This might be of particular interest to Rick and others interested in economic systems.
bob
http://www.alternet.org/story/155481/ted%3A_even_more_elitist_than_we_thought?page=2
[From Rick Marken (2012.05.19.0810]
···
On Fri, May 18, 2012 at 7:37 PM, Bob Hintz bob.hintz@gmail.com wrote:
This might be of particular interest to Rick and others interested in economic systems.
bob
http://www.alternet.org/story/155481/ted%3A_even_more_elitist_than_we_thought?page=2
Thanks, Bob. Reminds of a George Bernard Shaw quote I just read recently:
The more I see of the moneyed classes, the more I understand the guillotine.
Best
Rick
–
Richard S. Marken PhD
rsmarken@gmail.com
www.mindreadings.com
Excellent find.
Chuck Tucker
···
This might be of particular interest to Rick and others interested in economic systems.
bob
http://www.alternet.org/story/155481/ted%3A_even_more_elitist_than_we_thought?page=2
-----Original Message-----
From: Bob Hintz
Sent: May 18, 2012 10:37 PM
To: CSGNET@LISTSERV.ILLINOIS.EDU
Subject: inequality
Perhaps TEDTalk should have removed it because it was quite wrong, consider this statement “The extraordinary differential between a 15% tax rate on capital gains, dividends, and carried interest for capitalists, and the 35% top margi nal
rate on work for ordinary Americans is a privilege that is hard to justify without just a touch of deification.” For one thing, the tax rate is actually much higher because that income was taxed at the corporation at 35%. This is the infamous double tax on capital gains and dividends. It is easy to justify, not just the lower rate, but reducing the rate to zero. For one thing it is more efficient to collect taxes at the corporation, especially when foreign owners are involved, but the main justification is the structural effects on the economy. Double taxing the returns to equity, while single taxing the interest on debt, gives debt financing a relative advantage. This incentive to use debt financing increases the leverage and risk in the economy, leading to bubbles and crises like the recent collapse. We need more economic literacy in this society, because ignorance leaves people too vulnerable to marxist class warfare demogoguery.
– Martin L
···
On 5/18/12 8:37 PM, “Bob Hintz” bob.hintz@GMAIL.COM wrote:
This might be of particular interest to Rick and others interested in economic systems.
bob
http://www.alternet.org/story/155481/ted%3A_even_more_elitist_than_we_thought?page=2
Martin, so is it that black and white?
Are Capital Gains Double Taxed?
http://www.tax.com/taxcom/taxblog.nsf/Permalink/UBEN-8MJHUF?OpenDocument
Let's face it: the truth, the whole truth, and nothing but the truth just doesn't make for good storytelling.
Chad
Chad T. Green, PMP
Program Analyst
Loudoun County Public Schools
21000 Education Court
Ashburn, VA 20148
Voice: 571-252-1486
Fax: 571-252-1633
Web: http://cmsweb1.loudoun.k12.va.us/50910052783559/site/default.asp
There are no great organizations, just great workgroups.
-- Results from a study of 80,000 managers by The Gallup Organization
Martin Lewitt 05/19/12 9:36 PM >>>
Perhaps TEDTalk should have removed it because it was quite wrong, consider
this statement "The extraordinary differential between a 15% tax rate on
capital gains, dividends, and carried interest for capitalists, and the 35%
top marginal rate on work for ordinary Americans is a privilege that is hard
to justify without just a touch of deification." For one thing, the tax
rate is actually much higher because that income was taxed at the
corporation at 35%. This is the infamous double tax on capital gains and
dividends. It is easy to justify, not just the lower rate, but reducing the
rate to zero. For one thing it is more efficient to collect taxes at the
corporation, especially when foreign owners are involved, but the main
justification is the structural effects on the economy. Double taxing the
returns to equity, while single taxing the interest on debt, gives debt
financing a relative advantage. This incentive to use debt financing
increases the leverage and risk in the economy, leading to bubbles and
crises like the recent collapse. We need more economic literacy in this
society, because ignorance leaves people too vulnerable to marxist class
warfare demogoguery.
-- Martin L
···
On 5/18/12 8:37 PM, "Bob Hintz" wrote:
This might be of particular interest to Rick and others interested in economic
systems.bob
http://www.alternet.org/story/155481/ted%3A_even_more_elitist_than_we_thought?
page=2
The author offers a poor analysis, for example:
"There are two other problems with this argument as a defense for
targeted relief of capital gains. First, not all corporate income flows
to individuals as capital gains. Dividends from corporations also
deserve relief from double tax. In fact, they deserve more of a break.
Even though dividends are also taxed at a 15 percent rate, they are tax
disadvantaged vis-�-vis capital gains because they are taxed as they
accrue. Second, not all capital gain comes from the sale of corporate
stock. Capital gains can be realized on the sale of real estate, bonds,
art, shares of passthrough businesses (not subject to corporate tax),
and C corporations that pay little or no tax."
The fact that dividends deserve more of a break from capital gains, is not
an argument that the double taxation of capital gains should not be
eliminated. Of course not all income from corporations flows through
capital gains, but when dividends are paid, under fundamental analysis,
the value of the corporation is reduced because it has less cash. So the
dividends paid out reduce the capital gains. It is for the income that
is not paid out in dividends that capital gains represents a double tax.
Retained earnings increase the balance sheet and thus the value of the
stock under fundamental analysis, that that value is reduced by the taxes
that already have been paid.
"This would contradict the position Republicans take when they argue for a
corporate rate reduction -- that is, most of the burden of the
corporate tax falls on workers (in the form of lower wages)."
