not so sure that many of the things we label as “natural monopolies” are. My understanding of telephones was that we did just fine until post (during maybe?) WW II when AT&T convinced the government that telephones were a “natural monopoly” and they needed to be given the legal weight to be the only carrier in the country. The often cited reasons (or the ones that I heard growing up) for why telephones were a natural monopoly were
A) because it was too difficult to build out a competitor
B) because it would be awful and inefficient for everyone to have 3 or 4 or 5 separate lines coming into their house for phones.
If A were true, why did we need laws making competition in the telephone space illegal for the longest time?
If B were true, then the fact that you can now get your telephone service from a cable provider or TV service from your phone company should be a problem, but I only see it as a good thing.
I can almost buy natural monopoly arguments for something like roads, but for a lot of other things, I wonder if we haven’t deluded ourselves into thinking things can’t be any other way.
> Could you make a specific economic case where suburbs are more efficient?
I gave one. Suburbs more efficiently provide private backyards. There are plenty of others.
> > Efficiency depends on what you want
> it is an absurd delusion that violates all science, to assert that efficiency is correlated with desire.
No one said that efficiency is correlated with desire. Instead, we’re pointing out that what what you desire matters too – that’s not an “absurd delusion”, it’s basic truth. For example, I don’t care how efficiently one can make cigarettes. (Which reminds me, the statement “efficiency is correlated with desire” is untrue, but it doesn’t “violate all science”.)
Cities and suburbs provide different things. In addition, while cities provide some things more efficiently than suburbs, suburbs provide some things more efficiently than cities.
Which reminds me – efficiency isn’t the only important factor. I’m pretty sure that Shelby doesn’t wear the most efficient clothing, and so on. (I’ve played this game before. I’ve gone through someone’s personal choices and found that they almost never made the “most efficient” choice.) It’s unclear why Shelby thinks that others should behave differently wrt the things that they value.
> My personal thought is suburbia appears to be a idealized lovefest with the agricultural age
That’s nice, but since most of the folks who live in suburbs don’t feel that way, it’s irrelevant if not harmful to any discussion other than “how does Shelby think”.
I get that you like cities. It would do you good to understand that other people like different things.
@tmoney: Both A and B were actually true at the time. AT&T did some really good things back then; a lot of the people that pulled for the later breakup were being penny-wise and dollar-foolish.
@Jessica Boxer: Excellent, can we eliminate the biggest monopoly of all first? That would be the government.
@Rich: > Also, eliminating spectrum regulation just doesn’t make sense
@Jessica Boxer: Who is proposing that.
Ughm. You did. In the previous sentence as fact.
@Jessica Boxer: Git off my property you varmint, or you’ll see the business end of my shotgun.
Say this to my friends with tanks and grenades :-)
There are only two outcomes: either someone will be able to physically oppress all contenders for the “top position” (then you’ll have new government) or the whole thing dissolves and country/world regresses back to medieval times. The first outcome does not really solve anything and while last one solves problem of spectrum (because you’ll lose the ability to build radios) it’s hardly an ideal solution.
@Jessica Boxer: We could have defined an IP address to be the physical coordinate of the issuing authority. It takes about 52 bits to represent your position to within one square meter, add another 12 for vertical height, and another 64 to give a full set of IP addresses, and then anyone who owns a cubic meter of volume can issue more IP addresses than you could ever need, with the same number of bits as IPv6, no central issuing authority required.
You can use such addresses now if you wish. The question then becomes: how will you convince anyone else to use your “no-central-authority IPv7 addresses”? The IPv4-to-IPv6 was never about creation of IP addresses (that’s easy) and was always about changes in the networking architecture (that’s hard).
@Jessica Boxer: From what I see, the IANA isn’t doing such a great job with this whole IPv6 thing anyway.
It does much better job then whiners who post ridiculous things on random blogs and offer nothing constructive besides that.
> A) because it was too difficult to build out a competitor
Many competitors would be willing to build out the easy, profitable part of the network (especially if they were granted legal rights to dig up your yard at their convenience), but that would have meant un-hiding the subsidies in providing “universal service”.
> B) because it would be awful and inefficient for everyone to have 3 or 4 or 5 separate lines coming into their house for phones.
Of course it is inefficient to string two cables where one would suffice. But there are other inefficiencies in the alternatives. One taste for that kind of debate can be found in any discussion of Broadband over Power Lines. I love my FiOS, but from Saturday 1900 until Monday 2000 it would have been nice to have enough current to power POTS coming into my home over twisted pair as some of my neighbors still do. Different lines bring different capabilities.
# khim Says:
> Good idea.
As it happens, I was being sarcastic. I am not actually in favor of entirely eliminating government, though I do believe that is a position taken by this blog’s host. However, I am in favor of eliminating most of it.
> Ughm. You did. In the previous sentence as fact.
Nope, one of the legitimate functions of government from my pov is the defense of private property with the use of force.
> There are only two outcomes:
You mean you can only think of two possible outcomes, which is not the same thing. I suggest your read David Friedman’s “Machinery of Freedom” before you dismiss anarcho-capitalism so glibly.
> You can use such addresses now if you wish. The question then becomes: how will you convince anyone else to use your “no-central-authority IPv7 addresses”?
I presume this is a serious question, so I will answer: exactly the same way that IPv6 got ratified. Nonetheless, I imagine the problem here is not that you don’t know that, it is that you completely missed the point. So let me clarify, the point is that many things that people think can only exist with a central authority in fact don’t need a central authority at all.
Her proposal isn’t actually that unrealistic; for example, we could simply assign the 8000::/(3 or 4) block for this purpose, and it wouldn’t be either disruptive or particularly difficult.
Libertarian dogma. Antitrust law and competition-promoting regulation have worked phenomenally well in Europe, where 4G runs at 4G speeds, all cellphones are compatible with any network, and onerous contracts are pert-near nonexistent.
If U.S. carriers were forced to compete on quality terms rather than rely on oligopoly and vendor-locking, we’d see quality of service improve here correspondingly.
“I find it interesting that tech folks who would presumably laugh at any proposal requiring perpetual motion will happily propose schemes that rely on the human equivalent.”
“Yes, it’s very odd. It’s as though they think people in “government” or a “utility” will stop behaving like, er, people.”
Definitely a case of “Quis custodiet ipsos custodes?” Who will regulate the regulators, who are people too? I’ve never seen this problem adequate addressed by the political Left, who seem to think that *of course* those wonderful philsopher-kings would never do anything but what is right and proper. One might almost think that they don’t want anyone to look too closely at their real goals.
Cathy, I have to say in defense of the founding fathers of the USA that they were very aware of “who will watch the watchers” problem. And they devised many intricate mechanisms to do so via competitive government. As examples: three independent branches of government, one bifurcated between popular elections and state appointment; an electoral college; an independent judiciary with powers of review; regular popular elections; a constitution of enumerated powers; a bill of rights just in case they didn’t quite get the “enumerated powers” thing, especially the first and second amendment; federalism and more generally fractionating government into multiple levels and chunks and so forth.
Their design was admirable, and we are all richer for it today. However, each of these different mechanisms has been subject to continuous attacks since Madison’s ink dried, and today, many of these walls are broken down. I personally thought it was a turning point in our republic when, on being questioned on the constitutionality of ObamaCare, the speaker of the house looked dumbfounded and replied: “Are you serious? Are you serious?”
I personally believe the turning point must have been far before this — enough that the prevailing “knowledge” in the governing body shifted so that the Constitution no longer limits lawmakers in power by design, but mandates they act “in the defense of the public good” (or some other collectivist claptrap).
You know, I was reading Dr. Martha Stout’s excellent book The Sociopath Next Door. In it she claims that 4% of Americans are sociopaths, and contrasts it with scoieties like India, China, or Japan where around 0.05% of the population are sociopathic. Though sociopathy is partly genetic, the key factor, according to Dr. Stout, is the culture. A culture that constantly sends messages of “you can do/be/have anything you want” — such as ours — is going to be much more fertile soil for the development of full-blown sociopathy than one such as India or China where responsibilities to family and community come first.
The “who watches the watchers” problem, regulatory capture, etc. are vastly more problematic in a society where everyone is presumed to be acting only — or primarily — in their own interest. But not all societies are like ours, where acting in self-interest is viewed as an inherent good; if anything our culture is the aberrant one for being structured around this meme. Throughout human history communitarian collective societies have been the norm, not the exception. Look up what “ubuntu” really means. It’s a concept as old as humanity itself. In such societies, the watchers are watched by the community, have been since the day they were born, and are far less likely to make the sort of sociopathic power grabs we’ve been conditioned to accept as “human nature”.
>Throughout human history communitarian collective societies have been the norm, not the exception.
So have cannibalism and infanticide. “Communitarian collective” societies are a great deal for those lucky enough to be born into power positions within them and a perpetual ration of petty oppression, humiliation, and shit for everybody else. Conversely, individualistic societies treat women, children, low-caste and poor people, and marginaux of all kinds far, far better. They’re also wealthier and have much higher social mobility.
# Jeff Read Says:
> The “who watches the watchers” problem, regulatory capture, etc. are vastly more problematic in a society where everyone is presumed to be acting only — or primarily — in their own interest.
I’m sure you are not claiming that India and China are better societies, less corrupt, less subject to regulatory capture are you?
> Throughout human history communitarian collective societies have been the norm, not the exception.
Throughout human history, tyranny, poverty, starvation, plague, war and death have been the norm, not the exception too.
> Look up what “ubuntu” really means. It’s a concept as old as humanity itself. In such societies, the watchers are watched by the community,
The watchers oppressed the people, brutally and with violence throughout most of human history. For sure, before the bad guys managed to accumulate more and more power, when their scope of operation was smaller they had less power to oppress. I’m in favor of smaller units of government for that reason (federalism being at the core of that in the US Constitution.)
In reference to ubuntu: if you think tribal Africa was such a joyous place to live, I suggest you go visit it — it is available today in Zimbabwe. Let me tell you, I have been to Africa. It really sucks there.
> So have cannibalism and infanticide.
FWIW, I don’t think cannibalism has been all that common in human history. Not that it hasn’t existed, but it does seem to be one of the few universal taboos.
>FWIW, I don’t think cannibalism has been all that common in human history.
There’s a revisionist movement in anthropology that’s made a lot of popular hay by claiming this. They’re the same people who exalt communitarian tribal societies as peaceful arcadias, and they’re full of shit.
In reality, cannibalism was a widespread practice until relatively recently in the Pacific Islands (there may still be a few very old people alive there who can remember the taste of “long pig”) and is still practiced ritually in Sub-Saharan Africa. Until the Spanish Conquest, cannibalism was routine in Central America and the Andes – recent research shows that the Incas actually fattened children for ritualized slaughter and consumption. Victors in battle among Tamil-speaking cultures of South India ate the flesh of their defeated enemies until well into historical times; Iroquois Indians tortured war captives to death and then ate them. There’s archaeological evidence of cannibalism in Europe into the early Iron Age.
That’s just stupid. If you were a customer of Gray Telephone instead of Bell Telephone, you’d still only have one line coming into your house. It’s just that Gray and Bell would have to be linked together, so that a call originating on Gray could go to Bell and vice versa. The two competing companies might not like doing that, but their customers would insist upon it, as would the local governments that grant them special right of way privileges to allow the wires to be strung between poles or buried under public streets and sidewalks as well as private property.
Expanding on Jeff Read’s comment, I’d like to compare American constitutional government with the British model. In America, our constitution is the product of the late Enlightenment admiration for elaborate clockwork mechanism, like the solar system or Harrison’s chronometer. The Founders built in an elaborate system of checks and balances, expecting to keep us democratic automatically.
I am certainly not complaining…after more than two centuries we are still democratic…but look at the British. Their constitution isn’t even written down, yet everyone knows what it is, and all agree to abide by it. Parliament is supreme…no checks and balances, really…yet they are still democratic, too. It’s just that nobody there wants to be King of the World (not even The Queen!), and if someone does show up to try, the British won’t let him. Their problem today is a large immigrant population that hasn’t absorbed their way of life – yet.
Our (American) problem today is the lack of agreement among ourselves as to what our constitution says and means, including a few parts that are unwritten. (Yeah, I know that we aren’t supposed to have unwritten constitutional stuff, but we do.) Too many disputes end up in the Supreme Court.
> You know, I was reading Dr. Martha Stout’s excellent book The Sociopath Next Door. In it she claims that 4% of Americans are sociopaths, and contrasts it with scoieties like India, China, or Japan where around 0.05% of the population are sociopathic. Though sociopathy is partly genetic, the key factor, according to Dr. Stout, is the culture.
If China has so few sociopaths, how did they staff their purges?
> A culture that constantly sends messages of “you can do/be/have anything you want” — such as ours — is going to be much more fertile soil for the development of full-blown sociopathy than one such as India or China where responsibilities to family and community come first.
However, a very dependent community is far more vulnerable to a sociopath. A sociopath who has power is far more dangerous than one who doesn’t, and dependent communities make it impossible to avoid a sociopath’s evil.
> In such societies, the watchers are watched by the community, have been since the day they were born, and are far less likely to make the sort of sociopathic power grabs we’ve been conditioned to accept as “human nature”.
Wrong. Sociopaths always grab for power. In dependent communities, you can’t avoid them.
> Their constitution isn’t even written down, yet everyone knows what it is, and all agree to abide by it.
Really? I can name at least one “right of Englishmen” that went away despite this “agreement”.
> Parliament is supreme…no checks and balances, really…yet they are still democratic, too.
Really? Then why doesn’t the UK have capital punishment? I ask because there’s absolutely no support for it in the political class despite 70+% support among the population as a whole.
“Really? Then why doesn’t the UK have capital punishment? I ask because there’s absolutely no support for it in the political class despite 70+% support among the population as a whole.”
Oh, it’s easy enough to be tough when a pollster asks the questions; demanding death as public policy in front of your fellow citizens is another thing entirely. The days when public hangings were popular entertainment in England are long over.
That’s because it’s easier to get five Justices to find a penumbra of an emanation somewhere than it is to get 2/3 each of the House and Senate, and 3/4 of the state legislatures to all agree on something. Thus we have ta “Living Constitution”: somehow the words in it don’t mean what the people who wrote and passed those words thought they meant when they wrote and passed them.
/me looks back at that last sentence trying to figure out how to make it more sensible, realizes it isn’t possible, because the idea it’s trying to explain can’t be made sensible.
If our Constitution is a Social Contract, then such reasoning self-destructs, for no contract can exist unless all the parties agree to the same terms. By appealing to the Supreme Court, advocates of the Living Constitution are admitting that they’re changing the terms of the contract (and not by the amendment process that was… agreed to in the first place).
Pardon me for hijacking this thread by bringing up the original topic.
I share Eric’s concern about the power of free market and that the DOJ seems to be deviating from that path with this action. Also, that T-mobile’s survival is questionable in the current circumstances. The problem with that logic is that it assumes an inevitable conclusion, and that government intervention is interfering with natural processes that should be left alone. The inevitable conclusion of T-mobile’s demise is indirectly a result of government policy to date that favors well-funded big players over lesser ones. I am hopeful that the DOJ’s salvo is an indication that the regulatory agencies are starting to wake up to this.
Eric, you said you’re a T-mobile customer. I know a few other people from your neck of the woods who are as well. I would love to be one. Unfortunately for me, there is only one carrier with good service in my area (Verizon). AT&T is next best (voice but no data at my house, nothing at my place of work) and Sprint/T-mobile don’t even register on the chart. I respect the fact that Verizon chose to build in my area when others wouldn’t/couldn’t. But, dammit, I’d like to have a choice. Killing off T-mobile doesn’t get me any closer to that. Unless AT&T’s post-merger promise to build out includes my area which has so far escaped them and T-mobile. I’m not holding my breath.
Let’s be glad that, at least for now, it seems that a federal bureaucracy is acting like it cares about consumers. Doesn’t happen often, savor the moment.
Well, obviously, because they were silly enough to write it down in 1689! It’s only the unwritten stuff that gets preserved!
(Well, okay, jury trial managed to survive despite being written down, but only because Baroness Thatcher managed to rally the House of Lords in its defense against Labour.)
This would be pretty cool:
I bought a midrange not-quite-smartphone just before low-end Android took off, so I’m in no position to speculate as to the credibility of the above scenario.
“There’s a revisionist movement in anthropology that’s made a lot of popular hay by claiming this.”
That is not “revisionist”. That claim has been made from the start. If I remember correct, this claim has been very popular in the USA at least since the 1960s. Which is odd, as the US still practices public human sacrifices, so ritual cannibalism should not be so far off.
Anyhow, cannibalism is mostly ritual for obvious economic reasons. It is also quite unhealthy, as the cannibal will contract every disease and parasite carried by the victim. The Kuru infections of New Guinea are a very good example (https://secure.wikimedia.org/wikipedia/en/wiki/Kuru_%28disease%29).
“Antitrust law and competition-promoting regulation have worked phenomenally well in Europe,”
I agree. I still have to see any indication that the European customers with heavy regulation (even roaming charges are capped) are worse off than all those deregulated markets with “competing standards”, like the US.
So with much more regulation, in what way am I worse off as a European consumer? I pay less for more quality AND more choice.
I know what the answer is, in the long term the Free Market of cell phones will win and the European way will end in misery. But in the long term, we are all dead and cell phones will have been abandoned. So I do not care while I have better service for less money.
“However, a very dependent community is far more vulnerable to a sociopath.”
This is pure nonsense and shows a complete lack of understanding of how these cultures work. A very “dependent community” as you call it, will work by reciprocity. You never get anything for nothing in Japan, China, or even Russia. That is something sociopaths can only adapt to with extreme difficulty.
Outside (civil) wars, socio/psychopaths only “flower” in “trusting” communities. Or communities that specifically recruit them for anti-social jobs. If you need torturers, death squads, or a CEO to betray employees, (other) shareholders, and customers, then socio/psychopaths really flower.
(before you start, China has been in a civil war between 1911 and 1970, up to 1948 fought by war-lords and the Japanese, then between, regional, factions of the communist party, sociopaths did indeed flower in this environment)
“Throughout human history, tyranny, poverty, starvation, plague, war and death have been the norm, not the exception too.”
That is the writers bias. What gets written down, is the exception. If it is in the newspapers, it is exceptional. If it is in the chronicles, it is exceptional.
In most of history, people dies of simple diseases, accidents, or crimes. Every decade, there was a famine, and every few decades, a local war. That is 99% of all history. The really bad things, like continental plagues that kill 30% and more of a population, or 100/80/30 years wars, they happened once a millennium or so. But in hindsight, we lump together things that are separated by half a continent and several generations. Because they stand out of the boring facts of normal life.
@William B Swift: The following is not stupid, and it is a delusion that local-order “efficiency” correlates with overall efficiency. I will grant that temporary efficiencies are still efficiencies, but it is the INefficiency (i.e. antithesis of efficiency) of backyards that correlates with cost of providing low-population density resources such as wireless service, which impacts the outcome of the topic of this blog.
Your example “efficiencies” for surburbia only apply in a local-order, which is an unsustainable semi-closed system (because there is no such thing as a closed-system, due to Coase’s Theorem and the 2nd Law of Thermo, which says entropy is always increasing globally).
I asked you to provide an economic case for suburbia, which means that the economics should be sustainable.
An unsustainable system is not efficient, because is causes a waste of time and resources. For example, debt is very “efficient” at stimulating demand which induces supply, which thus induces the demand for more debt. But this local order collapses, because it is not creating more entropy (independent possibilities), because the demand and supply was not driven by orthogonal necessities, but instead by a top-down distortion of price with a temporary top-down controlled distortion of the information in the value of capital. The top-down control is because one entity (the central bank) is controlling the rate of fractional debasement, which is one of the levers for the value of capital.
One can argue that short-term “efficiencies” are efficient in producing short-term failure, when they are inefficiencies in the global cost structure. And that local orders are part of natures way of annealing the overall trend to maximum entropy, i.e. Apple kickstarted the smartphone era, even though their model is not as long-term efficient as an open one such as Android. So in that respect, I grant you that it doesn’t violate all science. I meant that it violates all science in terms of the efficiency of the global trend. However, my point still remains true, which is that suburbia is not sustainable long-term, because it is not long-term efficient.
@Winter: I didn’t write what you attributed to me.
I get that you like cities. It would do you good to understand that other people like different things
I don’t favor cities over rural life. I actually love being in nature and I share that lovefest for the “Leave It To Beaver” ideal.
