Control of System Concepts (was Re: Wealth Disparity)

[From Rick Marken (2010.12.02.1450)]

Thanks to Martin Lewitt (Dec 1, 2010 1846 MST) and Kenny Kitzke
(2010.12.01) for answering my question about why a Christian would
feel comfortable with the increasing wealth disparity in the US. It
seemed to me like this would require controlling for two inconsistent
system concepts: Christianity ( "Do not lay up for yourselves
treasures on earth") and free market capitalism ("Greed is good (Do
lay up for yourselves treasures on earth)"). But I can see that this
is just a problem of words. From your replies I am picking up that
there is really just one system concept being controlled here. There
is no conflict at all. If we call that concept "Christianity" then the
word itself elicits different meanings in me than it does in you. Same
with "free market capitalism". So I think using words to describe
system concepts can be misleading.

I think the only way to get at what your (and my) system concepts are
is to see what kinds of things create an error for us. For example,
when Martin says "especially when most of the wealthy provide
employment, products and services to others" that statement creates a
huge error for me (which I experience as an emotion, like anger or
exasperation). And there are many things that Kenny says that creates
an error for me. And I'm sure it works the other way too; most of
what I say about society probably creates an error for both Kenny and
Martin L.

But what I realized from this little exercise is this: The fact that
we experience error (in the form of an emotion) as a result of what we
say to each other is a a sign that what was said is a disturbance that
is pushing _some_ perception away from it's reference level. The
statement that "the wealthy provide employment" creates error because
I have a reference for a perception (of society or the economy or
something) that is inconsistent with the idea that "the wealthy
provide employment". I think a statement like this is a disturbance to
what we have been calling system level perceptions -- currently
thought to be the highest level type of perceptions in the hierarchy.
System level perceptions are our perceptions of various aspects of a
society (interacting people); the references for these perceptions are
our specifications for what these social perceptions _should_ be.

When Kenny talks about a twelfth level I believe he is talking about
the possibility that the references for system concept perceptions --
currently the highest level references in the PCT hierarchy -- are set
by the outputs of even higher level control systems that are
controlling perceptions that are functions of many system concepts (if
he is following the approach to noticing levels that has been taken in
the development of the HPCT hierarchy). This would suggest that our
references for our system concepts are selected by higher level
systems in ourselves; that higher level systems in us select
references for system concepts in order to control for these higher
level perceptions. Maybe this is true. I think it is plausible. I just
don't know what the perceptions at the level above system concepts
would be. Kenny suggests "self" but that's kind of vague. I think
the only way to get at it is to try to come up with some hypotheses
about what the perceptions above system concepts might be and describe
what would constitute disturbances to those variables. Then see if
people actually experience error when those disturbances are applied
or if they vary their system concepts in a way that protects those
perceptions from disturbance.

Should be easy;-)

Best

Rick

···

--
Richard S. Marken PhD
rsmarken@gmail.com
www.mindreadings.com

[Martin Lewitt Dec 2, 2010 1605 MST]

Perhaps my "wealthy provide employment" was incomplete, because such a significant proportion of jobs are provided by corporations which probably should not be thought of as wealthy, or a subject of Christianity at all, but merely as a mechanism for raising and managing capital, i.e., a legal "machine" for efficiently managing productive processes in a cost effective, sustainable (profitable) manner, implemented with human employees and stock owner representatives. Corporations probably cannot be correctly characterized as "greedy" for instance, since they don't accumulate wealth for consumption, but because that is one of the signs of efficiency. Failing to generate sustainable profits when one could have, is wasteful, because the wasted resources could have been employed elsewhere, increasing prosperity.

Christianity does question wealth and an overemphasis on materialism, but it doesn't raise being wealthy to a sin. Keep in mind even though the general perception before capitalism was that wealth was static, Christianity did emphasis good stewardship of ones wealth, e.g., the parable of the talents, not consuming the seed corn, not letting weeds get into ones crops, not spilling ones seed, etc. So the virtue of properly managing resources for quality, and growth was acknowledged, which suggests awareness that some wealth is not static.

Perhaps one of the supporting principles of Christian nonviolence or pacifism is the knowledge that "My kingdom is not of this world.", and "And judge not, and ye shall not be judged: and condemn not, and ye shall not be condemned: release, and ye shall be released:". Because there is ultimate justice in the afterlife, you don't have to get your panties in a wad over someone else's sin of "greed". It is nice that you are concerned for the poor and would prefer that others share their wealth like you do, but hatred and anger over someone else's greed probably is not good for your health, and is none of your business anyway.

-- Martin L

regards,
    Martin L

···

On 12/2/2010 3:50 PM, Richard Marken wrote:

[From Rick Marken (2010.12.02.1450)]

Thanks to Martin Lewitt (Dec 1, 2010 1846 MST) and Kenny Kitzke
(2010.12.01) for answering my question about why a Christian would
feel comfortable with the increasing wealth disparity in the US. It
seemed to me like this would require controlling for two inconsistent
system concepts: Christianity ( "Do not lay up for yourselves
treasures on earth") and free market capitalism ("Greed is good (Do
lay up for yourselves treasures on earth)"). But I can see that this
is just a problem of words. From your replies I am picking up that
there is really just one system concept being controlled here. There
is no conflict at all. If we call that concept "Christianity" then the
word itself elicits different meanings in me than it does in you. Same
with "free market capitalism". So I think using words to describe
system concepts can be misleading.

I think the only way to get at what your (and my) system concepts are
is to see what kinds of things create an error for us. For example,
when Martin says "especially when most of the wealthy provide
employment, products and services to others" that statement creates a
huge error for me (which I experience as an emotion, like anger or
exasperation). And there are many things that Kenny says that creates
an error for me. And I'm sure it works the other way too; most of
what I say about society probably creates an error for both Kenny and
Martin L.

But what I realized from this little exercise is this: The fact that
we experience error (in the form of an emotion) as a result of what we
say to each other is a a sign that what was said is a disturbance that
is pushing _some_ perception away from it's reference level. The
statement that "the wealthy provide employment" creates error because
I have a reference for a perception (of society or the economy or
something) that is inconsistent with the idea that "the wealthy
provide employment". I think a statement like this is a disturbance to
what we have been calling system level perceptions -- currently
thought to be the highest level type of perceptions in the hierarchy.
System level perceptions are our perceptions of various aspects of a
society (interacting people); the references for these perceptions are
our specifications for what these social perceptions _should_ be.

When Kenny talks about a twelfth level I believe he is talking about
the possibility that the references for system concept perceptions --
currently the highest level references in the PCT hierarchy -- are set
by the outputs of even higher level control systems that are
controlling perceptions that are functions of many system concepts (if
he is following the approach to noticing levels that has been taken in
the development of the HPCT hierarchy). This would suggest that our
references for our system concepts are selected by higher level
systems in ourselves; that higher level systems in us select
references for system concepts in order to control for these higher
level perceptions. Maybe this is true. I think it is plausible. I just
don't know what the perceptions at the level above system concepts
would be. Kenny suggests "self" but that's kind of vague. I think
the only way to get at it is to try to come up with some hypotheses
about what the perceptions above system concepts might be and describe
what would constitute disturbances to those variables. Then see if
people actually experience error when those disturbances are applied
or if they vary their system concepts in a way that protects those
perceptions from disturbance.

Should be easy;-)

Best

Rick

[From Kenny Kitzke (2010.12.02.21.00EST)]

I tried to make clear why when controlling for being a Christian I do not experience any system level conflict with not controlling for reducing wealth disparity in the USA.

There is at least potential conflict between controlling for being a Christian and controlling for free market capitalism depending upon the beliefs you hold regarding free market capitalism. Some free marketers would defend a principle of “Let the Buyer Beware.” I would not. So, if the car salesman says the car gets 50 mpg when it can’t (a lie) and it’s the buyer’s problem if he relies on that and makes the buy, it would be a conflict for me.

I think Martin Lewitt has made far more of a case of defending and controlling for “Free Market Capitalism” than I have. I am not sure at all whether his beliefs version would conflict with his beliefs version of being a Chrsitian. I doubt if we would be congruent on either, much less both.

I would not agree that “Christian” is my only Self concept. I believe being a PCTer is also a Self concept. And, I had initial doubts about whether they were in conflict. My wife believes there is a conflict and is noticeably disturbed if I ever mention PCT in her presence. I have reconciled these two system level concepts and can control for both simultaneously without internal conflict. Explaining that will take a book and I have it as a goal but adding “Author” to my Self concept has not had the gain to overcome other uses of my energy expending output.

I think PCT and Bill’s HPCT has helped me not get disturbed by your conceptualizations of Christians like me or Free Marketers, somewhat like me. Your opinions of my-self, Rick, pale in comparison to my perceptions of MY-SELF. I also understand that from prior discussions with you and Bill how attempts to convert you, including threatening you with eternal torment, as many Christians do, is not my belief, need or action in part because of my enhanced understanding of what happens when you attempt to control the behavior of others.

