HPCT and Ayn Rand

CSGnet Archive CSG2004
41

[From Mike Acree (2004.01.08.1230 PST)]

Bill Powers (2004.01.08.0845 MST)--

While soaking someone $200 for a bottle of wine seems sort of morally
neutral to me, the other transaction seems less so. You failed to mention
that someone had $10,000 and thus was able to buy a kidney, so someone
without any spare money couldn't have it. I don't think it is morally
neutral that such things should be determined by wealth..

Depending on the wine, $200 might be a bargain, rather than a soaking.

In saying I sold a kidney for $10,000, I didn't think I needed to specify additionally that the buyer had $10,000. Whether it was spare change or the buyer had to take up a collection from all his friends and relatives also didn't seem relevant to the point. I also don't see how this transaction is any more, or less, determined by wealth than the wine purchase. Both involve money, which the buyer values less than the object purchased. The sale in both cases was obviously determined by things besides money--my interest in this particular wine and the buyer's interest in my kidney. Hence it is not clear to me what moral difference you see in these negotiated transactions. Do you want to introduce some method other than negotiation?

Mike

42

[From Rick Marken (2004.01.08.1350)]

Martin Taylor (2004.01.08.1426) --

Rick Marken (2004.01.08.1055)--

I think this discussion would be much more interesting -- and much more
likely to keep everyone on the same page -- if someone would post a dynamic
model of a market, preferably a market in which the agents (buyers and
sellers) are control systems.

That would be good, but it would be hard in such a model to
incorporate the broadcast effects of individual transactions...

I think we just need a model of a money (rather than a barter) based market
consisting of agents selling goods for money and using that money to obtain
the goods they want. I think such a model is needed before we can say
whether there are "broadcast effects" and, if there are, what they are.

Best

Rick

···

--
Richard S. Marken
MindReadings.com
Home: 310 474 0313
Cell: 310 729 1400

43

[From Rick Marken (2004.01.08.1415)]

Mike Acree (2004.01.08.1148 PST)]

But I might as well take
this occasion to make a comment on Bill's Test Bed proposal. In fields as
tangled and muddled as economics, I'm very much in favor of starting out from
scratch, rethinking the assumptions, which is what I take the intention here
to be. But imagine the following scenario:

The "psychology" scenario you describe really has nothing to do with what
the Testbed model is about. The Testbed model is not a model in the same
sense as PCT is a model. The Testbed model is simply a computer _simulation_
of the world of economic transactions in which economic agents behave. It's
like a simulation of a Skinner box, representing relevant functional
characteristics of the box, like the fact that n lever presses produce m
grams of food. The simulation doesn't say how much an animal will press to
get food or how much food it will eventually eat. The later is a job for the
model of the organism to be tested.

The model of the market that I envision would have to include a component
like the Testbed that simulates the market "environment": the fact that
goods can be acquired only by paying money for them, that money is acquired
only by selling goods for money, and so on. The agents that participate in
this market could be S-R devices, utility maximizers or whatever. But if I
do this I would model these agents as control systems, because, of course,
they are.

I would start with a market made up of a small population of agents, say 10.
I think that might be enough for starters.

Best regards

Rick

···

--
Richard S. Marken
MindReadings.com
Home: 310 474 0313
Cell: 310 729 1400

44

[From Bill Powers (2004.01.08.1839 MST)]

Mike Acree (2004.01.08.1148 PST)--

But imagine the following scenario: A psychologist announces that he
wants to do that in psychology, and he will proceed by constructing more
elaborate and complex models than have been feasible before the era of
superduper computers. There will be measurements of all sorts of
biological, psychological, and social variables, on many thousands of
individuals, and the model will link their averages on all of these
variables. Structural equation modeling will be used to test, for
example, whether biological variables affect psychological variables or
vice versa. With sufficiently sophisticated software, we can allow
nonrecursive (reciprocal) causal relations. The ultimate result will be
a complete model of human behavior.

I think it would be better to see how the test bed project works out. One
can imagine all sorts of things.

Best,

Bill P.

45

[From Bill Powers (2004.01.08.1842 MST)]

Mike Acree (2004.01.08.1230 PST)--

In saying I sold a kidney for $10,000, I didn't think I needed to specify
additionally that the buyer had $10,000. Whether it was spare change or
the buyer had to take up a collection from all his friends and relatives
also didn't seem relevant to the point. I also don't see how this
transaction is any more, or less, determined by wealth than the wine
purchase. Both involve money, which the buyer values less than the object
purchased.

I'm sure that a poor man values a new kidney more than he values $10,000,
too, but that's moot, since he doesn't have $10,000 and can't get it. The
wealthy man lives and the poor man dies. If the poor man manages to scrape
up $10,000, the rich man smiles and offers $10,001. He can always beat the
poor man's bid.

In my moral system, wealth alone is not a sufficient basis for deciding how
to allocate scarce resources. I can't produce any objective or theoretical
support for that preference; it's simply a requirement I have for the kind
of society I want to live in. Is your preference different?

The problem with accumulations of wealth is that they create positive
feedback: the more of it you have, the easier it becomes to get still more.
Wealth can buy political and physical power, which can be used to ward off
attempts to limit power. Look at the campaign reform fiasco. I don't see
how my moral system can be implemented without society placing limits on
the acquisition of power by individuals.

The sale in both cases was obviously determined by things besides
money--my interest in this particular wine and the buyer's interest in my
kidney. Hence it is not clear to me what moral difference you see in
these negotiated transactions. Do you want to introduce some method other
than negotiation?