However, one thing I had to learn the hard way, which we observe that ever westerner makes the same mistakes when they come here, is that when I tried to live my western life in the Philippines, I learned that it is very expensive to live more than 20 meters from a government provided road and electricity. Most everything that I tried to reproduce from my western life, simply didn’t work economically, because I was paying for the subsidy personally. So that is when I had the epiphany that it isn’t cheap oil, but rather the ability of the west to run large government subsidies with debt, that is the difference between the third world. And that is why I say, it is a mass delusion.
My fault, sorry. That quote was from Jessica Boxer. I have no idea what caused this error.
“So that is when I had the epiphany that it isn’t cheap oil, but rather the ability of the west to run large government subsidies with debt, that is the difference between the third world.”
Roads are not build from debt, but from taxes. That is, people do pay for roads with money they earned. The same for the grids and other utilities. And it is this infrastructure that makes economic growth possible. There is efficiency in population size and infrastructure has historically earned it’s costs back many times over.
And where did you get the idea that humans can live a wealthy life alone in nature? Lone humans tend to die quickly when dropped in the wilderness. In the developing world, “locals” hate nature and prefer the company of other humans, the more the better.
The Constitution as contract idea was thoroughly disproved more than a century and a half ago, see Lysander Spooner’s No Treason: The Constitution of No Authority. The problem with the idea of the Constitution as contract is that a contract only binds those that explicitly agree to it, it cannot bind those who don’t agree, who in fact have never been given the opportunity to agree or disagree.
@William B Swift: “Natural monopolies” depend on what you consider important.
That is a vacuous statement w.r.t if they are long-term (global trend of entropy) efficient. Your hand-waving w.r.t. my point that “it is an absurd delusion that desire correlates with effficiency” doesn’t provide any evidence to support your accusation of my stupidity.
@Jessica Boxer: Excellent, can we eliminate the biggest monopoly of all first? That would be the government.
The government is planning to subsidize suburbia even longer (the feds have been floating an idea in the news about a big housing refinancing plan coming), which will more fully bankrupt the USA. I read the Philippines government (as an example of the third world) is on the order of 17% of the economy (much of the economy is not measured). But there is a lack of roads and good internet far from the big cities. You get what you pay for. People can delude themselves into thinking they aren’t paying for suburbia, but the due date for the debt collapse is approaching. The people will huddle together with the sovereign subsidy until all the real capital has been drained. That is the nature handles low IQ. But even the center of the bell curve has a more prosperous life than kings of yore, so natures method works on the global trend.
We could have defined an IP address to be the physical coordinate
Entities need to move. I vaguely remember Russ Nelson writing in the past about how a free market, decentralized allocation scheme (for domains, IPs, wireless sprectrum, etc) might work.
@VXbinaca: It’s just a bad idea to merge AT&T and T-Mobile
It is impossible for anyone to know that now, and we will only know in retrospect. Nature has a chaotic annealing process that works towards a global trend optimization, that isn’t always readily apparent a priori. For example, since the USA seems determined to go down with with its Titantic suburbia, the most efficient thing may be to monopolize the telcoms as part of the destruction of suburbia. We will see nature’s optimization plan as it unfolds over the coming decade or so. One of the necessary qualities of the annealing of a free market, is the individual actions lack a readily apparent global trend correlation.
@tmoney I can almost buy natural monopoly arguments for something like roads
The global trend optimization could be we don’t need roads any more. There are no “unnatural” monopolies. There are only monopolies and they come and go. It is all part of nature, including the Iron Law of Political Economics, which applies here.
it would be awful and inefficient for everyone to have 3 or 4 or 5 separate lines
Not always true. I have 3 lines coming into my house, so I can insure up-time, load balance, and work around issues, such as one of my providers changes my IP address every minute. Sometimes redundancy is more efficient than optimum bifurcation, when the resource consumed is insignificant compared to the output (or my work). In general this is the problem with top-down pontification. A free market is composed of many individual situations that need to be optimized differently.
@Andy Freeman: pretty sure that Shelby doesn’t wear the most efficient clothing
Clothing is an insignificant resource item, so the inefficiency of clothing is irrelevant to the global trend optimization. There is never 100% coverage of any phenomena in nature. There big resource items are critical to the global trend optimization. Btw, the mostly costly resource which nature is optimizing, is knowledge.
@khim: There are only two outcomes: either someone will be able to physically oppress all contenders for the “top position” (then you’ll have new government) or the whole thing dissolves and country/world regresses back to medieval times.
Technology provides the resolution to resource conflicts, never the government. You never have the solution, until you have the technology to solve it. In this case, we would expect that technology can eliminate the sprectrum entirely. I think we are well on the way towards, refer to Esr’s comments above. Another example is my Copute language is an attempt to create Open Source 2.0, by eliminating the resource contention over intra-code cross-dependencies (i.e. eliminate refactoring with compositions).
It does much better job then whiners who post ridiculous things on random blogs and offer nothing constructive besides that.
Technology eliminates talk. There are those who build, and those who talk. We just need a technology for that, which doesn’t depend on any centralized coordination. It simply is adopted by market because it works better. Perhaps I will look in that someday.
@Jeff Read: Antitrust law and competition-promoting regulation have worked phenomenally well in Europe,
Just wait for the debt bill to come due soon. There unintended side-effects to collectivism, and they are often have the collectivist signature.
“you can do/be/have anything you want” — such as ours — is going to be much more fertile soil for the development of full-blown sociopathy
But not all societies are like ours, where acting in self-interest is viewed as an inherent good
Regardless is the first statement if provably true, the “unlimited resources” requires the delusion of debt (which is intimately connected to collectivism and statism), but it is illogical in your second statement to conflate self-interest with collectivism. Agricultural age societies are also self-interested, but they can’t rely on a debt subsidy, so they leverage their tribe, which is their extended family.
@Kevin Synder: T-mobile’s demise is indirectly a result of government policy to date that favors well-funded big players over lesser ones
The government is subsidizing suburbia, which means it is impossible to get profitable economies-of-scale. Thus the government is causing monopoly in wireless. Now the government will fight against what it is causing. This is typical. But it is the desires of the population that is causing this, they have this delusional lovefest with an idealized agricultural era epitomized by the “Leave It To Beaver” sitcom. If the population couldn’t pull demand forward 30 years with 30 year mortgages subsidized FHA, Fannie Mae, Freddie Mac, etc.. then they would quickly awaken from this delusion.
> esr: [Cannibalism] … is still practiced ritually in Sub-Saharan Africa.
Well, if you wanna talk ritually, then it’s still practiced in most Christian churches in the world at least once a week, if you grok my meaning…
>Well, if you wanna talk ritually, then it’s still practiced in most Christian churches in the world at least once a week, if you grok my meaning…
Er, no. The difference is, in sub-Saharan Africa they still carve up actual humans and eat their flesh. I said “ritual” because this is not a day-to-day practice but associated with African folk medicine and magical beliefs.
In general this is the problem with top-down pontification.
typo+bad block quote tag+no edit feature=even more cryptic comment.
@Winter: Roads are not build from debt, but from taxes.
Debt is an inflation tax, because the money supply is debased at the prevalent interest rate.
where did you get the idea that humans can live a wealthy life alone in nature?
I didn’t write such a notion.
@Winter, I forgot to say that our governments spend more than the receive in taxes, and the debt they create is an inflation tax. So yes you are correct, our roads are built from the indirect tax of debt. And this subsidy causes distortions, e.g. suburbia.
“Just wait for the debt bill to come due soon. There unintended side-effects to collectivism, and they are often have the collectivist signature.”
The northern European (rich) countries are not running into a debt bill. That is the poor southern parts. And they are running into a debt bill because their economies are less productive than those of the north. But this is the eternal “you will be punished in the afterlife”. Actually, the rich part could pay down the debts of the poor part without running into unsurmountable problems. What is much more difficult is to make the poor part stop wasting their money. Paying off their debts would be “the wrong signal” as they say.
And inflation is NOT a debt. You can call it a lot, but it is not an amount of money that will have to be returned in the future. Many countries actually repay their debts, on time. And the debts are incurred, not on the roads and utilities (which run without any borrowing), but on entitlements.
“I didn’t write such a notion.”
“is that when I tried to live my western life in the Philippines, I learned that it is very expensive to live more than 20 meters from a government provided road and electricity. ”
What I know of the conditions in the tropics, being out of sight of a road is basically being dropped in the wilderness. But if that was not what you meant, ok, you did not say that. Yes, without infrastructure, much of what we consider “western life” is dependent on an infrastructure that is generally supplied by “governments”. Your conclusion is obviously different from mine. The message I take home from that is that that there are 7 billion people on this planet because of government provided infrastructure.
And I have not seen even a shadow of evidence that there could be living 7 billion people without government provided infrastructure. The empirical evidence that is there seems to point in the opposite direction, after governments break down, a lot less people are able to survive.
My understanding is that most of the wealthy EU countries have loaned the money to the PIIGS, so no one country can escape the debt default, and this will force them to huddle together into an even more unified fiscal union, even though there will be much “dog & pony show” threatening an EU breakup, to appease populist EU voter angst. There may be exceptions if there are any resource rich Nordic countries which did not intertwine their banking systems and can afford their socialism due to their large ratio of natural resources to population. However, when the global economy eventually succumbs to the severe stagflation coming in 2012, thus resource exports plummet, then resource export dependence may implode their social systems.
My point about Philippines was that without the govt subsidy, I am forced to live in the city when I want resources that (in order to be profitable and exist) require population density, e.g. wireless coverage and internet. And when I do go out to the farms, I expect lots of mud and the need for 4X4 during rainy season. Westerners (including myself when I was still a third world virgin) expect low population density suburbs (i.e. idealized farms) should be paved like high population density cities, with manicured laws, a basketball court, a swimming pool, a tennis court, and with all the same conveniences of cities. I am asserting that if they actually had to pay the debt for it, they wouldn’t be able to afford it at such low density of shared use of such infrastructure (i.e. amortized over fewer workers). They will pay this debt but on a lag, when the demand they stole from the future disappears from the coming present.
I don’t think the recent ability to service debts is indicative of the future, because the actuarial debt of the west is orders-of-magnitude greater than the current debt service, so this problem is going to explode in the coming years. It is exasperated by declining birthrates, especially in Europe. Also there has never been a government in the history of the world that didn’t default on its debt. Even the USA has defaulted on its debt during the Civil War.
inflation is NOT a debt
I didn’t write that notion. I wrote that debt is an inflation tax, because debt and the money supply are correlated.
When all boats are rising on the front-end of the debt expansion, then no one cares that they pay 10x more housing, because they view their house as an investment. But when the demand disappears one the downside of the debt payback, that is where the inflation tax becomes evident.
You will see the effects in Europe and the USA over the coming decade or so. We are not yet at the inflection point, but very close. Then we won’t need to debate theory, it will evident. So I would prefer to just shut up.
My original intention was just to offer a theory that end of suburbia would resolves the issue of this blog. But I can see that touches on that mass delusion, so I better not even go into it. It creates too much back & forth debate. And it is better for me to just wait a few years and shrug my shoulders then. In the meantime, I need to be busy building and not talking. Thanks for the discussion all.
The US budget problem does not result from subsidising suburbia.
It is an effect of the Cold War. To avoid debate on containing the Soviet empire we bought everything. We had the big defense budget, the generous entitlements, the lavish pension plan. The works. We scattered defense contracts throughtout the country so that even the most ardent McGovernite would think twice before shooting his re-election chances in the belly.
The government also made it uneconomic to hire low and semi skilled citizen labor in low value-added enterprises.
Now we have to have those debates that we put off for so long. It would be good if we could do it for this election. We have a large group of citizens elegible to vote now who can look forward to payiing the Baby Boomers’ bills for the next thirty years. That might focus their attention.
“My understanding is that most of the wealthy EU countries have loaned the money to the PIIGS, so no one country can escape the debt default, and this will force them to huddle together into an even more unified fiscal union, even though there will be much “dog & pony show” threatening an EU breakup, to appease populist EU voter angst.”
The problem is not a lack of money to repay the debts of the PIIGS countries. The problem is the defaulting of single countries leading to a new round of bank defaults. In the end, the EU have the money to repay all those debts. You seriously underestimate the economic power of, eg, Germany. The problem is that 1) those who would have to pay, do not want to and 2) that would not solve the underlying problem of low productivity in the PIIGS.
The populist vote should remind you of Europe of a century ago. The idea that “we are great, we can do it alone” is the same as then around 1911 when the French parliament was confident that now was the time for retribution against Germany. If you listen to the people, it is just 1911 again. We know where that lead us.
Your analysis ( and you are not alone) is directed to the wrong end of the stick. The money is unimportant. If everyone is a debtor and a creditor, it is in the end just moving money from one pocket to another. The money we use to secure the debts of Greece is paid back to our own banks who lend it to the Greek in the first place. So our tax money goes to secure our own bank accounts and pensions. It is our own money going in at one end and coming out again at the other.
What is more important is that the EU seems to be unable to take advantage of the economic integration. The fact that Greece and Portugal cannot increase their productivity is much, much more worrying than anything else.
And as a reminder about debt defaulting: An order (or two?) of magnitude more European money disappeared in USA debt defaults than in all the PIIGS combined. But somehow, our local, USA sponsored populist (yes, he is sponsored by USA trusts), does not seem to mind the money we lost in the USA.
# Winter Says:
> In the end, the EU have the money to repay all those debts.
The EU has no money at all, except that which it takes from the hard working people. Your idea that money is just some number on a ledger that circles from one column to another or one pocket to another is just so wrong.
Money isn’t just paper or numbers, it represents value. Value created by the risk of capital, the effort of labor, the innovation of entrepreneurs, and the savings and investment of ordinary people. Or in the case of debt, value which hasn’t even been created yet taken from future generations who have no say in the matter whatsoever. I find it horrifying that you seem perfectly comfortable taking the money from hard working Germans and giving it to profligate dilettantes in Greece.
The problem in Europe is not that the books don’t balance right, the problem is that the Greeks are fat and happy on unsustainable promises, and are coddled with an entitlement mentality as if the world owes them a living. And the stupidity of European monetary union has tied together economies that are fundamentally different. It is like the age old story of the rich, hard working guy marrying the pretty princess, who maxes his credit card, and then cries a tantrum when he cuts her off.
I hope I don’t need to say this, but I will. My characterization of certain national characteristics is not meant to impune any individual Greek or German. This is macroeconomics not microeconomics.
And lest I be accused of American arrogance, let me state for the record that there is plenty of that going on here in the USA. Texas and Nebraska have to put up with the profligacy of California and Illinois. I agree with your contention that the US debt crisis has seriously compounded the problems in Europe. However, lets just be clear, the blame for the American debt crisis lies largely at the door of our terrible government. A government that is more Hellenistic and less Teutonic every day.
>>Really? Then why doesn’t the UK have capital punishment? I ask because there’s absolutely no support for it in the political class despite 70+% support among the population as a whole.
> Oh, it’s easy enough to be tough when a pollster asks the questions; demanding death as public policy in front of your fellow citizens is another thing entirely.
>The days when public hangings were popular entertainment in England are long over.
Who said anything about entertainment?
However, thank you for demonstrating the separation that I asserted. You completely disrespect something that 70% of your countrymen want.
> I forgot to say that our governments spend more than the receive in taxes, and the debt they create is an inflation tax. So yes you are correct, our roads are built from the indirect tax of debt. And this subsidy causes distortions, e.g. suburbia.
Nice try, but wrong.
The federal govt spends more than it takes in, but state/local govts, the ones that build the vast majority of the roads that support suburbia, don’t.
Federal road spending is in the noise wrt the federal budget, so it is absurd to assert that suburbia caused inflation via govt debt. (And, most federal road spending is covered by road-specific taxes, which also gets siphoned off for not-road spending.)
>>However, a very dependent community is far more vulnerable to a sociopath.
> [Citation needed]
It comes from the meaning of dependence. If I’m dependent on someone, I’m vulnerable to them. Members of a “very dependent community” are, by definition, dependent.
> This is pure nonsense and shows a complete lack of understanding of how these cultures work.
Not at all.
> A very “dependent community” as you call it, will work by reciprocity.
All communities work by reciprocity. The difference in dependent communities is that there aren’t any alternatives.
> You never get anything for nothing in Japan, China, or even Russia. That is something sociopaths can only adapt to with extreme difficulty.
Wrong. You clearly don’t know any socipaths.
> Outside (civil) wars, socio/psychopaths only “flower” in “trusting” communities.
Not at all. Sociopaths flower in communities where you can’t avoid them, that is, dependent communities.
Which reminds me – are you really claiming that Russia doesn’t have sociopaths?
>Which reminds me – are you really claiming that Russia doesn’t have sociopaths?
Are you looking for a straw man ?
This debate always devolves into a visceral and non-objective one, and no one is going to change their mind. Lets just wait to see who are the winners and losers. I will take one last stab at explaining my view of the likely situation and outcome.
@Bob: US budget problem is because USA has never been able to collect more than about 18% of GDP as taxes (regardless of tax rates). Fed govt is spending a $trillion/year more than its tax base. All serious economists (including Warren Buffett who discuss at 14min his data) say the US economy can’t recover until housing does. Housing is the most valuable asset owned by Americans (excluding the top 1-10% who own most of the non-housing wealth), with a total value of roughly $20 trillion. The US economy is dependent on suburban model of retailing, spread out services, etc. Cut the entire defense department, and it wouldn’t solve our fiscal problem. The elephant in the room is entitlements, and if we cut entitlements, then it means the end of suburbia, because the main expense that people can adjust is housing (followed by health care), by moving in with in-laws or renting in high density units. What is your data saying the US fiscal problem is not dependent on suburbia?
@Winter: Without exports to the PIIGS, China, and the USA, Germany’s economy will shrink as the global economy hits the stagflation wall. The problems of Europe never had anything to do with isolationism, it was always due to experiments idealized collective “solutions”, and the failures of these experiments blamed on other things. But this debate will devolve into a shouting war, so it is better we just observe 2013. Given the failure to understand their experiments, of course EU will choose to a more authoritarian fiscal union as “solution” to the crisis, probably leaning towards Totalitarianism. The Germans will say finally “okay we have no choice but to bail out you PIIGS, but now we are going to teach you how to be productive”. Hey just copy us, lend money to people who can’t produce, so you can pull demand for your exports forward, then blame the borrower and force controls on him.
@Andy Freeman: Federal spending in general in the $trillions, feeds state tax revenues.
Meh…increased population density also increases aggression and the need for more social rules to minimize friction. There are tradeoffs for everything.
The primary downsides to suburbia is increased transportation costs and the presumption of peak oil driving these costs to unsustainable levels.
IF that happens without replacement by EV or other alternative transportation then suburbs will evolve into edge cities with closer commutes and shopping. Northern Virginia has several examples of such. In any case, I’m bullish on technology finding solutions to problems without the world ending.
The east coast suburbs seem to have sufficient density for effective infrastructure outside of public transportation and even there folks commute by car to public transportation points (light rail, subways, etc) to get into the cities.
And my primary reason for living in suburbia vs urban center is education. Schools in cities suck and when you factor private education into costs then suburbs are a bargain.
@Shelby: It seems very curious to argue that, because the Federal government spends more money than it takes in, therefore *every single thing* the Federal government spends money on is therefore financed by the indirect taxation of debt. Somehow there’s a problem there… Couple of ways you could isolate for “debt” and what might be causing it: one would be to look at gov’ts that weren’t borrowing money (that would be the US through most of its history among others) and see what they spent on, another would be to try to isolate for types of spending that correlate to the increased deficit gov’t deficit spending of the past several decades. (Somehow I doubt the closest correlation would be with *infrastructure* spending).
Also, as to your ‘increased efficiency of cities’ argument… so, why don’t we live in hives again? Think about it. There are things humans place positive value on that cities do *not* efficiently provide. Remember, think hives. Or go live in a housing project or something. I understand they’re quite efficient- at *something*.
Harsh environments are expensive. Alaskans (kind of the exact opposite of the Philippines) generally accept a lower standard of living than people in the lower 48, simply because almost all goods are so much more expensive to provide (there’s more of course, but that should be enough) as anyone who has tried to order from/ship to Alaska can tell you. But the people who live there seem to think it’s worth it, for some reason.
@Winter You only need to look at ATT and TMO’s data plans.
When I switched last year from ATT, $20 a month netted me 100 megs of 2G data. That same $20 nets me 2 gigs of 4G, and a few months ago, unlimited. If ATT got TMO, depending on the deal and knowing ATT it would be the worst case scenario, I would be losing that sweet deal.