And, thanks for at least perceiving what I am conceiving above Level 11, a Self composed of lower level systemic and belief perceptions which might be plausible and have something to do with how we perceive ourselves rather than how we perceive the world out there. The kind of errors at these perceptual levels can produce emotions that are longer-term and devastating leading to depression and suicide. This is quite different from becoming fearful of a sound in the night until we get inside our house. Or being angry when we break a favorite coffee cup as opposed to a lifetime hatred for people we conceive to be of a different race, color, culture or religion than we are. It is problems/errors like this that if PCT/HPCT can alleviate, I think it will take its place as an important advancement in the science of psychology. Then, we would have a huge PCTer population and CSGNet.

Oh well, there I go, creating my own reality in my imagination which lets me sleep sound tonight.

In a message dated 12/2/2010 5:51:14 P.M. Eastern Standard Time, rsmarken@GMAIL.COM writes:

···

[From Rick Marken (2010.12.02.1450)]

Thanks to Martin Lewitt (Dec 1, 2010 1846 MST) and Kenny Kitzke
(2010.12.01) for answering my question about why a Christian would
feel comfortable with the increasing wealth disparity in the US. It
seemed to me like this would require controlling for two inconsistent
system concepts: Christianity ( “Do not lay up for yourselves
treasures on earth”) and free market capitalism (“Greed is good (Do
lay up for yourselves treasures on earth)”). But I can see that this
is just a problem of words. From your replies I am picking up that
there is really just one system concept being controlled here. There
is no conflict at all. If we call that concept “Christianity” then the
word itself elicits different meanings in me than it does in you. Same
with “free market capitalism”. So I think using words to describe
system concepts can be misleading.

I think the only way to get at what your (and my) system concepts are
is to see what kinds of things create an error for us. For example,
when Martin says “especially when most of the wealthy provide
employment, products and services to others” that statement creates a
huge error for me (which I experience as an emotion, like anger or
exasperation). And there are many things that Kenny says that creates
an error for me. And I’m sure it works the other way too; most of
what I say about society probably creates an error for both Kenny and
Martin L.

But what I realized from this little exercise is this: The fact that
we experience error (in the form of an emotion) as a result of what we
say to each other is a a sign that what was said is a disturbance that
is pushing some perception away from it’s reference level. The
statement that “the wealthy provide employment” creates error because
I have a reference for a perception (of society or the economy or
something) that is inconsistent with the idea that “the wealthy
provide employment”. I think a statement like this is a disturbance to
what we have been calling system level perceptions – currently
thought to be the highest level type of perceptions in the hierarchy.
System level perceptions are our perceptions of various aspects of a
society (interacting people); the references for these perceptions are
our specifications for what these social perceptions should be.

When Kenny talks about a twelfth level I believe he is talking about
the possibility that the references for system concept perceptions –
currently the highest level references in the PCT hierarchy – are set
by the outputs of even higher level control systems that are
controlling perceptions that are functions of many system concepts (if
he is following the approach to noticing levels that has been taken in
the development of the HPCT hierarchy). This would suggest that our
references for our system concepts are selected by higher level
systems in ourselves; that higher level systems in us select
references for system concepts in order to control for these higher
level perceptions. Maybe this is true. I think it is plausible. I just
don’t know what the perceptions at the level above system concepts
would be. Kenny suggests “self” but that’s kind of vague. I think
the only way to get at it is to try to come up with some hypotheses
about what the perceptions above system concepts might be and describe
what would constitute disturbances to those variables. Then see if
people actually experience error when those disturbances are applied
or if they vary their system concepts in a way that protects those
perceptions from disturbance.

Should be easy;-)

Best

Rick

Richard S. Marken PhD
rsmarken@gmail.com
www.mindreadings.com

[Martin Lewitt Dec 2, 2010 2138]

In the interest of full disclosure, as a non-believer, small "a"

atheist, I don’t control for being a Christian, I just have an
appreciation for Judaism’s and Christianity’s literature and other
contributions to western values, rather than the hostility typical
of the capital “A” Atheists.

I control for my own life (personal responsibility and freedom) and

do not control for the lives of others (oppression, e.g., coercively
imposed central planning, slavery, conscription, etc.).

Martin L
···

rsmarken@GMAIL.COMrsmarken@gmail.com
www.mindreadings.com

[From Rick Marken (2010.12.03.0930)]

�Martin Lewitt (Dec 2, 2010 1605 MST)--

Perhaps my "wealthy provide employment" was incomplete, because such a
significant proportion of jobs are provided by corporations which probably
should not be thought of as wealthy

What is disturbing (in both the lay and PCT meanings of the term) to
me about the idea that the "wealthy provide employment" is not so much
the "wealthy" part (though the myth that the "wealthy provide
employment" is often used to justify the existence of large
discrepancies in wealth, the idea being that the wealthy need all that
money so they can provide jobs to the non-wealthy; noblesse oblige, I
suppose). It's the idea that employment is an open-loop process: that
employment is caused ("provided") by people (the wealthy, the
management, whoever) deign to give (if sufficiently encouraged by the
promise of huge, untaxed profits) jobs to the otherwise lazy,
do-nothing masses.

I think of employment as an essential component of the cooperative ,
closed-loop control process that is an economy. I see the people who
"provide employment" as the people we have agreed to be the
coordinators of the production process. Their job is to hire enough
people with the needed skills to produce enough to meet demand. The
demand is created by the employed in all industries (including the
coordinators themselves) who are paid money that can be used to buy
what they need of the products produced by the employees in all
industries including their own. So part of the job of all coordinators
-- who are given the power (by law) to control hiring and compensation
-- should be paying all employees at least enough so that they can
provide the demand that keeps all industries, including their own, in
business, employing people and maintaining demand.

Unfortunately, coordinators nowadays are controlling mainly for
profits that enrich themselves and investors as the expense of
workers. They do this by paying workers as little as possible and
laying off workers or shipping jobs to other countries with lower
labor costs so that profits are maintained; profits that are used
mainly to increase the value of stock which then goes to the
coordinator as bonus pay. So it's not really true that these
coordinators -- wealthy or not -- provide jobs. Ultimately, jobs are
provided and maintained by demand for what is produced. And most of
the demand comes from the workers themselves. Since most of the
revenue of production in the last 30 years has increasingly gone to
profit (and executive salaries and bonuses) rather than salaries,
demand has been stagnant while the rich have been getting richer with
money that they can't return to the economy as demand (that's
leakage). Workers had been able to make up for their stagnant demand
(lack of buying power) by borrowing -- credit card debt and taking
seconds on their houses. But that game ended in 2008.

This whole economic nightmare (that will apparently continue
indefinitely given the fact that we now have a naive wuss for a
President; oh how we need "I welcome their hatred" FDR) has been
created by an open-loop view of the economy that sees one group of
people ( the wealthy, the entrepreneurs, the grown-ups, titans of
industry, whatever) as providing employment for others. In fact,
producers provide employment only to the extent that the employed
provide the demand for what is being produced.

Best

Rick

···

---
Richard S. Marken PhD
rsmarken@gmail.com
www.mindreadings.com

[From Rick Marken (2010.12.03.1100)]

Martin Lewitt Dec 2, 2010 2138]

In the interest of full disclosure, as a non-believer, small "a" atheist, I
don't control for being a Christian, I just have an appreciation for
Judaism's and Christianity's literature and other contributions to western
values, rather than the hostility typical of the capital "A" Atheists.

I'm one of those capital "A" atheists who has a great appreciation for
the Bible (the literature of Judaism and Christianity) as literature,
though it could use some very heavy editing and some of the best stuff
is in the Apocrypha, which didn't make the biblical cut. But I think
the idea that this literature contributed to values gets it backwards.
I think it's clear that it's one's personal values (references for
principle perceptions) that contribute to the literature, not vice
versa. And those personal values only do that if one has the goal
(reference) of seeing Biblical literature as contributing values (as
the literature itself often says it does, making the Abrahamic
mythologies -- Judaism, Christianity, Mohammedanism -- unique). Those
who do have such a goal are clearly controlling for seeing in the
Bible values that are consistent with their own.

If one reads the Bible (as I did) without the goal of trying to see it
as contributing values one comes away rather appalled at the conceit
that the Bible contributes values (well, I did anyway). The first
story I read was Jacob and Esau. I think the basic idea of the story
was that Jacob was admirable and Esau was not. But I saw it exactly
the other way around. Same with Abraham; going off to kill his son
because some voice told him to; what a mishuga. And don't even ask
about David. Things get a lot better in the New Testament but that guy
Paul was another mishuga.

I know that people who want to see the Biblical literature as
contributing values can do it quite well; and the values they see it
contributing are (surprise,) always consistent with the values they
had before they read it. So people who value having slaves can see
that value in the Bible and people who value abolishing slavery can
find a way to get that value from the Bible too. It's all control. I
hope someday we can get to the point where we can enjoy the (heavily
edited) literature of ancient Israel in the same way we enjoy reading
the literature of ancient Greece (Homer) and Rome (Ovid).

Best

Rick

···

--
Richard S. Marken PhD
rsmarken@gmail.com
www.mindreadings.com

[Martin Lewitt Dec 3, 2010 1238 MST]

[From Rick Marken (2010.12.03.1100)]

Martin Lewitt Dec 2, 2010 2138]

In the interest of full disclosure, as a non-believer, small "a" atheist, I
don't control for being a Christian, I just have an appreciation for
Judaism's and Christianity's literature and other contributions to western
values, rather than the hostility typical of the capital "A" Atheists.

