Living in Euro-Cloud-Cuckoo land

I often tell people that I think The Economist is the best news magazine in the English language – and not because they make a relatively frequent habit of quoting me, either. The house style is intelligent, often penetrating, witty, and sober about important things.

It is very rare that The Economist indulges in wishful thinking to the point of doomed fantasy. But that is exactly where their lead editorial, How To Save The Euro, goes this week. Save the Euro? Really? One wonders what they’re smoking over there.

The editorial makes hilarious reading, if you have the bleak sense of humor I do about such things, because while The Economist owns up pretty frankly to the large risks of a Euro rescue plan and concedes how unlikely it is to succeed, its wise men are still in denial on some very fundamental points. The most important of these is its insistence that there is a useful distinction to be made between governments like that of Greece – frankly insolvent – and governments like those of Spain and Italy which merely have a liquidity problem.

The ugly truth, which the bond markets are now waking up to, is that there are no solvent governments in Europe. Every single one (including The Economist’s native United Kingdom) has made political commitments to future entitlement spending that they will be unable to meet, and taken out loans they will be unable to repay. The governments that The Economist persists in regarding as solvent are merely those about which the bond markets have not panicked yet.

Why are there no solvent governments in Europe? Because the logic of social-democratic politics, both in Europe and the American dare-not-speak-its-name version, leads to a perpetually expanding class of government clients being funneled money that is increasingly outright borrowed, because the ever more taxed and regulated private sector simply cannot generate enough wealth for the redistributors’ political needs.

“The trouble with socialism,” as Margaret Thatcher observed, “is that eventually you run out of other peoples’ money”. Yes, I’ve made this point before – but it bears repeating, because all the grave mumbling and comic-opera posturing now going on from the state of California to the shores of Greece is designed to obscure that central point. The Economist, along with the elites it sells to, is caught up in ever more frantic efforts to evade the fact that the political fixers have run out of other peoples’ money.

That’s what the recent downgrade of U.S. Treasuries means. The bond markets are figuring out that no amount of tax-rate fiddling will close our structural deficit. Anyone who thinks “taxing the rich” will do it is a particularly innumerate idiot (but there’s never any shortage of those). “The rich” don’t have enough money for that. Nobody has enough money for that.

So…don’t expect the Euro to survive another six months. What we’re going to see, over the next few years, is an increasing frequency of sovereign defaults as the big-state system collapses under the weight of the debts it has run up. There will be bank runs, more financial panics, depressive convulsions, and (all too probably) hyperinflation from governments that don’t outright default.

If we’re lucky, there won’t be more than a lot of civil unrest while this goes down. If we’re unlucky, there will be a war or two and some serious crackups in major nation-states. History does not suggest much ground for optimism here. In reality, there is no such thing as “Too big to fail”; there is only “The bigger they are, the harder they fall.”

347 thoughts on “Living in Euro-Cloud-Cuckoo land

  1. I’ve heard from a friend in Finland that their central bank is producing currency and coinage so they can drop out of the Eurozone quickly if need be. That tells me their leadership is reading the situation as rather dire.

  2. Some people work for a living and some people vote for living. Sooner or later these two divergent mind sets must collide.

  3. When one’s framework meets the shredder, the denial can be truly breathtaking.

  4. @esr
    In history, many countries have defaulted, or even had hyperinflation. It was never a cause of desintegration. And most certainly not a reason to abolish “governments”.

    On the countrary. After a big fpinancial crisis, goverments are strengthened.

    But I agree. The Economist has a good track record. I trust their view on the matter lmuch more than yours. Especially as your insight in European ecnomics is scanty.

  5. I think they’ll survive six months for sure. It’ll be six months of increasingly ill-advised bailouts that keep it afloat, but too many people have too much invested in the concept of the Euro for them to let it fail gracefully. So it’ll be long, ridiculous, and incredibly painful instead.

    Monster: Yeah, I think Finland is the only country in Europe that’s really willing to admit what’s going on. And good god are they raising some hell doing it. Asking for collateral on their bailout loans and getting it, behind the backs of the rest of Europe? It’s like watching a catfight, but less sexy and more likely to lead to a war.

  6. For the first time in what seems like ages, I actually agree with you on an economical issue. Problem: I live in Europe myself.

  7. That’s what the recent downgrade of U.S. Treasuries means. The bond markets are figuring out that no amount of tax-rate fiddling will close our structural deficit.

    Standard and Poor’s downgraded US debt, not the bond markets. The bond market reacted by pointing and laughing, and then buying US Treasuries.

  8. I think esr is dead on here, and the world situation is on the edge of a cliff in many more ways. “Spengler” has been making the case that Egypt is on the verge of a food crisis that will make Somalia “look like a picnic.” China is a house of cards, with a real estate/bank lending bubble, the worldwide recession sending millions of factory workers back to the often-restless provinces, anger over pollution and corruption, etc. I’ll bet Beijing is considering how much of a fuss a weakened and distracted Obama would really make if they made a lunge for Taiwan to “unify China” and (not coincidentally) quell domestic troubles. Plus Syria, Iran, Bahrain, Turkey….

    Oh, and don’t forget US financial exposure to all of this, through the IMF, with Fiat owning Chrysler, etc.

  9. bond market reacted by [...] buying US Treasuries

    This was anticipated decades ago by Exter’s Inverted Pyramid.

    The Euro may fail and it will hurt the people and not the elite. But the EU won’t (permanently) disintegrate nor will the elite lose control over the cattle, because a population of socialists always returns to the same trough. The human political condition is remarkably insoluble, and the only progress that is ever made is technological.

    I place my bet on gold, guns, and gore.

  10. I was making the same arguments in 2009 and 2010. Socialism, hyperinflation, dollar depreciation, US default, etc.

    But I was wrong then for the same reasons that you are wrong now. My model of how the world works didn’t survive contact with reality.

    Commodity inflation was a one-time blip due to demand from emerging markets Now prices have flatlined.

    Fears of hyperinflation and US default should have driven bond prices down, and yields up. Instead prices are way up, and yields are way down.

    Don’t tell me that governments and central banks are holding down commodity prices and long-term bond yields. No government has enough capital to do that, the markets are just too fucking big.

    Sorry @esr, but your cognitive model and mine didn’t stand the test of reality. It’s time to get a new model.

  11. In history, many countries have defaulted, or even had hyperinflation. It was never a cause of desintegration.

    You might have heard of the Soviet Union, once upon a time?

    When the money runs out to run business as usual, the out-of-money, out-of-credibility central government suddenly can’t manage issues that had stayed safely suppressed for decades, even centuries. One of those issues that couldn’t stay suppressed pulls the trigger, sure, but running out of money loaded and aimed the gun.

    Belgium, Spain, Italy, and Britain all have decent centrifugal forces working on them already.

    And a peaceful break-up is the soft landing. The hard landings go all the way up to bloody revolutions that install expansionist totalitarian regimes. Maybe Europe is too old for that. But I’d keep an eye on the French just the same.

  12. @esr
    I’d like to point out a possible typo.
    ” and taken out loans they will be unable to replay”
    Shouldn’t the last word be “repay”?

  13. People have not been paying attention when the Euro was introduced. They all have some hazy memory about their “national” currencies and “economic independence”.

    However, the hard economic fact is that the German economy dominates the whole of the EU economy. The economies of all the countries surrounding Germany were completely locked to the German economy. And their currencies were bolted to the D-mark. They had no freedom to manipulate their currencies or interest rates without paying a very, very hefty price in terms of a long term increase in interest rates.

    To summarize, the countries in the German economic zone, which make up the bulk of the EU, paid in D-marks, but had no say in the management of the D-mark. Then, in the early nineties, the French had a wonderful idea to get some some control back over their currency. They made a deal, the Germans would relinquish control over the D-mark, and the French would allow the Germans to drag Eastern Germany into the EU. So, the D-mark was relabeled Euro and the other countries depending on it got a say in the interest policy of the German Central Bank, which got a new annex in Frankfurt.

    They drew up some requirements for entry into the Euro zone that would exclude Italy, Spain and the other economies that were more independent of the German economy. But these countries made a herculean effort to get in, and succeeded. Sowing the seeds of the current troubles.

    If the Euro falters, we are back to the old situation, where most EU countries will pay in D-marks, without a say in interest rates. Because the deeper economic reality is still the same: Most of the EU economy is dominated by Germany. Some countries, like Finland, are outside the German sphere, and therefore less dependent on the D-mark. For France and the smaller border countries of Germany, there is not much choice. It is either the Euro or the D-mark. Predictions are then that if the Euro is abolished, we will get the Neuro: the North European Euro. The delay is expected to be the time needed to print the new currency. Probably Finland will fall off, but they have no urgent need to be in anyway. They might have some second thought about it when they see their interest rates starting to fluctuate (rise) again.

    This short overview shows the original article could hardly be more removed from the economic reality.

    But Eric is in good company. Most other Europeans have just as little understanding of European economics. In contrast, the Economist (the periodical) has a lot of the required understanding. So in future, Eric might reconsider if he thinks he can beat an analysis printed in the Economist. They have been wrong before, but their track record is better than almost anyone else. I would not bet against them in economics or politics. (their track record in science and technology is less stellar)

  14. @Steven Ehrbar
    “You might have heard of the Soviet Union, once upon a time?”

    Blaming the fall of the Soviet Union on government finances shows you have not understood anything about the USSR. For a starter, most of the population is still in the central state: Russia. And that underwent a financial collapse after the dissolution of the USSR. As a result of that financial crisis they got the current authoritarian government.

    @Steven Ehrbar
    “Belgium, Spain, Italy, and Britain all have decent centrifugal forces working on them already.”

    And how are the language disputes in Belgium and Spain related to their government finances? You really want to suggest the Flemish and Catalan just thought about We are talking centuries.

    Centrifugal forces in these countries are negatively correlated to economic prosperity. The better the government finances, the more people want to be “free”. The moment the times go bad, the call for “freedom” becomes muted.

    @Steven Ehrbar
    “But I’d keep an eye on the French just the same.”

    If there was ever a “Big Government” people, it would be the French. So I am not sure what you are waiting for.

  15. Ah, yes, the Soviets had no financial problems at all, which is why they didn’t desperately throw economic reform (under the name “peristroika”) at the wall and hope that it would stick. Of course not. Silly me.

  16. It amazes that otherwise bright people can’t understand the simple concept that economic collapse doesn’t convert collectivists into anarchists. Nothing will change.

  17. @Shelby
    “economic collapse doesn’t convert collectivists into anarchists.”

    Now, that is an analysis I can agree with.

  18. @Winter

    Initially you say. “So, the D-mark was relabeled Euro…”

    But later you also say, “…there is not much choice. It is either the Euro or the D-mark. Predictions are then that if the Euro is abolished, we will get the Neuro: the North European Euro.”

    This is unnecessarily confusing – if the D-mark is really the Euro, are you saying the D-mark is the Euro is (or will be) the Neuro?

    I am more persuaded by Eric’s analysis because reading him, a thing stays a thing. The law of identity is as important in economics as in every other field of endeavor.

  19. @Winter
    “The economies of all the countries surrounding Germany were completely locked to the German economy. And their currencies were bolted to the D-mark.”

    That is not true. I grew up in Belgium, and I can remember several devaluations of the Belgian Frank. It’s only in the decade or so before the intruduction of the Euro that the Belgian Frank was “bolted” to the D.Mark. At that time all currencies that would later be absorbed by the Euro were bolted to each other.

    (BTW. The “centrifugal forces” in Belgium are a godsend. The country’s been running on automatic pilot for almost 5 years now. Best thing that could happen to in this crisis. )

    @ESR: Not all European countries are verging on bankruptcy. Don’t confuse “European Union” with “Europe”…

  20. @K_
    “At that time all currencies that would later be absorbed by the Euro were bolted to each other.”

    Indeed, my point. Because it was the Bundebank, and the Bundesbank alone, that set the interest rates and determined money supply.

    Any country walking out of step was severely punished by the financial markets. Just as they are now.

  21. @Winter: No, at the time that all pre-Euro currencies were bolted together in preperation for the Euro the European Central Bank started operating, and was responsible for the money supply. From that day on the different european currencies were just different manifestations of the same currency…

  22. @K_
    “No, at the time that all pre-Euro currencies were bolted together in preperation for the Euro the European Central Bank started operating, and was responsible for the money supply.”

    I know my country, the Netherlands, had not dared to shift a hairs width from the German policies for a decade. The same for Austria. The French were growing very anxious about their inability to vary their own interest rates. Just before the fall of the Iron Curtain, the French lost all room for interest rate policies. When the British left the fixed european exchange rate system (ERM), everyone was hit by interest rate increases. By then, the Belgium Franc had been in that fixed exchange rate mechanism (ERM) for a long time. Also, the German Economy was not only by far the biggest in the ERM zone, but they also dominated European exports.

    The lesson was learned that if you wanted to have low interest rates, you should follow the D-mark. So the French took the stance that if you cannot beat them, join them. See above.

    http://en.wikipedia.org/wiki/European_Exchange_Rate_Mechanism
    (This Wikipedia entry is somewhat teleocentric, the ERM was very vague about the future form of monetary union, the idea of the Euro as a real currency came only around 1990 and the necessary treaties were only signed in 1992)

    If you look through all the posturing and propaganda, EU policy is largely a power struggle between Germany and France, with the British as a reluctant third party. There is obviously more to the EU, but this power struggle is a good starting point for understanding.

  23. The normal meaning of insolvency is that you cannot meet the payments that your existing commitments to creditors require.

    It is neither here nor there whether “logic of social-democratic politics … leads to a perpetually expanding class of government clients”. If ESR is right, perhaps now solvent countries will become insolvent. But the word insolvent does not work the way his article uses it.

    Incidentally, the UK is not in the Eurozone, and if you wish to talk of non-Eurozone Europe, Switzerland is one of several European nations with government debt under 40%.

  24. @Winter:
    The corollary is the ongoing collectivist integration of EU is driven by what the Europeans are.

    The unsustainable economic costs are transferred to the weakest, either within the EU or those developing nations which can be colonized under fiction of “spreading democracy”, which also serves as a front for drug running by those coddled by the collectivist system.

    Does Europe have a drug running agency like our CIA, or does the CIA run Europe too?

  25. It frightens me that there are still so many Americans who refuse to comprehend that the same thing is happening on our side of the pond. Prior to 2009jan20 it was customary to point out that the Eurosocialists were simply ten years ahead of the American socialists in bringing about collapse, but nowadays our Marxist-in-chief has closed that gap to perhaps a year or less.

    The reason it is problematic is because the socialists still have a firm grasp on our media and, more frighteningly, our education system. They are creating new socialists faster than us Real Americans can vote them out and dismantle their destructive policies. They paint us with patently inane labels such as “racist” and “corporate aristocrat” when we point out the obvious insolvency of tax-and-spend economics.

    Western society as we know it is teetering on the brink of extinction. One can only hope that the impending demise of the Euro is seen as a wake up call for everyone else, and a liberation of economic policy is the result.

    (Note that I refuse to invoke the word “collapse” because that word attracts “survivalists” who have an unrelated dementia that isn’t worth working into the equation.)

  26. From the Unification of Germany the history of (western) Europe has been a struggle between France and Germany with Britain playing a reluctant third party… (Possibly before, but then we get into problems of definition of the players).

    Apocalyptic thought; what happens if German and/or France says “your troops must exit the country, but their stuff stays?”

  27. @Ian Argent
    “(Possibly before, but then we get into problems of definition of the players).”

    Before it was Prussia io Germany. On that scale we have to include Russia too. Austria left the power stage before German unification.

  28. @winter: “If you look through all the posturing and propaganda, EU policy is largely a power struggle between Germany and France, with the British as a reluctant third party.”

    Not just EU policy. The same applies to the last couple of centuries of European history…

    @Charles Stewart: Switerzland not only has low public depth. The government seems to be unable to run a deficit even now (and not for lack of trying). Unemployment is also still very low (at 2.8%). I must say that looking at the rest of Europe from the vantage of the Alps has surreal qualities at times.

  29. @K_
    “I must say that looking at the rest of Europe from the vantage of the Alps has surreal qualities at times.”

    There is an old joke about the Swiss. We would know when aliens have settled on earth. They would have their own country, which would be clean, ordered, and rich, and they would never be at war. So you know there are no aliens on earth ;-)

  30. @Winter: up for a quick round of Avalon Hill’s Diplomacy? Which, in the early stages, often ends up with GB, FR, DE playing one game and TU, IT, AH, and RU playing another until the games collide in the Balkans, AH, or Scandinavia…

  31. Winter tends to write many objectionable things, but AFAIK his analysis of the importance of the D-Mark before the Euro, and the Euro as a second D-Mark is spot on this time. I remember that in 1990 or so everybody thought in DM terms when going for shopping from one country to another etc. I have lots of worries for the countries of the Eurozone but not for the Euro itself, the Germans will sort that out. It will be everybody else who will be hurt f.e. when they get kicked out of it.

  32. @Shenpen
    “the Germans will sort that out. It will be everybody else who will be hurt f.e. when they get kicked out of it.”

    There is a fear that Greece outside of the Euro will impoverish and become a security concern against an aggressive Turkey. A war on the borders of the EU is always more costly than anything we might have to do to prevent it.

  33. What will happen is this:

    Greece will default. There will be threats of Dire Economic Sanctions. The Greeks will say “Right. We’re trying to A) keep our voters happy and B) keep them from turning into armed mobs. You’re gonna come here and repossess the Parthenon? Or start a war?”

    Greece will then resurrect a local currency. There will be shocks through the Eurozone system. It may end up shaking Portugal, Ireland, Italy or Spain into insolvency, but hopefully being able to see it coming will let them gird for it.

    Even so, at least one of those countries is likely to slide under. To preserve the Euro, there will be severe measures put into place, which will shove all four of those countries out of it.

    With luck, this will happen quickly enough that when California, Illinois and a few other insolvent states come to Congress with their hats out, we’ll have a nice, sharp example by which to say “Slash your budgets, abolish your public employee unions, sell off your pension plans.”

  34. Winter

    Some countries, like Finland, are outside the German sphere, and therefore less dependent on the D-mark.

    Germany is currently the biggest destination for Finnish exports and second largest trade partner overall with 13.3 % of imports and 10.1 % of exports. The top six trade partners are Russia (17.8 %and 9.0 %), Germany, Sweden, China, the Netherlands, and USA (3.4 % and 6.8 %).

    The Monster

    I’ve heard from a friend in Finland that their central bank is producing currency and coinage so they can drop out of the Eurozone quickly if need be.

    The mint and print shop of the Bank of Finland was spun off as a private company named Setec, which produced euro notes and coins briefly around 2002. The company has since been sold to a Dutch multinational, which has held on to the facilities in Vantaa, but they now make passports and various ID cards there, not money. I suppose the Finnish government may have ordered new Finnish marks and pennies from anywhere if they are actually preparing to drop out of the euro. If they’re are using the old mint, probably quite a few Dutch people would know about it.

    That said, dropping out of the euro is not a serious topic of the political debate here. Finland got into a lot of trouble trying to defend the Finnish mark in the 1991-92 crash. The government kept saying that they’ll defend the currency no matter what, then turned on a dime (pun somewhat intended) and allowed the value of the mark to be determined on the world market on a couple of days notice. The value dropped dramatically, of course, and the people and companies holding foreign debt wound up in deep trouble. This is in relatively fresh living memory in Finland. On the other hand, the Scandinavian countries did not join the monetary union (Norway isn’t a EU member at all), and they haven’t done too badly with their own currencies over the last decade (apart from the horrors of social democracy, that is).

  35. @Mikko
    “Germany is currently the biggest destination for Finnish exports and second largest trade partner overall with 13.3 % of imports and 10.1 % of exports.”

    Compare to Dutch exports: 25% Germany, 11% Belgium, 9% France, 8% UK, 5% Italy/USA each. And half of our GDP is export. They used to say that when Germany sneezed, the Netherlands have a cold.

  36. @Winter
    “And half of our GDP is export.”

    Actually, it’s more than two-thirds of the GDP.

    Though, granted, that only worsens said cold.

  37. Winter: As a result of that financial crisis they got the current authoritarian government.

    Well, yes, isn’t that always the way? One of the most interesting observations of Hayek (as I understand, though I clearly need to read more) was that fascism arises when the (inevitable?) failure of socialism results in a populist backlash, which itself is both co-opted by the remaining socalist dogma and power structures and hijacked by nationalist authoritarians.

    I do feel like the Economist has shifted position in the last ten years or so; it used to be reliably libertarianish, but nowadays even though that’s still their default intellectual framework you get the impression that the staff doesn’t really believe it anymore and the sort of soft socialism of Western Europe is seeping through all the cracks…

  38. Just to put things a bit into perspective, there have been talks in Germany about making a constitutional amendment that the budget must be balanced, and the chief economist of the Deutsche Bank openly subcribes to Misesian-Hayekian economics.

    This suggest that beside the many social democratic policies, there is also a significant amount of libertarian-leaning good economic-fiscal sense going on in Germany. The world is not so black and white…

    That’s why I am not too worried for Germany, nor for the DM V2.0 aka the EUR. However, as for the PIIGS and Britain with their 400% external debt ratio and Belgium with their 266% (note: K_, the autopilot apparently does not prevent the piling on of debt) and the others…

  39. Apocalyptic thought; what happens if Germany and/or France says “your troops must exit the country, but their stuff stays?”

    We call them out for being thieves?

  40. The question is. How will the us stock market respond to widespread government defaults and will banks be a safer place for your money that still has more utility than gold in a safe?

  41. Large cohorts of the population (both in Europe and the USA) have become weak, dependent sheepeople tethered to a government handout and now vote for their livelihood. At some point, the practice of blood-sucking the productive element of society will kill the golden goose and then chaos will reign as hunger and deprivation expand. This used to be known as common sense, but unfortunately it isn’t all that common any more. Eric is right, this problem is not about esoteric knowledge and high level economic theory, it’s about basic human nature and the dog-eat-dog reality of social collision.

  42. > Apocalyptic thought; what happens if German and/or France says “your troops must exit the country, but their stuff stays?”

    Nothing much at first. The stuff isn’t worth that much and most of the money (buildings et al) isn’t portable anyway. (Yes, each plane looks like it costs a lot, but the total isn’t all that large compared to the infrastructure.)

    Trying to keep the planes would be really expensive – if the USAF wants to keep their planes, it would cost most of the German AF to stop them and the result would be a combination of “it got away” and “it was destroyed”, so that’s a net loss.

    Ground equipment can’t escape, because of limited range and portability, but it would cost much of the German military to take possession. It’s very unlikely that the amount of usable stuff captured would be worth more than what it cost to capture it.

    Even if we just walk away, what are they going to do with said stuff? They can sell the tanks, artillery, and planes, but that’s chickenfeed. Who has the money to buy the bases?

    Yes, they could sell the bases to the Chinese and/or the Russians, but neither will pay much.

    However, the big reason why it won’t happen is what happens after “at first”. Those bases bring a lot of money into those countries, and that money won’t flow if the bases aren’t there. (Yes, I’m aware that those countries pay some of the costs.)

    In short, getting rid of those bases would be an economic disaster.

  43. “sheepeople” and “sheeple” are overly-optimistic. No one is afraid of sheep. I prefer “cattle” as a metaphor – cattle will turn you into a red smear if they stampede and you are in the wrong place.

  44. Winter’s dire description of how all the other countries in Western Europe felt constrained to adhere to Bundesbank policies lest their interest rates rise deserves a great big DUH!

    The reason why central bankers who deviated from Bundesbank policies (presumably in the direction of looser money) were punished with higher interest rates was that the market had taken the measure of the Bundesbankers, and determined that they would indeed stick to their “Nie wieder Weimar!” policy. Anyone who wanted to have looser money than the Deutsche Mark would therefore be expected to thereby debase its value. The markets express that expectation by increasing interest rates denominated in a currency to discount that loss of value. In fact, the markets might even add in a premium to adjust for a tax collector wanting to get an inflated piece of the inflated profit for the bond-holder.

  45. @The Monster
    Actually, you are wrong. The Dutch florin(? What was the English name again) should have been appreciated against the Dmark, as it was stronger. But they could not do that. So we had the curious experience of a currency which was too cheap for its value.

    You see, you hace all kinds of unfounded prejudice.

  46. “Apocalyptic thought; what happens if Germany and/or France says “your troops must exit the country, but their stuff stays?”

    Egypt did exactly that with a much more aggressive superpower, namely, the Soviets, just after the Yom Kippur War I think. Nothing really happened.

    However this is just idle speculation. Europe has 99 urgent problems now, looting some tanks and suchlike is not one of them. In fact, American troops are good for the economy, read bars and suchlike, the last think anyone needs in these times is a thousand unemployed bartenders. And hookers. Hell hath no fury like an unemployed hooker.

  47. I fear the political left has programmed people (in cities particularly) to depend so much on handouts that when hyperinflation comes and suddenly many people can’t afford to buy food, they’ll accept ANY level of tyranny-unto-slavery as long as they get food to eat. And those who value their individualism and freedom enough to refuse will be {persecuted|jailed|killed}.

    I hope I’m wrong.

  48. TomA,

    You are right, but don’t pin it on the poor alone. I prefer the term “parallel society” because it is in the whole verticum: the market has its rich, middle-class, and poor, and the state has its rich (corporate welfare, subsidies), middle-class (well-paid bureaucrats, caregivers) and poor (welfare).

    So visually, it is not a horizontal, but a vertical line dividing the market and the state.

  49. Off-topic: I thought OS definition required source code release and that Apache was an OS license. If those are true then is Stallman wrong when he said:

    Google has complied with the requirements of the GNU General Public License for Linux, but the Apache license on the rest of Android does not require source release. Google has said it will never publish the source code of Android 3.0 (aside from Linux), even though executables have been released to the public. Android 3.1 source code is also being withheld. Thus, Android 3, apart from Linux, is non-free software, pure and simple.

    Which was quoted here: http://digitizor.com/2011/09/20/richard-stallman-android-free-software/

  50. @K_ Says:
    Yes, Belgium’s lack of a government (not to be confused with the lack of a state) has been very beneficial for them.

  51. In Texas we do something similar, but not by accident. We only have “a government” (in the european meaning of the word, as in a legislature) every other year.