Hmmm, I hadn't heard this argument, I usually heard that if falls on
consumers in the form of higher prices, and that taxing corporations is
just a demagogic way of politicians to claim they are taxing someone else,
when it is really a hidden tax on the economy that consumers ultimately
pay. It is really more honest to finance government by taxing consumers
directly. What is clearer is that by increasing the cost of equity
capital to businesses, it means that fewer business investment justify
financing. It is basic decision making to consider the cost of capital in
comparison to the expected rate of return from business investment.
All the arguments that a tax on capital gains are a double tax are good
arguments, however dismissive this author is, but he doesn't even address
the structural impact the double tax has of creating a bias in favor of
risky inflexible debt financing, increasing layoffs and deepening
recessions.
-- Martin L
···
On 5/19/12 9:33 PM, "Chad Green" <Chad.Green@LCPS.ORG> wrote:
Martin, so is it that black and white?
Are Capital Gains Double Taxed?
http://www.tax.com/taxcom/taxblog.nsf/Permalink/UBEN-8MJHUF?OpenDocumentLet's face it: the truth, the whole truth, and nothing but the truth just
doesn't make for good storytelling.Chad
Chad T. Green, PMP
Program Analyst
Loudoun County Public Schools
21000 Education Court
Ashburn, VA 20148
Voice: 571-252-1486
Fax: 571-252-1633
Web: http://cmsweb1.loudoun.k12.va.us/50910052783559/site/default.aspThere are no great organizations, just great workgroups.
-- Results from a study of 80,000 managers by The Gallup OrganizationMartin Lewitt 05/19/12 9:36 PM >>>
Perhaps TEDTalk should have removed it because it was quite wrong,
consider
this statement "The extraordinary differential between a 15% tax rate on
capital gains, dividends, and carried interest for capitalists, and the
35%
top marginal rate on work for ordinary Americans is a privilege that is
hard
to justify without just a touch of deification." For one thing, the tax
rate is actually much higher because that income was taxed at the
corporation at 35%. This is the infamous double tax on capital gains and
dividends. It is easy to justify, not just the lower rate, but reducing
the
rate to zero. For one thing it is more efficient to collect taxes at the
corporation, especially when foreign owners are involved, but the main
justification is the structural effects on the economy. Double taxing the
returns to equity, while single taxing the interest on debt, gives debt
financing a relative advantage. This incentive to use debt financing
increases the leverage and risk in the economy, leading to bubbles and
crises like the recent collapse. We need more economic literacy in this
society, because ignorance leaves people too vulnerable to marxist class
warfare demogoguery.-- Martin L
On 5/18/12 8:37 PM, "Bob Hintz" wrote:
This might be of particular interest to Rick and others interested in
economic
systems.bob
http://www.alternet.org/story/155481/ted%3A_even_more_elitist_than_we_tho
ught?
page=2
[From Rick Marken (2012.05.19.2215)]
We need more economic literacy in this society,
I take it that you are not purposefully being ironic.
because ignorance leaves people too vulnerable to marxist class warfare demogoguery.
And, I might add, to neo-fascism and corporatist policies that are winning the class war for the top .001%
RSM
···
On Sat, May 19, 2012 at 6:35 PM, Martin Lewitt mlewitt@comcast.net wrote:
–
Richard S. Marken PhD
rsmarken@gmail.com
www.mindreadings.com
[From Bill Powers (2012.05.20.,0655 MDT)]
[From Rick Marken
(2012.05.19.2215)]We need more economic literacy in this society,
I take it that you are not purposefully being ironic.
because ignorance leaves people too vulnerable to marxist class
warfare demogoguery.And, I might add, to neo-fascism and corporatist policies that are
winning the class war for the top .001%
I can’t resist adding this marxist class warfare comment. I completely
fail to understand why some people view the whole economy as a wonderful
windfall for themselves which they immediately try to drain into their
own pockets. Organizing companies and operating them successfully is, of
course, an occupation requiring intelligence, skill, and knowledge, so
those who can take on that job successfully can feel they are sharing the
load fairly and giving back some of what they gain from the rest of us.
But where did this idea come from that they are superheros with
superhuman powers and supernatural requirements for admiration and
privileges? As my Dad used to say, they put their pants on one leg at a
time (instead of levitating and putting both legs in the pants at once).
Why do they think they deserve to be treated like royalty or even gods?
They are no more skilled at their specialties than are mathematicians or
lathe operators or inventors or control theorists or teachers. When they
do their jobs right, everyone benefits and everything works better. The
same can be said of all the others. None of them could do their jobs if
it weren’t for the others doing theirs. We need everybody. There is
simply too much to learn, know, and do for any small part of the
population to run the whole show. That’s why inequality is a stupid
policy.
Best,
Bill P.
···
On Sat, May 19, 2012 at 6:35 PM, Martin Lewitt > mlewitt@comcast.net > wrote:
[From Rick Marken (2012.05.20.1120)]
Bill Powers (2012.05.20.,0655 MDT)–
I can’t resist adding this marxist class warfare comment. I completely
fail to understand why some people view the whole economy as a wonderful
windfall for themselves which they immediately try to drain into their
own pockets. Organizing companies and operating them successfully is, of
course, an occupation requiring intelligence, skill, and knowledge, so
those who can take on that job successfully can feel they are sharing the
load fairly and giving back some of what they gain from the rest of us.
But where did this idea come from that they are superheros with
superhuman powers and supernatural requirements for admiration and
privileges?
Not necessarily in order of appearance (or importance) it came from: Ayn Rand, Fox News, right wing talk radio, Ronald Reagan, the Austrian School, management consultants, libertarians and, of course, from the would-be superheros themselves.