There is a need to negotiate only if one can't simply have his way without
considering anyone else. The game Monopoly is a nice illustration of the
principle I'm talking about. When you get enough money to add enough houses
and hotels, you acquire money even faster and the players with less money
become even less able to catch up and more likely to go bankrupt. This
happens in poker, too. If one player gets very far ahead, he can simply buy
the pot: bet more than the others dare to bet simply to drive them out of
the game. Luck sometimes intervenes, but in general the player with the
most money has the best chance of making even more. I learned this during a
few years of weekly poker games with friends, where I learned not to play
poker any more.

In real life, there are some games one can't opt out of. I can't decide not
to eat any more, if I want to see how the next few years come out.

I should think that an anarchist would be very much against allowing any
one person to get control over other people.

Best,

Bill P.

46

[From Mike Acree (2004.01.09.1150 PST)]

Bill Powers (2004.01.08.1842 MST)--

In my moral system, wealth alone is not a sufficient basis for deciding how
to allocate scarce resources. I can't produce any objective or theoretical
support for that preference; it's simply a requirement I have for the kind
of society I want to live in. Is your preference different?

Evidently. I simply don't care whether the possessor of the kidney donates it to a friend or relative or stranger, sells it to the highest bidder, or keeps it. Or if I do have preferences, I keep them to myself unless my opinion is solicited. I don't see what happens as my business, and I see it leading to a lot of conflict if I try to make it my business. You specifically don't want the kidney to go to the person who offers the most money for it, though you haven't specified to whom you do want it to be given, or how you would determine that. But, as I understand it, we're not talking about mere preference on your part: You want to force your choice on the possessor of the kidney (else this discussion is idle). (My preference, obviously, is for you to keep your nose--i.e., your guns--out of other people's business. I say "other people's business" because I don't see the kidney as communal property, calling for a communal decision.)

The problem with accumulations of wealth is that they create positive
feedback: the more of it you have, the easier it becomes to get still more.

Yes. That has its advantages, of course. Once poor countries get started on the path to prosperity, they can progress rather rapidly to a higher standard of living.

Wealth can buy political and physical power, which can be used to ward off
attempts to limit power. Look at the campaign reform fiasco.

Yes again.

I don't see
how my moral system can be implemented without society placing limits on
the acquisition of power by individuals.

The question is who places--i.e., enforces--those limits? They are by necessity not subject to those limits themselves. You've said "society" here, but you are also the one who has warned us (appropriately, in my view) about abstractions like this, reminding us that actions are performed by individuals. Hence I would reformulate your proposition to say that your moral system can't be implemented without _removing_ limits on the acquisition of power by individuals.

I should think that an anarchist would be very much against allowing any
one person to get control over other people.

The verb "allow" presumes someone with the power to allow or disallow, so this formulation is self-contradicting. What anarchists oppose, I would say, is deliberately setting up one individual or institution with decisive power over all others.

Mike

47

[From Bill Williams 9 January 2004 12:30 AM CST]

Mike,

You say, [From Mike Acree (2004.01.08.1209 PST)]

"I'm not sure why my posts attract such cheap shots."

Maybe the responses you are getting are a result of your trolling for them. By your selection of the $200 bottle of wine and the $10,000 dollar kidney as a basis for discussion, I think it might be apt to repeat the familiar mantra and say that, "I see you have chosen..." etc. etc. And, after all, your critics may not be of the opinion that their responses to the chum that is being thrown in the water are, in fact, "cheap shots."

As I see it, the arguments based upon the neo-classic conception of economic individuals as maximizers are well known. Somewhat less well known are the anomolies and paradoxes that such a scheme generates. Within the mainstream of the profession it is my impression that many people might be persuaded to discard what remains an 18th and 19th century theoretical position for something else, if they thought something else that was better was availible. The classic path in science is to start with anomolies and then extend the explaination of the anomolous cases to what has been considered to be the normal case. Using control theory makes it possible to do heterodox economics as a theoretical enterprize. In the past there hasn't been anything that could replace maximization as a central methodological principle. But, now there is, and this means that for the first time heterodox economics can be more than just criticism. This ought, eventually, to make a big difference. As long as there was no alternative to maximization, maximization and the implications drawn from it (and a few supplementary assumptions) always assumed the central position in economic discussions-- both orthdoxy and heterodox as well. Didn't matter whether you were orthodox or heterodox if you studied economic theory you studied the implications of the principle of
maximization. And, there hasn't been, has never been an alternative that has been remotely comparable to maximization as a principle upon which to construct an alternative to orthodoxy. One of the interesting things that I've seen when I've begun to apply control theory to the standard problems in economics has been that the answers I come to in at least some, or many cases aren't all that far from those of orthodox theory. So, a control theory economics may not be all that popular with many of the heterodox people who are Marxists and other kinds of economic radicals. So, it seems likely that a control theory perspective may initiate a distinctively new thread in economic discussions generally. I don't expect that it will be compatible with the existing bodies of received theOry in eeither the Orthdoox or the heterodox sides in economic controversy-- because

    "No substantial agreement upon a point of knowledge
   or conviction is possible between persons who proceed from
   disparate preconceptions." p. 721.

     Edgell, Steven and Townshend, Jules 1993 "Marx and Veblen on
   Human Nature." Journal of Economic Issues vol 27 # 3 September

Bill Williams

responses are, in fact, "cheap shots."