  52. @Winter

    The Dutch florin(? What was the English name again) should have been appreciated against the Dmark, as it was stronger. But they could not do that. So we had the curious experience of a currency which was too cheap for its value.

    I’m afraid you’ll have to explain “But they could not do that” to me. What does that mean, exactly? Did they try to do it? Did something happen when they tried? Or were they constrained by some political consideration?

    And how do you know that the Florin was “stronger” than the DM? If the market didn’t see it the same way you did, what did you/they know that the other didn’t?

  53. @shenpen: I don’t know where you’ve got your figures from, but Belgiums’ debt is currently just a hair below 100% of GDP, and has been growing at a slower pace then expected. One of the reason is that, as there is no government, every department has had its budget frozen, which means that as a GDP is growing, government expenditure as a % of GDP drops (slowly).

    That doesn’t mean the country’s a shining example, but it does seem to give support to the argument that the best the government can do in the current situation nothing.

    It is true that in Germany there have been talks to make running deficits unconstitutional. In Switzerland they have had a provision in the constitution forcing the government to run a surplus when the economy is growing, and allows small deficits when the economy is in recession. Last year the state budgeted a deficit, but ended up with a large surplus anyway.

    @Ian Argent: What happens when Germany and/or France tell the US/UK to take the troops out? Well France already told “foute le camps” to the US a long time ago.
    I don’t think Germany however legally can.

  54. @Shenpen . . . “You are right, but don’t pin it on the poor alone.”

    People who have been seduced and then indoctrinated into the entitlement mentality are not limited to the poor (or even the weak-minded). Just as drug addiction is found at all strata of society, so is true for the debilitating pychosis of “government owes me whatever I need.” Even corporations have succumbed, such as GE, which has become a whore for government favoritism and subsidy. For the infinitely needy, government is sustenance by whatever means necessary. And therein lies the real danger. We now have a strong feedback loop between the growing power of government and the infinite needs of the unproductive.

  55. @The Monster
    The Dutch export and save a lot. More than they import. Which meant that their currency should have been appreciated. Somewhat like the Swiss Franc now. And like the Swiss, they feared the unemployment from a decrease in export, and the market turmoil ftom an appreciation: If you go up today, you might go down tomorrow. That is Risk, hence a higher interest.

    Result, they worked to keep the currency down.

  56. @TomA
    Main groups of entitlement? The old and the invalids. And children (education). We have become weak indeed

    And tax deductions for home owners, but that would not be what you call entitlements, I believe.

  57. @William B Swift

    From:
    http://www.apache.org/licenses/LICENSE-2.0.html

    4. Redistribution. You may reproduce and distribute copies of the Work or Derivative Works thereof in any medium, with or without modifications, and in Source or Object form, provided that You meet the following conditions:

    see the “or” in that… and the conditions are basically noting which files you’ve changed, and maintaining a copy of the license with the redistribution…

    Dave

  58. @David Scott Williams

    Thanks, I see my mistake. It was actually a long-standing mistake too. I think I have been more a “free software” than an “open source” type without realizing it.

  59. On the whole, I agree with ESR. Greece is about to default because it refuses to implement scheduled government employee layoffs, etc., as government debt continues to rise and French banks with massive Greek debt exposure will fail following that default. The dominoes will continue their fall as government bond rates of the PIIGS rise and generate defaults in those countries and more banks fail. There is not enough real money to salvage the EU financial system or the USA system. Global financial markets will be littered with toxic assets nobody wants to remove from their books. The pain will be felt by all and global recession/depression will be the minimal result. No one can foresee the larger results of such financial anarchy but it’s guaranteed to be ugly.

    What happens when Germany / Europe tells USA to take the troops out?

    Even if it happened (not likely very likely to go that route vs USA doing that all on it’s own) we have a total of 4 Brigades of Army (~40k w support with 20k draw down scheduled) and 20 k of Air Force (who would fly out regardless).

  60. The Dutch export and save a lot. More than they import. Which meant that their currency should have been appreciated.

    Only if their monetary policy complemented the trade imbalance. It’s not impossible for a central bank to inflate a country’s money supply too fast and still maintain a trade “surplus”.

  61. Shelby,

    > It amazes that otherwise bright people can’t understand the simple concept that economic collapse doesn’t convert collectivists into anarchists. Nothing will change.

    Very well said indeed.

    Yours,
    Tom

  62. @The Monster
    But our central bank kept the money supply in check. Look at curren day Switzerland.

  63. They paint us with patently inane labels such as “racist” and “corporate aristocrat” when we point out the obvious insolvency of tax-and-spend economics.

    Sigh. Governments get to do it three ways. They can tax-and-spend, they can borrow-and-spend, or they can print-money-and-spend. Given how our current problems are born of banks trying to sell loans as money-producing assets (which they are not,) the “borrow-and-spend” strategy doesn’t have much appeal. The “print-money-and-spend” strategy presents the problem of inflation, (see Weimar Germany for a lesson how that works) though there are certain limited circumstances where “print-money-and-spend” does make sense. That leaves “tax-and-spend” as the least-bad of all the alternatives.

    Arguably, our Government could choose to spend less, but what do you want it to spend less on? Alternately, would you like to give our Government the authority to decide what constitutes the most intelligent and efficient way to do things so it can cut services as deeply as possible? (Hint, single-payer health care would cost, in terms of GDP, about half of what the current sytem costs us.) The idea the we give government some kind of autocratic authority to decide what constitutes “efficiency” could lead to some very serious nightmares… so I’m afraid you’re stuck with “tax-and-spend.”

    Or maybe YOU want to pay less taxes, but goddammit, the gubmint better not mess with your Medicare? Maybe you need to do a better job of thinking things out. This stuff is not simple, and simplistic thinking doesn’t just “get you nowhere” it actually takes you backwards very quickly.

  64. Apocalyptic thought; what happens if Germany and/or France says “your troops must exit the country, but their stuff stays?”

    The reply is “lots of luck with that”, combined with “nice military you have there. Be a shame if something was to happen to it.”

    (As is noted above, the “stuff” mostly isn’t that valuable, anyway.

    But more importantly, how’re they going to stop us from taking it back? All the really cool stuff is air-mobile, and frankly they’re not about to start a shooting war to try and keep some M-2s and the like, I imagine.

    Of course, also to note is that France can’t really say that, because our presence in France is essentially zero, apart from occasionally borrowing part of Istres Air Base for joint operations.)

  65. Alex,

    > That leaves “tax-and-spend” as the least-bad of all the alternatives.

    I’ve done the math. There is not enough money to tax. An impossible solution may be least bad, but it is also impossible. As long as you are picking impossible solutions, why not the Fountain of Youth – but only if you agree to forego Social Security and Medicare?

    Yours,
    Tom

  66. > (Hint, single-payer health care would cost, in terms of GDP, about half of what the current sytem costs us.)

    No, it wouldn’t.

    Yes, I know that other countries spend less per person. However that says nothing about how much single-payer would cost in the US. The relevant data suggests that single-payer in the US would likely be far more expensive.

    For starters, the federal govt costs about the same, per-person, as govt in the “high-service” countries, yet no one suggests that the federal govt provides anywhere near the same benefits. Throw in state and local govts and things are even worse.

    But, that’s govt in general. Let’s look at healthcare in particular.

    About of half of US healthcare is currently paid for completely by federal, state, or local govts. It doesn’t cost less (per person) than private healthcare. (And no, that isn’t because the populations are different.)

    That wouldn’t be true if the US govt could do healthcare significantly more efficiently than the private sector. (Yes, various US departments can cut a check for a fairly low cost, but that’s not the same as delivering health care efficiently.)

    And yes, half of the US population is enough to get any economies of scale. It’s far larger than any health care system in the world.

    There are various reasons why the US govt fails wrt healthcare. (For example, adminstration sources claim that medicare fraud alone is at least 7x the total profit and CEO compensation of the private healthcare providers, and that estimate is probably a low-ball. Note that folks are more likely to win appeals against private healthcare than they are against govt healthcare.)

    I’m a reasonable person so I’m willing to let any adminstration have free rein wrt govt employee healthcare and the Indian Health Service to produce a system that actually is better than the private system that we have. However, until there’s an existence proof…

    I picked govt employee healthcare because govt employees are reasonably representative of private sector employees, and if they revolt… I picked IHS because almost anything would be an improvement.

    Oh, and the budget for that free rein starts at exactly (per person) what is being spent today and gets cut 5% (per capita) for the first three years of the experiment. (Since you’re claiming 50%, 15% should be nothing.) You can spend the amount cut on covering more people, so the total budget can be constant if you’d like.

  67. Arguably, our Government could choose to spend less

    Arguably? The federal government spent something like 30% less per capita during the 90s, during which I don’t recall having to hire mercenaries to successfully get to the grocery store.

    but what do you want it to spend less on?

    For starters, welfare for the wealthy. If means testing Social Security is too complicated, at the very least stop paying wealthy retirees *more* than middle class and poor retirees. And of course all corporate welfare should be nuked from orbit. As far as defense goes, declare victory in the Middle East and go home. We’ve done all we can in terms of killing people and breaking things, now it’s up to the people to decide whether they want democracy or theocracy.

    As long as you are picking impossible solutions, why not the Fountain of Youth – but only if you agree to forego Social Security and Medicare?

    Actually, I do believe we should be seriously researching ways to cure or reduce the effects of aging. That’s the underlying cause of much of our fiscal problems, as well as a a huge quality of life issue.

  68. > Given how our current problems are born of banks trying to sell loans as money-producing assets (which they are not,)

    http://en.wikipedia.org/wiki/Asset – “In financial accounting, assets are economic resources. Anything tangible or intangible that is capable of being owned or controlled to produce value and that is held to have positive economic value is considered an asset. Simply stated, assets represent ownership of value that can be converted into cash (although cash itself is also considered an asset).”

    Loans are a claim on a stream of payments, which makes them assets.

    Yes, some loans are mispriced, but that doesn’t imply that loans as a class are not assets any more than gold being overpriced makes it “not an asset”. (Note that “positive economic value” does not imply that the value exceeds the price of the asset. It just says what way money flows given ownership and/or control.)

  69. Brian, your “solutions” would not cut more than about 1/3rd of the current yearly deficit.

  70. “Actually, I do believe we should be seriously researching ways to cure or reduce the effects of aging. That’s the underlying cause of much of our fiscal problems, as well as a a huge quality of life issue.”

    I’m all for medical (and longevity) research, but in the near term (next 50 years) that’s going to make things worse, not better. More old people collecting pensions and Social Security for longer times, much greater medical expenses, long-term care for them – it’s not pretty.

    At the same time, fewer young people in the workforce to support them….how many of you are willing to throw grandma under the bus?

  71. @mb:
    Fears of hyperinflation and US default should have driven bond prices down, and yields up.

    Your model is correct at the end game because gold is at the bottom of Exter’s Inverted Pyramid. Until then, the world does not want to abandon the fiat (i.e. debt as money, collectivist enabling) system, which means the reserve currency’s sovereign bonds will approach 0% at the final top of the 30 year bond bubble. The PIIGS never had a global reserve currency (nor CIA and military to enforce it), which is why they had to choose to join the Euro or exit the collectivist bubble. The people of course preferred collectivism. Iceland is perhaps the lone exception.

    The elite are financing this Arab Spring, they want to sow chaos to shut off the supply of oil. Those who think we have noble goals there are deceived. We will enter a severe stagflation (actually depression-inflation) in 2012, with oil at $175+, gold at $2500+, silver at $75+. I bought silver at $9, hedged at $45 expecting a dip, now moving back to long. The Euro currency bloc will experience economic collapse in 2012, the EU structure will grow more intertwined to deal with it collectively, and capital controls will be placed on the dollar, probably a bank holiday, retirement accounts will be sequestered, etc.. The Phoenix is on track for 2018, the timeline first announced in the Economist in 1988.

  72. @LS:
    how many of you are willing to throw grandma under the bus?

    None of us. But the economic reality is going to throw her under the bus with medical rationing, and let’s hope not the post-Wiemar solution to their collectivist health care resources.

    My mother and I didn’t throw my grandma under the bus. Enslaving ourselves in collectivism isn’t the only option. We can work hard, save, and be prepared to do our honor to our elders, giving a meaningful life. The system we have now encourages us to not give a damn.

    I realize I am not going to change the mind of any collectivist. And I am confident without collectivism there is a higher probability we would have the cure to your cancer already. I know that logic won’t make sense to you, because you will ask yourself who would have funded the small market and thus the $billions is research. But I know the way knowledge formation works and doesn’t work. I am tired of explaining it.

  73. All very cheap and easy. The only difference between US and Euro entitlement is that the US millionares are the entitled ones. The whole bullsht myth of big government should not be being repeated by intelligent people. Succesive republican and neo-labour governments expanded government while REDUCING taxes year after year. Laisez faire capitalism doomed both continents with a shrunken, toothless goverment unable to make or enforce rules in the face of avalanches of apparently easy money.

  74. The worry wasn’t so much that they would sell off the gear (or, for that matter, keep the aircraft, as noted, that would be difficult to do), but that they would keep it for their own later use…

    Is there not still a lot of stuff pre-positioned for US troops to deplane, march into depots, and march out fully-equipped?

    And, the argument of threatening military action to allow the US to retrieve the gear requires a credible threat. The US has the capability to wipe out all of the rest of NATO’s military unilaterally, at least to the extent necessary to clear a port on the North Sea to sealift the stuff out (tanks are not air-transportable in any useful quantity). What I don’t know whether we would have is the credible threat, and I’m pretty sure we don’t have the sealift capability to pull it all out anyway. The solution might be blowing it place, of course.

  75. And I am confident without collectivism there is a higher probability we would have the cure to your cancer already.

    I wish people wouldn’t say stupid things like this that they can’t possibly substantiate. And that goes for the negative of this statement too (just picking on the person at the bottom of the comments).

  76. @Roger Phillips:
    Most statements (including this one) can’t be substantiated.

  77. Most statements (including this one) can’t be substantiated.

    I wasn’t making a philosophical statement about the inaccessibility of truth. Furthermore there is a difference between things that don’t need to be true to be useful and specific truth-propositional claims purporting the advantages of course of action A over course of action B.

  78. > Succesive republican and neo-labour governments expanded government while REDUCING taxes year after year.

    What would we do without innumerate people who don’t know the difference between tax rates and taxes thinks that capital letters will hide their ignorance?

    Hint – you can spend taxes and, modulo the “Great Recession”, they’ve been increasing. Meanwhile tax rates have only a vague relationship to taxes collected.

  79. > I wish people wouldn’t say stupid things like this that they can’t possibly substantiate.

    I wish people were naturally highly numerate. This is fun!

    Yours,
    Tom

  80. @Roger Phillips: I find that I’m in a peculiar position – actually *defending* Shelby over what I agree is a very stupid statement, but you’ll notice that he said, “I am confident…”, which means that he is expressing an *opinion* here. You can instantiate an opinion even if you can’t substantiate it.

    Of course, the rest of us can have our own opinions, and tell him he’s full of crap, but that’s only our opinion…..

  81. > Is there not still a lot of stuff pre-positioned for US troops to deplane, march into depots, and march out fully-equipped?

    There’s some heavy stuff, but it’s not enough to be considered “fully-equipped”. And, whatever country decides to take that stuff needs to supply trained troops to use said equipment. That’s non-trivial.[1] There aren’t many “not Americans” with the relevant training and the ones that exist already have decent equipment because they’re the best troops that their countries have.

    But a better question is “and go where/do what?” They can’t go to non-neighbors without the help of the US or Russia, the only countries with significant military transport capability.

    And then there’s our ability to take them out. The electronics won’t work (they’re easy to disable on our way out), so they’ll be sitting ducks. (I’m charitably assuming that we don’t engage in mechanical sabotage.)

    [1] The US military is not a low-skill organization.

  82. Of course, the rest of us can have our own opinions, and tell him he’s full of crap, but that’s only our opinion…..

    Yes, yes. You’re right that he’s literally correct; after all, he decides what he is or isn’t confident in. Nonetheless, it was made directly before this claim:

    I know that logic won’t make sense to you, because you will ask yourself who would have funded the small market and thus the $billions is research. But I know the way knowledge formation works and doesn’t work. I am tired of explaining it.

    If you don’t like my original quotation pick any other you’d like.

  83. > And, the argument of threatening military action to allow the US to retrieve the gear requires a credible threat. The US has the capability to wipe out all of the rest of NATO’s military unilaterally

    The opposition won’t be “all of the rest of NATO”, it will be the lone country that decides that it wants our stuff. France won’t help Germany or the UK (because of balance of power issues) and Germany and the UK can’t help each other because of the channel and France. (Remember that there’s nothing in France to seize.)

  84. I’ve done the math. There is not enough money to tax. An impossible solution may be least bad, but it is also impossible. As long as you are picking impossible solutions, why not the Fountain of Youth – but only if you agree to forego Social Security and Medicare?

    The 2010 budget is around two trillion dollars. The current GDP is around 14 trillion dollars. That implies a 14% tax rate, which is difficult, but not impossible. Add in some stuff from everyone’s wish list like getting out of Iraq and Afghanistan, ending corporate welfare, charging market rates when we sell mineral rights or bandwidth, legalizing drugs, lowering the defense budget, allowing government programs to negotiate bulk drug prices (something they currently are not allowed to do,) etc., and you’ve got some decent hope for getting the budget down to 10% of the GDP.

    The problem comes when you consider that the two-trillion dollar budget is the operating budget. Paying off the national debt adds something like 1.8 trillion dollars more to the spending budget every year, essentially doubling the amount of money the US needs to pay out. That’s what makes the whole thing difficult. (Imagine your family paying 45% of it’s income to pay of loans and credit cards, which getting nothing of value. The charts below should lead you to some interesting conclusions about just who is responsible. (Hint; they weren’t socialists.)

    We also have the lowest income, corporate, and capital gains tax right now than we’ve had in the last 75 years:

    http://www.ritholtz.com/blog/2011/04/us-tax-rates-1916-2010/

    You might also look here for a graphical representation of the US national debt. Note that we have a giant spike in debt during World War II. The debt is being paid down from about 1945 until just after 1980. At that point Reagan lowers taxes and starts borrowing heavily. The first Bush and Clinton do some work to get the debt under control, and it starts heading lower about 1995, then Bush II sends our debt levels skyrocketing. Notice that from the end of World War II until 1980 both Republican and Democratic presidents pay back the debt. From that point forward, Democrats pay back the debt and Republicans increase it until Obama comes along, at which point the debt stops growing, but it does not shrink much. (We’ll have to wait at least two years more to see what Obama achieved where the debt is concerned.)

    http://www.usgovernmentspending.com/downchart_gs.php?chart=H0-fed&year=1792_2016&units=p

    In other words, you’re wrong. Not only can we pay higher taxes, we successfully paid much higher taxes throughout our most successful period in history, from the end of World War II until around 1980.

    Loans are a claim on a stream of payments, which makes them assets.

    Loans generated through careful parsing of credit scores and other due diligence are assets. Loans created by lying on loan applications during an asset bubble are the financial version of toxic waste.

    And of course all corporate welfare should be nuked from orbit.

    Yippee! I want to push the button!

  85. Can we talk about something interesting now? Which of you geniuses has made any money on your supposed ability to predict social, political or economic trends? It’s like listening to academics talk about programming, or (worse) the Pope giving his opinion on contraception.

  86. @Brian 2:

    Even folks at the Daily Kos have rebutted the idea of means-testing Social Security.

    The only reason that Social Security is acceptable to people these days (as a form of retirement income) is that you basically get out in benefits what you put in, with higher-payers covering administrative costs of lower-payers. Thus someone who has twice the income and pays in twice as much will get a bit less than twice the benefits.

    If you means-test, that completely goes away and becomes another welfare program, straight-up. At the same time, if you remove the cap on the taxation portion, you either must remove the cap on the benefits as well (wait until you see 2 million dollar SS checks), or it becomes little more than welfare again.

    Therefore, you either have to adjust the rates for everybody or the benefits for everybody, but you can’t really skew the program any more or the anti-welfare crowd will really get upset.

    @LS: Grandma voted for unsustainable benefits, so she decided to stand in front of the bus – inertia is dragging her underneath. I’d make another proposition: When you retire, you can start collecting Medicare benefits at any age you want (after 65 or some such thing). However, you are limited to the services, procedures, medications and standard of care available at the time that you started collecting benefits (or something better if it costs less, but for no other justification). Thus, if you start collecting Medicare at age 65, at age 85 it will only cover now 20-year-old medical treatments. Granted, that’s still going to be pretty awesome, and it means that the longer you wait until you retire, the better your coverage. It also will result in increased cost savings because it will be easy for whole health centers to buy out-of-date medical equipment on the cheap in order to provide dedicated care centers to these people. Now that’s cost control!

  87. Alex,

    You left out the unfunded liabilities. Go back, add $90 trillion to your starting figure and try again.

    Yours,
    Tom

  88. You left out the unfunded liabilities. Go back, add $90 trillion to your starting figure and try again.

    Sigh. Medicare and Social Security are part of the budget. The idea that we need to generate 90 trillion dollars immediately to pay for them is bullcrap spawned by extremely poor logic.

  89. @LS:

    I’m all for medical (and longevity) research, but in the near term (next 50 years) that’s going to make things worse, not better. More old people collecting pensions and Social Security for longer times

    SENS-style life extension adds years to the middle of your life, not the end. Old people wouldn’t be “old”, and would be producing instead of collecting welfare.

    @Garrett:

    Even folks at the Daily Kos have rebutted the idea of means-testing Social Security.

    Excellent, I’ll take that as evidence that it’s a good idea.

    If you means-test, that completely goes away and becomes another welfare program, straight-up.

    Yes, which is what it should be. (And is in reality; the Supreme Court has ruled that you have no actual legal claim on any SS benefits). I have no problem paying to support retired people who had low incomes their entire lives and can’t work any longer. I do have a problem paying for a sixth annual vacation for retired millionaires.

  90. @Garret: What grandma decided when she voted way back when is irrelevant. We have the unsustainable situation we are in *now*. It will become even more unsustainable as time goes by. If grandma needs a treatment that will extend her life, who among us is going to say, “No, your time has come! Into the disintegration chamber with you!”?. I know that *I* am NOT that person, and I don’t want to know anyone willing to be him or her. We have to provide the money for health care, even if we have to give up our cars and live in single-bedroom apartments in so-so neighborhoods. Our standard of living is not as high as we thought it was; we thought we were growing steadily more prosperous; we were wrong.

  91. Human nature plays an important role in this topic. In the event of a major financial collapse (and attendant social chaos), productive people will do what comes naturally and find new ways to support themselves. Conversely, unproductive people will rant and riot for a resumption of government handouts in order to support themselves. Government will respond in whatever fashion maximizes its survival and power base. In a worst case scenario, desperation will bring about a violent collision among these various factions. This is Eric’s warning to us, and we best pay attention.

  92. SENS-style life extension adds years to the middle of your life, not the end. Old people wouldn’t be “old”, and would be producing instead of collecting welfare.

    Not unless the eligibility age for Social Security were tied to some metric, and if it had been since its inception, the age would be in the mid- to upper-80s by now.

    If grandma needs a treatment that will extend her life, who among us is going to say, “No, your time has come! Into the disintegration chamber with you!”?. I know that *I* am NOT that person, and I don’t want to know anyone willing to be him or her.

    How much will that treatment cost? What else could be done with that amount of money that’s going to extend her life by a few years—such as providing clean water or mosquito nets to third-world children, or even working to improve nutrition for inner-city kids right here?

  93. > We also have the lowest income, corporate, and capital gains tax right now than we’ve had in the last 75 years:

    Once again, you can’t spend tax rates, you can only spend tax revenues, and the former do not determine the latter. (Reagan lowered rates, but revenues increased.)

    The US has never managed to collect more than 21% of GDP in taxes, no matter what the rates. In fact, the sustainable number appears to be just under 20%.

    So, if you want lots of tax revenues, you need tax rates that allow significant growth.

    Also, the deficit reduction under Clinton had two causes – the fall of the USSR and a Republican congress, neither of which were due to Democrats.

    Bush blew up the the deficit with war and social spending. The only democrat objection to the latter was that he didn’t spend enough. (The $1T prescription drug monstrosity is a good example – Dems wanted more.) That said, the last yearly deficit under Bush and a Repub congress was >$170B and the trend was down. The Dems took congress and the deficit exploded because Bush wouldn’t say no. We’re now running a $1.5T deficit with no significant change projected (by Obama).

  94. > The idea that we need to generate 90 trillion dollars immediately to pay for them is bullcrap spawned by extremely poor logic.

    If you don’t/can’t pay the NPV of the liabilities that you’re incurring today, when do you think that you’ll be able to do so? After all, you’ll be incurring other liabilities later, so you can’t rely on future revenues to pay for current liabilities.

    Suppose that your landlord was willing to let you pay this month’s rent over 12 months starting a year from the relevant month. You’d pay nothing until the beginning of year 2, but by the end of that year, you’d be making 12 payments per month until a year after you left. At that point, the required payments would start declining, and you’d be free after the end of the second year.

    Do you really think that it makes sense to not put aside the NPV of those payments each month? If you can’t afford that, what makes you think that you can afford the 12 payments a month? How are you going to make the payments after you leave, and presumably need to pay for other accomodations?

    The only sensible approach is to set aside the NPV of obligations as they are incurred. And, if you can’t predict that NPV of a given set of obligations, you shouldn’t incur them.

    No – pension obligations are not like a mortgage. A mortgage is paying off an asset, an asset that can be sold. Pension obligations are not an asset, they’re a liability.

  95. > Loans generated through careful parsing of credit scores and other due diligence are assets.

    In other words “Given how our current problems are born of banks trying to sell loans as money-producing assets (which they are not,)” was wrong – loans are assets.

    > Loans created by lying on loan applications during an asset bubble are the financial version of toxic waste.

    No, they’re assets that cost more than they’re worth.

    Note that the risk calculations were based, in part, on bogus numbers from GSEs, which lied about the fraction of loans that were subprime.