As my Dad used to say, they put their pants on one leg at a
time (instead of levitating and putting both legs in the pants at once).
Why do they think they deserve to be treated like royalty or even gods?
They are no more skilled at their specialties than are mathematicians or
lathe operators or inventors or control theorists or teachers. When they
do their jobs right, everyone benefits and everything works better. The
same can be said of all the others. None of them could do their jobs if
it weren’t for the others doing theirs. We need everybody. There is
simply too much to learn, know, and do for any small part of the
population to run the whole show. That’s why inequality is a stupid
policy.
It has always puzzled me how people who are clearly very “smart” about what they do could embrace what seemed to me such obviously “stupid” beliefs as the ones you describe. Hierarchical PCT has helped remove some of my puzzlement. People can be very skilled at controlling for programs and carry out these in the service of ugly principles and system concepts. It’s all control. But some of it, though very skillful, is pretty darn ugly!
Best
Rick
···
–
Richard S. Marken PhD
rsmarken@gmail.com
www.mindreadings.com
[From Bill Powers (2012.05.20.1235 MDT)]
Rick Marken
(2012.05.20.1120)]Bill Powers (2012.05.20.,0655 MDT)–
But where did this idea come from that they are superheros with
superhuman powers and supernatural requirements for admiration and
privileges?RM: Not necessarily in order of appearance (or importance) it came from:
Ayn Rand, Fox News, right wing talk radio, Ronald Reagan, the
Austrian School, management consultants, libertarians and, of course,
from the would-be superheros themselves.
People can be very skilled at
controlling for programs and carry out these in the service of ugly
principles and system concepts. It’s all control. But some of it, though
very skillful, is pretty darn ugly!
BP: The following is dangerously hubristic, but looking at what a lot of
the free market crowd seem to be controlling for, I sometimes wonder if
they actually have any system concepts at all. I don’t see how anyone can
think that the best world to live in is one where every person is for
himself, and not even realize how self-destructive that idea is
since everyone else will also be doing that, and there are a lot more of
them than there are of you. If everyone around you is armed, for example,
it would be foolish to trust anyone you didn’t know personally for a long
time, and even then you’d have to be on guard lest you annoy them or just
catch them in a bad mood. You might have to shoot your best friend, or
your wife.There would be no such thing as a free and easy friendly
relationship with anyone. Everyone would live behind fortifications and
shoot at anything that moved. How can you not see that, unless you don’t
see anything at that level?
I assume that the so-called 11 levels of control have been built up over
three and a half billion years starting with one level, then adding
another one that uses the first one, and so on to whatever is the highest
level in a given species. But within any species, have all lines of
descent developed exactly the same number and kind of levels? Oh boy, I
don’t like the way this thought is developing, but there it is, sounding
racist and sexist and elitist and everythingelseist. It’s one hypothesis,
let’s say, that would fit the facts, even though I would like to see it
disproved as soon as possible. But I have to ask how anyone can not see
that the best way to live is the only one that obeys Kant’s
“categorical imperative”: “Act only according to that
maxim whereby you can, at the same time, will that it should become a
universal law.” That is a system concept, or rather a principle that
fits only one kind of system concept, the same one Gandhi and Christ,
along with others from even deeper in history and prehistory, tried to
teach a long time ago . To some people this is simply the truth about
social life. To others, apparently, it is incomprehensible. Is it
possible that the historical record, despite its brevity, might show us
the advent of the system concept level and its subsequent uneven
development?
Or is it just that because the system concept level is so new, and is
still the highest level, it is experimental in nature and takes on all
sorts of uncontrolled random kinds of organization as the human race goes
on reorganizing? I think I like that hypothesis a little better and hope
it is right., though I don’t see how it would leave us any better
off.
Best,
Bill P.
[From Rick Marken (2012.05.20.2120)]
Bill Powers (2012.05.20.1235 MDT)–
BP: The following is dangerously hubristic, but looking at what a lot of
the free market crowd seem to be controlling for, I sometimes wonder if
they actually have any system concepts at all.
I have had the same thought myself. How might we test it?
BP: But I have to ask how anyone can not see
that the best way to live is the only one that obeys Kant’s
“categorical imperative”: “Act only according to that
maxim whereby you can, at the same time, will that it should become a
universal law.” That is a system concept, or rather a principle that
fits only one kind of system concept, the same one Gandhi and Christ,
along with others from even deeper in history and prehistory, tried to
teach a long time ago .
So maybe we all can perceive and control system concepts but the free marketers (or whoever it is we’re talking about) have just ended up with a different reference for the kind of system concept they want… one that looks a lot less like Lincoln County road then Armageddon (quoting Dylan again;-)
RM: To some people this is simply the truth about
social life. To others, apparently, it is incomprehensible.
Or it is comprehensible but just not what they want.
I was actually trying to get at what might be the “free marketer” system concept a while ago. I’ve found that free marketers appear to be very reluctant to discuss what they want for society. Either they know that what they want is pretty ugly or they don’t know what they heck I’m talking about when I ask what kind of society they want to live in.
Ah well. Did you see the eclipse today. Awesome!
Best
Rick
···
–
Richard S. Marken PhD
rsmarken@gmail.com
www.mindreadings.com
[Martin Lewitt 2012 May 20 2327 MDT]
[From Bill Powers (2012.05.20.1235 MDT)]
Rick Marken
(2012.05.20.1120)]Bill Powers (2012.05.20.,0655 MDT)–
But where did this idea come from that they are superheros with
superhuman powers and supernatural requirements for admiration and
privileges?RM: Not necessarily in order of appearance (or importance) it came from:
Ayn Rand, Fox News, right wing talk radio, Ronald Reagan, the
Austrian School, management consultants, libertarians and, of course,
from the would-be superheros themselves.