I don’t need to wait and see what happens to know ATT taking TMO is bad for everyone, even ATT customers. I’m glad I don’t know. Free Capitalism be damned if it means my data is cut, and I ain’t no Nader Green Party consumer protection nut either.
The east coast suburbs seem to have sufficient density for effective infrastructure outside of public transportation and even there folks commute by car to public transportation points (light rail, subways, etc) to get into the cities.
Boston, NYC, and DC are funny places. Suburbs here are not the same as suburbs in most other regions. For example, Boston city limits are about 2 miles from the coast, but it’s an urban environment for 10 miles inland. There are two towns between my “suburb” and Boston, but to an outsider, they wouldn’t even realize they were in 4 different towns in the space of 5 miles – they’d just assume that they were still in Boston, because to their eyes, they haven’t left the city.
And my primary reason for living in suburbia vs urban center is education. Schools in cities suck and when you factor private education into costs then suburbs are a bargain.
I don’t find this to be true. The Boston suburbs with good school districts are notorious for having the highest housing prices. You aren’t spending $15k a year on private schooling because you’re spending $15k more a year indirectly in the form of higher mortgage payments and higher property taxes.
Another solution around here is 6 years of private schooling, during the elementary years, when tuition is the cheapest, and hope your kid aces the Boston Latin entrance exams for grades 7-12. I’m sure NYC residents do something similar for Stuyvesant. The other exam schools in Boston/NYC are excellent too, better than all but a few suburban schools. In both cities, the exam schools skim off the top 10-15% of the total student population.
> are vastly more problematic in a society where everyone is presumed to be acting only — or primarily — in their own interest.
The secret to economics is to accept that people ALWAYS act in their own interest. If people seem to act altruistically it’s actually just a facade, really they’re just being nice because it’s in their interest. The reason (for example) that banks aren’t regularly robbed isn’t that people care about banks, it’s that they’d probably end up in prison if they tried.
> Yes, it’s very odd. It’s as though they think people in “government” or a “utility” will stop behaving like, er, people.
Eric, to do the sort of public choice reasoning that you do you really have to grok what I said in the previous paragraph. Most people don’t.
Presumably this is because we are wired to see good and evil, right and wrong, them and us, etc. This tends to work effectively for tribe-sized groups (where people suffer greatly from being tagged “evil” if they break the rules), but tend to fail .for full-blown organisations (where primitive monitoring and punishment mechanisms fail).
> Boston, NYC, and DC are funny places. Suburbs here are not the same as suburbs in most other regions.
This description closely matches the ‘suburban’ landscape of the main Texas cities as well. All the talk of suburbs being fancy farmland or whatever just makes me scratch my head.
@jsk: I lived in Corpus Christi, TX in 2002 and 2006, and toured some of Houston, San Antonio, and Dallas, even hung out at the parks for pickup basketball games. Typically every where in USA it is 1500+ sq ft for a small family on a 5,000+ sq ft lot. Whereas here in Asia the typical middle class subdivision house size for a small family (and my house size with 2 kids) is 300 – 500 sq ft on a 1000 sq ft lot. That is a factor of 25 in terms of population density. Imagine what that does to wireless infrastructure economics?
Correction: factor of 5 in density, but families are larger here, roughly double that of USA, so roughly a factor of 10 in density.
# Shelby Says:
> Imagine what that does to wireless infrastructure economics?
I’m sure this is a dumb question — I’m not an expert on radio technology at all. But why does that have an effect of wireless infrastructure costs? Can’t you handle lower density by increasing the power of the towers and spacing them out more? Isn’t wireless infrastructure costed on a per user basis, not a per square mile basis?
Please enlighten me.
Which is blatantly ridiculous. We know how Sasol’s Secunda’s tech works, we know its cost structure as a publicly-traded company, and we know roughly how much coal the US has. “Peak oil” does not translate to peak hydrocarbon motor fuel.
Peter Davies Says:
> The secret to economics is to accept that people ALWAYS act in their own interest.
I don’t think that is true at all. It is a gross simplification of why people do things. Why, for example, does the marine jump on the grenade? For sure, if you dilute the meaning of “self interest” enough you can make some weak case, but you end up with a theory with no predictive power.
And even if you want to make this claim, I presume you really mean “people always act in what they believe is in their own interest.” Obviously people act in ways contrary to their own interest all the time.
> The reason … that banks aren’t regularly robbed isn’t that people care about banks, it’s that they’d probably end up in prison if they tried.
That is nonsense. The reason why banks aren’t robbed regularly is because most people have some degree of moral code, and they think that stealing from banks is wrong and immoral. People choose to act for lots of reasons: morality, biological imperatives, social pressures, brain washing, emotions, love, familial obligations, and so forth.
> free markets lead to monopolies in situations like this,
WTF? The telecom market is highly regulated, and the more regulations any market has, the more consolidation you’ll see.
>inflation is NOT a debt.
That’s true. Inflation is a way to renege upon a debt.
You can to an extent, but increased distance from the tower has a number of nonobvious detrimental effects on signal. Three that pop to my mind:
– Increased distance in the real world (as opposed to some sort of anechoic chamber) also means increased interference from structures, terrain, and especially multipathing. You can’t make multipath issues go away by turning yours to 11.
– Signaling at the range of a cellular tower on gigahertz frequencies mean that both Doppler shifts and round-trip time become significant. You’ll notice if you open up the “advanced” configuration of more flexible 802.11 APs that you can tweak some of the signaling characteristics of the PHY and lower MAC; some vendors actually display these selections in terms of linear distance. Supporting devices working farther out means lowering performance for devices closer to the AP.
– The coverage area for an antenna with no directional preference in the terrestrial plane is vaguely circular. Recall that circles can’t tile the plane; the overlap required to prevent dead spots means that the larger the coverage area for each particular cell, the more interference each will experience. This will depend very largely on the channel selection available to the operator and the selectivity of the radios on each end.
This description closely matches the ‘suburban’ landscape of the main Texas cities as well. All the talk of suburbs being fancy farmland or whatever just makes me scratch my head.
Just to put things into perspective, Boston proper has a population density of 12700 people per square mile while Dallas proper has a density of 3800 people per square mile. While the Boston suburbs thin out, but the town I live in still has a density of 6700 people per square mile, and there are 2 other towns between my town and Boston. Aka, my little city (I really can’t call it a suburb) has twice as many people per square mile as Dallas.
Fuel is not the major cost of suburbia, which each person can verify as percentage of their family expenses. The major cost of suburbia is the lower economy-of-scale and costly duplication of everything, restaurants, fire departments, parks, electric/internet/cable/wireless grid, sewers, drainage, roads, infrastructure maintenance, etc.. Refer to the data I presented in my prior reply to Bob.
“Peak oil” does not translate to peak hydrocarbon motor fuel
Also, CNG or LPG can power any existing car with a $1000 conversion kit, Honda offers a CNG Civic, many fleets have already been converted, and Chesapeake is installing 1000 fueling stations now.
There will never be a shortage of hydrocarbon, because it is integral to the Carbon cycle of the earth. Carlin understood.
I think “peak oil” is another lie promulgated by the same interests that gave us the AGW lie, e.g. we find out yesterday that Venezuela has more oil than Saudi Arabia. For those into conspiracy theories, King Hubbert who first promulgated the peak oil theory, created (listen to 16min) Technocracy, Inc. in 1933, whose purposes was to replace the free market system with one top-down controlled by technical experts. Sound familiar to AGW? Now we see EPA with aid of POTUS executive orders shutting down coal plants due to the bogus AGW “global warming threat”, without any enabling law other than an arguably unconstitutional overreaching of executive branch powers.
@Winter: This might convince you about Germany’s vulnerability.
> It is a gross simplification of why people do things.
It is. I apologise.
> I presume you really mean “people always act in what they believe is in their own interest”
True, but the two are rarely different. Asking “what was our best interest back in prehistory?” explains the difference most of the time.
> Why, for example, does the marine jump on the grenade?
Group loyalty. People are prepared to suffer in support of “Us” versus “Them”. This historically made biological sense, since back in prehistory “Us” probably contains our relatives (and thus genes) and “Them” didn’t. Other examples include Islamic terrorism and Eric’s dedication to support open source (see his essay, “Take My Job, Please!”).
> People choose to act for lots of reasons: morality, biological imperatives, social pressures, brain washing, emotions, love, familial obligations, and so forth.
All of those (except brain washing) can easily be explained as selfish if you remember how important success of relatives is (“Selfish Gene”). Morality is a technique to avoid short-sightedness, the consequences of being labeled “untrustworthy” are much greater than any single violation of trust. Biological imperatives are all survival instincts (except sex which is a reproductive one). Social pressures is simply avoiding the bad consequences of being ousted by your peer group (which often meant death by starvation in tribal societies). Emotions (including love) are simply a super fast way of identifying self interest (imagine if you had no sense of fear). Familial obligations is simply protecting your relatives.
I am trying to get a workable model for what appears to be major paradigm shift for the world.
I am listening to a roundtable discussion (some PhDs) about property rights and the local implementation of global Agenda 21, and it contains some data points that were new for me. I am skeptical of their perspective in the sense I don’t want to be a victim of irrational fear-mongering (which is what they claim is being used). If anyone is interested in this, perhaps they could share their analysis of its relevance or irrelevance, if any, to current state-of-affairs with suburbia, debt crisis, and the economics thereof that may be forcing monopolization of industry in general. I haven’t worked it all out in my mind yet in the sense of having irrefutable data and testing all sides of all hypothesis, so I hesitated to share it, but it is also somewhat more informative than any other roundtable on property rights I remember.
I suppose I would want to test the theory that this is a natural outcome of the decline of the industrial age, as vested interests who are incapable of transforming their antiquated industrial capital to the knowledge (software) age, are naturally resorting to politics to force the value of their capital, which results in zero-sum game theory that drags humanity down with the evaporation of their progressively useless capital. I welcome anyone who wants to point out that I am being overly dramatic, and instinctively I want to view this as a great honor to be a small part of the open source age, perhaps with software (and the freedom-of-information spread that is deriving from it) being the only or a significant way to lead humanity out of such a morass. Okay I let you all fire away and I won’t be hurt by your candor.
@hsu $15k/yr for 1 child. And that’s on the lower end of the spectrum.
$30k for 2 kids.
I have 3.
@steven I don’t necessarily subscribe to peak oil. But transportation costs/auto dependence is cited as the primary reason for unsustainability
@Shelby Transportation costs are the primary cost difference between living in NY and in the suburbs. Auto, fuel, taxes for roads, etc. Restaurants, stores etc are concentrated in malls and big box clusters and can serve far more customers than scattered smaller mom and pop stores…not that this is a big plus in my book but it is more “efficient”. The delta is we DRIVE there. Fire and police services strike me as more population related vs geographic related. In any case crime is lower in the suburbs.
As hsu pointed out population density in Boston suburbs is quite high. As are Dc/Baltimore, Philly, NY, etc. More than sufficient for cost effective services without being packed like Asian cities which if anything are LESS sustainable by being overpopulated.
@Nigel: more generally you meant to say that the low density is the primary cost, not just transportation, but the cost of everything impacted by that spread, including the theory that wireless may cost more at lower density, that sewers cost more when they are longer, that houses cost more when the average size is larger than city apartments, etc.. It is more expensive to build vertically, so there may be diminishing returns beyond a certain density. So the delta is not just driving. It is that the local economy is dependent on a higher average cost per person. Add in all the private bank and government subsidy debt to pump it up, it becomes infested with these bloodsucking local planning vested interests, which further drive the base costs up.
@hsu & Nigel: I attended Ecole Classique in Metairie, LA and it was excellent, and I see it is only $8k/yr for high school. I pay $500/yr where I am now.
Debt crisis? It might help if you look at what happened in earlier monetary crises. There have been several bouts of hyper-inflation and complete collapse of the financial systems in history, e.g., current day Zimbabwe, Argentina in the 1980, Europe after 1945, Germany in the 1920s. The results have never ever been a collapse and dissolution of the state. The result has always been a strengthening of the state power and a new monetary unit. In most cases, a strong reindustrialization occurred. The same happened after the collapse of the Soviet Union.
In this sense, money is unimportant. The best predictor of the economic future is not the “debt crisis”, but the strength of social structures (that damned community) and the education of the population. Looking at your predictions, I think you are looking at the wrong factors.
Wireless at the same level of service costs about the same at the east coast densities we’re talking about. Cell phones suck above a certain density and each cell has a smaller footprint. Try using your smartphone in a large stadium. Wired deployment is a bit cheaper but I have both FiOS and Comcast available so it is profitable here.
Houses cost the same for more sq footage or less for the equivalent sq footage in the suburbs. This is why we live here. Sewage costs are dominated by the cost of processing sewage, not the sunk costs of a sewage pipes.
You pay $500 a year because you live in place with a lower standard of living for the majority of the population. Many of my relatives are from the RP (Manila in fact) and they aren’t here because they got tired of living in paradise.
# Peter Davies Says:
> True, but the two are rarely different.
Nonsense. The girl who gets pregnant at 14 because she wants a baby who will love her unconditionally — how exactly is that in her self interest? She might think it is, but it isn’t by any realistic measure of what is best for her.
> Asking “what was our best interest back in prehistory?” explains the difference most of the time.
That is a completely different standard from “what is in my self interest”. But even that isn’t correct.
> Group loyalty. People are prepared to suffer in support of “Us” versus “Them”
That is correct, but it is exactly the opposite of what you are claiming — namely that people only act for their own interest. You can make vague tenuous claims about group interest benefiting the individual, but in this case the brave Marine is dead, so the group can no longer benefit him.
> “Us” probably contains our relatives (and thus genes) and “Them” didn’t.
Again, you are moving the goal posts. Now you are claiming that we act to preserve our genes. I think this is closer to the truth, but is still only partly the truth. How exactly Eric is preserving his genes by supporting OSS I’m a little fuzzy on, unless Eric has been spreading his oats rather further than he is owning up to :-)
> All of those (except brain washing) can easily be explained as selfish
No they can’t unless you use such a ridiculously expansive view of “selfish” as to be totally useless. You might win the argument by using such an expansive definition but you would not have a useful theory of human behavior.
> if you remember how important success of relatives is (“Selfish Gene”). Morality is a technique to avoid short-sightedness,
Success of relatives is not the same as “selfish”. Like I say if you move the goal posts often enough and make them wide enough anyone can score a goal, but you’re still not going to win the soccer championship.
Yes, and when they do, the routing will have to change. The original IP allocation scheme paid no attention to physical locations, making routing tables difficult to manage. With hindsight, it’s easy to see that giving, say, every
hp.comaddress in the world the same high-order octet was not a good idea. Hence we have CIDR and an explicit policy of allocating /8 blocks to specific geographic areas.
Of course, those high-level allocations have all been made, and IPv4 is soon to run out of growing room.
Yes it is. I like it when my relatives are successful. I do things that encourage that to happen because it makes me feel good. When someone tells you they’re doing something for a selfless reason, they are still doing it for some reason that makes them feel better about themselves.
This “selfish selflessness” is an important distinction because those people who claim to “care” so damn much about the “less fortunate” keep making decisions that don’t so much help the “less fortunate” as they help the “caring” to feel good about how much they “care”.
> How exactly Eric is preserving his genes by supporting OSS I’m a little fuzzy on, unless Eric has been spreading his oats rather further than he is owning up to :-)
We talking about the same Eric?!
The Monster Says:
>Yes it is. I like it when my relatives are successful.
You are jumping in the middle and missing the point. I’m not saying that success of your relatives is never selfish, just that it is not always so. And consequently, an argument that people always act in their own interest is plainly incorrect.
There are clearly cases where success of your relatives is a net negative to you. For example, someone jumps you and your family in the street with a knife. You fend them off to allow your family to run. You die in the process. You selflessly chose to sacrifice yourself for your kids. Net benefit to you? Zero, because you are dead. I gave a similar example of the grenade.
I choose death ending scenarios because they eliminate value judgments about what is better. In modern societies parents sacrifice a lot financially for their kids. Is that selfishly to enjoy successful kids, and the pleasure of a family. I think it is pretty close to impossible to measure these things, but objectively it doesn’t seem like a good trade to me. (Being childless, perhaps that is my inexperience talking.) However, it is very clear why biological imperatives and genetic propagation would evolve us to do that, and why there are consequently immense pressure of women in society to get married and have babies. That seems to be an obvious reason why people have families, and we delude ourselves into thinking it is on net a benefit.
This is perhaps less true today than it used to be, but certainly historically, men were sufficiently reluctant to make that sort of commitment that nature had to make sex extraordinarily enjoyable to convince men to risk pregnancy. And even today, we have some pretty brutal and oppressive laws to force tom cats to take up the financial consequences of fatherhood. So, apparently, some people at least don’t think family is such a great trade for half your wealth.
But, since these things are not objectively measurable, I’ll stick to the death scenarios, since no-one can seriously make the case that a healthy person is better off dead than alive.
> $30k for 2 kids.
BTW, this lights another of my fuses. Why is private education so expensive? The answer is obvious — only really rich people buy it because the bottom end is scooped off my the putatively free government system.
When you think about it, how much should education really cost? For example, what do you really need in grade school? A classroom, a few simple materials and books, and a few external services like gym. How much can that really cost? I think it is hard to add it up to more $50,000 for a grade school teacher, $20,000 for a room, and say $500 per kid for books and external services. Which works out to $4k per kid if you have 20 kids in the class. And that is if you follow the current traditional grade school model, which really is oriented toward “no expense spared.”
Of course if you go to a Cadillac school for rich kids, there are lots of bells and whistles you can add, especially lower ratios, but to replicate what most kids get in the public sector in private is massively cheaper. Where I live the average cost per public school kid is well over $10,000. What the hell do they do with all that money?
Here is a simple fix: change the tax code to offer a $6,000 tax credit for educational expenses per kid, payable for any educational expenses except schools run by the government. Require kids to supply a certificate of very low level basic competence with your 1040 to qualify for the credit, and if they don’t have one, cut the credit in half. Allow it to go all the way to age 23. Stop all other federal assistance related to education. Have private companies issue the certificates, certified by any state government.
Pass that one change to the law, and the USA would have the best public schools in the world within five years. It would also cost less than the current federal expense on education. (I am not even including the cost of local and state education expenses, just federal.)
Just because the government thinks funding public education is a societal good, doesn’t mean they need to run the schools.
And of course I know it will never happen, because schools are run for the benefit of politicians and teachers, not for kids.
You might be surprised that there are countries where you can indeed start your own school and get government funding. My country has such a system (the Netherlands)
# Winter Says:
> You might be surprised that there are countries where you can indeed start your own school and get government funding.
I am surprised, delighted in fact. Thanks for sharing.
I think the word you’re looking for is “voucher”.
The entire point of having [great…-(grand-)]children is that eventually I’ll be dead, and them continuing to live after I’m dead is something I like.
Net benefit to me of them living after I’m dead is not zero.
You’re defining “selfish” as very narrow, short-term thinking, and then declaring that people who do long-term selfish thinking are therefore not thinking selfishly.
The Kansas City, Misery School District produces arguably the worst education in the state, at an annual cost per pupil of over $15.5K. In Kansas City, MO is arguably the best high school education, but it’s provided at Rockhurst High School, a Jesuit institution. The tuition nominally charged each student is a tad over $10.5K. Now, I know I’m comparing tuition to cost, and it’s possible that some subsidy allows the school to price the tuition under the actual cost, but normally such subsidies come in the form of scholarships against the nominal tuition. So I’m going to say that I expect the actual cost is pretty darned close to that figure.
That leaves us with the question: Why does one of the worst educational systems in MO cost $5K/student-year more than one of the best? The simple answer is that everyone who goes to Rockhurst goes there willingly (or at least their parents will it) while the students in the KCMSD are those whose families can’t afford to pay for an alternative. When you pay for something yourself, you want to minimize cost and maximize benefit. When someone else pays, the benefit they maximize is that good feeling about “caring” to which I alluded before, not necessarily what actually benefits you (according to your definition of “benefit”.)
Well, `monopolies’ is one way of interpreting that. There are others, though–like `shared infrastructure’:
Back in 2004 or so, right about the time when Cingular bought AT&T’s Wireless division, I was with team that was pushing shared infrastructure at the wireless-industry: the basic idea being that, rather than every carrier investing in building their own towers, we’d create a `neutral shared-hosting’ industry that would build-out multi-carrier DAS infrastructure (Distributed Antenna Systems, which could be cheaper and easier to deploy than towers *and* provide better coverage) and then lease space in the DAS boxes to the carriers.