I'm one of those capital "A" atheists who has a great appreciation for
the Bible (the literature of Judaism and Christianity) as literature,
though it could use some very heavy editing and some of the best stuff
is in the Apocrypha, which didn't make the biblical cut. But I think
the idea that this literature contributed to values gets it backwards.
I think it's clear that it's one's personal values (references for
principle perceptions) that contribute to the literature, not vice
versa. And those personal values only do that if one has the goal
(reference) of seeing Biblical literature as contributing values (as
the literature itself often says it does, making the Abrahamic
mythologies -- Judaism, Christianity, Mohammedanism -- unique). Those
who do have such a goal are clearly controlling for seeing in the
Bible values that are consistent with their own.

If one reads the Bible (as I did) without the goal of trying to see it
as contributing values one comes away rather appalled at the conceit
that the Bible contributes values (well, I did anyway). The first
story I read was Jacob and Esau. I think the basic idea of the story
was that Jacob was admirable and Esau was not. But I saw it exactly
the other way around. Same with Abraham; going off to kill his son
because some voice told him to; what a mishuga.

Very similar to my response. I wasn't much impressed with the strange "kill Jesus" mechanism for the forgiveness of sin, either. Surely, an omniscient, omnipotent being could have accomplished the same end with a snap of figurative fingers, rather than washing in the blood.

And don't even ask
about David.

The singer/dancer running a protection racket? Presumably he had the best of intentions like most central planners.

Things get a lot better in the New Testament but that guy
Paul was another mishuga.

I guess a compassionate intelligence trying to apply a philosophy to real world problems across cultural barriers 2 millennia ago, just didn't speak to you. The earnestness and expression of his attempt does speak to me. I prefer Ecclesiastes, but Christianity and western cultural owes much of what we value today to the Pauline letters.

I know that people who want to see the Biblical literature as
contributing values can do it quite well; and the values they see it
contributing are (surprise,) always consistent with the values they
had before they read it.

One would expect some of this since the readers are often from the Judeo-Christian culture before they even began. But sometimes it is transforming or inspires a renewed or purer commitment.

So people who value having slaves can see
that value in the Bible and people who value abolishing slavery can
find a way to get that value from the Bible too. It's all control. I
hope someday we can get to the point where we can enjoy the (heavily
edited) literature of ancient Israel in the same way we enjoy reading
the literature of ancient Greece (Homer) and Rome (Ovid).

There is much to learn even from the parts you would redact, although it is probably more for those interested in cultural anthropology. Why were the concepts of sacrificial offerings and fasting so universal across human cultures?

regards,
    Martin L

···

On 12/3/2010 12:00 PM, Richard Marken wrote:

Best

Rick
--
Richard S. Marken PhD
rsmarken@gmail.com
www.mindreadings.com

[Martin Lewitt Dec 3, 2010 1425 MST]

[From Rick Marken (2010.12.03.0930)]

  Martin Lewitt (Dec 2, 2010 1605 MST)--

Perhaps my "wealthy provide employment" was incomplete, because such a
significant proportion of jobs are provided by corporations which probably
should not be thought of as wealthy

What is disturbing (in both the lay and PCT meanings of the term) to
me about the idea that the "wealthy provide employment" is not so much
the "wealthy" part (though the myth that the "wealthy provide
employment" is often used to justify the existence of large
discrepancies in wealth, the idea being that the wealthy need all that
money so they can provide jobs to the non-wealthy; noblesse oblige, I
suppose).

The need for wealth should be no mystery, capital equipment isn't free, even in a moneyless society. There is often price competition for quality labor as well, given the other opportunities that labor might have.

  It's the idea that employment is an open-loop process: that
employment is caused ("provided") by people (the wealthy, the
management, whoever) deign to give (if sufficiently encouraged by the
promise of huge, untaxed profits) jobs to the otherwise lazy,
do-nothing masses.

I think of employment as an essential component of the cooperative ,
closed-loop control process that is an economy. I see the people who
"provide employment" as the people we have agreed to be the
coordinators of the production process. Their job is to hire enough
people with the needed skills to produce enough to meet demand.

But we can't meet all demand, there is scarcity. So there needs to be enough money to hire the people away from their other opportunities. If your opportunity, can't justify the cost of hiring them away, then perhaps they are meeting demands that society values more in their current positions, and the demand you hope to meet goes unfulfilled.

The
demand is created by the employed in all industries (including the
coordinators themselves) who are paid money that can be used to buy
what they need of the products produced by the employees in all
industries including their own. So part of the job of all coordinators
-- who are given the power (by law) to control hiring and compensation
-- should be paying all employees at least enough so that they can
provide the demand that keeps all industries, including their own, in
business, employing people and maintaining demand.

Scarcity may require that some industries don't operate at all. The demand for most fuel efficient carbon fiber or titanium automobiles may have to go unfulfilled, because people only want the extra benefits of resource expensive carbon fiber and titanium enough to justify their uses in other applications.

Unfortunately, coordinators nowadays are controlling mainly for
profits that enrich themselves and investors as the expense of
workers. They do this by paying workers as little as possible and
laying off workers or shipping jobs to other countries with lower
labor costs so that profits are maintained; profits that are used
mainly to increase the value of stock which then goes to the
coordinator as bonus pay.

Profits would not be increasing the value of the stock if they mainly went to the coordinator as bonus pay. Bonus pay is a cost which reduces profits.

So it's not really true that these
coordinators -- wealthy or not -- provide jobs. Ultimately, jobs are
provided and maintained by demand for what is produced. And most of
the demand comes from the workers themselves. Since most of the
revenue of production in the last 30 years has increasingly gone to
profit (and executive salaries and bonuses) rather than salaries,
demand has been stagnant while the rich have been getting richer with
money that they can't return to the economy as demand (that's
leakage).

Revenue still mostly goes to costs for labor and materials, there are a few high margin industries, like software, but they usually pay their workers pretty well.

Workers had been able to make up for their stagnant demand
(lack of buying power) by borrowing -- credit card debt and taking
seconds on their houses. But that game ended in 2008.

Yes, but that is hardly the fault of voluntary relationships with the wealthy. Even in a relatively "free" market, the government does much to structure and distort market forces.

This whole economic nightmare (that will apparently continue
indefinitely given the fact that we now have a naive wuss for a
President; oh how we need "I welcome their hatred" FDR) has been
created by an open-loop view of the economy that sees one group of
people ( the wealthy, the entrepreneurs, the grown-ups, titans of
industry, whatever) as providing employment for others. In fact,
producers provide employment only to the extent that the employed
provide the demand for what is being produced.

That is a rather static view that under represents to contribution of those that have forgone consumption to produce. They quite often divert resources into other research and eventual production that they think will better meet unmet demand or meeting demand that is already being met more affordably or with higher quality.

regards,
     Martin L

···

On 12/3/2010 10:28 AM, Richard Marken wrote:

Best

Rick
---
Richard S. Marken PhD
rsmarken@gmail.com
www.mindreadings.com

[Martin Lewitt Dec 3, 2010 1458 MST]

[From Rick Marken (2010.12.03.0930)]

  Martin Lewitt (Dec 2, 2010 1605 MST)--

Perhaps my "wealthy provide employment" was incomplete, because such a
significant proportion of jobs are provided by corporations which probably
should not be thought of as wealthy

What is disturbing (in both the lay and PCT meanings of the term) to
me about the idea that the "wealthy provide employment" is not so much
the "wealthy" part (though the myth that the "wealthy provide
employment" is often used to justify the existence of large
discrepancies in wealth, the idea being that the wealthy need all that
money so they can provide jobs to the non-wealthy; noblesse oblige, I
suppose).

Whoops I missed the main assumption I want to question here, because for some reason, my Thunderbird search on "justify" did not work. There is no need to "justify" the existence of large discrepancies in wealth. Those discrepancies already exist and no action is required. It is actions that need to be justified, and the burden is particular high in justifying coercive actions. That is probably where the most important differences in reference values exist. Since coercion is a higher level concern than wealth discrepancy for me, I look first to address any concern I have for such discrepancy, to see where coercion may actually have contributed to it, and the happy result of reducing both coercion and wealth discrepancy can be achieved. Beyond that, there are often many noncoercive changes or alterations in coercive policy without increasing coercion which will reduce the wealth disparity or alter the processes which increase it.

-- Martin L

···

On 12/3/2010 10:28 AM, Richard Marken wrote:

  It's the idea that employment is an open-loop process: that
employment is caused ("provided") by people (the wealthy, the
management, whoever) deign to give (if sufficiently encouraged by the
promise of huge, untaxed profits) jobs to the otherwise lazy,
do-nothing masses.