48

[From Bill Williams 9 January 2003 3:00 PM CST]

Mike you say, [From Mike Acree (2004.01.09.1150 PST)]

"What anarchists oppose, I would say, is deliberately setting up one individual or institution with decisive power over all others."

How then would an anarchists reply to a question about what to do when one "institution" that is the market is perceived as having too much power?

Bill Williams

49

[From Mike Acree (2004.01.08.1348 PST)]

Bill Powers (2004.01.08.1839 MST)--

I think it would be better to see how the test bed project works out. One
can imagine all sorts of things.

It is certainly true that, when I speak about my imagination of your imagination, there is room for a lot of error. The only possible justification for such extreme presumption on my part is the slim chance that it may head off some (of what I see as) blunders.

I have the impression (maybe this was more from Rick's description?) that you envision positing a "theoretically neutral" bank, for example. But will this bank issue its own currency (as a free bank could)? Will it use 100% or fractional-reserve banking? Will there be a central (government) bank which controls interest rates and credit? My concern would be that what you subsequently saw as empirical conclusions emerging from the model might be only consequences of assumptions built in unwittingly.

But enough (or too much) already. I promise to say no more in advance.

Mike

50

[From Mike Acree (2004.01.09.1402 PST)]

Bill Williams 9 January 2004 12:30 AM CST--

"I'm not sure why my posts attract such cheap shots."

Maybe the responses you are getting are a result of your trolling for them. By your >selection of the $200 bottle of wine and the $10,000 dollar kidney as a basis for >discussion, I think it might be apt to repeat the familiar mantra and say that, "I see you >have chosen..." etc. etc. And, after all, your critics may not be of the opinion that >their responses to the chum that is being thrown in the water are, in fact, "cheap shots."

The only such "cheap shot" I saw coming from you was the one about slavery. I picked the wine and kidney examples specifically because they are the kinds of transactions which many people think should be regulated, and in fact have been heavily regulated (to the point of having been made illegal). I was asking people to articulate their reasons for wanting to control such transactions between other people.

responses are, in fact, "cheap shots."

I don't know what you mean. But thanks for trying to explain.

No material disagreement with the rest of your post.

Mike

51

[From Mike Acree (2004.01.09.1422 PST)]

Bill Williams 9 January 2003 3:00 PM CST--

How then would an anarchists reply to a question about what to do when one "institution" >that is the market is perceived as having too much power?

I would ask for clarification of what was meant. I know what it means to say that the government, or its agents, have too much power, but the market is all of us, negotiating peaceful transactions with others. The questioner may have put "institution" in quotes for a reason: The institution of government is a real agency, with real agents acting on its authority; there isn't any corresponding institution on whose behalf or authority I'm acting in buying a bottle of wine. "The market" is an abstraction in a way that "the government" is not.

My best guess about what might be meant is that Bill Gates has the money to buy an army, if he chose. (Like other rich people, he does hire a security staff.) But it would still be less powerful than the U.S. Army, supported by the resources of the whole country. So that interpretation must not be what was meant.

Mike

52

[From Bill Powers (2004.01.09.1519 MST)]

Mike Acree (2004.01.08.1348 PST)--

It is certainly true that, when I speak about my imagination of your
imagination, there is room for a lot of error. The only possible
justification for such extreme presumption on my part is the slim chance
that it may head off some (of what I see as) blunders.

It might.

I have the impression (maybe this was more from Rick's description?) that
you envision positing a "theoretically neutral" bank, for example. But
will this bank issue its own currency (as a free bank could)? Will it use
100% or fractional-reserve banking? Will there be a central (government)
bank which controls interest rates and credit? My concern would be that
what you subsequently saw as empirical conclusions emerging from the model
might be only consequences of assumptions built in unwittingly.

It will lend money, keeping track of the amount owed and the amount repaid,
and charging interest on the amount outstanding. It may pay interest to
depositors, It will obey reserve laws if you want it to. It will borrow
money from the government, or buy bonds, if you want it to. There can be as
many kinds of banks as you want, operating by any rules you want.

But you have to commit yourself to the properties you put into this
environment, and after doing so you have to commit yourself to the
properties of the agents who run it -- and then stand back, letting the
chips fall where they may. I guarantee that whatever properties you put
into this environment, the results will surprise us all.

Best,

Bill P.

53

[From Rick Marken (2004.01.09.1450)]

Mike Acree (2004.01.08.1348 PST)--

I have the impression (maybe this was more from Rick's description?) that you
envision positing a "theoretically neutral" bank, for example. But will this
bank issue its own currency (as a free bank could)? Will it use 100% or
fractional-reserve banking? Will there be a central (government) bank which
controls interest rates and credit?

These are not really theoretical questions, Mike. They are questions about
how economic entities (banks in your examples) actually work in the economy
being modeled. The model banks will issue currency the same way the real
banks issue currency. They will maintain the fraction of reserves that banks
maintain in the real economy. The model will have a central bank that
controls interest rates and credit if the real economy has a central bank
that controls interest rates and credit.

The modeler has to find out how banks and other economic entities work in
order to create a good model. The theoretical part of the model concerns the
economic entities whose workings we cannot observe: the agents who make up
the economy.

Best regards

Rick

···

--
Richard S. Marken
MindReadings.com
Home: 310 474 0313
Cell: 310 729 1400

54

[From Bill Powers (2003.01.09.1525 MST)]

Mike Acree (2004.01.09.1150 PST)–

I simply don’t care whether the
possessor of the kidney donates it to a friend or relative or stranger,
sells it to the highest bidder, or keeps it.