  96. Typo: missing close quotes after “eventually you run out of other peoples’ money.”

  97. ‘SENS-style life extension adds years to the middle of your life, not the end. Old people wouldn’t be “old”, and would be producing instead of collecting welfare.’

    Nonsense, old age government pension are based on political calculations not on economic ones.

  98. @Doc Merlin&Christopher Smith
    https://secure.wikimedia.org/wikipedia/en/wiki/List_of_countries_by_life_expectancy
    There is still some room for improvement. However, I read some rumors that the official numbers are much too conservative for children born around 2000.

    Old people remain healthy and productive for longer. The solution for the old age pensions is to increase the retirement age. This is going on all over the world. Some additional changes in work practices have to be made, but in general, much of the financial burden can be reduced by increasing retirement age.

    It is clear that health care and pensions are two areas where the “free market” is failing. Everywhere in the world, when left to themselves, people spend too much for health care (more spending but less quality, eg, USA vs UK) and save too little for their pensions (Medicare vs obligate Pension Funds, eg, USA vs Netherlands).

    These are areas where free choice does not lead to an efficient market solution. So the people have to choose: Do they prefer freedom (with bad price/quality care and pensions) or efficiency (with good price/quality care and pensions).

    I am glad even US Libertarian commentors here acknowledge this market failure. That is the first step to a solution.

  99. @K_Says: I think Shenpen was talking about combined public and private debt, which is often a more useful figure than public debt.

    I’m surprised that no-one has mentioned Reinhart & Rogoff’s figure of 90%, where public debt starts to become difficult to finance, a figure derived from their impressive historical analysis of past debt crises. Italy and Greece are way over this. Greece is not only insolvent, it is also failing to pay such things as sales tax rebates in order to have enough money to pay the coupon on its bonds, and relies on Eurozone governments to buy new bonds.

    Italy is an interesting case: Italy has a large grey economy that does not feature in official GDP statistics, so its economy is arguably in a less bad place than its statistics indicate. It has a solvency problem; it is not insolvent yet, though. The problem is that Italian politics is a circus and will not take the urgent measures required.

    Spain’s public debt fundamentals are not bad, but it has a bad private debt problem, which is why extremely risk-averse bond investors are demanding such a risk premium, and it needs to service a lot of debt in the coming months. This is why the Economist says it has a liquidity problem, but not a fundamental solvency problem.

  100. @Charles Stewart
    Good summary of the state of the matters. It explains why China is considering buying Italian debt:
    http://www.guardian.co.uk/business/2011/sep/13/china-talks-buy-italian-debt

    In addition, Ireland’s problem is the same as Spain, private debts as a result of a housing bubble. Ireland seems to have solved its problems by reducing wages and prices to run up a surplus. At least that was what a German economist told our news. They think they can manage the defaults:
    http://www.irishtimes.com/newspaper/breaking/2011/0830/breaking3.html

    I have no idea about Portugal.

  101. @K_ and Charles Stewart:
    All the Western countries are bankrupt in the sense that they require the ponzi scheme of the fiat system to sustain that keeps their economies in the cash flow “black” (an actuarial “red”) by pumping debt into new victims. As Esr has noted in the past, this actuarial abyss is particularly acute in the EU countries with negative population growth. Without disintegration and abandonment of collectivism, I see they have no choice but totalitarian expansion, eugenics, or massive brown/black immigration. Such abandonment is unrealistic, e.g. even the freedom-of-information Pirate party in Germany calls for collectivist education.

    Germany appears to me to be a culture of delusional perfectionist idealism (study her great philosophers), which is fundamentally idolizing man’s ability to control and improve upon nature. Yet the entropic force is always in control. So many bright Germans, who just don’t get it. Man’s accomplishments are good only when they are highly decentralized and thus in harmony with the entropic force, and as of 2010 proven to be the fundamental force. Encourage some Germans or those more knowledgeable about them, to share their insight. Our world hangs in the balance, now is the time to step forward. The hackers saved the world once already with the internet, I hope y’all can do it again. The stakes are higher now.

  102. @Shelby
    “All the Western countries are bankrupt in the sense that they require the ponzi scheme of the fiat system to sustain that keeps their economies in the cash flow “black””

    For this conclusion you have to estimate future payments and chalk them down as current debts. But these future payments are not certain, and certainly are not debts in any sensible way. Current day pension payments are done with current day income. Future pension payouts are done with future income. And there is absolutely no reason to assume that these future payouts are required to exceed future income. Because the payments will be adapted to income.

    These so called “entitlements” are not legal entitlements in Europe. It can be decided at any time to reduce the payouts or to increase the retirement age (they are already doing that now).

    The only real problem is the reduction in work force beyond what can be compensated by increased retirement age. But that is not a debt problem. That is a future contraction of the economy that is independent of saved money. Because a future workforce will not work for current or even projected wages. No amount of money saved now can expand the workforce then. It can increase productivity, but that only leads to a distribution problem: Why should these productive workers hand over almost all of their earnings?

    I see only two solutions to these demographic problems:
    1 Immigration of young people (the USA is doing that)
    2 Emigration of old people

    Ad 2, invest in foreign countries with a young work force and then go to consume your invested money there after retirement. The there seems to be needed as long as there is no common currency. This requires that the country of the investment target honors property rights enough to let you keep your earnings.

    Note that nothing will work if the world will have a contracting population. But that is a problem for some future generation.

  103. @K_:
    which means that as a GDP is growing, government expenditure as a % of GDP drops

    Without the fiat ponzi expansion (Fact: GDP grows at the rate of usury), the real GDP won’t be growing. Analysis of GDP must differentiate between real and nominal, i.e factoring in the true rise in cost-of-living, where the official govt statistics are lies. Without new debt victims, the ponzi scheme of fiat implodes, and you are left with the uneconomic collectivist apparatus. The western world is now in a state of negative-marginal-utility-of-debt, which means expanding debt actually decreases the real GDP, although nominal GDP increases and the govt’s lie about the deflator and thus the official real GDP. Bottom line is gird for bad times ahead. The collectivist party hangover is underway.

    As I understand from my Belgium friend, the problem there is massive regulation. One can’t work in a place they are not registered, and even farms are highly regulated.

  104. Typo: debt grows at the rate of usury, and nominal GDP is correlated with debt, since the money is debt in a fiat system.

  105. The Finnish Minister of Finance Jutta Urpilainen made the news today when she confirmed the obvious, namely that the Department of Finance has emergency plans for “rapid deterioration of the Eurozone crisis” (read: Greek default). It’s been clear for some time that the collateral deal that was pledged to Finland for further financing of Greece is meaningless. The Minister did not specify what the “emergency plans” plans were, but it’s generally assumed that they have to do with placing Greece in default and reorganizing the debt. Nobody in any position of power is talking about Finland leaving the monetary union.

    A Finnish tabloid’s take on this a few days ago was a cartoon where Urpilainen (age 36, Social Democratic Party) and Bundeskanzlerin Angela Merkel (age 56, CDU) were wrestling naked over the issue. It wasn’t quite the girl-on-girl action that one might want to see.

  106. @Winter:
    The blow-back of debt is not anarchistically greased as you portray. Debt ferments malinvestment, thus readjustment of promises slides on the politically expedients in the more virulent forms, such as totalitarianism.

    People view their savings as real, which includes the retirement promises. They don’t understand they’ve been (and requested via voting to be) deceived (e.g. they want to be lied to about actual GDP deflator, actuarial accounting, etc).

    Passive capitalism (i.e. investment in usury bonds) is more ponzi slavery, so your collectivist “solution” is just kicking-the-can down the road to a more horrific finale, as spreading such system into the developing world will decline the population growth rate.

    Fundamental problem is the slavery of usury monetary systems. This enables collectivism and the malinvestment. The blow-back is always delayed, and the “solution” to the blow-back is to double-down by finding new debt victims to sustain the ponzi scheme.

    Now you know why I am logically an anarchist. So much so, that I don’t care if the collectivists destroy the world, and kill me in the process. This has been the hardest part of my personal adjustment to the entropic force. Again, I do hold out some hope that hackers (technology) can provide an anarchist escape route and save the world again.

  107. @Shelby
    I cannot make head nor tails of your response.

    Just this week our parliament has voted in a law which increases the retirement age to 67 by 2025 and make the retirements age dependent on life expectancy. Germany has already done that in 2007.
    http://news.bbc.co.uk/2/hi/europe/6434929.stm

    Our State retirement payments are not always corrected for inflation or GDP increase (growth). That is decided based on the current economic situation. That has been the case for decades now.

    So two of your central assumptions are empirically falsified. They do not hold! This whole “ponzi slavery” stuff is simply a mirage of your mind.

    @Shelby
    “Passive capitalism (i.e. investment in usury bonds) is more ponzi slavery, so your collectivist “solution” is just kicking-the-can down the road to a more horrific finale, as spreading such system into the developing world will decline the population growth rate.”

    It seems you lost track of all your theories.

    If I buy into a factory in China and then, after my retirement, I go live in China from the proceeds of this investment, what am I doing wrong? I increased the productivity in China, Chinese work and live there, and now when they are wealthy, they pay me the dividends of my investment. And, somehow, by making these Chinese people wealthy, I have decreased their fertility? They already have laws that prohibit more than 1 child (they will certainly loosen that in the near future).

    If I do that in the Philippines, India, or Bangladesh, any influence of my investment would be from them getting wealthy. Maybe you are against them becoming wealthy?

  108. I did say the thought was apocalyptic..

    whatever country decides to take that stuff needs to supply trained troops to use said equipment.

    In this scenario it’s NATO troops using NATO-compatible equipment. Whether that means they’re up to snuff when compared to US troops is another question; one I understand is outstanding since the late unpleasantness in the Persian Gulf and Afghanistan.

    The opposition won’t be “all of the rest of NATO”

    Which means the capability to do in all of NATO is overkill – which is a Good Thing in military terms.

    While I was aware that France had pulled out of NATO a while back, I had been under the impression they had rejoined at least partially – though I didn’t know if that meant REFORGER gear was stored in-country.

    I hadn’t considered that modern heavy equipment is relatively easy to sabotage quickly, which would put a damper on the excitement, to be sure.

    Unlikely to the point of irrelevancy outside the fevered minds of technothriller writers, then.

  109. @Alex R.:
    you’re stuck with “tax-and-spend.”

    Tax at 100% and it still won’t make the West solvent. The options forward are all totalitarian unfortunately, because the people will not willingly admit they’ve been willfully deceived and their collectivism must be abandoned. Fundamentally you don’t understand that the system is ponzi bankrupt. More tax means less production, which means tax revenues fall (in real terms, i.e. non-liar deflator for GDP).

  110. @Ian Argent
    “I did say the thought was apocalyptic..”

    This whole discussion is stupid. Extremely so! However, it does nicely show how far out you all walked from reality.

    These are not developing world countries. These countries can (and do) build their own nuclear warheads and their own space rockets. They all have their own arms industry and two of them build nuclear submarines and aircraft carriers.

    They have zero incentives to
    1 Attack the USA
    2 Do so with weapons the USA has build
    3 Steal the weapons instead of simply buying or building them

  111. @Winter:
    I increased the productivity in China

    Debt induced nominal GDP growth is malinvestment– not productivity. I already explained this in one of the recent blogs. I don’t want to repeat that argument again.

  112. @Shelby
    “Debt induced nominal GDP growth is malinvestment– not productivity.”

    Non-sense. I sell tulips and cheese to the Chinese and invest the money in Chinese factories. We pay our retirements from real money, not debt. Your debt fetish is none of our concern.

    Actually, the Europeans (e.g., Germans) sell a lot of capital goods to China. So they earn plenty of money there.

  113. @Winter:
    So two of your central assumptions are empirically falsified

    No, those are early stage totalitarian eugenic solutions, that will have to be accelerated and made more horrific. Entirely consistent with my model. I said they are not anarchistically pliable. As the ponzi scheme implodes, the totalitarianism will either have to accelerate inwards (i.e. eugenics) and/or outwards (e.g. colonizing the developing world with loans under a new Phoenix monetary system).

  114. @Winter:
    I sell tulips and cheese to the Chinese and invest the money in Chinese factories

    YOU don’t do that, the collective does. And that is the difference between malinvestment and investment. Investment is annealed by many independent actors, acting in their personal best interest with real-time feedback loops. Collectivism is about pooling resources and lying about the future, and removing the feedback loops that would reveal the lies in the present.

    Fundamentally a collectivist will never get that point.

  115. It was implied in prior post, that bonds remove the feedback loop of personal risk, because they provide a guaranteed return. The borrower in the is able to borrow more as the economy expands because everyone else is borrowing more. Ponzi scheme. Malinvestment. There is no real-time granular realization of risk, with necessary market-based adjustments to investment, rather it only happens at the end for the “Too Big To Fail”.

    Now you will spread that to the developing world, teach them how to lower their fertility, and bring the world to the finale abyss. Wonderful.

  116. Alex,

    > The idea that we need to generate 90 trillion dollars immediately to pay for them is bullcrap spawned by extremely poor logic.

    The government has to have the income from $90 trillion dollars. Which means that it either has to have the $90 trillion dollars, or it has to tax people so much that they get no income from keeping their $90 trillion dollars. The people don’t have the $90 trillion to take, but they don’t have the $90 trillion to produce the income to take either.

    We haven’t even gotten to the political ability to increase revenues as much as you would like.

    You are advancing ideas that are both economically and politically impossible.

    Yours,
    Tom

  117. @Shelby
    “No, those are early stage totalitarian eugenic solutions,”

    We are not in Transylvania (and even there they don’t do that anymore). You watch too many horror movies.

    @Shelby
    “And that is the difference between malinvestment and investment.”

    Sorry, but we have bankers that do investments for clients. Our bankers do not care about who their clients are and our pension funds etc simply look for the best ROI. So our country looks just like a normal country.

    @Shelby
    “bonds remove the feedback loop of personal risk, because they provide a guaranteed return. … Ponzi scheme. ”

    So you actually do not even understand the very basics of investment economics. Pathetic and Sad.

  118. @Andy Freeman:
    I’m a reasonable person so I’m willing to let any adminstration have free rein

    Collectivism is never reasonable. It is always pure evil in a sheepskin.

    that doesn’t imply that loans as a class are not assets

    A claim on a Ponzi system is never an asset, unless you can find a greater fool to buy it.

    @Brian 2:
    it’s up to the people to decide whether they want democracy or theocracy

    +1. Spoken like an anarchist without collectivist caveats. America with a responsible gun owner under every blade of grass was never threatened by attack. The 9/11 debate is the prior blog.

    @SPQR:
    Brian, your “solutions” would not cut more than about 1/3rd of the current yearly deficit.

    I understood Brian to be saying that reducing collectivism would be the solution. But I agree with your implication, that collectivism can never be reduced, only exterminated or expanded. And those who want to exterminate it are outnumbered, thus only a technological extermination will suffice.

    @domi:
    difference between US and Euro entitlement is that the US millionares are the entitled ones

    Compliant cattle think totalitarianism is good. Remember the elite are not millionaires, but billion and trillionaires, and they are fattening you for the collective harvesting. Your elite in Europe sit above the entire system, as do ours in USA.

  119. @Winter:
    Pathetic and Sad.

    Indeed, because you don’t understand basic laws of investment. So go your merry way to the next totalitarian hell. I will be keeping notes and roflmfho. And, I will do my technological best to render passive capital (i.e. bonds and debt) useless, by making knowledge fungible.

    @Roger Phillips:
    specific truth-propositional claims purporting the advantages of course of action A over course of action B

    I think I have substantiated that collectivism is always malinvestment. That is sufficient to substantiate my claim (about knowledge formation) and elevate beyond mere opinion. Nevertheless, I conservatively injected as opinion. Thanks LS for noting that.

    Intellectual weakness of many statisticians and bean counters is an inability to consider anything if they don’t have an immediate data point for each narrow proposition. They are thus bound by chains and unable to formulate a generative theory that explains an overall model. In short, they can’t look over the trees, to see the forest.

    Which of you geniuses has made any money on your supposed ability to predict social, political or economic trends?

    I am up about 300% since 2006. I should be up more than that, but was subject to several thefts. But my networth in money is irrelevant. I live a very simple life. What matters is whether I can slay collectivism. Do you measure you success in life in money? How sad, empty, and enslaved if so.

    @Alex R:
    idea that we need to generate 90 trillion dollars immediately to pay for them is bullcrap spawned by extremely poor logic

    The poor logic was your assumption that interest rates will remain low forever and thus that $15+ trillion in debt will be serviceable at any tax rate, not to mention that tax revenues have never exceeded 25% of GDP in the USA in non-wartime. Even at 100%, we can’t service the debt with 1980 levels of interest rates, and they going much higher than that this time around (because the situation is much worse, we aren’t even a creditor nation any more).

  120. # Winter Says:
    > But these future payments are not certain, and certainly are not debts in any sensible way.

    I wouldn’t pay much attention to Shelby, he lives in his own bizzaro world. However, your statement above is both correct and misleading. They are not debts in any formal way, but they are liabilities. If I run an medical insurance company, there is no guarantee that anyone on my plan is going to be sick, but, based on sound actuarial principles, I assume an estimated liability. If I don’t I soon end up bankrupt and in jail.

    > And there is absolutely no reason to assume that these future payouts are required to exceed future income. Because the payments will be adapted to income.

    I’m not familiar with Dutch law, however, that is not true in the USA. The payments are promised, committed and tied to inflation. For sure, the promises can be reneged on, but that is the point, I suppose. Here in the US, the recipients of social security and medicare are probably one of the largest and most powerful voting blocks. So when I say “the promises can be reneged on” that is more theory than reality.

    > These so called “entitlements” are not legal entitlements in Europe. It can be decided at any time to reduce the payouts or to increase the retirement age (they are already doing that now).

    But if I had an insurance policy that unilaterally changed their payout schedule, I imagine you would encourage me to seek relief in the courts. This is the problem when government takes over basic functions of society that can readily be provided by private business. Not only are governments extremely bad at these things, they also have the power to simply unilaterally change the rules. If the government is going to run private type concerns it is only reasonable that they do so in a manner similar to a private company. Which is to say, they don’t get to change the rules of an agreement after the fact. For sure, you can say “well social security isn’t an insurance program” and you’d be right, however, if a private company weaseled out of their obligations by technical loopholes in their contract you’d be rightly outraged.

    > The only real problem is the reduction in work force beyond what can be compensated by increased retirement age.

    Private insurance companies don’t have this problem. Why not?

    > I see only two solutions to these demographic problems:

    The solution is to actually save the money that people are being forced to put into an insurance scheme, not spend it on current expenses. That leaves the problem that you have already stolen trillions of dollars, and you’d have to fess up, and find a way to fix your prior pilfering. But sunshine is the best policy, and in politics you can always blame that other guy.

    I’d suggest that step one in a government reform here in the USA would be a complete audit of the books according to GAAP. The same bozos who impose Sarbenes Oxley and Dodd Frank on the rest of us couldn’t get their books past the most minimal of accounting standards.

    However, I don’t know much about Dutch politics, so perhaps it is better there.

  121. “> The only real problem is the reduction in work force beyond what can be compensated by increased retirement age.

    Private insurance companies don’t have this problem. Why not?”

    Because they are based on sound actuarial principles as opposed to looting the pension plan to pay for other things.

  122. @LS:
    The govt spends $1000 for a toilet. Knowledge formation is not about how much passive capital (i.e. stealing via malinvestment cycles of redistribution of wealth) society throw at a problem set, but rather is driven by entropic efficiency. But don’t expect 1 in a million people to understand that. If we could do a lecture in the same room, we could gain understanding, but probably not in this blog format.

    Entropic efficiency is really Esr and Linus’s “given more eyeballs, more bugs are shallow” (I replaced the word ‘sufficient’ on purpose).

    For example, it was recently discovered that a flower extract shrinks most tumors, and perhaps B17 from apricot seeds too.

    I am very empathetic of your situation. Do you want to leave an enslavement economic model legacy to your offspring?

  123. @Jessica Boxer
    Private insurance is vulnerable too.

    A reduced work force increases wages. State pensions try to correct for increased wealth. That explodes. Private insurance pays out money. Money that will have much less buying power than anticipated. So private insurance leaves pensioners much poorer than “adverticed” requiring extra support.

    What we see in Europe is a change in policies to increase retirement age to redress the balance. Note that state pensions are not legally bound to deliver fixed payouts. They knew what they were doing (they just removed the last such promise from our national system). One of the advantages of a “collectivist” society is legal flexibility.

    The fact that I believe that Shelby urgently needs psychiatric help is no reason to deny him a discussion.

  124. @Shelby
    I was told that in 1980. What is new is the way the poison is delivered to the tumor.

    Progress in cancer treatment is much more gradual than the newspapers lead you to believe. However the accumulated gains hace been substatial over the years. Careful work and many small steps are transforming cancer into a chronic disease.

  125. Shelby wrote:
    @SPQR:
    Brian, your “solutions” would not cut more than about 1/3rd of the current yearly deficit.(quoting me)

    I understood Brian to be saying that reducing collectivism would be the solution. But I agree with your implication, that collectivism can never be reduced, only exterminated or expanded. And those who want to exterminate it are outnumbered, thus only a technological extermination will suffice.

    Shelby, I don’t think your observation was even in the same continental landmass.

  126. “Old people remain healthy and productive for longer. The solution for the old age pensions is to increase the retirement age. This is going on all over the world. Some additional changes in work practices have to be made, but in general, much of the financial burden can be reduced by increasing retirement age.”

    Uh, this is *another* problem. Productivity is such that fewer people are needed to produce society’s needs, thus reduced demand for workers (fewer jobs). Things are bad enough for youngsters looking for a job now, and they’ll see more oldsters hanging on to the jobs that are available…more social dynamite (sigh).

  127. Winter Says:
    > Private insurance is vulnerable too.
    > … Money that will have much less buying power than anticipated. So private insurance leaves pensioners much poorer than “adverticed” requiring extra support.

    So your argument is that governments have the power to destroy even the best run private industries, and drain even the most prudent investments? On that point I have have to agree with you.

    In fact, it is a core strategy they use to arrogate more power to themselves — destroy the alternatives, then take over with a feigned reluctance, to compensate for the putative failure of the free market.

  128. @Winter

    >I see only two solutions to these demographic problems:
    >1 Immigration of young people (the USA is doing that)

    Of course Europe is doing that too, the list of cities with the most Turks living in them is like 1. Istanbul 2. Berlin 3. Ankara etc. but the problem is that the third-word population brings third-world cultural elements with them and it was pretty much proven in their own countries that those cultural attitudes are not that productive.

    Moreover, we don’t even get the nice, educated, modern people from Istanbul and Beograd. They are OK people. What we get is the one-bit illiterate dumbass peasants from some backwards village in Anatolia or Kosovo. (90% of anti-immigrant sentiment comes not from these people being foreigner, but from being illiterate peasants… whenever Germans or Austrians go on a holiday to Istanbul they realize they actually like the Turks, the city types… but those who migrate are the village types.)

    I am not at all sure that the average / mean Arab or Turkish migrant is even a net taxpayer, i.e. pays more tax than what he uses in welfare and services. Hopefully yes, but probably not at that rate as the natives and thus pensions will be in danger.

    While we are at it, I don’t know if it happens in Western Europe too, but the way it happened in Hungary that the centre-left party became the party of the retired pensioners who are 30% of the population and basically are interested in one thing: more pension. Several of my friends actually forbade their 80-something grandparents from voting, saying them you won’t screw up the future of your great-grandkids for a 5% pension raise just because you are too old to understand what is actually going on: you stay at home. I am not sure if the same thing is happening in Western Europe but I think it will, as pensioners become a powerful voting block reductions will be politically impossible.

  129. Tax at 100% and it still won’t make the West solvent. The options forward are all totalitarian unfortunately, because the people will not willingly admit they’ve been willfully deceived and their collectivism must be abandoned. Fundamentally you don’t understand that the system is ponzi bankrupt. More tax means less production, which means tax revenues fall (in real terms, i.e. non-liar deflator for GDP).

    Except that when we had higher tax rates during the 1950s and 1960s we were far more productive. Taxes are not theft, they pay for infrastructure, schools, research, etc., all of which generated income once upon a time, but which are failing now because we’ve been deluded into not paying for them by an intense propaganda campaign that tells us things like, “goverment investment is a ponzi scheme.”

    I will happily admit that we have major financial problems, and that taxes are only one of the tools needed for addressing them, but dismissing government as a ponzi scheme is just plain silly. We also have pretty good historical data on what worked to solve previous financial crisis, but we’re not using that date. Instead we’re relying on ideological ideas which have a questionable relationship to the facts.

    Let me suggest a simple exercise. As you drive to work tomorrow, catalog in your mind all the things you see which the government pays for, including “invisible” issues like repairs to the street you’re driving on, clean water and safe food at that drive-though you just passed, or building inspectors (which ensure, at least here in California, that homes, businesses and that bridge you just crossed stay up during an earthquake.) Then try to devise a system in your mind which creates all the favorable outcomes you’ve observed on your drive at least as well as our government does. Test your ideas against all the negatives you can imagine, such as human greed, stupidity, ideologies which don’t match observed facts, corruption and kleptocracy. It’s not nearly as easy as you imagine it to be.

  130. @LS:
    Productivity is such that fewer people are needed to produce society’s needs

    You are confused. It is quite obvious that society’s needs aren’t being met. That is not productivity.

    You made the same collectivist conceptual logic error as Winter (in a prior blog), where he equated labor to production. Replicated goods, where the knowledge content is nearly static, is not productivity. I would think you would be the first to know that, given your primary urgent personal need is for anti-cancer knowledge. But again, without a long-winded explanation, not 1 in a million collectivists would ever understand this distinction.

  131. I am not sure if the same thing is happening in Western Europe but I think it will, as pensioners become a powerful voting block reductions will be politically impossible.

    General strikes every spring when colleges get out are a symptom of this happening now, plus the fact that the economic principles of increased productivity are eroding the kinds of jobs available for people who can’t become knowledge workers.

    The guy who made shoes at a factory for 20 years and can’t learn programming has reasons to fear “increased productivity.” What’s the point of cheaper goods if you have to go on the dole to buy them, because your entire skill set has been rendered obsolete?