The view from the inside, at the time, was basically that the carriers already knew that tower-buildout didn’t pay, which was why they were throwing most of their money at marketing instead–to keep the churn going, continuously brigning in new customer to replace the same number of customers that they were losing due to those customers having realised that the service was more expensive than useful. So, we had to convince them that we could actually cost-effectively improve coverage and that it was possible to do better than just `keep churn going’. I think we’d finally managed to convince AT&T… right befre Cingular bought them.
I left that industry in 2006; I wonder whatever happened to our idea, though.
“shared infrastructure …”
Yes, it’s a much better term than monopoly…BUT:
We still need a solution to the various problems of the commons. We need a national electrical distribution system in addition to a wireless sytem and I’m sure other examples can be thought of, BUT:
There has to be a way to see that the purveyors of any of these don’t slack off and let quality deteriorate.
There has to be a way to see that the workers of any of these don’t use their monopoly to raise the cost beyond reason.
I was the one who made the original prediction that rozzin quoted, but I have to admit that I don’t see any easy solutions to the problems I just listed.
# Christopher Smith Says:
> I think the word you’re looking for is “voucher”.
No, not really, it is significantly different.
# The Monster Says:
> Net benefit to me of them living after I’m dead is not zero.
Sorry, you are assuming your conclusion.
> You’re defining “selfish” as very narrow, short-term thinking, and then declaring that people who do long-term selfish thinking are therefore not thinking selfishly.
No, on the contrary. You can’t be selfish if there is no self to fish. But we could easily end up in a deep rabbit hole about freedom of will, purpose and all sorts of other things, which is way too much work for labor day weekend. I am certainly not saying that there is not selfishness in altruistic actions, what I am saying is that “people always act in their own self interest” is simply not true, the human decision making process is far more complicated than that.
Bottom line is that you will find very few people in the real world who agree that jumping on the grenade is selfish. Normally the majority doesn’t determine truth, however, the majority do define the meaning of words, so I’ll leave it at that.
In terms of public schools, does selection effect have some impact on the results of private schools? Of course. Is that the only reason they perform better? No, of course not. Furthermore, there are many, many kids in the crappiest public schools that, given an opportunity would excel, and many parents with kids in crappy schools who desperately want their kids to do well, but are totally stymied by the horrendous monopoly system. One need only look at the waiting lists for charter schools to see this. The solution to schooling is simple — give control back to the people who care most about the results of individual students.
Lets be frank here: whoever is responsible for some of these terrible schools, and the vast swaths of wasted humanity and opportunity really deserves to go to jail for what they have, or have not done.
> No, not really, it is significantly different.
Your proposal sounds like the school-voucher proposals I’ve heard, with the distinction that it’s applied at the federal instead of state level. Besides that, what differences do you see, and how do they make the system work differently?
We indeed have more “competition” between schools in the Netherlands. This does have positive influences on quality. However, less than you would think.
The confounding factors are a chronic shortage of teachers, and the effects of unmotivated students and parents. The biggest effect on a student’s performance is the motivation and education of the parents. No school reform can help with that.
@Winter: I have a longish post stuck in moderator queue (because it is too long), and I wanted to be clear that the point I am detailing in that post, is that the social structure is not strong in the collectivist model, because it is based on false pricing of relative value. And that also is the essence of the suburbia point I am making. And my overall mathematical point, is that the way collectivism spreads is primarily via the debt model. This is what makes it so impossible to get rid off, and why we end up talking a lot, because we can’t fix it. However, I think there is a technological solution, that won’t require any more talk.
@Jessica et al, and this false pricing of relative value explains why education is so messed up and concurs with your and Monster’s points. Winter, in a non-collectivist, free-market system, the kids and parents who are unmotivated, wouldn’t be forced to attend, and the society wouldn’t be forced to waste its resources. Collectivism always involves force. Free markets involve choice. When people can choose, resources are not wasted, because ultimately no matter how much we force people, people are only productive the areas they (like and) choose to be. Not everyone is destined to be a highly paid profession, some will be more lowly paid janitors with “on the job” education. In such a competitive model, people have an incentive to improve their education, if they so desire.
What I should have done was put this link to my long comments, and that is what I will do in the future. Winter, at that link, I agreed with you that collectivism will continue for as long as it can, even reconstituted after crisis outcomes. However, I offer an idea that it may not remain the only way. And Nigel, I refuted your points, and explained my bigger picture analysis. Apologies to Esr for not thinking of doing that with my long comments.
“Collectivism always involves force. Free markets involve choice. ”
Bringing up children always involves force, because children cannot be “free” and take care of themselves. And a parent’s self interest does not have to be aligned to a child’s best interest. So parents are generally curtailed in their freedom wrt their children. That is why education always includes force to get children into schools: Compared to no education, almost any type of education benefits every child. And the importance of a child’s education to everyone else surpasses that of the importance of the child’s education to the parents. That is probably why it makes sense to almost every country in the world to set up a state-sponsored education system: The benefits outweigh the costs by a large margin.
Actually, even “libertarians” should be able to figure out that an educational market will not be efficient. Those who pay, the parents, are largely ignorant of it’s long term quality and they do not directly benefit from the investment. And those who benefit most, the children, have no say at all in the matter. So, in the end, parents send children to the wrong schools, or to no school at all, and they either pay too little because they do not care or cannot understand the importance or they pay too much because they cannot judge the quality of private tuition (which often is miserable).
And you should get yourself to cope with the fact that “living together”, even in a sense of trading at a free market, always involves some curtailing of freedoms. That is not limited to “collectivism”. The alternative of “not living together”, and not trading, leads to death, so that is not a free choice.
@Jessica $20k for a classroom seems light. $50k for a teacher is light unless you assume no benefits. The average for public school teachers was around $50k. Less for private.
In public school (ours anyway) there one teacher assistant per grade with 3-4 classes per grade. In private school our ratio was 1-1 for a class of around 20-25.
There are music teachers, art teachers, and gym teachers. At least one media person. There’s a fair sized computer lab. Principle, assistant principle, 3-4 admins, janitorial staff.
Now the private school just had an owner, 1 admin, 4 classes and hired part time music, reading and other teachers for once a week. She was lucky and owned her own building but there still utilities, maint, cleaning, insurance (probably significant), consumable materials, teaching materials, etc.
@monster they probably don’t pay priests that much :)
The proble with comparing public to private school performance is that public schools have to take anyone. Including special needs kids that I forgot to include in that list for Jessica. I may dislike mainstreaming because it disrupts my kids but if I had a special needs kid I’d probably try to get that for them. But that’s another teacher and aide.
On the other hands private school populations are self selecting where most parents are motivated to make sure their kids have a good education AND can afford them. Same for charter schools…parents line up like folks do for new Apple products just to apply or get into the lottery. Of course they perform better…they either select for the smart kids or for parents that care and willing to pay or both.
@Shelby ignoring that transportation/automobile dependence ARE the commonly listed downsides ofmsuburbia, no you didn’t refute anything.
Take for example the cost of cell coverage. Your assumption that it costs less for urban environment ignores that any given tower can only handle so much traffic and are densely packed together in the city while in the suburbs the same number of towers support a similar number of people just over a wider region. Often the urban towers are overloaded causing poorer quality of service. The cost of running the tower backhaul to the local loop is cheaper in the city but not that much.
Likewise you are completely wrong about property prices in urban vs suburban for the same product quality in terms of crime rate and schools. Many families would probably move back into the city if they could find safe, AFFORDABLE housing in the city with semi decent schools.
That police costs less per capita in a city vs suburb is relevant only if you also factor in the outcome in safety.
If you accept lower quality outcomes in cell service and police services then yeah, cities are cheaper. So what? It still doesn’t make cities “sustainable” anyway.
Higher population density translates into higher productivity. That is what drives city growth.
Yes, this is a common argument against voucher systems. But “special needs” kids are a small minority of the overall student population (by definition; if they were a large segment, they wouldn’t be considered “special”). So the voucher system can take that into account:
Just to use round numbers, let us make that $15K/student-year in KCMSD. We’ll cut that number in half, and give $7.5K voucher to any “normal” student who goes to a private school. But if the kid is identified as having special needs, we’ll increase it. A sliding scale will define extras for various disabilities. Some students might have vouchers as high as $100K, and the total cost to the taxpayers would still be less than it is now while those larger vouchers for special needs kids would create a market to serve them better.
No, that only half of what I wrote. The primary reason that private schools do better is because parents care enough to pay for private school and can afford it as well as private schools kick out troublemakers unless parents can afford a large endowment.
Special needs is one small aspect of this but I included it because I did forget the special Ed teachers AND the extra teacher aide in each class with a special needs kid into her costs.
$7.5k worth of vouchers will simply lead to crappier public schools, a raft of crappy cheap private inner city schools, a couple more really nice charter schools, a raft of schools that teach “intelligent design” vs science (something I’m not worried about jesuits doing) and a nice windfall for folks like me.
I’d love a windfall but it’s not to great for most other folks.
William, the Constitution is a contract that binds *the government*, not the people. The explicit agreement you desire can be witnessed with every oath of office taken.
I suppose we should mass-sue at least two branches of government for “breach of contract”…
# Christopher Smith Says:
> what differences do you see
What is the difference between $25 and a $25 gift certificate to Barnes and Noble?
> @Jessica $20k for a classroom seems light.
Commercial real estate costs $10-$20 a foot where I live. So 1000 sq ft costs about $15,000 each, with another $5,000 amortized over several years for fixtures etc. Seems reasonable to me.
> $50k for a teacher is light unless you assume no benefits.
I specifically said grade school, where teachers are paid much less than the average of all grades. Higher grades would no doubt cost more. As for other services I included some money for them, perhaps it is a little light, but as I said, it is based on the present day “no expense spared” attitude to schools. It is far from clear to me why the public is obliged to pay for little Johnny’s violin lessons, or little Susie’s pottery class. or why we need to have football or soccer in schools when “suburbia” does a perfectly adequate job of doing so. (If you don’t live in an American suburb, let me explain that subdivision sports are ubiquitous here. Generally organized by park districts or home owner associations to provide full and complete sports leagues and training outside of the public school system. They tend to fade off in high school, but that is just because of competition from the schools.)
One of the biggest problems in education is the serious lack of structural innovation. We have it in our heads that the best way to cram little Johnny and Susie’s head full of calculus and cooking, is in a classroom full of desks, with a schoolteacher at the front. For sure we see occasional variations, but schools are bound by the structures and expectations of funding and union requirements. That is the difference between tax credits and vouchers.
BTW, I tend to agree that there are lots of parents who don’t give a damn, and will park their kids where-ever. That is why I suggested that they have a basic level of competence test. Parents will insist that their kids try if there is cold hard cash involved. However, it is also why I would set the bar low. Kids just have to be making reasonable progress, we don’t need everyone to be a straight A student. Nonetheless, the main point is that there are lots of parents that do give a damn, and I would say probably the majority of parents fit in that category. And if we give those parents the opportunity to take charge of their kids’ education they would grab it and run with it and make a big difference.
In truth a large part of it isn’t even to do with the parents at all, but with the educators and administrators. For a lot of them they can listen to parents’ complaints and maybe care a little, but generally their goal is to “handle” parents, not fix the perceived problems the parents’ demand fixing. That is because they, the administrators, entirely control the money. However, if parents controlled the money, that would demand of the administrators that they be more responsive to the parents’ needs, because the parents pay their check. That alone is enough to make a huge difference.
Well, a prime example of keeping a monopoly BEYOND its usefulness: The US Postal Service!
I mean it is not so that there are no examples of “mostly” unregulated postal competition (see Europe/Germany – except for minimum wage laws). But even in the US the postal service has competition from private enterprises, though not in all fields, because, well, they still hold a monopoly on that.
And what broke up the monopoly? Mostly the internet and the rise of e-mail.
So, this is actually an example of two of the arguments from above. How a monopoly is kept by government regulation even to the disadvantage of its consumers and how the monopoly is disrupted by new technology (think of coaches against cars).
> a raft of schools that teach “intelligent design” vs science (something I’m not worried about jesuits doing)
I don’t agree with your broader conclusion, however, I think this is a legitimate concern, and I’m curious why you are not worried about the Jesuits doing it. Of course I recognize their right to do it, but just because someone has the right to do something doesn’t make it the right thing to do.
It is also worth pointing out that despite many years of schools teaching the science of evolution that that effort does not seem to have taken real well, since way more than half our population still believes in some form of intelligent design, and has doubts about the theory of evolution. However, that is far more to do with the fact that, genetically speaking, it is more important to be popular than right. We need our religion.
@Winter: I have a 9 point reply here, and here is #2:
2. What is the equation that tells with certainty which skills will be in demand and not oversubscribed in the distant future?
@Nigel: Regarding cell tower density, seems you didn’t read the comment of Christopher Smith.
Likewise you are completely wrong about property prices in urban vs suburban for the same product quality
My point flew over your head. I didn’t even say anything about what you are writing about.
@Jessica Boxer or Nigel: Religion is any group that has a shared alignment of beliefs. Typically this causes the group to want to eliminate the other, including atheism and the theist groups. Seems you would have to eliminate humanity. I believe nature and evolution thrives with diversity, and if some religious fool (even the collectivism religion) tries to hurt me (Inquisition, cannibal, etc) or force beliefs on me, I will defend myself. It seems everyone has their definition of evil. I have tried to say that collectivism is evil in the past, but I realize now it is part of the annealing process of where we are headed to. It is not worth wasting our time hating things that are. Much more exciting to find something worth doing that helps, and through that we can actually cause the uneconomic (i.e. evil) things to die economically and naturally.
@Winter: do you have kids?
@Winter: A summary of my link is that a collectivist promises that which is impossible to predict, the future, and thus is a habitual liar. The free market promises nothing, not even freedom, and thus is a habitual truth-teller. I wouldn’t want to be known as a liar.
$7.5K of voucher for the student who no longer attends public schools will leave $7.5K with the district to continue funding its operations for the students who do.
@Shelby I read it but I understand that he talking about rural and not coastal suburban cell ranges. Given that the suburbs we’re talking about has higher tower density beneath the max range (GSM or CDMA) it’s typically more “efficient” ( read cheaper to deploy) than the required microcell structure required in higher densities. Multipath and other issues are even more annoying in the urban canyon environment.
Even then I suspect a good part of the NY and DC suburbs have 1-5 mi tower distances with some areas with sub-mile microcells.
Did you ever wonder how a school curriculum is designed? Do you actually know how the school systems in Europe and Asia work?
National school curiculums are not the caricature you make of them.
@Jessica I’m not as worried about Jesuits because there have been a good many Jesuit scientists. They seem to be willing to speak their mind even if it annoys the pope. Like the last Vatican astronomer that got the axe for calling ID stupid (not quite in those words) even knowing the pope was partial to the idea.
Now I’m not expecting them to be teaching sex ed beyond abstinence but that’s okay. That’s really my job as a parent anyway even if I’m nominally prochoice and all.
On a completely note, I wonder the possibility of schism between the american catholic church and the Vatican. Unlikely in this day and age I think but I get the impression as an outsider that there’s significant differences in theological opinion…
@Jessica regarding salaries, my ex started teaching 2nd grade I think @around 36k. A friend teaching private school was making a lot less.
Anyway, given you are posting here I assume you are well educated and intelligent. If you like to move to my area and open a private school and charge only $4k I’d love that…but I suspect you’ll be eating ramen the first year and bankrupt the next. Given this is an expensive area I think even at @ $8k you’ll be struggling. Even in Kansas I’m thinking $8k is going to be tough…the church has a lot of advantages most private schools don’t.
# Nigel Says:
> They seem to be willing to speak their mind even if it annoys the pope.
OK, I thought you were saying the opposite, so I missed your point. I’m afraid the intricacies of the Roman Catholic organization are not something I know too much about. I probably couldn’t tell a Jesuit from a Jehovah’s witness.
> Now I’m not expecting them to be teaching sex ed beyond abstinence but that’s okay.
Yes, the government teaching kids about sex — now there is a REALLY good idea.
> On a completely note, I wonder the possibility of schism between the american catholic church and the Vatican. Unlikely in this day and age I think but I get the impression as an outsider that there’s significant differences in theological opinion…
I don’t think so. Not unless Obama divorces Michelle and marries a new young floozy, and even then only if the Pope doesn’t play along. However, if that does happen, then they are in big trouble.
This is not only wrong, it is literally crazy, being based on the delusions of a paranoid schizophrenic. Adam Curtis in The Trap traces Hayekian economics, Laingian psychological theory, modern libertardianism and the current love affair with the “free market” to the paranoid delusions that John Nash had when he developed game theory at the height of his schizophrenia, believing that everyone everywhere was acting in their own self interest at the expense of others, and “out to get you” and encoding that as an axiom in his game theories. The only people who actually behave according to the models of behavior predicted by free-market economics are economists… and psychopaths.
If you start with selfishness as an axiom upon which to build your society, the only society you can build is one which rewards selfishness. Free-market economics == institutionalized psychopathy.
Psychopaths excepted, humans are communitarian by nature. They have survived for thousands of years by banding together to ensure mutual survival and well-being. Derrick Jensen put it: “The Tolowa lived… for 12,500 years if you believe the myths of science. If you believe the myths of the Tolowa, they lived… since the beginning of time.”
Ah, easy…the Jesuits are the ones better educated than you. :)
“Yes, the government teaching kids about sex — now there is a REALLY good idea.”
They do it here, starting in primary school. Actually, most children in kindergarden already have a good clue where the babies come from.
We have the oldest mothers and lowest STD rates in the world. We even have gay marriages (our previous minister of agriculture was a lesbian married to a woman, our current minister of finance is gay).
So, on the whole, that was a REALLY good idea.
“I have a 9 point reply here, and here is #2:”
Each of your 9 points that touches education show you have absolutely no clue about how education is organized in other countries. None of these points have any relevance to the schools I know here, nor in neighboring countries.
I will take the time to explain a few points from my country (there are similar structures in many other countries). See the Wikipedia article for more details:
“2. What is the equation that tells with certainty which skills will be in demand and not oversubscribed in the distant future?”
Variety, choice, and good basics are the tools.
Our high-school system is divided into three “levels”, two levels being directed to general education that should be followed by a tertiary education at college/university level (in USA terms). The third level is directed more to vocational training, although you can do a general education first and vocational later. All children (parents) are completely free in their choice of vocational/professional training. The lessons delivered follow the choices of the students. That is, if more students chose a certain vocation/field, more classes are given. There is a choice of subjects open to students in every high-school.
The biggest discussion point in our educational system is how to improve it in ways that make it “future proof”. Which means, how to change the lessons to help students cope better with future changes in the world.
Here is your #3
“If the state forces uniform indoctrination, then how does the workforce adapt to the unknown future?”
In my country, every religious, philosophical, or pedagogical view of life can found schools at every stage of education, getting an equal funding per student as students in county schools (actually, they get somewhat more). The only requirements are that enough parents sign up and they deliver quality on the general terms of education. Every school is free in selecting teachers.
So we have Catholic, Evangelical, Calvinist (two or three varieties), Ecumenical, Muslim, Hindu, and Buddhist schools (I might forget some religions). Furthermore, we have schools based on the ideas of Maria Montessori, Helen Parkhurst, Rudolf Steiner, and some others. The range is from fundamentalist Christian to various left wing. Parents are free to send their children to any school that will take them. Quite a number of children will travel to another city to attend their high school of choice.
“6. The educational market is efficient now. Proof is I opted out, which has been very efficient in many facets.”
An efficient market is one that gives people what they want at the lowest price possible. You were able to get no education. This is not what most children need or want. So the market would be efficient if it could give you the education you wanted at the lowest cost, which it, obviously, did not.
The educational market cannot be efficient as education should deliver to the children what these children want to have had as an education when they have grown up. But it is the parents that have to pay for the education without understanding the needs of their children. Nor have the parents the same priorities as the children. Who can make the choices that will give the children what they need?
No market can be efficient if those who benefit from the sale are not those who have to pay for the goods. If such a market can be efficient, it would be the death of libertarianism.
We have the oldest mothers and lowest STD rates in the world.
So, on the whole, that was a REALLY good idea.
Isn’t it ironic that the childless (my assumption) woman and man, preach about the collective indoctrination (i.e. force, mass delusion, and religious) value for declining population, which is by induction the death of such a shared culture. I notice the father (Nigel) has a more tolerant view of diversity (i.e. non-religious) and the parent’s role in diverse procreation culture. “Those who talk, don’t build”.