I think you would care if it was your kidney that needed replacing, and
there was a higher bidder whose kidney wasn’t on the verge of failure, or
who just wanted a spare kidney just in case. And whatever the state of
your kidneys now, you could be that losing bidder some day.

I don’t see what happens as my
business, and I see it leading to a lot of conflict if I try to make it
my business. You specifically don’t want the kidney to go to the
person who offers the most money for it, though you haven’t specified to
whom you do want it to be given, or how you would determine that.

I said I wouldn’t want wealth to be the criterion for getting the kidney.
Specifically, I wouldn’t want it to be the criterion for my
getting a kidney, since I am not wealthy. Since this is a life and death
choice and hardly anybody can get a kidney transplant except through
publicly supported institutions like hospitals, I would judge strictly on
the basis of urgency. Or maybe some even more equitable basis – I can be
persuaded once the basis thesis is accepted.

But, as I understand it, we’re not
talking about mere preference on your part: You want to force your
choice on the possessor of the kidney (else this discussion is
idle).

No, I want a social contract to exist that applies, by majority
agreement, to everyone. Only in that way can I be assured of fair
treatment if the need arises.

(My preference, obviously,
is for you to keep your nose–i.e., your guns–out of other people’s
business.

Fine, as long as there’s no chance that keeping my nose out of it will
serve me better than butting in. Would an anarchist advise me to be
altruistic about this?

I say “other people’s
business” because I don’t see the kidney as communal property,
calling for a communal decision.)

That’s very altruistic of you to look out for other people’s
independence, but what about your own interests? If you thought you or
someone you care greatly about might need a kidney some day, and you
weren’t wealthy, wouldn’t you want to make donated kidneys into communal
property? It’s not as if you were telling people they have to donate
their kidneys. You’re just saying that donated kidneys are such a scarce
life-saving commodity that you want them allocated in an impartial
way.

The problem with accumulations
of wealth is that they create positive

feedback: the more of it you have, the easier it becomes to get still
more.

Yes. That has its advantages, of course. Once poor countries
get started on the path to prosperity, they can progress rather rapidly
to a higher standard of living.

Unfortuantely, positive feedback also works in the other direction: any
little decline leads to a greater decline. It’s unstable.

The question is who places–i.e.,
enforces–those limits? They are by necessity not subject to those
limits themselves.

Why not? If the experts on kidney replacement work out distribution
rules, those rules would apply to them as well as others. And we can have
review panels made of people who do not have the same interests. Sort of
like checks and balances. Where have I heard that before?

You’ve said “society”
here, but you are also the one who has warned us (appropriately, in my
view) about abstractions like this, reminding us that actions are
performed by individuals. Hence I would reformulate your
proposition to say that your moral system can’t be implemented without
removing limits on the acquisition of power by
individuals.

No, I am the individual I am thinking about, and I don’t want to remove
power limits on others. Being fair (i.e., recognizing that only fair
rules can long survive and be enforced) I would expect to be subject to
the same limitations, so whatever details I propose should not cripple
others relative to me, and vice versa. After I convince enough other
individuals to support the same program, we will have a social contract,
even if there is no such thing as Society.

I
should think that an anarchist would be very much against allowing
any

one person to get control over other people.

The verb “allow” presumes someone with the power to allow or
disallow, so this formulation is self-contradicting.

If there is an inherent self-contradiction in anarchy. I would not be
surprised, but that is for you to decide. Perhaps you do not get together
with other anarchists, or try to persuade them to adopt your version of
anarchy. Perhaps you do not want to eliminate factors that reduce
acceptance of anarchy. Perhaps it doesn’t matter to you if anarchy dies
out.

On the other hand, if these things matter, then I don’t see how you can
do anything about them without persuasion, and without some sort of
communal (that is, effective) response to people who would act to wreck
the anarchist movement – especially those who would rule you by
force.

What anarchists oppose, I would
say, is deliberately setting up one individual or institution with
decisive power over all others.

The question remains, HOW can you oppose it? Don’t you find that you have
to violate your own principles to keep those with decisive power from
winning? Are you going to march around waving signs? If you don’t set up
any institutions with power and voluntarily support them, what chance do
you give your ideas to prevail?

Best,

Bill P.

55

[From Mike Acree (2004.01.09.1712 PST)]

Rick Marken (2004.01.09.1450)--

These . . . are questions about
how economic entities (banks in your examples) actually work in the economy
being modeled. The model banks will issue currency the same way the real
banks issue currency. They will maintain the fraction of reserves that banks
maintain in the real economy. The model will have a central bank that
controls interest rates and credit if the real economy has a central bank
that controls interest rates and credit.

Then I may have misunderstood. It sounds as though you will be modeling, say, the U.S. economy of 1/9/04, or of Italy in 2003, or of the U.S. in 1784, or (perhaps most importantly) of a free-market system that hasn't yet existed, or all of the above. I was assuming you intended a "generic" bank, which was the source of my concern.

The modeler has to find out how banks and other economic entities work in
order to create a good model.

I would have thought that understanding how banks and other economic entities work was much of the task of economics, so modeling would then have to come after rather than before a good theory of economics. But I grant some back and forth is to be expected.

Mike

56

[From Bill Williams 9 January 2003 10:40 PM CST]

Mike,

The only such "cheap shot" I saw coming from you was the one about slavery.