  132. Shenpen Says:
    > What we get is the one-bit illiterate dumbass peasants from some backwards village in Anatolia or Kosovo.

    I don’t live in Berlin or Austria, so I have no idea what the situation is like there. However, my experience is exactly the opposite. For sure, most of the Mexicans and other assorted central Americans who come illegally to the USA are from the “peasant” class. (Though for what it is worth, I think that is not a word I am comfortable with at all. It reflects a life view that I do not subscribe to.) However, my experience with these poor Mexicans is very good for the most part. What is the stereotype of Mexican migrant workers? Standing on the street corner, not to sell drugs, but to find work doing construction or yard work. A desire to work hard in exchange for a decent living is an attitude a lot of native Americans could do with adopting.

    Further, the Mexican culture is bristling with positive qualities, fun loving, family oriented, work oriented, treat people as they treat you. These are all extremely positive, and again, the Americans could do with learning a few things from them. I’m not in favor of illegal immigration for a lot of reasons, but Mexicans (and other Central Americans) offer many good things for our country. Even if they are “peasants”. I’ll take many a Mexican migrant over the snooty well educated elitists in many of the college towns in America.

  133. # Alex R. Says:
    > Except that when we had higher tax rates during the 1950s and 1960s we were far more productive.

    By what measure? And how to you demonstrate that taxes are the principle factor here? Americans in the 1950s had not yet been poisoned by liberal education “you’re wonderful just the way you are” policies. And Americans in the 1950s had to deal with what, 1% of the regulatory interference that we do today. And Americans in the 1950s had far more opportunities to reduce their actual tax rates by various tax strategies, etc. etc. The way to measure this is to look at what happened in the years after tax rate reductions, not over long distances of time and space.

    > Taxes are not theft,

    If you get to define “theft,” then you are correct. There are communities where large flat nosed guys stop by to tax the local retailers, and provide protective and other services in exchange. Of course, if you don’t pay your taxes they send the Sicilian IRS to enforce your tax obligation. At least they don’t patronize you by telling us that it is for your own good.

    > “goverment investment is a ponzi scheme.”

    Nobody (or few serious people) claim this, we claim that social security is a Ponzi scheme, which it is, except that for a few reasons it is worse, and more dishonest than any actual Ponzi scheme.

    > Let me suggest a simple exercise. As you drive to work tomorrow,

    Nearly all the things you mention are paid for by local or state governments. The biggest problems are at the federal level. One of the geniuses of the US Constitution is the federalization of the country where people actually have a choice in the kind of government they have, at the state, city, county, township, water district, school district sub division, etc level. The centralization of government is all about taking away those choices and making a one size fits all solution. Sorry Mr. Obama/Bush, we can run our own schools.

    > Test your ideas against all the negatives you can imagine, such as human greed, stupidity, ideologies which don’t match observed facts, corruption and kleptocracy.

    Here is the thing about human greed stupidity and ideology: these negative qualities don’t disappear when you arrive in Washington DC. Politicians are just as subject to them. Decentralized government (and especially privatization) defangs individuals and makes them compete for our business, so we get what we want despite the disingenuous proclivities of those who provide for us.

    All governments are corrupt to some extent. The more powerful they are, the more damaging that corruption is.

  134. It is important to remember that high tax rates are not the same as high taxes. Those high rates in the ’50s and ’60s were accompanied by liberal credits and deductions. Almost everything was deductible. When it wasn’t people deducted it anyway.

    IRS enforcement was lax by present standards. Enforcement was not computerized. When enforcement was stiffened in the ’70s people stopped declaring Fido and Fluffy as dependents.

    High tax rates are an instrument of corruption. People who have a lot have a lot to protect. They are willing to spend some to protect the rest. The richer they are, the more they have to spend. This can be a very good thing for lawmakers. (Absolutely not quid-pro-quo!)

  135. @Jessica Boxer:
    my experience is exactly the opposite

    I assume Shenpen is not surprised that since EU has an opulent welfare theft model, it attracts the maggots. As I remember, in the USA we draw from hard-working farmer class of tropical natives in Central America (from tropic of Cancer to Capricorn), originally to work in agriculture, and since the housing bubble more into construction. Europe has so regulated farming that they probably have less demand for the hard-working farmer class. It may be more hassle to get a job in EU, than to get welfare, e.g. in Belgium you have to be registered to work. From my internet view, USA appears to be rapidly sliding towards this regulation morass. For example, I read the FDA is holding hearings Sept. 30 on making vitamins illegal without a prescription.

  136. @Jessica Boxer
    About purchasing power. This is simple supply and demand.

    Past: Workers plenty, savings scarce
    -> Wages low, capital expensive

    Future: Workers scarce, savings plenty
    -> Wages high, capital cheap

    See, no government needed. Even Adam Smith was already writing abouy it.

  137. I wouldn’t pay much attention to Shelby

    Yet you do, and then copy my points. What do they call a person who does what they say not to do.

    governments [...] have the power to simply unilaterally change the rules

    That is authoritarianism, and when it has popular support, that is totalitarianism. Same as what I said.

    recipients of social security and medicare are probably one of the largest and most powerful voting blocks

    That is what I said too, that anarchist pliability is not present.

  138. @Winter: where is savings plenty? Are you counting that funny debt-is-money money?

  139. @Alex R.: You are apparently a dyed-in-wool collectivist, so I don’t think there is any response I could make which would convince you. For me as an anarchist, your statement is so incredibly illogical, that I don’t even think I want to try to argue with you. I don’t need anything govt provides, especially not the mega-deaths (1 million in Iraq alone), I can be happy in jungle eating bananas and getting eaten by mosquitoes if private enterprise can’t produce (which is the inane assumption you make).

  140. Winter Says:
    > About purchasing power. This is simple supply and demand.

    I’m sorry Winter but you are mistaken. In a fiat money system the issuing agency (in this case the United States Federal Reserve Bank) sets the ratio of money to value, or as you call it buying power. This is not supply and demand, it is direct government (or quasi government) action.

    The plain fact is that for most goods and services the trend, compensated for inflation, is downward in price not upward. For example, it costs far less as a percentage of average wages to feed, clothe and house yourself than it did 100 years ago, and that despite the fact that the quality and quantity of food, clothes and houses has dramatically increased.

    Of course, there are some obvious exceptions. Many of them are to do with increasing government interference (medical care and education being the most obvious examples.)

  141. These are areas where free choice does not lead to an efficient market solution. So the people have to choose: Do they prefer freedom (with bad price/quality care and pensions) or efficiency (with good price/quality care and pensions).

    When it comes to medical care, you’re simply inaccurate. The United States has unquestionably the best medical outcomes given certain conditions. I don’t think you’ll find anybody here, Eric least of all, who will say that US government nutrition advice and tax policy don’t encourage getting sick in the first place, but that’s a separate question from the quality of medical care given a condition. Regarding life expectancy numbers overall, most countries in the world count live births as stillbirths (not included in the calculations) if the infant dies soon after being born. The United States counts live births as live births; adding in a few zeroes to a mean will sink it quickly.

    When it comes to pensions, you’re question-begging. To start with, libertarians have no objection at all with default-opt-in retirement savings plans like have belatedly been approved in the United States. But as Forbes recently pointed out, even economically rational individuals might decide that participating in a “pension” program like Social Security doesn’t make sense for them. I’m in the process of getting a promising startup off the ground and would much rather have the cash in my pocket now so I could make progress faster; the return will probably be just a tad more than I’ll get from Social Security.

    They have zero incentives to
    1 Attack the USA
    2 Do so with weapons the USA has build
    3 Steal the weapons instead of simply buying or building them

    You’re imprecise here in a way that can bite you badly. No, the rational balance of costs and benefits certainly says that they shouldn’t attempt these things, but that doesn’t mean at all that there aren’t some incentives to do so. A person with blinders on—or a demagogue—can easily focus on just the incentives to take some action while ignoring the massive predictable downsides.

    Old people remain healthy and productive for longer. The solution for the old age pensions is to increase the retirement age. This is going on all over the world. Some additional changes in work practices have to be made, but in general, much of the financial burden can be reduced by increasing retirement age.

    Entirely agreed. However, in the United States, at least, it’s not politically feasible. Increasing the age for maximum Social Security benefits from 65 to 67 got tantrums from entitled 50-year-olds.

  142. @Jessica
    All that is irrelevant. Whatever the financial policies, there will be less “working” hours per dollar savings. Whether you count in Swiss Francs or gould. Because much more is saved and less hours will be worked (in aging populations).

    And a hairdresser still needs 20 minutes to do your hair and a nurse still needs the same time to feed a sick person. Some jobs cannot be made more productive.

    That is Europes problem.

    And like chemotherapy, we might not like the solutions (im/emigration) but we might not have a choice.

  143. @Christopher Smith
    On average, the Britisch get better health care than Americans for halve the money. Some Americans get better health care for much more money, but most get worse care for more money. That I call inefficient.

    And the market failing in both health care and pensions is not at the supply side, but at the demand side. Consumers demand unnecessary health care uncritically, and they chronically save too little.

    You attackted the question at the wrong end.

  144. On average, the Britisch get better health care than Americans for halve the money. Some Americans get better health care for much more money, but most get worse care for more money. That I call inefficient.

    [citation needed]

    And the market failing in both health care and pensions is not at the supply side, but at the demand side. Consumers demand unnecessary health care uncritically, and they chronically save too little.

    They demand (what I’ll agree is often objectively) unnecessary health care precisely because the price signals are so distorted; if the seniors who go to the doctor for entertainment (and yes, there are some, and yes, those few really do add a significant cost burden to the whole system) were forced to pay even a 20-year-old’s copayment, they might choose the movies instead.

    And as far as savings, you’re still begging the question. Who gets to say what “too little” is? (For what it’s worth, I tend to agree, but I’m willing to let people make their own beds if they have to lie in them. I also support eliminating entirely taxes on production and replacing them, as far as they’re needed, on taxes on consumption.)

  145. The United States has unquestionably the best medical outcomes given certain conditions.

    And given certain financial largesse.

    The United States is the only industrialized nation where quality of health care is directly proportional to income.

    I will repeat John Cowan’s advice that you kindly refrain from commenting on this issue until you’ve read Kenneth Arrow’s 1963 paper explaining why, in detail, health care is not a market good. It’s on the Web and not hard to find.

  146. # Winter Says:
    > there will be less “working” hours per dollar savings.

    More money for less work seems good to me, but I suspect I am totally missing your point. Feel free to fill me in.

    > And a hairdresser still needs 20 minutes to do your hair and a nurse
    > still needs the same time to feed a sick person. Some jobs cannot be
    > made more productive.

    No doubt some jobs (those dealing directly with people) are harder to make more productive, but the vast majority can, and it is the averages that count. But clearly the nurse’s total time can be reduced by automated delivery systems, automated kitchen systems, mass produced, prepackaged meals, and other such peripheral improvements, meaning she can spend more time with her patient and less on rote.

    Hair dressers are actually an interesting case. I’d bet the average time per capita spent with a hairdresser has been increasing not decreasing. For sure, the use of electric clippers can certainly make haircuts quicker (and vacuum systems decrease the peripheral costs), but it is a luxury good, and people actually want to take more time, and can take more time because society as a whole is getting much richer. For some women, getting their roots dyed is no longer a luxury, it is a necessity. (Sorry if that is sexist, I know some of you guys like to get your roots done too :-)

    > And like chemotherapy, we might not like the solutions (im/emigration) but we might not have a choice.

    Don’t you find it curious that all the “world is coming to an end, we need centralized control” all circulate around the failure of government programs like social welfare and entitlement programs, or in the most heavily regulated industries such as medicine and banking?

    In the sphere of the private, I look around and I see exponentially growing wealth. Despite the predictions of Paul Erlich and his gang or latter day Nostrudamuses, we are not running out of resources. Rather the infinite capacity of the human imagination has taken the useless and made it useful. The last thing we need to do is to transfer more control from those who make us rich to those who make us poor.

    Obama was wrong. He doesn’t want to spread the wealth, he wants to spread the poverty.

  147. @Jessica Boxer
    “More money for less work seems good to me, but I suspect I am totally missing your point. Feel free to fill me in.”

    I begin to see the point of misunderstanding.

    You might want to read:
    https://secure.wikimedia.org/wikipedia/en/wiki/Dependency_ratio

    http://www.scalloway.org.uk/popu13.htm

    and the country list:
    http://hdrstats.undp.org/en/indicators/147.html

    More in:
    http://research.stlouisfed.org/publications/regional/05/04/population.pdf

    In India, the size of the aged dependent population is 7.7% of that of the working age population. In the USA it is 19.4%, in Germany it is 30.9%, and in Japan it is 35.1%. Which mean that there are some 14 people of working age for every Indian not of working age, but only three workers in Germany and Japan.

    So, in India every retiree has 14 people to entice to work for her. In Germany and Japan only three. So the Japanese and German workers might “make” a lot of money, but she will have difficulty to produce enough surplus for both herself and for all these dependents. German and Japanese retirees have saved a lot of Dmark/Euros/Yen, but whatever the real “value” of the currency, they all vie for the same few workers to produce food, shelter, and care. And that scarce work will become expensive on any scale!

  148. @Jessica Boxer
    “In the sphere of the private, I look around and I see exponentially growing wealth.”

    That is because the global number of working people is still growing exponentially, and therefore the total size of the world economy. But locally, population will start shrinking, and with it economic production. And we are talking here about local problems, ie, Europe’s and Japan’s demographic aging.

    @Jessica Boxer
    “Don’t you find it curious that all the “world is coming to an end, we need centralized control” all circulate around the failure of government programs”

    No, this is about the real basics of humanity: Caring for the old, young, and ill. And that requires work and time. And good organization.

    @Jessica Boxer
    “we are not running out of resources.”

    We are running out of space. Try getting rid of some poison or waste. In Europe that is becoming really expensive. Along the river Rhine, we are short of room for storing excess water.

  149. RE: However, my experience with these poor Mexicans is very good for the most part. What is the stereotype of Mexican migrant workers? Standing on the street corner, not to sell drugs, but to find work doing construction or yard work. A desire to work hard in exchange for a decent living is an attitude a lot of native Americans could do with adopting.

    Further, the Mexican culture is bristling with positive qualities, fun loving, family oriented, work oriented, treat people as they treat you. These are all extremely positive, and again, the Americans could do with learning a few things from them.

    Hooyah Jessica Boxer – I echo these observations. Many of these folks come to this country and “put out” working hard, seeking to make a better life for themselves and their families. And they DO work and work hard. And then some figure out how our benefits and entitlements system works…the problem is with our whole fundamentally broken and rotten system that makes welfare type porgrams so damned attractive to some.

    But in my observation most come here and WORK. One of my favorite phrases (often heard from Tea Partiers these days) is “but, but, but, they’re takin’ our jobs!” Right. I see soooo many native American kids just filling up those daily lines for farmhands, dockworkers, and housekeepers.

    I have no ill will toward many illegals – look if I came from the poverty and violence stricken hellholes these unfortunate folks come from, I’d be hopping the border too – anything to get my family out of there. Its not like even the most “desireables” (doctors, scientists, etc.) can get through the immigration process very well. And hey, American kids ain’t exactly crowding the physical labor sector up, so there is work for them to do, and they want it. Even at a lower wages. Its our system that causes the strain of the “illegals.” If you were a parent and could get college and whatnot for yours, what would you do? There’s a phrase for this…”enablers.”

    But don’t worry. taxation isn’t theft and human greed, stupidity, ideologies which don’t match observed facts, corruption and kleptocracy are apparently absent from our government.

  150. @Christopher Smith
    “[citation needed]”

    http://www.kff.org/insurance/snapshot/OECD042111.cfm

    And about quality, watch Sicko (Michael Moore). What he shows about the British NHS and the French system is actually true (yes, I know). But you are a grown-up, you can find out what the quality of care is in the UK and assorted other countries.

    @Christopher Smith
    “They demand (what I’ll agree is often objectively) unnecessary health care precisely because the price signals are so distorted;”

    That shows a complete lack of understanding of humans (are you human?). It is well known that those fearing for their health and life will spend every penny on a chimera of help. And if there is a market with asymmetric information, it is the health care market. No one will trade a hysterectomy for a holiday. But what patients can really judge the necessity of that hysterectomy? But I agree that the USA market is messed up pretty badly.

  151. The United States is the only industrialized nation where quality of health care is directly proportional to income.

    Once more, [citation needed]. I think you’re using “directly proportional” in a general rather than technical sense, in which case I’m willing to agree that a person with higher wealth in the United States has access to better medical treatments, but then your claim doesn’t apply only to the United States: Private for-fee medical care is also available in Britain for those who judge the NHS inadequate and can pay.

    I will repeat John Cowan’s advice that you kindly refrain from commenting on this issue until you’ve read Kenneth Arrow’s 1963 paper explaining why, in detail, health care is not a market good. It’s on the Web and not hard to find.

    To the extent that choices regarding medical care involve externalities (such as immunizations), Arrow’s absolutely correct that third parties have an interest in the choices that individuals make, and there’s a strong case to be made for “collective action” (which does not, however, necessarily imply government action).

    Arrow also correctly identifies major relevant issues on the supply side; in fact, the artificial restriction of physician residencies by the AMA has been repeatedly identified as a significant contributor to the increased cost of medical care in the United States. However, calling this problem a “market failure” is to equivocate: A government-granted monopoly is the one restricting supply in the first case.

    Thomas Sowell has pointed out that while demand for medical care is not as elastic as that for, say, movie tickets, there is in fact a significant elasticity both in raw demand and, perhaps more important, in the types of treatments selected. I personally, when afflicted by a sinus infection, have simply called my doctor and obtained a $4 prescription for amoxicillin, which was just as effective as if I had stopped work for hours to travel to visit him, paid for an office visit, and been prescribed an expensive antibiotic series.

    Finally, Arrow’s point that medical care involves dramatic uncertainties at each step is not in question. For millions of years, however, animals have been developing strategies precisely to deal with major uncertainties in life, and to rule a field with major uncertainties “non-market” on that basis is absurd. When loss of luxury-cargo ships at sea was a serious risk, shippers didn’t call transportation a non-market good and demand government subsidies; they formed Lloyd’s. Even today, public-health initiatives like the distribution of mosquito nets in tropical regions are being funded and carried out privately. The jump from “X involves uncertainty” or even “X is a non-market good” to “the government should run X” is a non-sequitur.

  152. Winter Says:
    > So, in India every retiree has 14 people to entice to work for her. In Germany and Japan only three.

    Oh, ya, I get it, you are stuck in the government paradigm where current workers have to support current retirees. That is, and always was a crazy system. If it doesn’t get eliminated, then we are indeed in trouble.

    >German and Japanese retirees have saved a lot of Dmark/Euros/Yen, but whatever the real “value” of the currency, they all vie for the same few workers to produce food, shelter, and care.

    Yeah, I get this as your other point, but as you know capital is often a good substitute for labor, and especially so when mixed with the creative imagination of people, and the free market opportunity to exercise that imagination.

    For example, in my home, I work full time, but I don’t need a maid or a cook because I have substituted capital goods for these particular laborers. However, no matter how hard I try neither my vacuum cleaner or my toaster will not wear that little black dress with the white apron. Oh well, I guess we all have to make sacrifices :-)

  153. “The guy who made shoes at a factory for 20 years and can’t learn programming has reasons to fear “increased productivity.” What’s the point of cheaper goods if you have to go on the dole to buy them, because your entire skill set has been rendered obsolete?”

    We can take the above as a ‘given’, but things are worse than that. I’ve commented on this on another thread, but it bears repeating:

    As the pace of automation increases (process controls get smarter) the fewer and fewer remaining jobs available will require higher and higher levels of intelligence and education. People with average intelligence will not be able to keep up. The current jobless recovery in the US shows that many of the people that were working before 2008 were featherbedding on the money that we were borrowing, and there’s simply no place in the market for them now.

    It’s an unfortunate fact of the free-market economy (illustrated by the Great Depression, Japan’s lost decade, the present Great Recession) that economies can be put into a level of local stability with high unemployment. Pump-priming attempts to push it back up meet with powerful restoring forces. What I wrote about in the paragraph above will make things much worse.

  154. @Jessica Boxer
    “but I don’t need a maid or a cook because I have substituted capital goods for these particular laborers.”

    Indeed, but we are talking 14 to 1 versus 3 to 1. And that will become 2 to 1 in a few decades. And there is no government needed to get to that point. In Japan this is really becoming a problem. Retirees already have to team up to take care of each other. Robots have to be used to give dementing old people at least some conversational interaction.

    What will you do when you cannot drive anymore? When you cannot do your shopping?

  155. And about quality, watch Sicko (Michael Moore).

    Sorry, but Michael Moore simply isn’t credible, and Sicko isn’t a documentary. Among other “oversights”, it neglects to mention that care in the countries it praises isn’t available to all residents and then frequently only after long waits; the NHS is becoming notorious for allowing minor medical issues to balloon into amputations and deaths because of a lack of timely treatment. Additionally, it’s worth noting that Cuba banned Sicko because the censors believed it would present the US medical situation in a favorable light to its own citizens.

    I don’t at all dispute that the US spends more on medical care per capita (in no small part because of the diffused-cost problem); it’s the poorer-outcome that I am not buying.

    That shows a complete lack of understanding of humans (are you human?).

    You’re claiming that people won’t use $foo when it’s completely unnecessary if there’s no direct cost to themselves? Are you human?

    It is well known that those fearing for their health and life will spend every penny on a chimera of help.

    Agreed, but what point are you trying to make: That people fearing for their health shouldn’t be permitted to spend their own money on chimeras, or that they should be permitted to spend other people’s money on them?

  156. @Winter, your link shows a lot of data on cost but none on quality or outcomes. That health care is more expensive in the US than in the rest of the OECD is far less controversial than the claim that the other OECD nations get better outcomes for less. Try again.

    @Christopher Smith, it seems you’ve met my grandmother. A finer example of hypochondria and Munchausen’s syndrome one could hardly find. I don’t even want to know how much she costs Medicare for her weekly doctor visits over the last twenty years, as it would be too humiliating to bear.

  157. What will you do when you cannot drive anymore? When you cannot do your shopping?

    Order groceries online to be delivered by autonomous vehicle?

  158. # Winter Says:
    > That is because the global number of working people is still growing exponentially,

    Labor is only one factor in the creation of wealth. Certainly some advanced countries’ population is destined to shrink, but they can still create wealth other ways. However, the one thing that kills that is an over burdening state that regulates, taxes, restricts and controls the life out of the entrepreneurial drive.

    > No, this is about the real basics of humanity: Caring for the old, young, and ill. And that requires work and time. And good organization.

    It does require the production of wealth. The old and the ill can for the most part provide for themselves through savings and insurance, the young can be provided for by their parents.

    There are some small number in each of these groups that, through no fault of their own, cannot do so. Humans have a deep inbuilt charitable spirit that helps such people when they are not trapped into it in ugly forcible taxation based entitlement systems. If we need a safety net to help the truly destitute senior citizens then have one, but why do we have to pay for the retirement of ALL senior citizens.

    I’m busting my butt while grandpa is sitting on a million of investments, practicing his putting in Palm Beach, while taking a chunk of my hard earned cash? Forget that! Grandma is at risk of eating dog food? Call me up, I’d be happy to help her out. There are lots more grandpas than grandmas, and there would be even more if grandma’s capacity to save had not been so denuded by the heavy taxation of social security.

    > We are running out of space.

    Only because of excessive regulation that imposes silly rules on the control of that space. Here in the USA less that 3% of the land area is urbanized. We are not running out of space, we are running out of government approved space.

  159. @Jeff Read:

    I will repeat John Cowan’s advice that you kindly refrain from commenting on this issue until you’ve read Kenneth Arrow’s 1963 paper explaining why, in detail, health care is not a market good. It’s on the Web and not hard to find.

    Read it. Don’t agree with it. The jist is that you don’t need health care until you need it, and when you do need it there’s no real choice about it anyway, so you’re not going to shop around on price or quality.

    By that logic, legal services aren’t a market good, either. Neither are roofers, plumbers or auto mechanics.

    Yep. Boy am I ready for that socialized auto care!

  160. # Winter Says:
    > What will you do when you cannot drive anymore? When you cannot do your shopping?

    Peapod of course.

    Here in the US there are technologies designed to make senior restricted living very ammenable — they are called senior living villages. Small villages designed specifically to fit the needs of the old. When I get old and crusty I’m going to live in one, they look awesome. In fact, if I weren’t too young I’d think about moving there right now!!

    Same for all the other questions. And FYI, I am certainly not opposed to your solution of increased immigration for service based professions.

  161. # Morgan Greywolf Says:
    > Yep. Boy am I ready for that socialized auto care!

    Hush Morgan, you don’t want to put the idea into peoples’ heads.

  162. > the NHS is becoming notorious for allowing minor medical issues to balloon into amputations and deaths because of a lack of timely treatment.

    I ‘d just like to drop by and say I’ve never heard of such a thing. Can you provide sources, please?

  163. > The jist is that you don’t need health care until you need it, and when you do need it there’s no real choice about it anyway, so you’re not going to shop around on price or quality.

    Note that that’s not true of the vast majority of health care, which consists of appointments.

    One can even shop for urgent and arguably emergency care in advance.

  164. Thank you for the links. Indeed those news articles do not good. Still one can argue that you have the option of going to a private doctor? (I’m assuming that such headlines are the result of temporary budget cuts and that in the future such tricks will be no longer used; otherwise you’d be paying ‘twice’ for a service).

  165. >>whatever country decides to take that stuff needs to supply trained troops to use said equipment.

    > In this scenario it’s NATO troops using NATO-compatible equipment.

    No, it’s NATO troops trying to use US equipment intended for US troops.

    As to “compatible”, the various NATO forces don’t even use the same small arms (rifles etc). They’re trying to be compatible wrt ammunition.

    We’ve discussed heavy arms, which won’t be captured intact. The same is true of things like RPGs, grenades, etc.

    > I hadn’t considered that modern heavy equipment is relatively easy to sabotage quickly

    It’s not just modern, heavy equipment has always been easy to sabotage quickly. Yes, even when “heavy” meant catapult and oxcarts.

  166. Still one can argue that you have the option of going to a private doctor?

    Absolutely. But then one can’t claim that the US system is worse because people with more money can pay for more/better/faster treatment.