Rand may have broadened or democratized the appreciation to producers and creators of all sorts, but the worship of the super-rich, royalty and upper class has always been there. It seems to be part of human nature to be prone to cults of personality, of the warrior hero or leader.
People can be very skilled at
controlling for programs and carry out these in the service of ugly
principles and system concepts. It’s all control. But some of it, though
very skillful, is pretty darn ugly!BP: The following is dangerously hubristic, but looking at what a lot of
the free market crowd seem to be controlling for, I sometimes wonder if
they actually have any system concepts at all.
Part of the beauty of the system is that no one has to have system concepts, or rather that the system concepts are orthogonal to the emergent phenomenon of the market, rule of law, contract, honor and freedom of voluntary exchange.
I don’t see how anyone can
think that the best world to live in is one where every person is for
himself, and not even realize how self-destructive that idea is
since everyone else will also be doing that, and there are a lot more of
them than there are of you.
What makes you think that it is one where everyone is for himself? What if instead everyone was for the other person, wouldn’t the voluntary exchanges be the same? I wouldn’t want you to have to pay too high a price because I’m thinking of you, you wouldn’t want to pay me too low a price, because you want my productive enterprise to be sustainable for all, and you would want me to be able to maintain my capital equipment and improve my products.
If everyone around you is armed, for example,
it would be foolish to trust anyone you didn’t know personally for a long
time, and even then you’d have to be on guard lest you annoy them or just
catch them in a bad mood.
Yes, hunter gatherer societies were more violent. See the case made by Pinker.
You might have to shoot your best friend, or
your wife.There would be no such thing as a free and easy friendly
relationship with anyone. Everyone would live behind fortifications and
shoot at anything that moved. How can you not see that, unless you don’t
see anything at that level?
So you think in a market society, neighbors are more valuable to you if they are dead? I think even people in India who I never met and who I wouldn’t be able to communicate with even if I did, are valuable.
I assume that the so-called 11 levels of control have been built up over
three and a half billion years starting with one level, then adding
another one that uses the first one, and so on to whatever is the highest
level in a given species. But within any species, have all lines of
descent developed exactly the same number and kind of levels? Oh boy, I
don’t like the way this thought is developing, but there it is, sounding
racist and sexist and elitist and everythingelseist. It’s one hypothesis,
let’s say, that would fit the facts, even though I would like to see it
disproved as soon as possible. But I have to ask how anyone can not see
that the best way to live is the only one that obeys Kant’s
“categorical imperative”: “Act only according to that
maxim whereby you can, at the same time, will that it should become a
universal law.” That is a system concept, or rather a principle that
fits only one kind of system concept, the same one Gandhi and Christ,
along with others from even deeper in history and prehistory, tried to
teach a long time ago . To some people this is simply the truth about
social life. To others, apparently, it is incomprehensible. Is it
possible that the historical record, despite its brevity, might show us
the advent of the system concept level and its subsequent uneven
development?
I can easily will that free market capitalism become a universal law. It is tough to imagine a less oppressive one.
Or is it just that because the system concept level is so new, and is
still the highest level, it is experimental in nature and takes on all
sorts of uncontrolled random kinds of organization as the human race goes
on reorganizing? I think I like that hypothesis a little better and hope
it is right., though I don’t see how it would leave us any better
off.
The system concept level is at least as ancient as the divine right of kings, the idea that some people know what is better for others than they know for themselves. In order to find a global optimum in a complex nonlinear system, you first need to be able to reach agreement on what it is.
Regards,
Martin L
[From Bill Powers (2012./05.21.0908 MDT)]
Martin Lewitt 2012 May 20 2327 MDT –
ML: Rand may have broadened or
democratized the appreciation to producers and creators of all sorts, but
the worship of the super-rich, royalty and upper class has always been
there. It seems to be part of human nature to be prone to cults of
personality, of the warrior hero or leader.
BP: I seem to have missed out on that. Of course I admire people who are
very good at what they do, if it’s not something horrible, but I think
the posturing and preening sorts are just ludicrous. There isn’t actually
any such thing as royalty or an upper class or a leader, except as other
people create those images of others in their own minds and assume
subordinate roles to make them seem real.
RM: People can be very skilled at controlling for programs and carry
out these in the service of ugly principles and system concepts. It’s all
control. But some of it, though very skillful, is pretty darn
ugly!BP: The following is dangerously hubristic, but looking at what a lot
of the free market crowd seem to be controlling for, I sometimes wonder
if they actually have any system concepts at all.ML: Part of the beauty of the system is that no one has to have system
concepts, or rather that the system concepts are orthogonal to the
emergent phenomenon of the market, rule of law, contract, honor and
freedom of voluntary exchange.
BP: That’s an interesting view, strictly from the principle level. In
fact, if my view of system concepts is like anyone else’s, it is
the system concept that both emerges from and then organizes the
principle level. Of course nobody “has to” have system
concepts, any more than they “have to” have legs. But some do
have them, and some – possibly – do not. And here it’s my own system
concept that make me reluctant to think that I have any special place
that is not accessible to all other people – in fact, makes it repugnant
to think that, even hypothetically.
BP: I don’t see how anyone can think that the best world to live in
is one where every person is for himself, and not even realize how
self-destructive that idea is since everyone else will also be doing
that, and there are a lot more of them than there are of you.ML: What makes you think that it is one where everyone is for
himself? What if instead everyone was for the other person,
wouldn’t the voluntary exchanges be the same?