I think of employment as an essential component of the cooperative ,
closed-loop control process that is an economy. I see the people who
"provide employment" as the people we have agreed to be the
coordinators of the production process. Their job is to hire enough
people with the needed skills to produce enough to meet demand. The
demand is created by the employed in all industries (including the
coordinators themselves) who are paid money that can be used to buy
what they need of the products produced by the employees in all
industries including their own. So part of the job of all coordinators
-- who are given the power (by law) to control hiring and compensation
-- should be paying all employees at least enough so that they can
provide the demand that keeps all industries, including their own, in
business, employing people and maintaining demand.

Unfortunately, coordinators nowadays are controlling mainly for
profits that enrich themselves and investors as the expense of
workers. They do this by paying workers as little as possible and
laying off workers or shipping jobs to other countries with lower
labor costs so that profits are maintained; profits that are used
mainly to increase the value of stock which then goes to the
coordinator as bonus pay. So it's not really true that these
coordinators -- wealthy or not -- provide jobs. Ultimately, jobs are
provided and maintained by demand for what is produced. And most of
the demand comes from the workers themselves. Since most of the
revenue of production in the last 30 years has increasingly gone to
profit (and executive salaries and bonuses) rather than salaries,
demand has been stagnant while the rich have been getting richer with
money that they can't return to the economy as demand (that's
leakage). Workers had been able to make up for their stagnant demand
(lack of buying power) by borrowing -- credit card debt and taking
seconds on their houses. But that game ended in 2008.

This whole economic nightmare (that will apparently continue
indefinitely given the fact that we now have a naive wuss for a
President; oh how we need "I welcome their hatred" FDR) has been
created by an open-loop view of the economy that sees one group of
people ( the wealthy, the entrepreneurs, the grown-ups, titans of
industry, whatever) as providing employment for others. In fact,
producers provide employment only to the extent that the employed
provide the demand for what is being produced.

Best

Rick
---
Richard S. Marken PhD
rsmarken@gmail.com
www.mindreadings.com

[From Rick Marken (2010.12.03.1630)]

�Martin Lewitt (Dec 3, 2010 1425 MST)--

Rick Marken (2010.12.03.0930)--

What is disturbing (in both the lay and PCT meanings of the term) to
me about the idea that the "wealthy provide employment" is not so much
the "wealthy" part (though the myth that the "wealthy provide
employment" is often used to justify the existence of large
discrepancies in wealth, the idea being that the wealthy need all that
money so they can provide jobs to the non-wealthy; noblesse oblige, I
suppose).

The need for wealth should be no mystery, capital equipment isn't free, even
in a moneyless society. �There is often price competition for quality labor
as well, given the other opportunities that labor might have.

The wealth I am talking about is personal income and assets. Capital
equipment is a cost of doing business and is paid for along with labor
costs out of revenue from consumers. Ultimately, wealth is goods and
services. Total US wealth is measured in dollars by GDP. The dollar
value of GDP is measured in terms of the cost of the labor and capital
equipment used to produce it. That dollar cost was put into the hands
of consumers (who were the providers of the labor and capital -- yes,
even bankers are consumers -- that produced the goods and services)
who are "paying themselves back" the cost of producing GNP by
consuming it (paying for it). It's the circular flow of money. So GDP
is the total wealth (income) available in a fixed time interval, say a
year. A wealth discrepancy exists when a small portion of the
aggregate consumer controls a large portion of that wealth; so when
.01% of the aggregate consumer controls 6% of GDP (as is not the case;
they used to control only 2%) you've got wealth discrepancy; a
discrepancy that is completely independent the capital costs of
production.

I see the people who
"provide employment" as the people we have agreed to be the
coordinators of the production process. Their job is to hire enough
people with the needed skills to produce enough to meet demand.

But we can't meet all demand, there is scarcity.

The demand I'm talking about is the money paid to the aggregate
consumer for producing the goods and services, not actual need. If
there is $1m that consumers want to spent on widgets then the producer
should adjust production to meet that demand. If the demand goes up to
$2m the producer should again adjust to meet that demand.

And in a modern industrialized economy scarcity is really not a
factor. Isn't the average household income in the US about $50,000;
that's what you get by dividing GDP by the number of households in the
US. $50,000 for every household may not provide a life that's high on
the hog but it sure isn't scarcity.

Scarcity may require that some industries don't operate at all.

I think scarcity is not a factor in modern economies except for the
scarcity created by egregious wealth discrepancy.

Profits would not be increasing the value of the stock if they mainly went
to the coordinator as bonus pay. �Bonus pay is a cost which reduces profits.

The increased value of stocks goes to the coordinator (CEO) as stock
options. They don't take it as bonus pay; these people are not stupid.
They are not particularly good (in my opinion) but they are definitely
not stupid. You're down in Enron country, aren't you. You should know
how it's done.

In fact,
producers provide employment only to the extent that the employed
provide the demand for what is being produced.

That is a rather static view that under represents to contribution of those
that have forgone consumption to produce.

The view is not static; it is a dynamic control model. And how in the
world does one forgo consumption to produce?

Best

Ric

···

--
Richard S. Marken PhD
rsmarken@gmail.com
www.mindreadings.com

[From Rick Marken (2010.12.03.1645)]

�Martin Lewitt (Dec 3, 2010 1458 MST)--

Whoops I missed the main assumption I want to question here, because for
some reason, my Thunderbird search on "justify" did not work. �There is no
need to "justify" the existence of large discrepancies in wealth. � Those
discrepancies already exist and no action is required.

They not only exist, they have been growing. I don't think the
increase in wealth discrepancy has resulted from a sudden increase in
competence of rich people. It's a result of public policy.

Since coercion is a higher level concern than
wealth discrepancy for me, I look first to address any concern I have for
such discrepancy, to see where coercion may actually have contributed to it,
and the happy result of reducing both coercion and wealth discrepancy can be
achieved.

The increase in wealth discrepancy is a direct result of a decrease in
what you call "coercion". I presume it's taxes that you consider
coercion (so all that talk about no taxation without representation
was really about no taxation at all for you, I presume). The top
marginal tax rate started decreasing under Ronnie Raygun and has
continued it's decline (except for a brief, minor increase under
Clinton) to the present; and that decline has been mirrored by a
corresponding increase in the national debt and the wealth of those
who had their taxes reduced (duh!). So trillions of dollars in what
should have been national wealth devoted to improving common
infrastructure so important to private production (transportation,
education, research, etc) has gone right into the pockets of assholes
like the Koch brothers, who can now buy elections and ensure that
their wealth keeps increasing and they will never have to increase
their contribution to the common good.

�Beyond that, there are often many noncoercive changes or
alterations in coercive policy without increasing coercion which will reduce
the wealth disparity or alter the processes which increase it.

Name one!

Best

Rick

···

-- Martin L

�It's the idea that employment is an open-loop process: that
employment is caused ("provided") by people (the wealthy, the
management, whoever) deign to give (if sufficiently encouraged by the
promise of huge, untaxed profits) jobs to the otherwise lazy,
do-nothing masses.

I think of employment as an essential component of the cooperative ,
closed-loop control process that is an economy. I see the people who
"provide employment" as the people we have agreed to be the
coordinators of the production process. Their job is to hire enough
people with the needed skills to produce enough to meet demand. The
demand is created by the employed in all industries (including the
coordinators themselves) who are paid money that can be used to buy
what they need of the products produced by the employees in all
industries including their own. So part of the job of all coordinators
-- who are given the power (by law) to control hiring and compensation
-- should be paying all employees at least enough so that they can
provide the demand that keeps all industries, including their own, in
business, employing people and maintaining demand.

Unfortunately, coordinators nowadays are controlling mainly for
profits that enrich themselves and investors as the expense of
workers. They do this by paying workers as little as possible and
laying off workers or shipping jobs to other countries with lower
labor costs so that profits are maintained; profits that are used
mainly to increase the value of stock which then goes to the
coordinator as bonus pay. �So it's not really true that these
coordinators -- wealthy or not -- provide jobs. Ultimately, jobs are
provided and maintained by demand for what is produced. And most of
the demand comes from the workers themselves. Since most of the
revenue of production in the last 30 years has increasingly gone to
profit (and executive salaries and bonuses) rather than salaries,
demand has been stagnant while the rich have been getting richer with
money that they can't return to the economy as demand (that's
leakage). �Workers had been able to make up for their stagnant demand
(lack of buying power) by borrowing -- credit card debt and taking
seconds on their houses. But that game ended in 2008.

This whole economic nightmare (that will apparently continue
indefinitely given the fact that we now have a naive wuss for a
President; oh how we need "I welcome their hatred" FDR) has been
created by an open-loop view of the economy that sees one group of
people ( the wealthy, the entrepreneurs, the grown-ups, titans of
industry, whatever) as providing employment for others. In fact,
producers provide employment only to the extent that the employed
provide the demand for what is being produced.

Best

Rick
---
Richard S. Marken PhD
rsmarken@gmail.com
www.mindreadings.com

--
Richard S. Marken PhD
rsmarken@gmail.com
www.mindreadings.com

[Martin Lewitt Dec 3, 2010 0140 MST]

[From Rick Marken (2010.12.03.1645)]

  Martin Lewitt (Dec 3, 2010 1458 MST)--
Whoops I missed the main assumption I want to question here, because for
some reason, my Thunderbird search on "justify" did not work. There is no
need to "justify" the existence of large discrepancies in wealth. Those
discrepancies already exist and no action is required.