    (I’m assuming that such headlines are the result of temporary budget cuts and that in the future such tricks will be no longer used; otherwise you’d be paying ‘twice’ for a service).

    I’m not British, but I see no reason to make that assumption. In fact, the nature of bureaucracy in general is to slouch inexorably in that direction; the last article in particular claims that the bureaucrats are telling hospitals to slow down treatment they otherwise would be able to provide to make sure that patients don’t come to expect quick treatment.

  167. A salient quotation:

    It comes after an NHS watchdog suggested that if patients are forced to wait a long time, they will remove themselves from lists “either by dying or by paying for their own treatment”.

  168. > I’m assuming that such headlines are the result of temporary budget cuts and that in the future such tricks will be no longer used;

    Why would you assume that? Those are merely recent stories – that sort of thing has been happening for decades. If you want to argue that things will be different in the future, you get to explain why.

    > otherwise you’d be paying ‘twice’ for a service.

    That’s assuming that you can afford to pay after they took your money to pay for services that you didn’t get.

  169. “The old and the ill can for the most part provide for themselves through savings and insurance, the young can be provided for by their parents.”

    The way things are going, the young are moving back in with their parents for longer and longer periods, eventually being still there when their parents become old and ill. Then what?

  170. # LS Says:
    > The way things are going, the young are moving back in with their parents for longer and longer periods, eventually being still there when their parents become old and ill. Then what?

    I think if we head down the same crazy track we are on, we are in big trouble. However, a new stimulus, or arrogating more power to the beast is exactly the opposite of a solution. In fact the word to describe it would be “insanity”.

    When we get a more conservative government in 2012, which, without a major change seems inevitable, the changes they make will mostly slow down the Titanic; the iceberg still looms large. Primarily because the will not get a super majority in the senate, though I expect they will win everything else.

  171. The way things are going, the young are moving back in with their parents for longer and longer periods, eventually being still there when their parents become old and ill. Then what?

    Then the family as a whole is consuming fewer resources?

  172. There are lots more grandpas than grandmas, and there would be even more if grandma’s capacity to save had not been so denuded by the heavy taxation of social security.

    Your boring comments about what you think you know about the effects of regulation aside, I am interested to know what you think of systems such as Australia’s where retirement saving is enforced by law (currently about 10% of your income).

  173. @Christopher Smith
    People on this blog always complain that I should not trust Michael Moore and Sicko. But they are never able to point at an actual error. So I can savely assume all the cases he mentioned are true. Which fits in with the reports I saw on our news, and the reports of personal experiences written down by American bloggers.

    Which all show that for about a quarter of the population a medical condition can bankrupt them, that they often receive inadequate and over expensive care for chronic conditions and that emergency rooms are block by the uninsured.

    In short, for double the pet capita expenditure, a large fraction of the Americans gets sub standard health care when compared to the British.

    Pointing fingers to splinters in the eye of the NHS does not distract from the beam in the eye of US managed health care.

  174. # Roger Phillips Says:
    > Your boring comments about what you think…

    You don’t do well in social situations do you Roger?

    > what you think of systems such as Australia’s where retirement saving is enforced by law (currently about 10% of your income).

    I don’t know the details, but it sounds massively better than what we have here.

  175. Forced savings is better than to forced redistribution which is a better than a pension looting scheme like social security.

  176. @Christopher Smith:
    when afflicted by a sinus infection, have simply called my doctor and obtained a $4 prescription for amoxicillin

    And destroy your body long-term. Don’t be surprised when you have cancer or neurological pathology in the future. Antibiotics are toxic with accumulated risk and should only be used for ailments the body’s immune system can’t deal with. And one can strength the immune system with whole food diet.

    Collectivism applied to health care always leads to totalitarianism. People make poor choices, they copy each other in terms of toxic expedient medications, and the collective exhausts its resources.

    @Winter:
    those fearing for their health and life will spend every penny on a chimera of help

    And that is precisely why applying collectivism to it ends up as totalitarianism, some combination of inward rationing (i.e. eugenics) and/or outward conquest to steal resources. As an an anarchist without caveats, I refuse to spend other people’s money if I am faced with death, because I am preparing myself to be at peace with leaving this world.

    libertarians have no objection at all with default-opt-in retirement savings plans like have belatedly been approved in the United States

    I object. Pooling savings (including insurance) is collectivism, and has adverse outcomes of course. The prior debate was here.

    @Winter:
    less “working” hours per dollar savings [...] Some jobs cannot be made more productive

    Luddite nonsense. There are no jobs that can’t be made more productive with technology. This eliminates or reduces the demand for jobs over time. The market handles this by motivating people to pursue jobs that are in demand. Right now that is software, where salaries are north of $100,000 and the supply is radically insufficient. And this will become more so, as we are leaving the Industrial Age and entering the Knowledge Age. Collectivism attempts to distort these market signals and keep people trapped in jobs that are not productive (don’t produce what is in sufficient demand).

  177. “Then the family as a whole is consuming fewer resources?”

    That was Christopher Smith’s answer to my comment on adult children living with their parents. Of course, years ago this was very common – there’s lots of nostalgic bleat about family togetherness and all…but there are problems with that one, too.

    1. It only works if mom and dad don’t have too many children.
    2. If pensions and social security collapse, and medicare also goes away, then the world will go back to the strategy of mom and dad having many children, so as to have enough to support them in their old age. This works against 1., above.
    3. The world has too many people in it right now. We don’t want to have to spread the resources out among such a large population increase. This works against 2., above.

  178. Cursor placement typo: in the prior comment (awaiting moderator), I attributed a quote of Christopher to Winter, “libertarians have no objection…”.

  179. LS Says:
    > 3. The world has too many people in it right now.

    How exactly do you justify this claim?

  180. @Winter:
    Some Americans get better health care for much more money

    And some get the best health care for free, because they understand that health care is a lifestyle that you do before you get sick. The collective now is trying to tell us we can’t eat raw foods, we can’t have vitamins, etc.. Wonderful.

  181. People on this blog always complain that I should not trust Michael Moore and Sicko. But they are never able to point at an actual error. So I can savely assume all the cases he mentioned are true.

    The inaccuracies are mostly errors of omission, which is why I pointed out Cuba’s actions. There’s no question that terrible outcomes do occur under any economic system, but Sicko has been roundly criticized for comparing the best outcomes of other countries’ systems to the worst of the USA’s.

    Which all show that for about a quarter of the population a medical condition can bankrupt them, that they often receive inadequate and over expensive care for chronic conditions and that emergency rooms are block by the uninsured.

    A medical condition can bankrupt many people—but they will typically get treated regardless of ability to pay for trauma and other short-term medical needs. Absent a comparison with other systems, I’m not going to grant that such situations produce worse outcomes in the US than elsewhere.

    Furthermore, libertarians point out that one of the primary reasons so many people have no insurance is precisely that the federal government has mandated that all insurance plans be silver-plated and priced them out of the reach of those consumers. My insurance agent has told me that when he started in the business, it was quite easy to find a policy for someone even with a chronic medical condition, but now, coverage simply isn’t available at a reasonable price.

    Finally, the issues with lack of primary care and difficulty managing chronic conditions owe much to the supply effects I discussed above. In states that are permitting primary-care facilities to be staffed by physician’s assistants and licensed nurse practitioners, we’re already seeing the price of primary-care visits drop sharply; Walmart is even opening minor-medical clinics in some of its stores.

  182. 1. It only works if mom and dad don’t have too many children.

    Or this one?

    2. If pensions and social security collapse, and medicare also goes away, then the world will go back to the strategy of mom and dad having many children, so as to have enough to support them in their old age. This works against 1., above.

    If you slip in all savings under the guise of “pensions”, then of course the world will have problems.

  183. “As the pace of automation increases (process controls get smarter) the fewer and fewer remaining jobs available will require higher and higher levels of intelligence and education. People with average intelligence will not be able to keep up.”

    Read Kurt Vonnegut’s “Player Piano” for the logical endpoint of this.

  184. @Jeff Read:
    Kenneth Arrow’s 1963 paper [...] health care is not a market good

    Health care is a market good, but collectivists delude themselves into a welfare economic model (Arrow’s stated precondition), which promises that it isn’t a market good, which then leads to totalitarianism, i.e. some combination of inward rationing (i.e. eugenics) and/or outward conquest to steal resources (even hidden as loaning money and creating debt bubbles, e.g. the PIIGS).

    @Cathy:
    Kurt Vonnegut’s “Player Piano” for the logical endpoint

    Another Luddite. The Knowledge Age includes art, marketing, psychology, etc.. You might be surprised how creative non-college educated people are.

  185. @WCC:
    if I came from the poverty and violence stricken hellholes these unfortunate folks come from

    You think of yourself as superior. These so called “hellholes” are superior in some ways to the Western system. The evidence is we are getting such quality people from there. The poverty is a problem for those people in developing nations who are collectivists and huddle into the inner city slums. I know from my personal experience of living in such a slum. The farmer types have a higher quality of life in many respects than a Westerner does, especially with radically reduced cancer rates, closer family ties, more laughing and less stress, more time spent outdoors, etc.. And now they have internet, and their children are learning high-tech. I am here living in it.

  186. @Winter:
    That is because the global number of working people is still growing exponentially, and therefore the total size of the world economy. But locally, population will start shrinking, and with it economic production.

    This is total nonsense. With automation and increasing knowledge, more is produced with less people. The problem collectivists have is they want to consume today and promise in the future, more than they can produce. It is simple, you try to invent strawmen, to justify lying to people about what collectivists can’t control– the future production and thus intelligent investment.

    Collectivism is a cover for people who want to buy bonds and steal the innovation of others. They promise the foolish cattle everything, in order to steal from them. INSANITY.

  187. LS Says:> 3. The world has too many people in it right now.

    “How exactly do you justify this claim?”

    @Jessica Boxer: You’ve obviously never driven on the Cross-Bronx Expressway.

  188. “There’s too many people!”

    “There’s not enough food!”

    “If everyone would just eat one other person, the problem would be halved!”

    -Billy Connolly

  189. # LS Says:
    > @Jessica Boxer: You’ve obviously never driven on the Cross-Bronx Expressway.

    There might be too many people in New York City, but I’ve been fifty miles north in the Catskills, they are both beautiful and empty.

    BTW, traffic jams are what happens when the abundance of the free market in car production meets the poverty of the government in road production.

  190. Cathy Says:
    >“As the pace of automation increases (process controls get smarter) the fewer and fewer remaining jobs available will require higher and higher levels of intelligence and education. People with average intelligence will not be able to keep up.”

    But we have been exponentially increasing automation since James Watt, and we have been exponentially increasing population since then too. Somehow all those dummies seem to find work. Don’t confuse the present emergency with mega trends.

  191. >You don’t do well in social situations do you Roger?

    Autistic or Asperger’s, I think. He means well and he really is very bright, so I try to overlook his neurological handicaps.

  192. @Winter:
    Shelby urgently needs psychiatric help

    This is crossing the line, because as you know such an accusation can be a direct attack on a person’s freedom and self-determination.

    I have a different outlook and lifestyle than you. I have been tolerant of you. I would never try to use force to take away your self-determination. I think collectivism is insane, but I don’t support the concept of psychiatry as a weapon.

    I guess that is my reward for expecting a self-declared communist to be rational and non-violent. The truth is all collectivists are wolves hiding under their image of themselves as do-gooders and providers of debt “capital”. I have even expressed that I wished for your voice to remain around, so that your logic could be well understood and debated.

    The truth is that loans (i.e. buying bonds) also a weapon of conquest and mutual destruction. For you that might be insane, but it is because you lack the model to see the truth. We have different ideology. So you want to use weapons?

  193. BTW, traffic jams are what happens when the abundance of the free market in car production meets the poverty of the government in road production.

    And when there’s not a marginal price on using roads. I’m not a fan of the cronyish way toll roads typically get implemented, but some pragmatic suggestions for automatically-varying congestion pricing a la Singapore have been floated and have the advantage of putting the marginal cost mostly on the people without whom the roads wouldn’t be oversubscribed.

  194. @Winter:

    I was told that in 1980. What is new is the way the poison is delivered to the tumor.

    Progress in cancer treatment is much more gradual than the newspapers lead you to believe.

    My entropic efficiency model (basically “more monkeys randomly banging on the code, the more bugs fixed”) says progress is slowed because $billion drug companies don’t want to invest in technologies they can’t patent and make a $billion market from one that should only be a $millions one. The delivery of the flower extract needs to be patentable, or they will bury it.

    This is why I think healthcare for cancer patients would be much less expensive and much more effective, if didn’t apply collectivism. As it is now, FDA works with the drug companies to prevent competition from smaller capitalized solutions, such as herbs, etc.. They hide behind clinical studies, which are fabricated lies, etc.. Like the 9/11 debate, this is something one has to dig into the details to appreciate. And I am not up for another lengthy proving session, like I had to do in the 9/11 blog.

  195. Oops. That last post was a touchpad error.

    @Jessica Boxer

    You don’t do well in social situations do you Roger?

    I do pretty well, I just don’t apply all the usual acting on the Internet. I am trying to cut through what I see as an enormous amount of noise. I don’t see the point in posting comments that purport to represent truth (in the material sense) when there is nothing empirical to back them up. If people were posting aphorisms or rules-of-thumb (neither of which are intended to be propositional) then I would understand. The comments I think are most interesting are the personal anecdotes, since reading them is like (unreliable) fact collection. The theories people keep pushing about politics and economics are just unproven waffle. Eric (and many others here and elsewhere I think) seems to be from the “any predictive theory is legitimate” school of thought. I think theories can have unfortunate side effects, such as making you think you know more than you do and require art to apply safely. I don’t think much art is being applied in this thread.

    Addressed to nobody in particular:

    I am interested to hear more about what it’s like needing treatment in the US. Here is a dump of minutiae for anyone who is interested in the Australian system:

    I live in a two-tier system and have used both the private and public systems. I have not used the system enough to compare the two, but I have witnessed some level of disorganisation in both public and private hospitals. My experience of emergency rooms is that if the triage nurse thinks there’s any chance you may be dying then you are seen immediately. If not, then you can wait for upwards of 3 hours to be seen. If you go into a public hospital via the ER everything is free (except comforts like TV). I have had minor surgery done under private health cover but I do not remember the charges. My recollection is that either the insurer or the government pays for the bulk of the costs, but there can be non-trivial out-of-pocket expenses (less than a few thousand I would estimate). My health insurance (which is almost the best you can get here) is about $1700 a year.

    Every time I visit my GP it is free, but again you can wait more than an hour (I bring a book). If you are willing to pay 60 AUD you can generally see a doctor quickly. Some doctors run over time on their appointments to be thorough, others rush you through the door to be punctual. Almost any blood test the doctor wants done is free for me. Once you get to know a doctor they will order tests for any reasonable concern.

    Specialists are (like hospital) more complicated in terms of charges. Some things are paid for by the government, some things are not. Specialist visits for me (ophthalmology) have ranged from about 100AUD to 300AUD. If you’re willing to pay you can often get non-critical tests done the next day at the place of your choosing (if tests are critical you’ll be sent to hospital). If not, you may have to wait. I have always had tests done immediately so I don’t know what the waiting lists are like.

  196. @Shelby
    “This is crossing the line, because as you know such an accusation can be a direct attack on a person’s freedom and self-determination.”

    No, this is a genuine concern.

    There are worrying aspects in your comments that make me believe you might have serious problems with paranoid delusions. Doctors and antibiotics are life savers, not attempting to murder you. The fact that people prefer to live in communities with formalized mutual assistance (what you call “collectivism”) is not the start of eugenic totalitarianism that must be combated. You display many more such obsessions and fixations involving too many meaningful connections between random events. On the whole, you sound rather unhappy under it.

    I realize that avoiding help is part of these syndromes, and that makes me sad.

  197. @Shelby and many others
    “With automation and increasing knowledge, more is produced with less people.”

    Indeed. But we do not live by knowledge alone. Even after 200 years of automation, there is still one teacher for each class of students. If anything, the classes have become smaller. The number of doctors and nurses per patient have only increased.

    The fact that material stuff has become spectacularly cheaper hides the fact that many “services” have not. That is one of the prime reasons the cost of education and health care never go down, only up.

    We all think of how cheap cars and TV sets have become since their introduction in the mass market. But most jobs involving interaction between people have seen much smaller increases in productivity, if they saw any at all.

    It really pays to get informed of the problems the Japanese face with their aging population. If anything can be automated, the Japanese have tried to do it.

  198. @Christopher Smith
    “A medical condition can bankrupt many people—but they will typically get treated regardless of ability to pay for trauma and other short-term medical needs.”

    But it is the chronic conditions that cripple and kill. Inadequate care for chronic conditions is crippling and costs years of your life. But these are also the expensive treatments.

    There is a reason the advocates of the US system always come up with trauma care. That is the cheap and visible part. You see your surgeon and radiologist a few times for your cancer or stroke “problem”. But your will need drugs and care for years to come afterwards. I have also seen so many examples of US health care providers who refuse to diagnose serious conditions until they have become acutely life threatening (and likely to kill the patient on the cheap) that I tend to believe Michael Moore when he states that this is a conscious policy.

  199. @Winter:
    “Indeed. But we do not live by knowledge alone. Even after 200 years of automation, there is still one teacher for each class of students. If anything, the classes have become smaller. The number of doctors and nurses per patient have only increased.”

    Actually no, in higher ed, the number of teachers per student has decreased.
    The number of admin per student has increased many times over however.

  200. @Winter:
    No, this is a genuine concern.

    No, it is brow-beating.

    Doctors and antibiotics are life savers

    I didn’t say they are not life savers. I said also toxins, and if you abuse them for non-serious ailments, then cancer rates rise. We have a natural immune system that works fine most of the time.

    Tangentially, you know that the efficacy of most antibiotics is declining due to resistant strains formed by overuse and misuse.

    not the start of eugenic totalitarianism that must be combated

    Rofl. Study history.

    I will be gleefully expending my energy on technology to do my small part to enable those who want to survive and prosper, while the collectivists fall into their Cuckoo-land gore pit.

    connections between random events

    So that is what you do when you’ve been defeated by logic. You hide either in a lie or delusion.

    that makes me sad

    I would be sad too, if I had an ideology that only knows how to lie (promise what it can’t), brow-beat, and murder.

    And this is very strong evidence for my point that collectivists never change, irregardless of how many times their economic model wrecks havoc on mankind.

    The non-collectivists need to get busy producing technology that makes collectivism impossible. When each person is able to hold his savings in his own brain, that is the end of collectivism. The only thing collectivism can do to tax and steal at that point is to steal the physical heads.

  201. @Winter:

    material stuff has become spectacularly cheaper hides the fact that many “services” have not. That is one of the prime reasons the cost of education and health care never go down, only up

    The last cries of the collectivists as the Knowledge Age renders their economic model impossible to enforce.

    I guess you didn’t notice that education and health care cost too much because of the collectivist model. We had this discussion already about education in a recent blog, yet you redundantly repeat the same worn out ideology that makes no sense. For K-12, the problem is the govt subsidy, and for higher education, the problem is the govt providing everyone a student loan. Debt is always a weapon of mass destruction, because it eliminates the market feedback forces in the near-term, and pushes those feedback forces to the “Too Big To Fail” collective. But Winter you would never be able to understand this, even if I did take the time to explain it full detail and elaboration.

    get informed of the problems the Japanese face with their aging population

    Japan faced one big problem. They invest all their money in bonds, the weapon of mass destruction. I have studied Japan and have drawn off the knowledge of experts. Japan instead of actively investing, they refused to integrate their society into the world and preferred the “safety” of passive capital (i.e. bonds). So they go the “safety” they asked for, and none of the investment growth.

  202. “Debt is always a weapon of mass destruction, because it eliminates the market feedback forces in the near-term,”

    I don’t agree here. Without a central bank to manipulate money creation and a government to provide a risk-free asset (by moving all its risk onto every other asset), debt isn’t nearly as dangerous.

  203. @Doc Merlin:
    The key is that without fractional reserve banking, debt isn’t nearly as dangerous, because debt bubbles implode expeditiously. But if people demand debt and bonds, they also implicitly demand fractional reserve banking and a govt backstop, because otherwise bond holders consistently end up bankrupted. The 1800s is evidence, the implicit forces of which transitioned us to the central bank in 1913.

    Afaics, the only solution is to eliminate the ability to store capital, by making DYNAMIC knowledge the only capital of significance. Then capital becomes active, and debt, bonds, and govt become useless. I am actively developing this solution.

  204. My previous response seems to have been eaten by the spam filter.

    @Jessica, Eric, others: I find it mildly disturbing how willing many of the respondents are to put forward theories there is simply no way of testing. I don’t think these things are being put forward as some kind of non-propositional knowledge (e.g. aphorisms, rules of thumb). From past interactions I would guess Eric is from the “any predictive theory is a good one” school of thought (this seems to be extremely common in academia as well). I think theories can have side effects, such as making you think you know more than you do. Consequences before truth (especially where the truth is unclear).

    @ Shelby:

    So that is what you do when you’ve been defeated by logic.

    I don’t think you know what the term “logic” means. For a start, it can’t be used to “prove” the kinds of things you seem to think it can. If I had to judge based upon this thread I would have said your epistemology was pretty close to the central planners you hate so much.

    Btw are you the Shelby that used to post on LtU? I enjoyed your posts there much more. Less baloney.

  205. @Shelby
    You think of yourself as superior.

    Wrong. I think of myself as lucky. I won the birth lottery and was born in the US. An accident of birth is luck, not superiority.

    I began life on the bottom rungs in this country, but I didn’t stay there. No way I was repeating the cycle of destruction I saw all around me. I took advantage of the relatively free society we live in and capitalized on opportunities as they came. I learned the value of work and creating opportnity through my family. Most are not wealthy, but all own their homes and property and have no debt. All refuse to take part in the entitlement system. My own mother worked three jobs because she refused to be on the handout.

    Many of the people I described don’t have the opportunity in their society to do the same or its so far beyond their reach that risk analysis makes hopping the border the more promising choice.

    By the way, that cited statement was your attempt to put me on the defensive right away – your opening statement had nothing really to do with the rest of your comment. You talk a lot about wanting debate even with those you are thoroughly against – well, thats good. A mark of intellectual honesty and discipline is to not use bullshit tactics like this.

  206. I don’t know where Eric gets his numbers, but the claims that every European economy is bankrupt is absolutely false. Norway has huge surpluses, Sweden has a budget in balance and a small national debt. Germany is doing so well that it can swallow the Greek fraud if it wanted to. Poland seems to be doing rather well for themselves. There are other examples, but this was not meant to be an exhaustive list.

    The entitlements that are in place in all these countries are actually financed. The ones that come into play immediately, like health care, schools and social welfare are paid for over the tax bill the same year as the costs are incurred. Long term liabilities like pensions and unemployment benefits are these days paid for by accumulating capital in huge funds. They are regulated so that payments are adjusted to life expectancy when you retire. The only entitlements that possibly could break the system are the payments that in essence guarantee subsistence income to all citizens. As long as the wheels of society turn reasonably smoothly, we can afford this. To most people in Europe, it is unacceptable that people starve to death, freeze to death or die from easily curable illnesses because they lack income.

    This creates freedom for everyone. You give up a percentage of your income and you no longer have to worry about insurance policies for a number of catastrophes that may befall you (you may want to top up if your requirements are above subsistence though).

    @JessicaBoxer: It is quite obvious that the population of the world is too large, when some key renewable resources are depleted at a higher rate than they are regenerated. Fish in the sea, fossile fuels, yield depletion of arable land and the shrinking rain forests are all signals that Earth can’t support its current population. Even though we are at a point in time when fertility is dropping below 2.0, the world population will continue to grow for another 100 years due to increased longevity and other factors.

  207. @Roger Phillips:
    Okay I accept the challenge. Let gets down into the brass knuckles of it.

    My theory has been proven already.

    Which theory do you think can’t be falsified?

  208. Which theory do you think can’t be falsified?

    I did not say anything could not be falsified. Try again.

  209. @WCC:
    Wrong. I think of myself as lucky. I won the birth lottery and was born in the US.

    For me “thinking you are superior” is the same as “thinking my birthplace is superior”. I don’t try to make an enemy, but I do question your assertion that you were lucky. I think in many ways being born in the USA is unlucky. I am contemplating changing my citizenship, because for one thing USA taxes me even I am not inside the country using the resources. I also provided other reasons why being born in developing country on a farm is superior is some ways.

    Btw we share hardship at youth, I was raised in the slums of New Orleans and Baton Rouge, and at one point my sister and I were the only non-negro kids in the entire elementary, and the first non-negro hair that every other student had every run their hand on. I constantly had greasy hair as a result. I had to endure 10 school changes before I reached second year high school. But never saw this as hardship, but rather as a wonderful human experience. I was exposed to things that many other people will never experience in their lives.

    I guess I resent the characterization that USA is some golden place. It is inaccurate and it is condescending towards other cultures and countries.

  210. I did not say anything could not be falsified

    falsifiable
    2. able to be proven false, and therefore testable

    You wrote:
    there is simply no way of testing

    I don’t have time to play games. If you have a point, please make it.

  211. @Jacob Hallén:
    I am not speaking for Esr. I provided my reasons in a prior comment and another.

    I suspect the natural resources exporters will succumb after China does. Germany will succumb when its export markets succumb. Centralized fiat debt implosions on an 80 year pump lag are a beeaacchh.

    Imho, Esr is understating the probable horror ahead. That is unless the collectivists would stop doubling-down (i.e. kicking the can with more debt and money printing), but that is about as likely as aliens taking over.

  212. @Shelby
    “I suspect the natural resources exporters will succumb after China does.”

    China was founded as a nation around 221 BC. It has survived essentially intact every disaster imaginable except a direct hit by a large comet. As long as there were Chinese people left, China was reconstituted.

    But you have found that one disaster even worse than the plagues and the Mongols combined: Debt default!

    You should make a disaster movie script out of that. Say, Dinocroc vs Superdebt.

  213. Germany survived Hitler too. Iraq survived so far. China survived communism so far. Millions dead in every instance.

    So your point is megadeath is no problem?