BP: No, they wouldn’t. They would be vastly different. Rather than each
person trying to do what is most beneficial for himself in each
transaction, each person would first check to see if that would prevent
someone else from enjoying life, liberty, and the pursuit of happiness.
In the presence of someone who is starving, a person would lose his
appetite, or share the deprivation at least enough to alleviate the most
acute misery.
When someone has done something foolish or improvident and has found
himself in a hole he can’t get out of, a person would not refrain
from helping simply in order to teach a lesson to the sufferer or to
other witnesses to the suffering – he would not say see, you should have
thought about this result before you did that foolish thing, and now you
will simply have to suffer the consequences. And all you others who might
be thinking about doing the same thing, remember what is happening to
this unfortunately creature and let his continuing plight remind you to
be more responsible. And no, I am certainly not going to rescue him nor
will I permit you to do so – if I did that, both he and the rest of you
would see irresponsibility rewarded and would have no incentive to
improve your behavior. People simply have to learn that actions have
consequences, and the only way for that to happen is to suffer
them.
Is there is system concept behind that set of principles? I can’t imagine
what it might be, but if you can explain it I’d like to learn. It sounds
like a series of excuses or rationalizations intended to make selfishness
and revenge seem consistent with social living, which is what I
imagine someone would invent if principles were the highest form of
perception. Principles are a step above laws, because laws are always
specific biddings and forbiddings, while principles apply generally. When
logically constructed rules come into conflict, we resort to principles
to sort out the priorities – we try to think of the intent rather the
letter of the law. But what do we do when principles come into conflict?
What if doing the best for myself directly results in others preventing
me from doing the best for myself? Or even worse, what if doing the best
for others means that I have to forego doing what is good for me? What if
even altruism turns out to be a self-negating principle? Without some
place even higher to go, we have no place to stand from which we can see
the real problem or resolve it.
ML: I wouldn’t want you to have
to pay too high a price because I’m thinking of you, you wouldn’t want to
pay me too low a price, because you want my productive enterprise to be
sustainable for all, and you would want me to be able to maintain my
capital equipment and improve my products.
BP: Absolutely, and behind those principles is the kind of system concept
I am thinking about. It takes into account not just the short-term
benefits but the overall effect on the whole society and future benefits
that will accrue if others are also getting what they want. In fact it
gives priority to the Big Picture, as if the point is not who deserves
benefits and who doesn’t, but how all can best benefit from the way we do
things – even the foolish and improvident, the people who have legs and
those who don’t.
BP: If everyone around you is armed, for example, it would be foolish
to trust anyone you didn’t know personally for a long time, and even then
you’d have to be on guard lest you annoy them or just catch them in a bad
mood.ML: Yes, hunter gatherer societies were more violent. See the case
made by Pinker.BP: You might have to shoot your best friend, or your wife.There
would be no such thing as a free and easy friendly relationship with
anyone. Everyone would live behind fortifications and shoot at anything
that moved. How can you not see that, unless you don’t see anything at
that level?So you think in a market society, neighbors are more valuable to
you if they are dead? I think even people in India who I never met
and who I wouldn’t be able to communicate with even if I did, are
valuable.
Sure, as long as they don’t constitute a deadly threat to you. But give
everyone equal access to arms, and everybody becomes a potential deadly
threat, especially people you don’t know rather thoroughly. Should we let
Iran develop their nuclear weapons just so we will all be equally
threatening to each other?
BP: I assume that the so-called 11 levels of control have been built
up over three and a half billion years starting with one level, then
adding another one that uses the first one, and so on to whatever is the
highest level in a given species. But within any species, have all lines
of descent developed exactly the same number and kind of levels? Oh boy,
I don’t like the way this thought is developing, but there it is,
sounding racist and sexist and elitist and everythingelseist. It’s one
hypothesis, let’s say, that would fit the facts, even though I would like
to see it disproved as soon as possible. But I have to ask how anyone can
not see that the best way to live is the only one that obeys Kant’s
“categorical imperative”: “Act only according to that
maxim whereby you can, at the same time, will that it should become a
universal law.” That is a system concept, or rather a principle that
fits only one kind of system concept, the same one Gandhi and Christ,
along with others from even deeper in history and prehistory, tried to
teach a long time ago . To some people this is simply the truth about
social life. To others, apparently, it is incomprehensible. Is it
possible that the historical record, despite its brevity, might show us
the advent of the system concept level and its subsequent uneven
development?ML: I can easily will that free market capitalism become a universal
law. It is tough to imagine a less oppressive
one.
BP: Try. Only try viewing if from the employee’s point of view rather
than the entrepreneur’s or owner’s.
BP: Or is it just that because
the system concept level is so new, and is still the highest level, it is
experimental in nature and takes on all sorts of uncontrolled random
kinds of organization as the human race goes on reorganizing? I think I
like that hypothesis a little better and hope it is right., though I
don’t see how it would leave us any better off.ML: The system concept level is at least as ancient as the divine right
of kings, the idea that some people know what is better for others than
they know for themselves.
BP: That’s a principle, not a system concept. Anyway, if the system
concept level didn’t appear until the idea of “kings” was
invented, it’s brand-new, and it’s no wonder that we haven’t mastered
it.
ML: In order to find
a global optimum in a complex nonlinear system, you first need to be able
to reach agreement on what it is.
BP: But before that, you have to be able to recognize what it is that is
suboptimum and reach an agreement on that. I’m not saying that just being
able to perceive in terms of system concepts means that we will
automatically pick the right ones. Finding the right ones for
straightening out all our conflicting principles is a matter of trial and
error, with error predominating at first. Just as straightening out all
our conflicting laws is a matter of trial-and-error reorganizations of
the principle level.