Wasn't intended as a "cheap shot." It seemed to me, and it still does, that in the absence of any sort of regulation of the market, then "what would prohibit the purchase and sale of human beings?" Or, are you in favor of _some_ regulation. And, yes, I do remember the old joke.

responses are, in fact, "cheap shots." this was a fragment that I didn't catch when I posted.

I don't know what you mean. So, it doesn't mean anything.

I think I may agree with you in some respects concerning the "Test Bed."

Billl Williams

57

[From Bill Powers (2004.01.09.2123 MST)]

Mike Acree (2004.01.09.1712 PST)]

Rick Marken (2004.01.09.1450)--
>The modeler has to find out how banks and other economic entities work in
>order to create a good model.

I would have thought that understanding how banks and other economic
entities work was much of the task of economics, so modeling would then
have to come after rather than before a good theory of economics. But I
grant some back and forth is to be expected.

The test bed is not a theoretical model. It's suppose to represent the real
system. In models of tracking behavior, there is a "test bed" consisting of
a model of the mouse, the cursor, the target, and the disturbance or
disturbances. When the simulated mouse is moved by changing the number
representing its position, the cursor number changes accordingly (perhaps
with a second disturbance number added to it). The target number changes to
show target movements. Another number indicates the actual distance on the
screen between cursor and target. Since we have complete knowledge of this
part of the setup, the test bed part of the model is guaranteed to be 100%
accurate. Then we plug in the part of the model that represents the
hypothetical perception (cursor position, target position, and as a result,
cursor minus target distance), reference signal, error signal, and output
function. These hypothetical components represent the model of the
controlling person that we're testing. Those are the parts we have to guess
at, and we adjust the parameters of those parts until the overall behavior
is as close as possible to what we see the person doing. The test bed, the
model of the physical world outside the controller, remains the same for
all models of the controller part.

As a starting point, we will probably just model the main features of
banks: deposits and withdrawals, interest payments on savings, and interest
charges for loans. Aside from those functions, a bank will be a "plant"
like any other, with employees earning (and spending) wages, capital-income
recipients receiving (and spending) dividends and profits, and so forth. We
will probably ignore things like taxes and capital gains, social security,
medicare, and other such services, while we get the basic model running.
Omitted features can be added as we see how they are supposed to work. All
of this is descriptive, not theoretical. We just try to represent what we
can see happening.

The theoretical part comes after the test bed is reasonably complete. It
consists of adding controlling agents (consumers and managers) who
determine when money is spent and on what, who set the policies and targets
for the manufacturing or service plant, who determine how capital and wage
income are apportioned, how much money is to be spent on investments, how
much interest is to be charged or paid, and other such things. These are
the aspects of economics that relate to assumptions about the human beings
in the system rather than the mechanics of the system. Theoretical
assumptions about the controlling agents are what is to be tested in the
test bed, just as a car maker can try many different engine designs out
with a single dynamometer and brake simulator setup, or an airplane
designer can test various wing designs in a suitably instrumented wind
tunnel (we could call this part of the model an economic wind tunnel if
that would communicate better). The test consists of setting up initial
conditions and then letting the simulation run without further interference
or adjustment. The behavior that unfolds can be compared with common-sense
judgment, historical data, or data that is revealed as time goes by, a true
prediction. Where the model behaves unrealistically, the reason can be
traced to incorrect assumptions about the agents. The form of the agent
model (but not the test bed part) can be modified to correct the failure.
One hopes.

That's the overall strategy I envision. It will take a considerable amount
of work, time, and knowledge to get something workable out of this
effort.We can but set one foot in front of another and commence the journey.

Best,

Bill P.

58

[From Bill Willliams 9 January 2003 10:50 PM CST]

Mike,

My best guess about what might be meant is that Bill Gates has the money to buy an army, if he chose. (Like other rich people, he does hire a security staff.) But it would still be less powerful than the U.S. Army, supported by the resources of the whole country.

Short of sending out death squads, given enough money, there are lots of things people with money can do to make life difficult for other people-- espeically people questioning the power that comes with money. I know, according to you its all a matter of voluntary transactions. But, I once taught money and banking. So, I included a lesson on "red-lining." This was before the passage of anti-red-lining legislation. So, I got the boot, and it all ended up in Federal court. The administrators lied under oath, but fortunately the jury perceived that they were lying. Now, you may ask what does this have to do with an argument about a market? The "market" you may say didn't conive to get me fired. It was a bank, or a bank officer. However, it was a market ideology that provided a cloak under which commercial interests used the power that they had (all voluntary according to your conception) to invade a university and remove a professor who was exposing an abuse.

So that interpretation must not be what was meant.

Actually it come, with some minor changes in definition and detail, fairly close. Given the sort of differences in the distribution of wealth and according to my understanding of the situation _power_ there are going to be abuses. According to your conception of the market, it is a matter of voluntary transactions. However, it has been my experience that if you don't play along, sing the party line, they will try to come after you. Really the only reason my life wasn't disrupted far more than it was, was due to my having come into some money as a result of my folks real estate speculation. And, that comparatively small fund allowed me to thumb my nose at a dishonest university system and continue thinking about economics from the standpoint of relative immunity to a system of ideological supervision. A system that is rather effective in prohibiting genuine inquiry in social theory.

However, once this sort of ideological supervision is imposed, the result is a situation in which nearly everyone goes a bit crazy. And, not only is it difficult to tell the good guys from the bad guys, but nearly everyone ends up with, in a sense, dirty hands.

Bill Williams

59

[From Bill Williams 10 January 2003 9:OO PM CST]

The following is a description circulated here, the University of Missouri Kansas City, concerning the activities of conservative foundations. It may have some implications regarding issues of how volition and other constructs including "the economy" are defined or rather redefined.