  214. Or is your point that those outcomes are not causally correlated with debt and collectivism? I can prove they are.

  215. # Jacob Hallén Says:
    > The entitlements that are in place in all these countries are actually financed.

    First of all, I don’t know much about Scandinavian countries’ approach to these issues. However, what you say certainly piques my interest, so I will have to find out more.

    >@JessicaBoxer: It is quite obvious that the population of the world is too large, when some key renewable resources are depleted at a higher rate than they are regenerated.

    You echo the claim “the world population is too high”, and offer as proof “key resources are being depleted faster than they can be renewed”. You have not make the link between these two claims. You offer no proof that one leads inevitably to the other. We are, after all, pretty short of whale oil these days too.

    I can offer this for consideration: despite the fact the world population continues to grow at exponential rates, the simple fact is that the world is a richer place today than it ever has been in the past. There are some exceptions (where people are subject to despots), and there are occasional blips (such as the current crisis), however the trend is very clear. I wouldn’t make the claim that it is inexorable. But for sure it is not accidental. There are plain and clear reasons why the world is headed on the upward curve.

    The world population is self correcting. Apparently, nature doesn’t agree with your assessment.

  216. # Winter Says:
    > Even after 200 years of automation, there is still one teacher for each class of students.

    In the case of education, here in the US, and I suspect most other developed countries, public education is controlled by governments and unions. Unions in particular have a specific remit — do what is best for their members. Consequently, schools are run for the benefit of educators and administrators not for the benefit of students or parents. These realities ossify the education system such that it is hardly different today than it was 50 years ago. How is that possible? With all the capabilities for information conveyance we have today, we are still doing chalkboards and 30 year old science textbooks? This is hyperbole of course, but not by much.

    However, if you think of the basic service of education — helping kids develop academic skills and core knowledge sets — it could clearly be delivered in a much, much more efficient and effective manner than it is today. However, “school” carries with it a whole lot of baggage besides the plain service of education. Add to that the fact that the union contract is inviolable, and good people like Michelle Rees get the boot, it is no wonder that education has not succumbed to the powerful transforming forces of the past fifty years. In truth, it is an outrage that we have robbed our children so profoundly of what they could have had, but for a few union thugs.

    > The number of doctors and nurses per patient have only increased.

    The situation in medicine is rather different. The problem in medicine is not who funds it, but how much it costs. I have commented on this here many times before, but government interference in the medical industry in a plethora of different ways sends the price of medical care up one or two orders of magnitude. Fix that problem, and most of the issues with medical care go away.

    Medicine has been profoundly affected by automation, however the reality of it is hidden behind the wall of the way medicine is paid for. How many doctors or nurses you have is not subject to the normal pressures of competition, and so we have gold plated plans that means you have a nurse to blow your nose and fluff your pillow, and many doctors doing what one or two could do. (There is also a component of fear of lawsuit, but that is a different matter.) Of course, some people need a nurse to blow their nose, and some people need multiple specialists to help with their difficult case. Most do not though. Most medical cases can be taken care of with a 1-900 phone in doctor (possibly located in Mumbai), and an amoxicilin from the local Walmart.

    > There is a reason the advocates of the US system always come up with trauma care.

    You are correct, there is a difference. And that is why diluting the word “insurance” to mean “Doctor, can you put a band aid on little Susie’s boo boo” is so very destructive.

  217. @Shelby
    “So your point is megadeath is no problem?”

    Oh yes. I can see how the plagues and Mongols caused megadeath. World wars caused megadeath. Civil wars and tyrants caused megadeath.

    But a money reform or bankruptcy causing megadeath? That is more “Dinocroc vs Superdebt” stuff.

    Because if your debtor goes bankrupt, you lose your money. Sad and painful, but hardly lethal. And if everybody loses their savings? That has happened several times in history. Mostly as the consequence of a megadeath, or war. What then happens is, eh, nothing. People simply start again. Happy that they survived, grieving for the dead, and angry at whomever caused it.

  218. @Jessica Boxer
    “The world population is self correcting. Apparently, nature doesn’t agree with your assessment.”

    Yes. If there are too many people, most will die after they run out of some vital supply. The few survivors (a few thousand?), if any, can start anew. That is, if the ecosystem has any carrying capacity left.

    The point is there may be very few survivors. Or none at all. Nature has seen it all before. Just look at the collapse of the Newfoundland Cod population. Or the collapse of the Easter Island human or Greenland Viking populations (whatever their causes). That is the type of thing that happens if Nature corrects.

  219. @winter

    “Yes. If there are too many people, most will die after they run out of some vital supply.”

    Only that doesn’t happen, becuase there is nothing like a “vital supply”. For everything there are substitutes.

    The limits to growth are not set by the environment, but by how willing we are to exploit it…

  220. K_ Says:
    “The limits to growth are not set by the environment, but by how willing we are to exploit it”

    Not technically correct, I mean energy density of space is finite, but it is in any meaningful sense this is completely correct.
    Its a /very/ powerful message.

  221. @K_
    “For everything there are substitutes. ”

    Oxygen, soil, fresh water, trees, iron. Except for soil, these seem not very limiting yet (if ever).

    But for our current society: phosphorous, fossil fuels, a temperate climate.

    Personally, I think our eagerness to dump dangerous stuff in our environment might be the most urgent problem. Environmental degradation can kill quite efficiently (it is the common cause for extinction). Phosphorous is a forgotten limiting factor. Fresh water is problematic in many regions.

  222. Those of you who seem to believe that humankind will pull through, no matter what the obstacles, try googling ‘Fermi paradox’ and ‘great filter’.

    We are simply one species among many. The dinosaurs went extinct; so can we. The universe doesn’t care.

  223. # LS Says:
    > We are simply one species among many. The dinosaurs went extinct; so can we. The universe doesn’t care.

    No we’re not, not as far as terrestrial species go anyway. The dinosaurs did not have telescopes or space ships, or nuclear weapons. Right now I don’t know that we have the ability to save ourselves from the dinosaurs’ fate, but we are a lot closer than the dinosaurs were.

    We are certainly not invulnerable, but we are certainly the smartest, most innovative, most self aware species that the earth has ever produced, and if you think that doesn’t make a difference to our survival prospects as a species, I’d have to say you are wrong.

    After all, we are told we have to save the whales, and the polar bears, and, apparently, the Atlantic cod. If we can do that, then evidently, we are better than fish at overcoming species extinction events.

  224. > The farmer types have a higher quality of life in many respects than a Westerner does, especially with radically reduced cancer rates, closer family ties, more laughing and less stress, more time spent outdoors, etc.. And now they have internet, and their children are learning high-tech. I am here living in it.

    Hold it – that lifestyle isn’t as “efficient” as city life and therefore exists only because of cities. Presumably, such folks should be herded into cities, or at least cutoff. At least that’s what Shelby told us about folks who are living halfway between “farmer types” and city-dwellers.

  225. @Shelby:

    I don’t have time to play games. If you have a point, please make it.

    The point about theories was not addressed to you, as I think it would be a waste of time discussing it with you. I just thought I should point out that “logic” (whatever you think that is) cannot prove the things you think it can. I wasn’t attacking your empiricism.

  226. > To most people in Europe, it is unacceptable that people starve to death, freeze to death or die from easily curable illnesses because they lack income.

    So? If you’re suggesting that the US is different, you’re wrong. (Our poor people tend to be obese.)

    Yes, I realize that media paints a different picture, but its job is to sell fishwrap and you like fishwrap that makes you feel superior. (Yes, there are homeless, and there are empty beds in subsidized&free housing that those folks refuse to use. Should we force them?)

    BTW – If you come to LA, you’ll find that the water is a lot colder than Baywatch would suggest.

  227. The funny thing is that the countries that are the most economically insolvable (Portugal, Spain, Greece and Italy) are the ones with a higher chance to survive a financial meltdown, because their people can always go back to their villages and farm the fields they inherited from their fathers. I know, because my grandfathes did during the German occupation of Greece during WWII, when money practicly ceased existing. Not a glamourous way to live, but a way to live nevertheless. The finnish on the other hand, not so much. Its that safety net that makes people of the meditteranean somewhat irresponsible with money. North Europeans on the other hand dont have that net and are more carefull.

    Anyway, such a meltdown simply WON‘T HAPPEN. The euro folks at Brussels will devise an “urgency government“ for near bankrupt states, that, not having any voters to eport to, will make the drastic measures needed to eliminate the parasites that live off the public sector. Such governmebt has alreadt been prepared for Greece, so its closer than you think.

  228. @Roger Phillips:
    Your comment about untestability was addressed to “others”, so I assumed it included me.

    Deductive logic has a binary test. Inductive logic has a probability, or Occam’s Razor test. Inductive logic is deductive is a suitable complex binary test can be described.

    Please note that there is no absolute empiricism, because the Shannon-Nyquist Theorem says that (regardless of any pre or post filter), that we never know if we have aliasing in our samples, until we sample infinite samples (either infinite close together or infinite time, which is the same thing). This is to be expected, since we can never get 100% coverage of any phenomenon, because the cost of doing so is asymptotic. Which is simply another way of expressing the 2nd Law of Thermodynamics, which says that the universe is trending to maximum disorder (maximum independent possibilities). Which is another way of saying that the force of entropy, is the fundamental force, which is now proven. This is something I have been explaining for a long time, and many smart people have said I was an idiot.

    If you feel I have presented a logic or theory that is not substantiated beyond a reasonable doubt, please tell me specifically which one bothers you the most, so that we can try to determine if my inductive reasoning and evidence is weak or strong. I can’t argue with some general accusation, you must provide a specific case of your allegation.

  229. @Winter:

    I can see how the plagues and Mongols caused megadeath. World wars caused megadeath. Civil wars and tyrants caused megadeath.

    But a money reform or bankruptcy causing megadeath?

    Only a tiny percent of humans are sociopaths that lust for power.

    Thus the only way to get a large scale war is to oppress men economically, otherwise they simply won’t fight.

    Thus every large scale war has been caused by economic failure. This is always at the root cause a fight over resources, which means the root cause is there was historic malinvestment.

    Winter your concept that adjustments can be made in the future, ignores the fact that people have limited time here, and if they work their entire life, they don’t accept for the promises to be changed when they are too old to go back and make different decisions had the debt bubble and malinvesting system not been in force.

  230. @Winter:
    Why are American men fighting in Iraq? Many of them are enlisted, because they would be unemployed otherwise. We are fighting in Iraq, because our collectivism depends on the dollar ponzi scheme, and so we must create guarantee our control over energy in order to sustain the middle-class debt bubble in the homeland. Our collective has created an elite who fulfill our insatiable demands for material goods and debt, and use this a leverage to colonize the developing world, and extract resources at a fraction of the cost that they charge to their debt cattle in the West. The geopolitics is about managing these forces to maximize profit for the elite and that resolves to maximizing imbalances, volatility and ultimately war. All of this, because the common man wants the malinvestment of debt and the infinite promises of the collective.

    It is a sick INSANITY, but unfortunately not 1-in-a-million can see that is the case.

  231. Even religious wars were really economic wars. It was about who was going to control the power of the collective. And if you oppress men economically, then plant the idea that the enemy is not the collective but actually a heretic religion, then the men think they are fighting for the solution.

  232. Deductive logic has a binary test. Inductive logic has a probability, or Occam’s Razor test. Inductive logic is deductive is a suitable complex binary test can be described.

    Deduction need not be binary. There are plenty of deductive systems that are not binary valued. Inductive reasoning cannot be modeled logically in general. As you point out, the usual way around this is to shoe-horn an inductive test into a deductive one (e.g. using probability). That in no way circumvents the underlying problem. Logic cannot prove anything about reality, only models. The relevant question is not “is my logic rigorous”, but “how convincing is my model or method”? I don’t believe you have a method for rigorously proving sociological generalisations. If you want to lay out your method, I’m interested to hear it. FWIW I haven’t read all yoru posts in detail because the specific reasoning is irrelevant to my complaint.

    Please note that there is no absolute empiricism,

    Of course not. But my objection was not about empiricism. It was about logic. Logic does not prove anything about reality, it is for reasoning about models. Your model is the thing you have to get right. If you are going to make a positive knowledge claim then it befalls to you to substantiate to the satisfaction of the listener.

    This is something I have been explaining for a long time, and many smart people have said I was an idiot.

    You’re not an idiot, just misguided. I am not an expert in information theory, but your interpretation of the Shannon-Nyquist theorem reeks of the misguided way many people have interpreted Godel’s theorems into philosophical contexts. This kind of application of mathematics to philosophy is a quack’s game.

    If you feel I have presented a logic or theory that is not substantiated beyond a reasonable doubt, please tell me specifically which one bothers you the most, so that we can try to determine if my inductive reasoning and evidence is weak or strong.

    Okay, let’s try this theory:

    Health care is a market good, but collectivists delude themselves into a welfare economic model (Arrow’s stated precondition), which promises that it isn’t a market good, which then leads to totalitarianism, i.e. some combination of inward rationing (i.e. eugenics) and/or outward conquest to steal resources (even hidden as loaning money and creating debt bubbles, e.g. the PIIGS).

    This may or may not be true. No amount of rationalistic argument will prove it one way or another. Some scientists can get away with this because they have a strong track record of getting it right. Even then it is wise to be skeptical. There is no generally applicable “theory of society” that we can use for anything useful. So people working in that domain cannot appeal to tools from completely different domains. There are alternatives to pretending to know things.

    What’s befuddling to me is that you’re against central planning, so you presumably believe society is relatively complex and non-linear. This seems to favour a skeptical outlook to me. And yet you put forth general assertions with great conviction.

    I can’t argue with some general accusation, you must provide a specific case of your allegation.

    It’s not a specific allegation. You believe that “logic” proves some kind of sociological theory. The problem is your insistence on searching for consistency rather than exercising reliable methods and tolerating ambiguity. Making your arguments more consistent internally makes them better at fooling yourself and others but does nothing to guarantee their authenticity.

  233. The limits to growth are not set by the environment, but by how willing we are to exploit it

    +++++++++++1000000000000000000000000000000!!!!!!!!!!!!!!!

    energy density of space is finite

    That is not correct. The energy density is always trending to maximum. It is simply an issue of getting into the sub-dimensionality of space in order to direct the energy into our dimensional scale. The sub-dimensions are N dimensional waves, not bounded in spacetime. That was one of the main conclusions I realized from the entropic force. I need to get back to that, once I am finished with Copute.

  234. Deduction need not be binary

    I didn’t say the conclusions being logically proved are necessarily binary, rather I said the test of whether the conclusions are proved is either true or false. I contrasted this with inductive logic, where the test of validity is probabilistic.

    Logic cannot prove anything about reality, only models

    This is because reality can not be measured with 100% coverage, i.e. certainty, as I explained in my prior comments. In fact, our reality is probabilistic and governed by the entropic force.

    And it turns out that there is only one way to connect models to reality, and the critical point is that only an entropic model of the universe can explain infinity and our reality. In short, infinity is 100% disorder, meaning you can never get there, because then you couldn’t measure that you were there. This explains the Uncertainty principle.

    Your model is the thing you have to get right

    Agreed. And my model is the only one that can connect infinity to reality. If you think of anything else that infinity could be in reality, you end up back at one conclusion.

    your interpretation of the Shannon-Nyquist theorem reeks of

    Handwaving. I believe that is your lack of understanding of the specifics of my claim and the connection to what was written in Shannon’s paper. We won’t know unless we get into the specifics, which we should do in chat or email, but I already have done this several times with others and I would prefer to put this off until a later time, because I am trying to write a compiler. I just came here to share the conclusions, which were previously vetted. Unfortunately, I don’t have link to well organized discussion on this issue. It sounds like you might be a good person to retest my specifics on in the future.

    You’re not an idiot

    Thank you. Ditto, that is why I am taking your comments seriously.

    What’s befuddling to me is that you’re against central planning, so you presumably believe society is relatively complex and non-linear. This seems to favour a skeptical outlook to me. And yet you put forth general assertions with great conviction.

    Imagine how Einstein felt when he discovered a unifying theory, that made it possible to relate previously thought to be unrelated phenomena. When I discovered the entropic force, I realized that what seemed to be complex, was really just the annealing towards global maximum entropy, which is always increasing. They knew this in 1856, but they didn’t know that it was a fundamental force. Now we know that F=ma can be derived from the trend of entropy. So we are getting closer to proving that it is a fundamental force that controls all these other complex phenomena.

    You say there is no generally applicable theory, and I say there is. So now someone has to prove that my theory does not hold. I have not been able to find one phenomena that can’t be explained by the entropic force. The other complaint has been that it has no predictive power. Well so far, it has predicted Newton’s law of gravity and the Uncertainty principle.

    Why should I be skeptical about the only possible way to explain infinity in reality, not just as a model?

    Thus there is nothing that isn’t a market good. Everything is governed by the entropic force. The inconsistencies would be local orders, which are part of the global trend of the entropic force. Without orders, then 100% disorder would be need to measurable. It all fits together.

  235. esr,

    Did you see Roger’s “September 22nd, 2011 at 7:39 pm”? The bits about logic and modelling might inspire an interesting post.

    Winter,

    > the collapse of the Easter Island human

    was caused by imported disease and exported slaves, not resource constraints.

    Roger Phillips,

    Love, love, love your “September 22nd, 2011 at 7:39 pm”! Your point about how models are empirical and that logic is only good for reasoning about them is extraordinarily thought provoking. I think I want to talk it over with my smartest friends in meatspace, as well as carrying it to Google+ and maybe Facebook. I’m certain I want to discuss it with my wife, who is one of my smartest friends in meatspace, and my daughters, who show considerable promise in my utterly biased opinion. I suspect we will learn something.

    Yours,
    Tom

  236. LS
    > @Jessica Boxer: Did you do the googling I suggested?

    Ehhh, the dog ate my homework?

    To be honest, I don’t need to Google to know what the Fermi paradox is. Thanks all the same. I’d be happy to discuss it with you if you are interested. I don’t think it is particularly paradoxical at all.

    Oh heck, I suppose if I say that I should say why I don’t think it is paradoxical…

    Bottom line is that there are very few things that are likely to make an alien civilization evident to us. It is why, for example that I believe the SETI project is a waste of money. I suppose the most likely type of evidence of an alien civilization would be through the detection of EM radiation with a non random component. However the evidence of our civilization is that technology users go through a very brief period when EM radiation is transmitted at high power. After a short time (100 years in our case) the scarcity of the resource means that EM radiation becomes transmitted at very low power broken into geographical areas. Even at the highest of powers our signals would be barely perceptible at even the closest stars. The likelihood of a single photon from my cell phone getting there is too small to even give consideration to.

    These facts are not peculiarities of our particular technological choices, they are intrinsic limitations of the laws of physics. Consequently, if there was the most powerful civilization on the nearest star, we probably wouldn’t even know it.

    That is unless they tried to contact us. Here though we see an anthropomorphism. Just because we are benignly curious does not mean that any other civilization would be either curious or benign. Even if they were both, the only real option they would have would be to transmit a narrow EM beam to various nearby stars. It is not obvious why we should be the lottery winners. In fact, winning the lottery is far more likely than being the star picked for Vulcan meet and greet.

    I guess the only other alternative is some form of close to light speed travel, or some new physics we don’t know. But there is no reason to believe that such things exist, and no reason to believe that, were it to exist, we would be the target of their investigations. (Except when they come and build some pyramids for us, of course.)

    Consequently, even if the universe was bristling with life, even technologically advanced life, I think it is unlikely we would know about it.

    But that is just my opinion.

  237. Oh, just one other thing about the radio noise from an alien civilization: not only would it be very low power, it would also strongly resemble randomness. This is true because the interpretation of the radio signal needs a extra non transmitted data, such as an encryption key, or various aspects of software radios or UWB. Again, as the radio spectrum gets used more efficiently, more and more of the redundant information gets squeezed out of the signal, and consequently it sounds more and more like random noise. In a way, a low powered evenly random buzz across the whole spectrum might be the best evidence of intelligence.

  238. Only a tiny percent of humans are sociopaths that lust for power.

    Thus the only way to get a large scale war is to oppress men economically, otherwise they simply won’t fight.

    That’s a massive non-sequitur. I rather agree with Varys:

    “Power resides where men believe it resides. No more and no less.”
    “So power is a mummer’s trick?”
    “A shadow on the wall,”

    I could probably beat up Barack Obama the individual in a hand-to-hand fight. I’m sure Eric could. But the President of the United States is protected by a large memetic system that includes everything from moral constraints on the use of violence to the fact that third parties are willing to feed and clothe still other individuals to protect him physically.

    I see no reason to disregard the tendency of a wide variety of memes to go groupthink, whether religious, political, or otherwise. Economic oppression is just one particular instance of that class of meme, and it’s far from the only cause of collective irrational behavior.

    > the collapse of the Easter Island human

    was caused by imported disease and exported slaves, not resource constraints.

    Are we talking about the collapse that happened right at the same time that the palm trees disappeared? Because the evidence is quite clear that lack of food caused by depletion of environmental resources threw the island into a massive civil war.

  239. Jessica Bocer says “I guess the only other alternative is some form of close to light speed travel, or some new physics we don’t know. “

    Well, maybe sorta kinda…

    <a href="http://blogs.discovermagazine.com/badastronomy/2011/09/22/faster-than-light-travel-discovered-slow-down-folks/"Faster than light particle?

    Yeah I know the source is what it is – I used this as an introductory link because it at least provides some skepticism. Interesting that they are holding back publication until absolutely verifiable…Anyway, its worth chasing down the info if you are interested. I know this isn’t really addressing your comment but thought you might be interested.

  240. @winter:
    “Oxygen, soil, fresh water, trees, iron. Except for soil, these seem not very limiting yet (if ever).

    But for our current society: phosphorous, fossil fuels, a temperate climate.”

    None of these are anywhere near running out. Current phosphorus mines, may be close but untapped world phosphorus supply is massive.

  241. @Andy Freeman:
    Hold it – that lifestyle isn’t as “efficient” as city life and therefore exists only because of cities

    You still don’t seem to understand that I was referring to the efficiency of being in harmony with the entropic force. Specifically with respect to suburbia, I was referring to the massive use of debt, govt debt spending, and govt mortgage backing, etc.. to drive a collective order that was not market based, and thus out-of-sync with maximizing degrees-of-freedom (i.e. the entropic force). Thus the inefficiency was w.r.t. the entropic force.

    Farmers who are operating without debt and producing more than they consume are not entangled in a “Too Big To Fail” order. And they have much flexibility now, given they are not burdened with the inexorable quagmire of middle class America.

  242. @Christopher Smith:
    That’s a massive non-sequitur

    The operative phrase was “large-scale”. I think if you study history, you will see I am 100% correct.

    The reason is simple to understand. No large-scale thing can happen, unless it is driven by economics.

    I see no reason to disregard the tendency of a wide variety of memes to go groupthink, whether religious, political, or otherwise. Economic oppression is just one particular instance of that class of meme, and it’s far from the only cause of collective irrational behavior.

    This is where my IQ is demonstrated. People disgree about memes, because people are diverse. The only way to get a large-scale movement is an economic motivation.

    And that is basically driven by the 2nd Law of Thermodynamics, i.e. the entropic force, which means there is asymptotic cost to uniform coverage of any phenomenon.

    The elite understand this intuitively (even if they don’t know the science of it). This is why they try to maximize economic imbalances, because they get the most leverage this way. The natural force of entropy is always working to dissipate uniformity.

  243. HTML fail in prior comment, should have been block quoted:

    I see no reason to disregard the tendency of a wide variety of memes to go groupthink, whether religious, political, or otherwise. Economic oppression is just one particular instance of that class of meme, and it’s far from the only cause of collective irrational behavior.

  244. The natural force of entropy is always working to dissipate uniformity.

    Thanks. I think this helps me understand the issue clearly.

  245. So what I am saying is that memes (which are naturally diverse) are framed in a Hegelian dialectic delusion (i.e. the Inquisition), used to hide an underlying inexorable economic problem. The delusion is motivated by the fact that the economic problem is one that no one wants to solve, or can’t be solved.

    Believe or not, I interpret that a certain book says that memes are supposed to remain diverse to an individual level, and it warned us horrific things would happen with collectivism and not respecting individual memes. These verses have been entirely misinterpreted, especially by Jessica Boxer. But again, that is not an appropriate topic for this audience.

  246. Shelby Says:
    > These verses have been entirely misinterpreted, especially by Jessica Boxer.

    What you talking about Shelby? Sorry, I don’t much follow your rantings.

  247. I didn’t say the conclusions being logically proved are necessarily binary, rather I said the test of whether the conclusions are proved is either true or false.

    Deduction has no necessary connection to truth or falsehood (or any other binary semantics). This may be a digression. If what you’re saying is when you say “logic” you mean some kind of generalisation from prior facts then so be it; I’m not trying to be an essentialist. People do this all the time, but beware the implied (but missing in this case) certainty that comes with using the word “logic”.

    And it turns out that there is only one way to connect models to reality, and the critical point is that only an entropic model of the universe can explain infinity and our reality.

    Sorry, but you have not substantiated this and I do not believe you will be able to. Furthermore you’ve ran well away from the discussion, which was about sociological theories such as the one you put forth. I am yet to hear you explain your method. If these are your Cliffs Notes on your method then I am not really interested in continuing the discussion. Maybe you are the next Einstein. Part of that entails being able to demonstrate your methods to the rest of us.

    And my model is the only one that can connect infinity to reality. If you think of anything else that infinity could be in reality, you end up back at one conclusion.

    I doubt very much that you can infer from your theory of everything the proposition about collectivism that you put forth. I’m not saying your ideas don’t have merit, but I think you’ve gone down a very deep rabbit hole here.

    You say there is no generally applicable theory, and I say there is. So now someone has to prove that my theory does not hold.

    If you want me to believe something, you have to do the convincing. I am quite happy living with the ambiguity. Your theory has to yield some value that gets my attention. Also, the discussion pertains to (or did) a general proposition about collectvisim. So far you have not substantiated it. Unless you believe this statement is a consequence of your theory of everything (which is unproven) then the theory of everything is irrelevant.

    I have not been able to find one phenomena that can’t be explained by the entropic force.

    I’m not sure what you mean by “explain” here. Perhaps you mean to say that all these phenomena are consequences of the theory. Of course, there is a simpler theory that has everything as its consequence: False.

    The other complaint has been that it has no predictive power. Well so far, it has predicted Newton’s law of gravity and the Uncertainty principle.

    Again, I don’t find it clear what you mean by ‘predict’. I presume you mean it excludes certain things from happening, e.g. things don’t fall up. If you have a unifying physical theory, fantastic. That in no way means it is applicable in sociology.

  248. The issues raised by the Fermi paradox are not dependent on radio communication. The universe is about 14 billion years old. If intelligent life evolved somewhere a billion years ago, it would have had plenty of time to spread throughout the galaxy, even given slow travel speeds (well below c). People have run the numbers, and even under the most pessimistic assumptions, it turns out that we should have seen clear evidence of alien civilizations by now. (Saucers buzzing Iowa farmhouses don’t count.)

    There should have been real contact by now – not Weekly World New fodder – but there isn’t. It’s very likely that intelligent civilizations self-destruct. Our danger to ourselves is real.

  249. LS Says:
    > There should have been real contact by now

    “Should” is a pretty big house to build on a quicksand of so many “maybes”.

  250. Jessica, we can talk about in private email if you want. Or if you don’t want, I understand. My email is shelby atter coolpage dotter com.

    @Doc Merlin:
    After I asserted to you that spacetime is not a bound, then…

    Well I see they finally discovered what I had been predicting for several years about frequencies faster than the speed-of-light. Here is what I wrote publicly on Sept 23 2010, which was compilation of some writings from 2006 and 2008:

    Although Einstein’s model is useful for many observed effects, he ignored the complex plane (sqrt[-1]) of the Lorentz factor (1 / sqrt[1 - v^2 / c^2]), choosing to model only the covariant effects where nothing could move faster (i.e. v > c) than the speed-of-light. It has since been shown that only the light-cone restriction is necessary for coordinate transformations to be the Lorentz transformations[4].

    Thereafter observed excessive gravitational effects on electromagnetic signals coming from outer space, can not be explained by general relativity in terms of the matter that can be detected to exist. This anomaly is evidence of some “dark matter” estimated to comprise 80% of the universe, which can not be detected by electromagnetic radiation. Electromagnetic radiation is assumed by general relativity to never travel faster than the speed-of-light, so any matter which exhibited frequencies faster than the speed-of-light would need to be explained by more a general theory such as Mass-Entropy[1].

    This explains why quantum mechanics and general relativity have not yet been reconciled– the frequencies that the quantum particles (and “dark matter”) are exhibiting (note I did not write ‘speed they are moving’[1]) is faster than can be measured in space-time, so quantum dynamics is modeled and measured in probabilities[5], a form of anti-aliasing. If the equation for Planck’s constant where the constant is instead taken to be a value of 1, tells us how much faster the speed-of-light required to measure the quantum frequencies deterministically. Note that volume downscaling in 3-dimensions is cube root (10^-3), and the mass of an electron is 10^-31 kg, and Planck’s constant is 10^-34 kg-m/s.

    Mass-Entropy explains what is happening when quantum particles appear to be entangled[6] over large space-time distances is that the mutual Q is at a much higher frequencies (and I mean an abstraction of ‘Q’ and ‘frequency’ beyond space-time limitations)[1], than the traditional speed-of-light limit. Quantum particles do not physically travel large space-time distances (not even when a large space-time scale body travels), rather the mutual Q of the two locations in space-time is resonant. This is the mechanism by which mass is formed from disorder spontaneously due to mutual observation. The frequencies greater than the speed-of-light are not manifest in the time dimension, rather super dimension(s), so the effects appear in the space-time domain as probabilistic.

    Mass-Entropy[1] works at all scales (dimensions) of matter, but in order to make it useful we need ways to falsify its relationships within measurable effects in the space-time domain, i.e. it must teach us how to escape our limited space-time understanding of our universe.

    General relativity requires that an observer is at one fixed point at any one point in time. We know from copying digital information that mass[1] can exist in more than one place at the same time, this is macro-scale entanglement. General relativity isn’t continuous in the time domain, because all points in time at frequencies greater than the speed-of-light occupy the same point in space-time. To generalize space-time, we need not make the speed-of-light go faster, we can model the higher frequencies by adding a 5th dimension to the tangent space which is the complex probability amplitude of the random variable that the observer is only at that tangent point at the (speed-of-light imprecision) point in time.

  251. Apologies I didn’t provide a link instead of the long quote, because I closed my forum to public access recently. My definitions of the terms “Q”, “mass”, “matter”, etc are highly abstracted in my entropy model, and not the same as your understanding of them.

    @LS:
    In my mass-entropy model, spacetime is not the only reality. There are infinite realities and so it is possible that we are unable to perceive the aliens which are already “here” (their “here” may not be in spacetime).

    @Roger Phillips:
    Deduction has no necessary connection to truth or falsehood (or any other binary semantics)

    I didn’t say the semantics of the system being deduced must be binary. I said that deduction requires that the validity of each deductive step of reasoning be true, and not false, i.e. a binary test for validity of reasoning.

    “logic” you mean some kind of generalisation from prior facts

    Agreed this is inductive reasoning, which can range from probabilistic to intuition. And we agree that it does not prove with certainty. The scientific method is never certain, but rather a preponderance of evidence, peer-reviewed reasoning, and demonstrably useful analytical power. Existentialism is like farting in the wind any way, everybody has an opinion, and they all stink because no one will every be able to say what infinity is in quantifiable terms. The only definition of infinity that can be provided is one that has infinity in its definition, i.e. if I say infinity is 100% disorder, then I must define that 100% disorder is infinite orthogonal possibilities (infinite terms in Shannon entropy).

    Your theory has to yield some value that gets my attention

    It predicted that CERN would discover frequencies faster than the speed-of-light. In addition to the prior quote where I expected such, I wrote on April 05, 2008 when learning that CERN was looking into anti-gravity:

    My theory shows that mass is really just a form of order (a low Entropy state of matter), and that gravity is just the fact that mass exists. And my theory shows that the “opposite of mass” (i.e. anti-mass) is disorder (a higher Entropy state of matter), and that “opposite of gravity” (i.e. anti-gravity) is just the transistion from an more ordered state to a more disordered state of matter.

    Maybe you are the next Einstein.

    Thanks, but I am sure I am not. Verlinde or one of these others I hope.

    I understand that you and many others remain unconvinced that the entropic force applies to physical and informational matter, but your objective is only when it is human matter. You think somehow the social information and matter somehow obey a different set of laws, like some kind of superstition. What can I say?

  252. @Roger Phillips:
    I think it is key to note that the entropic force unifies information, mass, and inertia. If you accept that, then it becomes difficult to argue that society, which is a network of information actors, is not subject to the entropic force.

    Perhaps it will help if I share the definitions I was making, and I am not saying that these have been substantiated by Verlinde’s work thus far.

    Redefine the basic concepts of physics to be dimensionless, i.e. more generalized and applicable to any domain, e.g. space, time, space-time, dimensions we are not even aware of, etc..

    Matter (aka ether) is infinite (maximum) disorder, i.e. no self-similarity and no information.

    Frequency is the repeatable self-similarity of the changing organization of matter, i.e. the types of information. Change is not restricted to the space-time domain.

    Mass is the measured frequencies, i.e. information.

    Q is measurable frequencies, i.e. the capacity for information.

    Energy is the capacity to change Q.

    Impedance is the incapacity to change Q.

    Force is the rate of change in Q, i.e. the frequencies of the capacity to measure frequencies. Rate is not restricted to the space-time domain.

    Work is the measured change in Q.

    Note how Q in any domain can convert mass to disorder, e.g. when our Q in space-time is changed to less than the Nyquist frequency or greater than the Nyquist period. This is analogous to losing the perception of some structure if zoomed too close or too far.

    One of the key things that Tesla discovered was that energy is not transmitted, rather it is conserved. See my standing waves explanation below. What he meant by this is that mass effectively does not exist if it is not measured. A tree can’t fall in the forest if nothing perceived (measured) its fall, but of course some creature does perceive the tree fall and humans perceive Butterfly effects thereof, even if we weren’t tuned to perceive the tree fall directly.

    Thus it is key to understand that the existence of mass is relative to the observer’s Q. If the observer changes Q, then different mass will be perceived. If the basis to which the observer perceives mass depends on (is not orthogonal to) other perceptions, e.g. the concept of time which gives rise to Butterfly effects, then changing an observer’s Q will not cause mass to entirely appear or disappear (for all possible future dependent perceptions) without a prerequisite change in the environment Q.

    In Einstein’s space-time domain (dimension), the theoretical limit of capacity to change Q is mc^2, because c (speed-of-light) is the environmental limit of that domain (Einstein ignored the complex plane of the Lorentz equation). However, attaining this theoretical limit is complicated by the conflation of Q in this space-time environment, as explained in the prior paragraph.

    In essence, what Tesla was doing was finding ways to tune mutual Q that un-conflated with the environment, so that energy was conserved, i.e. no mass or information was created or destroyed.

  253. @Shelby
    “And my theory shows that the “opposite of mass” (i.e. anti-mass) is disorder (a higher Entropy state of matter), and that “opposite of gravity” (i.e. anti-gravity) is just the transistion from an more ordered state to a more disordered state of matter.”

    You have the signs wrong. In the Entropic Gravity theories, eg, Verlinde’s theory, Gravity is the force that emerges due to the increase of entropy when two masses come closer together. Anti-gravity would decrease entropy by pulling the masses apart. The same reasoning generates mass in an object.

    Signs do matter in physics. Try to read Verlinde’s original paper, it is rather simple.
    http://arxiv.org/abs/1001.0785

    Anyhow, entropy tells us something about the distribution of energy (and force) in statistical physics. It has zero application in sociology. In sociology, you would have to derive parallel statistics from the ground up. I suspect your political biases (prejudices) will make it very unlikely that you can do that.

  254. I said that deduction requires that the validity of each deductive step of reasoning be true, and not false, i.e. a binary test for validity of reasoning.

    I misunderstood what you said as referring to statements, not proofs. I find your terminology misleading FWIW, since again you keep talking about “truth” which is completely separate to notions of proof (“reasoning”).

    You think somehow the social information and matter somehow obey a different set of laws, like some kind of superstition. What can I say?

    This is not my assumption at all. It may or may not be true that humans exist specially in the universe. I have no idea, and I doubt you do either. However, even if humans are the same as all other matter that does not imply that your theory can be applied (in reality) to prove propositions in the domain of sociology. It is not necessarily feasible to compute/prove every true sentence in a theory.

  255. “Anyhow, entropy tells us something about the distribution of energy (and force) in statistical physics. It has zero application in sociology”

    Nonsense, entropy is applicable in the social sciences.
    In economics its especially useful as it can be used to measure information flow in the market system. In social systems entropy is sort of where Claud Shannon meets Hayek.

  256. Jessica Boxer,

    > Just because we are benignly curious does not mean that any other civilization would be either curious or benign.

    Why do you say “we are benignly curious”? Was Mao benignly curious? Tamerlane? Cortez? Rockefeller? Custer? There are plenty of humans who have been in charge of enough people to do real damage and not benignly curious. Including in Western civilization and, I think, the American portions of it. I think the history of man shows plenty of evidence against both curiousity and benign intentions. I think I proved your point, though.

    Christopher Smith,

    > Are we talking about the collapse that happened right at the same time that the palm trees disappeared? Because the evidence is quite clear that lack of food caused by depletion of environmental resources threw the island into a massive civil war.

    What I have been reading lately is that the formerly clear evidence turned out not to be so clear.

    Yours,
    Tom

  257. @Doc Merlin
    The second law of thermodynamics defines entropy as a state variable in terms of a temperature and energy.

    Shannons information does not follow the second law in small systems. And any application of the second law outside physics and chemistry is purely metaphorical.

  258. Tom DeGisi Says:
    > Why do you say “we are benignly curious”?

    I was referring to our space exploration efforts, however, your point is well taken.

  259. By that logic, legal services aren’t a market good, either.

    I’m inclined to think not. Here in the U.S. we treat it as one; accordingly in the U.S., despite nominal claims of “equal protection under the law”, protection under the law is actually proportional to income, just as quality of health care is. A worst case for a democratic society.

    I’m beginning to understand what Michael Moore meant when he described democracy as the opposite of capitalism.

  260. What I have been reading lately is that the formerly clear evidence turned out not to be so clear.

    The evidence I find most convincing is that of the layers of bones and other castoffs from what the islanders were eating. Those changed in ways that indicate (by comparison between chiefs and ordinary families) that the diet became steadily “lower-class” and then abruptly descended into a free-for-all and then cannibalism.

    Can you point me to the new information?

  261. Jeff Read said:

    I’m beginning to understand what Michael Moore meant when he described democracy as the opposite of capitalism.

    And I have always understood what the framers meant by the “Tyranny of the Majority”.

  262. Jeff Read:

    What is the alternative? Every economy managed top down has resulted in dictatorship with such rigid uniformity that it suggests causation rather correlation. The nearly unlimited power that is concentrated into the hands of a single political group when that group is given the ability to manage an economy top down has, in every instance, caused the worst individuals to float to the top, eliminate dissenting parties and ruthlessly murder any pretense of democracy.

    Every collectivist economy that has not concentrated power into the hands of a few individuals disintegrated within a short time (think of all the 19th century utopian experiments). Over the last 35 years, the poor and working classes (worldwide, not necessarily in a particular rich nation) have witenessed what is probably the most dramatic inncrease in human prosperity in this planets history. Why so glass half empty?

  263. @Chris Green
    The world is not either black or white. It is populated by humans who might not behave completely rationally when taking a decision. So not all goods and services will be traded in efficient markets. Needles or bread is Ok. But health is notorious for inducing irrational decisions. Love, respect, and security are primary needs the market have difficulty in pricing effectively.

    So the fact that justice should not be priced on a free market does not mean that nothing else should. We have known countries where eggs and needles were sold on a free market, but love and justice were not.

  264. Jeff Read

    It might be that what you are disillusioned about (and your post communicated disillusionment) is that life if basically unfair and difficult for many people. That is true. It has always been true and neither capitalism nor the free market changed that, although it can be argued that they reduced it. Perhaps you have an idea that has not yet been tried?

  265. @Winter

    We have known countries where eggs and needles were sold on a free market, but love and justice were not.

    Please name one. I bet I won’t like it.

    I am reminded of the quote: “Peace is a condition the existence of which we infer from the fact that there have been intervals between wars.”

    I think the same may be true of justice. Perhaps we infer its possibility from the few occasions when a minimal number of people are unhappy with a verdict.

    The USA has a system where from time to time the little guy may obtain redress for his wrongs. Other times he may obtain compensation all out of proportion to his injury, and still other times see him left with nothing. How will you tell which is which? How do you get me to agree with you in all cases? If we agree that you understand justice perfectly and appoint you supreme arbiter what happens after you die?

    There Ain’t No Justice. Sorry.

  266. @Bob
    There aint no justice, neither freedom, truth or true love.

    Still we will strive to come nearer to this ideal. Only a cynic will deny justice to all because it cannot be had by one. If you are only satisfied by perfection, you will get nothing at all.

    A bleak world indeed you want to lead us in.

  267. I have no wish to lead anyone anywhere. “Uneasy lies the head that cares for clowns.” Or something like that.

    I suggest that a system where a gunslinger (otherwise known as a lawyer) may be hired in the marketplace, perhaps on contingency, to seek redress for your wrongs, may be very bad, but perhaps it is less bad than many alternatives.

    I most certainly do not justice to depend on your political connections. The friends of the King often go scot free. I have never been one of them.

  268. @Winter:
    Gravity is the force that emerges due to the increase of entropy when two masses come closer together

    I think you are missing the point of where the entropy is increasing and where it is decreasing. I am reasonably sure that I understand a model that encompasses Verlinde’s model. What Verlinde’s model shows is that entropy inside the black hold is increasing, where the energy is conserved by a gravitational force outside the black hole, that does an equivalent work. That energy is not transmitted, but conserved is a crucial realization, that I also wrote about. This is how matter is entangled at a distance. The reality we get is the one we perceive, i.e. the “Q” of our senses (as I defined “Q”). Btw, one of the implications of this is that the information capacity of the radio spectrum is infinite, and there is no need for a government to control it, as it is not a limited resource.

    My model is more general. Outside the black hole, the entropy of what we normally call “matter” is decreasing, but the entropy of what we normally call “anti-matter” is increasing. In other words, the inside of the black hole is the anti-matter of our universe. In my model, there is only one kind of matter, and the black hole is just one of infinite possible perceptions, as is spacetime, etc.. Verlinde’s model of gravity is arbitrary, and it is chosen to match what our senses can perceive. We have built our model reality from our senses.

    I had also theorized that the entropic force would explain the capillary force (and have some public writings on that), so I well along the way towards what Verlinde discovered.

  269. I also did anticipate Verlinde’s result, when I wrote the following in 2008:

    Why the singularity can not be an infinitely dense mass
    It is impossible for the Singularity to be an infinitely dense mass, because the only forms of mass that don’t have volume, are due to forces produced from energy (e.g. inertia). But there is no energy in the Singularity, because the star gave up all it’s energy in the process of forming the Singularity. Instead of inventing infinite special cases of mass, e.g. “darkmatter”, etc., we can simply go back to the E=mc2 and equation for Entropy, as I did in the development of my theory. Then the Singularity is easily explained as an infinitely small point of 0 energy and 0 mass and thus dominant Anti-Gravity directed towards this point. Then no science that stood beforehand needs to be handled with new special cases. My theory is merely explaining the how the 2 most fundamental laws of universe (relativity & entropy) interact.

    Another reason why the singularity can not be an infinitely dense mass
    Because all the equations dealing with mass and energy fail inside the Singularity, because the volume and space is 0. Zilch.

    Whereas, my explanation using infinite Entropy inside the Singularity, is completely workable mathematically. The theory can thus be used to make predictions about the behavior of the singularity and the transition to it, because won’t just hit “divide by 0″ at the point of 0 volume.

    And why? Because Entropy contains a logarithm. As the Entropy goes to infinity, the self-similarity of matter (or ether) inside can go to “no contrast”

  270. @Roger Phillips:

    even if humans are the same as all other matter that does not imply that your theory can be applied (in reality) to prove propositions in the domain of sociology

    You asked why I was not skeptical, and I responded by saying I am skeptical that human matter would behave any different than other matter w.r.t. to the fundamental force, i.e. the entropic force. So I think you have your skepticism in the wrong direction. Perhaps Occam’s Razor applies.

    I am skeptical that human matter in an information network called society, would behave different from any other network of information, such as the matter under the entropic force. What Verlinde is demonstrating is that there is no distinction between matter and information. This is very fundamental in every way.

    So I think it is akin to superstitution to believe that society does not follow the entropic force. And if society must also try to minimize its global entropy, then we can clearly see that collectivism is a local order that will fail due to this entropic force. Then we can clearly see this is what Coase’s Theorem was stating. Then yes, we can tie in Godel, Halting theorem, etc.. It all then fits finally into a universal theory.

    And this has huge implications on the importance of our work in computer science. What I fabulous time to be alive!

  271. Then yes, we can tie in Godel, Halting theorem, etc.. It all then fits finally into a universal theory.

    I’m sorry Shelby, but I don’t think it’s worth talking to you about this any more. If you think Godel’s theorems are any more than very specific statements about formal systems then I cannot help you.

  272. Here is some speculation. It is interesting to consider the bifurcating network, i.e. trunks that branch into narrower trunks. In a physical layout, such as the internet or water pipes, it is more energy efficient than a fully connected mesh. However, consider the IP network that sits on top of the physical internet, it more resembles a fully connected mesh. And which of those network contains the bulk of the information content? Of course the IP network does. This is an example of a local order that exists to facilitate maximizing entropy. This is what Verlinde describes in his blog, where his says the entropic force follows the path of least resistance, and so the order can actually increase locally. I assume collectivism is doing this. Somehow it is facilitating the global trend to maximum entropy. I suspect this is because technology is motivated by problems, i.e. knowledge only exists because ignorance does, otherwise there would be no contract. So I recognize collectivism as natural, but it doesn’t follow that it is necessarily impossible for us to find a more efficient means to maximizing knowledge and technology.

  273. @Roger Phillips:

    If you think Godel’s theorems are any more than very specific statements about formal systems

    Logic fail. I didn’t say that they were more than statements about formal systems, I implied that they could be consistent with a unification of information and matter.

  274. Shelby it’s not clear who you’re talking to or what argument you’re trying to answer anymore. My only objection is I don’t think you can claim to know the things you say you do via your physical theory. You have in no way answered this accusation. You just keep bringing more and more irrelevant material into the discussion to try to show how your theory “explains” everything. Even if your theory were perfectly precise and accurate that would not mean it could be applied in every domain (firstly due to computability).

  275. Logic fail. I didn’t say that they were more than statements about formal systems, I implied that they could be consistent with a unification of information and matter.

    Now you’re just being a jerk. Your posts are very unclear and you ramble endlessly. So excuse me for having some comprehension problems. The fact of the matter is you have presented fantastic claims and failed to substantiate them, pretending to hide behind an endless proliferation of meaningless jargon.

  276. What Godel and Halting theorems both demonstrate is that a discrete (i.e. countable, measurable, existential) formal system is incomplete, or that it can’t prove its consistency or bounds. This is consistent with my prior assertion of what the Shannon-Nyquist theorem states and my interpretation of the entropic force. In short, the aliasing is never known until there are infinite samples (either infinite in time or in smallness of spacing).

    It is common sense that given we live in a relativistic universe, that one’s measurements depend on one’s measurements. The entropic force proves this. Now you might get some insight into why I say that only the entropic force could explain infinity, and why I say it unifies models (math) and reality.

    Kaboom! :D

  277. Roger is sounds like gibberish to you because your mind is not grasping it conceptually yet.

  278. It is not necessary gibberish, just irrelevant jargon to avoid answering any specific query in a coherent manner. The fact is you haven’t demonstrated the strength of your predictions. You just keep droning on and on about how great your theory is, blissfully missing the point that this is not about how accurate or precise your theory is (my argument is independent of this). No doubt you think I just don’t “get it”. You are not interested in learning well established principles and I am not interested in learning your crackpot ideas. So we are at an impasse.

  279. you’re just being a jerk

    Hey you were being a jerk:

    then I cannot help you

    I merely pointed out that your inability to do the logic of sets, doesn’t mean I need you to help me. At least I was factual in my retort, and not just condescending as you were to me.

    I am trying to explain the concept to you, but it is not very helpful to be condescending to me, when you don’t understand the concept.

  280. Roger it is interesting how you spin your inability to understand my concept, as me not following established principles and me being a crackpot, yet 3 years ago I predicted the two most major developments in fundamental physics in decades:

    1. That entropy is the fundamental force and basis of a universal theory.
    2. Frequencies of distantly entangled matter are faster than the speed-of-light, because they are not transmitted, but rather conserved.

  281. Roger Phillips:

    Even if your theory were perfectly precise and accurate that would not mean it could be applied in every domain (firstly due to computability).

    Entropic force requires that computability is dynamic, which of course all of us in software understand to be true. This is one reason to explain why Godel and Halting theorems are consistent with the universal model, that model says that the global number of independent possibilities is trending to maximum.

    Thus we can see that systems that limit the degrees-of-freedom in computability are going to overcome by systems that increase the degrees-of-freedom. From there, we can conclude that collectivism decreases the degrees-of-freedom of the social network, because the actors are no longer independent.

    It is really so simple. I don’t know why you are having so much difficulty?

  282. @Shelby:

    And which of those network contains the bulk of the information content? Of course the IP network does. This is an example of a local order that exists to facilitate maximizing entropy.

    NOTE: I implied that the bifurcating physical topology has a lower entropy than the fully connected mesh, but this is only true when the fully connected mesh has no cost of adding and removing connections. And I meant to imply this is (on the balance of gains minus costs) the case of the IP network.

    The designers of the internet apparently instinctively understood that there is an entropic force that requires maximizing degrees-of-freedom, in order for a system to scale globally. When I started to read Esr a couple of years ago, I realized his Inverse Commons and other concepts were based in the entropic force. I still have to find time to read the book on hacker culture. P.S. that was the big turn for me towards open source and it radically changed my life and explained many of mistakes in life.

  283. @Winter:

    Shannons information does not follow the second law in small systems. And any application of the second law outside physics and chemistry is purely metaphorical.

    I think you need to re-read Verlinde’s paper. Indeed entropy can decrease locally (“path of least resistance”), but only because the global entropy is decreasing as an ultimate result.

    I provided the internet as an example. Clearly physical networks are highly ordered, and it would seem to be less ordered to have a chaotic fully connected wireless mesh. But such a physical mesh is inefficient, and the larger information content increase (i.e. increasing entropy) can be gained at the virtual network layer (Internet Protocol Address). Thus that highly ordered physical internet is consistent with a global disorder of the virtual IP network that sits on top of it.

    I view collectivism this way. It exists to provide us with these low information content industrial and commodity resources, while the real entropy gains are in the Knowledge Age which sits virtual and orthogonal to the nation-state noise. The collectivist killing pit is just another noise, because the open source of knowledge is very resilient, i.e. even if Esr or other important person is killed in the pit, the progress will not be abated.

    But it still is a shame. Perhaps we can do better.

  284. @ Shelby
    s/global entropy is decreasing/global entropy is increasing/

    No!
    In social systems, global entropy doesn’t always decrease. When you remove barriers to entry and obstructions to the market for example, the entropy increases. Interestingly enough, market efficiency can be measured using entropy measures, with 100% noise representing perfectly efficient markets. (This means that all arbitrage opportunities are being exploited before you have access to them.)

    Note: Right now markets are very low entropy (the correlations are currently higher than they have ever been).

  285. @Tom DeGisi

    Quite interesting reading from a first skim-through; I’ll have to peruse it later. Thanks for the link!

  286. Jesus. And I thought I was the most annoying person on this blog. What a tarpit.

  287. @Winter:

    So not all goods and services will be traded in efficient markets. Needles or bread is Ok. But health is notorious for inducing irrational decisions. Love, respect, and security are primary needs the market have difficulty in pricing effectively.

    So the fact that justice should not be priced on a free market does not mean that nothing else should. We have known countries where eggs and needles were sold on a free market, but love and justice were not.

    I will argue the market is pricing them efficiently. For example, with health care the collective will simply kill (or ration health care for) everyone that has taken a low entropy route to their health care needs by depending on insurance instead of increasing their own personal knowledge about lifestyle and health care options. So this is much more efficient, because it culls the dead-weight on the information super highway.

    That doesn’t mean no one has benefited from collective health care, or that no useful technology has been created. The workings of local orders are complex and not obviously correlated to global trends.

    The only operative form of justice is one gained via personal acquisition of knowledge.

    Love is of course a market good, or did you not notice the rich old men with hot chicks (like me, lol, joke)? I interpreted Esr’s blog about the dating game as love being a competition about who can provide knowledge, i.e. is who interesting and different from the uniformity of society.

    Collectivists tell you they are about “love, respect, security, and justice’, but what they mean in reality is respectively, “impersonalization, conformity, rationing, and collusion”.

  288. @Doc Merlin:
    In social systems, global entropy doesn’t always decrease

    I didn’t say they always decrease. I said the collective part that reduces independence, causes a decrease, but I also said that local orders can facilitate derivative independence. I provided the physical internet vs. IP network as an example.

    When you remove barriers to entry and obstructions to the market for example

    Agreed. And very much agreed on the arbitrage point.

    @Roger Phillips:
    Jesus. And I thought I was the most annoying person on this blog. What a tarpit.

    I assume that is directed at me. Is that your only logical retort?

    If you really think you are superior, then I assume you could argue your case successfully. I am very much known (by those who know me) to admit when I am wrong, but you have to be able to explain why you think I am wrong. I can’t read your mind. I enjoy knowing when I am wrong, because I hate to waste my time on a failed direction.

  289. @Winter: I have a comment stuck in moderator queue that replies to your comment about “love, respect, security, and justice”. Perhaps check back after Esr wakes up, if he approves it. I think it was one word that caused it to get stuck in the spam filter.

  290. @Roger Philips:
    I think you will appreciate something I wrote that is the comment in the moderator queue:

    That doesn’t mean no one has benefited from collective health care, or that no useful technology has been created. The workings of local orders are complex and not obviously correlated to global trends.

    I think this is the essence of the complaint you are making against me. You are saying that I can’t take a global model and apply it to every local order. And I am trying to explain to you, that I didn’t. I am trying to show how these local orders are consistent with the global model. Any way, I am forced to guess about your actual thoughts, because what you’ve shared thus far is very terse.

  291. If you really think you are superior, then I assume you could argue your case successfully.

    You are the one making fantastical claims.. Correspondingly you have a long road to travel if you are going to persuade anyone that your theory proves the sociological generalisations you think it does. You have not done so. I have no case to answer, because I am not making any kind of fantastic claim. I am not even claiming you are wrong or any of the other things you seem to think I am claiming.

    Where are your proofs? Where are your experiments? Papers? Machines? You have nothing, Shelby. You insist that I don’t know how to work with the “logic of sets” because I don’t feel like precisely combing through your wall-of-text rants to get at whatever it is that you mean. Until you show me some real scientific work that demonstrates your sociological generalisations I am going to cease talking to you. I’m only replying now in the hope that it will prevent others from getting caught in your tarpit of delusion.

    So please, go on rambling. You are only expending your own credibility.

  292. You are saying that I can’t take a global model and apply it to every local order. And I am trying to explain to you, that I didn’t. I am trying to show how these local orders are consistent with the global model. Any way, I am forced to guess about your actual thoughts, because what you’ve shared thus far is very terse.

    You are guessing, and you are guessing incorrectly. You seem to think I am objecting to specifics of your model or the way in which you have applied it. It is not for me to prove you wrong, it is for you to prove yourself right. You have woefully failed to do so, offering not real science but the ramblings of a delusional. Show me your real science. Not links to some article you think is relevant. Show me some real scientific work proving the claim you put forward. If not, then please stop abusing science for your ideological purposes.

  293. @Roger Phillips:
    This is a blog, not a scientific journal. If I had the time to publish in science journal, then I wouldn’t have the time to write a compiler. I didn’t intend to go into great detail, but you challenged me to provide what I have, so I did.

    I must to some extent live vicariously through hardcore scientists such as Verlinde, and CERN’s work which for example has measured another fantastic expectation of my theory. I am confident that my theory will be accepted science within a decade or less. You choose not to entertain work at early stages of development, so that is your prerogative, but why do you feel that compels you to talk derogatorily about me here? I understand that you don’t want to read any speculation or inductive logic, because in your mind everything is black & white, either proved or not proven.

    That is a very limiting condition, because it prevents you from exploring new concepts. One reason is because as Godel’s theorem tells you, there is no proof that is both complete and consistent. So you demand perfect, but perfection does not exist EVER. For example, you can start from one set of accepted principles, and stay stuck and never find the better model, because your principles can’t get you there. Sometimes we have to throw away those, reach for something new, then come back and explain how those original science were subsets of our more general model.

    As I said from the beginning, those who are too firmly grounded in being able to prove every step in exhaustive detail, limit themselves from the creativity to find the paradigm shifts. I use sound logic as I step through the possibilities in my inductive logic, and that is a valid form of scientific investigation. And some of the steps have now evidence and proofs.

    We gather here to exchange ideas. We provide links to evidence and developments that support our arguments. I have provided a link to Verlinde’s paper for example. I have also related my ideas to for example the Inverse Commons and provided numerous other citations.

    As for machines, I am building one right now based on my theory about entropic force and the application to knowledge and human networks. It is a language grammar and compiler named Copute, that attempts to increase the degrees-of-freedom for expressing computability bottom-up, and I ask you to wait to judge my future success or failure.

    I disagree with your argument that you don’t have to prove a case. Imagine every idiot could say, “false” and it was my job to prove to everybody else that he is not an idiot. You are advocating collectivism of science. No it your responsibility to find a case that proves me false.

    I am going to cease talking to you

    If you don’t want to be friendly, that is not my problem. I have no lack of friends. I am friendly with everyone who is friendly (i.e. not condescending and judgmental).

    hope that it will prevent others from getting caught in your tarpit of delusion

    Yeah I knew all along that you viewed yourself as the collective gatekeeper of valid science.

    Didn’t you read Esr’s Cathedral and Bazaar? A Bazaar is a very noisy place with many monkeys randomly banging on things, but that is how free markets function, and they do anneal the globally best solutions.

    You are only expending your own credibility.

    Credibility is not knowledge. S/N ratio is important, but there is no perfect filter.

    You seem to think I am objecting to specifics of your model or the way in which you have applied it

    No, I guessed correctly. I knew that you were objecting to application of a general concept without local evidence. I was correct from the beginning when I wrote that bean counters can’t see past the trees to forest. I knew from your first comment against Jessica, the way you viewed reality.

    ramblings of a delusional

    The entropic force is delusional? So that explains is why scientists are flocking to Verlinde’s paper. What you think is delusional is that the entropic force has any applicability to such diverse topics such as sociology.

    And so what science do sociologists have? They collect some data and try to build a model that fits the data, then they discover an outlier then they build a new model, etc.. It is the bean counter way of science. Whereas, Einstein was riding in an elevator, then he realized something very general. He wouldn’t have gotten there by simply collecting data and trying to fit statistical models.

    The truly interesting work is not the countable complexities, which are dynamic and always changing, but the fundamental models of matter.

  294. @Roger Phillips:
    “Imagination is more important than knowledge. For knowledge is limited to all we now know and understand, while imagination embraces the entire world, and all there ever will be to know and understand.”

    “The most beautiful thing we can experience is the mysterious. It is the source of all true art and science.”

    “The more one chases the quanta, the better they hide themselves.”

    “Arrows of hate have been aimed at me too, but they have never hit me, because somehow they belonged to another world with which I have no connection whatsoever.”

    “. . . I became more and more convinced that even nature could be understood as a relatively simple mathematical structure.”

    “There have already been published by the bucketsful such brazen lies and utter fictions about me that I would long since have gone to my grave if I had allowed myself to pay attention to them.”

    -Einstein

  295. @Shelby
    “I think you need to re-read Verlinde’s paper. Indeed entropy can decrease locally (“path of least resistance”), but only because the global entropy is decreasing as an ultimate result.”
    (emphasis mine)

    I do not have to, again, but your insistence that entropy should decrease during spontaneous processes shows that you still have no clue about the second law of thermodynamics. I suggest you take a course in thermodynamics, eg,
    http://ocw.mit.edu/courses/chemistry/5-60-thermodynamics-kinetics-spring-2008/video-lectures/

    @Shelby
    “What Verlinde’s model shows is that entropy inside the black hold is increasing, where the energy is conserved by a gravitational force outside the black hole, that does an equivalent work. ”

    Which illustrates that you still have no clue. I will explain for the innocent bystander.

    Verlinde took existing work about the thermodynamics of General Relativity (based upon Bekenstein, Jacobson, Padmanabhan, and ‘t Hooft) and turned it around to explain Gravity and space itself from thermodynamics. Neither his theory nor his paper contain new facts about thermodynamics or gravity. You do not understand that Entropic Gravity is about the fact that the entropy of a closed region is limited by the surface area of that region (the Holographic principle), and not by the volume. That alone shows that you have really missed the whole point of Entropic Gravity.

    To summarize, Entropic Gravity (ie, Verlinde’s theory) is about the relation between mass/energy, space, and gravity/acceleration. It shows that we can quantify our ignorance about the underlying microscopic (real and physical) mechanism using classical thermodynamics and statistical physics. From that thermodynamics results a quantitative theory about gravity that is ignorant about the underlying mechanisms. Just like the 19th century could build a quantitative theory of elasticity without the underlying quantum mechanics.

    J. D. Bekenstein, “Black holes and entropy,” Phys. Rev. D 7, 2333 (1973).
    J. D. Bekenstein, “A Universal Upper Bound On The Entropy To Energy Ratio For Bounded Systems,” Phys. Rev. D 23 (1981) 287.
    T. Jacobson, “Thermodynamics of space-time: The Einstein equation of state,” Phys. Rev. Lett. 75, 1260 (1995).
    T. Padmanabhan, “Thermodynamical Aspects of Gravity: New insights,” arXiv:0911.5004 [gr-qc].
    G. ’t Hooft, “Dimensional reduction in quantum gravity,” arXiv:gr-qc/9310026.

    If you want more from a real physicist, there are several blogs that discuss this. I think the series of posts by Johannes Koelman is a good starter:
    http://www.science20.com/hammock_physicist/rumsfeld_principle_mikado_sticks_and_how_not_get_girl-82801

    The series started even before Verlinde published his paper based on an interview with Verlinde:
    http://www.science20.com/hammock_physicist/holographic_hot_horizons

  296. @Shelby
    “Btw, one of the implications of this is that the information capacity of the radio spectrum is infinite, and there is no need for a government to control it, as it is not a limited resource.”

    So why did you not build an infinite bandwidth communication system and become rich and famous?

  297. @Winter:
    entropy should decrease during spontaneous processes

    I never wrote that. I am saying the opposite. Perhaps you missed the comment that corrected the typo:

    typo: s/global entropy is decreasing/global entropy is increasing/

    You have some correct statements about Verlinde’s paper, but you are wrong in your allegations about what I understand and you have not refuted my prior comment. I will take some time to see if I can compose a reply that explains it more eloquently.

  298. So why did you not build an infinite bandwidth communication system and become rich and famous?

    Do you think this is a serious retort?

    I hope you aware of statistical multiplexing and related methods for compressing more information into a channel. The theoretical limit to compression is the entropy rate. The variables are not just the frequency in the transmission medium, but include also the global smorgasbord of information vectors that can be multiplexed.

  299. @Shelby
    “I will take some time to see if I can compose a reply that explains it more eloquently.”

    You might spend your time on a more productive task (I will, I will do some shopping). There is simply no way that you can turn Verlinde’s (and many others’) theoretical work on space and gravity into a model of human group behavior. You better build your infinite bandwidth communicator.

    If you want to contribute to our understanding of sociology or economics, do some empirical work based on real humans.

  300. @Shelby
    “The theoretical limit to compression is the entropy rate.”

    When you write:
    “information capacity of the radio spectrum is infinite”
    There is no way to cram an infinite amount of information per second into a finite band of radio waves. With or without compression and statistical multiplexing.

    Even more, the information that can be transmitted in finite bands of radio waves is very, very finite. You might dream about a few bits per photon, but that will not get you anywhere.

  301. You choose not to entertain work at early stages of development, so that is your prerogative, but why do you feel that compels you to talk derogatorily about me here?

    This is not about “entertaining work at early stages”. it’s about you claiming to have proven certain things. That is not “early stages”. I am not wasting my time reading the rest of your post, since you give off the impression of a delusional.

  302. To give an example of your delusions, Shelby, you imagine for some reason that I am defending the social sciences. You have failed to prove your generalisations after claiming o have proven them. If you want to admit that it’s your opinion that there’s some connection between your theory of everything and sociology, fine. However, you have not proven anything, nor are your replies germane to what was said previously. You’re like a strawman factory. You imagine that I am a fan of “beancounter science” because I think the term “proof” should be reserved for real science and not the ill-informed ramblings of yet another Internet delusional.

  303. @Winter:
    The singularity has an infinite spacetime curvature. The holographic representation of the blackhole is what we can perceive because we can’t perceive the anti-matter, i.e. disorder, “inside” the blackhole. Actually there is no “inside” because disorder is not spacetime dimensioned, i.e. is dimensionless in terms of our spacetime model of quantification, and that is why we don’t perceive it directly.

    In my more general theory speculation, I say the anti-matter is disorder that has frequencies of self-similarity that are greater than the speed-of-light. This is why we can’t perceive it. The anti-matter that is the blackhole is not “inside”, but rather the universe wraps back onto itself in a disordered dimension.

    So from our perception, the entropy outside the blackhole is decreasing (being lost) as it is absorbed into the blackhole. The holographic principle says that the entropy absorbed by the blackhole is proportional to the area (not the volume) of the event horizon. The conservation of energy requires that the mass lost to the blackhole produces a work-equivalent gravitational force. This also relates a decrease in local entropy (what we perceive) and an increase in global entropy (the anti-matter) to the gravitational forces, thus showing that the trend of entropy to maximum is a fundamental force.

    Thus as I said from the start, the decrease in entropy (in our spacetime dimension perception) is offset by an increase in the gravity force. In my more general theory, I am speculating that this entropy is the anti-matter that we know exists but we can’t measure it within our spacetime model of perception (existence). So actually the entropy was not lost, it was just that the gravitational forces became so great that the matter was disordered beyond Planck’s constant, thus it became imperceptible in our spacetime dimension, and we can only see its effects along the event horizon.

    With a blackhole, nature is converting very high order (dense mass) to very high disorder (anti-matter), and creating a gravitational force to keeping feeding that process. This is the universal trend towards maximum entropy.

    There is already some research being done on applying this principle to nature in general. And the general equivalence of mass, energy, and information has implications on everything.

  304. @Shelby
    “”

    Some people have identified you as a real person. But looking at your writings you sound exactly like the physics version of the The Postmodernism Generator
    http://www.elsewhere.org/pomo/

    Maybe I have fallen for the trap. You build a Postmodernism Generator for Physics and generate random texts to post here. Could you share the code?

    Whether you are a real person who actually believes this delusional stuf, or a Postmodern generator, my life is too short to be involved in your rants. From now on, I will ignore any comment from you that is not addressing a real subject.

  305. @Roger Phillips:
    claiming to have proven certain things

    I intended only to claim narrow proofs, i.e. that Verlinde has proven a relationship between the trend of entropy and gravity, that CERN has discovered that there are frequencies greater than the speed-of-light, and some other relationships that I claim are strongly evidenced. I have not intended to claim absolute proof beyond that. Applying Occam’s Razor, I have said that I am more skeptical that natural processes would not have a universal theory, and that given the equivalence of information, mass, and energy, that it is not surprising to me that I see these effects of ordered systems such as collectivism behaving the way they do, because they do not disobey my entropic view of the universe. Do you have a more substantiated theory for anything we have been discussing on this page about collectivism, market goods, etc?

    I welcome any specific lapses or overclaiming cases you want to point out. It is next to useless to make general accusations, like “delusional”, “crackpot”, etc..

    you imagine for some reason that I am defending the social sciences

    Where did I say that? I only said that you claimed I couldn’t prove my theories with respect to sociology and other fields. It seems you are imagining things that don’t exist.

    your opinion that there’s some connection between your theory of everything and sociology, fine

    Thanks, I think that is what I have been doing. If not, feel free to quote and point out where I overclaimed.

    You imagine that I am a fan of “beancounter science” because I think the term “proof” should be reserved for real science

    Well yes because that is what you are saying. I don’t think I misused the word “proof”, did I? I said Verlinde had proven the entropic force is a fundamental force.

  306. @Winter:
    I will ignore any comment from you
    So you concede the debate and spin as a problem of mine? I understand this is what people do when they experience cognitive dissonance.

    There is no way to cram an infinite amount of information per second into a finite band of radio waves. With or without compression and statistical multiplexing.

    Let me try to explain the narrowness of your thought process, by giving you a question. What is your informational frame-of-reference?

    Hint: information becomes redundant.

    @Roger Phillips:
    You imagine that I am a fan of “beancounter science” because I think the term “proof” should be reserved for real science

    Given that I didn’t claim proofs that don’t exist, you were attacking that I was using inductive reasoning. Afaik, I never claimed to have proven something that I didn’t prove. So all you accomplished was a bunch of noise and few logic errors. I also remember your comment to Jessica where you were criticizing her for expressing her inductive reasoning, which you characterized as boring opinions. So it sure seems like you want only proofs here. And that would be a beancounters method of creative reasoning, if we are limited pure proofs in our thinking. If that is not what you intended, then you can clarify. Again in this comment, you equate “real science” with “proof”. I am not sure if you meant that exclusively. I think science also involves a creative inductive reasoning step, which of course over time has to stand up to evidence and be formalized.

  307. @Shelby
    “What is your informational frame-of-reference? Hint: information becomes redundant.”

    Brilliant!

    I have to concede that your implementation of The Postmodernism Generator is well done. This utterance almost makes sense. Can you open source the code?

    Yes I know. I promised not to do it again. But I could not resist to compliment the master. I will stop now.

  308. @Winter:
    If you say transmit “a” and Jessica says transmit “a” and Roger says transmit “a”. If the channel only has 1 character of bandwidth, then each of you say that the channel is saturated, yet if my frame-of-reference is that I can see all three of you sending the same character, then from my frame of reference, I can send all of your transmissions. Now you can shut up.

    @Roger Phillips:
    In your “real” science, there are only “proofs”, but as I explained to you, there is no formal system of proofs that is both complete and consistent, due to Godel’s theorem. Thus your “real” science is always either incomplete or inconsistent. That is why I think your brow-beating is nonsense.

    Science is about a preponderance of evidence and eliminating theories that are invalidated by evidence. We thousands of years of history of collectivism wrecking havoc due to the economic failure caused by the reduction in degrees-of-freedom. We can clearly see that every fiat currency has failed, and we can clearly see the reason is because debt causes malinvestment, which is another way of saying that it causes too many people to do the same thing, thus reducing the degrees-of-freedom.

    That is science.

  309. @Winter
    “Some people have identified you as a real person. But looking at your writings you sound exactly like the physics version of the The Postmodernism Generator”

    Yes. As Scott Adams would put it, Shelby seems to be the first human to fail the Turing test.

  310. >Yes. As Scott Adams would put it, Shelby seems to be the first human to fail the Turing test.

    No, he’s just crazy.

    Shelby, your ravings have exceeded acceptable limits of volume and nuttiness. You are wasting my time. You are now limited to one post per day. If you fail to comply I will ban you. If you attempt to evade this limit (as you have before) by posting under a different name, be aware that your style is distinctive and easily recognizable; I will ban you immediately.

    (I apologize to my regulars for not putting my foot down sooner. I haven’t because the combination of intelligence and grandiose, delusional mentation Shelby exhibits is rather pity-inducing.)

  311. @RE ESR and Shelby’s crazyness
    His point about the imaginary plane and special relativity, isn’t craziness though. Thats how tachyons are thought to work (imaginary mass and all that).
    His other points have useful information in them as well, if they are often very poorly stated. I mean, its not just crazy noise like we would expect from a schizophrenia victim.

    As a side note:
    His point about market entropy and collectivism was also a good one. Collectivism tends to decrease market entropy (i.e.: decrease market efficiency) by increasing transaction costs.

  312. @Doc Merlin
    Don’t be fooled. My remark about the postmodernism generator was dead serious. Shelby uses the right words from physics, but his sentenses are meaningless.

  313. Doc Merlin at September 23rd, 2011 at 11:23 pm:

    market efficiency can be measured using entropy measures, with 100% noise representing perfectly efficient markets.

    I find this interesting. You seem to have a generalized Efficient Market notion (random walks, etc.) in mind. Are there citations to the literature in Economics and/or Finance that use entropy measures in this context?

  314. @TomC
    Entropy for market measures go beyond just random walks. From information theory, entropy measures the amount of information one is missing if you don’t know the value of a random variable. This means at 100% entropy the variable is perfectly unknown. At 0% entropy its perfectly known.

    Translating this into the language of market efficiency:
    This means that at 100% entropy its impossible to exploit price movements for gain. At 0% entropy, 100% of the movement is exploitable.

  315. I did find an article in econophysics that used entropy for this, but I can’t find it anymore.

  316. Funny then that bond yields in the UK, Germany and several other countries that you declare insolvent are at record lows.

  317. @james c

    Funny then that bond yields in the UK, Germany and several other countries that you declare insolvent are at record lows.

    Not really.
    1) The creation of the modern derivatives market means to properly price a sovereign bond as a risk-less asset you need to price a bond + a CDO on that bond. This is particularly true when comparing to older assets.

    2) The central banks are buying up bonds from these nations as fast as they can, which means the yields are being held down artificially. This is one reason why bank excess reserves are so huge, despite many of the the largest banks being undercapitalized.

    3) There just aren’t very many good investments right now and we are awash in liquidity, so the substitution effect is holding down yields across the market.

  318. Doc Merlin,

    Yields have not fallen ‘across the board’, are not being driven down by central bank buying (they have stopped)-etc, etc.

  319. ‘Doc Merlin,

    Yields have not fallen ‘across the board’, are not being driven down by central bank buying (they have stopped)-etc, etc.’

    1) Yes, risk adjusted yields have fallen.
    2) No, central banks haven’t stooped buying. The Fed is just aren’t using QE to buy anymore but are using standard open-market operations, and using twisting.

  320. That should read:
    “The Fed is just not using QE to buy anymore, but is using standard open-market operations, combined with twisting.”

  321. Pity me me all the way to eventual truth. Thanks for the compliment. Just got back to this page, been busy. No problem with not commenting further, this is waste of time.

  322. Note that the Uncertainty Principle says that the fundamental accuracy of quantum mechanics is Planck’s constant (expressed in radians) divided by 2. Note that the Shannon-Nyquist theorem says that the highest frequency that can be measured in a signal without aliasing is the sampling rate divided by 2.

    It isn’t crazy to speculate that the dark matter is aliasing error within the limitation of Planck’s constant, i.e. speed-of-light and wave length.

    Luboš Motl Pilsen argues against Entropic gravity because he makes some calculation about relative entropy and reversibility in the spacetime frame-of-reference, but yet he has no data on what might be happening in the dark matter which can’t be measured directly in spacetime. My speculation is that Entropic gravity is a relationship between spacetime perception of matter and the dark matter (which I speculate is in the blackhole which I speculate is same as saying “in our universe”).

    This is why I argued to not limit discussion to what can be measured or proved, because the uncertainty principle assures us that which we try to measure is changed when we measure it (i.e. our spacetime frame-of-reference is always relative). The darkmatter is apparently outside the realm of the scientific method. Rationally, science has a fundamental limitation. Of course I seek to be able to understand this and bring into the scientific method. But just because no one can at the moment, doesn’t mean they are crazy for thinking about these issues.

    Such speculation is supported by that it is impossible for the Singularity to be an infinitely dense mass, because all the equations dealing with mass and energy fail inside the Singularity, because the volume and space is 0. And the only forms of mass that don’t have volume, are due to forces produced from energy (e.g. inertia). But there is no energy in the Singularity, because the star gave up all it’s energy in the process of forming the Singularity. Instead of inventing infinite special cases of mass, e.g. “darkmatter”, whereas the calculation of Entropy increasing inside the Singularity (to a number of independent possibilities greater than can be accommodated within Plank’s constant), does not fail mathematically, because Entropy contains a logarithm and thus asymptotically approaches infinity as the precision of the matter asymptotically approaches 0.

    The holographic principle is the relationship of the quantity of matter “inside” the blackhole and what area of spacetime would be required to enclose that quantity of matter with Planck’s constant of resolution. The blackhole is a window into that matter in our spacetime frame-of-reference, but it doesn’t mean that matter is at that location, because it exists in another entropic dimension, which isn’t bounded by spacetime. Anyway, that is my speculation.

  323. “And the only forms of mass that don’t have volume, are due to forces produced from energy”

    This is incorrect. Electrons, are very likely volume-less.

  324. “This is incorrect. Electrons, are very likely volume-less.”

    Word games strawman. If electrons are volume-less, then they are not a counter-example to the point I was making, which was:

    …all the equations dealing with mass and energy fail inside the Singularity, because the volume and space is 0. And the only forms of mass that don’t have volume, are due to forces produced from energy (e.g. inertia). But there is no energy in the Singularity…

  325. Sharing a new development. In my wild speculation, they won’t be pulling any anti-matter particles apart, rather they may be able to convert some of the (which in my speculative theory is) sub-Planck’s resolution of disordered matter into matter sufficiently ordered that it can be measured. They will reverse the effect of matter falling into a blackhole. If I am correct, the ability to create matter out of “nothing”, should be a major breakthrough for science. I have not done any calculations to determine if I think the energy level will be sufficiently concentrated, nor have I looked at their detailed calculations.

  326. Nice article! It made me realize so many things. And yes, I have to agree that The Economist is the best magazine. :)

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