I don’t think anybody can say what the ultimate system concepts will be,
or if they will ever stop evolving. But I do wish that more people were
working on that.
Best,
Bill P.
[Martin Lewitt 2012 May 22 2312 MDT]
[From Bill Powers (2012./05.21.0908 MDT)]
Martin Lewitt 2012 May 20 2327 MDT –
ML: Rand may have broadened or
democratized the appreciation to producers and creators of all sorts, but
the worship of the super-rich, royalty and upper class has always been
there. It seems to be part of human nature to be prone to cults of
personality, of the warrior hero or leader.BP: I seem to have missed out on that. Of course I admire people who are
very good at what they do, if it’s not something horrible, but I think
the posturing and preening sorts are just ludicrous. There isn’t actually
any such thing as royalty or an upper class or a leader, except as other
people create those images of others in their own minds and assume
subordinate roles to make them seem real.
I think you mean is that they are subjective. I feel the same way. While, for instance, government, having no mass, does not exist either, it is still a useful concept for predicting the behavior of others, especially those who think they are a part of the government. Humans are prone to such subjective constructs. Leaders are probably a universal in human societies of all scales.
RM: People can be very skilled at controlling for programs and carry
out these in the service of ugly principles and system concepts. It’s all
control. But some of it, though very skillful, is pretty darn
ugly!BP: The following is dangerously hubristic, but looking at what a lot
of the free market crowd seem to be controlling for, I sometimes wonder
if they actually have any system concepts at all.ML: Part of the beauty of the system is that no one has to have system
concepts, or rather that the system concepts are orthogonal to the
emergent phenomenon of the market, rule of law, contract, honor and
freedom of voluntary exchange.BP: That’s an interesting view, strictly from the principle level. In
fact, if my view of system concepts is like anyone else’s, it is
the system concept that both emerges from and then organizes the
principle level. Of course nobody “has to” have system
concepts, any more than they “have to” have legs. But some do
have them, and some – possibly – do not. And here it’s my own system
concept that make me reluctant to think that I have any special place
that is not accessible to all other people – in fact, makes it repugnant
to think that, even hypothetically.
I think values, controlled variables and observations come first, principles are distilled from attempts to make sense of these as a systematic whole. Of course, the principles and systemic understanding can iterate with the former, and “higher” values and controlled variables within the emerging system can become preferred.
BP: I don’t see how anyone can think that the best world to live in
is one where every person is for himself, and not even realize how
self-destructive that idea is since everyone else will also be doing
that, and there are a lot more of them than there are of you.ML: What makes you think that it is one where everyone is for
himself? What if instead everyone was for the other person,
wouldn’t the voluntary exchanges be the same?BP: No, they wouldn’t. They would be vastly different. Rather than each
person trying to do what is most beneficial for himself in each
transaction, each person would first check to see if that would prevent
someone else from enjoying life, liberty, and the pursuit of happiness.
In the presence of someone who is starving, a person would lose his
appetite, or share the deprivation at least enough to alleviate the most
acute misery.
If should be obvious that everyone doing what is most beneficial for himself is an over simplification to the point of distortion of the capitalist free market system. People form and participate in social organizations, such as corporations for instance, where shared goals are pursued. As for “someone who is starving”, at a higher system level, it can be appreciated that teaching someone to fish, is more valuable than just giving them a fish.
When someone has done something foolish or improvident and has found
himself in a hole he can’t get out of, a person would not refrain
from helping simply in order to teach a lesson to the sufferer or to
other witnesses to the suffering – he would not say see, you should have
thought about this result before you did that foolish thing, and now you
will simply have to suffer the consequences. And all you others who might
be thinking about doing the same thing, remember what is happening to
this unfortunately creature and let his continuing plight remind you to
be more responsible. And no, I am certainly not going to rescue him nor
will I permit you to do so – if I did that, both he and the rest of you
would see irresponsibility rewarded and would have no incentive to
improve your behavior. People simply have to learn that actions have
consequences, and the only way for that to happen is to suffer
them.Is there is system concept behind that set of principles? I can’t imagine
what it might be, but if you can explain it I’d like to learn. It sounds
like a series of excuses or rationalizations intended to make selfishness
and revenge seem consistent with social living, which is what I
imagine someone would invent if principles were the highest form of
perception. Principles are a step above laws, because laws are always
specific biddings and forbiddings, while principles apply generally. When
logically constructed rules come into conflict, we resort to principles
to sort out the priorities – we try to think of the intent rather the
letter of the law. But what do we do when principles come into conflict?