@Jessica Boxer: vouchers are collectivism. Those who want to opt-out of failure, can do it any time.
@Winter & Jessica: the collectivist religion can’t sustain itself without taxation. My theory is making software modules fungible, will make it impossible to tax knowledge, which will cause the waterfall economic crash of the collectivist religion. The more they tax the physical industrial world to compensate for the loss of tax base to the nontaxable knowledge sector, the faster the economic winners jump ship from that negative profit margin industrial age. As a last gasp in futility, the collectivist religion will try to tax the human body, i.e. breathing (carbon tax), eating, etc.. by physically tagging the body with a monitoring device.
@Jeff Read and Jessica Boxerl: Humans always act in their self-interest, because they control themselves. Since no one can predict the future, then no one can be self-interested if the mis-definition is for it to be a certain quality of outcome. The fundamental hubris of collectivists is they habitually lie about the future.
@Nigel, Ecole Classique is only $5.5k for high school. My point about suburbia was not the relative cost between urban and suburban, rather between a highly collectivist suburbia and less idealized suburbia with less debt inflation and the costly coattails of debt uniformity such as local planning boards, etc.. New Orleans is known for its horrible infrastructure, e.g. cracked or no roads and sidewalks, and slums. This is an example of the advantage of diversity, with quality affordable private education. And there is a Jesuit school uptown. The collectivist model of uniform distribution of resources, thus mis-price and mis-allocate resources, which can explain why equivalent population density can be more expensive. The collectivist will incorrectly state that the knowledge production is higher in those areas with a more uniform resource distribution among the population.
My kids are doing fine, thank you. And “oldest mothers” is about “grow up before you get kids”. We are not yet in the same boat as Germany and Italy. In the world, the average age of the mother at the birth of her first child is a good indicator of both her own education and a predictor of that of her children. It does not have to be, but it tends to be so. I have no clue about what you mean by “diversity”, but I cannot remember of putting on a single comment condemning people for living their life as they want it.
“the collectivist religion can’t sustain itself without taxation.”
Can you point out communities that live and work together that do not pay taxes? And would you want to live there? Are you part of a community that does not pay taxes?
So, who are the people who practice non-collectivism and can sustain themselves without taxes? I am very eager to know.
My point being, you seem to want to abolish taxes, but have you any empirical evidence that is actually possible? And not the common “Just-So” stories with shallow make-believe economics. I mean evidence identifying real people living in real communities without paying taxes (monetary or in-kind).
> We have the oldest mothers and lowest STD rates in the world.
Ah, correlation doesn’t mean causality, right? Obviously the culture of the Netherlands is very different than the US, and especially the parts where most of the STDs and teenage pregnancies come from. I assure you there is plenty of sex ed in American schools.
I have a friend who married a Dutchman and went to live over there in Nuenen, I believe. From what I hear there isn’t any more room in your country for babies. :-) The Dutch are nothing if not practical.
BTW, when I found out you are from the Netherlands that changed my perspective. The Dutch have a long and honorable tradition of classical liberalism that I admire and respect. If you remember some of the earliest settlers in America first spent a few years in Amsterdam because of the great religious tolerance of the place.
However, social liberalism is not the same as fiscal liberalism. I don’t know enough about modern state of your country under the Euro superstate to make much of an intelligent comment on its present state.
Where institutionalized psychopathy gets you.
I am aware of no freshman Republican in Congress who in any way advocated default. Had any done so, there would be direct quotes, video clips, etc. of it. Quite a few of them wanted to leave the debt ceiling where it was, but to equate refusing to go deeper into debt with refusing to service the existing debt is either colossally ignorant or deliberately disingenuous. The people who pushed this “The Republicans want to default!” meme don’t have the excuse of being ignorant. They fscking lie.
The Republicans have expressed their refusal to service the existing debt over and over. Because there’s only one way to service the existing debt.
Jeff Read, your misrepresentation of the positions of the TEA Party affiliated Congressmen is pretty brazen. There was no “refusal” to service existing debt. And there is no way to reconcile your claim with the facts.
Sorry, but Jeff is half right. There was another way and that was to cut spending. It is the great contradiction of the tea party: you can’t say “Taxed enough already” and “Save Social Security” in the same breath without a clanging cognitive dissonance in any honest thinking person.
One minor complaint though: The left like to use the euphemism “revenue” to mean tax increases, a description that everyone from the media to the right have bought into. However that is quite misleading. It is simply a fact that there is a great deal of historical precedent to indicate that tax cuts correlate with revenue increases. By no means am I saying that is always the case, but to call tax increases “revenue” is misleading, and is founded on a huge assumption that history indicates is often wrong.
There you, go, I managed to hack off both sides in one comment.
Jeff Read says:
>>> The Monster,
The Republicans have expressed their refusal to service the existing debt over and over. Because there’s only one way to service the existing debt.
Jeff you are a good guy. But this is the wrong approach.
The problem is not that taxes are not high enough. The problem is that spending is out of control, and has been for a while.
The remedy MUST come on the spending spend. The American people deserve better than to have more of their money taken to spent on boondoggles like “green jobs.”
And Jessica I really have not heard the tea partiers say anything about “saving social security.”
No matter how much you raise taxes, government will screw it up someway. This is why people must be prepared for retirement themselves.
The existing debt can be serviced by some combination of reducing spending and increasing revenues.
The phrase “RAISE TAXES” is itself bullshit, because what is meant by that phrase is “increase certain marginal tax rates“. Whether increasing those tax rates actually produces any additional revenue is another story. Veronique du Rugy has shown pretty convincingly that fiddling with the rates above a certain level does not change the revenue, which has been 19±1% of GDP for decades. Raising the rates forces businesses to move to more friendly countries, forces capital to flee profitable private-sector investments in favor of various domestic tax shelters. In the process, the GDP rises more slowly or even falls, leaving government with 18-20% of a smaller pie than it would have had otherwise.
As one of those freshmen TEA Party types, Senator Marco Rubio, put it so well: “We don’t need higher tax rates; we need more taxpayers.” We need more people making more money and paying taxes on that higher income. If we do that, we have more revenue.
Sure you can. You can be saying “save Social Security from having the Trust Fund pissed away on Cash for Clunkers and other Stupid Stimuli”. You can be saying “Honor the commitments we’ve made to the people already at or near retirement age, saving the benefits they’ve been promised; and gradually increase the retirement age for those who have time left to adjust to the change (say delay the retirement age by one month each year until the formula is actuarially sound).”
What you CAN’T say is “keep the retirement age where it was set decades ago, when most people entering the workforce were expected to die before that age” and still think you’re taxed enough already.
But again, there seems to be some confusion between “refuse to take on new debts” and “refuse to honor the debts we’ve already assumed”. To those of us in Flyover Country, it’s not exactly rocket surgery: Don’t make a promise you can’t keep. Government should promise us little enough that it can always deliver.
Venezuela does not have more oil than Saudi Arabia. Venezuela’s oil is all heavy crude. The ME easily has over a trillion barrels of heavy crude on top of the 600 billion barrels of light crude it has. Nobody is finding any need to tap into that simply because there is enough light crude pouring out of the ground already. Add to that the fact that the vast majority of refineries in the world can only handle light crude and not the venezuelan heavy crude.
Monster, they borrow 40% of everything they spend. Fiddling around at the edges of the rules for SS is not going to come close to fixing the problem. The country is bankrupt, and we need deeply radical action to fix it.
They want to claim a moral right to Social Security benefits, they can go try collecting them from the people who made the promises while spending their Social Security taxes on bloated government.
Which is to say, since this is a democratic republic and they were qualified to vote, their younger selves. The facts of what the politicians they elected were doing with their money were available to them; if I decide not to pay the promises they made themselves, there is no violation of any commitment on my part.
The old who are both poor and disabled? Give them enough charity to live on. The rest can consider their improvident collective spending decisions (as expressed by the politicians they elected) as they live off private retirement or income from continuing to work.
Nuenen? I used to have some relatives who lived there. Famous as the birthplace of Van Gogh. But there was no room for an artist there so he had to leave for Belgium. Your friend would be connected to that light-bulb factory by any chance ;-)
“If you remember some of the earliest settlers in America first spent a few years in Amsterdam because of the great religious tolerance of the place.”
The story here is that they left for America because they could not stand the tolerance. They were not allowed to harass other people.
what you mean by “diversity”, but I cannot remember […] condemning people for living their life as they want it
The collectivist of course doesn’t understand how collectivism reduces choice and exists only due to force. The collectivist argues that people have the choice of the vote, which of course is another lie. Since you are not paying me adequately to expound on that, I won’t
Yes I am I living in a society that doesn’t pay taxes, and it works beautifully for me. Probably you wouldn’t like the Philippines, because you would want to change it to be more uniformly “rich”. However, what I see is that the people are very rich in freedom, they completely ignore all the laws, even the traffic laws. And it works a lot more efficiently in the overall sense. When I first got here, I thought it was insanely, and I thought was very inefficient, but I have since realized that I have done my greatest work from here, and when I go back to USA, I work as a slave or I burn my resource faster while trying to work independently. For example, I coded CoolPage and Art-O-Matic from a Nipa Hut, and CoolPage had a million websites in 2001 (confirmed Altavista) before the social networks started, and when the internet population was 10 times smaller. Unfortunately I didn’t know about open source at that time and thus didn’t understand how to take it to the next level. And I had the blinding accident in 2001. I will grant you that eye surgeons are butchers in the Phils.
Taxes can not be increased in the USA, because the revenue has historically been around 18% of GDP, no matter what the tax rates are. And the GDP is going to decline regardless what anyone does. Thus, it doesn’t matter what nonsense they talk about in D.C., a global economic implosion is unavoidable, due to 80+ years of unabated creeping collectivism without a corrective depression. In the 1800s, with the freedom-of-choice and competition of multiple fraudulent private banks issuing private fractional reserves notes, we had more frequent corrective depressions, that were more shallow than then horrific one we will get now. But this one coming now (to end by 2024 with a new world order), will actually be a very positive one for those who embrace knowledge and disown collectivism. Major paradigm shift underway.
“Yes I am I living in a society that doesn’t pay taxes, and it works beautifully for me. Probably you wouldn’t like the Philippines, because you would want to change it to be more uniformly “rich”. However, what I see is that the people are very rich in freedom, they completely ignore all the laws, even the traffic laws.”
Tax revenue in the Philippines is around 14% of GDP
So you are able to evade paying taxes, but someone else is paying more to make up for that. And people ignoring traffic laws does not lead to freedom, but to death. Here are some statistics:
I understood that not only the public ignores the law, but so do the police and the army. I also understand that those living in the Philippines would like to earn more and have increased safety, in addition to better education and health care. I assume you would consider it a reason to leave if they achieve these “collectivist” goals?
SS has its own Trust Fund, which has been growing until very recently due to the demographics of the Baby Boom paying in at a much faster rate than our parents could withdraw. Unfortunately, it has been allowed to ignore changes in life expectancy, and the SSA had to cash in at least some of the special Treasury securities the Trust Fund owns, years before it was expected to do so. It can be made solvent by “fiddling around” to make it actuarially sound, requiring current workers to pay in more and retirees to take out less.
The entire reason for the existence of the Trust Fund is so that SS can be sold to people as a program under which each worker’s “contributions” earn interest and build his retirement savings. (Legally, the US Government does not recognize any such obligation to any individual’s retirement, but still it’s the way that the program is marketed.) The people who want to “save SS” are simply asking for those promises to be kept. The fact that Congress has spent insane amounts of money on other things should not affect the Trust Fund and those promises.
The Monster Says:
> SS has its own Trust Fund,
Indeed, it has an empty box. So did Bernie Madoff. All that is in there is paper, unfunded phony debt. There sure as heck isn’t any money in there. Nobody thought that adjusting the terms of Madoff’s agreement would fix up his program and make it actuarially sound.
>Unfortunately, it has been allowed to ignore changes in life expectancy,
This is the great liberal lie. The reason SS is running out of money is not because of changes in demographics or life expectancy, it is that politicians raided the lockbox, stole the money that these seniors saved, and spent it on expenditures to get themselves re-elected. I don’t know about you but if I borrow from my 401k to pay my grocery bill, I consider that an failure of money management and a gross emergency. It’d be really nice if I could borrow from someone else’s 401k to pay my grocery bill, but that is against the law.
# Winter Says:
>The story here is that they left for America because they could not stand the tolerance. They were not allowed to harass other people.
Ah, it is always nice when a compliment is rebuffed with a misleading innuendo. So I guess our brief détente is ended, and we resume our regular programming…
So I guess that the Netherlands is not a particularly good example to compare against the rest of the world: when you have to dig your country out of the ocean, mega public works projects become a lot more important. Think of the environmental destruction to the Zuider Zee! How many unique species of bird and fish were destroyed in that outrageous imposition of parasitic humanity on pristine nature.
It’s not just SS – there’s Medicare, too. The whole problem is much larger. We geezers (I’m 65) are living longer and longer, and doing so by consuming more and more expensive medical procedures. This trend is going to continue into at least the next few decades.
It was kind of annoying to me to see and hear the conservatives howling about Obamacare setting up ‘death panels’ that would cut grandma off, while at the same time, howling about the expense of Medicare entitlements….
This problem is not going to go away. The old folks have to be paid for, no matter how you do it.
I guess that when grandma doesn’t have enough teeth to chew the sealskins to make them pliable any more, she’s got to leave the igloo and keep walking…
The Social Security Trust Fund is exactly the file cabinet of worthless pieces of paper that President Bush said it was. The Federal government spent all that money and borrowed more.
It’s as if you want a new car, so you start a savings plan. You also want to go out on Friday nights, so you write yourself and IOU, put it on your desk, and go out partying. At the ‘end’ of your savings plan all you have is a stack of worthless pieces of paper. You have better hope you don’t really need that new car.
The incentives are perverse. The USA has a fourth party payer system for medical care.
You (1) and your doctor (2) decide on treatment. The doctor’s office submits the bill to the plan administrator’s office (3), which usually pays it, perhaps with a bit of back-and-forth. When the plan administrator’s profit margin gets too narrow, they raise their rates to the subscribers. (4)
If it’s a private plan, the subscriber is usually your employer. If it’s a public plan, it’s the tax payers.
The price signals never get from the provider to the payer. These idiotic “reform” attempts do nothing to change the incentives.
We know that price signals work just fine in medical care. Just about any elective procedure not covered by most plans gets cheaper and higher quality over time. The best example is LASIK. I got LASIC in 1995. It cost $4000/eye. It was well worth it for the fifteen years of good binocular vision. Now it costs much less. They don’t even have to slice off the front of your cornea these days.
“smaller carriers like T-Mobile that don’t merge with larger ones will simply go under, leaving their assets to be snapped up by the remaining incumbents at the going-out-of-business sales.”
Nonsense, actually smaller carriers like MetroPCS and T-Mobile are growing at a faster rate than the large carriers.
Living in another country as an expat isn’t the same as being born and living there, even or perhaps especially as a balikbayan. Leaving is easy. You have means and education that many don’t. While many people are happy in the RP some people not so much. Try life as a rugby kid first and then tell me that the RP is such an awesome place.
And where do you get the idea that you don’t pay taxes in the RP? Not as a tourist you don’t but great googly moogly WTF do you think the BIR does? You’d file on April 15 is you were a citizen…unless you are dirt poor.
Here’s the tax rate chart:
Rich In Freedom = Highly Corrupt because it’s not really a country governed by Rule of Law. We think politics is corrupt over here in the US. Not even close. Which is a shame, because the rich get richer and the poor get “more free” and it is a beautiful country.
Also, AT&T wants to merge with T-Mobile because people keep leaving AT&T for T-mobile. It has better reception in many areas, better service and is cheaper. Your analysis is completely wrong.
“SS has its own Trust Fund”
You do realize that the SS trust fund is entirely non-marketable treasury debt. This is another way of saying worthless IOUs.
1) Because they are non-marketable they can’t be sold on the open market.
2) Because its treasury debt its the government borrowing from itself to fund something. In GAAP accounting, that is considered fraud.
I hope that now the ludicrousness of the statement has become apparent to you. This is a democratic republic. Spending the SS trust fund isn’t something that was done to the people near or past retirement age, it’s something they did. If they had wanted to, they could have voted in politicians who would pass a balanced budget amendment and set aside a real trust fund. They didn’t. They ate their own seed corn, and borrowed more from the neighbors and ate that too, and now claim they somehow have a moral right to the harvest of a crop they failed to sow, claiming they were somehow victimized by the chefs they themselves hired to cook the seed corn.
> The story here is that they left for America because they could not stand the tolerance.
True. They were trying to keep themselves and their children spiritually pure. Too much tolerance for various sorts of sinful behavior makes that harder. The Amish set themselves apart for similar reasons, although many Amish communities do have a custom of letting their children live among the heathen for a time before they have to commit to living under the rules.
> They were not allowed to harass other people.
This does not match what I have heard. Where did you hear this?
> The reason SS is running out of money is not because of changes in demographics or life expectancy, it is that politicians raided the lockbox, stole the money that these seniors saved, and spent it on expenditures to get themselves re-elected.
No it’s not, mathematically speaking. There are three things, and that I think that is the least of them. The most important and expensive is the changes in demographics and life expectancy. The second most important and expensive are the unfunded vote-buying increases in benefits. No money was either saved or stolen, but reckless promises were made which could not be kept. The third most important and expensive reason is the one you mention. I know Congress is profligate, but their theft just does not compound as fast as the demographic and life expectancy changes. In 1940 the number of people paying in compared to the number of beneficiares was 160 to 1. Now it’s 2.9 to 1. Congress has not increased their rate of theft by fifty times in the same period.
> Ah, it is always nice when a compliment is rebuffed with a misleading innuendo.
We could also compliment the Dutch for lending us the highly tolerant William and Mary in 1688. That was a true act of friendship to English speaking people worldwide. We have benefitted from it ever since.
“Ah, it is always nice when a compliment is rebuffed with a misleading innuendo. So I guess our brief détente is ended, and we resume our regular programming…”
Sorry, no offense intended, honest. I am just a little cynical (or a lot). The story does do the rounds here that the puritans were not very enamored by the religious&political landscape. Our famous tolerance of the day was actually a cold war between religious creeds. As no one could get the upper hand, a tense cease fire was observed. There were occasional episodes we are still ashamed of. And your friend might have warned you that we will talk down our own country all the time (but we do not mean it).
“when you have to dig your country out of the ocean, mega public works projects become a lot more important.”
What it does teach you is that we all drown together. And without taxes, the pumps stop and we get wet feet, and in the end, wet hair. So it does give you a different perspective on what is needed to keep a country dry.
Indeed, a lot of “nature” was destroyed by the new land projects. But in a country where you cannot place a hand on the ground where there has not be a plow cut through before (literally!) we just create our own nature. All of our nature preserves are man made. Except for some sea preserves.
“> They were not allowed to harass other people.
This does not match what I have heard. Where did you hear this?”
Could be a faulty memory. This is what I remembered from decades ago. But I would not push it, could simply be the other way around, that they were harassed.
My source was the Pilgrims, so there might be some bias. :) Your description of a cold war between sects is also the sort of uncomplimentary thing that people don’t necessarily write about themselves. Yet both the Pilgrims wanting to harass others and a cold war between sects sound suspiciously like typical human behavior, which I am always interested in. They also sound suspiciously like various problems in early Colonial history here. If your memory happens to dredge up anything interesting in either of those Zuiderzees, I’d be interested to hear it. I do know you can’t speak for all the Dutch, but I don’t know the perspective of even a single Dutchman, so the information you give is always welcome.
Amusingly the “freedom of religion” and “no official religion” bits in the US are largely so no OTHER Christian sect could become the official religion of the US…or so my less than stellar memory makes me believe…
> I am aware of no freshman Republican in Congress who in any way advocated default.
Actually, at least one Repub introduced legislation confirming that the 14th amendment (debts must be paid) would be honored. He got creamed by Dems screaming about paying bankers before SS recipients.
It wasn’t Dems who said that they’d default on loans to pay SS.
And no, the entitlement programs and the military are not govt debts.
> Andy Freeman: Federal spending in general in the $trillions, feeds state tax revenues.
The claim was that roads were largely paid for by the federal govt. That claim is false.
Yes, the feds give states money lots of money. They even give lots of money for roads, but that doesn’t imply that the fed spending on roads dominates state spending.
