Gold is not an Investment, excess saving is hoarding

Krugman's latest words on Gold are interesting, and end up calling gold a scam investment.

Buying gold promotes only one kind of business, that of mining and selling gold.  That's a tiny part of the overall economy.

Buying gold doesn't provide credit to people building other kinds of industries.  Buying corporate stocks and bonds would.

Putting money in a bank enables more lending by lowering the cost of money to the bank.  More lending means more pro ducting of things like cars, houses, and home improvements.

So buying gold is rather anti-social.  I know rational utility maximizers aren't supposed to be swayed by such things.  Anyway, I wouldn't be buying gold anyway, as I understand it as a speculation on the value of gold.  Speculation is a fancy word for gambling, and I don't like to do that because I seem to be a pretty consistent loser at gambling.

But whether I am swayed by such things or not, I think about them.

Now, there may be not so good aspects to those other things I just mentioned, and what they enable.  And I've long thought that "buying" is more pro-social than saving or financial investing because in the former case you are providing income to someone else, and in the latter you are only providing a loan.

So if it's OK to buy stuff, say high end audio equipment, why not gold?

Well also precisely because buying stuff not only provides income to others (one persons spending is anothers income), it provides us with stuff, which we enjoy directly.  So utility is amplified, so to speak, by buying the amplifier I may need for the best audio reproduction.  In fact, if an amplifier provides utility to me in the future…it is an investment.  (In some cases, it might be good store of value…or even a speculative wedge, as well, but that's not what I'm talking about.)

This may fall apart if I buy too much stuff, more than I need, more than I use, etc.  (Something I'm pretty sloppy about, actually.)

Of course, to the gold bug, survivalist, or similar kook, owning that shiny metal is enjoyed directly.  But that's a little sick, isn't it?

The main defensible reason to own gold would be as a store of value.  Though I dismiss the attempt to gain money or advantage through an increase in the price of gold as "gambling," merely holding gold, not respective of the fact it may become worth more or less relative to other things…is a defensible reason within limits.

What are those limits?  The limits to one's need for future consumption security or future reasonable bequest.  Saving more than that is "hoarding," which means other people's productive activity is being pinched indefensibly.  With the richest people however we may not think of this as hoarding so much as status seeking.  The richest seek to be richer than others.

That kind of pursuit of wealth for it's own sake, however, is just as bad socially as hoarding.

Rather than saving too much…what should the wealthy do?  Spend righteously and/or give money away righteously!

Happy Holidays

It's a commonplace that "thank you" is a rhetorical way of dismissing someone.  It's the last thing you say, or need say, to any kind of contractor, service person, or sales person.  And it's the last thing they need to say to you.  So, if someone is almost beginning an argument, which might take awhile, you can dismiss them with "thank you" and move on.

It doesn't seem quite as well known that holiday slogans such as "Merry Christmas" and "Happy Holidays" serve very much the same role rhetorically.  They are last words.  Since they are Non Sequitur, it follows they can only be responded in kind or with another non sequitur, politely of the same kind.

So as we are giving others our good wishes (or gratitude) we are also telling them "Move out of my way, buddy, I gotta get on with my Christmas shopping."

Now don't take this too badly, quite often non sequiturs are absolutely needed.  About once a minute or so perhaps…  And without them, people often become bores without knowing it.

Now the Christmas Greetings have another less-then-fully-wonderful aspect.  The are obviously an example of cultural imperialism.  We may think, despite the windbags, Christmas has become basically a secular holiday, and we need secular holidays, so go with what the Romans do, Christmas is for all Americans--a secular American holiday, not an exclusively Christian one.  But regardless of thinking that or not, not all people can be expected to think that, and there are those Christian windbags insisting that it isn't a secular holiday too, so there is that to think about also.

So offering a specific holiday with religious baggage as greeting is unavoidably culturally imperialistic.

Returning such a greeting isn't imperialistic, though it might be other things.  Not returning such a greeting in kind could be worse, or not, as transitions can occur to needless and useless argument.

I'm not that worried in the act of a single "Merry Christmas."  While it is unavoidably culturally imperialistic, it may be very little so unless used as a platform for further invasion, as the windbags do.

President Obama's CIA Roots

This isn't Republican birtherism.  The exact opposite is true.  The President's mother and father were both CIA operatives, who met in Hawaii.  The young boy seen as having the perfect complexion for some future high office, he was groomed with CIA opportunities all the way.

http://www.infowars.com/bombshell-barack-obama-conclusively-outed-as-cia-creation/

Similar things can be said about other Presidents in recent history, I am sure.

His "looking forwards, not backwards" toward all CIA crimes like torture certainly follows.

One problem is, we're taking their word it is different now wrt torture.  And their word has a long history.

Giving an executive order to stop torture in 2009 was a fine first step.  But prosecution(s) should have followed, since it was already illegal (and against treaties).