What if doing the best for myself directly results in others preventing
me from doing the best for myself? Or even worse, what if doing the best
for others means that I have to forego doing what is good for me? What if
even altruism turns out to be a self-negating principle? Without some
place even higher to go, we have no place to stand from which we can see
the real problem or resolve it.ML: I wouldn’t want you to have
to pay too high a price because I’m thinking of you, you wouldn’t want to
pay me too low a price, because you want my productive enterprise to be
sustainable for all, and you would want me to be able to maintain my
capital equipment and improve my products.BP: Absolutely, and behind those principles is the kind of system concept
I am thinking about. It takes into account not just the short-term
benefits but the overall effect on the whole society and future benefits
that will accrue if others are also getting what they want. In fact it
gives priority to the Big Picture, as if the point is not who deserves
benefits and who doesn’t, but how all can best benefit from the way we do
things – even the foolish and improvident, the people who have legs and
those who don’t.BP: If everyone around you is armed, for example, it would be foolish
to trust anyone you didn’t know personally for a long time, and even then
you’d have to be on guard lest you annoy them or just catch them in a bad
mood.ML: Yes, hunter gatherer societies were more violent. See the case
made by Pinker.BP: You might have to shoot your best friend, or your wife.There
would be no such thing as a free and easy friendly relationship with
anyone. Everyone would live behind fortifications and shoot at anything
that moved. How can you not see that, unless you don’t see anything at
that level?So you think in a market society, neighbors are more valuable to
you if they are dead? I think even people in India who I never met
and who I wouldn’t be able to communicate with even if I did, are
valuable.Sure, as long as they don’t constitute a deadly threat to you. But give
everyone equal access to arms, and everybody becomes a potential deadly
threat, especially people you don’t know rather thoroughly. Should we let
Iran develop their nuclear weapons just so we will all be equally
threatening to each other?jj
People aren’t threatening just because they are armed, and at times, you can feel safer when they are around. BTW, all the talk of “someone who is starving”, is rhetoric often used by those who would engage in protectionist policies, instead of helping people such as those in India, who are more likely to be experiencing real starvation.
BP: I assume that the so-called 11 levels of control have been built
up over three and a half billion years starting with one level, then
adding another one that uses the first one, and so on to whatever is the
highest level in a given species. But within any species, have all lines
of descent developed exactly the same number and kind of levels? Oh boy,
I don’t like the way this thought is developing, but there it is,
sounding racist and sexist and elitist and everythingelseist. It’s one
hypothesis, let’s say, that would fit the facts, even though I would like
to see it disproved as soon as possible. But I have to ask how anyone can
not see that the best way to live is the only one that obeys Kant’s
“categorical imperative”: “Act only according to that
maxim whereby you can, at the same time, will that it should become a
universal law.” That is a system concept, or rather a principle that
fits only one kind of system concept, the same one Gandhi and Christ,
along with others from even deeper in history and prehistory, tried to
teach a long time ago . To some people this is simply the truth about
social life. To others, apparently, it is incomprehensible. Is it
possible that the historical record, despite its brevity, might show us
the advent of the system concept level and its subsequent uneven
development?ML: I can easily will that free market capitalism become a universal
law. It is tough to imagine a less oppressive
one.BP: Try. Only try viewing if from the employee’s point of view rather
than the entrepreneur’s or owner’s.j
I’ve been employed by a massive unresponsive corporation and actually considered that a union might be necessary. That is an option within a capitalist free market system.
BP: Or is it just that because
the system concept level is so new, and is still the highest level, it is
experimental in nature and takes on all sorts of uncontrolled random
kinds of organization as the human race goes on reorganizing? I think I
like that hypothesis a little better and hope it is right., though I
don’t see how it would leave us any better off.ML: The system concept level is at least as ancient as the divine right
of kings, the idea that some people know what is better for others than
they know for themselves.BP: That’s a principle, not a system concept. Anyway, if the system
concept level didn’t appear until the idea of “kings” was
invented, it’s brand-new, and it’s no wonder that we haven’t mastered
it.ML: In order to find
a global optimum in a complex nonlinear system, you first need to be able
to reach agreement on what it is.BP: But before that, you have to be able to recognize what it is that is
suboptimum and reach an agreement on that. I’m not saying that just being
able to perceive in terms of system concepts means that we will
automatically pick the right ones. Finding the right ones for
straightening out all our conflicting principles is a matter of trial and
error, with error predominating at first. Just as straightening out all
our conflicting laws is a matter of trial-and-error reorganizations of
the principle level.
Shouldn’t each person be free to pursue their own system concept as long as their concept doesn’t involve coercion of others? I see it as suboptimal that we have a tax system that favors debt financing over equity financing, and that gives the Fed and banks monopolistic first access to newly created money. Does having a concept of and specific examples of suboptimality imply that I do have a system concept level ? If not, what level is it?
Regards,
Martin L
···
On 5/21/12 10:43 AM, “Bill Powers” powers_w@FRONTIER.NET wrote:
I don’t think anybody can say what the ultimate system concepts will be,
or if they will ever stop evolving. But I do wish that more people were
working on that.Best,
Bill P.
[Martin Taylor 2012.05.19]
[From Rick Marken (2012.05.19.0810]
This might be of particular interest to Rick and othersinterested in economic systems.
bob
http://www.alternet.org/story/155481/ted%3A_even_more_elitist_than_we_thought?page=2
Thanks, Bob. Reminds of a George Bernard Shaw quote I just readrecently:
“The more I see of the moneyed classes, the more I understand theguillotine.”
If you follow this link and then follow further link trails, you may
wind up at the “Spirit Level” site that I recommended some time ago
. The reason I mention
this is in connection with Richard K’s fine demonstration paper that
shows you can have causality without correlation, and the
implications of that fact for policy in several areas of research. The problem is that many people turn this true statement around
around and say “correlation does not imply causality”, which is
false. It is true that if two variables A and B are correlated,
there may be no direct influence from one to the other, but if there
is none, then something else influences them both, directly or
indirectly. In case 3, there is no direct link between A and B, but
there might be some factor that relates them through C, such as that
they satisfy the equation A+B=C (imagine that A and B are the
volumes of two types of goods, and C is the volume of a box into
which they must fit).
(Note that although type 4, the “control” case, is shown separately,
it is actually type 1, since there is a direct causal path from B to
A).