The bulk of federal spending on roads is for interstate highways. However, that’s not the bulk of spending on roads, and the states pay a hefty piece (if not the dominant piece) of the interstate highway costs.
@Bob: I don’t know if you have been unfortunate enough to have developed some expensive disease. If you had (God forbid!) you would have seen the insurance statements, and know that the insurance companies have negotiated really cheap rates from the doctors and medical labs. It’s just that, when you need really serious medical attention, you need a lot of stuff, and it all costs a lot in total.
I have multiple myeloma. It’s a blood cancer. The insurance company has spent well over $300,000 on my treatment so far. None of the expenses have been unreasonable. Two decades ago, there would not have been such expenses – simply because I would have died, and not incurred them.
Tom DeGisi Says:
> No it’s not, mathematically speaking.
Tom you might be technically correct, it is only technically theft if it is against the law. But it is certainly morally bankrupt. The propaganda is that it is the government helping you save for retirement, the truth is that it is a legalized Ponzi scheme. Actually, it is worse than a Ponzi scheme on many levels.
I am one of those crazy right wing loons who believes that the “Social Security Trust Fund” should actually have some funds in it.
“Fuel is not the major cost of suburbia, which each person can verify as percentage of their family expenses. The major cost of suburbia is the lower economy-of-scale and costly duplication of everything, restaurants, fire departments, parks, electric/internet/cable/wireless grid, sewers, drainage, roads, infrastructure maintenance, etc.”
If it were that simple, I would expect taxes to be lower (per capita) on average in urban areas, but in practice quite the opposite seems to be true.
I’m going to quickly cover housing prices and taxes of a 3 bedroom home in Boston vs a 3 bedroom home in Newton, which is a suburb of Boston (about 5 miles away, meaning that it’s still more dense than Dallas, at 4600 people per square mile) with a very good public school system.
Average home price: $334200 or $1250/month mortgage at current rates
Estimated yearly taxes: $4000
Average home price: $632900 or $3600/month mortgage at current rates
Estimated yearly taxes: $7000
Thus, it costs $31200 more to live in Newton over Boston. So for 2 kids, if you can keep their private schooling costs below $15600/year, then it is cheaper to live in Boston, even with private schooling costs, than it is to live in Newton with its public school system.
In addition, the 3 Boston exam schools take about 19.5% of all kids in grades 7-12 (5480 total enrollment in the 3 exam schools vs 28170 estimated students in all Boston public schools in grades 7-12), which means that if your kids are in the upper 19.5% of all kids (highly likely for anyone who is reading a blog like this), then it becomes much cheaper for you to live in Boston, once your kids are no longer in elementary school.
While I took a sample for 3 bedroom homes, the numbers work out to about the same $15k per child difference for both 2 bedroom and 4 bedroom homes too. And yes, Newton is an expensive suburb, but you’ll find that the housing prices of a suburb correlates highly with the quality of the public school system in the Boston area.
If it’s not obvious, I thought a long time about whether or not I should pay the “school” tax of living in a suburb with a very good public school system before deciding against it.
“Government should promise us little enough that it can always deliver.”
This deserves to be heavily quoted and framed somewhere…
> Tom you might be technically correct, it is only technically theft if it is against the law. But it is certainly morally bankrupt. The propaganda is that it is the government helping you save for retirement, the truth is that it is a legalized Ponzi scheme. Actually, it is worse than a Ponzi scheme on many levels.
Absolutely agree. Social Security and Medicare are unconstitutional, highly unethical and highly immoral. I hate FDR (and Bismarck) worse than Keith Olbermann hates George W. Bush. The changes in demographics and life expectancy are what made it utterly obvious that they are worse than Ponzi.
> I am one of those crazy right wing loons who believes that the “Social Security Trust Fund” should actually have some funds in it.
So do I. Third most important reason is still rather important.
@hsu: “I’m going to quickly cover housing prices and taxes of a 3 bedroom home in Boston vs a 3 bedroom home in Newton, which is a suburb of Boston…”
Newton is an extremely upscale suburb, nowhere near middle-class average. You can’t compare prices of the whole of Boston, which includes a full range of household incomes and housing prices from poor to rich, with a rarefied suburb like Newton.
But it does. It has Treasury securities backed by the full faith and credit of the US Government, which exactly like Federal Reserve Notes (“funds”) are. The people who were forced by law to pay their “contributions” into that Trust Fund were not allowed to direct them to any other kind of asset.
BTW, a lot of Bernie Madoff’s property was sold to help pay back his victims. The US Government owns a huge amount of land with insane amounts of mineral rights that could go to repay the Trust Fund. I’m kinda partial to Alaska North Shore myself, but I wouldn’t mind having some of that oil shale money.
No. Instead my son is autistic. Not only does he need a great deal of training just to get him to interact with the rest of the world, but he will probably never be self supporting. He turns 11 this month. He’s not ill, but the financial issues are similar.
There are three classes of things requiring medical care:
1) Maintenance; routine exams, immunizations, and minor procedures. These tend to be relatively inexpensive and can be budgeted.
2) Trauma/major illnesses and the like; things that catastrophic care insurance properly covers.
3) Long term maintenance for conditions like diabetes, organ transplant anti-rejection therapy, treatable mental illness, and the like.
We conflate the three, when each presents different funding issues. 1) and 3) are more expensive than they have to be because price signals don’t reach the decision makers. I’m not sure how well it would work out to handle 2) as if it were a car repair…
Medical plans pay by procedure, not by illness or outcome. They try to control costs by limiting payments for particular procedures. This is easy to game.
HMOs tried to mandate particular procedures for particular conditions, but that’s an exercise as futile as it is outrageous. The HMOs can’t keep up with the latest medical information. No patient wants to be in the position of a kitten taken to the vet.
The government began this in WWII when they imposed salary and wage controls. The various companies scrambling for workers offered benefits packages instead. Health plans are among the results.
This government tends to hook up the hose, turn on the faucet, and then turn off the nozzle. When the hose inevitably leaks the response is to tighten the nozzle and tie knots in the hose. Eventually the hose doesn’t work very well for spraying water.
How about you write yourself an IOU for the amount of your most recent paycheck. Then go out an buy yourself something nice with your pay. After all, you can always use that IOU to cover your bills.
> But it does. It has Treasury securities backed by the full faith and credit of the US Government, which exactly like Federal Reserve Notes (“funds”) are. The people who were forced by law to pay their “contributions” into that Trust Fund were not allowed to direct them to any other kind of asset.
This does not convince me that the Social Security Trust Fund actually has funds in it. It does convince me that Federal Reserve Notes are not actually funds. But then I am a proponent of strong money, and Bernanke is not.
Just go to zillow and start looking up the average 3 family home prices in all of the Boston suburbs that have good public school systems. I’ll name a few off the top of my head: Lexington, Weston, Winchester, Wellesley, Belmont, Westwood, Concord. All of those towns have $600k+ average home prices. All of them offer extremely good public education. Newton is not the outlier that you think it is.
As for Boston proper, what you find is that nearly all public schools are ranked below the state average, no matter what district of Boston you are in, even if you live in a wealthy district. Only the exam schools break the mold.
But you don’t need Boston to look at the low end of the spectrum. Just zillow the poorer suburbs and look at their public school ratings. It’ll make you sad. You have to move out to the boonies to find an affordable home with a good school system.
Reasonable commute, reasonable home price, decent school system. Pick two.
> It does convince me that Federal Reserve Notes are not actually funds.
I won’t argue with that, but the fact that they aren’t is an even larger problem than that the securities in the Trust Fund aren’t. Or they are two manifestations of the same underlying problem, if you will.
Either way, there is still no conflict between “Taxed Enough Already” and “Save Social Security”. Increasing tax rates will not help the problem, and neither will holding senior citizens hostage.
@Everyone: The last routine visit to my oncologist produced a charge as follows:
What the doctor would normally charge (if I was self-pay) $203.00
What I was charged (insurance company negotiated) $80.77
The $80.77 was the TOTAL, not the net after insurance payments. Please don’t tell me that a medical specialist doesn’t deserve $80.77 for an office visit. Clearly, the price signals *are* getting through here.
Trying to make everyone skinflint the doctors is NOT going to defuse the medical care cost time bomb. This is a threat hanging over everyone. We ALL need medical insurance. If you live long enough, you WILL run into expenses that you cannot budget for. Don’t think that you can just buy a ‘catastrophic coverage policy’ for cheap. They won’t save you any money.
# The Monster Says:
>I won’t argue with that, but the fact that they aren’t is an even larger problem than that the securities in the Trust Fund aren’t. Or they are two manifestations of the same underlying problem, if you will.
I agree that Federal Reserve notes are pretty close to a Ponzi scheme too. That fancy language of “full faith and credit of the United States” comes down to basically “don’t worry, we will pay this debt by taxing your children.”
Nonetheless, my 401k doesn’t contain a pile of money, it contains ownership of assets that are appreciating in value. That is what normal people do when saving for retirement. So you are right in a sense. The box isn’t empty, it is full of fake money where the ink is barely dry.
It is notable that in the States they actually buy securities with the pension money they save. They have to, there are laws against states doing what the SSA does. Obviously they are not doing so great either, but at least there is something in those coffers.
> Either way, there is still no conflict between “Taxed Enough Already” and “Save Social Security”. Increasing tax rates will not help the problem, and neither will holding senior citizens hostage.
I understand that you don’t want it to be true, but it is. The problem with entitlement programs is that they are all phony Ponzi schemes. We have run out of money and we can’t run the scam anymore. I feel bad for the folks who depend on it, in the same way I feel bad for the teachers in Wisconsin. The government is reneging on a deal. I’m not suggesting that we dump them all in the street. However, the first step to getting yourself out of a hole is to stop digging. The last thing we want to do is save social security, we want to destroy social security, and do as much as we can to compensate the people who’s money was stolen.
The Tea Party wants to cut up the Fed’s credit cards? Great idea!! However, if you’re going to cut up the credit cards you gotta stop buying new shoes and jewelery first, and maybe even cancel your gym membership.
> I won’t argue with that, but the fact that they aren’t is an even larger problem than that the securities in the Trust Fund aren’t. Or they are two manifestations of the same underlying problem, if you will.
Oh yeah. FDR messed us up with entitlements and Nixon floated the dollar. Grrrrr.
> Either way, there is still no conflict between “Taxed Enough Already” and “Save Social Security”. Increasing tax rates will not help the problem, and neither will holding senior citizens hostage.
Just the normal conflicts about allocating resources.
“Amusingly the “freedom of religion” and “no official religion” bits in the US are largely so no OTHER Christian sect could become the official religion of the US…”
Read the Religion header of:
The idea over here is indeed that of a splintered religious landscape that prevented every intolerant creed to get powerful enough to suppress the others. The Catholics were not so lucky. They were oppressed by all the others united.
Tom DeGisi Says:
> We could also compliment the Dutch for lending us the highly tolerant William and Mary in 1688.
Far from it. William of Orange was invited to be King of England because they wanted to get rid of James II/VII. What was his crime? Not only being a Catholic, but being a public Catholic. And if you think William was tolerant, I suggest you read about the situation in Ireland following his ascension to the throne, especially the battle of the Boyne, and the subsequent oppression of Catholics. There is a reason why all those crazy loyalist terrorists in Ireland were called “Orangemen”. (Which by the way is in no way meant as an endorsement of the terrorists in the IRA.)
BTW, Mary II was English — she was James’ sister who married William.
“William of Orange was invited to be King of England because they wanted to get rid of James II/VII. What was his crime? Not only being a Catholic, but being a public Catholic.”
Yes. Gun rights activists should know that the English Bill of Rights which came out of the Glorious Revolution (that put W&M on the throne as co-equal rulers) guarantees the right to bear arms only if you are a Protestant.
And when I suggested that splintered secular government (with limited power and geographic scope) might have some influence on that, you called me ignorant.
There’s something funny about one price for them and another price for you.
I don’t want to skinflint the doctors. The good ones are bright people who worked hard learning their profession and continue to work hard for their patients.
What I don’t want is for good doctors to have to spend time and money to game the system just to make a living. That’s what happens now.
“Just go to zillow and start looking up the average 3 family home prices in all of the Boston suburbs that have good public school systems. I’ll name a few off the top of my head: Lexington, Weston, Winchester, Wellesley, Belmont, Westwood, Concord. All of those towns have $600k+ average home prices. All of them offer extremely good public education. Newton is not the outlier that you think it is.”
I lived in the Boston metro as recently as last year, and I’ve visited Newton. It is definitely a very upscale place; if you’re not upper-middle class, I don’t see how you could afford to live there, period. I agree with you that there are other unaffordable suburbs nearby.
There are more middle-class suburbs around Boston, places like Canton, Norwood, Walpole, Stoughton, Framingham. Probably the cheapest decent town within commuting distance is Plymouth. And yes, they are farther from town and have less ready access to downtown. But in the real world, people live where they can afford to live.
There are factors driving the extremely high housing prices in eastern MA. Most of the land is already developed, so homes don’t sell for the cost of building the existing house today less depreciation; there is a tight supply/demand situation based on the value of the land. Plymouth is cheaper primarily because there is still significant land available for new construction.
None of this is meant to argue against the core discussion point here re: public schools. I am just very uncomfortable using Boston as an example because its housing is so unaffordable to anyone with a household income anywhere near the median. I think you’ll find that the majority of homeowners in these communities bought them decades ago when price/income ratios were more affordable.
> Far from it.
For his day he was highly tolerant. At that time, when people were supposed to adopt the religion of their prince, those who did not tended to be considered traitors. In addition, alot of the Catholic v. Protestant was really prince v. prince or nation v. nation. William advanced tolerance between Protestant sects in Great Britain, which eventually led to tolerance for Catholic and Jews and so on.
>William advanced tolerance between Protestant sects in Great Britain, which eventually led to tolerance for Catholic and Jews and so on.
That is true, though one shouldn’t exaggerate the speed of the change. Jews remained ineligible for naval service and the peerage until after 1800.
“And when I suggested that splintered secular government (with limited power and geographic scope) might have some influence on that, you called me ignorant.”
At that time, The Netherlands were a world power and arguably the nation with the most modern government.
They won the war against Spain because they were better at borrowing money and they floated the first stock market. They conquered Java.
Splintered powerless government with limited geographic scope was not the thing noted by contemporaries.
The British copied many of the Dutch tricks when they started their ascent to power.
>The British copied many of the Dutch tricks when they started their ascent to power.
Personally, I think this actually understates the case a bit. I’ve studied the period around the Glorious Revolution because it’s where the deepest roots of the U.S. Constitutional tradition lie. The British did not merely copy “tricks”, they copied almost the entire mind-set of the most successful mercantile republic in Europe. English-speaking writers tend to focus on the roots of British republicanism in Anglo-Saxon common law via Blackstone’s commentaries, but I think in doing so they slight the influence of the Dutch Republic as a living early model of post-feudal governance without absolutism.
I’ve suspected for years that this influence loomed larger in the minds of John Locke and his contemporaries than has been reflected in histories of the period. And why do I think this? Um, the republicans chose a Dutch king! They weren’t just importing a bloodline, they were buying the Dutch governance model.
# esr Says:
> Um, the republicans chose a Dutch king!
I don’t know that that is true at all. They chose a Protestant king, one who had reliably fought against Catholics in Europe, and they chose a King with at least a tenuous claim to the English crown via has wife who was a Stuart, and James’ daughter. They forced James to abdicate to make the transaction look legal and constitutional.
The fact that he was Dutch, or the fact that he came with a particular attitude to government doesn’t seem to me to have been one of the characteristics that were primarily of appeal. William’s massacre of civilians in Ireland was his true nature — Catholic hater. And the English bill of Rights as someone else pointed out was primarily directed at restoring and recognizing the ancient rights of Protestants.
After all, it wasn’t long before they got the Germans to come and take over, and Hanover was hardly a liberal democracy. No, it was the Catholic thing that was at the heart of it, as was evidenced by the final rejection of a Catholic King when the Scottish Dandy, grandson of James, was utterly repudiated at Culloden moor. They chose a protestant foreign king, who could barely speak English, over the long and ancient line of the Stuarts, for one reason only: Catholicism.
>I don’t know that that is true at all.
Jessica, I don’t think your account and mine are inconsistent. Or to put it another way, all interesting behavior is overdetermined. There were several different factions important in post-Glorious-Revolution British politics, of which the republicans were only one. They had influence on the post-revolutionary settlement mainly because a few of their public intellectuals had managed to capture the role of ideologists for a revolution with very complex social and religious roots. This is different from the later American revolution, in which republican ideologues looking back on 1688 as a model were in the driver’s seat from almost the beginning (and which, notably, had no religious component at all).
For the less secular-minded Willam’s anti-Catholic credentials were important, but it would be as wrong to settle on that as a mono-causal explanation as it would be to suppose that the republicans had the invention of the unwritten British constitution and the selection of the new royals all their own way. That they certainly did not; to name at least one competing faction, the aristocratic families were deeply concerned with dynastic legitimacy in a way neither the republicans nor the Protestant zealots shared.
The English had great reason to fear a Catholic monarch. There’s a reason ‘bloody’ is a swear word in Britain. Mary, daughter of Henry VIII, brought the inquisition to Britain.
England originally went Protestant when the Pope refused Henry VIII the standard annulment on grounds of infertility that other monarchs got when their wives did not produce a male heir. Henry’s wife happened to be the daughter of the King of Spain, who quashed the annulment.
Religion and politics were intertwined.
“…American revolution, in which republican ideologues looking back on 1688 as a model…”
They looked back further than that. The Glorious Revolution was an outgrowth of the earlier English Civil War where Charles I was deposed (and executed…”Be’old ‘e ‘head of a traitor!”). I would suggest that all Americans look up and read about the Putney Debates (1647). It will become obvious where many American ideas got started.
“Thomas Rainsborough, the MP for Droitwich, argued: “I desire that those that had engaged in it should speak, for really I think that the poorest he that is in England hath a life to live as the greatest he; and therefore truly. Sir, I think it’s clear that every man that is to live under a Government ought first by his own consent to put himself under that Government; and I do think that the poorest man in England is not at all bound in a strict sense to that Government that he hath not had a voice to put himself under…”
Rainsborough was an early American colonist who returned to England when he heard of the events of the period. He felt that he simply couldn’t stay out of it.
In fact, there was a sort of American Revolution against the Stuarts that was tied to the Glorious Revolution. There is a book that goes into this in some depth; I’ll check the title the next time I go to the library.
Essentially, it argues that in 1689 the American Colonies went through a period of political upheaval much like that which occured in the 1770’s.
Tax revenue in the Philippines is around 14% of GDP
Increasing since the 7% VAT circa 1990s, and now 12% VAT. Concentrated in cities, where the malls and government infrastructure are. TV on every mountain top promulgated “proud to be a filipino”, over family and tribe.
So you are able to evade paying taxes
I pay Philippine VAT and USA income taxes. My VAT expenditures are a miniscule % of my future income. Since 2006, I am riding future capital gains with gold & silver and personal R&D mode (recently on Copute). Reflecting on changing my citizenship, if USA cancels all passports. My future capital appreciation might be untaxable by loaning silver at 0% interest to programmers, while it is declining in price, thus generating me a fiat loss with a gain in ounces. Recently contemplating a new concept of fungible knowledge units.
And people ignoring traffic laws does not lead to freedom, but to death
Non-uniform distribution is more dynamic and more optimally anneals overall societal outcomes. 99.9% of people can’t understand the asymptotic infinite cost of 100% uniformity. Disappointed recently that motorcyclists required to not wear slippers and wear a helmet, loud music in the jeepneys no longer allowed, and in the cities the boys can no longer hang off the back of the jeepneys.
not only the public ignores the law, but so do the police and the army
Changing now. I found it to be exciting and challenging. Locals said I was crazy to walk in the mountains at night, and I thought it was because of the deadly snakes and NPA rebels, but they were afraid of the “white lady” ghost, hahaha. Yet still some mountain tribes eat barbecued rats, so I have places to go when I want to go feral.
[…filipinos…] would like to earn more and have increased safety, in addition to better education and health care. I assume you would consider it a reason to leave if they achieve these “collectivist” goals?
The upperclass Chinese want to escape.
Nearly all populations are collectivist to some degree (except perhaps Somalia), but it is much more difficult to get uniformity with 7100 islands (longest fractal coastline in the world), because of the lower economy-of-scale for infrastructure projects, e.g. national road networks end at each coastline. Inevitable that industrialization is bankrupted by the software age, materialism will get less expensive and more ubiquitous. Populations will huddle together for their material wants, and their relative value in the overall economy will decline. Knowledge outperformers will not be economically bound to the collectivism. It is possible the collectivists will depopulate themselves, e.g. they accept urgent actions on AGW, peak resources, and overpopulation.