They not only exist, they have been growing. I don't think the
increase in wealth discrepancy has resulted from a sudden increase in
competence of rich people. It's a result of public policy.

I partially agree, public policy made a significant contribution, but some of the increase in "discrepancy" depend on the sources of that new wealth, some may be less labor intensive and thus naturally concentrate in fewer people.

Since coercion is a higher level concern than
wealth discrepancy for me, I look first to address any concern I have for
such discrepancy, to see where coercion may actually have contributed to it,
and the happy result of reducing both coercion and wealth discrepancy can be
achieved.

The increase in wealth discrepancy is a direct result of a decrease in
what you call "coercion". I presume it's taxes that you consider
coercion (so all that talk about no taxation without representation
was really about no taxation at all for you, I presume).

If you mean I had no representation, then yes, winner take all geographical districts give me no representation.

The top
marginal tax rate started decreasing under Ronnie Raygun and has
continued it's decline (except for a brief, minor increase under
Clinton) to the present; and that decline has been mirrored by a
corresponding increase in the national debt and the wealth of those
who had their taxes reduced (duh!). So trillions of dollars in what
should have been national wealth devoted to improving common
infrastructure so important to private production (transportation,
education, research, etc) has gone right into the pockets of assholes
like the Koch brothers, who can now buy elections and ensure that
their wealth keeps increasing and they will never have to increase
their contribution to the common good.

It sounds like you are saying there should have been more spending on infrastructure even though much spending was already being debt financed. However, recall that after the Volcker recession, the US economy reached what economists considered full employment. Which consumer demands do you think should have been unmet so that resources could be diverted to your centrally planned priorities?

  Beyond that, there are often many noncoercive changes or
alterations in coercive policy without increasing coercion which will reduce
the wealth disparity or alter the processes which increase it.

Name one!

1) Having the federal reserve no longer consider increasing labor costs inflationary, and remain neutral in the allocation of the returns from productivity increases to labor or capital.

2) Requiring the federal reserve to create money directly into the hands of the people instead purchasing US treasuries which gives the benefit of the newly created money to relatively well-to-do bondholders and foreign central banks.

3) Reducing the double taxation of dividends and capital gains, so that investing the savings of the middle class in the stock markets are less speculative, less leveraged and more stable. If you object to this as a reduction in coercion, it can be made revenue neutral by double taxing interest on debt instead, I would recommend limiting the deductability of interest to $1,000,000.

4) Opening up Anwar and offshore oil reserves to development. This would reduce "leakage" to the oil exporting countries, and add to the number of higher paying middle class jobs.

5) Healthcare tort reform, which would lower costs to the health insured and doctors, while reducing the misallocation of wealth to relatively unproductive attorneys.

6) Reducing the barriers to entry to the medical professions, reducing costs to consumers while providing more employment opportunities at less educational expense.

7) Legalizing recreational drugs, bringing them into regular economy where they pay taxes or where consumers can pay lower prices or grow their own, retaining more of their wealth.

8) Partial privatization of Social Security, allowing recipients to participate in the greater returns in the now reformed stock market, and so that die before receiving signficant social security benefits have something to leave to their children and other beneficiaries.

9) Reforming corporate governance so that executive compensation packages are disclosed, and poison pills which serve entrenched interests at the expense of stockholders are not allowed.

Just a sampling.

-- Martin L

···

On 12/3/2010 5:47 PM, Richard Marken wrote:

Best

Rick

-- Martin L

  It's the idea that employment is an open-loop process: that
employment is caused ("provided") by people (the wealthy, the
management, whoever) deign to give (if sufficiently encouraged by the
promise of huge, untaxed profits) jobs to the otherwise lazy,
do-nothing masses.

I think of employment as an essential component of the cooperative ,
closed-loop control process that is an economy. I see the people who
"provide employment" as the people we have agreed to be the
coordinators of the production process. Their job is to hire enough
people with the needed skills to produce enough to meet demand. The
demand is created by the employed in all industries (including the
coordinators themselves) who are paid money that can be used to buy
what they need of the products produced by the employees in all
industries including their own. So part of the job of all coordinators
-- who are given the power (by law) to control hiring and compensation
-- should be paying all employees at least enough so that they can
provide the demand that keeps all industries, including their own, in
business, employing people and maintaining demand.

Unfortunately, coordinators nowadays are controlling mainly for
profits that enrich themselves and investors as the expense of
workers. They do this by paying workers as little as possible and
laying off workers or shipping jobs to other countries with lower
labor costs so that profits are maintained; profits that are used
mainly to increase the value of stock which then goes to the
coordinator as bonus pay. So it's not really true that these
coordinators -- wealthy or not -- provide jobs. Ultimately, jobs are
provided and maintained by demand for what is produced. And most of
the demand comes from the workers themselves. Since most of the
revenue of production in the last 30 years has increasingly gone to
profit (and executive salaries and bonuses) rather than salaries,
demand has been stagnant while the rich have been getting richer with
money that they can't return to the economy as demand (that's
leakage). Workers had been able to make up for their stagnant demand
(lack of buying power) by borrowing -- credit card debt and taking
seconds on their houses. But that game ended in 2008.

This whole economic nightmare (that will apparently continue
indefinitely given the fact that we now have a naive wuss for a
President; oh how we need "I welcome their hatred" FDR) has been
created by an open-loop view of the economy that sees one group of
people ( the wealthy, the entrepreneurs, the grown-ups, titans of
industry, whatever) as providing employment for others. In fact,
producers provide employment only to the extent that the employed
provide the demand for what is being produced.

Best

Rick
---
Richard S. Marken PhD
rsmarken@gmail.com
www.mindreadings.com

[From Rick Marken (2010.12.04.0940)]

�Martin Lewitt (Dec 3, 2010 0140 MST)--

Rick Marken (2010.12.03.1645)--

I don't think the increase in wealth discrepancy has resulted
from a sudden increase in competence of rich people. It's a
result of public policy.

I partially agree, public policy made a significant contribution, but some
of the increase in "discrepancy" depend on the sources of that new wealth,
some may be less labor intensive and thus naturally concentrate in fewer
people.

Wealth disparity was at its lowest and virtually constant from
1943-1980. During that time the top marginal tax rate was never lower
than 70%. Then came 1980 and the top marginal rate started going down
precipitously. Between 1980-2008 the rate was never higher than 50%
and was typically about 35%. That's the policy change that coincided
with the increase in wealth disparity. You say some of this disparity
resulted from sources of new wealth. That requires believing that no
such sources of wealth were ever developed from 1943-1980. This seems
highly unlikely to me just on the face of it, but also because the
average rate of growth in wealth from 1943-1980 was 7.9%; from
1980-2008 it was 6% (and it was only that high thanks to Reagan's
second term government spending spree and the high growth rate of the
"high tax" Clinton era).

RM: The top
marginal tax rate started decreasing under Ronnie Raygun and has
continued it's decline (except for a brief, minor increase under
Clinton) to the present; and that decline has been mirrored by a
corresponding increase in the national debt and the wealth of those
who had their taxes reduced (duh!). So trillions of dollars in what
should have been national wealth devoted to improving common
infrastructure so important to private production (transportation,
education, research, etc) has gone right into the pockets of assholes
like the Koch brothers, who can now buy elections and ensure that
their wealth keeps increasing and they will never have to increase
their contribution to the common good.

It sounds like you are saying there should have been more spending on
infrastructure even though much spending was already being debt financed.

It might sounds like that to you. But if you try reading it again you
might see that that is not what I'm saying. What I'm saying (or trying
to say) is that when tax rates were reduced, revenue was reduced which
led to deficit (and increasing debt). Since most of the tax reduction
went to the wealthy, the loss of government revenue showed up as
increased wealth for the wealthy (the increased wealth disparity).
With the government unable to even pay it's existing expenses, there
was no will to invest in infrastructure improvement, which would have
just increased deficit and debt even more (though there was always
room for more military spending, which Raygun did with abandon, which
is why we had "full" unemployment toward the end of Raygun's term;the
end of the Cold War put an end to that "boom").

However, recall that after the Volcker recession, the US economy reached
what economists considered full employment.

Yes, a result of Raygun's huge government spending program, creating
tons of jobs in the military-industrial complex.

Which consumer demands do you
think should have been unmet so that resources could be diverted to your
centrally planned priorities?

I have no idea what you are talking about here.

�ML: Beyond that, there are often many noncoercive changes or
alterations in coercive policy without increasing coercion which will
reduce the wealth disparity or alter the processes which increase it.

RM: Name one!

1) Having the federal reserve no longer consider increasing labor costs
inflationary, and remain neutral in the allocation of the returns from
productivity increases to labor or capital.

Don't see how having the Fed "remain neutral in the allocation of the
returns from productivity increases to labor or capital" would
decrease wealth disparity. But what I do know is that this suggestion
is certainly not non-coercive; it's thought control. How are you going
to have the Fed stop considering something without enforcing that.
What if the Fed doesn't want to stop considering it? Are you going to
do nothing? If so, your proposal is meaningless.