In the case of the “Spirit Level” data there is a high correlation
between income inequality and many “bad” social conditions such as
murder rate, obesity, infant mortality and low life expectancy, low
education, imprisonment, poor social mobility, mutual mistrust, and
so forth. The ten individual measures were into a single dimension
that I call “quality of life”, for which the correlation (over the
23 countries for which data were available for all the indices
included) with income inequality is 0.87 (either measure accounts
for over 75% of the variance in the other). Another ten socially related measures, such as public expenditure on
health care, recycling, paid maternity leave, drugs usage, spending
on advertising, spending on police, calorie intake, and so forth,
were not available for all 23 countries and were not included in the
overall index, but the correlations go the same way (more inequality
↔ more police, more calorie intake, less spending on foreign
aid, less commitment to peace, for example).
This doesn’t mean that directly changing income inequality would
improve all the other variables, but it does mean that if it does
not, then changing something else would influence both income
inequality and at least some of the social measures. That “something
else” might be, for example, the average strength of commitment to
“free market” economics in a population, or the attitude toward
poverty as something chosen by the poor, or some other commonly held
belief. Who knows? But there must be a direct or indirect causal
influence that relates high income equality to poor social indices.
Martin
(Attachment causal_w_control.jpg is missing)
[From Rick Marken (2012.05.19.1200)]
Martin Taylor (2012.05.19)–
If you follow this link and then follow further link trails, you maywind up at the “Spirit Level” site that I recommended some time ago
http://www.equalitytrust.org.uk/why . The reason I mention
this is in connection with Richard K’s fine demonstration paper that
shows you can have causality without correlation, and the
implications of that fact for policy in several areas of research.
I’ve read the Spirit Level – as much as I could handle. It’s pretty depressing and, for me, preaching to the choir.
As far as correlation is concerned, I’m with you on it (believe it or not). But the problem is that the correlations are often low by PCT standards so when you point them out – such as my pointing out that there is positive correlation (about .5) between top marginal tax rate and growth, the exact opposite relationship that economists believe should exist – you get “well, the r isn’t that big so who cares”. The fact that it goes in the exact opposite direction that it should is apparently of no concern to those who already know the truth. This is why I no longer post economic data; I let Krugman do it and, despite his Nobel, he’s been about as effective as I have. I guess it’s because we were both born on the same day.
I do have one comment on inequality; I don’t know if I’ve posted it before on CSGNet but I would like to see what you think of it.
I think that one way to demonstrate the problem with inequality, without resorting to data, is using a kind of mathematical approach. The approach involves thinking about how inequality would affect the economy “in the limit”. If inequality is “good” then the more the merrier. In the limit, inequality means that one person has the entire GDP and everyone else has zero. I think it’s obvious that the economy would not work at all in this situation. Even if everyone kept on producing, they wouldn’t survive long because they would have no money to purchase what was produced. So they would eventually die, eliminating productive capacity and the one person with all the money would only survive until all the stuff that was already produced deteriorated.
If equality is good then the more of that the better and, in the limit, everyone would have exactly the same proportion of GDP – 1/N * GDP, where N is the number of people in the economy. This economy would work (though it would exasperate the Ayn Rand types) because everyone would have enough money to purchase what they were producing. So it might be an ugly, cinderblock, soviet style world but the economy would work. Everyone would be able to consumer what they needed of what was produced.
What this little thought experiment suggests to me is that we probably don’t want total inequality (because it doesn’t work) or total equality (because it’s boring). What we want is probably some intermediate level of inequality; we don’t know what that level should be; everyone will certainly have a different idea (reference for inequality). But I think those who ere in the direction of wanting more equality are the ones who have a more sensible economic goal; those who want (or tolerate) more inequality are risking (and, as now, getting) economic catastrophe for the sake of a a particular aesthetic vision of society – a society where only those who are smart, pretty, competent and/or ruthless survive.
Best
Rick
(Attachment causal_w_control1.jpg is missing)
···
The problem is that many people turn this true statement aroundaround and say “correlation does not imply causality”, which is
false. It is true that if two variables A and B are correlated,
there may be no direct influence from one to the other, but if there
is none, then something else influences them both, directly or
indirectly. In case 3, there is no direct link between A and B, but
there might be some factor that relates them through C, such as that
they satisfy the equation A+B=C (imagine that A and B are the
volumes of two types of goods, and C is the volume of a box into
which they must fit).(Note that although type 4, the "control" case, is shown separately,it is actually type 1, since there is a direct causal path from B to
A).<img alt="" src="cid:part3.09080807.02090202@mmtaylor.net" height="208" width="736"> In the case of the "Spirit Level" data there is a high correlationbetween income inequality and many “bad” social conditions such as
murder rate, obesity, infant mortality and low life expectancy, low
education, imprisonment, poor social mobility, mutual mistrust, and
so forth. The ten individual measures were into a single dimension
that I call “quality of life”, for which the correlation (over the
23 countries for which data were available for all the indices
included) with income inequality is 0.87 (either measure accounts
for over 75% of the variance in the other).Another ten socially related measures, such as public expenditure onhealth care, recycling, paid maternity leave, drugs usage, spending
on advertising, spending on police, calorie intake, and so forth,
were not available for all 23 countries and were not included in the
overall index, but the correlations go the same way (more inequality
↔ more police, more calorie intake, less spending on foreign
aid, less commitment to peace, for example).This doesn't mean that directly changing income inequality wouldimprove all the other variables, but it does mean that if it does
not, then changing something else would influence both income
inequality and at least some of the social measures. That “something
else” might be, for example, the average strength of commitment to
“free market” economics in a population, or the attitude toward
poverty as something chosen by the poor, or some other commonly held
belief. Who knows? But there must be a direct or indirect causal
influence that relates high income equality to poor social indices.Martin
–
Richard S. Marken PhD
rsmarken@gmail.com
www.mindreadings.com