@Winter: I replied about Phils taxes.
@LS: The old folks have to be paid for, no matter how you do it.
Let’s hope we don’t solve it in the way post-Weimer Germany was the “solution” to the earlier failed idealized health insurance boondoggle.
We ALL need medical insurance
I don’t. I paid for my eye surgeries from my savings and negotiated with my surgeon and the hospital. Circa 2001, I refused the 4th surgery (eye pressure was deflated and would “lose eye soon”) and did my own holistic treatment which was successful.
@Nigel: USA is arguably more corrupt because it has more laws and highest % in prison. Here a rapist was allowed to marry the girl (her request) to commute his life sentence. Yes locals are leaving by the millions to seek opportunities abroad, just as young Americans will do after coming crash. That is how a free market works.
@Andy Freeman: that doesn’t imply that the fed spending on roads dominates state spending.
I wrote that federal spending in general inflates state tax revenue. Road spending is taken from state tax revenue. Only the federal govt can run expanding fiscal deficits, so all deficit spending originates from the Feds.
@Cathy: If it were that simple, I would expect taxes to be lower (per capita) on average in urban areas
The cost of suburbia is subsidized by the federal deficits.
The events leading out of feudalism appear to be attempts to free humanity from the slavery of unmotivated passive capital, whose power was sustained by the marriage of state and religion (which outlawed the “sin” of usury), by using debt to bypass and compete against hoarded private capital. I wrote previously that gold can’t be the only money, otherwise passive capital enslaves all the future innovation, because all profits are captured as a deflation relative to gold. Appears mankind has been oscillating between debasement blowback (Roman empire and now) and no debasement motivating capital hoarding (feudalism).
The fundamental problem is that in a material world, the transactional cost in The Theory of the Firm (thanks Winter), enables the corporate capital to accumulate faster than for those who produce the knowledge. However, I think we are entering a radical paradigm shift, where knowledge (the mind) becomes much more valuable than material production. Because industry can be automated (see the $1200 3D printer) but the knowledge isn’t static and can’t be automated. I refuted Kurzweil’s Singularity and debated Chomsky on Hume’s mitigated skepticism (the upshot is I argue that abstract math and infinity exist and are equivalent to the never ending universal trend to maximum entropy).
> >Andy Freeman: that doesn’t imply that the fed spending on roads dominates state spending.
> I wrote that federal spending in general inflates state tax revenue. Road spending is taken from state tax revenue. Only the federal govt can run expanding fiscal deficits, so all deficit spending originates from the Feds.
You claimed that suburbia’s roads were a massive federal subsidy. The fact that the feds borrow some money to build those roads doesn’t support that claim.
As I pointed out, states and localities the vast majority of road costs.
And, the vast majority of federal money transferred to states and localities is not for roads.
And, before you reply that money is fungible, the vast majority of state and local spending is not for roads.
There simply isn’t a huge federal subsidy for roads.
However, there is a huge federal subsidy for mass transit. Every system gets/got a large fraction of its capital costs from the feds and most get operating subsidies as well. If city transportation is so efficient…..
Which reminds me – where are welfare costs highest?
>> Cathy: If it were that simple, I would expect taxes to be lower (per capita) on average in urban areas
> The cost of suburbia is subsidized by the federal deficits.
No evidence of that has been shown.
> Your example “efficiencies” for surburbia only apply in a local-order, which is an unsustainable semi-closed system (because there is no such thing as a closed-system, due to Coase’s Theorem and the 2nd Law of Thermo, which says entropy is always increasing globally).
Nice blather, but it applies to cities as well.
The fact that cities provide some things more efficiently doesn’t imply that cities provide all things more efficiently. I’ve provided examples where suburbs are more efficient.
> I asked you to provide an economic case for suburbia, which means that the economics should be sustainable.
I did to the level of rigor that you did for cities. (Hint – cities are also responsible for federal debt.)
> However, my point still remains true, which is that suburbia is not sustainable long-term, because it is not long-term efficient.
Actually, the above contains two errors. The first is that the false assertion that cities are providing the right things more efficiently. The second is the false assertion that maximum efficiency is required for sustainability.
> > Andy Freeman: pretty sure that Shelby doesn’t wear the most efficient clothing
> Clothing is an insignificant resource item, so the inefficiency of clothing is irrelevant to the global trend optimization.
I gave clothing as an example. As I wrote “I’ve gone through someone’s personal choices and found that they almost never made the “most efficient” choice.”
I can find a more efficient alternative for every decision that you make. It’s easy for transportation, food, shelter, which dominate most people’s costs. (Do you really want to argue that point? Yes, I’ve got a more efficient alternative to your bike.)
And, in most cases, you’ll reject those alternatives because they don’t provide something that you want.
Suburbia may cost more overall (a point that I’ve conceded only for the sake of argument – I’m pretty sure that it’s false), but it delivers things that people want, things that cities can’t deliver as efficiently.
I would love to reply to Shelby, but unfortunately I lack the tools needed to cut through his luxuriant thicket of obfuscatory verbiage. I will report that my latest insurance statement puts their cost of my treatment at almost $400K. This is not the sort of thing that ordinary people can self-pay. If any of you have prospered in your life, maybe have a family living in a nice house, etc., the last thing you need is to develop something like I have and have it all taken away from you by your medical expenses. You need medical insurance (and life insurance if you have a dependent family). It’s a collectivist idea, I know, but there are really good reasons behind it.
Nothing said by anyone so far negates the fact that medical costs will grow even faster in the future as our life expectancies grow longer. This is yet another problem that our society will have to shoulder. I know that Obamacare is unpopular, but at least it is an attempt, however flawed at dealing with the problem. We certainly need something better, but what?
Perhaps you can all subscribe to the LS School of Natural Medicine:
“If you get sick, you die.”
It’s perfectly natural.
@Andy Freeman: vast majority of federal money transferred to states and localities is not for roads
This is 3rd time that I will say the same explanation to you. The Feds are running $trillion deficits, and some of this money ends up in state tax revenues. The Feds created the housing and suburbia bubble by creating FHA, Freddie Mae & Fannie Mac which buy most of the loans from the banks, etc, etc.. Are you asserting that the only way the Feds can impart money to the states and the suburbia bubble is by direct transfers? If yes, then you are wrong. If no, then you have no point against my point.
If I understand correctly you assert there is no evidence that the Federal programs and deficits give any greater (indirect) subsidy to suburbia over cities. And you assert that there is no evidence that suburbia requires a subsidy, or at least that any such (indirect) subsidy is not more than the one required by cities. If you can confirm or deny if that is your position, then we can move on to analyzing data which would answer the debate. I want to first confirm your position, because I don’t want you to move the goalposts, when I provide you with refuting data.
@LS: I empathize with your predicament, it can happen to any of us. Of course, if I had magic, I would use it to help you as much as I could. I can understand why you might feel bitter that I am against insurance. But the fact is that no one can create resources from nothing. So there is always some hard-fail limit to collectivism. Just saying that society must share its resources, denies the fact that if too many people want those resources, then there are no more resources, and society collapses. In Germany’s case, it had a horrific hard-fail. I don’t wish this on a million people, and I don’t wish for your demise. If I had more time, I would like to try to help you, but you would have to be willing to give my ideas a try. One thing I did with a liver cancer patient was giving him huge doses of Vitamen D, lots of sunlight and exercise, and he is now in remission. I realize that some situations can’t be cured with holistic methods, e.g. Steve Jobs even though I am hoping he can pull through. I remember when I was face down in the bed for 1 year, I had a lot of time to reflect on how much I loved running. I would dream about my runs in way that I had not before the incident. When I decided the eye might be unsalvageable, I said the heck with steriod drops and non-movement and began running like I could die any minue and I wanted to have my last best run nonstop. Well the doctors were shocked, the pressure in my eye recovered from less than 1, to normal.
So I would love to motive you, you live only for each day! Carpe diem! I hope you will love every moment of life. You are alive!
Typo: Vitamin C, not D. 20,000mg/day up what you can handle w/o diarrhea. This is not medical advice.
# LS Says:
> I will report that my latest insurance statement puts their cost of my treatment at almost $400K.
I don’t know much about your disease, but I guarantee you the cost is vastly inflated by the mess of the medical industry arising out of regulation. Let me repeat an example of this that I came across recently. The father of a friend of mine was diagnosed with sleep apnea. The treatment is a machine that blows air up your nose while you sleep, which keeps your nasal passages open. The machine is some simple plastic tubing, an air pump with a computer control and a piece of foam that acts as an air filter.
If you could buy it in a competitive environment, it would cost you $39.95 at Walmart. However, the maker bills the insurance company $1500. Why? Patents, regulations, the elimination of competition, state licensing laws, threats of lawsuits — the list goes on and on. This is one example, I can give you dozens of others (or grep some of my past comments here, where I have given many such examples.)
That is why your treatment costs $400k. That is why you can’t pay for it out of pocket. That is why it is a self reinforcing bureaucracy that is getting worse and worse. Adding the Federal government into an even stronger position of control (and positioning them to take over the whole thing) is guaranteed to make it worse.
> You need medical insurance (and life insurance if you have a dependent family). It’s a collectivist idea, I know, but there are really good reasons behind it.
But do you need medical insurance to pay for your kids’ flu shot? Or do you need medical insurance to pay for your complication free child birth? Or do you need medical insurance for your annual physical?
Lloyds of London has its origins in shipping. But the insurance didn’t pay for the ropes, or the crew or the food for the journey. It paid for disastrous loss. No sensible person argues against medical insurance, what they argue against is its present form, where everything medical, including the tissues you blow your nose with in hospital has to get paid for by your premium.
Insurance is indeed a collectivist idea, a voluntary association. No force, no taxes, just people working together to manage their risk. It is a beautiful thing — no government or force required outside of the normal enforcement of contracts.
> Nothing said by anyone so far negates the fact that medical costs
> will grow even faster in the future as our life expectancies grow longer.
No doubt newer treatments will come on line over time, however, why do you think that means they will cost more? Look at other technologies: we get greater capability for less cost all the time. Why should medicine be any different? The reason it is different is because medicine has been turned into a regulatory dinosaur.
> This is yet another problem that our society will have to shoulder. I know that Obamacare is unpopular, but at least it is an attempt, however flawed at dealing with the problem.
Sure, but paying off a credit card with money from a loan shark is also an attempt at a solution to a problem, it is just a very bad attempt. The Republicans actually had some good ideas (which is frankly a rare event.) Allow interstate competition, would help a lot. Tort reform would help a lot. Removing tax advantages from employer provided insurance would help a lot. But these are the opposite direction from which our current government is going.
My point wasn’t that suburban living is necessarily less efficient, but that given the federal subsidizing a housing and sprawl bubble via FHA, FNMA, FHWA ($70 billion/yr on roads), VA loans (which don’t even require an appraisal), Fannie+Ginnie Mae & Freddie Mac, that the priorities for the allocation of suburban resources are being distorted to be more extravagant than they would be without this $trillions of debt spending injection by the Feds.
I have no efficiency point against people that can afford a backyard without the govt subsidy of the debt bubble for housing. My point is that without the debt subsidy from the Feds, we would see much less uniformity of extravagance in suburbs. Instead they would look more like Detroit, with some lots in disrepair and others more extravagant.
My point is that debt bubbles create the illusion that a middle class can all live above their means, by pulling demand forward by the term of the mortages, i.e. 30 years. I recognize the “ebb and flow” between debt expansion and contraction is a necessary counterbalance to capital hoarding of a feudal era, but when the creation of debt money is too centrally controlled, it leads to excessive overshoots on the expansion side, and more horrific reversions on the contraction side. I am offering the theory that current suburban uniformity of extravagance is evidence that we are very far into the excessive overshoot stage, and that wireless unprofitability is another effect of such overshoot.
Insurance is indeed a collectivist idea, a voluntary association. No force, no taxes, just people working together to manage their risk. It is a beautiful thing
I am undecided about this catastrophic insurance concept. I understand the logic that if x% of the population will have a claim in their lifetime, thus it is lower risk for all of us to pay x% into a pool, than for x of us to be bankrupted.
1. A collective pool breeds claims corruption.
2. Every detailed actuarial analysis of insurance I’ve done, mathematically supports that on the statistical aggregate, everyone would have been collectively wealthier investing the money individually. Since wealthier societies can afford more charity, I think catastrophes should fall to charity.
3. Catastrophic insurance causes people to change to more risky behavior, because they think their risk is someone else’s problem.
4. Who bails out the insurance company? (we all do).
Etc. I have some where about 20 points I had done on this long ago. I eventually realized there is a fundamental math to all such things that involve collective promises. This had a profound effect on my philosophy, since I like math.
# Shelby Says:
> I am undecided about this catastrophic insurance concept.
Who cares? If you don’t want it, don’t buy it, just don’t interfere with my right to buy it.
> 2. Every detailed actuarial analysis of insurance I’ve done, mathematically supports that on the statistical aggregate, everyone would have been collectively wealthier investing the money individually.
Which shows that you don’t even understand the purpose of insurance. It is definitely true that if everyone invested their premiums (assuming everyone gets the same rate of return), that they would on average be better off without insurance. But insurance isn’t about averages, it is about outliers. It is about reducing the deviation from the norm. It is trading a lower average return for a lower risk or below average return.
>I think catastrophes should fall to charity.
I think people should take responsibility for themselves as much as is possible.
> 3. Catastrophic insurance causes people to change to more risky behavior, because they think their risk is someone else’s problem.
Assuming that risk taking is not factored into insurance premium, which in all successful insurance programs it is. And if you have decided that charity is going to pull your butt out of the fire, how exactly is that any different?
> 4. Who bails out the insurance company? (we all do).
But you want us all to bail out anyone who has a catastrophe! The answer in a sensible society is no-one, it being the responsibility of the insured via professional advice, to chose an insurance company that is appropriately capitalized.
#Jessica Boxer Says:
> If you don’t want it, don’t buy it, just don’t interfere with my right to buy it.
Agreed. As far I know, I have NEVER advocated collective force to prevent anything. I mean that I am undecided whether catastrophic insurance is rational.
> Which shows that you don’t even understand the purpose of insurance.
Which shows you don’t read, because I wrote, “I understand the logic is…thus it is lower risk for all of us to pay x% into a pool, than for x of us to be bankrupted”. I am just analyzing, no need to push us to ad hominem emotions.
> It is trading a lower average return for a lower risk or below average return
And I am explaining that is a mathematical fallacy, because uniform distributions are FAIL in nature ALWAYS, because perfection has an infinite asymptotic cost. Random individual outcomes are required to anneal (globally optimize) fitness of overall outcomes, because it is the only global optimizer that works when one can’t know the structure of the problem a priori.
So when you remove the small risk of outliers, you fight against global optimization, which leads to the 20 ways that insurance leads to collectivism creep, and results in a big morass like what we have now in the western world. It is no accident that we are in a debt bubble, people love to promise about the future. That is a fundamental quality of collectivism, and it is always a FAIL and a LIE.
Either you are free market, or you are not, similar to how a woman can’t be a little bit pregnant. And the reason is not subjective, it is based in the math that controls outcomes. That is the math of the probabilistic organization of all matter in our universe. That is entropy. You will find the equation for entropy in every discipline of the sciences, even biology. In fact, even computer science, but I can’t write a treatise here on that to connect the continuum hypothesis, halting theorem, Godel’s theorem, etc.
> charity is going to pull your butt out of the fire, how exactly is that any different?
Charity is not a future promise. It is something someone does of their own free will based on the current reality, not some future reality which no one can know a priori. The mathematical problem with insurance is that it impacts the future reality, such that it removes all the protective power it was designed to create. Because the future adjusts to the economic incentives it was presented with.
The point is that no one can guarantee that we will be able to recover from catastrophe. When we get there, we will know what resources we have available. And if we didn’t waste our resources on collective foolishness, we will have more to drawn on.
> I think people should take responsibility for themselves as much as is possible.
Exactly. Since I know I don’t have medical insurance, I exercise a lot and eat raw whole foods. Those with insurance may not be so disciplined about their health.
> in all successful insurance programs [risk] it is [factored in].
You know where this leads? A device attached to your body to monitor eating, etc.. I told you this is where collectivism is going, because people never learn about this math. And how much prosperity does that create, as compared to one where people willing take responsibility instead of needing forced monitoring.
> But you want us all to bail out anyone who has a catastrophe!
No, unlike insurance, there is no promise. You bailout if you want to. And (on the statistical aggregate) you will have more excess wealth to do so, because you avoided the LIE of insurance.
These things are simple for me to grasp, but so difficult for most people. I don’t know why.
There’s little point to catastrophic health insurance. As my own case illustrates, the real expenses to the insurance companies are the catastrophies. Routine doctor visits add little to the premiums, especially when you consider that most policies have a deductable and a copay. You might as well go whole-hog.
Yes, medical equipment is very expensive. It has to go through a rigorous approval process that is a lot like military procurement ($800 hammers, etc.). Things have to be packed sterile, etc. In my case, the use of ordinary, non-sterile scissors to cut sutures could have resulted in a fatal infection.
I’d like to point out that there were three great centers in the U.S. for the treatment of myeloma. One in Arkansas, one at the Mayo Clinic and the third at St. Vincents Hospital here in New York. I was treated at St. Vincents. St. Vincents is now closed and in bankruptcy. If they were getting outrageous fees and gaming the system, why aren’t they still in business? I can tell you that I went through two stem cell transplants there for two weeks apiece, and I did not see *any* examples of great fraud or abuse, or overstaffing, or any of the fairy tales of medical expense that the wishful thinkers claim. The same applies to the many, many tests given to me over the years. They were all necessary.
After the transplants, I was prescribed Revlimid. This is new drug from Celgene that has proven extremely useful for various cancers. It costs about $200 per pill. (I took 10 pills per month.) Outrageous? Gelgene spent millions to develop it and get it approved. They need to recoup their costs before their patent runs out. If they can’t do that, you can forget about new drug development.
These are the real-life experiences of one person. Things cost what they cost. Blathering on about free markets, Liberterianism, patents and so on does not bring in any money. This is real life. Deal with it. If any of you is going along without medical insurance or a drug plan, you need to fix that problem RIGHT AWAY.
#Jessica Boxer Says:
>So when you remove the small risk of outliers, you fight against global optimization,
Your argument is extremely hard to follow, “global optimization”? That is nuts. However, insurance does not remove the small risk of outliers, it recognizes their existence and provides a mechanism to save for them and pay for them.
> which leads to the 20 ways that insurance leads to collectivism creep,
> It is no accident that we are in a debt bubble, people love to promise about the future.
We are in a debt bubble because our government is run on debt, and they are run on debt because we have a political system that allows politicians to sell our children’s future for our votes today.
> Either you are free market, or you are not, similar to how a woman can’t be a little bit pregnant.
That is just simply false. “freedom” is not black and white, it is a dimension. Regardless, people agreeing to work together against future calamity, and providing a shared mechanism for doing so is 100% freedom. I don’t see why you disagree with this. There is a difference between voluntary collective action, and government action.
> That is the math of the probabilistic organization of all matter in our universe. That is entropy.
Good gravy, you are talking about a macro economics of the universe? Sorry that is a bit above my head (and yours too I suspect.) However, let me just point out that human society has been getting more and more organized and functional over time, not less. The science of entropy allows for this for various reasons that you don’t seem to acknowledge.
> Charity is not a future promise.
It is if you are claiming that is your mechanism in society for dealing with calamity. Charity quickly turns into entitlement if you let the government get involved.
>Exactly. Since I know I don’t have medical insurance, I exercise a lot and eat raw whole foods. Those with insurance may not be so disciplined about their health.
FWIW, I think that is a foolish choice, but knock yourself out.
> You know where this leads? A device attached to your body to monitor eating, etc.
Right, because that is why every car has a driving monitor to manage car insurance risk. Competition allows people to balance fudge in the insurance premium against voluntarily submitting to various degrees of monitoring.
> These things are simple for me to grasp, but so difficult for most people. I don’t know why.
Because you are talking nonsense.
Hypothesis that Myeloma is due to vitamin B12 deficiency.