(this preface by Kelley Pinkham UMKC center full employment and price stablity )

  "Conservative foundations have been orchestrating a national attack on labor studies. If the
  opponents of the ILE prevail, activist-oriented programs in Massachusetts, Michigan, Missouri and
  other states will be next on the right-wing hit list."
   
  FYI -- UMKC's Labor Studies Program is housed in the economics department.

···

------------------------------------------------------
   
  Class Warfare
   
  by DAVID BACON
   
  [from the January 12, 2004 issue]
   
  The best labor studies programs like to think of themselves as activist-oriented–firmly grounded in the gritty world
  of workers. They don't usually find themselves at the center of high-profile political disputes. But in Sacramento
  cloakrooms, where lobbyists normally whisper blandishments into legislators' ears, the University of California's
  labor studies program is now being discussed in language once reserved for reds, and worse. The program,
  lobbyists say, not only organized meetings to stop the recall of then-Governor Gray Davis, but last summer "union
  thugs" supposedly even left those meetings to beat up recall petition circulators.
   
  The accusations sound pretty wild, even considering California's usual election histrionics, but they're more than
  just overheated rhetoric. It's payback time in Sacramento. When newly elected Governor Arnold Schwarzenegger
  unilaterally imposed draconian budget cuts on the state just before Christmas, he wiped out this year's remaining
  funding for the Institute for Labor and Employment. If he does the same thing with next year's appropriation in
  March, the institute will be destroyed.
   
  The current set of charges are the latest in a long effort to eliminate the ILE once and for all. Behind them is a
  political alliance between the state's Associated Builders and Contractors (ABC, the powerful lobby for nonunion
  construction companies) and the Pete Wilson wing of the state's Republican Party, which has retaken the
  governor's mansion.
   
  The ABC in particular has been gunning for the ILE for two years, since it conducted a survey in 2001 of "project
  labor agreements" (or PLAs)–arrangements in which wages, benefits and union status are hammered out before
  work begins on major construction projects. The ILE published its findings in a working paper. This sounds pretty
  innocuous, but PLAs are a big roadblock to the growth of nonunion construction. Builders are so incensed about
  them, and so powerful, that the agreements were actually banned by President Bush as one of his first acts in
  office (facing Congressional opposition, he later allowed agreements for then-current projects to continue, but
  prohibited PLAs on new federal projects).
   
  Labor studies programs around the country are watching what is happening to the ILE in California with
  trepidation. Conservative foundations have been orchestrating a national attack on labor studies. If the opponents
  of the ILE prevail, activist-oriented programs in Massachusetts, Michigan, Missouri and other states will be next
  on the right-wing hit list.
   
  The controversy raises a fundamental question about labor rights–should joining a union be protected and
  encouraged by law and public policy, or are unions just a narrow private interest? At the beginning of the builders'
  campaign in California, Steve Friar, executive director of the San Diego-Imperial County Coalition for Fair
  Employment in Construction, wrote an op-ed in Riverside's North County Times in which he asked,"Unions are
  private organizations, so why are taxpayers required to cough up money for union propaganda to be filtered
  throughout the state?" Well, because encouraging collective bargaining has been public policy since 1936.
  Besides, the same university spends many times that tax money promoting the goals of another private
  institution–business.
   
  Yet the question indicates how far public discourse has moved since the National Labor Relations Act became
  the nation's basic law giving unions legal status. The act's preamble holds that employees should (not can) band
  together to bargain. To accept Friar's argument, that social goal has to be deemed a "private" special interest. In
  fact, this change in public consciousness is one important objective of the attack on labor studies.
   
  There's another, unspoken assumption as well. Every economic policy adopted by Congress, and by every state,
  assumes that the proper purpose of economic activity is the creation of private profit. In the current political
  climate, profit-making is even equated with democracy. Business schools treat increasing productivity–that is, the
  rapid and efficient accumulation of profit–not only as economically necessary but as a patriotic duty.
   
  QUOT-Can you imagine a business administration program that doesn't take for granted the need to make
  profits?" asks Elaine Bernard, who heads Harvard's Trade Union Program, "or that doesn't want to talk to
  business leaders, or place its students in companies?" But when a labor program assumes that workers should
  strive to raise wages and improve conditions, it's considered selfish–against the public interest.
   
  In July, for instance, at the height of recall mayhem in California, the Institute for Labor and Employment was given
  the "California Golden Fleece Award" by the Pacific Research Institute, a right-wing think tank. (From 2000
  through 2002, PRI received $450,000 from the Sarah Scaife Foundation and $150,000 from the John M. Olin
  Foundation, both prominent funders of ultraconservative causes.) ILE's crimes, listed on PRI's website, included
  popularizing unions in high schools and adult schools and doing research that supported campaigns to raise the
  minimum wage and pass "living wage" ordinances. The PRI called all this evidence of ILE's "anti-capitalism" that
  "strikes at the heart of a basic economic freedom in America–the right of employers and employees to freely
  negotiate compensation." The not-so-subtle implication was that workers should negotiate as individuals, not in
  unions.
   
  In August the PRI's agenda became even clearer. In an Orange County Register op-ed, PRI staffers Andrew
  Gloger and Lawrence McQuillan suggested ominously that "a Davis defeat could signal an end to the ILE. But
  would that be such a bad thing?" The Register, voice of the most extreme of the state's Republicans, editorialized,
  "Here's a program that ought to go, even if the state weren't submerged in red ink."
   