2) Requiring the federal reserve to create money directly into the hands of
the people instead purchasing US treasuries which gives the benefit of the
newly created money to relatively well-to-do bondholders and foreign central
banks.

How is this non-coercive? How do you "require" the Fed to do this
without backing up the requirement with the threat of coercive force.

3) Reducing the double taxation of dividends and capital gains so that
investing the savings of the middle class in the stock markets are less
speculative, less leveraged and more stable. �If you object to this as a
reduction in coercion, it can be made revenue neutral by double taxing
interest on debt instead, I would recommend limiting the deductability of
interest to $1,000,000.

Again, how is this non-coercive? What are you going to do about the
people who want to tax both dividends and capital gains? How are you
going to collect the double taxed interest on debt non-coercively?

4) Opening up Anwar and offshore oil reserves to development. � This would
reduce "leakage" to the oil exporting countries, and add to the number of
higher paying middle class jobs.

How are you going to do that non-coercively? How are you going to get
drilling crews in there if there are a bunch of people waiting to
prevent them from getting in?

5) Healthcare tort reform, which would lower costs to the health insured and
doctors, while reducing the �misallocation of wealth to relatively
unproductive attorneys.

How are you going to do this without a fight from the attorneys?
You'll have to coerce the attorneys into playing by these new rules.

6) �Reducing the barriers to entry to the medical professions, reducing
costs to consumers while providing more employment opportunities at less
educational expense.

Again, how are you going to enforce this?

7) �Legalizing recreational drugs, bringing them into regular economy where
they pay taxes or where consumers can pay lower prices or grow their own,
retaining more of their wealth.

The legalizing drugs part sounds great but how are you going to
collect the taxes without the threat of penalty for not paying (ie.,
without coercion)?

8) Partial privatization of Social Security, allowing recipients to
participate in the greater returns in the now reformed stock market, and so
that die before receiving significant social security benefits have something
to leave to their children and other beneficiaries.

How are you going to non-coercively get people who like the current
system to change?

9) Reforming corporate governance so that executive compensation packages
are disclosed, and poison pills which serve entrenched interests at the
expense of stockholders are not allowed.

How are you going to non-coercively get executives to disclose this stuff?

Just a sampling.

Besides the fact that I don't see how any off these proposals would
reduce wealth disparity by much -- if at all -- all of them are
coercive. You said you had all these non-coercive ways to reduce
wealth disparity. So far I have seen no proposals that are
non-coercive, let alone that have any chance of reducing wealth
disparity. Feel free to try again.

Best

Rick

···

--
Richard S. Marken PhD
rsmarken@gmail.com
www.mindreadings.com

[Martin Taylor 2010.12.04.13.15]

[From Rick Marken (2010.12.04.0940)]
Wealth disparity was at its lowest and virtually constant from
1943-1980. During that time the top marginal tax rate was never lower
than 70%. Then came 1980 and the top marginal rate started going down
precipitously. Between 1980-2008 the rate was never higher than 50%
and was typically about 35%. That's the policy change that coincided
with the increase in wealth disparity.
The same thing happened in Canada, though not so dramatically. The

top marginal rate was 67%, and now it is about 43% give or take a
couple of points. The wealth disparity is (surprisingly to our
conservative financial commentators) increasing dramatically.

Just as a point of reference with respect to the US National Debt,

as a percentage of GDP it was about 120% when Truman came in, about
33% when Reagan came in, and about 93% now. Apparently it’s not so
hard to get the debt down, provided you don’t follow Reagan/Bush
policies. Here’s a graph from zFacts.com

![moz-screenshot1.png|514x365](upload://lfeWaUyS6wqeRm1werxH49wFyBa.png)

Just the facts, ma'am.

Martin

[From Rick Marken (2010.12.04.12050)]

(Martin Taylor 2010.12.04.13.15)

Just as a point of reference with respect to the US National Debt,

as a percentage of GDP it was about 120% when Truman came in, about
33% when Reagan came in, and about 93% now. Apparently it’s not so
hard to get the debt down, provided you don’t follow Reagan/Bush
policies. Here’s a graph from zFacts.com

![moz-screenshot1.png|514x365](upload://lfeWaUyS6wqeRm1werxH49wFyBa.png)



Just the facts, ma'am.



Martin

This is great Martin. Thanks. I’ve attached the wealth discrepancy graph. It would be nice if you could superimpose that on the debt graph above.

Best

Rick

WealthDiscrepancy1.jpg

···


Richard S. Marken PhD

rsmarken@gmail.com
www.mindreadings.com

[Martin Taylor 2010.12.04.17.41]

Superimposed (easier said than done!) grqphs attached. I don't think

you can get much out of them, but here you are.

Martin

moz-screenshot1.png

US_Debt.jpg

···

[From Rick Marken (2010.12.04.12050)]

        (Martin Taylor

2010.12.04.13.15)

        Just as a point of reference with respect to the US National

Debt, as a percentage of GDP it was about 120% when Truman
came in, about 33% when Reagan came in, and about 93% now.
Apparently it’s not so hard to get the debt down, provided
you don’t follow Reagan/Bush policies. Here’s a graph from
zFacts.com

        <img src="cid:part1.04050805.00040208@mmtaylor.net" alt="">



        Just the facts, ma'am.



        Martin
  This is great Martin. Thanks. I've attached the wealth discrepancy

graph. It would be nice if you could superimpose that on the debt
graph above.

  Best



  Rick

  --

  Richard S. Marken PhD

  rsmarken@gmail.com

  [www.mindreadings.com](http://www.mindreadings.com)

[From Rick Marken (2010.12.04.1500)]

Martin Taylor (2010.12.04.17.41)

Superimposed (easier said than done!) grqphs attached. I don't think

you can get much out of them, but here you are.

Beautiful, Martin. Thanks. What I get out of it is that the Republicans started down the path to insanity in 1980 (they used to be rather decent folks) and have not quit. They are destroying this country and there is no stopping them now. Hope we don’t drag you guys down with us;-)

Best

Rick

···


Richard S. Marken PhD
rsmarken@gmail.com
www.mindreadings.com

[Martin Lewitt Dec 4, 2010 1513 MST]

[From Rick Marken (2010.12.04.0940)]

  Martin Lewitt (Dec 3, 2010 0140 MST)--

Rick Marken (2010.12.03.1645)--

I don't think the increase in wealth discrepancy has resulted
from a sudden increase in competence of rich people. It's a
result of public policy.

I partially agree, public policy made a significant contribution, but some
of the increase in "discrepancy" depend on the sources of that new wealth,
some may be less labor intensive and thus naturally concentrate in fewer
people.

Wealth disparity was at its lowest and virtually constant from
1943-1980.

But wealth was also much lower then, that is hardly preferable.

During that time the top marginal tax rate was never lower
than 70%. Then came 1980 and the top marginal rate started going down
precipitously. Between 1980-2008 the rate was never higher than 50%
and was typically about 35%. That's the policy change that coincided
with the increase in wealth disparity.

What is the statistical significance of extrapolating from one datum?

You say some of this disparity
resulted from sources of new wealth. That requires believing that no
such sources of wealth were ever developed from 1943-1980. This seems
highly unlikely to me just on the face of it, but also because the
average rate of growth in wealth from 1943-1980 was 7.9%; from
1980-2008 it was 6% (and it was only that high thanks to Reagan's
second term government spending spree and the high growth rate of the
"high tax" Clinton era).

I guess you are given Clinton credit for the dot.com bubble.

RM: The top
marginal tax rate started decreasing under Ronnie Raygun and has
continued it's decline (except for a brief, minor increase under
Clinton) to the present; and that decline has been mirrored by a
corresponding increase in the national debt and the wealth of those
who had their taxes reduced (duh!). So trillions of dollars in what
should have been national wealth devoted to improving common
infrastructure so important to private production (transportation,
education, research, etc) has gone right into the pockets of assholes
like the Koch brothers, who can now buy elections and ensure that
their wealth keeps increasing and they will never have to increase
their contribution to the common good.

Such bitterness, perhaps you could try controlling for freedom as the common good, as many who lived in the shadow of the iron curtain learned the hard way.

It sounds like you are saying there should have been more spending on
infrastructure even though much spending was already being debt financed.

It might sounds like that to you. But if you try reading it again you
might see that that is not what I'm saying. What I'm saying (or trying
to say) is that when tax rates were reduced, revenue was reduced which
led to deficit (and increasing debt). Since most of the tax reduction
went to the wealthy, the loss of government revenue showed up as
increased wealth for the wealthy (the increased wealth disparity).

If the wealth was merely retained by the wealthy, then the wealth disparity already existed. But once again you are assuming a static model. There were also large increases in the rate of productivity growth in the 80s and 90s arguable made possible because more capital stayed in the private sector.

With the government unable to even pay it's existing expenses, there
was no will to invest in infrastructure improvement, which would have
just increased deficit and debt even more (though there was always
room for more military spending, which Raygun did with abandon, which
is why we had "full" unemployment toward the end of Raygun's term;the
end of the Cold War put an end to that "boom").

The increasing deficit, may actually have acted as a restraint on increases in unproductive government spending, further increasing wealth. Milton Friedman argued that government spending (competing demand) was the actual tax on the economy.