My personal experience is that B-complex deficiency caused me severe insomnia (lucky if I could sleep 3 hours a day, extremely frustrating, I lost years of my life to that struggle, more exercise made it worse) and sudden onset of peripheral neuropathy. This seems to be back in sustainable balance now eating more whole foods (vitamin supplements only gave a temporary benefit, then lost efficacy), with the intense exercise have a positive effect now that the insomnia is solved. I read that your type of cancer is best to use as limited as possible of treatment in order to extend longevity. Intuitively, this sounds like a cancer that is a potential candidate for holistic experimentation. If I were you and it was physically possible, I would be training like madman for triathlons, eating raw vegetables and fruit, and living in a warm climate and maintaining a skin tan. I am not trying to belittle the seriousness of the situation you face, perhaps the body has enormous capability that can be tapped.
Because you are talking nonsense.
End of discussion. I don’t debate any more with people whose logic is ad hominem.
> I don’t debate any more with people whose logic is ad hominem.
That is not ad hominem. It was a mildly cranky response to a pretty silly statement. Grow up. I know why these things are simple for only you to grasp and not for anyone else. It’s because you are often truly bad at writing, that is, at explaining yourself. I am good at reading, but you often write prose that doesn’t make sense. By way of contrast, Jessica is completely clear almost all the time. Wrong sometimes, but clear! If you are going to try to advance sophisticated, unusual ideas, even if they are sophisticated and unusual by being simple, you need a sophisticated, unusually good way of expressing yourself. I think you need to read a lot of Hemingway. Use short sentences made up of short words, like he did. He was both sophisticated and unusually good at expressing himself – through simplicity. If your ideas are so simple, you should be able to explain them simply. Your explanations are complex.
OTOH, when you write about health, you do much better.
Shelby, I’m not doubting or denying any of your personal experience, but the site you linked to as
> Hypothesis that Myeloma is due to vitamin B12 deficiency.
i.e. http://www.canceraction.org.gg, at first glance ticks all of the boxes for a quack site – heavy metal toxicity, mercury fillings, Max Gerson, coffee enemas, Electro Magnetic Fields and the rest. It’s also not helped by having an unusual country TLD (Guernsey).
I wouldn’t trust anything written there without further independent verification.
# LS Says:
> There’s little point to catastrophic health insurance. As my own case illustrates, the real expenses to the insurance companies are the catastrophies.
I don’t believe that is true, I think your case is an extreme outlier. However, I don’t have any data to back up my position, so if you have some please let me know.
> Routine doctor visits add little to the premiums, especially when you consider that most policies have a deductable and a copay. You might as well go whole-hog.
I don’t agree. When people don’t pay the cost of things they are less prudent in its use. Co -pays probably help a little, but a doctors visit costs a lot more than $20. There is no price competition because the user doesn’t pay directly, and because the way the market is structured the insurance companies have a hard time managing it too.
> Yes, medical equipment is very expensive. It has to go through a rigorous approval process that is a lot like military procurement ($800 hammers, etc.). Things have to be packed sterile,
The “rigorous approval process” is filled to overflowing with bs. I have done some work on software for medical devices and you can’t imagine how wasteful it is until you see it with your own eyes. And not only wasteful, but dangerously distracting. But lets face it, the incentives on the regulatory bodies are all wrong, the price competition on the producers is messed up by patents, and all sorts of other things drive the cost through the roof.
Excessive safety is hazardous in itself. For example, if you use statin drugs you will read pages and pages of stupid “don’t shove it up your nose” type warnings. However, buried in all the warnings will be a statement that you should not take it with grapefruit juice. This is pretty non obvious, but the two interact in a way as to cause poor absorption, and can potentially lead to an overdose taking it on a normal schedule. By burying the real warning in all the nonsense you lose the really important thing.
Equally, excessive safety can also mean that fear of iatrogenic deaths means that drugs that could have saved many lives are never made available, or are withdrawn unnecessarily. This has resulted in the deaths of millions of people in the last few decades where the FDA has withheld drugs from the US market that were available and saving lives in Europe. But lives not saved are never counted on the ledger.
Excessive regulatory costs also means that drugs become too expensive to make available. A recent example of that is coral snake antivenin. In the US the stock of this antivenin is about to expire. However, nobody will make any new antivenin because there are only a few hundred bites a year, and the regulatory costs of starting production again are so high that each vial would be too expensive to market. Consequently, if you get bitten by a coral snake, you’d better hope you are in Mexico, because they have plenty of antivenin. People who die of coral snake poisoning are also not counted on the ledger as lives not saved.
> etc. In my case, the use of ordinary, non-sterile scissors to cut sutures could have resulted in a fatal infection.
I don’t know how it works for you, but sterile can mean use a new thing every time, or boil it in water for a long time. Sterile is not hard to achieve (especially with metal objects), but if cost is no object you take a different approach.
> St. Vincents is now closed and in bankruptcy. If they were getting outrageous fees and gaming the system, why aren’t they still in business?
I don’t believe I ever claimed that doctors were getting outrageous fees or gaming the system. I don’t know much about St. Vincents, but if I were to guess, I’d say it probably closed because it had to treat people who never paid their bills, or because some scumbag lawyer sued then into oblivion. That is the sort of thing that kills hospitals. I think medical staff are like most decent people, trying to offer a valuable service and make a living while putting up with heaps of bs from bureaucrats and other scummy people who are sucking the life out of the system.
> I was prescribed Revlimid. … It costs about $200 per pill. (I took 10 pills per month.) Outrageous? Gelgene spent millions to develop it and get it approved. They need to recoup their costs before their patent runs out. If they can’t do that, you can forget about new drug development.
So it is widely claimed, but if you only look at one side of the coin you get a very biased answer. The fact is the drug patents also has a lot of things that decrease innovation as well as providing a motive for innovation. As a matter of fact, the GAO recently came out with a report that concluded that drug patents are, on net, detrimental to innovation in drug development. Or to put it another way, patents mean we have less new drugs not more.
I have repeated this argument a hundred times on this blog, and so I’ll not do it again. I don’t know if Revlimid would have been developed if drugs didn’t have patents, and for your sake I am glad that it did. However, the fact is that the patent regime may very well have prevented lots of other drugs from being developed. Deaths not prevented are never counted in the FDA’s statistics of the safety and efficacy of drugs.
> These are the real-life experiences of one person. Things cost what they cost.
Things don’t “cost what they cost.” The cost of things depends on what goes into them, and if you put worthless or counterproductive things in, then that drives up the cost. A large part of the cost is the efficiency with which things are made (from concept to delivery), and without appropriate incentives and competitive pressures there is much less pressure to make things efficiently.
I apologize for rambling on so long.
Nonetheless, let me offer you my best wishes for your future health. The free market has produced a wonderful medical system in this country, so I hope that you can use it to your benefit for a long and healthy life.
“I don’t know much about St. Vincents, but if I were to guess, I’d say it probably closed because it had to treat people who never paid their bills…”
Yes, that’s a big part of it. Another reason that *everyone* needs medical insurance. I certainly don’t want a society where hospitals refuse treatment to some people, but the hospitals *must* get their money. Either the rest of us have to carry the cost of the deadbeats, or the hospital has to close.
Things cost what they cost.
My answer to Jessica’s “20 ways” question about my assertion that insurance begets wider scale collectivism, is quite simple. First the reader must understands the various comments I have been making (in the past few blogs) about passive capital. Then note that a pool of insurance money is passive capital. If someone wants to explore that rationally, I am willing to go deeper into that logic. I can try to collect my logic and see if I can reduce it to a set of simple, concise statements. I have linked passive capital in a broad theory of history, from feudalism up to what I believe is causing current day events with the declining industrial era.
The problem with my exposition, besides the fact that I am not as gifted in prose as someone like Esr, is I am thoroughly exhausted from programming and writing about 15 – 18 hours a day (no joke). I haven’t left my room nor had a shower for I think is going on 2 months of nonstop effort (my maid brings me food). I am determined to finish Copute before I see the light of day. Eventually I am often able to take what is clear in my mind and explain it succinctly, such as I think I accomplished with the tutorial I wrote the prior all niter.
The reason I wanted to disengage from Jessica, is because I sensed that she was not trying to explore the topic rationally. And if a person is not rational, then debating with them only ends up making two people look like idiots, because it devolves into a shouting match that buries the logic of the issue. If my point is “nonsense”, then the rational way to express that, is to present a counter logic. First, she accused me of not understanding the mainstream logic and math in support of insurance, but I had written that mainstream logic in the comment she was replying to. The second evidence that caused me to conclude that she was in a visceral mode, is she asked me a question about the 20 ways (meaning her data is not yet complete, if she is sincerely seeking the truth) and yet in the same comment declare with certainty that I am nonsense. So I just didn’t see how she and I were going to make in progress, when she had made up her mind to vilify me. Whereas, my opening comment said that I am “undecided” about the issue, meaning I want to explore it rationally.
Note that passive capital is dead money, because stored capital is always losing value unless it is actively invested. But the only way a collective body can invest, is via debt, because the whole point of active investment, is that individuals compete on ideas about resource allocation. I can take that logic much deeper, if there are some readers who are sincere. It is very far from “nonsense”.
@James M: thanks for pointing that out.
I read Jessica’s latest reply to LS, and it is so ironic to me that she “gets it”, but somehow fails to apply what she understands, to what I am saying about the costs of passive capital.
This theory may or may not be interesting or have applicability beyond your suggestion to me.
Apparently my mind naturally expresses concepts in the style of computer language, where expressions and concepts are composed of RECURSIVE permutations of themselves, and this is exhibited in my writing style especially when I am deep in programming mode and mentally exhausted. Some people have a natural talent for some things, and are not as good as other things. For example, I think Esr wrote in the past about a comparison of his versus Linus’s strengths.
Whereas, in my prior linked tutorial, I point out that in human language, the sentences and concepts are usually only weakly referentially recursive, i.e. sentences are not compositions of sentences, but I often try to force them to be, i.e. “globally optimizing” is referring to the whole body of comments I had presented over the past days.
Thus I must expend effort to flatten concepts from a N dimensional space of unlimited recursion and orthogonality of expressions (where the programmer must assume full generality of the potential application of constructs), to the linear space of human language. I do much worse when I have less energy or am forced to rush because I have too many things open. Perhaps other people either naturally think in terms of human language, and/or they are gifted to process the bidirectional mapping effortlessly. In general, I do better when I am not trying to say too much all at one time. But I am very impatient about concepts, because there is so much good work that needs to be done.
For example, I submitted comments building a theory about passive costs, and then in other comments connected it to entropy, degress-of-freedom, and fitness, I assumed that readers could make the fully generalized connection of the sources of costs that cause resource failure (i.e. low productivity and ultimately rationing) in collectivism and thus the applicability of passive capital and its connection to debt. But I understand in reality, we have to flatten out these intertwined relationships into a linear statements, in order for readers to gain comprehension of the specific interactions of those concepts that I am concerned about.
The theory (which I am undecided about), that passive capital costs of pooling investment capital for catastrophic insurance exceeds the collective benefit, may or may not hold up to peer review, which is why I wanted to discuss it. I do understand that a person who doesn’t have the free time to present concepts clearly, is probably wasting his and the readers’ time. I tried my best, and perhaps I failed on that. Apologies if I overreacted to Jessica’s “nonsense” comment, I am just trying to avoid descending into some non-productive, emotional morass.
Several typos. Change “rationing) in collectivism” to “rationing) in insurance”. Change “passive costs” to “passive capital costs”. Change “good as other things” to “good at other things”. Change “the bidirectional mapping” to “the bidirectional (but not bijective) mapping”. Change “exceeds the collective benefit,” to “exceeds the collective benefit to the degree of inducing widespread debt and collective failure,”.
I am truly exhausted, and will take a break from blogging.
>> vast majority of federal money transferred to states and localities is not for roads
> This is 3rd time that I will say the same explanation to you.
And it’s the third time that you get it wrong. You take a couple of facts, add a couple of falsehoods, and end up with an error.
> The Feds are running $trillion deficits, and some of this money ends up in state tax revenues.
Yes, but that money goes to things other than suburbia.
> The Feds created the housing and suburbia bubble by creating FHA, Freddie Mae & Fannie Mac which buy most of the loans from the banks, etc, etc..
The “housing bubble” wasn’t suburbia only. And, while the housing bubble had huge effects on the federal deficit, the deficit is significantly larger and much of the “not housing bubble” part went to cities.
> Are you asserting that the only way the Feds can impart money to the states and the suburbia bubble is by direct transfers?
> If no, then you have no point against my point.
Except that I do, as shown above.
Shelby’s argument has basically been “my rent costs $2100, therefore the Chinese invented concrete using rubber bands”.
> But the only way a collective body can invest, is via debt, because the whole point of active investment, is that individuals compete on ideas about resource allocation.
That’s true iff debt includes equity, which is an odd definition.
So, we’ve got a choice. Either Shelby is babbling or he’s writing in a personal code.
He wouldn’t be the first person to claim to be speaking in code when it becomes clear that he’s actually babbling.
> Yes, that’s a big part of it. Another reason that *everyone* needs medical insurance.
I think that is probably true, however, the problem with medical insurance is simply that it costs insanely way to much. And it costs insanely way to much for the reasons I outlined about. See, when I say it costs insanely way to much people think that I mean it is 10% or 20% burdened with regulation, and other stuff. But I don’t believe that is true at all. I think all that stuff imposes a 1,000% to 10,000% burden onto the cost. What is my basis for this? I base it on sampling. I have identified dozens of medical products and services that can be documented to cost 10-100 times as much in the insurance world as when similar products are offered under the full glare of competition.
I won’t reiterate them here. I have given at least a dozen examples in comments on this blog before. I gave one example above: a CPAP machine that undoubtedly costs 50 times as much as it should.
A family medical policy in Illinois typically costs $1500 a month (depending on bla, bla, bla). If that policy cost $300 a month, we would see a qualitative change not just a quantitative change.
Things do not “cost what they cost”. The pricing of goods and services is much more complicated than that. On the contrary: in a society where innovation and competition are given free reign the cost of things decreases inexorably, and the quality of things increases inexorably.
Medicine is not a political football, it is quality of life, or life and death. The present system is the proximate cause of the deaths of millions of people in the USA. Obamacare is a poison that doubles down on the current insanity instead of fixing it. It is the government “fixing a problem” that they caused in the first place, and fixing it by making it worse.
It is like a guy stabbing you in the gut, then offering to drive you to the hospital, and then, when you accept, he drives crazy and crashes your ambulance into the wall at 80mph.
Which reminds me, Shelby’s assumption that more efficiency leads to more sustainability is wrong. It’s easy to construct cases where a less efficient resource allocation is far more sustainable. In fact, he claimed to have lived in one – the Philippines. The rural areas are probably less efficient, but they’re almost certainly more sustainable. Yes, the rural areas produce a lot less and different things but sustainability is largely determined by costs, not efficiency. (Efficiency reduces the cost to produce a given output, but outputs are also a variable.)
That’s important because he makes a similar type error wrt cities and suburbs even if we grant all of Shelby’s other assertions (many of which are false). Cities may well be more efficient at providing food, shelter, communication, and transportation than suburbia but they fail to produce other things or do so less efficiently.
Pineapple game me some temporary energy.
Shelby’s assumption that more efficiency leads to more sustainability is wrong
Andy you are conflating so many things, that it is becoming arduous for me to unravel all of them.
What “efficiency” are you referring to? I am assuming that I guess you mean efficiency of materials cost for suburbia?
This demonstrates that you are not even close to understanding my point, so of course something you don’t understand won’t make any sense to you.
I have been writing about the entropic efficiency of the relative knowledge in a system. How many times have I stated that the problem of collectivism is it attempts to create uniform distributions, which by the standard mathematical equation for entropy, are low-entropy system. Low entropy systems are not as robust as high entropy ones in terms of long-term adaption outcomes. Caveat: At any given static slice of time, high-entropy systems can be composed of low-entropy semi-closed constituents, but these low-entropy parts don’t outlive the universal trend to maximum entropy as stated in 1856 in the law of thermodynamics which governs the matter of our universe from large to small, and from energy to mass.
And it’s the third time that you get it wrong. You take a couple of facts, add a couple of falsehoods, and end up with an error.
You simply do not understand the point. You building straw-man tangents.
That’s true iff debt includes equity, which is an odd definition.
How does one invest in debt, except by buying a bond. You thought I mean the insurance company will borrow money? Why would you think that?
The rest of your comments make no point at all.
Someone who debated with me in the past about my Theory of Everything, just emailed me this. I haven’t studied it yet, but perhaps it is vindication time!
> It is an approach to explaining gravity using thermodynamics. Black
> holes show up, entropy, disorder… the sorts of things your own
> theory involved. Perhaps this confirms your own approach. I’m just
> starting to look into it a bit now.
Well, your comments starting at September 9th, 2011 at 4:11 am and ending at September 9th, 2011 at 7:42 am are quite well written, so I expect you are correct that you have more problems explaining recursive thoughts. The other thing all of us do is get excited and write too fast. Fatigue and hunger mess me up, also.
I’ve noticed that I am more poorer at writing and discussing well when I am upset or cranky. I was able to notice Patrick doing the same and he confirmed it. One thing that makes me cranky is going round and round with someone when it’s clear to me they don’t understand my points. Often it’s my fault because I am going too fast and skipping steps. But I’m still cranky. When the crankiness shows up in my writing the person I’m going round with often senses it and gets cranky back. Things can degrade rapidly. Have you experienced this from either end?
Thank you so much Tom for writing that. It is the only appreciation feedback I have ever gotten from esr.ibiblio.org, so like all firsts, it has a special quality. I am actually embarrassed by my boisterousness, and the main thing is I want to be a small part of a team or a society without exclusion. I especially like when society is diverse to the point of spontaneous displays of shared creativity which takes on the form of love. Esr had a blog recently about a impromptu live band in a subway, and it reminded me of my youth in New Orleans, with the impromptu Jazz that used to flourish before it was commercialized as a derivative of nationwide debt-induced mayonnaise that has spread over everything. I remember as a very young child, that people were out strolling the neighborhood, and that is why I love the Philippines. When I stroll in the USA at public gathering places, people don’t have spontaneous displays of affectionate conversations with strangers. I want to be friendly with everyone here, and to be best of my human failing ability, I harbor no pride about anything that has transpired here, and I wish no one would feel any animosity. Everyone here aided in directing me away from my sloppy writing, and it is not their fault that I didn’t write clearly. In short, I appreciate everyone, and I tolerate everyone. I saw that Winter got refuted in the other blog, and I hope he doesn’t leave, because I learn something from everyone. Winter taught me about the Theory of the Firm, Jessica taught me 2 years ago about Coase’s Theorem, and I am sure that Andy and Nigel have or will teach me something important, etc.. Of course, I have learned some critical concepts from Esr. I would like to explain that I strive to not be religious, and I think I was misunderstood when I first approached this blog, but I won’t go there, because it doesn’t fit this blog’s audience. For sure, I am not the type of Christian that anyone else would think of when they imagined what a Christian is. I don’t believe in converting anyone to anything for example. But again, I won’t explain about that.
Andy Freeman, it was the astute portion of your comment, that pointed out that the resource consumption level is not correlated with the entropic efficiency, that enabled pointed me in the direction of how condense my point. I failed to point that out, for the reasons Tom conveyed, too tired, flustered, hungry, etc..
Also I want to make two things very clear about me so that hopefully I won’t be incorrectly stereotyped. I don’t go to church, and I don’t have a vendetta against science or evolution. I embrace the scientific method and try not be predisposed. And everyone is welcome to think what ever they want.
>The proble with comparing public to private school performance is that public schools have to take anyone.
Google for “Jaime Escalnte” and “Marva Collins.” The kids aren’t the problem.
In case my overall point about insurance somehow is still not clear, the point I raised is that the lender is no less economically (not talking morals here) culpable in the contribution to declining entropic efficiency caused by debt, as debt pulls forward demand and stimulates more uniform distribution, which is what I referred to as “mayonnaise”, trying to draw the analogy to something that hides the diversity of flavor. I said I am undecided as to whether losses in entropic efficiency due to the passive capital of catastrophic insurance is a detrimental enough to outweigh the individually self-interested benefit. My concern is I think the systemic entropic efficiency losses are self-reinforcing, meaning that a little bit of it, drives more of it, and there is no natural limiting balance. But I have not yet been able to make this part of my concern irrefutable.
Here is an inspirational link which is an example that humans can be naturally charitable, when they have excess resources. Here they go out their way, by their own free will, to give their own blood to solve a dire emergency. I suppose this is an example of the gift economy that Esr mentions in the Magic Cauldron.