  Finally, the recall forces (mobilized by the website www.recallgraydavis.com) sent out an e-mail appeal on August
  17, accusing the ILE of organizing anti-recall workshops "where recall supporters are beaten." In actual fact,
  UCLA's Downtown Labor Center had been asked by building trades unions to allow use of one of its rooms for a
  meeting to discuss anti-recall strategy. The center agreed, but the meeting was later moved to another site, and
  no labor center staff even went to it. The only beating was a sidewalk scuffle in Sacramento, where pro-recallers
  picketed an anti-recall event that had no connection to the labor center. Nevertheless, recall organizers linked the
  labor center to the incident. Their site asked readers to send e-mail messages to ILE director Ruth Milkman (a
  UCLA professor); Kent Wong, director of the UCLA Labor Center; and even Richard Atkinson, then president of
  the University of California.
   
  One e-mail response asked "Are you completely a criminal???" "The nation is awakening to you liberal
  (communist) elitists…why don't u move to cuba," warned another. Meanwhile, ABC lobbyist Matt Tennis, in
  Sacramento's Capitol Morning Report, asked innocently, "Why are California taxpayers paying for a program that
  trains union officials how to defeat the recall campaign against Gray Davis?"
   
  The attack on the ILE could close the doors of one of the best-funded labor studies programs in the country. Three
  years ago, the Institute for Labor and Employment was created in cooperation with the California Labor
  Federation and pro-labor legislators. By winning a permanent multimillion-dollar yearly appropriation, this new
  umbrella institution was able to begin expanding the decades-old programs at Berkeley and Los Angeles to eight
  of the system's nine campuses.
   
  The ILE's creation came on the heels of a change in direction in the old programs. In the mid-1990s a new set of
  academics and staff took charge in Berkeley and Los Angeles, with a much more dynamic vision of the ILE's
  relationship with workers and unions. The Labor Center in Los Angeles became an institution in which students,
  academics and union organizers studied the increasing role of immigrants in the Los Angeles work force. The
  Center for Labor Research and Education in Berkeley gave a home to labor activists who formed the Labor
  Immigrant Organizing Network, and then wrote the resolution that changed the position of the AFL-CIO itself on
  immigration.
   
  The activism of immigrant workers in California certainly wasn't making the construction industry happy. In one
  1992 strike alone, thousands of immigrant drywall workers paralyzed home construction in Southern
  California–just one of many such battles. So a labor center with real links to those workers and the unions helping
  them was not something the builders were disposed to like.
   
  This same change in the direction of labor studies has taken place far beyond California, reflecting a larger effort
  among labor academics to reject the habits and assumptions of cold war, business trade unionism. Cold war-era
  labor studies programs became large institutions on the campuses of land-grant state universities. They taught
  labor economics, trained stewards and union negotiators, and examined health and safety problems. But these
  worthwhile functions were tied to a philosophy of labor-management cooperation, which was founded on the
  premise that corporations would pursue a policy of enlightened self-interest–acceptance of unions and willingness
  to bargain.
   
  The era of enlightened corporate self-interest is long gone, however, if indeed it ever existed. For more than two
  decades the country's largest corporations have busted unions as a normal part of business activity, and have lost
  whatever interest they had in labor-management cooperation. It should be no surprise, then, that the end of union
  acceptance in the workplace should bring with it an end to the prestige of labor-management cooperation in
  academia. If employers don't want it, who does?
   
  In truth, the best labor studies programs these days aren't very interested in labor-management cooperation
  either. In general, they are less focused on the institutional needs of unions and more attuned to the larger social
  and economic issues affecting the labor movement. "Teaching students how to file grievances and write unfair
  labor practice charges in an era in which workers are fired in 31 percent of all organizing drives is pretty
  irrelevant," says Tom Juravich, director of the Labor Relations and Research Center at the University of
  Massachusetts.
   
  "There are two different ideas of labor studies," explains Bernard. "One puts the labor movement under a
  microscope for outside people to examine it. When the labor movement was on the ascendant in the 1960s and
  '70s, universities saw them as a powerful institution in society. That was good, but the guiding idea in industrial
  relations was how to stop struggle and have labor peace, how to quiet people down. The other philosophy sees
  that labor is about working people, and is involved with them. We would expect to see programs like that come
  under attack."
   
  In university industrial-relations departments of the cold war era, union-related studies were a small part of larger
  programs that analyzed ways to boost productivity and otherwise help employers manage workers. Today the
  conservative academics Bernard describes have gone off to business schools to teach human resource
  management. That leaves the field of labor studies smaller, but sharper. And that's the threat that right-wing think
  tanks have identified.
   
  Writer Steven Malanga has been their primary national voice. Malanga was given a grant by the Brunie Fund for
  New York Journalism to mount the initial attack in New York's City Journal, published by the Manhattan Institute
  last summer. Charles Brunie is the institute's chairman emeritus. Like the Pacific Research Institute, the
  Manhattan Institute is a conduit for funds coming from some of the nation's most conservative
  foundations–$475,000 from Sarah Scaife and $585,000 from the Bradley Foundation between 2000 and 2002.
  The John M. Olin Foundation, which gave $951,000, is represented on the Manhattan Institute's board by James
  Piereson.
   
  "Increasingly, these programs have come to define their mission chiefly as supporting labor and its organizing
  efforts rather than educating students," Malanga says. Like the PRI, he singles out those activities carried on by
  labor studies programs that affect the poor and immigrants, heaping scorn on studies defending the minimum
  wage and supporting living-wage ordinances.
   