And then there's drones.  He promised to use them less, but they haven't been dismissed altogether as law and ethics would demand.

And CIA, Wall Street, Military Industrial Complex, Media, Plutocracy, it's all the same thing with a lot of corrupt relationships.

More Utility from more people?

Economic philosopher Jeremy Bentham developed the concept of Utility, a quantity roughly commensurate with the human sense of pleasure or goodness, and diminished by pain or badness.

Modern economic theories posit that markets regulate human activity to maximize utility.  These theories are full of extremely flawed assumptions and are mostly wrong.  (See for example the excellent book, Debunking Economics by Steve Keen.)

Among economists and others there is a notion that more human beings on earth increases utility as well.  Since under almost all circumstances, humans would prefer life to death, each additional person increases the total number of humans that would experience positive utility (and hence there is more Utility) unless circumstances get very bad.

I believe this is wrong on many ways, and that a much smaller human population would be better.  How is "more Utility from more people" wrong?  Let me describe some ways:

1) Not Just Humans.  The earth includes many non-human species who also experience pleasure and pain and goodness and badness in other ways.  There is no universal reason why their Utility shouldn't count.  Increasing human population generally increases the human planetary footprint, reducing the land space, biodiversity, unpolluted water and air, and other things which are needed to support non-human wildlife populations and their Utility.  Sure, humans could organize their activities so that they have less impact.  But they've tended not to, and even if they did, a larger human population only makes it more difficult to minimize the human ecological footprint.

The unfortunate fact is that the increasing number of Humans has created what is already the 6th largest extinction event in Earth's history, and it is likely to get far far worse over the next few hundred years.

2) Limited Natural Resources and Sinks.

3) Overcrowding.

While additional humans means more possibilities to experience Utility, it may diminish the Utility available to others in the cases of limited resources and overcrowding.  At some point the latter decreases may be greater than the hoped-for increases.  This is obvious when you go from a situation where everyone can easily be fed to one where there isn't quite enough, but occurs in many other ways as well.

4) Wrong model of Utility?

The notion that Utility is nearly automatic to human life may be fundamentally wrong.  I describe this idea last because it is somewhat speculative and could be wrong.

My own idea is that humans do not automatically have a positive utility, but rather neutral utility, i.e. zero.  It is network effects related to the existence of other human beings, as well as resources and opportunities, that provide either positive or negative utilities.

Such a model of utility arising out of the natural and social networks makes utility highly unstable.  When things are good they can be very good, as when there is a Golden Age.  When things are bad they can turn very bad, as in world wars or societies based on terror.

This also makes Utility highly contingent, not the sort of thing that can just add up when you have more people.  Fundamentally, and not even referencing limited resources, more people can be either positive or negative.  It depends.

Where has the golden age gone?

Written in reply to this blog post.

It's easy to think of golden ages in the past primarily because we lack experiences there.  Interpersonal violence has actually been on a long decline for thousands of years, just that it used to be more one-on-one.  The golden democratic age of ancient Greece ended with Socrates and his pupils.  Socrates preached a society run by those who know best--elites.  And he got what he wanted through his pupils who destroyed Athenian democracy.  Which didn't work out very well because they didn't know as much as they thought they did.  Funny he has become a kind of secular god precisely because his anti-democratic idealism fit with the emperors we have lived with since.  So our current rot actually began with ancient Greece.

The golden age democracy of Greece was much more democratic because it was based on lottery, not the rigged elections we have in capitalist democracy.  With elections that money can rig, democracy simply becomes another way we are owned.  The main way elections are rigged is through the media-controlled primaries.  Individualism and individual choice is promoted incessantly, but power-to-the-people actually comes only through solidarity.  Solidarity means real political parties with stakeholders whose success depends on how much they actually deliver to the people, not how much advertising they can buy.  The smoke filled rooms we abolished were actually what made our system work better.  The last golden age was from FDR to Kennedy, and economic elites--especially fossil fuel and war barons--reasserted control starting with the assassination of Kennedy and the rise of movement conservatism.

There's still a chance the Neolithic Revolution will be a success, but it's looking more like the beginning of the end.

Peace, Sister

I continue to believe that lesser evilism is the correct strategy in rigged games like voting in capitalist democracy.  Vote, and get on with it.  Don't bother with the campaign crap, except perhaps very selectively.  Put your effort into something else: reading, research, education, demonstrations.  Education is the big one, I always say.  And it starts with self-education.  And there are endless ways to do that.

However, YMMV.  If you have another vision, go for it.  3rd parties* are a perennial favorite among the most dedicated.  Less dedicated--perhaps--go for anti-voting.  IMO anti-voting doesn't have much positive effect in the historical record.  Believers might counter that when it (may) have an effect, it will turn the tables, unlike merely reordering the silverware.  It's not for me, but if you want to go for that, go for it!