However, recall that after the Volcker recession, the US economy reached
what economists considered full employment.

Yes, a result of Raygun's huge government spending program, creating
tons of jobs in the military-industrial complex.

There were other industries growing rapidly at the time as well. If you are arguing that military-industrial spending is much more effective than Obama's shovel ready programs, it will help if you have a mechanism to account for the difference.

Which consumer demands do you
think should have been unmet so that resources could be diverted to your
centrally planned priorities?

I have no idea what you are talking about here.

Government demand competes for resources with consumer demand. Central planner's grand schemes effectively "tax" consumers even when debt financed, unless the resources were sitting idle.

  ML: Beyond that, there are often many noncoercive changes or
alterations in coercive policy without increasing coercion which will
reduce the wealth disparity or alter the processes which increase it.

RM: Name one!

1) Having the federal reserve no longer consider increasing labor costs
inflationary, and remain neutral in the allocation of the returns from
productivity increases to labor or capital.

Don't see how having the Fed "remain neutral in the allocation of the
returns from productivity increases to labor or capital" would
decrease wealth disparity. But what I do know is that this suggestion
is certainly not non-coercive; it's thought control. How are you going
to have the Fed stop considering something without enforcing that.
What if the Fed doesn't want to stop considering it? Are you going to
do nothing? If so, your proposal is meaningless.

The Fed's mission was set by congress, full employment and stable prices. The fed repeatedly in the 80s and 90s interpreted rising wages as inflationary and tightened money supply and causing slow downs. This effectively allocated more of returns from rapidly increasing productivity to capital rather than labor, instead of just letting market forces determine the allocation. This is one source of the increased wealth disparity that concerns you. A change in this can be "enforced" by simple Congressional clarification of the mission, specifically mentioning neutrality and/or by appointed Fed governors which will manage the Fed in the neutral manner.

2) Requiring the federal reserve to create money directly into the hands of
the people instead purchasing US treasuries which gives the benefit of the
newly created money to relatively well-to-do bondholders and foreign central
banks.

How is this non-coercive? How do you "require" the Fed to do this
without backing up the requirement with the threat of coercive force.

The may have started out as a private trust, but now it is just a part of the federal government, expected to be managed more independently of the political process. Part of the implementation would not be a "requirement" at all, but would give the Fed the new alternative tool for creating money rather than the purchase of government bonds or the stimulation of a pyramid of debt. "Requiring" the fed to use the new mechanism exclusively or preferentially and transparently would merely be a reform of a government agency.

3) Reducing the double taxation of dividends and capital gains so that
investing the savings of the middle class in the stock markets are less
speculative, less leveraged and more stable. If you object to this as a
reduction in coercion, it can be made revenue neutral by double taxing
interest on debt instead, I would recommend limiting the deductability of
interest to $1,000,000.

Again, how is this non-coercive? What are you going to do about the
people who want to tax both dividends and capital gains? How are you
going to collect the double taxed interest on debt non-coercively?

The people who want to tax both dividends and capital gains can stay free, there is no reason to do anything with these people despite their coercive and economically illiterate nature. Eliminating the double taxation of dividends and capital gains would be reducing coercion. Double taxing interest would be coercive, would not represent a net increase in coercion at the macro-economic level if done concurrently with the decrease in coercion. It would be a political compromise and admittedly change the distribution of coercion. The first two were non-coercive, and this one doesn't increase the level of coercion which is the other standard I mentioned.

4) Opening up Anwar and offshore oil reserves to development. This would
reduce "leakage" to the oil exporting countries, and add to the number of
higher paying middle class jobs.

How are you going to do that non-coercively? How are you going to get
drilling crews in there if there are a bunch of people waiting to
prevent them from getting in?

Keep in mind that coercion is not the use of force, just the initiation of the use or threat of force. Those acting to prevent would be the initiators and thus the coercers.

5) Healthcare tort reform, which would lower costs to the health insured and
doctors, while reducing the misallocation of wealth to relatively
unproductive attorneys.

How are you going to do this without a fight from the attorneys?
You'll have to coerce the attorneys into playing by these new rules.

The attorneys are officers of the court, the rules will just have changed. Certain mechanisms the attorneys used will just no longer exist or will have to meet reformed standards.

6) Reducing the barriers to entry to the medical professions, reducing
costs to consumers while providing more employment opportunities at less
educational expense.

Again, how are you going to enforce this?

You don't have to enforce it, you just have to stop enforcing the old more restrictive barriers.

7) Legalizing recreational drugs, bringing them into regular economy where
they pay taxes or where consumers can pay lower prices or grow their own,
retaining more of their wealth.

The legalizing drugs part sounds great but how are you going to
collect the taxes without the threat of penalty for not paying (ie.,
without coercion)?

Taxing the drugs would be coercive, but perhaps less than the confiscation which is currently occurring. Of course, those growing their own would probably only be taxed on the first batch of seeds.

8) Partial privatization of Social Security, allowing recipients to
participate in the greater returns in the now reformed stock market, and so
that die before receiving significant social security benefits have something
to leave to their children and other beneficiaries.

How are you going to non-coercively get people who like the current
system to change?

Certain treasury bonds could be available as investment vehicles which would offer the same low rates of return that the current system is based upon. The change could be voluntary, by the provision of options that might have higher rates of return. Increasing options would not be coercion. Other needed reforms to the system might be coercive, but they would be needed even without the privatisation. At least privatisation offers the opportunity to decrease the wealth disparity.

9) Reforming corporate governance so that executive compensation packages
are disclosed, and poison pills which serve entrenched interests at the
expense of stockholders are not allowed.

How are you going to non-coercively get executives to disclose this stuff?

It would probably only apply to publicly traded companies that already have voluntarily submitted to the standards of the stock exchanges and are further regulated by the Securities and Exchange commission. There will be strong pressure from their stockholders to continue to be traded on the exchanges. Reforms such as this are usually implemented with significant input from the regulated corporations, when the needs are recognized and usually benefit the corporations by restoring public trust. But this may be argued to be coercion, agreed to in order to gain the benefit of artificial limited-liability status.

Just a sampling.

Besides the fact that I don't see how any off these proposals would
reduce wealth disparity by much -- if at all -- all of them are
coercive. You said you had all these non-coercive ways to reduce
wealth disparity. So far I have seen no proposals that are
non-coercive, let alone that have any chance of reducing wealth
disparity. Feel free to try again.

Not all are coercive. Apparently you can only see reducing the wealth of the wealthy as reducing disparity. More of the returns from the increases in productivity will go the workers with item one.

Item two is directly redistributive. The benefits of new money creation would go to the poor instead of the banks and those who would benefit from increased bond prices, including bondholders. The current method of money creation directly benefits the wealthy at the expense of the general public.

Item 3, puts the economy on a less leveraged basis, meaning fewer layoffs in economic downturns and shallower recessions. it also makes investment is stocks a safer alternative for middle class savers relative to the low returns from deposit accounts.

Note, the pattern is one of benefitting the lower end of the wealth disparity generally without coercive and ultimately economically self destructive parasitization of the wealthy. Reducing the non-market based privileges and windfalls of the wealthy is not coercion.

regards,
    Martin L

···

On 12/4/2010 10:39 AM, Richard Marken wrote:

Best

Rick

[From Rick Marken (2010.12.04.1655)]

Martin Lewitt (Dec 4, 2010 1513 MST)–

Wealth disparity was at its lowest and virtually constant from

1943-1980.

But wealth was also much lower then, that is hardly preferable.

Oy vey. I give (that’s probably the way poor Obama feels, too).

Your side has won, anyway. Enjoy.

Best

Rick

···

During that time the top marginal tax rate was never lower

than 70%. Then came 1980 and the top marginal rate started going down

precipitously. Between 1980-2008 the rate was never higher than 50%

and was typically about 35%. That’s the policy change that coincided

with the increase in wealth disparity.

What is the statistical significance of extrapolating from one datum?

You say some of this disparity

resulted from sources of new wealth. That requires believing that no

such sources of wealth were ever developed from 1943-1980. This seems

highly unlikely to me just on the face of it, but also because the

average rate of growth in wealth from 1943-1980 was 7.9%; from

1980-2008 it was 6% (and it was only that high thanks to Reagan’s

second term government spending spree and the high growth rate of the

“high tax” Clinton era).

I guess you are given Clinton credit for the dot.com bubble.

RM: The top

marginal tax rate started decreasing under Ronnie Raygun and has

continued it’s decline (except for a brief, minor increase under

Clinton) to the present; and that decline has been mirrored by a

corresponding increase in the national debt and the wealth of those

who had their taxes reduced (duh!). So trillions of dollars in what

should have been national wealth devoted to improving common

infrastructure so important to private production (transportation,

education, research, etc) has gone right into the pockets of assholes

like the Koch brothers, who can now buy elections and ensure that

their wealth keeps increasing and they will never have to increase

their contribution to the common good.

Such bitterness, perhaps you could try controlling for freedom as the common good, as many who lived in the shadow of the iron curtain learned the hard way.