  One suspects that Malanga would not have been satisfied, even twenty years ago, with a business-union
  approach to labor studies. Yet he yearns for that past "when labor bosses were culturally conservative, supported
  pro-growth policies, and sent their hardhats to battle long-haired students over the war in Vietnam." Today, he
  fulminates, labor studies programs "dispatch student interns to help unions organize" and "use classrooms to
  push the labor movement's tendentious views of privatization, globalization, and corporate America," substituting
  "propaganda and activism for the disinterested pursuit of truth."
   
  Of course, the discussions in college classrooms of privatization and globalization, or even the miserable wages
  of the university's own immigrant janitors (not to mention teaching assistants themselves) are not held as a result
  of orders from the AFL-CIO. These are burning questions for a whole generation of young people. Labor studies
  programs that don't engage them run the risk of being irrelevant, and left without students. Juravich says simply,
  "Students are less interested in the AFL, and more in sweatshops."
   
  The program at the University of Massachusetts was also reorganized in the early 1990s. According to Juravich,
  the old labor studies programs made the mistake of clinging to a service model for curriculum. "Our program and
  California's moved away from that. We don't wait for the labor movement to tell us what to do. We initiated
  research into the work force of our area, like the 3,000 fish-processing workers in New Bedford. We do strategic
  research for organizing, to see how power flows. I understand that feels inappropriate to people threatened by our
  independence and the strategic nature of what we do. That's why our field is in crisis, with an attack on the major
  player and on our funding. It's a very dangerous time."
   
  Following his first foray against labor studies, Malanga wrote a second City Journal article this fall, in which he
  repeated the same distortions peddled by the ABC and its recall allies. This time he accused the ILE of digging
  up "dirt on major property owners and investors, studying ways to organize young workers in California's
  supermarket industry, and researching how best to fight the privatization of welfare services." Like his friends at
  PRI, he too ends with a threat. "The fat public funding for projects of questionable academic value is unlikely to
  survive in the new Schwarzenegger era–along with the fat public funding for unneeded layers of unionized
  government employees."
   
  The long knives are out, and the ILE may just be the first to feel their sharp cuts.

60

[Martin Taylor 2004.01.1340]

[From Mike Acree (2004.01.08.1209 PST)]

Martin Taylor 2004.01.08.1426--

I mean the kind of effects that Mike Acree would like to solve by
having the several million affected people each individually pay
lawyers and judges to pursue a suit against the people that
voluntarily entered into each of these thousands of transactions.

I had already pointed out in the post to which you were responding:

if Bill P. is offended by my selling a kidney for $10,000, he could
sue both of us for the >emotional trauma of observing or reading
about this transaction. In this case I would >expect an
arbitration agency concerned to protect a reputation for fairness
to make no more >than a trivial award, not enough to cover Bill's
costs.

and further that

It will generally be in my interest to negotiate a compensatory
payment in advance, lest a >post facto award be more than I want to
pay.

Hence I see no basis for your remark. It is our present system, on
the contrary, which subsidizes lawsuits in various ways, as
documented, for example, in Philip Howard's _The Death of Common
Sense_ or Walter Olson's _The Litigation Explosion_.

By "our" I assume you mean the US system, which unfortunately seems
to be creeping into Canada.

However, you will notice that your response actually does illustrate
what I was trying to say. If I can put it metaphorically: the death
of a thousand cuts is no less a death than the death of a stab to the
heart.

Or less metaphorically, a requirement to control the myriads of
perceptions involved in addressing equivalent myriads of arbitration
agencies, or in arranging myriads of compansatory payments in
advance, will severely reduce my ability to control those perceptions
I would control with ease in the presence of a reasonable set of
regulatory rules with authorities to enforce them. I don't want to be
bothered with that stuff, but you, against my will, would require me
either to be bothered, or to accept the restrictions that your
activities and transactions might produce on my ability to control.
In other words, you would be restricting my freedom.

You ask Bill to put a lot of effort into asking an arbitration agency
to offer a trivial compensation, not enough to cover his financial
costs, implying that he wouldn't bother to try to get the
compensation. So, you are asserting that there is no way within your
system for Bill to recover the slight loss of control your
transaction imposed on him. Not only that, but if he could even
recover some financial benefit, it is not clear to me how that would
compensate for his inability to reduce the error concerned with his
feelings of disgust at witnessing the transaction. Nor is it clear
how devoting a lot of time and energy in the appeal to the arbitrator
increases his ability to controol other things.

Therefore, once again, by your transaction, within your "voluntary
transaction" regime, you are arbitrarily imposing on Bill a loss of
ability to control. At the same time, thousands of other dyads are
making transactions, some of which will also either disturb Bill's
perceptions or affect his environmental feedback paths. Few of these
effects will individually be--to put it colloquially--worth worrying
about, but cumulatively they can have a very large effect.

I don't want to waste my time and energy (a.k.a. ability to control)
on researching the most corruptible judges and least venal private
security forces (which, in a good anarchy, could equally well control
some of their perceptions by robbing me instead of my opponent).
Instead, I want to sepnd that time in controlling perceptions that
help me to enjoy life.

Other people have addressed the issue of so-called "voluntary"
agreements between parties of different powers.

But I'm also puzzled (if it wasn't obvious from the foregoing) how or
why money gets into the act when it isn't my monetary perceptions
that are being affected by your transactions.

Martin