(IMO, 3rd parties may be productive in some places, but in most of the USA almost all of the time, they are not.  Worked for Teddy Roosevelt, though, one of USA's best Presidents.)

As John Emerson at his Trollblog website says, movement conservatism has succeeded not because of following a single coherent "best" strategy, but by endless experimentation on the part of endless entrepreneurs.  Some lose big.  Fortunately, with all the money from plutocrats sloshing around, even the big losers can get nicely taken care of afterwards.  Perhaps better, even, to be a bigger looser.  So therefore big risks are taken, and sometimes pay off.  That's politics, not following the rules of one academic political scientist or another, as the Democrats do.  90% of all political science PhD's are Democrats, meanwhile one of the most successful political operatives ever--Karl Rove--took a political science course once.

Meanwhile, if you want me to vote 3rd party, show me the good bets first, that won't be what I would consider spoilers.  I'd even do more for a principled candidate (of the right kind, the only kind actually) than just vote, if they really, not in fantasy, had a decent chance of winning.  I do also support candidates, as I did the Kucinich presidency, largely for educational effects, though I denied that to myself at the time.  Kucinich, a primary challenger, never became a spoiler (to my knowledge, though he didn't sign the Texas Democratic Party loyalty oath).

The overarching desire to be obeyed

Roger Gathman follows me in saying the the least reform would be special prosecutors for police violence cases.  Also, he compares the shooting by Daniel Harmon-Wright to that of Darren Wilson.  In the former case the police officer's claim to self-defense was contradicted by eye witnesses, and those eye witnesses were believed.  Underlying both cases, RG believes, was the Officers desire to be obeyed:

The Ferguson case, which hinged on Wilson’s claim that he felt his life was endangered, can be paralleled by a case that was tried just last year of a Culpepper Virginia policeman who killed a sunday school teacher, Patricia Cook. The policeman, Daniel Harmon-Wright, claimed that when he reached in her car window to take her license, she rolled up the window and took off. Thus, he shot her – seven times – because otherwise he would have been dragged to death. This seems more life threatening that anything that happened to Wilson. The difference was that eye witnesses, in the Harmon-Wright case, were believed, and they asserted that Harmon-Wright’s hand was not trapped in that window, and that he simply unloaded when she took off in her car. She was “escaping” him, just as Michael Brown was escaping Wilson, and the automatic response was shoot to kill. In fact, with a special prosecutor, I think Wilson’s claim of being threatened would be broken down in court – and what would be left was the overwhelming desire to be obeyed. However, there are limits on how police can achieve that last goal.

The Rational State

Bruce Wilder makes some more great comments in the blog on Ferguson at Crooked Timber.

As several commenters have noted, racism has a history. Indeed, it does. Turning racism into a political taboo marks one of the great triumphs of political liberalism in its long fight for the dignity and autonomy of the individual and to transform the state into a rationally administered instrument for a shared, public good.

The series of historic triumphs for political liberalism over racial oppression marked out a series of historic defeats for reactionary and authoritarian conservatism if “conservatism” is the label we care to attach to whatever apology in whatever era has been offered for complacency and indifference, regarding conventional acceptance of cruelty and vicious, amoral selfishness.

It doesn’t seem to me that one can really argue effectively with cruelty and vicious, amoral selfishness; in democratic politics, we’re always arguing with complacency and indifference regarding moral conventions.

It’s a measure of that remarkable series of triumphs of liberal politics against racism that “racist” is a such a powerful pejorative in conventional moral terms.

I love the phrase, "transform the state into a rationally administered instrument for a shared, public good."

Make it so is what we must do, not, for the foreseeable future, imagine we can work positively toward eliminating the existence of states.

Even though the history of states is precisely the opposite, or a kind of Pareto opposite, primarily to maintain the private good of the most elite and powerful within the society, with some good trickling down to some others.  But many reforms, and especially the civil rights reforms of the 20th century, and social democratic reforms like the New Deal, have broadened the beneficiaries of state's existence somewhat.  That program, of broadening the public good, was basically working until it was dismantled in the 1970's by concerted effort of plutocrats and oligarchs.

Then Bruce takes a turn toward saying this should not be turned into partisan bumper stickers and t-shirts.  Well I agree in a limited sense.  But this brings up the area where, I believe, Bruce and I differ.

I believe in voting for Democrats not as our saviors, but as simply being the better choice.  So hold your nose and vote.  But then move on, and practice actual reform politics in other ways.  It's a pity the electoral system has not only not been made better, but has become even more money oriented in the past few decades.  That will need to be changed…but it cannot be changed by tiny numbers of people voting for purity parties.

Who Will Guard the Guardians

An excellent analysis by Bruce Wilder of the unending problem of hierarchically organized societies.  He is not damning hierarchical organization--he recognizes how essential it is--but the question "Who Will Guard the Guardians" must be dealt with.