It sounds like you are saying there should have been more spending on

infrastructure even though much spending was already being debt financed.
It might sounds like that to you. But if you try reading it again you

might see that that is not what I’m saying. What I’m saying (or trying

to say) is that when tax rates were reduced, revenue was reduced which

led to deficit (and increasing debt). Since most of the tax reduction

went to the wealthy, the loss of government revenue showed up as

increased wealth for the wealthy (the increased wealth disparity).

If the wealth was merely retained by the wealthy, then the wealth disparity already existed. But once again you are assuming a static model. There were also large increases in the rate of productivity growth in the 80s and 90s arguable made possible because more capital stayed in the private sector.

With the government unable to even pay it’s existing expenses, there

was no will to invest in infrastructure improvement, which would have

just increased deficit and debt even more (though there was always

room for more military spending, which Raygun did with abandon, which

is why we had “full” unemployment toward the end of Raygun’s term;the

end of the Cold War put an end to that “boom”).

The increasing deficit, may actually have acted as a restraint on increases in unproductive government spending, further increasing wealth. Milton Friedman argued that government spending (competing demand) was the actual tax on the economy.

However, recall that after the Volcker recession, the US economy reached

what economists considered full employment.
Yes, a result of Raygun’s huge government spending program, creating

tons of jobs in the military-industrial complex.

There were other industries growing rapidly at the time as well. If you are arguing that military-industrial spending is much more effective than Obama’s shovel ready programs, it will help if you have a mechanism to account for the difference.

Which consumer demands do you

think should have been unmet so that resources could be diverted to your

centrally planned priorities?
I have no idea what you are talking about here.

Government demand competes for resources with consumer demand. Central planner’s grand schemes effectively “tax” consumers even when debt financed, unless the resources were sitting idle.

ML: Beyond that, there are often many noncoercive changes or

alterations in coercive policy without increasing coercion which will

reduce the wealth disparity or alter the processes which increase it.
RM: Name one!

  1. Having the federal reserve no longer consider increasing labor costs

inflationary, and remain neutral in the allocation of the returns from

productivity increases to labor or capital.
Don’t see how having the Fed "remain neutral in the allocation of the

returns from productivity increases to labor or capital" would

decrease wealth disparity. But what I do know is that this suggestion

is certainly not non-coercive; it’s thought control. How are you going

to have the Fed stop considering something without enforcing that.

What if the Fed doesn’t want to stop considering it? Are you going to

do nothing? If so, your proposal is meaningless.

The Fed’s mission was set by congress, full employment and stable prices. The fed repeatedly in the 80s and 90s interpreted rising wages as inflationary and tightened money supply and causing slow downs. This effectively allocated more of returns from rapidly increasing productivity to capital rather than labor, instead of just letting market forces determine the allocation. This is one source of the increased wealth disparity that concerns you. A change in this can be “enforced” by simple Congressional clarification of the mission, specifically mentioning neutrality and/or by appointed Fed governors which will manage the Fed in the neutral manner.

  1. Requiring the federal reserve to create money directly into the hands of

the people instead purchasing US treasuries which gives the benefit of the

newly created money to relatively well-to-do bondholders and foreign central

banks.
How is this non-coercive? How do you “require” the Fed to do this

without backing up the requirement with the threat of coercive force.

The may have started out as a private trust, but now it is just a part of the federal government, expected to be managed more independently of the political process. Part of the implementation would not be a “requirement” at all, but would give the Fed the new alternative tool for creating money rather than the purchase of government bonds or the stimulation of a pyramid of debt. “Requiring” the fed to use the new mechanism exclusively or preferentially and transparently would merely be a reform of a government agency.

  1. Reducing the double taxation of dividends and capital gains so that

investing the savings of the middle class in the stock markets are less

speculative, less leveraged and more stable. If you object to this as a

reduction in coercion, it can be made revenue neutral by double taxing

interest on debt instead, I would recommend limiting the deductability of

interest to $1,000,000.
Again, how is this non-coercive? What are you going to do about the

people who want to tax both dividends and capital gains? How are you

going to collect the double taxed interest on debt non-coercively?

The people who want to tax both dividends and capital gains can stay free, there is no reason to do anything with these people despite their coercive and economically illiterate nature. Eliminating the double taxation of dividends and capital gains would be reducing coercion. Double taxing interest would be coercive, would not represent a net increase in coercion at the macro-economic level if done concurrently with the decrease in coercion. It would be a political compromise and admittedly change the distribution of coercion. The first two were non-coercive, and this one doesn’t increase the level of coercion which is the other standard I mentioned.

  1. Opening up Anwar and offshore oil reserves to development. This would

reduce “leakage” to the oil exporting countries, and add to the number of

higher paying middle class jobs.
How are you going to do that non-coercively? How are you going to get

drilling crews in there if there are a bunch of people waiting to

prevent them from getting in?

Keep in mind that coercion is not the use of force, just the initiation of the use or threat of force. Those acting to prevent would be the initiators and thus the coercers.

  1. Healthcare tort reform, which would lower costs to the health insured and

doctors, while reducing the misallocation of wealth to relatively

unproductive attorneys.
How are you going to do this without a fight from the attorneys?

You’ll have to coerce the attorneys into playing by these new rules.

The attorneys are officers of the court, the rules will just have changed. Certain mechanisms the attorneys used will just no longer exist or will have to meet reformed standards.

  1. Reducing the barriers to entry to the medical professions, reducing

costs to consumers while providing more employment opportunities at less

educational expense.
Again, how are you going to enforce this?

You don’t have to enforce it, you just have to stop enforcing the old more restrictive barriers.

  1. Legalizing recreational drugs, bringing them into regular economy where

they pay taxes or where consumers can pay lower prices or grow their own,

retaining more of their wealth.
The legalizing drugs part sounds great but how are you going to

collect the taxes without the threat of penalty for not paying (ie.,

without coercion)?

Taxing the drugs would be coercive, but perhaps less than the confiscation which is currently occurring. Of course, those growing their own would probably only be taxed on the first batch of seeds.

  1. Partial privatization of Social Security, allowing recipients to

participate in the greater returns in the now reformed stock market, and so

that die before receiving significant social security benefits have something

to leave to their children and other beneficiaries.
How are you going to non-coercively get people who like the current

system to change?

Certain treasury bonds could be available as investment vehicles which would offer the same low rates of return that the current system is based upon. The change could be voluntary, by the provision of options that might have higher rates of return. Increasing options would not be coercion. Other needed reforms to the system might be coercive, but they would be needed even without the privatisation. At least privatisation offers the opportunity to decrease the wealth disparity.

  1. Reforming corporate governance so that executive compensation packages

are disclosed, and poison pills which serve entrenched interests at the

expense of stockholders are not allowed.
How are you going to non-coercively get executives to disclose this stuff?

It would probably only apply to publicly traded companies that already have voluntarily submitted to the standards of the stock exchanges and are further regulated by the Securities and Exchange commission. There will be strong pressure from their stockholders to continue to be traded on the exchanges. Reforms such as this are usually implemented with significant input from the regulated corporations, when the needs are recognized and usually benefit the corporations by restoring public trust. But this may be argued to be coercion, agreed to in order to gain the benefit of artificial limited-liability status.

Just a sampling.
Besides the fact that I don’t see how any off these proposals would

reduce wealth disparity by much – if at all – all of them are

coercive. You said you had all these non-coercive ways to reduce

wealth disparity. So far I have seen no proposals that are

non-coercive, let alone that have any chance of reducing wealth

disparity. Feel free to try again.

Not all are coercive. Apparently you can only see reducing the wealth of the wealthy as reducing disparity. More of the returns from the increases in productivity will go the workers with item one.

Item two is directly redistributive. The benefits of new money creation would go to the poor instead of the banks and those who would benefit from increased bond prices, including bondholders. The current method of money creation directly benefits the wealthy at the expense of the general public.

Item 3, puts the economy on a less leveraged basis, meaning fewer layoffs in economic downturns and shallower recessions. it also makes investment is stocks a safer alternative for middle class savers relative to the low returns from deposit accounts.

Note, the pattern is one of benefitting the lower end of the wealth disparity generally without coercive and ultimately economically self destructive parasitization of the wealthy. Reducing the non-market based privileges and windfalls of the wealthy is not coercion.

regards,

Martin L

Best

Rick


Richard S. Marken PhD
rsmarken@gmail.com
www.mindreadings.com

[Martin Taylor 2010.12.04.22.32]

[Martin Lewitt Dec 4, 2010 1513 MST]

[From Rick Marken (2010.12.04.0940)]

  Martin Lewitt (Dec 3, 2010 0140 MST)--

Rick Marken (2010.12.03.1645)--

I don't think the increase in wealth discrepancy has resulted
from a sudden increase in competence of rich people. It's a
result of public policy.

I partially agree, public policy made a significant contribution, but some
of the increase in "discrepancy" depend on the sources of that new wealth,
some may be less labor intensive and thus naturally concentrate in fewer
people.

Wealth disparity was at its lowest and virtually constant from
1943-1980.

But wealth was also much lower then, that is hardly preferable.

What is your measure of "wealth"? I'd like to see a graph of it, to correspond with the ones Rick and I posted.

Martin

···

On 12/4/2010 10:39 AM, Richard Marken wrote: